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Exhibit 4.3
THE DETROIT EDISON SECURITIZATION FUNDING LLC,
Issuer
and
THE BANK OF NEW YORK,
Trustee
INDENTURE
Dated as of [ ], 2001
Securing Securitization Bonds
Issuable in Series
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TABLE OF CONTENTS
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ARTICLE I
Definitions and Incorporation by Reference
SECTION 1.01 Definitions................................................................................ 2
SECTION 1.02 Incorporation by Reference of the Trust Indenture Act...................................... 2
SECTION 1.03 Rules of Construction...................................................................... 3
ARTICLE II
The Securitization Bonds
SECTION 2.01 Form....................................................................................... 3
SECTION 2.02 Execution, Authentication and Delivery..................................................... 4
SECTION 2.03 Denominations; Securitization Bonds Issuable in Series..................................... 4
SECTION 2.04 Temporary Securitization Bonds............................................................. 5
SECTION 2.05 Registration; Registration of Transfer and Exchange........................................ 6
SECTION 2.06 Mutilated, Destroyed, Lost or Stolen Securitization Bonds.................................. 7
SECTION 2.07 Persons Deemed Owner....................................................................... 8
SECTION 2.08 Payment of Principal and Interest; Interest on Overdue Principal; Principal and Interest
Rights Preserved........................................................................... 8
SECTION 2.09 Cancellation............................................................................... 10
SECTION 2.10 Amount; Authentication and Delivery of Securitization Bonds................................ 10
SECTION 2.11 Book-Entry Securitization Bonds............................................................ 15
SECTION 2.12 Notices to Clearing Agency................................................................. 15
SECTION 2.13 Definitive Securitization Bonds............................................................ 16
ARTICLE III
Covenants
SECTION 3.01 Payment of Principal and Interest.......................................................... 16
SECTION 3.02 Maintenance of Office or Agency............................................................ 17
SECTION 3.03 Money for Payments to Be Held in Trust..................................................... 17
SECTION 3.04 Existence.................................................................................. 18
SECTION 3.05 Protection of Collateral................................................................... 19
SECTION 3.06 Opinions as to Collateral.................................................................. 19
SECTION 3.07 Performance of Obligations................................................................. 20
SECTION 3.08 Negative Covenants......................................................................... 20
SECTION 3.09 Annual Statement as to Compliance.......................................................... 20
SECTION 3.10 Issuer May Consolidate, etc., Only on Certain Terms........................................ 21
SECTION 3.11 Successor or Transferee.................................................................... 22
SECTION 3.12 No Other Business.......................................................................... 22
SECTION 3.13 No Borrowing............................................................................... 22
SECTION 3.14 Guarantees, Loans, Advances and Other Liabilities.......................................... 22
SECTION 3.15 Capital Expenditures....................................................................... 22
SECTION 3.16 Restricted Payments........................................................................ 22
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SECTION 3.17 Notice of Events of Default................................................................ 23
SECTION 3.18 Inspection................................................................................. 23
SECTION 3.19 Adjusted Overcollateralization Balance Schedules........................................... 23
SECTION 3.20 Sale Agreement, Servicing Agreement and Swap Agreement Covenants........................... 23
SECTION 3.21 Taxes...................................................................................... 27
ARTICLE IV
Satisfaction and Discharge; Defeasance
SECTION 4.01 Satisfaction and Discharge of Indenture; Defeasance........................................ 27
SECTION 4.02 Conditions to Defeasance................................................................... 28
SECTION 4.03 Application of Trust Money................................................................. 30
SECTION 4.04 Repayment of Moneys Held by Paying Agent................................................... 30
ARTICLE V
Remedies
SECTION 5.01 Events of Default.......................................................................... 30
SECTION 5.02 Acceleration of Maturity; Rescission and Annulment......................................... 31
SECTION 5.03 Collection of Indebtedness and Suits for Enforcement by Trustee............................ 32
SECTION 5.04 Remedies................................................................................... 34
SECTION 5.05 Optional Preservation of the Collateral.................................................... 35
SECTION 5.06 Limitation of Proceedings.................................................................. 36
SECTION 5.07 Unconditional Rights of Securitization Bondholders To Receive Principal and Interest....... 36
SECTION 5.08 Restoration of Rights and Remedies......................................................... 37
SECTION 5.09 Rights and Remedies Cumulative............................................................. 37
SECTION 5.10 Delay or Omission Not a Waiver............................................................. 37
SECTION 5.11 Control by Securitization Bondholders...................................................... 37
SECTION 5.12 Waiver of Past Defaults.................................................................... 38
SECTION 5.13 Undertaking for Costs...................................................................... 38
SECTION 5.14 Waiver of Stay or Extension Laws........................................................... 39
SECTION 5.15 Action on Securitization Bonds............................................................. 39
ARTICLE VI
The Trustee
SECTION 6.01 Duties and Liabilities of Trustee.......................................................... 39
SECTION 6.02 Rights of Trustee.......................................................................... 40
SECTION 6.03 Individual Rights of Trustee............................................................... 41
SECTION 6.04 Trustee's Disclaimer....................................................................... 41
SECTION 6.05 Notice of Defaults......................................................................... 41
SECTION 6.06 Reports by Trustee to Holders.............................................................. 41
SECTION 6.07 Compensation and Indemnity................................................................. 42
SECTION 6.08 Replacement of Trustee..................................................................... 43
SECTION 6.09 Successor Trustee by Merger................................................................ 44
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SECTION 6.10 Appointment of Co-Trustee or Separate Trustee.............................................. 44
SECTION 6.11 Eligibility; Disqualification.............................................................. 45
SECTION 6.12 Preferential Collection of Claims Against Issuer........................................... 46
SECTION 6.13 Representations and Warranties of the Trustee.............................................. 46
ARTICLE VII
Securitization Bondholders' Lists and Reports
SECTION 7.01 Issuer to Furnish Trustee Names and Addresses of Securitization Bondholders................ 46
SECTION 7.02 Preservation of Information; Communications to Securitization Bondholders.................. 46
SECTION 7.03 Reports by Issuer.......................................................................... 47
SECTION 7.04 Reports by Trustee......................................................................... 47
SECTION 7.05 Provision of Servicer Reports.............................................................. 47
ARTICLE VIII
Accounts, Disbursements and Releases
SECTION 8.01 Collection of Money........................................................................ 48
SECTION 8.02 Collection Account......................................................................... 48
SECTION 8.03 Release of Collateral...................................................................... 54
SECTION 8.04 Issuer Opinion of Counsel.................................................................. 55
SECTION 8.05 Reports by Independent Accountants......................................................... 55
ARTICLE IX
Supplemental Indentures
SECTION 9.01 Supplemental Indentures Without Consent of Securitization Bondholders...................... 55
SECTION 9.02 Supplemental Indentures with Consent of Securitization Bondholders......................... 57
SECTION 9.03 Execution of Supplemental Indentures....................................................... 59
SECTION 9.04 Effect of Supplemental Indenture........................................................... 59
SECTION 9.05 Conformity with Trust Indenture Act........................................................ 59
SECTION 9.06 Reference in Securitization Bonds to Supplemental Indentures............................... 59
ARTICLE X
Redemption of Securitization Bonds
SECTION 10.01 Optional Redemption by Issuer.............................................................. 60
SECTION 10.02 Mandatory Redemption by Issuer............................................................. 60
SECTION 10.03 Form of Redemption Notice.................................................................. 60
SECTION 10.04 Payment of Redemption Price................................................................ 61
ARTICLE XI
Miscellaneous
SECTION 11.01 Compliance Certificates and Opinions, etc.................................................. 61
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SECTION 11.02 Form of Documents Delivered to Trustee..................................................... 62
SECTION 11.03 Acts of Securitization Bondholders......................................................... 63
SECTION 11.04 Notices, etc., to Trustee, Issuer and Rating Agencies...................................... 63
SECTION 11.05 Notices to Securitization Bondholders; Waiver.............................................. 64
SECTION 11.06 Notices to Luxembourg Stock Exchange....................................................... 64
SECTION 11.07 Alternate Payment and Notice Provisions.................................................... 65
SECTION 11.08 Conflict with Trust Indenture Act.......................................................... 65
SECTION 11.09 Effect of Headings and Table of Contents................................................... 65
SECTION 11.10 Successors and Assigns..................................................................... 65
SECTION 11.11 Severability............................................................................... 66
SECTION 11.12 Benefits of Indenture...................................................................... 66
SECTION 11.13 Legal Holidays............................................................................. 66
SECTION 11.14 GOVERNING LAW.............................................................................. 66
SECTION 11.15 Counterparts............................................................................... 66
SECTION 11.16 Issuer Obligation.......................................................................... 66
SECTION 11.17 No Petition................................................................................ 66
APPENDIX A MASTER DEFINITIONS
SCHEDULE I SCHEDULED OVERCOLLATERALIZATION LEVELS
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INDENTURE, dated as of [ ], 2001, by and between THE
DETROIT EDISON SECURITIZATION FUNDING LLC, a Michigan limited liability company,
as Issuer, and THE BANK OF NEW YORK, a New York banking corporation, in its
capacity as trustee for the benefit of the Holders of the Securitization Bonds
and as agent for itself and any Swap Counterparty (collectively, the "Trustee").
The Issuer has duly authorized the execution and delivery of
this Indenture to provide for one or more Series of Securitization Bonds,
issuable as provided in this Indenture. Each such Series of Securitization Bonds
will be issued only under a separate Series Supplement to this Indenture duly
executed and delivered by the Issuer and the Trustee. The Issuer is entering
into this Indenture, and the Trustee is accepting the trusts created hereby,
each for good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged and each intending to be legally bound hereby.
GRANTING CLAUSE
The Issuer hereby Grants to the Trustee as trustee for the
benefit of (i) the Holders of the Securitization Bonds from time to time issued
and Outstanding, (ii) the Trustee and (iii) any Swap Counterparty a security
interest in all of the Issuer's right, title and interest whether now owned or
hereafter acquired, in, to and under: (a) all Securitization Property
transferred by the Seller to the Issuer from time to time pursuant to the Sale
Agreement and all proceeds thereof; (b) the Sale Agreement; (c) all Bills of
Sale delivered by the Seller pursuant to the Sale Agreement; (d) the Servicing
Agreement; (e) the Administration Agreement; (f) any Interest Rate Swap
Agreement; (g) the Collection Account and all subaccounts thereof (including the
General Subaccount, each Series Overcollateralization Subaccount, each Series
Capital Subaccount, the Reserve Subaccount, each Series Subaccount, any Class
Subaccount and any Defeasance Subaccount) and all cash, securities, instruments,
investment property or other assets deposited in or credited to the Collection
Account or any subaccount thereof from time to time or purchased with funds
therefrom; (h) all investment property and all other property of whatever kind
owned from time to time by the Issuer other than: (w) any cash released to any
Swap Counterparty by the Trustee from the related Class Subaccount pursuant to
Section 8.02(d) and any Interest Rate Swap Agreement, (x) any payment received
by the Issuer pursuant to any hedge arrangement and (y) the proceeds from the
sale of the Securitization Bonds used to pay (1) the costs of issuance of the
Securitization Bonds and the Issuer's "up-front other qualified costs" (as such
term is used in the Financing Order) and (2) the purchase price of the
Securitization Property paid pursuant to the Sale Agreement; (i) all accounts
and general intangibles, (j) all present and future claims, demands, causes and
choses in action in respect of any or all of the foregoing; and (k) all payments
on or under and all proceeds of every kind and nature whatsoever in respect of
any or all of the foregoing, including all proceeds of the conversion, voluntary
or involuntary, into cash or other liquid property, all cash proceeds, accounts,
accounts receivable, general intangibles, notes, drafts, acceptances, chattel
paper, checks, deposit accounts, insurance proceeds, condemnation awards, rights
to payment of any and every kind and other forms of obligations and receivables,
instruments and other property which at any time constitute all or part of, or
are included in the proceeds of, any of the foregoing (collectively, the
"Collateral").
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Alternatively, if but only if, contrary to the agreement of
the parties and the Financing Order, any transfer of any Securitization Property
from the Seller to the Issuer referred to in clause (a) in the preceding
paragraph is determined by a court not to be a true sale as contemplated by the
Statute, then the Issuer for and on behalf of Detroit Edison as its agent,
hereby Grants (the "Alternative Grant") to the Trustee as trustee for the
benefit of (A) the Holders of the Securitization Bonds from time to time issued
and Outstanding, (B) the Trustee and (C) any Swap Counterparty a security
interest in all of Detroit Edison's right, title and interest whether now owned
or hereafter acquired, in, to and under the Securitization Property, including
under any Michigan UCC financing statements filed with respect to this
Alternative Grant, and (iii) the term "Collateral" as defined in this Indenture
shall include the Alternative Grant.
Such Grants are made to the Trustee to have and to hold in
trust to secure the payment of principal of, and interest on, and any other
amounts owing in respect of, the Securitization Bonds and all fees, expenses,
counsel fees and other amounts due and owing to the Trustee and, to the extent
provided in any Series Supplement, any amounts due and owing to any Swap
Counterparty (collectively, the "Secured Obligations") equally and ratably
without prejudice, preference, priority or distinction, except as expressly
provided in this Indenture and to secure performance by the Issuer of all of the
Issuer's obligations under this Indenture with respect to the Securitization
Bonds, all as provided in this Indenture.
The Trustee, as trustee on behalf of the Holders of the
Securitization Bonds, and acting on behalf of itself and any Swap Counterparty,
acknowledges such Grants, accepts the trusts hereunder in accordance with the
provisions hereof and agrees to perform its duties herein required.
ARTICLE I
Definitions and Incorporation by Reference
SECTION 1.01 DEFINITIONS. Capitalized terms used but not
otherwise defined in this Indenture have the respective meanings set forth in
Appendix A hereto unless the context otherwise requires.
SECTION 1.02 INCORPORATION BY REFERENCE OF THE TRUST INDENTURE
ACT. Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture. Each of the
following TIA terms used in this Indenture has the following meaning:
"Commission" means the Securities and Exchange Commission.
"indenture securities" means the Securitization Bonds.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the
Trustee.
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All other TIA terms used in this Indenture that are defined by the TIA, defined
by TIA reference to another statute or defined by Commission rule have the
meaning assigned to them by such definitions.
SECTION 1.03 RULES OF CONSTRUCTION. (a) An accounting term not
otherwise defined has the meaning assigned to it in accordance with generally
accepted accounting principles as in effect from time to time;
(b) "including" means including without limitation;
(c) with respect to terms defined in Appendix A hereto, words
in the singular include the plural and words in the plural include the singular;
(d) unless otherwise specified, references herein to Sections
or Articles are to Sections or Articles of this Indenture; and
(e) the words "herein", "hereof", "hereunder" and other words
of similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision.
ARTICLE II
THE SECURITIZATION BONDS
SECTION 2.01 FORM. (a) The Securitization Bonds and the
Trustee's certificate of authentication shall be in substantially the forms set
forth in Exhibit A to the related Series Supplement, with such appropriate
insertions, omissions, substitutions and other variations as are required or
permitted by this Indenture or by the related Series Supplement and may have
such letters, numbers or other marks of identification and such legends or
endorsements placed thereon as may, consistently herewith, be determined by the
Managers of the Issuer executing such Securitization Bonds, as evidenced by
their execution of such Securitization Bonds. Any portion of the text of any
Securitization Bond may be set forth on the reverse thereof, with an appropriate
reference thereto on the face of the Securitization Bond. Each Securitization
Bond shall be dated the date of its authentication.
(b) The Securitization Bonds shall be typewritten, printed,
lithographed or engraved or produced by any combination of these methods (with
or without steel engraved borders), all as determined by the Managers of the
Issuer executing such Securitization Bonds, as evidenced by their execution of
such Securitization Bonds.
(c) Each Securitization Bond shall bear upon its face the
designation so selected for the Series and Class, if any, to which it belongs.
The terms of all Securitization Bonds of the same Series shall be the same,
unless such Series is comprised of one or more Classes, in which case the terms
of all Securitization Bonds of the same Class shall be the same.
(d) Each Securitization Bond shall state that Section 10n(2)
of the Statute provides the following pledge by the State of Michigan:
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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 adjusting the
securitization 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.
The above-referenced pledge by the State of Michigan is hereby incorporated into
this Indenture.
SECTION 2.02 EXECUTION, AUTHENTICATION AND DELIVERY. (a) The
Securitization Bonds shall be executed on behalf of the Issuer by a Manager. The
signature of any such Manager on the Securitization Bonds may be manual or
facsimile.
(b) Securitization Bonds bearing the manual or facsimile
signature of individuals who were at any time Managers shall bind the Issuer,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Securitization Bonds.
(c) At any time and from time to time after the execution and
delivery of this Indenture, the Issuer may deliver Securitization Bonds executed
on behalf of the Issuer to the Trustee pursuant to an Issuer Order for
authentication; and the Trustee shall authenticate and deliver such
Securitization Bond as in this Indenture provided and not otherwise.
(d) No Securitization Bond shall be entitled to any benefit
under this Indenture or be valid or obligatory for any purpose, unless there
appears on such Securitization Bond a certificate of authentication
substantially in the form provided for herein executed by the Trustee by the
manual signature of one of its authorized signatories, and such certificate upon
any Securitization Bond shall be conclusive evidence, and the only evidence,
that such Securitization Bond has been duly authenticated and delivered
hereunder.
(e) To the extent any of the Securitization Bonds are listed
on the Luxembourg Stock Exchange and the rules and regulations of such exchange
so require, a transfer or other agent appointed pursuant to Section 3.02(b)
shall be authorized on behalf of the Trustee to execute and deliver such
certificate of authentication.
SECTION 2.03 DENOMINATIONS; SECURITIZATION BONDS ISSUABLE IN
SERIES. (a) The Securitization Bonds of each Series shall be issuable as
registered Securitization Bonds in the Authorized Denominations specified in the
Series Supplement therefor.
(b) The Securitization Bonds may, at the election of and as
authorized by a Manager and set forth in a Series Supplement, be issued in one
or more Series (each of which may be comprised of one or more Classes), and
shall be designated generally as the "Securitization Bonds" of the Issuer, with
such further particular designations added or
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incorporated in such title for the Securitization Bonds of any particular Series
or Class as a Manager of the Issuer may determine and be set forth in the Series
Supplement therefor.
(c) Each Series of Securitization Bonds shall be created by a
Series Supplement authorized by a Manager and establishing the terms and
provisions of such Series and, if applicable, any Classes thereof. The several
Series and any Classes thereof may differ as between Series and Classes, in
respect of any of the following matters:
(i) designation of the Series and each Class thereof;
(ii) the aggregate initial principal amount of the
Securitization Bonds of the Series and each Class thereof;
(iii) the Interest Rate of the Series and each Class thereof
or the formula, if any, used to calculate the applicable Interest Rate
or Interest Rates for the Series and each Class thereof;
(iv) the Payment Dates of the Series and each Class thereof;
(v) the Expected Final Payment Date of the Series and each
Class thereof;
(vi) the Final Maturity Date of the Series and each Class
thereof;
(vii) the Series Issuance Date of the Series;
(viii) the place or places for payments with respect to the
Series and each Class thereof;
(ix) the Authorized Denominations for the Series and each
Class thereof;
(x) the provisions, if any, for redemption by the Issuer of
the Series and each Class thereof;
(xi) the Expected Amortization Schedule for the Series and
each Class thereof;
(xii) the Overcollateralization Amount with respect to the
Series;
(xiii) the Required Capital Amount with respect to the Series;
(xiv) the effective date of any Periodic Adjustment for the
Series;
(xv) the credit enhancement, if any, applicable to the Series
and each Class thereof; and
(xvi) any other terms of the Series or each Class that are not
inconsistent with the provisions of this Indenture.
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SECTION 2.04 TEMPORARY SECURITIZATION BONDS. (a) Pending the
preparation of definitive Securitization Bonds pursuant to Section 2.13 or, in
the case of Securitization Bonds held in a book-entry only system by a Clearing
Agency, a Manager on behalf of the Issuer may execute, and upon receipt of an
Issuer Order the Trustee shall authenticate and deliver, temporary
Securitization Bonds which are printed, lithographed, typewritten, mimeographed
or otherwise produced, of the tenor of the definitive Securitization Bonds in
lieu of which they are issued and with such variations not inconsistent with the
terms of this Indenture as the Manager executing such Securitization Bonds may
determine, as evidenced by their execution of such Securitization Bonds.
(b) If temporary Securitization Bonds are issued, the Issuer
will cause definitive Securitization Bonds to be prepared without unreasonable
delay except where temporary Securitization Bonds are held by a Clearing Agency.
After the preparation of definitive Securitization Bonds, the temporary
Securitization Bonds shall be exchangeable for definitive Securitization Bonds
upon surrender of the temporary Securitization Bonds at the office or agency of
the Issuer to be maintained as provided in Section 3.02, without charge to any
Holder. Upon surrender for cancellation of any one or more temporary
Securitization Bonds, a Manager on behalf of the Issuer shall execute and the
Trustee shall authenticate and deliver in exchange therefor a like Series (and
if applicable, Class) and aggregate initial principal amount of definitive
Securitization Bonds in Authorized Denominations. Until so exchanged, the
temporary Securitization Bonds shall in all respects be entitled to the same
benefits under this Indenture as definitive Securitization Bonds.
SECTION 2.05 REGISTRATION; REGISTRATION OF TRANSFER AND
EXCHANGE. (a) The Issuer shall cause to be kept a register (the "Securitization
Bond Register") in which, subject to such reasonable regulations as it may
prescribe, the Issuer shall provide for the registration of Securitization Bonds
and the registration of transfers of Securitization Bonds. The Trustee shall be
the registrar (the Trustee or any successor thereof in such capacity, the
"Securitization Bond Registrar") for the purpose of registering Securitization
Bonds and transfers of Securitization Bonds as herein provided. Upon any
resignation of any Securitization Bond Registrar, the Issuer shall promptly
appoint a successor or, if it elects not to make such an appointment, assume the
duties of Securitization Bond Registrar.
(b) If a Person other than the Trustee is appointed by the
Issuer as Securitization Bond Registrar, the Issuer shall give the Trustee and
any transfer, paying or listing agent of the Issuer appointed pursuant to
Section 3.02(b) prompt written notice of the appointment of such Securitization
Bond Registrar and of the location, and any change in the location, of the
Securitization Bond Register; the Trustee and any such agent shall have the
right to inspect the Securitization Bond Register at all reasonable times and to
obtain copies thereof; and the Trustee and any such agent shall have the right
to rely upon a certificate executed on behalf of the Securitization Bond
Registrar by a duly authorized officer thereof as to the names and addresses of
the Holders of the Securitization Bonds and the original and Outstanding
principal amounts and number of such Securitization Bonds (separately stated by
Series and, if applicable, Class).
(c) Upon surrender for registration of transfer of any
Securitization Bond at the office or agency of the Issuer to be maintained as
provided in Section 3.02, a Manager on behalf of the Issuer shall execute, and
the Trustee shall authenticate and the Securitization Bondholder
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shall obtain from the Trustee, in the name of the designated transferee or
transferees, one or more new Securitization Bonds in any Authorized
Denominations, of a like Series (and, if applicable, Class) and aggregate
initial principal amount.
(d) At the option of the Holder, Securitization Bonds may be
exchanged for other Securitization Bonds of a like Series (and, if applicable,
Class) and aggregate initial principal amount in Authorized Denominations, upon
surrender of the Securitization Bonds to be exchanged at such office or agency
as provided in Section 3.02. Whenever any Securitization Bonds are so
surrendered for exchange, a Manager on behalf of the Issuer shall execute, and
the Trustee shall authenticate and the Securitization Bondholder shall obtain
from the Trustee, the Securitization Bonds which the Securitization Bondholder
making the exchange is entitled to receive.
(e) All Securitization Bonds issued upon any registration of
transfer or exchange of Securitization Bonds shall be the valid obligations of
the Issuer, evidencing the same debt, and entitled to the same benefits under
this Indenture, as the Securitization Bonds surrendered upon such registration
of transfer or exchange.
(f) Every Securitization Bond presented or surrendered for
registration of transfer or exchange shall be duly endorsed by, or be
accompanied by a written instrument of transfer in the form satisfactory to the
Trustee duly executed by, the Holder thereof or such Holder's attorney duly
authorized in writing, with such signature guaranteed by an Eligible Guarantor
Institution in the form set forth in such Securitization Bond.
(g) No service charge shall be made to a Holder for any
registration of transfer or exchange of Securitization Bonds (except as may be
required by the rules and regulations of the Luxembourg Stock Exchange with
respect to any Securitization Bonds listed thereon), but, other than in respect
of exchanges pursuant to Sections 2.04 or 9.06 not involving any transfer, the
Issuer may require payment by such Holder of a sum sufficient to cover any tax
or other governmental charge that may be imposed in connection with any
registration of transfer or exchange of Securitization Bonds, including the fees
and expenses of the Trustee.
(h) The preceding provisions of this Section 2.05
notwithstanding, except to the extent otherwise required by the rules and
regulations of the Luxembourg Stock Exchange with respect to any Securitization
Bonds listed thereon, the Issuer shall not be required to make, and the
Securitization Bond Registrar need not register, transfers or exchanges of
Securitization Bonds selected for redemption or transfers or exchanges from and
including the Record Date preceding the date on which final payment of principal
is to be made with respect to such Securitization Bond.
SECTION 2.06 MUTILATED, DESTROYED, LOST OR STOLEN
SECURITIZATION BONDS. (a) If (i) any mutilated Securitization Bond is
surrendered to the Trustee, or the Trustee receives evidence to its satisfaction
of the destruction, loss or theft of any Securitization Bond, and (ii) there is
delivered to the Trustee such security or indemnity as may be required by it to
hold the Issuer and the Trustee harmless, then, in the absence of notice to the
Issuer, the Securitization Bond Registrar or the Trustee that such
Securitization Bond has been acquired by a protected purchaser, a Manager on
behalf of the Issuer shall execute, and upon a Manager's
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request the Trustee shall authenticate and deliver, in exchange for or in lieu
of any such mutilated, destroyed, lost or stolen Securitization Bond, a
replacement Securitization Bond of like Series (and, if applicable, Class),
tenor and initial principal amount in Authorized Denominations, bearing a number
not contemporaneously outstanding; provided, however, that if any such
destroyed, lost or stolen Securitization Bond, but not a mutilated
Securitization Bond, shall have become or within seven days shall be due and
payable, or shall have been called for redemption, instead of issuing a
replacement Securitization Bond, the Issuer may pay such destroyed, lost or
stolen Securitization Bond when so due or payable or upon the Redemption Date
without surrender thereof. If, after the delivery of such replacement
Securitization Bond or payment of a destroyed, lost or stolen Securitization
Bond pursuant to the proviso to the preceding sentence, a protected purchaser of
the original Securitization Bond in lieu of which such replacement
Securitization Bond was issued presents for payment such original Securitization
Bond, the Issuer and the Trustee shall be entitled to recover such replacement
Securitization Bond (or such payment) from the Person to whom it was delivered
or any Person taking such replacement Securitization Bond from such Person to
whom such replacement Securitization Bond was delivered or any assignee of such
Person, except a protected purchaser, and shall be entitled to recover upon the
security or indemnity provided therefor to the extent of any loss, damage, cost
or expense incurred by the Issuer or the Trustee in connection therewith.
(b) Every replacement Securitization Bond issued pursuant to
this Section 2.06 in replacement of any mutilated, destroyed, lost or stolen
Securitization Bond shall constitute an original additional contractual
obligation of the Issuer, whether or not the mutilated, destroyed, lost or
stolen Securitization Bond shall be at any time enforceable by anyone, and shall
be entitled to all the benefits of this Indenture equally and proportionately
with any and all other Securitization Bonds duly issued hereunder.
(c) The provisions of this Section 2.06 are exclusive and
shall preclude (to the extent lawful) all other rights and remedies with respect
to the replacement or payment of mutilated, destroyed, lost or stolen
Securitization Bonds.
SECTION 2.07 PERSONS DEEMED OWNER. Prior to due presentment
for registration of transfer of any Securitization Bond, the Issuer, the Trustee
and any agent of the Issuer or the Trustee may treat the Person in whose name
any Securitization Bond is registered (as of the day of determination) as the
owner of such Securitization Bond for the purpose of receiving payments of
principal of and interest on such Securitization Bond and for all other purposes
whatsoever, whether or not such Securitization Bond be overdue, and neither the
Issuer, the Trustee nor any agent of the Issuer or the Trustee shall be affected
by notice to the contrary.
SECTION 2.08 PAYMENT OF PRINCIPAL AND INTEREST; INTEREST ON
OVERDUE PRINCIPAL; PRINCIPAL AND INTEREST RIGHTS PRESERVED. (a) The
Securitization Bonds shall accrue interest as provided in the form of
Securitization Bond attached to the Series Supplement for such Securitization
Bonds, at the applicable Interest Rate specified therein, and such interest
shall be payable on each Payment Date as specified therein. Any instalment of
interest or principal payable on any Securitization Bond which is punctually
paid or duly provided for by the Issuer on the applicable Payment Date shall be
paid to the Person in whose name such Securitization Bond (or one or more
Predecessor Securitization Bonds) is registered on the Record Date for such
Payment Date, in the manner specified in the related Series Supplement,
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and if not specified therein, either (i) by check mailed first-class, postage
prepaid to such Person's address as it appears on the Securitization Bond
Register on such Record Date or (ii) with respect to Securitization Bonds
registered on a Record Date in the name of the nominee of the Clearing Agency
(initially, such nominee to be Cede & Co.), payments will be made in accordance
with the DTC Agreement, except for the final instalment of principal payable
with respect to such Securitization Bond on a Payment Date, which shall be
payable as provided in clause (b) below. The funds represented by any such
checks or other amounts returned undelivered shall be held in accordance with
Section 3.03.
(b) The principal of each Securitization Bond of each Series
(and, if applicable, Class) shall be payable in instalments on each Payment Date
specified in the Expected Amortization Schedule included in the form of
Securitization Bond attached to the Series Supplement for such Securitization
Bonds, but only to the extent that moneys are available for such payment
pursuant to Section 8.02 provided that instalments of principal not paid when
scheduled to be paid shall be paid upon receipt of moneys available for such
purpose, in the order set forth in the applicable Expected Amortization
Schedule. Failure to pay in accordance with such Expected Amortization Schedule
because moneys are not so available pursuant to Section 8.02; to make such
payments shall not constitute a Default or Event of Default under this
Indenture. Notwithstanding the foregoing, the entire Outstanding principal
amount of the Securitization Bonds of any Series or Class shall be due and
payable, if not previously paid, either: (i) on the Final Maturity Date
therefor, (ii) on the date on which the Securitization Bonds of all Series have
been declared immediately due and payable in accordance with Section 5.02 or
(iii) on the Redemption Date, if any, therefor. The Trustee shall notify the
Person in whose name a Securitization Bond is registered, and any other Person
required under the relevant Series Supplement, at the close of business on the
Record Date preceding the Payment Date on which the Issuer expects that the
final instalment of principal of and interest on such Securitization Bond will
be paid. Such notice shall be mailed no later than ten (10) days prior to such
final Payment Date and shall specify that such final instalment of principal
will be payable only upon presentation and surrender of such Securitization Bond
and shall specify the place where such Securitization Bond may be presented and
surrendered for payment of such instalment, which, so long as any Securitization
Bonds are listed on the Luxembourg Stock Exchange, shall include the office of
the paying agent in Luxembourg appointed pursuant to Section 3.02(b). The
Trustee shall also arrange for such notice to be published in an Authorized
Newspaper, not later than the fifth day of the month of the expected payment of
such final instalment. Notices in connection with redemptions of Securitization
Bonds also shall be mailed to Securitization Bondholders as provided in Section
10.03.
(c) If the Issuer defaults in a payment of interest on the
Securitization Bonds of any Series, or in a default of any amount payable to any
Swap Counterparty, the Issuer shall pay defaulted interest, plus interest on
such defaulted interest at the applicable Interest Rate in any lawful manner
(subject to the availability of such amounts in the related Class Subaccount, in
the case of interest owed with respect to any Securitization Bonds which have a
floating rate of interest). The Issuer may pay such defaulted interest to the
Persons who are Securitization Bondholders and to any Swap Counterparty, as
applicable, at the rate specified in the related Series Supplement or Interest
Rate Swap Agreement, respectively, on a subsequent special record date, which
date shall be at least five Business Days prior to the payment date. The Issuer
shall fix or cause to be fixed any such special record date and payment date,
and, at least fifteen
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(15) days before any such special record date, the Issuer shall mail to each
affected Securitization Bondholder a notice that states the special record date,
the payment date and the amount of defaulted interest to be paid.
SECTION 2.09 CANCELLATION. All Securitization Bonds
surrendered for payment, registration of transfer, exchange or redemption shall,
if surrendered to any Person other than the Trustee, be delivered to the Trustee
and shall be promptly canceled by the Trustee. The Issuer may at any time
deliver to the Trustee for cancellation any Securitization Bonds previously
authenticated and delivered hereunder which the Issuer may have acquired in any
manner whatsoever, and all Securitization Bonds so delivered shall be promptly
canceled by the Trustee. No Securitization Bonds shall be authenticated in lieu
of or in exchange for any Securitization Bonds canceled as provided in this
Section 2.09, except as expressly permitted by this Indenture. All canceled
Securitization Bonds may be held or disposed of by the Trustee in accordance
with its standard retention or disposal policy as in effect at the time unless
the Issuer shall direct by an Issuer Order that they be destroyed or returned to
it; provided that such Issuer Order is timely and the Securitization Bonds have
not been previously disposed of by the Trustee.
SECTION 2.10 AMOUNT; AUTHENTICATION AND DELIVERY OF
SECURITIZATION BONDS. (a) The aggregate principal amount of Securitization Bonds
that may be authenticated and delivered under this Indenture shall not exceed
$1,774,202,000 plus the amount of any Refunding Issuance. The Issuer may issue
Securitization Bonds of a new Series as a Financing Issuance or a Refunding
Issuance.
(b) Securitization Bonds of a new Series may from time to time
be executed by a Manager on behalf of the Issuer and delivered to the Trustee
for authentication and thereupon the same shall be authenticated and delivered
by the Trustee upon Issuer Request and upon delivery by the Issuer, at the
Issuer's expense, to the Trustee of the following:
(i) Issuer Action. An Issuer Order authorizing and directing
the authentication and delivery of the Securitization Bonds by the
Trustee and specifying the principal amount of Securitization Bonds to
be authenticated.
(ii) Authorizing Certificate. A certified resolution of the
Managers authorizing the execution and delivery of the Series
Supplement for the Securitization Bonds applied for and the execution,
authentication and delivery of such Securitization Bonds.
(iii) Series Supplement. A Series Supplement for the Series of
Securitization Bonds being issued, which shall set forth the provisions
and form of the Securitization Bonds of such Series (and, if
applicable, each Class thereof).
(iv) Certificates of the Issuer and the Seller.
(A) An Issuer Officer's Certificate dated as of the
Series Issuance Date, stating:
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(1) that no Default has occurred and is
continuing under this Indenture and that the issuance
of the Securitization Bonds being issued will not
result in any Default;
(2) that the Issuer has not assigned any
interest or participation in the Collateral except for
the Grant contained in this Indenture; that the Issuer
has the power and authority to Grant the Collateral to
the Trustee as security hereunder; and that the Issuer,
subject to the terms of this Indenture, has Granted to
the Trustee a perfected security interest in all right,
title and interest in, to and under the Collateral free
and clear of any Lien, except the Lien of this
Indenture;
(3) that the Issuer has appointed the firm of
independent certified public accountants as
contemplated in Section 8.05;
(4) that attached thereto are duly executed,
true and complete copies of the Sale Agreement and the
Servicing Agreement;
(5) that all financing statements with respect
to the Collateral which are required to be filed under
the Michigan UCC or the uniform commercial code of any
other jurisdiction by the terms of the Sale Agreement,
the Servicing Agreement or this Indenture have been
filed as required; and
(6) that all conditions precedent provided in
this Indenture relating to the authentication and
delivery of the Securitization Bonds have been complied
with.
(B) An Officer's Certificate from the Seller, dated
as of the Series Issuance Date, to the effect that, in the
case of the Securitization Property to be transferred to the
Issuer on such date, immediately prior to the conveyance
thereof to the Issuer pursuant to the Sale Agreement:
(1) the Seller was the sole owner of such
Securitization Property and such ownership interest was
perfected; such Securitization Property will be validly
transferred and sold to the Issuer free and clear of
all Liens (other than Liens created by the Issuer
pursuant to this Indenture) and such transfer will be
perfected; the Seller has the power and authority to
own, sell and assign such Securitization Property to
the Issuer; the Seller has duly authorized such sale
and assignment to the Issuer; and the Seller has its
chief executive office in the State of Michigan; and
(2) the attached copy of the Financing Order
creating such Securitization Property is true and
correct and is in full force and effect.
(v) Issuer Opinion of Counsel. An Issuer Opinion of Counsel,
portions of which may be delivered by counsel for the Issuer and portions of
which may be delivered by counsel for the Seller and/or the Servicer, dated as
of the Series Issuance
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Date, subject to qualifications acceptable to the Trustee, to the collective
effect that:
(A) the Issuer has the power and authority to execute
and deliver the Series Supplement and this Indenture and to
issue the Securitization Bonds being issued, each of the
Series Supplement and this Indenture and such Securitization
Bonds have been duly authorized, executed and delivered, and
the Issuer is validly existing as a limited liability company
under the laws of the jurisdiction of its organization;
(B) no authorization, approval or consent of any
governmental body is required for the valid issuance,
authentication or delivery of such Securitization Bonds,
except for any such authorization, approval or consent as has
already been obtained and such registrations as are required
under the Blue Sky and securities laws of any state;
(C) the Securitization Bonds being issued, when
executed and authenticated in accordance with the provisions
of this Indenture and delivered, will constitute valid and
binding obligations of the Issuer entitled to the benefits of
this Indenture and the related Series Supplement;
(D) the Financing Order is final and non-appealable;
(E) this Indenture (including the related Series
Supplement), the Sale Agreement and the Servicing Agreement
are valid and binding agreements of the Issuer, enforceable
against the Issuer in accordance with their respective terms
except as such enforceability may be subject to bankruptcy,
insolvency, reorganization and other similar laws affecting
the rights of creditors generally and general principles of
equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law);
(F) the Sale Agreement is a valid and binding
agreement of the Seller, enforceable against the Seller in
accordance with its terms except as such enforceability may be
subject to bankruptcy, insolvency, reorganization and other
similar laws affecting the rights of creditors generally and
general principles of equity (regardless of whether such
enforcement is considered in a proceeding in equity or at
law);
(G) the Servicing Agreement is a valid and binding
agreement of the Servicer, enforceable against the Servicer in
accordance with its terms except as such enforceability may be
subject to bankruptcy, insolvency, reorganization and other
similar laws affecting the rights of creditors generally and
general principles of equity (regardless of whether such
enforcement is considered in a proceeding in equity or at
law);
(H) upon the delivery of a fully executed Bill of
Sale to the Issuer pursuant to Section 2.02(a) of the Sale
Agreement in connection with the issuance
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of Securitization Bonds being issued and the payment of the
purchase price of the related Securitization Property by the
Issuer to the Seller pursuant to such Bill of Sale and the
Sale Agreement, and the filing of the related financing
statement in accordance with the Michigan UCC, then pursuant
to the Statute (1) the transfer of the Securitization Property
by the Seller to the Issuer pursuant to such Bill of Sale and
the Sale Agreement constitutes a sale by the Seller of all of
its right, title and interest in, to and under such
Securitization Property to the Issuer and will constitute a
sale or other absolute transfer of such Securitization
Property, (2) such transfer is perfected against any third
party and (3) such transfer has priority over any other
transfer by the Seller of any interest in the Securitization
Property;
(I) upon the Issuer's receipt of the net proceeds of
any Securitization Bonds issued hereunder, with respect to the
Collateral,
(1) this Indenture creates in favor of the
Trustee, to secure payment of the Secured Obligations,
a valid security interest in the rights of the Issuer
in, to and under that portion of the Collateral
subject to Article 9 of the Michigan UCC, including
the Securitization Property (the "Article 9
Collateral"),
(2) upon filing of the related financing
statement in accordance with the Michigan UCC and the
Statute, such security interest will be perfected in
the Securitization Property and in each other item of
the Article 9 Collateral to the extent a security
interest can be perfected by filing a UCC financing
statement under the Michigan UCC and the Statute, and
(3) no interest of any other creditor of the
Issuer is equal or prior to the security interest of
the Trustee in the Article 9 Collateral;
(J) upon the Issuer's receipt of the net proceeds of
any Securitization Bonds issued hereunder, with respect to
the Collateral,
(1) this Indenture creates in favor of the
Trustee, to secure payment of the Secured Obligations, a valid
security interest in the rights, if any, of the Issuer in, to
the Securitization Property,
(2) upon filing of the related financing
statement in accordance with the Michigan UCC and the Statute,
such security interest will be perfected in the Securitization
Property to the extent a security interest can be perfected by
filing a UCC financing statement under the Michigan UCC and
the Statute, and
(3) no interest of any other creditor of the
Seller is equal or prior to the security interest of the
Trustee in the Securitization Property;
(K) this Indenture has been duly qualified under the
Trust Indenture Act and either the Series Supplement for the
Securitization Bonds applied for has been duly qualified under
the Trust Indenture Act or no such qualification of such
Series Supplement is necessary;
(L) all instruments required to be delivered
hereunder and furnished to the Trustee conform to the
requirements of this Indenture, and constitute all of the
documents required to be delivered hereunder, in order for the
Trustee to authenticate and deliver the Securitization Bonds
being issued, and all conditions precedent provided for in
this Indenture relating to the authentication and delivery of
such Securitization Bonds (unless waived in writing by the
Trustee) have been complied with;
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(M) either
(1) the registration statement covering the
Securitization Bonds is effective under the Securities
Act of 1933, as amended, and, to the best of such
counsel's knowledge and information, no stop order
suspending the effectiveness of such registration
statement has been issued under the Securities Act of
1933, as amended, nor have proceedings therefor been
instituted or threatened by the Commission, or
(2) the Securitization Bonds are exempt from
the registration requirements under the Securities Act
of 1933, as amended;
(N) this Indenture (including the related Series
Supplement) has been duly authorized, executed and delivered
by the Issuer and constitutes the legal, valid and binding
obligation of the Issuer, enforceable against the Issuer in
accordance with its terms;
(O) the Sale Agreement and the Servicing Agreement
have been duly authorized, executed and delivered by each of
the parties thereto; and
(P) the Issuer is not now and, following the issuance
of the Securitization Bonds will not be, required to be
registered under the Investment Company Act of 1940, as
amended.
(vi) Accountant's Certificate or Opinion. A letter
addressed to the Issuer and the Trustee, of a firm of Independent
certified public accountants of recognized national reputation to the
effect that (A) such accountants are Independent with respect to the
Issuer within the meaning of this Indenture, and are independent public
accountants within the meaning of the standards of The American
Institute of Certified Public Accountants, and (B) with respect to the
Collateral, they have made certain specified recalculations of
calculations and information provided by the Issuer for the purpose of
determining that, based on certain specified assumptions used in
calculating the SB Charge with respect to the related Securitization
Property, as of the Series Issuance Date for such Series, the SB Charge
will be sufficient to pay (1) assumed Operating Expenses when incurred,
plus (2) any amounts due under any Interest Rate Swap Agreement when
due, plus (3) the Overcollateralization Amount for such Series set
forth in the Final Prospectus (as such term is defined in the
Underwriting Agreement), plus (4) interest on the Securitization Bonds
at their respective Interest Rates when due as set forth in the Final
Prospectus, plus (5) principal of the Securitization Bonds in
accordance with the Expected Amortization Schedule set forth in the
Final Prospectus, and found such calculations to be mathematically
correct.
(vii) Required Capital Amount. Evidence satisfactory to
the Trustee that the Required Capital Amount for such Series has been
credited to the Capital Subaccount for such Series.
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(viii) Rating Agency Approval. Written notice from each
Rating Agency that such action will not result in a reduction or
withdrawal of the then current rating by such Rating Agency of any
Outstanding Series or Class of Securitization Bonds.
(ix) Bill of Sale. If the issuance of an additional Series
of Securitization Bonds is a Financing Issuance, the Bill of Sale
delivered to the Issuer under the Sale Agreement with respect to the
Securitization Property being purchased with the proceeds of such
Financing Issuance.
(x) Moneys for Refunding. If the issuance of a Series of
Securitization Bonds is a Refunding Issuance, the amount of money
necessary to pay the outstanding principal balance of and interest on
the Securitization Bonds being refunded to the Redemption Date for the
Securitization Bonds being refunded upon redemption, such money to be
deposited into a separate account with the Trustee.
SECTION 2.11 BOOK-ENTRY SECURITIZATION BONDS. Unless
otherwise specified in the related Series Supplement, each Series of
Securitization Bonds, upon original issuance, will be issued in the form of a
typewritten Securitization Bond or Securitization Bonds representing the
Book-Entry Securitization Bonds, to be delivered to The Depository Trust
Company, the initial Clearing Agency, by, or on behalf of, the Issuer pursuant
to the DTC Agreement. Such Securitization Bond shall initially be registered on
the Securitization Bond Register in the name of Cede & Co., the nominee of the
initial Clearing Agency, and no Securitization Bond Owner will receive a
definitive Securitization Bond representing such Securitization Bond Owner's
interest in such Securitization Bond, except as provided in Section 2.13. Unless
and until definitive, fully registered Securitization Bonds (the "Definitive
Securitization Bonds") have been issued to Securitization Bondholders pursuant
to Section 2.13:
(a) the provisions of this Section 2.11 shall be in full
force and effect;
(b) the Issuer, Securitization Bond Registrar and the Trustee
shall be entitled to deal with the Clearing Agency for all purposes of this
Indenture (including the payment of principal of and interest on the
Securitization Bonds and the giving of instructions or directions hereunder) as
the sole Holder of the Securitization Bonds, and shall have no obligation to the
Securitization Bond Owners;
(c) to the extent that the provisions of this Section 2.11
conflict with any other provisions of this Indenture, the provisions of this
Section shall control;
(d) the rights of Securitization Bond Owners shall be
exercised only through the Clearing Agency and shall be limited to those
established by law and agreements between such Securitization Bond Owners and
the Clearing Agency or the Clearing Agency Participants. Pursuant to the DTC
Agreement, unless and until Definitive Securitization Bonds are issued pursuant
to Section 2.13, the initial Clearing Agency will make book-entry transfers
among the Clearing Agency Participants and receive and transmit payments of
principal of and interest on the Securitization Bonds to such Clearing Agency
Participants; and
(e) whenever this Indenture requires or permits actions to be
taken based upon instructions or directions of Holders of Securitization Bonds
evidencing a specified percentage of
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the Outstanding Amount of the Securitization Bonds or a Series or Class thereof,
the Clearing Agency shall be deemed to represent such percentage only to the
extent that it has received instructions to such effect from Securitization Bond
Owners or Clearing Agency Participants owning or representing, respectively,
such required percentage of the beneficial interest in the Securitization Bonds
or such Series or Class and has delivered such instructions to the Trustee.
SECTION 2.12 NOTICES TO CLEARING AGENCY. Whenever a notice or
other communication to the Securitization Bondholders is required under this
Indenture, unless and until Definitive Securitization Bonds shall have been
issued to Securitization Bond Owners pursuant to Section 2.13, the Trustee shall
give all such notices and communications specified herein to be given to
Securitization Bondholders to the Clearing Agency, and shall have no obligation
to the Securitization Bond Owners.
SECTION 2.13 DEFINITIVE SECURITIZATION BONDS. (a) If (i) the
Issuer advises the Trustee in writing that the Clearing Agency is no longer
willing or able to properly discharge its responsibilities as depository with
respect to any Series or Class of Securitization Bonds and the Issuer is unable
to locate a qualified successor, (ii) the Issuer, at its option, advises the
Trustee in writing that it elects to terminate the book-entry system through the
Clearing Agency with respect to any Series or Class of Securitization Bonds or
(iii) after the occurrence of an Event of Default, Securitization Bond Owners
representing beneficial interests aggregating at least a majority of the
Outstanding Amount of the Securitization Bonds of all Series advise the Trustee
through the Clearing Agency in writing that the continuation of a book-entry
system through the Clearing Agency is no longer in the best interests of the
Securitization Bond Owners, then the Clearing Agency shall notify all affected
Securitization Bond Owners and the Trustee of the occurrence of any such event
and of the availability of Definitive Securitization Bonds to affected
Securitization Bond Owners requesting the same. Upon surrender to the Trustee of
the typewritten Securitization Bond or Securitization Bonds representing the
Book-Entry Securitization Bonds by the Clearing Agency, accompanied by
registration instructions, a Manager on behalf of the Issuer shall execute and
the Trustee shall authenticate the Definitive Securitization Bonds in accordance
with the instructions of the Clearing Agency. None of the Issuer, the
Securitization Bond Registrar or the Trustee shall be liable for any delay in
delivery of such instructions and may conclusively rely on, and shall be
protected in relying on, such instructions. Any Definitive Securitization Bonds
listed on the Luxembourg Stock Exchange shall be made available to the
Securitization Bond Owners through the office of the transfer agent appointed
pursuant to Section 3.02(b). Upon the issuance of Definitive Securitization
Bonds, the Trustee shall recognize the Holders of the Definitive Securitization
Bonds as Securitization Bondholders.
(b) Definitive Securitization Bonds will be transferable and
exchangeable at the offices of the Securitization Bond Registrar or, with
respect to any Securitization Bonds listed on the Luxembourg Stock Exchange, at
the offices of the transfer agent appointed pursuant to Section 3.02(b). With
respect to any transfer of such listed Securitization Bonds, the new Definitive
Securitization Bonds registered in the names specified by the transferee and the
original transferor shall be available at the offices of such transfer agent.
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ARTICLE III
COVENANTS
SECTION 3.01 PAYMENT OF PRINCIPAL AND INTEREST. The Issuer
will duly and punctually pay the principal of and interest on the Securitization
Bonds in accordance with the terms of the Securitization Bonds and this
Indenture; provided that except on the Final Maturity Date or the Redemption
Date for a Series or Class of Securitization Bonds or upon the acceleration of
the Securitization Bonds pursuant to Section 5.02, the Issuer shall only be
obligated to pay the principal of such Securitization Bonds on each Payment Date
therefor to the extent moneys are available for such payment pursuant to Section
8.02. Amounts properly withheld under the Code by any Person from a payment to
any Securitization Bondholder of interest or principal shall be considered as
having been paid by the Issuer to such Securitization Bondholder for all
purposes of this Indenture.
SECTION 3.02 MAINTENANCE OF OFFICE OR AGENCY. (a) The Issuer
will maintain in the Borough of Manhattan, The City of New York, an office or
agency where Securitization Bonds may be surrendered for registration of
transfer or exchange, and where notices and demands to or upon the Issuer in
respect of the Securitization Bonds and this Indenture may be served. The Issuer
hereby initially appoints the Trustee to serve as its agent for the foregoing
purposes. The Issuer will give prompt written notice to the Trustee and any
agent appointed pursuant to clause (b) below of the location and identity, and
of any change in the location or identity, of any such office or agency. If at
any time the Issuer shall fail to maintain any such office or agency or shall
fail to furnish the Trustee and each such agent with the address thereof, such
surrenders, notices and demands may be made or served at the Corporate Trust
Office, and the Issuer hereby appoints the Trustee as its agent to receive all
such surrenders, notices and demands.
(b) To the extent any of the Securitization Bonds are listed
on the Luxembourg Stock Exchange and the rules of such exchange so require, (i)
the Issuer will maintain in Luxembourg (A) an office and a transfer agent where
Securitization Bonds may be surrendered for registration of transfer or
exchange, (B) an office and a listing agent where notices and demands to or upon
the Issuer in respect of the Securitization Bonds and this Indenture may be
served, and (C) an office and a paying agent where payments in respect of the
Securitization Bonds may be made and (ii) any reference in this Indenture to the
office or agency of the Issuer referenced in Section 3.02(a) or 3.02(b) shall
also refer to such offices, and the transfer, listing and paying agents, of the
Issuer in Luxembourg, as applicable. The Issuer shall give the Trustee and any
other agent appointed under this Section 3.02(b) prompt written notice of the
location and identity, and of any change in the location or identity, of any
such office or agency.
SECTION 3.03 MONEY FOR PAYMENTS TO BE HELD IN TRUST. (a) As
provided in Section 8.02(a), all payments of principal of and interest on the
Securitization Bonds that are to be made from amounts withdrawn from the
Collection Account pursuant to Section 8.02(e), or Section 4.03 shall be made on
behalf of the Issuer by the Trustee or by another Paying Agent, and no amounts
so withdrawn from the Collection Account for payments of Securitization Bonds
shall be paid over to the Issuer except as provided in this Section 3.03 and in
Section 8.02.
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(b) The Issuer shall cause each Paying Agent other than the
Trustee to execute and deliver to the Trustee an instrument in which such Paying
Agent shall agree with the Trustee (and if the Trustee acts as Paying Agent, it
hereby so agrees), subject to the provisions of this Section 3.03, that such
Paying Agent will:
(i) hold all sums held by it for the payment of principal
of or interest on the Securitization Bonds in trust for the benefit of
the Persons entitled thereto until such sums shall be paid to such
Persons or otherwise disposed of as herein provided and pay such sums
to such Persons as herein provided;
(ii) give the Trustee notice of any Default by the Issuer
(or any other obligor upon the Securitization Bonds) of which the
Paying Agent has actual knowledge in the making of any payment required
to be made with respect to the Securitization Bonds;
(iii) at any time during the continuance of any such
Default, upon the written request of the Trustee, forthwith pay to the
Trustee all sums so held in trust by such Paying Agent;
(iv) immediately resign as a Paying Agent and forthwith
pay to the Trustee all sums held by the Paying Agent in trust for the
payment of Securitization Bonds if at any time the Paying Agent ceases
to meet the standards required to be met by a Paying Agent at the time
of its appointment; and
(v) comply with all requirements of the Code with respect
to the withholding from any payments made by it on any Securitization
Bonds of any applicable withholding taxes imposed thereon and with
respect to any applicable reporting requirements in connection
therewith.
(c) The Issuer may at any time, for the purpose of obtaining
the satisfaction and discharge of this Indenture or for any other purpose, by
Issuer Order direct any Paying Agent to pay to the Trustee all sums held in
trust by such Paying Agent, such sums to be held by the Trustee upon the same
trusts as those upon which the sums were held by such Paying Agent; and upon
such payment by any Paying Agent to the Trustee, such Paying Agent shall be
released from all further liability with respect to such money.
(d) Subject to applicable laws with respect to abandoned
property, any money held by the Trustee or any Paying Agent in trust for the
payment of any amount of principal of or interest on any Securitization Bond and
remaining unclaimed for two years after such amount has become due and payable
shall be discharged from such trust and be paid to the Issuer; and the Holder of
such Securitization Bond shall thereafter, as an unsecured general creditor,
look only to the Issuer for payment thereof (but only to the extent of the
amounts so paid to the Issuer), and all liability of the Trustee or such Paying
Agent with respect to such trust money shall thereupon cease; provided, however,
that the Trustee or such Paying Agent, before being required to make any such
repayment, may at the expense of the Issuer cause to be published once, in a
newspaper published in the English language, customarily published on each
Business Day and of general circulation in The City of New York, and in an
Authorized Newspaper,
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notice that such money remains unclaimed and that, after a date specified
therein, which shall not be less than thirty (30) days from the date of such
publication, any unclaimed balance of such money then remaining will be repaid
to the Issuer. The Trustee may also adopt and employ, at the expense of the
Issuer, any other reasonable means of notification of such repayment (including
mailing notice of such repayment to Holders whose Securitization Bonds have been
called but have not been surrendered for redemption or whose right to or
interest in moneys due and payable but not claimed is determinable from the
records of the Trustee or of any Paying Agent, at the last address of record for
each such Holder).
SECTION 3.04 EXISTENCE. Subject to Section 3.10, the Issuer
shall keep in full effect its existence, rights and franchises as a statutory
limited liability company under the laws of the State of Michigan (unless it
becomes, or any successor Issuer hereunder is or becomes, organized under the
laws of any other state or of the United States of America, in which case the
Issuer will keep in full effect its existence, rights and franchises under the
laws of such other jurisdiction) and will obtain and preserve its qualification
to do business in each jurisdiction in which such qualification is or shall be
necessary to protect the validity and enforceability of this Indenture, the
Securitization Bonds, the Collateral and each other instrument or agreement
included therein.
SECTION 3.05 PROTECTION OF COLLATERAL. (a) The Issuer shall
from time to time execute and deliver all such supplements and amendments hereto
and all such filings, financing statements, continuation statements, instruments
of further assurance and other instruments, and shall take such other action,
necessary or advisable to:
(i) maintain and preserve the Grants, Lien and security
interest (and the perfection thereof) of this Indenture or carry out
more effectively the purposes hereof;
(ii) perfect, publish notice of or protect the validity
of any Grant made or to be made by this Indenture;
(iii) enforce any of the Collateral, including any
Interest Rate Swap Agreement;
(iv) preserve and defend title to the Collateral and the
rights of the Trustee and the Securitization Bondholders in the
Collateral against the claims of all Persons and parties; or
(v) pay any and all taxes levied or assessed upon all or
any part of the Collateral.
(b) The Issuer hereby designates the Trustee its agent and
attorney-in-fact to execute any filing with the MPSC, financing statement,
continuation statement or other instrument required by the Trustee pursuant to
this Section 3.05.
SECTION 3.06 OPINIONS AS TO COLLATERAL. (a) On or before
March 31 in each calendar year, while any Series is Outstanding, commencing
March 31, 2002, the Issuer shall furnish to the Trustee an Issuer Opinion of
Counsel either stating that, in the opinion of such counsel, such action has
been taken with respect to the execution and filing pursuant to the
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Michigan UCC of financing statements and continuation statements as is necessary
to maintain the Lien and security interest, and the first priority thereof,
created by this Indenture and reciting the details of such action or stating
that in the opinion of such counsel no such action is necessary to maintain such
Lien and security interest, and the priority thereof. Such Issuer Opinion of
Counsel shall also describe the execution and filing of any filings pursuant to
the Michigan UCC of financing statements and continuation statements that will,
in the opinion of such counsel, be required to maintain the perfection of the
Lien and security interest of this Indenture until March 31 in the following
calendar year.
(b) Prior to the effectiveness of any amendment to the Sale
Agreement or the Servicing Agreement, the Issuer shall furnish to the Trustee an
Issuer Opinion of Counsel either (i) stating that, in the opinion of such
counsel, all filings, including filings pursuant to the Michigan UCC, have been
executed and filed that are necessary fully to preserve and protect the interest
of the Issuer and the Trustee in the Securitization Property and the proceeds
thereof, and reciting the details of such filings or referring to prior Opinions
of Counsel in which such details are given, or (ii) stating that, in the opinion
of such counsel, no such action shall be necessary to preserve and protect such
interest.
SECTION 3.07 PERFORMANCE OF OBLIGATIONS. (a) The Issuer (i)
shall diligently pursue any and all actions to enforce its rights under each
instrument or agreement included in the Collateral and (ii) shall not take any
action and will use its best efforts not to permit any action to be taken by
others that would release any Person from any of such Person's covenants or
obligations under any such instrument or agreement or that would result in the
amendment, hypothecation, subordination, termination or discharge of, or impair
the validity or effectiveness of, any such instrument or agreement, except, in
each case, as expressly provided in this Indenture, the Sale Agreement, the
Servicing Agreement, any Interest Rate Swap Agreement or any other Basic
Document.
(b) The Issuer may contract with other Persons to assist it
in performing its duties under this Indenture, and any performance of such
duties by a Person identified to the Trustee in an Issuer Officer's Certificate
shall be deemed to be action taken by the Issuer. Initially, the Issuer has
contracted with the Administrator to assist the Issuer in performing its duties
under this Indenture.
(c) The Issuer shall punctually perform and observe all of
its obligations and agreements contained in the Sale Agreement, the Servicing
Agreement, any Interest Rate Swap Agreement and in all other instruments and
agreements included in the Collateral.
SECTION 3.08 NEGATIVE COVENANTS. The Issuer shall not:
(a) except as expressly permitted by this Indenture, the Sale
Agreement, the Servicing Agreement, any Interest Rate Swap Agreement or any
other Basic Document, sell, transfer, exchange or otherwise dispose of any of
the Collateral, unless directed to do so by the Trustee in accordance with
Article V;
(b) claim any credit on, or make any deduction from the
principal or interest payable in respect of, the Securitization Bonds (other
than amounts properly withheld from such
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payments under the Code or pursuant to any Interest Rate Swap Agreement) or
assert any claim against any present or former Securitization Bondholder by
reason of the payment of taxes levied or assessed upon the Issuer or any part of
the Collateral;
(c) (i) permit the validity or effectiveness of this
Indenture to be impaired, or permit the Lien of this Indenture to be amended,
hypothecated, subordinated, terminated or discharged, or permit any Person to be
released from any covenants or obligations with respect to the Securitization
Bonds under this Indenture except as may be expressly permitted hereby, (ii)
permit any Lien (other than the Lien created by this Indenture) to be created on
or extend to or otherwise arise upon or burden the Collateral or any part
thereof, any interest therein or the proceeds thereof or (iii) permit the Lien
of this Indenture not to constitute a continuing valid first priority security
interest in the Collateral;
(d) take any action which is the subject of a Rating Agency
Condition if such action would result in any rating on any Class or Series of
Securitization Bonds being lowered as a result of such action; or
(e) take any action in violation of the Rating Agency
Condition.
SECTION 3.09 ANNUAL STATEMENT AS TO COMPLIANCE. The Issuer
will deliver to the Trustee, within 120 days after the end of each fiscal year
of the Issuer (commencing with the fiscal year 2001), an Issuer Officer's
Certificate stating, as to the Manager signing such Issuer Officer's
Certificate, that
(a) a review of the activities of the Issuer during such
fiscal year (or relevant portion thereof) and of performance under this
Indenture has been made under such Manager's supervision; and
(b) to the best of such Manager's knowledge, based on such
review, the Issuer has complied with all conditions and covenants under this
Indenture throughout such fiscal year (or relevant portion thereof), or, if
there has been a default in complying with any such condition or covenant,
describing each such default and the nature and status thereof.
SECTION 3.10 ISSUER MAY CONSOLIDATE, ETC., ONLY ON CERTAIN
TERMS. The Issuer shall not consolidate or merge with or into any other Person
or sell substantially all of its assets to any other Person or dissolve, unless:
(a) the Person (if other than the Issuer) formed by or
surviving such consolidation or merger or to whom substantially all of such
assets are sold shall be a Person organized and existing under the laws of the
United States of America or any state and shall expressly assume by an indenture
supplemental hereto, executed and delivered to the Trustee, in form satisfactory
to the Trustee, the due and punctual payment of the principal of and interest on
all Securitization Bonds and the performance or observance of every agreement
and covenant of this Indenture on the part of the Issuer to be performed or
observed, all as provided herein and in the applicable Series Supplement or
Series Supplements;
(b) the Person (if other than the Issuer) formed by or
surviving such consolidation or merger or to whom substantially all of such
assets are sold shall expressly assume all obligations and succeed to all rights
of the Issuer under the Sale Agreement, the Administration Agreement, the
Servicing Agreement and any Interest Rate Swap Agreement pursuant to an
assignment and assumption agreement executed and delivered to the Trustee, in
form satisfactory to the Trustee;
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(c) immediately after giving effect to such consolidation,
merger or sale, no Default or Event of Default shall have occurred and be
continuing;
(d) the Rating Agency Condition shall have been satisfied
with respect to such consolidation or merger or sale;
(e) the Issuer shall have received an Issuer Opinion of
Counsel (and shall have delivered and addressed copies thereof to the Trustee)
to the effect that such consolidation, merger or sale (i) will not have any
material adverse tax consequence to the Issuer or any Securitization Bondholder,
(ii) complies with this Indenture and all of the conditions precedent herein
relating to such transaction and (iii) will result in the Trustee maintaining a
continuing valid first priority perfected security interest in the Collateral;
(f) neither the Securitization Property nor the Financing
Order nor the rights of the Seller, the Servicer or the Issuer under the Statute
or the Financing Order shall be impaired thereby; and
(g) any action as is necessary to maintain the Lien created
by this Indenture shall have been taken.
SECTION 3.11 SUCCESSOR OR TRANSFEREE. (a) Upon any
consolidation or merger of the Issuer in accordance with Section 3.10, the
Person formed by or surviving such consolidation or merger (if other than the
Issuer) shall succeed to, and be substituted for, and may exercise every right
and power of, the Issuer under this Indenture with the same effect as if such
Person had been named as the Issuer herein.
(b) Upon any sale by the Issuer of substantially all of its
assets in a sale which complies with Section 3.10, The Detroit Edison
Securitization Funding LLC will be released from every covenant and agreement of
this Indenture to be observed or performed on the part of the Issuer with
respect to the Securitization Bonds and from every covenant and agreement of the
Sale Agreement, the Administration Agreement, the Servicing Agreement and any
Interest Rate Swap Agreement to be observed or performed on the part of the
Issuer.
SECTION 3.12 NO OTHER BUSINESS. The Issuer shall not engage
in any business other than purchasing and owning Securitization Property,
issuing Securitization Bonds from time to time, pledging its interest in the
Collateral to the Trustee under this Indenture in order to secure the
Securitization Bonds, entering into the Basic Documents relating to the
Securitization Bonds and performing its obligations thereunder and performing
activities that are necessary, suitable or convenient to accomplish these
purposes or are incidental thereto and other than as contemplated by the Basic
Documents.
SECTION 3.13 NO BORROWING. The Issuer shall not issue, incur,
assume, guarantee or otherwise become liable, directly or indirectly, for any
indebtedness except for the Securitization Bonds and except as contemplated by
the Basic Documents.
SECTION 3.14 GUARANTEES, LOANS, ADVANCES AND OTHER
LIABILITIES. Except as contemplated by the Basic Documents, Issuer shall not
make any loan or advance or credit to, or guarantee (directly or indirectly or
by an instrument having the effect of assuring
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another's payment or performance on any obligation or capability of so doing or
otherwise), endorse or otherwise become contingently liable, directly or
indirectly, in connection with the obligations, stocks or dividends of, or own,
purchase, repurchase or acquire (or agree contingently to do so) any stock,
obligations, assets or securities of, or any other interest in, or make any
capital contribution to, any other Person, other than any Eligible Investments.
SECTION 3.15 CAPITAL EXPENDITURES. The Issuer shall not make
any expenditure (by long-term or operating lease or otherwise) for capital
assets (either realty or personalty) other than Securitization Property
purchased from the Seller pursuant to, and in accordance with, the Sale
Agreement.
SECTION 3.16 RESTRICTED PAYMENTS. The Issuer shall not,
directly or indirectly, (a) pay any dividend or make any distribution (by
reduction of capital or otherwise), whether in cash, property, securities or a
combination thereof, to any owner of a beneficial interest in the Issuer or
otherwise with respect to any ownership or equity interest in, or ownership
security of, the Issuer, (b) redeem, purchase, retire or otherwise acquire for
value any such ownership or equity interest or security or (c) set aside or
otherwise segregate any amounts for any such purpose; provided, however, that if
no Event of Default shall have occurred and be continuing or would otherwise
result from such payment, the Issuer may make, or cause to be made, any such
distributions to any owner of a beneficial interest in the Issuer or otherwise
with respect to any ownership or equity interest or security in or of the Issuer
using funds either distributed to the Issuer pursuant to Section 8.02(e) or
which are not otherwise subject to the Lien of this Indenture, to the extent
that such distributions would not cause the book value of the remaining equity
in the Issuer to decline below 0.5% of the original principal amount of all
Series of Securitization Bonds which remain outstanding. The Issuer will not,
directly or indirectly, make payments to or distributions from the Collection
Account except in accordance with this Indenture and the Basic Documents.
SECTION 3.17 NOTICE OF EVENTS OF DEFAULT. The Issuer agrees
to deliver to the Trustee, the Rating Agencies and (to the extent the rules and
regulations of the Luxembourg Stock Exchange so require) any agent in Luxembourg
appointed pursuant to Section 3.02(b) written notice in the form of an Issuer
Officer's Certificate of any Default or Event of Default hereunder or under any
of the Basic Documents, its status and what action the Issuer is taking or
proposes to take with respect thereto within five Business Days after the
occurrence thereof.
SECTION 3.18 INSPECTION. The Issuer agrees that, on
reasonable prior notice, it will permit any representative of the Trustee,
during the Issuer's normal business hours, to examine all the books of account,
records, reports and other papers of the Issuer, to make copies and extracts
therefrom, to cause such books to be audited annually by Independent certified
public accountants, and to discuss the Issuer's affairs, finances and accounts
with the Issuer's officers, employees and Independent certified public
accountants, all at such reasonable times and as often as may be reasonably
requested. The Trustee shall and shall cause its representatives to hold in
confidence all such information except to the extent disclosure may be required
by law (and all reasonable applications for confidential treatment are
unavailing) and except to the extent that the Trustee may reasonably determine
that such disclosure is consistent with its obligations hereunder.
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SECTION 3.19 ADJUSTED OVERCOLLATERALIZATION BALANCE
SCHEDULES. Not later than the date on which a new Series of Securitization Bonds
is issued or any outstanding Series of Securitization Bonds is redeemed or
defeased, the Issuer shall deliver to the Trustee a replacement Schedule I
hereto, adjusted to reflect such issuance, redemption or defeasance and setting
forth the Scheduled Overcollateralization Level for each Payment Date with
respect to each Series.
SECTION 3.20 SALE AGREEMENT, SERVICING AGREEMENT AND SWAP
AGREEMENT COVENANTS. (a) The Issuer agrees to take all such lawful actions to
enforce its rights under the Sale Agreement, the Servicing Agreement and any
Interest Rate Swap Agreement and to compel or secure the performance and
observance by the Seller, the Servicer and any Swap Counterparty, of each of
their obligations to the Issuer under or in connection with the Sale Agreement,
the Servicing Agreement and any Interest Rate Swap Agreement, respectively, in
accordance with the terms thereof. So long as no Event of Default occurs and is
continuing, but subject to Section 3.20(f), the Issuer may exercise any and all
rights, remedies, powers and privileges lawfully available to the Issuer under
or in connection with the Sale Agreement, the Servicing Agreement and any
Interest Rate Swap Agreement.
(b) If an Event of Default occurs and is continuing, the
Trustee may, and, at the direction (which direction shall be in writing or by
telephone (confirmed in writing promptly thereafter)) of (i) with respect to the
Sale Agreement or the Servicing Agreement, the Holders of a majority of the
Outstanding Amount of the Securitization Bonds of all Series or (ii) with
respect to any Interest Rate Swap Agreement, the Holders of that percentage of
the Outstanding Amount of the Securitization Bonds of the related Class
specified in the related Series Supplement, shall, exercise all rights,
remedies, powers, privileges and claims of the Issuer against the Seller, the
Servicer or any Swap Counterparty under or in connection with the Sale
Agreement, the Servicing Agreement and any Interest Rate Swap Agreement,
respectively, including the right or power to take any action to compel or
secure performance or observance by the Seller, the Servicer or any Swap
Counterparty of each of their obligations to the Issuer thereunder and to give
any consent, request, notice, direction, approval, extension or waiver under the
Sale Agreement, the Servicing Agreement and any Interest Rate Swap Agreement,
and any right of the Issuer to take such action shall be suspended.
(c) With the consent of the Trustee, the Sale Agreement and
the Servicing Agreement may be amended, so long as the Rating Agency Condition
is satisfied in connection therewith, at any time and from time to time, without
the consent of the Securitization Bondholders, or the counterparty under any
Interest Rate Swap Agreement. However, such amendment may not adversely affect
in any material respect the interest of any Securitization Bondholder or any
counterparty under any Interest Rate Swap Agreement without the consent of the
Holders of a 66 2/3% of the Outstanding Amount of the Securitization Bonds of
each Series or Class, and each such counterparty, materially and adversely
affected thereby. Further, with the consent of the Trustee and the related
counterparty under any Interest Rate Swap Agreement, any Interest Rate Swap
Agreement may be amended, at any time and from time to time, so long as the
Rating Agency Condition is satisfied in connection therewith. However, such
amendment may not adversely affect in any material respect the interest of any
Securitization Bondholder or counterparty under any Interest Rate Swap Agreement
without the consent of the Holders of sixty-six and two-thirds percent (66 2/3%)
of the Outstanding Amount of the Securitization
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Bonds of each Series or Class, and each such counterparty, materially and
adversely affected thereby.
(d) If the Issuer, the Seller or the Servicer proposes to
amend, modify, waive, supplement, terminate or surrender, or agree to any
amendment, modification, waiver, supplement, termination, or surrender of, the
terms of the Sale Agreement, the Servicing Agreement or any Interest Rate Swap
Agreement, or waive timely performance or observance thereunder by the Seller,
the Servicer or any Swap Counterparty, respectively, in each case in such a way
as would materially and adversely affect the interests of any Securitization
Bondholders or the counterparty under any Interest Rate Swap Agreement, the
Issuer shall first notify the Rating Agencies of the proposed amendment,
modification, waiver, supplement, termination or surrender. Upon receiving
notification regarding whether the Rating Agency Condition has been satisfied,
the Issuer shall notify the Trustee, and the Trustee shall notify the
Securitization Bondholders and each counterparty under any Interest Rate Swap
Agreement, of the proposal and whether the Rating Agency Condition has been
satisfied with respect thereto. With respect to any such proposed action related
to the Sale Agreement and the Servicing Agreement, the Trustee shall consent to
such proposed action only (i) with the consent of the Holders of a majority of
the Outstanding Amount of the Securitization Bonds of each Class of each Series
, and each counterparty under any Interest Rate Swap Agreement, materially and
adversely affected thereby, and (ii) upon satisfaction of the Rating Agency
Condition. With respect to any such proposed action related to any Interest Rate
Swap Agreement, the Trustee shall consent to such proposed action only (y) with
the consent of the Holders representing 66 2/3% of the Outstanding Amount of the
Securitization Bonds of the related Class, and each counterparty under any
Interest Rate Swap Agreement, materially and adversely affected thereby and (z)
upon satisfaction of the Rating Agency Condition. If any such amendment,
modification, waiver, supplement, termination or surrender shall be so consented
to by the Trustee, and if applicable, such Holders or counterparty, the Issuer
agrees to execute and deliver, in its own name and at its own expense, such
agreements, instruments, consents and other documents as shall be necessary or
appropriate in the circumstances. For so long as any of the Securitization Bonds
are listed on the Luxembourg Stock Exchange and the rules of that exchange so
require, notice of such proposed action will be published by an agent to be
appointed by the Issuer in an Authorized Newspaper promptly following its
effectiveness.
(e) If the Issuer or the Servicer proposes to amend, modify,
waive, supplement, terminate or surrender in any material respect, or to agree
to any material amendment, modification, waiver, supplement, termination or
surrender of, the process relating to Periodic Adjustments, the Issuer shall
notify the Trustee and the Trustee shall notify Securitization Bondholders of
such proposal and the Trustee shall consent thereto only with the consent of the
Holders a majority of the Outstanding Amount of the Securitization Bonds of each
Series or Class materially and adversely affected thereby and only if the Rating
Agency Condition has been satisfied with respect thereto.
(f) Promptly following a default by either the Seller, the
Servicer or any Swap Counterparty under the Sale Agreement, the Servicing
Agreement or any Interest Rate Swap Agreement, respectively, and at the Issuer's
expense, the Issuer agrees to take all such lawful actions as the Trustee may
request to compel or secure the performance and observance by the Seller, the
Servicer or any Swap Counterparty, as applicable, of each of their obligations
to the
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Issuer under or in connection with the Sale Agreement, the Servicing Agreement
or any Interest Rate Swap Agreement in accordance with the terms thereof, and to
exercise any and all rights, remedies, powers and privileges lawfully available
to the Issuer under or in connection with the Sale Agreement, the Servicing
Agreement or any Interest Rate Swap Agreement, respectively, to the extent and
in the manner directed by the Trustee, including the transmission of notices of
default on the part of the Seller, the Servicer or any Swap Counterparty
thereunder and the institution of legal or administrative actions or proceedings
to compel or secure performance by the Seller, the Servicer or any Swap
Counterparty of each of their respective obligations under the Sale Agreement,
the Servicing Agreement and any Interest Rate Swap Agreement.
(g) If the Issuer shall have knowledge of the occurrence of a
Servicer Default under the Servicing Agreement or an event of default,
termination event or downgrade event under any Interest Rate Swap Agreement, the
Issuer shall promptly give written notice thereof to the Trustee and the Rating
Agencies, and shall specify in such notice the action, if any, the Issuer is
taking with respect to such default or event.
(h) If a Servicer Default shall arise from the failure of the
Servicer to perform any of its duties or obligations under the Servicing
Agreement with respect to the Securitization Property or the SB Charge, the
Issuer shall take all reasonable steps available to it to remedy such failure.
The Issuer shall not take any action to terminate the Servicer's rights and
powers under the Servicing Agreement following a Servicer Default without the
prior written consent of the Trustee and of the Holders of a majority of the
Outstanding Amount of the Securitization Bonds of all Series.
(i) As promptly as possible after the giving of notice of
termination to the Servicer and the Rating Agencies of the Servicer's rights and
powers pursuant to Section 7.01 of the Servicing Agreement, the Trustee, with
the consent of the Holders of Securitization Bonds evidencing not less than a
majority of the Outstanding Amount of the Securitization Bonds of all Series,
may appoint a successor Servicer (the "Successor Servicer"), and such Successor
Servicer shall accept its appointment by a written assumption in a form
acceptable to the Issuer and the Trustee. A person shall qualify as a Successor
Servicer only if such Person satisfies the requirements of Section 7.04 of the
Servicing Agreement. If within thirty (30) days after the delivery of the notice
referred to above, a Successor Servicer shall not have been appointed and
accepted its appointment as such, the Trustee, with the consent of the Holders
of Securitization Bonds evidencing not less than a majority of the Outstanding
Amount of the Securitization Bonds of all Series, may petition the MPSC or a
court of competent jurisdiction to appoint a Successor Servicer. In connection
with any such appointment, the Issuer may make such arrangements for the
compensation of such Successor Servicer as it and such Successor Servicer shall
agree, subject to the limitations set forth below and in the Servicing
Agreement, and in accordance with Section 7.04 of the Servicing Agreement, the
Issuer shall enter into an agreement with such Successor Servicer for the
servicing of the Securitization Property (such agreement to be in form and
substance satisfactory to the Trustee).
(j) Upon termination of the Servicer's rights and powers
pursuant to the Servicing Agreement, the Trustee shall promptly notify the
Issuer, the Securitization Bondholders and the Rating Agencies of such
termination. As soon as a Successor Servicer is appointed, the Issuer shall
notify the Trustee, the Securitization Bondholders and the Rating
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Agencies of such appointment, specifying in such notice the name and address of
such Successor Servicer.
(k) The Issuer shall not take any action to terminate or
assign the Swap Counterparty's rights and powers under any Interest Rate Swap
Agreement or replace any Swap Counterparty following an event of default,
termination event or downgrade event under any Interest Rate Swap Agreement
without (i) the prior written consent of the Trustee and of the Holders of that
percentage of the Outstanding Amount of the Securitization Bonds, if any such
consent is required under the related Series Supplement, of the related Series
and Class, if any, specified in the related Series Supplement, and (ii)
satisfying any other requirements set forth in the related Series Supplement and
Interest Rate Swap Agreement.
(l) Upon termination or assignment of any Swap Counterparty's
rights and powers, pursuant to any Interest Rate Swap Agreement, the Trustee
shall promptly inform the Issuer, the Securitization Bondholders of the related
Class and the Rating Agencies of such termination or assignment. As soon as a
replacement Swap Counterparty is appointed, the Issuer shall notify the Trustee,
the Securitization Bondholders of the related Class and the Rating Agencies of
such appointment, specifying in such notice the name and address of such
replacement Swap Counterparty.
SECTION 3.21 TAXES. So long as any of the Securitization
Bonds are outstanding, the Issuer shall pay all material taxes, assessments and
governmental charges imposed upon it or any of its properties or assets or with
respect to any of its franchises, business, income or property before any
penalty accrues thereon if the failure to pay any such taxes, assessments and
governmental charges would, after any applicable grace periods, notices or other
similar requirements, result in a Lien on the Collateral.
ARTICLE IV
SATISFACTION AND DISCHARGE; DEFEASANCE
SECTION 4.01 SATISFACTION AND DISCHARGE OF INDENTURE;
DEFEASANCE. (a) The Securitization Bonds of any Series, all moneys payable with
respect thereto and this Indenture as it applies to such Series shall cease to
be of further effect and the Lien hereunder shall be released with respect to
such Series, interest shall cease to accrue on the Securitization Bonds of such
Series and the Trustee, on demand of and at the expense of the Issuer, shall
execute proper instruments acknowledging satisfaction and discharge of this
Indenture with respect to the Securitization Bonds of such Series, when
(i) either
(A) all Securitization Bonds of such Series
theretofore authenticated and delivered (other than (1)
Securitization Bonds that have been destroyed, lost or stolen
and that have been replaced or paid as provided in Section
2.06 and (2) Securitization Bonds for whose payment money has
theretofore been deposited in trust or segregated and held in
trust by the Issuer
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and thereafter repaid to the Issuer or discharged from such
trust, as provided in Section 3.03) have been delivered to the
Trustee for cancellation; or
(B) the Expected Final Payment Date or Redemption
Date has occurred with respect to all Securitization Bonds of
such Series not theretofore delivered to the Trustee for
cancellation, and the Issuer has irrevocably deposited or
caused to be irrevocably deposited with the Trustee cash, in
trust for such purpose, in an amount sufficient to pay and
discharge the entire indebtedness on such Securitization Bonds
not theretofore delivered to the Trustee on the Expected Final
Payment Date or Redemption Date, as applicable, therefor;
(ii) the Issuer has paid or caused to be paid all other
sums payable hereunder by the Issuer with respect to such Series; and
(iii) the Issuer has delivered to the Trustee an Issuer
Officer's Certificate, an Issuer Opinion of Counsel and (if required by
the TIA or the Trustee) an Independent Certificate from a firm of
certified public accountants, each meeting the applicable requirements
of Section 11.01 and each stating that all conditions precedent herein
provided for relating to the satisfaction and discharge of this
Indenture with respect to Securitization Bonds of such Series have been
complied with.
(b) Subject to Sections 4.01(c) and 4.02, the Issuer at any
time may terminate (i) all its obligations under this Indenture with respect to
the Securitization Bonds of any Series ("Legal Defeasance Option") or (ii) its
obligations under Sections 3.04, 3.05, 3.06 (other than with respect to amounts
in the Defeasance Account), 3.07, 3.08, 3.09, 3.10, 3.12, 3.13, 3.14, 3.15,
3.16, 3.17, 3.18, 3.19 and 3.20 and the operation of Section 5.01(d) ("Covenant
Defeasance Option") with respect to any Series of Securitization Bonds. The
Issuer may exercise the Legal Defeasance Option with respect to any Series of
Securitization Bonds notwithstanding its prior exercise of the Covenant
Defeasance Option with respect to such Series.
(c) If the Issuer exercises the Legal Defeasance Option with
respect to any Series, (i) the maturity of the Securitization Bonds of such
Series may not be accelerated pursuant to Section 5.02 and (ii) except as
provided in Section 4.02, the Securitization Bonds of such Series may not be
redeemed. If the Issuer exercises the Covenant Defeasance Option with respect to
any Series, the maturity of the Securitization Bonds of such Series may not be
accelerated because of an Event of Default specified in Section 5.01(d).
(d) Upon satisfaction of the conditions set forth herein to
the exercise of the Legal Defeasance Option or the Covenant Defeasance Option
with respect to any Series of Securitization Bonds, the Trustee, on demand of
and at the expense of the Issuer, shall execute proper instruments acknowledging
satisfaction and discharge of the obligations that are terminated pursuant to
such exercise.
(e) Notwithstanding Sections 4.01(a) and 4.01(b) above, (i)
rights of registration of transfer and exchange, (ii) rights of substitution of
mutilated, destroyed, lost or stolen Securitization Bonds, (iii) rights of
Securitization Bondholders to receive payments of principal and interest, but
only from the amounts deposited with the Trustee for such payments, (iv)
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Sections 4.03 and 4.04, (v) the rights, obligations and immunities of the
Trustee hereunder (including the rights of the Trustee under Section 6.07 and
the obligations of the Trustee under Section 4.03) and (vi) the rights of
Securitization Bondholders under this Indenture with respect to the property
deposited with the Trustee payable to all or any of them, shall survive until
the Securitization Bonds of the Series as to which this Indenture or certain
obligations hereunder have been satisfied and discharged pursuant to Section
4.01(a) or 4.01(b) and have been paid in full. Thereafter, the obligations in
Sections 6.07 and 4.04 with respect to such Series shall survive.
SECTION 4.02 CONDITIONS TO DEFEASANCE. The Issuer may
exercise the Legal Defeasance Option or the Covenant Defeasance Option with
respect to any Series of Securitization Bonds only if:
(i) the Issuer irrevocably deposits or causes to be
deposited in trust with the Trustee cash or U.S. Government Obligations
for the payment of principal of and interest on such Series of
Securitization Bonds to the Expected Payment Date or Redemption Date
therefor, as applicable, such deposit to be made in the Defeasance
Subaccount for such Series of Securitization Bonds;
(ii) the Issuer delivers to the Trustee a certificate
from a nationally recognized firm of Independent accountants expressing
its opinion that the payments of principal and interest when due and
without reinvestment on the deposited U.S. Government Obligations plus
any deposited cash without investment will provide cash at such times
and in such amounts (but, in the case of the Legal Defeasance Option
only, not more than such amounts) as will be sufficient to pay in
respect of the Securitization Bonds of such Series (A) subject to
clause (B), principal in accordance with the Expected Amortization
Schedule therefor, (B) if such Series is to be redeemed, the Redemption
Price therefor on the Redemption Date therefor and (C) interest when
due;
(iii) in the case of the Legal Defeasance Option,
ninety-five (95) days pass after the deposit is made and during such
ninety-five (95) day period no Default specified in Section 5.01(e) or
5.01(f) occurs which is continuing at the end of the period; provided,
however, that in determining whether a default under Section 5.01(e)
has occurred, the requirement that the decree or order shall remain
unstayed and in effect for ninety (90) days shall be disregarded;
(iv) no Default has occurred and is continuing on the day
of such deposit and after giving effect thereto;
(v) in the case of the Legal Defeasance Option, the
Issuer delivers to the Trustee an Issuer Opinion of Counsel stating
that (A) the Issuer has received from, or there has been published by,
the Internal Revenue Service a ruling, or (B) since the date of
execution of this 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 the
Securitization Bonds of such Series will not recognize income, gain or
loss for federal income tax purposes as a result of the exercise of
such Legal Defeasance Option and will be subject to federal income tax
on the same amounts, in the
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same manner and at the same times as would have been the case if such
legal defeasance had not occurred;
(vi) in the case of the Covenant Defeasance Option, the
Issuer delivers to the Trustee an Issuer Opinion of Counsel to the
effect that the Holders of the Securitization Bonds of such Series will
not recognize income, gain or loss for federal income tax purposes as a
result of the exercise of such Covenant Defeasance Option 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 covenant
defeasance had not occurred; and
(vii) the Issuer delivers to the Trustee an Issuer
Officer's Certificate and an Issuer Opinion of Counsel, each stating
that all conditions precedent to the satisfaction and discharge of the
Securitization Bonds of such Series to the extent contemplated by this
Article IV have been complied with.
(b) Notwithstanding any other provision of this Section 4.02
to the contrary, no delivery of cash or U.S. Government Obligations to the
Trustee under this Section 4.02 shall terminate any obligations of the Issuer
under this Indenture with respect to any Securitization Bonds which are to be
redeemed prior to the Expected Final Payment Date therefor until such
Securitization Bonds shall have been irrevocably called or designated for
redemption on a date thereafter on which such Securitization Bonds may be
redeemed in accordance with the provisions of this Indenture and proper notice
of such redemption shall have been given in accordance with the provisions of
this Indenture or the Issuer shall have given the Trustee, in form satisfactory
to the Trustee, irrevocable instructions to give, in the manner and at the times
prescribed herein, notice of redemption of such Series.
SECTION 4.03 APPLICATION OF TRUST MONEY. All moneys or U.S.
Government Obligations deposited with the Trustee pursuant to Sections 4.01 or
4.02 with respect to any Series of Securitization Bonds shall be held in trust
in the Defeasance Subaccount for such Series and applied by it, in accordance
with the provisions of the Securitization Bonds and this Indenture, to the
payment, either directly or through any Paying Agent, as the Trustee may
determine, to the Holders of the particular Securitization Bonds for the payment
or redemption of which such moneys or U.S. Government Obligations have been
deposited with the Trustee, of all sums due and to become due thereon for
principal and interest. Such moneys or U.S. Government Obligations shall be
segregated and held apart solely for paying such Securitization Bonds and such
Securitization Bonds shall not be entitled to any amounts on deposit in the
Collection Account other than amounts on deposit in the Defeasance Subaccount
for such Securitization Bonds.
SECTION 4.04 REPAYMENT OF MONEYS HELD BY PAYING AGENT. In
connection with the satisfaction and discharge of this Indenture or the Covenant
Defeasance Option or Legal Defeasance Option with respect to the Securitization
Bonds of any Series, all moneys then held by any Paying Agent other than the
Trustee under the provisions of this Indenture with respect to such
Securitization Bonds shall, upon demand of the Issuer, be paid to the Trustee to
be held and applied according to Section 3.03 and thereupon such Paying Agent
shall be released from all further liability with respect to such moneys.
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ARTICLE V
REMEDIES
SECTION 5.01 EVENTS OF DEFAULT. "Event of Default" wherever
used herein, means any one of the following events (whatever the reason for such
Event of Default and whether it shall be voluntary or involuntary or be effected
by operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body):
(a) default in the payment of any interest on any
Securitization Bond when the same becomes due and payable and the continuation
of such default for five Business Days;
(b) default in the payment of the then unpaid principal of
any Securitization Bond of any Series or Class on the Final Maturity Date
therefor;
(c) default in the payment of the Redemption Price for any
Securitization Bond on the Redemption Date therefor;
(d) default in the observance or performance of any covenant
or agreement of the Issuer made in this Indenture (other than a covenant or
agreement, a default in the observance or performance of which is specifically
dealt with in clause (a), (b) or (c) above), or any representation or warranty
of the Issuer made in this Indenture or in any certificate or other writing
delivered pursuant hereto or in connection herewith proving to have been
incorrect in any material respect as of the time when made, and any such default
or incorrect representation or warranty shall continue or not be cured, for a
period of thirty (30) days after the earliest of the date (i) notice has been
given to the Issuer by the Trustee, (ii) there shall have been given, by
registered or certified mail, to the Issuer by the Trustee or to the Issuer and
the Trustee by the Holders of at least twenty-five percent (25%) of the
Outstanding Amount of the Securitization Bonds of any Series or Class, a written
notice specifying such default or incorrect representation or warranty and
requiring it to be remedied and stating that such notice is a "Notice of
Default" hereunder or (iii) the date the Issuer has knowledge of the default;
(e) the filing of a decree or order for relief by a court
having jurisdiction in the premises in respect of the Issuer or any substantial
part of the Collateral in an involuntary case or proceeding under any applicable
federal or state bankruptcy, insolvency or other similar law now or hereafter in
effect, or appointing a receiver, liquidator, assignee, custodian, trustee,
sequestrator or similar official for the Issuer or for any substantial part of
the Collateral, or ordering the winding-up or liquidation of the Issuer's
affairs, and such decree or order shall remain unstayed and in effect for a
period of ninety (90) consecutive days;
(f) the commencement by the Issuer of a voluntary case or
proceeding under any applicable federal or state bankruptcy, insolvency or other
similar law now or hereafter in effect, or the consent by the Issuer to the
entry of an order for relief in an involuntary case under any such law, or the
consent by the Issuer to the appointment of a receiver, liquidator, assignee,
custodian, trustee, sequestrator or similar official for the Issuer or for any
substantial part of the Collateral, or the making by the Issuer of any
assignment for the benefit of creditors, or the
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failure by the Issuer generally to pay its debts as such debts become due, or
the taking of action by the Issuer in furtherance of any of the foregoing; or
(g) any act or failure to act by the State of Michigan or any
of its agencies (including the MPSC), officers or employees that violates or is
not in accordance with the pledge and agreement of the State of Michigan in
Section 10n(2) of the Statute and recited in Section 2.01(d) herein.
SECTION 5.02 ACCELERATION OF MATURITY; RESCISSION AND
ANNULMENT. (a) If an Event of Default (other than an Event of Default under
Section 5.01(g)) occurs and is continuing, then and in every such case either
the Trustee or the Holders of a majority of the Outstanding Amount of the
Securitization Bonds of all Series may, but need not, declare all the
Securitization Bonds of all Series to be immediately due and payable, by a
notice in writing to the Issuer (and to the Trustee if given by Securitization
Bondholders), and upon any such declaration the unpaid principal amount of the
Securitization Bonds of all Series, together with accrued and unpaid interest
thereon through the date of acceleration, shall become immediately due and
payable.
(b) At any time after such declaration of acceleration of
maturity has been made and before a judgment or decree for payment of the money
due has been obtained by the Trustee as hereinafter provided in this Article V,
the Holders of a majority of the Outstanding Amount of the Securitization Bonds
of all Series, by written notice to the Issuer and the Trustee, may rescind and
annul such declaration and its consequences, provided that:
(i) the Issuer has paid or deposited with the Trustee,
for deposit in the General Subaccount of the Collection Account, a sum
sufficient to pay
(A) all payments of principal of and interest on all
Securitization Bonds of all Series and all other amounts that
would then be due hereunder or upon such Securitization Bonds
if the Event of Default giving rise to such acceleration had
not occurred; and
(B) all sums paid or advanced by the Trustee
hereunder and the reasonable compensation, expenses,
disbursements and advances of the Trustee and its agents and
counsel; and
(ii) all Events of Default, other than the nonpayment of
the principal of the Securitization Bonds of all Series that has become
due solely by such acceleration, have been cured or waived as provided
in Section 5.12.
(c) No such rescission shall affect any subsequent Default or
impair any right consequent thereto.
SECTION 5.03 COLLECTION OF INDEBTEDNESS AND SUITS FOR
ENFORCEMENT BY TRUSTEE. (a) The Issuer covenants that if (i) Default is made in
the payment of any interest on any Securitization Bond when such interest
becomes due and payable and such Default continues for five Business Days, (ii)
Default is made in the payment of the then unpaid principal of any
Securitization Bond on the Final Maturity Date therefor or (iii) Default is made
in the
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payment of the Redemption Price or for any Securitization Bond on the Redemption
Date therefor, the Issuer shall, upon demand of the Trustee, pay to it, for the
benefit of the Holders of the Securitization Bonds of such Series, such amount
as shall be sufficient to cover the costs and expenses of collection, including
the reasonable compensation, expenses, disbursements and advances of the Trustee
and its agents and counsel and the whole amount then due and payable on such
Securitization Bonds for principal and interest, with interest upon the overdue
principal and, to the extent payment at such rate of interest shall be legally
enforceable, upon overdue instalments of interest, at the respective Interest
Rate of such Series or the applicable Class of such Series.
(b) In case the Issuer shall fail forthwith to pay the amounts
specified in clause (a) above upon such demand, the Trustee, in its own name and
as trustee of an express trust, may institute a Proceeding for the collection of
the sums so due and unpaid, and may prosecute such Proceeding to judgment or
final decree, and may enforce the same against the Issuer or other obligor upon
such Securitization Bonds and collect in the manner provided by law out of the
property of the Issuer or other obligor upon such Securitization Bonds, wherever
situated, the moneys adjudged or decreed to be payable.
(c) If an Event of Default occurs and is continuing, the
Trustee may, as more particularly provided in Section 5.04, in its discretion,
proceed to protect and enforce its rights and the rights of the Securitization
Bondholders, by such appropriate Proceedings as the Trustee shall deem most
effective to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in this Indenture or in aid of the
exercise of any power granted herein, or to enforce any other proper remedy or
legal or equitable right vested in the Trustee by this Indenture or by law
including foreclosing or otherwise enforcing the Lien on the Securitization
Property securing the Securitization Bonds or applying to the MPSC or a court of
competent jurisdiction for sequestration of revenues arising with respect to
such Securitization Property.
(d) In case there shall be pending, relative to the Issuer or
any other obligor upon the Securitization Bonds or any Person having or claiming
an ownership interest in the Collateral, Proceedings under Title 11 of the
United States Code or any other applicable federal or state bankruptcy,
insolvency or other similar law, or in case a receiver, assignee or trustee in
bankruptcy or reorganization, liquidator, sequestrator or similar official shall
have been appointed for or taken possession of the Issuer or its property or
such other obligor or Person, or in case of any other comparable judicial
Proceedings relative to the Issuer or other obligor upon the Securitization
Bonds, or to the creditors or property of the Issuer or such other obligor, the
Trustee, irrespective of whether the principal of any Securitization Bonds shall
then be due and payable as therein expressed or by declaration or otherwise and
irrespective of whether the Trustee shall have made any demand pursuant to the
provisions of this Section 5.03, shall be entitled and empowered, by
intervention in such Proceedings or otherwise:
(i) to file and prove a claim or claims for the whole
amount of principal and interest owing and unpaid in respect of the
Securitization Bonds and to file such other papers or documents as may
be necessary or advisable in order to have the claims of the Trustee
(including any claim for reasonable compensation to the Trustee and
each predecessor Trustee, and their respective agents, attorneys and
counsel, and for
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reimbursement of all expenses and liabilities incurred, and all
advances made, by the Trustee and each predecessor Trustee, except as a
result of negligence or bad faith) and of the Securitization
Bondholders allowed in such Proceedings;
(ii) unless prohibited by applicable law and regulations,
to vote on behalf of the Holders of Securitization Bonds in any
election of a trustee, a standby trustee or Person performing similar
functions in any such Proceedings;
(iii) to collect and receive any moneys or other property
payable or deliverable on any such claims and to distribute all amounts
received with respect to the claims of the Securitization Bondholders
and of the Trustee on their behalf; and
(iv) to file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims
of the Trustee or the Holders of Securitization Bonds allowed in any
judicial proceedings relative to the Issuer, its creditors and its
property;
and any trustee, receiver, liquidator, custodian or other similar official in
any such Proceeding is hereby authorized by each of such Securitization
Bondholders to make payments to the Trustee, and, in the event that the Trustee
shall consent to the making of payments directly to such Securitization
Bondholders, to pay to the Trustee such amounts as shall be sufficient to cover
reasonable compensation to the Trustee, each predecessor Trustee and their
respective agents, attorneys and counsel, and all other expenses and liabilities
incurred, and all advances made, by the Trustee and each predecessor Trustee
except as a result of negligence or bad faith.
(e) Nothing herein contained shall be deemed to authorize the
Trustee to authorize or consent to or vote for or accept or adopt on behalf of
any Securitization Bondholder any plan of reorganization, arrangement,
adjustment or composition affecting the Securitization Bonds or the rights of
any Holder thereof or to authorize the Trustee to vote in respect of the claim
of any Securitization Bondholder in any such proceeding except, as aforesaid, to
vote for the election of a trustee in bankruptcy or similar Person.
(f) All rights of action and of asserting claims under this
Indenture, or under any of the Securitization Bonds, may be enforced by the
Trustee without the possession of any of the Securitization Bonds or the
production thereof in any trial or other Proceedings relative thereto, and any
such action or proceedings instituted by the Trustee shall be brought in its own
name as trustee of an express trust, and any recovery of judgment, subject to
the payment of the expenses, disbursements and compensation of the Trustee, each
predecessor Trustee and their respective agents and attorneys, shall be for the
ratable benefit of the Holders of the Securitization Bonds.
(g) In any Proceedings brought by the Trustee (and also any
Proceedings involving the interpretation of any provision of this Indenture to
which the Trustee shall be a party), the Trustee shall be held to represent all
the Holders of the Securitization Bonds, and it shall not be necessary to make
any Securitization Bondholder a party to any such Proceedings.
SECTION 5.04 REMEDIES. (a) If an Event of Default other than
Section 5.01(g) occurs and is continuing, the Trustee may do one or more of the
following (subject to Section 5.05):
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(i) institute Proceedings in its own name and as trustee
of an express trust for the collection of all amounts then payable on
the Securitization Bonds or under this Indenture with respect thereto,
whether by declaration or otherwise, enforce any judgment obtained, and
collect from the Issuer and any other obligor upon such Securitization
Bonds moneys adjudged due;
(ii) institute Proceedings from time to time for the
complete or partial foreclosure of this Indenture with respect to the
Collateral;
(iii) exercise any remedies of a secured party under the
Michigan UCC or the Statute or any other applicable law and take any
other appropriate action to protect and enforce the rights and remedies
of the Trustee and the Holders of the Securitization Bonds of such
Series;
(iv) sell the Collateral or any portion thereof or rights
or interest therein, at one or more public or private sales called and
conducted in any manner permitted by law; and
(v) exercise all rights, remedies, powers, privileges and
claims of the Issuer against the Seller, the Administrator, the
Servicer or any Swap Counterparty under or in connection with the Sale
Agreement, the Administration Agreement, the Servicing Agreement or any
Interest Rate Swap Agreement, respectively, as provided in Section
3.20(b);
provided, however, that the Trustee may not sell or otherwise liquidate any
portion of the Collateral following an Event of Default, other than an Event of
Default described in Section 5.01(a), 5.01(b) or 5.01(c), with respect to any
Series unless (A) the Holders of one hundred percent (100%) of the Outstanding
Amount of the Securitization Bonds of all Series consent thereto, (B) the
proceeds of such sale or liquidation distributable to the Securitization
Bondholders of all Series are sufficient to discharge in full all amounts then
due and unpaid upon such Securitization Bonds for principal and interest, or (C)
the Trustee determines that the Collateral will not continue to provide
sufficient funds for all payments on the Securitization Bonds of all Series as
they would have become due if the Securitization Bonds had not been declared due
and payable and the Trustee obtains the consent of Holders of sixty-six and
two-thirds percent (66K%) of the Outstanding Amount of the Securitization
Bonds of all Series. In determining such sufficiency or insufficiency with
respect to clause (B) and (C), the Trustee may, but need not, obtain and rely
upon an opinion of an Independent investment banking or accounting firm of
national reputation as to the feasibility of such proposed action and as to the
sufficiency of the Collateral for such purpose.
(b) If an Event of Default under Section 5.01(g) occurs and is
continuing, the Trustee, for the benefit of the Holders, shall be entitled and
empowered to the extent permitted by applicable law to institute or participate
in Proceedings reasonably necessary to compel performance of or to enforce the
pledge and agreement of the State of Michigan in Section 10n(2) of the Statute
and to collect any monetary damages incurred by the Holders or the Trustee as a
result of any such Event of Default, and may prosecute any such Proceeding to
final judgment or decree. Such remedy shall be the only remedy that the Trustee
may exercise if the
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only Event of Default that has occurred and is continuing is an Event of Default
under Section 5.01(g).
SECTION 5.05 OPTIONAL PRESERVATION OF THE COLLATERAL. If the
Securitization Bonds have been declared to be due and payable under Section 5.02
following an Event of Default and such declaration and its consequences have not
been rescinded and annulled, the Trustee may, but need not, elect, as provided
in Section 5.11(c), to maintain possession of the Collateral and not sell or
liquidate the same. It is the desire of the parties hereto and the
Securitization Bondholders that there be at all times sufficient funds for the
payment of principal of and interest on the Securitization Bonds, and the
Trustee shall take such desire into account when determining whether or not to
maintain possession of the Collateral or sell or liquidate the same. In
determining whether to maintain possession of the Collateral or sell or
liquidate the same, the Trustee may, but need not, obtain and rely upon an
opinion of an Independent investment banking or accounting firm of national
reputation as to the feasibility of such proposed action and as to the
sufficiency of the Collateral for such purpose.
SECTION 5.06 LIMITATION OF PROCEEDINGS. (a) No Holder of any
Securitization Bond of any Series shall have any right to institute any
Proceeding, judicial or otherwise, or to avail itself of any remedies provided
in the Statute, with respect to this Indenture, or for the appointment of a
receiver or trustee, or for any other remedy hereunder, unless:
(i) such Holder has previously given written notice to
the Trustee of a continuing Event of Default;
(ii) the Holders of not less than twenty-five percent
(25%) of the Outstanding Amount of the Securitization Bonds of all
Series have made written request to the Trustee to institute such
Proceeding in respect of such Event of Default in its own name as
Trustee hereunder;
(iii) such Holder or Holders have offered to the Trustee
security or indemnity reasonably satisfactory to the Trustee against
the costs, expenses and liabilities to be incurred in complying with
such request;
(iv) the Trustee for sixty (60) days after its receipt of
such notice, request and offer of indemnity has failed to institute
such Proceedings; and
(v) no direction inconsistent with such written request
has been given to the Trustee during such sixty (60) day period by the
Holders of a majority of the Outstanding Amount of the Securitization
Bonds of all Series;
it being understood and intended that no one or more Holders of Securitization
Bonds shall have any right in any manner whatever by virtue of, or by availing
of, any provision of this Indenture to affect, disturb or prejudice the rights
of any other Holders of Securitization Bonds or to obtain or to seek to obtain
priority or preference over any other Holders or to enforce any right under this
Indenture, except in the manner herein provided.
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(b) In the event the Trustee shall receive conflicting or
inconsistent requests and indemnity from two or more groups of Holders of
Securitization Bonds, each representing less than a majority of the Outstanding
Amount of the Securitization Bonds of all Series, the Trustee in its sole
discretion may determine what action, if any, shall be taken, notwithstanding
any other provisions of this Indenture.
SECTION 5.07 UNCONDITIONAL RIGHTS OF SECURITIZATION
BONDHOLDERS TO RECEIVE PRINCIPAL AND INTEREST. Notwithstanding any other
provisions in this Indenture, the Holder of any Securitization Bond shall have
the right, which is absolute and unconditional, and shall not be impaired
without the consent of each such Holder, (a) to receive payment of (i) the
interest, if any, on such Securitization Bond on or after the due dates thereof
expressed in such Securitization Bond or in this Indenture, (ii) the unpaid
principal, if any, of such Securitization Bonds on or after the Final Maturity
Date therefor or (iii) in the case of redemption, receive payment of the unpaid
principal, if any, and interest, if any, on such Securitization Bond on or after
the Redemption Date therefor and (b) to institute suit for the enforcement of
any such payment, and such right shall not be impaired without the consent of
such Holder.
SECTION 5.08 RESTORATION OF RIGHTS AND REMEDIES. If the
Trustee or any Securitization Bondholder has instituted any Proceeding to
enforce any right or remedy under this Indenture and such Proceeding has been
discontinued or abandoned for any reason or has been determined adversely to the
Trustee or to such Securitization Bondholder, then and in every such case the
Issuer, the Trustee and the Securitization Bondholders shall, subject to any
determination in such Proceeding, be restored severally and respectively to
their former positions hereunder, and thereafter all rights and remedies of the
Trustee and the Securitization Bondholders shall continue as though no such
Proceeding had been instituted.
SECTION 5.09 RIGHTS AND REMEDIES CUMULATIVE. No right or
remedy herein conferred upon or reserved to the Trustee or to the Securitization
Bondholders is intended to be exclusive of any other right or remedy, and every
right and remedy shall, to the extent permitted by law, be cumulative and in
addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
SECTION 5.10 DELAY OR OMISSION NOT A WAIVER. No delay or
omission of the Trustee or any Securitization Bondholder to exercise any right
or remedy accruing upon any Default or Event of Default shall impair any such
right or remedy or constitute a waiver of any such Default or Event of Default
or an acquiescence therein. Every right and remedy given by this Article V or by
law to the Trustee or to the Securitization Bondholders may be exercised from
time to time, and as often as may be deemed expedient, by the Trustee or by the
Securitization Bondholders, as the case may be.
SECTION 5.11 CONTROL BY SECURITIZATION BONDHOLDERS. The
Holders of a majority of the Outstanding Amount of the Securitization Bonds of
all Series (or, if less than all Series or Classes are affected, the affected
Series or Class or Classes) shall have the right to direct the time, method and
place of conducting any Proceeding for any remedy available to the Trustee with
respect to the Securitization Bonds of such Series or Class or Classes or
exercising
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any trust or power conferred on the Trustee with respect to such Series or Class
or Classes; provided that
(a) such direction shall not be in conflict with any rule of
law or with this Indenture;
(b) subject to the express terms of Section 5.04, any
direction to the Trustee to sell or liquidate the Collateral shall be by the
Holders of Securitization Bonds representing not less than one hundred percent
(100%) of the Outstanding Amount of the Securitization Bonds of all Series;
(c) if the conditions set forth in Section 5.05 have been
satisfied and the Trustee elects to retain the Collateral pursuant to such
Section and elects not to sell or liquidate the same, then any direction to the
Trustee by Holders of Securitization Bonds representing less than one hundred
percent (100%) of the Outstanding Amount of the Securitization Bonds of all
Series to sell or liquidate the Collateral shall be of no force and effect; and
(d) the Trustee may take any other action deemed proper by
the Trustee that is not inconsistent with such direction;
provided, however, that, subject to Section 6.01, the Trustee need not take any
action that it determines might involve it in liability for which it reasonably
believes it will not be adequately indemnified against the costs, expenses and
liabilities which might be incurred by it in complying with this request. The
Trustee also need not take any action that it determines might materially and
adversely affect the rights of any Securitization Bondholders not consenting to
such action.
SECTION 5.12 WAIVER OF PAST DEFAULTS. (a) Prior to the
declaration of the acceleration of the maturity of the Securitization Bonds of
all Series as provided in Section 5.02, the Holders of a majority of the
Outstanding Amount of the Securitization Bonds of all Series may waive any past
Default or Event of Default and its consequences except a Default (i) in payment
of principal of or interest on any of the Securitization Bonds or (ii) in
respect of a covenant or provision hereof which cannot be modified or amended
without the consent of the Holder of each Securitization Bond of all Series or
Classes affected. In the case of any such waiver, the Issuer, the Trustee and
the Holders of the Securitization Bonds shall be restored to their former
positions and rights hereunder, respectively; but no such waiver shall extend to
any subsequent or other Default or impair any right consequent thereto.
(b) Upon any such waiver, such Default shall cease to exist
and be deemed to have been cured and not to have occurred, and any Event of
Default arising therefrom shall be deemed to have been cured and not to have
occurred, for every purpose of this Indenture; but no such waiver shall extend
to any subsequent or other Default or Event of Default or impair any right
consequent thereto.
SECTION 5.13 UNDERTAKING FOR COSTS. All parties to this
Indenture agree, and each Holder of any Securitization Bond by such Holder's
acceptance thereof shall be deemed to have agreed, that any court may in its
discretion require, in any suit for the enforcement of any right or remedy under
this Indenture, or in any suit against the Trustee for
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any action taken, suffered or omitted by it as Trustee, the filing by any party
litigant in such suit of an undertaking to pay the costs of such suit, and that
such court may in its discretion assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in such suit, having due regard to
the merits and good faith of the claims or defenses made by such party litigant;
but the provisions of this Section 5.13 shall not apply to (a) any suit
instituted by the Trustee, (b) any suit instituted by any Securitization
Bondholder, or group of Securitization Bondholders, in each case holding in the
aggregate more than ten percent (10%) of the Outstanding Amount of the
Securitization Bonds of a Series or (c) any suit instituted by any
Securitization Bondholder for the enforcement of the payment of (i) interest on
any Securitization Bond on or after the due dates expressed in such
Securitization Bond and in this Indenture, (ii) the unpaid principal, if any, of
any Securitization Bond on or after the Final Maturity Date therefor or (iii) in
the case of redemption, the unpaid principal of and interest on any
Securitization Bond on or after the Redemption Date therefor.
SECTION 5.14 WAIVER OF STAY OR EXTENSION LAWS. The Issuer
covenants (to the extent that it may lawfully do so) that it will not at any
time insist upon, or plead or in any manner whatsoever, claim or take the
benefit or advantage of, any stay or extension law wherever enacted, now or at
any time hereafter in force, that may affect the covenants or the performance of
this Indenture; and the Issuer (to the extent that it may lawfully do so) hereby
expressly waives all benefit or advantage of any such law, and covenants that it
will not hinder, delay or impede the execution of any power herein granted to
the Trustee, but will suffer and permit the execution of every such power as
though no such law had been enacted.
SECTION 5.15 ACTION ON SECURITIZATION BONDS. The Trustee's
right to seek and recover judgment on the Securitization Bonds or under this
Indenture shall not be affected by the seeking, obtaining or application of any
other relief under or with respect to this Indenture. Neither the Lien of this
Indenture nor any rights or remedies of the Trustee or the Securitization
Bondholders shall be impaired by the recovery of any judgment by the Trustee
against the Issuer or by the levy of any execution under such judgment upon any
portion of the Collateral or upon any of the assets of the Issuer.
ARTICLE VI
THE TRUSTEE
SECTION 6.01 DUTIES AND LIABILITIES OF TRUSTEE. (a) If an
Event of Default has occurred and is continuing, the Trustee shall exercise the
rights and powers vested in it by this Indenture and use the same degree of care
and skill in their exercise as a prudent Person would exercise or use under the
circumstances in the conduct of such Person's own affairs.
(b) Except during the continuance of an Event of Default:
(i) the Trustee undertakes to perform such duties and
only such duties as are specifically set forth in this Indenture and no
implied covenants or obligations shall be read into this Indenture
against the Trustee; and
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(ii) in the absence of bad faith on its part, the Trustee
may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements of
this Indenture.
(c) The Trustee may not be relieved from liability for its
own negligent action, its own negligent failure to act or its own wilful
misconduct, except that:
(i) this clause (c) does not limit the effect of clause
(b) of this Section 6.01;
(ii) the Trustee shall not be liable for any error of
judgment made in good faith by an Authorized Officer unless it is
proved that the Trustee was negligent in ascertaining the pertinent
facts; and
(iii) the Trustee shall not be liable with respect to any
action it takes or omits to take in good faith in accordance with a
direction received by it pursuant to Section 5.11.
(d) Every provision of this Indenture that in any way relates
to the Trustee is subject to clauses (a), (b) and (c) of this Section 6.01.
(e) The Trustee shall not be liable for interest on any money
received by it except as provided in this Indenture or as the Trustee may agree
in writing with the Issuer.
(f) Money held in trust by the Trustee need not be segregated
from other funds held by the Trustee except to the extent required by law or the
terms of this Indenture, the Sale Agreement, the Servicing Agreement or any
Interest Rate Swap Agreement.
(g) No provision of this Indenture shall require the Trustee
to expend or risk its own funds or otherwise incur financial liability in the
performance of any of its duties hereunder or in the exercise of any of its
rights or powers, if it shall have reasonable grounds to believe that repayments
of such funds or adequate indemnity against such risk or liability is not
reasonably assured to it.
(h) Every provision of this Indenture relating to the conduct
or affecting the liability of or affording protection to the Trustee shall be
subject to the provisions of this Section 6.01 and to the provisions of the TIA.
(i) Under no circumstances shall the Trustee be liable for
any indebtedness of the Issuer, the Servicer or the Seller evidenced by or
arising under the Securitization Bonds or any Basic Document.
SECTION 6.02 RIGHTS OF TRUSTEE. (a) The Trustee may rely on
any document believed by it to be genuine and to have been signed or presented
by the proper Person. The Trustee need not investigate any fact or matter stated
in the document.
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(b) Before the Trustee acts or refrains from acting, it may
require an Issuer Officer's Certificate or an Issuer Opinion of Counsel. The
Trustee shall not be liable for any action it takes or omits to take in good
faith in reliance on an Issuer Officer's Certificate or an Issuer Opinion of
Counsel.
(c) The Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents or attorneys or a custodian or nominee, and the Trustee shall not be
responsible for any misconduct or negligence on the part of, or for the
supervision of, any such agent attorney, custodian, or nominee appointed with
due care by it thereunder.
(d) The Trustee shall not be liable for any action it takes
or omits to take in good faith which it believes to be authorized or within its
rights or powers; provided, however, that the Trustee's conduct does not
constitute wilful misconduct, negligence or bad faith.
(e) The Trustee may consult with counsel, and the advice or
opinion of counsel with respect to legal matters relating to this Indenture and
the Securitization Bonds shall be full and complete authorization and protection
from liability in respect to any action taken, omitted or suffered by it
hereunder in good faith and in accordance with the advice or opinion of such
counsel.
SECTION 6.03 INDIVIDUAL RIGHTS OF TRUSTEE. The Trustee in its
individual or any other capacity may become the owner or pledgee of
Securitization Bonds and may otherwise deal with the Issuer or its affiliates
with the same rights it would have if it were not Trustee. Any Paying Agent,
Securitization Bond Registrar, co-registrar or co-paying agent, or agent
appointed pursuant to Section 3.02(b) may do the same with like rights. However,
the Trustee must comply with Sections 6.11 and 6.12.
SECTION 6.04 TRUSTEE'S DISCLAIMER. The Trustee shall not be
responsible for and makes no representation as to the validity or adequacy of
this Indenture or the Securitization Bonds. The Trustee shall not be accountable
for the Issuer's use of the proceeds from the Securitization Bonds, and the
Trustee shall not be responsible for any statement of the Issuer in this
Indenture or in any document issued in connection with the sale of the
Securitization Bonds or in the Securitization Bonds other than the Trustee's
certificate of authentication. The Trustee shall not be responsible for the
form, character, genuineness, sufficiency, value or validity of any of the
Collateral, or for or in respect of the validity or sufficiency of the
Securitization Bonds (other than the certificate of authentication for the
Securitization Bonds) or the Basic Documents and the Trustee shall in no event
assume or incur any liability, duty or obligation to any Holder of a
Securitization Bond, other than as expressly provided for in this Indenture. The
Trustee shall not be liable for the default or misconduct of the Issuer, the
Seller, the Servicer or the Member or any Manager of the Issuer under any Basic
Document or otherwise, or the default or misconduct of any counterparty under
any Interest Rate Swap Agreement, and the Trustee shall have no obligation or
liability to perform the obligations of the Issuer.
SECTION 6.05 NOTICE OF DEFAULTS. If a Default occurs and is
continuing with respect to any Class or Series and if it is known to a
Authorized Officer of the Trustee, the
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Trustee shall mail to each Rating Agency and to each Holder of Securitization
Bonds of all Series notice of the Default within ninety (90) days after it
occurs. Except in the case of a Default in payment of principal of or interest
on any Securitization Bond, the Trustee may withhold the notice if and so long
as a committee of its Authorized Officers in good faith determines that
withholding the notice is in the interests of Securitization Bondholders.
SECTION 6.06 REPORTS BY TRUSTEE TO HOLDERS. (a) The Trustee
shall deliver to each Holder of Securitization Bonds such information as may be
required to enable such Holder to prepare its federal and state income tax
returns.
(b) With respect to each Series and Class of Securitization
Bonds, on or prior to each Payment Date therefor, the Trustee shall deliver a
statement prepared by the Trustee to each Holder of Securitization Bonds of such
Series and Class which shall include (to the extent applicable) the following
information (and any other information so specified in the Series Supplement for
such Series) as to the Securitization Bonds of such Series and Class with
respect to such Payment Date or the period since the previous Payment Date, as
applicable:
(i) the amount to be paid to Holders of the
Securitization Bonds of such Series and Class in respect of principal;
such amount to be expressed as a dollar amount per thousand;
(ii) the amount to be paid to Holders of the
Securitization Bonds of such Series and Class in respect of interest;
such amount to be expressed as a dollar amount per thousand;
(iii) the Securitization Bond Balance, after giving
effect to the payments to be made on such Payment Date, and the
Projected Principal Balance, in each case for such Series and Class and
as of such Payment Date;
(iv) the amount on deposit in the Overcollateralization
Subaccount for such Series and the Scheduled Overcollateralization
Level for such Series as of such Payment Date;
(v) the amount on deposit in the Capital Subaccount for
such Series as of such Payment Date;
(vi) the amount, if any, on deposit in the Reserve
Subaccount as of such Payment Date;
(vii) the amount to be paid to any Swap Counterparty;
(viii) the amount to be paid to the Trustee since the
preceding Payment Date;
(ix) the amount paid to the Servicer since the preceding
Payment Date; and
(x) any other transfers and payments made pursuant to
this Indenture.
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(c) If any Securitization Bonds are listed on the Luxembourg
Stock Exchange and the rules of such exchange so require, the Trustee shall
arrange for publication in an Authorized Newspaper that such statement shall be
available with the Issuer's listing agent in Luxembourg appointed pursuant to
Section 3.02(b).
(d) The Trustee's responsibility for disbursing the
information described in clause (b) above to Holders of Securitization Bonds is
limited to the availability, timeliness and accuracy of the information provided
by the Servicer pursuant to the Servicing Agreement.
SECTION 6.07 COMPENSATION AND INDEMNITY. (a) The Issuer shall
pay to the Trustee from time to time reasonable compensation for its services.
The Trustee's compensation shall not be limited by any law on compensation of a
trustee of an express trust. The Issuer shall reimburse the Trustee for all
reasonable out-of-pocket expenses, disbursements and advances incurred or made
by it, including costs of collection, in addition to the compensation for its
services. Such expenses shall include the reasonable compensation and expenses,
disbursements and advances of the Trustee's agents, counsel, accountants and
experts. The Issuer shall indemnify and hold harmless the Trustee from and
against any and all costs, damages, expenses, losses, liabilities or other
amounts whatsoever (including counsel fees) incurred by the Trustee in
connection with the administration of this trust, the enforcement of this trust
and all of the Trustee's rights, powers and duties under this Indenture and the
performance by the Trustee of the duties and obligations of the Trustee under or
pursuant to this Indenture. The Trustee shall notify the Issuer promptly of any
claim for which it may seek indemnity. Failure by the Trustee to so notify the
Issuer shall not relieve the Issuer of its obligations hereunder.
(b) The Issuer shall defend the claim and the Trustee may
have separate counsel and the Issuer shall pay the fees and expenses of such
counsel. The Issuer need not reimburse any expense or indemnify against any
loss, liability or expense incurred by the Trustee (i) through the Trustee's own
wilful misconduct, negligence or bad faith or (ii) to the extent the Trustee was
reimbursed for or indemnified against any such loss, liability or expense by the
Seller pursuant to the Sale Agreement or by the Servicer pursuant to the
Servicing Agreement.
(c) When the Trustee incurs expenses after the occurrence of
a Default specified in Section 5.01(e) or 5.01(f) with respect to the Issuer,
the expenses are intended to constitute expenses of administration under Title
11 of the United States Code or any other applicable federal or state
bankruptcy, insolvency or similar law.
SECTION 6.08 REPLACEMENT OF TRUSTEE. (a) The Trustee may
resign at any time upon thirty (30) days' prior written notice by so notifying
the Issuer. The Issuer may remove the Trustee with or without cause at any time,
with prior notice to the Rating Agencies, upon thirty (30) days' prior written
notice, and shall remove the Trustee if:
(i) the Trustee fails to comply with Section 6.11;
(ii) the Trustee is adjudged bankrupt or insolvent;
(iii) a receiver or other public officer takes charge of
the Trustee or its property; or
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(iv) the Trustee otherwise becomes incapable of acting.
(b) If the Trustee resigns or is removed or if a vacancy
exists in the office of Trustee for any reason (the Trustee in such event being
referred to herein as the "Retiring Trustee"), the Issuer shall promptly appoint
a successor Trustee.
(c) In addition, the Holders of a majority in Outstanding
Amount of the Securitization Bonds of all Series may remove the Trustee by so
notifying the Issuer and the Trustee and such Holders may appoint a successor
Trustee.
(d) A successor Trustee shall deliver a written acceptance of
its appointment to the Retiring Trustee and to the Issuer. Thereupon the
resignation or removal of the Retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. No resignation or removal of the Trustee shall become
effective until the acceptance of the appointment by a successor Trustee. The
successor Trustee shall mail a notice of its succession to Securitization
Bondholders. The Retiring Trustee shall promptly transfer all property held by
it as Trustee to the successor Trustee.
(e) If a successor Trustee does not take office within sixty
(60) days after the Retiring Trustee resigns or is removed, the Retiring
Trustee, the Issuer or the Holders of a majority in Outstanding Amount of the
Securitization Bonds of all Series may petition any court of competent
jurisdiction for the appointment of a successor Trustee.
(f) If the Trustee fails to comply with Section 6.11, any
Securitization Bondholder may petition any court of competent jurisdiction for
the removal of the Trustee and the appointment of a successor Trustee.
(g) Notwithstanding the replacement of the Trustee pursuant
to this Section 6.08, the Issuer's obligations under Section 6.07 shall continue
for the benefit of the Retiring Trustee.
SECTION 6.09 SUCCESSOR TRUSTEE BY MERGER. (a) If the Trustee
consolidates with, merges or converts into, or transfers all or substantially
all its corporate trust business or assets to, another corporation or banking
association, the resulting, surviving or transferee corporation or banking
association shall, without any further act be the successor Trustee. Notice of
any such event shall be promptly given to each Rating Agency by the successor
Trustee and any agent in Luxembourg appointed pursuant to Section 3.02(b).
(b) In case at the time such successor or successors by
merger, conversion, consolidation or transfer shall succeed to the trusts
created by this Indenture any of the Securitization Bonds shall have been
authenticated but not delivered, any such successor to the Trustee may adopt the
certificate of authentication of any Retiring Trustee, and deliver such
Securitization Bonds so authenticated; and in case at that time any of the
Securitization Bonds shall not have been authenticated, any successor to the
Trustee may authenticate such Securitization Bonds either in the name of any
Retiring Trustee hereunder or in the name of the successor to the Trustee; and
in all such cases such certificates shall have the full force and effect granted
by the Securitization Bonds or by this Indenture and this force and effect shall
be equal to any certificate issued by the Trustee.
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SECTION 6.10 APPOINTMENT OF CO-TRUSTEE OR SEPARATE TRUSTEE.
(a) Notwithstanding any other provisions of this Indenture, at any time, for the
purpose of meeting any legal requirement of any jurisdiction in which any part
of the Collateral may at the time be located, the Trustee shall have the power
and may execute and deliver all instruments to appoint one or more Persons to
act as a co-trustee or co-trustees, or separate trustee or separate trustees, of
all or any part of the Collateral, and to vest in such Person or Persons, in
such capacity and for the benefit of the Securitization Bondholders, such title
to the Collateral, or any part hereof, and, subject to the other provisions of
this Section 6.10, such powers, duties, obligations, rights and trusts as the
Trustee may consider necessary or desirable. No co-trustee or separate trustee
hereunder shall be required to meet the terms of eligibility as a successor
trustee under Section 6.11 and no notice to Securitization Bondholders of the
appointment of any co-trustee or separate trustee shall be required under
Section 6.08. Notice of any such appointment shall be promptly given to each
Rating Agency by the Trustee.
(b) Every separate trustee and co-trustee shall, to the
extent permitted by law, be appointed and act subject to the following
provisions and conditions:
(i) all rights, powers, duties and obligations conferred
or imposed upon the Trustee shall be conferred or imposed upon and
exercised or performed by the Trustee and such separate trustee or
co-trustee jointly (it being understood that such separate trustee or
co-trustee is not authorized to act separately without the Trustee
joining in such act), except to the extent that under any law of any
jurisdiction in which any particular act or acts are to be performed
the Trustee shall be incompetent or unqualified to perform such act or
acts, in which event such rights, powers, duties and obligations
(including the holding of title to the Collateral or any portion
thereof in any such jurisdiction) shall be exercised and performed
singly by such separate trustee or co-trustee, but solely at the
direction of the Trustee;
(ii) no trustee hereunder shall be personally liable by
reason of any act or omission of any other trustee hereunder; and
(iii) the Trustee may at any time accept the resignation
of or remove any separate trustee or co-trustee.
(c) Any notice, request or other writing given to the Trustee
shall be deemed to have been given to each of the then separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Indenture and
the conditions of this Article VI. Each separate trustee and co-trustee, upon
its acceptance of the trusts conferred, shall be vested with the estates or
property specified in its instrument of appointment, either jointly with the
Trustee or separately, as may be provided therein, subject to all the provisions
of this Indenture, specifically including every provision of this Indenture
relating to the conduct of, affecting the liability of, or affording protection
to, the Trustee. Every such instrument shall be filed with the Trustee.
(d) Any separate trustee or co-trustee may at any time
constitute the Trustee, its agent or attorney-in-fact with full power and
authority, to the extent not prohibited by law, to do any lawful act under or in
respect of this Agreement on its behalf and in its name. If any
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separate trustee or co-trustee shall die, become incapable of acting, resign or
be removed, all of its estates, properties, rights, remedies and trusts shall
vest in and be exercised by the Trustee, to the extent permitted by law, without
the appointment of a new or successor trustee.
SECTION 6.11 ELIGIBILITY; DISQUALIFICATION. The Trustee shall
at all times satisfy the requirements of TIA Section 310(a) and Section 26(a)(i)
of the Investment Company Act of 1940, as amended. The Trustee shall have a
combined capital and surplus of at least $50,000,000 as set forth in its most
recent published annual report of condition and it shall have a long-term debt
rating of "BBB-" or better by Standard & Poor's, "Baa3" or better by Moody's and
"BBB-" or better by Fitch. The Trustee shall comply with TIA Section 310(b),
including the optional provision permitted by the second sentence of TIA Section
310(b)(9); provided, however, that there shall be excluded from the operation of
TIA Section 310(b)(1) any indenture or indentures under which other securities
of the Issuer are outstanding if the requirements for such exclusion set forth
in TIA Section 310(b)(1) are met.
SECTION 6.12 PREFERENTIAL COLLECTION OF CLAIMS AGAINST
ISSUER. The Trustee shall comply with TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b). A Trustee who has resigned or been
removed shall be subject to TIA Section 311(a) to the extent indicated.
SECTION 6.13 REPRESENTATIONS AND WARRANTIES OF THE TRUSTEE.
The Trustee hereby represents and warrants that:
(a) the Trustee is a New York banking corporation validly
existing in good standing under the laws of the State of New York; and
(b) the Trustee has full power, authority and legal right to
execute, deliver and perform this Indenture and the Basic Documents to which the
Trustee is a party and has taken all necessary action to authorize the
execution, delivery and performance by it of this Indenture and such Basic
Documents.
ARTICLE VII
SECURITIZATION BONDHOLDERS' LISTS AND REPORTS
SECTION 7.01 ISSUER TO FURNISH TRUSTEE NAMES AND ADDRESSES OF
SECURITIZATION BONDHOLDERS. The Issuer shall furnish or cause to be furnished to
the Trustee (a) not more than five days after the earlier of (i) each Record
Date with respect to each Series and (ii) three months after the last Record
Date with respect to each Series, a list, in such form as the Trustee may
reasonably require, of the names and addresses of the Holders of Securitization
Bonds of such Series as of such Record Date, (b) at such other times as the
Trustee may request in writing, within thirty (30) days after receipt by the
Issuer of any such request, a list of similar form and content as of a date not
more than ten (10) days prior to the time such list is furnished; provided,
however, that so long as the Trustee is the Securitization Bond Registrar, no
such list shall be required to be furnished. In addition, the Issuer shall
furnish such list to any listing, transfer or paying agent appointed under
Section 3.02(b) to the extent such information is required by the rules and
regulations of the Luxembourg Stock Exchange.
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SECTION 7.02 PRESERVATION OF INFORMATION; COMMUNICATIONS TO
SECURITIZATION BONDHOLDERS. (a) The Trustee shall preserve, in as current a form
as is reasonably practicable, the names and addresses of the Holders of
Securitization Bonds contained in the most recent list furnished to the Trustee
as provided in Section 7.01 and the names and addresses of Holders of
Securitization Bonds received by the Trustee in its capacity as Securitization
Bond Registrar. The Trustee may destroy any list furnished to it as provided in
such Section 7.01 upon receipt of a new list so furnished.
(b) Securitization Bondholders may communicate with other
Securitization Bondholders pursuant to Section 312(b) of the TIA, with respect
to their rights under this Indenture or under the Securitization Bonds.
(c) The Issuer, the Trustee and the Securitization Bond
Registrar shall have the protection of Section 312(c) of the TIA.
SECTION 7.03 REPORTS BY ISSUER. (a) The Issuer shall:
(i) file with the Trustee and, so long as any
Securitization Bonds are listed on the Luxembourg Stock Exchange and
its rules so require, with the listing agent of the Issuer in
Luxembourg appointed pursuant to Section 3.02(b), within fifteen (15)
days after the Issuer is required to file the same with the Commission,
copies of the annual reports and of the information, documents and
other reports (or copies of such portions of any of the foregoing as
the Commission may from time to time by rules and regulations
prescribe) which the Issuer may be required to file with the Commission
pursuant to Section 13 or 15(d) of the Exchange Act;
(ii) file with the Trustee, the Commission and, so long
as any Securitization Bonds are listed on the Luxembourg Stock
Exchange, the listing agent in Luxembourg appointed pursuant to Section
3.02(b), in accordance with rules and regulations prescribed from time
to time by the Commission or the Luxembourg Stock Exchange,
respectively, such additional information, documents and reports with
respect to compliance by the Issuer with the conditions and covenants
of this Indenture as may be required from time to time by such rules
and regulations; and
(iii) supply to the Trustee (and the Trustee shall
transmit by mail to all Securitization Bondholders described in TIA
Section 313(c)) and, so long as any Securitization Bonds are listed on
the Luxembourg Stock Exchange and its rules so require, to the listing
agent of the Issuer in Luxembourg appointed pursuant to Section
3.02(b), such summaries of any information, documents and reports
required to be filed by the Issuer pursuant to clauses (i) and (ii) of
this Section 7.03(a) as may be required by rules and regulations
prescribed from time to time by the Commission.
(b) Unless the Issuer otherwise determines, the fiscal year
of the Issuer shall end on December 31 of each year.
SECTION 7.04 REPORTS BY TRUSTEE. (a) If required by TIA
Section 313(a), within sixty (60) days after the end of each fiscal year of the
Issuer, commencing with the year after the issuance of the Securitization Bonds
of any Series, the Trustee shall mail to
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each Holder of Securitization Bonds of such Series as required by TIA Section
313(c) a brief report dated as of such date that complies with TIA Section
313(a). The Trustee also shall comply with TIA Section 313(b); provided,
however, that the initial report so issued shall be delivered not more than
twelve (12) months after the initial issuance of each Series.
(b) A copy of each report at the time of its mailing to
Securitization Bondholders shall be filed by the Trustee with the Commission and
each stock exchange, if any, on which the Securitization Bonds are listed (to
the extent required by the rules of such exchange). The Issuer shall notify the
Trustee if and when the Securitization Bonds are listed on any stock exchange.
SECTION 7.05 PROVISION OF SERVICER REPORTS. Upon the written
request of any Securitization Bondholder to the Trustee addressed to the
Corporate Trust Office, the Trustee shall provide such Securitization Bondholder
with a copy of the Officer's Certificate referred to in Section 3.03 of the
Servicing Agreement and the Annual Accountant's Report referred to in Section
3.04 of the Servicing Agreement. If any Securitization Bonds are listed on the
Luxembourg Stock Exchange and rules of such exchange so require, the Trustee
shall also arrange for publication in an Authorized Newspaper that a copy of
such Issuer Officer's Certificate and such Annual Accountant's Report shall be
available with the Issuer's listing agent in Luxembourg appointed pursuant to
Section 3.02(b).
ARTICLE VIII
ACCOUNTS, DISBURSEMENTS AND RELEASES
SECTION 8.01 COLLECTION OF MONEY. Except as otherwise
expressly provided herein, the Trustee may demand payment or delivery of, and
shall receive and collect, directly and without intervention or assistance of
any fiscal agent or other intermediary, all money and other property payable to
or receivable by the Trustee pursuant to this Indenture. The Trustee shall apply
all such money received by it as provided in this Indenture. Except as otherwise
expressly provided in this Indenture, if any default occurs in the making of any
payment or performance under any agreement or instrument that is part of the
Collateral, the Trustee may take such action as may be appropriate to enforce
such payment or performance, including the institution and prosecution of
appropriate Proceedings. Any such action shall be without prejudice to any right
to claim a Default or Event of Default under this Indenture and any right to
proceed thereafter as provided in Article V.
SECTION 8.02 COLLECTION ACCOUNT. (a) (i) On or prior to the
Series Issuance Date for the first Series issued hereunder, the Trustee shall
open, at the Trustee's Corporate Trust Office, or at another Eligible
Institution, one or more segregated trust accounts in the Trustee's name for the
benefit of the Holders (collectively, the "Collection Account"). The Collection
Account shall initially be divided into subaccounts, which need not be separate
bank accounts: a general subaccount (the "General Subaccount"), an
overcollateralization subaccount for each Series of Securitization Bonds (each,
an "Overcollateralization Subaccount" or the "Series Overcollateralization
Subaccount"), a capital subaccount for each Series of Securitization Bonds
(each, a "Capital Subaccount" or the "Series Capital Subaccount"), a reserve
subaccount (the "Reserve Subaccount"), a series subaccount for each Series of
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Securitization Bonds (each, a "Series Subaccount") and a class subaccount for
any Class of any Series of Securitization Bonds which has a floating rate of
interest as specified in any Series Supplement (each, a "Class Subaccount"). On
or prior to the Series Issuance Date for each Series issued after the Series
Issuance Date for the first Series issued hereunder, the Issuer shall establish
an additional Series Subaccount therefor and a Class Subaccount for any Class of
such Series which has a floating rate of interest and in respect of which the
Issuer has entered into an Interest Rate Swap Agreement, as Subaccounts of the
Collection Account. Prior to depositing funds or U.S. Government Obligations in
the Collection Account pursuant to Sections 4.01 or 4.02, the Issuer shall
establish defeasance subaccounts (each, a "Defeasance Subaccount") for each
Series for which funds shall be deposited, as subaccounts of the Collection
Account. All amounts in the Collection Account not allocated to any other
Subaccount shall be allocated to the General Subaccount. Prior to the Initial
Payment Date, all amounts in the Collection Account (other than funds deposited
into the Capital Subaccount, up to the Required Capital Amount) shall be
allocated to the General Subaccount. All payments received by the Trustee from
any Swap Counterparty at any time shall be deposited in the related Class
Subaccount. All references to the Collection Account shall be deemed to include
reference to all subaccounts contained therein. Withdrawals from and deposits to
each of the foregoing subaccounts of the Collection Account shall be made as set
forth in Sections 4.01, 4.02, 4.03 and 8.02. The Collection Account shall at all
times be maintained in an Eligible Securities Account and only the Trustee shall
have access to the Collection Account for the purpose of making deposits in and
withdrawals from the Collection Account in accordance with this Indenture. Funds
in the Collection Account shall not be commingled by the Issuer with any other
moneys, and shall not be commingled by the Trustee. All moneys deposited from
time to time in the Collection Account, all deposits therein pursuant to this
Indenture, and all investments made in Eligible Investments with such moneys,
including all income or other gain from such investments, shall be held by the
Trustee in the Collection Account as part of the Collateral as herein provided.
(ii) Notwithstanding any other provision of this Indenture, the
Collection Account shall be an Eligible Securities Account and shall be
established only with a securities intermediary (as defined in Section
8-102(1)(n) of the Michigan UCC) that agrees with the Trustee that (A) the
Collection Account shall be a securities account of the Trustee, (B) all
property credited to the Collection Account shall be treated as a financial
asset, (C) such securities intermediary shall treat the Trustee as entitled to
exercise the rights that comprise each financial asset credited to the
Collection Account, (D) such securities intermediary shall comply with
entitlement orders originated by the Trustee without the further consent of any
other person or entity, (E) such securities intermediary shall not agree with
any person other than the Trustee to comply with entitlement orders originated
by such other person, (F) the Collection Account and all property credited to it
shall not be subject to any Lien, security interest, right of set-off in favor
of such securities intermediary or anyone claiming through it (other than the
Trustee), and (G) such agreement shall be governed by the laws of the State of
Michigan. The Collection Account shall be under the control (within the meaning
of Section 8-106 of the Michigan UCC) of the Trustee. If at any time the
Collection Account ceases to be an Eligible Securities Account, the Trustee
shall, within ten (10) days, establish a new Collection Account as an Eligible
Securities Account.
(b) All or a portion of the funds in the Collection Account
shall be invested in Eligible Investments and reinvested by the Trustee upon
Issuer Order; provided, however, that
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no funds in the Defeasance Subaccount for any Series of Securitization Bonds
shall be invested in Eligible Investments or otherwise, except that U.S.
Government Obligations deposited by the Issuer with the Trustee pursuant to
Sections 4.01 or 4.02 shall remain as such. All income or other gain from
investments of moneys deposited in the Collection Account, other than the
Capital Subaccount, shall be deposited by the Trustee in the Collection Account,
and any loss resulting from such investments shall be charged to the Collection
Account, other than the Capital Subaccount. All income or other gain from
investments of moneys deposited in the Capital Subaccount shall be deposited by
the Trustee in the Reserve Subaccount, and any loss resulting from such
investments shall be charged to the Reserve Account. The Issuer shall not direct
the Trustee to make any investment of any funds or to sell any investment held
in the Collection Account unless the security interest granted and perfected in
such account will continue to be perfected in such investment or the proceeds of
such sale, in either case without any further action by any Person, and, in
connection with any direction to the Trustee to make any such investment or
sale, if requested by the Trustee, the Issuer shall deliver to the Trustee an
Issuer Opinion of Counsel, acceptable to the Trustee, to such effect. Subject to
Section 6.01(c), the Trustee shall not in any way be held liable for the
selection of Eligible Investments or for investment losses incurred thereon
except for losses attributable to the Trustee's failure to make payments on such
Eligible Investments issued by the Trustee, in its commercial capacity as
principal obligor and not as Trustee, in accordance with their terms. The
Trustee shall have no liability in respect of losses incurred as a result of the
liquidation of any Eligible Investment prior to its stated maturity or the
failure of the Issuer to provide timely written investment direction. The
Trustee shall have no obligation to invest or reinvest any amounts held
hereunder in the absence of written investment direction pursuant to an Issuer
Order; provided, however, that if the Issuer shall have failed to give
investment directions for any funds on deposit in the Collection Account to the
Trustee by 11:00 a.m. (prevailing New York City time) (or such other time as may
be agreed by the Issuer and Trustee) on any Business Day, or (ii) a Default or
Event of Default shall have occurred and be continuing but the Securitization
Bonds shall not have been declared due and payable pursuant to Section 5.02,
then the Trustee shall, to the fullest extent practicable, invest and reinvest
funds in the Collection Account in one or more Eligible Investments of the kind
described in clause (e) of the definition thereof.
(c) Any SB Charges remitted by the Servicer to the Trustee
pursuant to the Servicing Agreement, any Indemnity Amounts remitted to the
Trustee by the Seller or the Servicer or otherwise received by the Trustee or
the Issuer, any other proceeds of Collateral received by the Servicer, the
Issuer or the Trustee, and any amounts paid by any counterparty under any
Interest Rate Swap Agreement received by the Servicer, the Issuer or the
Trustee, shall be deposited in the General Subaccount.
(d) On each Payment Date, or such other date related to such
Payment Date as may be specified in the related Series Supplement, the Trustee,
at the direction of the Servicer, shall allocate to each Class Subaccount from
the related Series Subaccount the amounts specified in the related Series
Supplement. Such amounts shall be so allocated after taking into account all
allocations required in connection with such Payment Date under clauses (e)(i)
through (v) below; provided that in the event of any shortfall of amounts to be
allocated pursuant to clause (e)(v) among more than one Class of the applicable
Series, amounts shall be allocated to such Class Subaccount on a Pro Rata basis
with all other Classes of the relevant Series. Amounts in each Class Subaccount
shall be applied as provided in the related Series Supplement.
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(e) Except as otherwise provided in any Series Supplement
with respect to any floating rate Class, and except with respect to the payment
of any administration fee payable under clause (i) below which may be disbursed
on a monthly basis if so provided in the Administration Agreement
notwithstanding the priorities set forth below, on each Payment Date, by 12:00
noon (prevailing New York City time), or if such day is not a Business Day, on
the following Business Day, the Trustee shall, at the direction of the Servicer,
apply all amounts on deposit in the General Subaccount of the Collection Account
(except as provided clause (xii) below) and any investment earnings on the
subaccounts in the Collection Account (except as provided in Section 8.02(b)
above) and, subject to the qualifications therein, after allocation to any Class
Subaccount and payment to any related Swap Counterparty in accordance with
Section 8.02(d) above, in the following priority:
(i) the administration fee payable under the
Administration Agreement, as specified in the related Series
Supplement, shall be paid to the Administrator; and fees payable to the
Independent Managers in an amount equal to $[ ] for such Payment Date,
shall be paid to the Independent Managers;
(ii) all amounts owed to the Trustee as of such Payment
Date for any expenses, including legal fees and expenses, Indemnity
Amounts (up to a maximum of $10,000,000 in the aggregate for the then
current and all prior Payment Dates and for all Series unless the
Issuer has received confirmation from S&P that a further amount will
not result in a reduction or withdrawal of the then current rating of
the Outstanding Securitization Bonds) and any other amounts due and
owing to the Trustee pursuant to the Basic Documents for such period so
long as no Event of Default would result from the payment of such
Indemnity Amounts (as limited above) or such other amounts, shall, at
the direction of the Servicer, be paid to the Trustee;
(iii) the Servicing Fee for such Payment Date and all
unpaid Servicing Fees from prior Payment Dates shall be paid to the
Servicer;
(iv) so long as no Event of Default has occurred and is
continuing or would be caused by such payment, all Operating Expenses
other than distributions in accordance with clauses (e)(i), (ii) and
(iii) above shall be paid to the Persons entitled thereto, provided
that the amount paid on such Payment Date pursuant to this clause
(e)(iv) may not exceed $100,000 in the aggregate for all Series;
(v) an amount equal to Interest payable on each Class of
each Series of Securitization Bonds on such Payment Date shall be
allocated to the corresponding Series Subaccount (provided that, to the
extent provided in any Series Supplement with respect to interest on
any floating rate Class, such amount shall be equal to the applicable
amount specified in the related Series Supplement payable with respect
to that Class) and, if there are insufficient funds to make such
allocation in full, amounts will be allocated Pro Rata to the
corresponding Class Subaccount;
(vi) an amount equal to any Principal of each Class of
each Series of Securitization Bonds payable as a result of acceleration
pursuant to Section 5.02, any Principal of any Series or Class of
Securitization Bonds payable on the Final Maturity
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Date of such Series or Class, and any Principal of a Series or Class of
Securitization Bonds payable on the Redemption Date for such Series or
Class shall be allocated to the corresponding Series Subaccount and, to
the extent there are insufficient funds to make such allocation in
full, amounts shall be allocated on a Pro Rata basis;
(vii) an amount equal to Principal scheduled to be paid
on each Class of each Series of Securitization Bonds on such Payment
Date according to the Expected Amortization Schedule, excluding any
amounts provided for pursuant to clause (e)(vi) above, shall be
allocated to the corresponding Series Subaccount and, if there are
insufficient funds for such Principal payment, shall be allocated on a
Pro Rata basis;
(viii) all remaining unpaid Operating Expenses and
Indemnity Amounts shall be paid to the Persons entitled thereto;
(ix) any amount necessary to replenish any shortfalls in
the Capital Subaccount for each Series below the Required Capital
Amount for such Series shall be allocated to the Capital Subaccount for
such Series, Pro Rata, based on the Outstanding principal balance of
each Series;
(x) an amount shall be allocated to the
Overcollateralization Subaccount for each Series sufficient to cause
the amount in the Overcollateralization Subaccount for such Series to
equal the Scheduled Overcollateralization Level for such Series as of
that Payment Date, Pro Rata, based on the Outstanding principal balance
of each Series;
(xi) the balance, if any, shall be allocated to the
Reserve Subaccount; and
(xii) following repayment of all outstanding Series of
Securitization Bonds, the balance, if any, shall be released to the
Issuer free from the Lien of this Indenture.
(f) For purposes of allocations among Series prior to an
acceleration of the Securitization Bonds pursuant to Section 5.02, except as
otherwise provided in any Series Supplement, "Pro Rata" means with respect to
any Series a ratio, (i) in the case of a payment of Interest on any Payment
Date, the numerator of which is the amount of Interest payable on such Series on
such Payment Date and, with respect to any Class of such Series of floating rate
Securitization Bonds, the gross fixed amount for that class on such Payment
Date, and the denominator of which is the aggregate amount of Interest payable
on all Series on such Payment Date; (ii) in the case of a payment of Principal
on any Payment Date, the numerator of which is the aggregate amount of Principal
scheduled to be paid or payable, as the case may be, on such Payment Date with
respect to such Series and the denominator of which is the sum of the aggregate
amounts of Principal scheduled to be paid or payable, as the case may be, with
respect to all Outstanding Series on such Payment Date; and (iii) in the case of
a payment or allocation on any Payment Date other than of Interest or Principal,
the numerator of which is the Outstanding principal amount of such Series
immediately prior to such Payment Date and the
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denominator of which is the aggregate Outstanding principal amount of all Series
immediately prior to such Payment Date.
(g) If, on any Payment Date, funds on deposit in the General
Subaccount are insufficient to make the payments and allocations contemplated by
subclauses (d) and (e)(i) through (vii), (ix) and (x) above for all Series, the
Trustee shall, at the direction of the Servicer, draw from amounts on deposit in
the following subaccounts in the following order up to the amount of such
shortfall, in order to make such payments and allocations:
(i) from the Reserve Subaccount for all Series, Pro Rata,
for payments and allocations contemplated by subclauses (d) and (e)(i)
through (vii), (ix) and (x),
(ii) from the Overcollateralization Subaccount for such
Series, Pro Rata, for payments and allocations contemplated by
subclauses (d), (e)(i) through (vii), and (ix)
(iii) from the Capital Subaccount for such Series, Pro
Rata, for payments and allocations contemplated by subclauses (d) and
(e)(i) through (vii);
provided that no amounts from the Reserve Subaccount, the Overcollateralization
Subaccount for such Series or the Capital Subaccount for such Series shall by
allocated to any Class Subaccount pursuant to subclause (e)(v) to the extent a
shortfall in amounts available to pay interest due on the related Class of
Securitization Bonds is due solely to any failure by a Swap Counterparty to make
payments due under the related Interest Rate Swap Agreement.
(h) On each Payment Date from amounts on deposit in the
Reserve Subaccount, the Trustee shall reimburse the Servicer any amounts payable
by the Issuer as Remittance Excess pursuant to Section 4.03(b)(B) of the
Servicing Agreement as provided therein.
(i) On each Payment Date for any Series prior to an
acceleration of the Securitization Bonds pursuant to Section 5.02, the amounts
on deposit in the Series Subaccount shall be allocated, at the direction of the
Servicer, in the following order of priority: (i) to pay Interest due and
payable on the Securitization Bonds of such Series with respect to such Payment
Date to the Holders of Securitization Bonds of such Series, and (ii) the
balance, if any, up to the amount of Principal scheduled to be paid or payable
on the Securitization Bonds of such Series on such Payment Date, to pay such
Principal to the Holders of Securitization Bonds of such Series.
(j) Prior to an acceleration of the Securitization Bonds
pursuant to Section 5.02, all allocations of Principal and Interest with respect
to any Series comprised of two or more Classes shall be allocated among the
Classes within such Series on a Pro Rata basis. All payments of Principal shall
be made in the order set forth in the Expected Amortization Schedule established
with respect to each Series and within such Series, in order of Class, and any
payments of Principal that were not made on the scheduled Payment Date therefor
shall be made in the order that they were scheduled for payment.
(k) For purposes of allocations among Classes within a single
Series prior to an acceleration of the Securitization Bonds pursuant to Section
5.02, except as otherwise provided
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in any Series Supplement, "Pro Rata" means with respect to any Class a ratio,
(i) in the case of a payment of Interest with respect to any Payment Date, the
numerator of which is the amount of interest payable to such Class on such
Payment Date, or in the case of any Class of floating rate Securitization Bonds,
the gross fixed amount for that class on such Payment Date and the denominator
of which is the aggregate amount of interest payable on all Classes within such
Series on such Payment Date; and (ii) in the case of a payment of Principal on
any Payment Date, the numerator of which is the aggregate amount of Principal
scheduled to be paid or payable, as the case may be, on such Payment Date with
respect to such Class and the denominator of which is the sum of the aggregate
amounts of Principal scheduled to be paid or payable, as the case may be, with
respect to all Outstanding Classes within such Series on such Payment Date.
(l) Prior to an acceleration of the Securitization Bonds
pursuant to Section 5.02, all payments of Principal and Interest to Holders of
Securitization Bonds of a single Class, or of a single Series without Classes,
shall be made on a proportionate basis based on the respective principal amounts
of such Securitization Bonds held by such Holders. All such payments of
Principal shall be made in the order set forth in the Expected Amortization
Schedule established with respect to each Series and within such Series, in
order of Class, and any payments of Principal that were not made on the
scheduled Payment date therefor shall be made in the order that they were
scheduled for payment.
(m) Upon an acceleration of the maturity of the
Securitization Bonds pursuant to Section 5.02, the aggregate amount of principal
of and interest accrued on each Securitization Bond shall be payable, without
priority of interest over principal or of principal over interest and without
regard to Series or Class, in the proportion that the aggregate amount of
principal of and interest accrued on such Securitization Bond bears to the
aggregate amount of principal of and interest accrued on all Securitization
Bonds.
(n) Notwithstanding any other provision in this Indenture to
the contrary, in the event of an acceleration of the Securitization Bonds, and a
subsequent liquidation of the Collateral in accordance with Section 5.04(a), if
so provided in any Interest Rate Swap Agreement, the proceeds of such
liquidation allocated to the related Class of floating rate Securitization Bonds
in accordance with this Section 8.02 shall be allocated between and paid to the
holders of such floating rate Class, on the one hand, and the related Swap
Counterparty, on the other hand, pro rata based on the aggregate amount of
principal and interest due and payable on such floating rate Class and the
aggregate amount payable to the related Swap Counterparty in accordance with
such Interest Rate Swap Agreement.
SECTION 8.03 RELEASE OF COLLATERAL. (a) All money and other
property withdrawn from the Collection Account by the Trustee for payment to the
Issuer as provided in this Indenture in accordance with Section 8.02 shall be
deemed released from this Indenture when so withdrawn and applied in accordance
with the provisions of Article VIII, without further notice to, or release or
consent by, the Trustee.
(b) Other than as provided for in clause (a) above, the
Trustee shall release property from the Lien of this Indenture only as and to
the extent permitted by the Basic Documents and only upon receipt of an Issuer
Request accompanied by an Issuer Officer's
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Certificate, an Issuer Opinion of Counsel and Independent Certificates in
accordance with TIA Sections 314(c) and 314(d)(1) meeting the applicable
requirements of Section 11.01 or an Issuer Opinion of Counsel in lieu of such
Independent Certificates to the effect that the TIA does not require any such
Independent Certificate.
(c) Subject to the payment of its fees and expenses pursuant
to Section 6.07, the Trustee may, and when required by the provisions of this
Indenture shall, execute instruments to release property from the Lien of this
Indenture, or convey the Trustee's interest in the same, in a manner and under
circumstances that are not inconsistent with the provisions of this Indenture.
No party relying upon an instrument executed by the Trustee as provided in this
Article VIII shall be bound to ascertain the Trustee's authority, inquire into
the satisfaction of any conditions precedent or see to the application of any
moneys.
(d) Subject to Section 8.03(b), the Trustee shall, at such
time as there are no Securitization Bonds Outstanding and all sums due the
Trustee pursuant to Section 6.07 have been paid, release any remaining portion
of the Collateral that secured the Securitization Bonds from the Lien of this
Indenture and release to the Issuer or any other Person entitled thereto any
funds or investments then on deposit in or credited to the Collection Account.
SECTION 8.04 ISSUER OPINION OF COUNSEL. The Trustee shall
receive at least five days notice when requested by the Issuer to take any
action pursuant to Section 8.03, accompanied by copies of any instruments
involved, and the Trustee shall also require, as a condition to such action, an
Issuer Opinion of Counsel, in form and substance satisfactory to the Trustee,
stating the legal effect of any such action, outlining the steps required to
complete the same, and concluding that all conditions precedent to the taking of
such action have been complied with and such action will not materially and
adversely impair the security for the Securitization Bonds or the rights of the
Securitization Bondholders in contravention of the provisions of this Indenture;
provided, however, that such Issuer Opinion of Counsel shall not be required to
express an opinion as to the fair value of the Collateral. Counsel rendering any
such opinion may rely, without independent investigation, on the accuracy and
validity of any certificate or other instrument delivered to the Trustee in
connection with any such action.
SECTION 8.05 REPORTS BY INDEPENDENT ACCOUNTANTS. The Issuer
shall appoint a firm of Independent certified public accountants of recognized
national reputation for purposes of preparing and delivering the reports or
certificates of such accountants required by this Indenture and the related
Series Supplements. Upon any resignation by such firm, the Issuer shall promptly
appoint a successor thereto that shall also be a firm of Independent certified
public accountants of recognized national reputation. If the Issuer shall fail
to appoint a successor to a firm of Independent certified public accountants
that has resigned within fifteen (15) days after such resignation, the Trustee
shall promptly notify the Issuer of such failure in writing. If the Issuer shall
not have appointed a successor within ten (10) days thereafter, the Trustee
shall promptly appoint a successor firm of Independent certified public
accountants of recognized national reputation. The fees of such firm of
Independent certified public accountants and its successor shall be payable by
the Issuer.
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ARTICLE IX
SUPPLEMENTAL INDENTURES
SECTION 9.01 SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF
SECURITIZATION BONDHOLDERS. (a) Without the consent of the Holders of any
Securitization Bonds or the counterparty under any Interest Rate Swap Agreement
but with prior notice to the Rating Agencies, the Issuer and the Trustee, when
authorized by an Issuer Order, at any time and from time to time, may enter into
one or more indentures supplemental hereto (which shall conform to the
provisions of the Trust Indenture Act as in force at the date of the execution
thereof), in form satisfactory to the Trustee, for any of the following
purposes:
(i) to correct or amplify the description of the
Collateral, or better to assure, convey and confirm unto the Trustee
the Collateral, or to subject to the Lien of this Indenture additional
property;
(ii) to evidence the succession, in compliance with the
applicable provisions hereof, of another person to the Issuer, and the
assumption by any applicable successor of the covenants of the Issuer
contained herein and in the Securitization Bonds;
(iii) to add to the covenants of the Issuer, for the
benefit of the Securitization Bondholders, or to surrender any right or
power herein conferred upon the Issuer;
(iv) to convey, transfer, assign, mortgage or pledge any
property to the Trustee for the benefit of the Securitization
Bondholders, the Trustee and the Swap Counterparty;
(v) to cure any ambiguity, to correct or supplement any
provision herein or in any Supplemental Indenture which may be
inconsistent with any other provision herein or in any Supplemental
Indenture or to make any other provisions with respect to matters or
questions arising under this Indenture or in any Supplemental
Indenture; provided, however, that (i) such action shall not, as
evidenced by an Issuer Opinion of Counsel, adversely affect in any
material respect the interests of any Securitization Bondholder or any
counterparty under any Interest Rate Swap Agreement and (ii) the Rating
Agency Condition shall have been satisfied with respect thereto;
(vi) to evidence and provide for the acceptance of the
appointment hereunder by a successor Trustee with respect to the
Securitization Bonds and to add to or change any of the provisions of
this Indenture as shall be necessary to facilitate the administration
of the trusts hereunder by more than one Trustee, pursuant to the
requirements of Article VI;
(vii) to modify, eliminate or add to the provisions of
this Indenture to such extent as shall be necessary to effect the
qualification of this Indenture under the TIA or under any similar
federal statute hereafter enacted and to add to this Indenture such
other provisions as may be expressly required by the TIA;
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(viii) to set forth the terms of any Series that has not
theretofore been authorized by a Supplemental Indenture, provided that
the Rating Agency Condition has been satisfied;
(ix) to provide for any Interest Rate Swap Agreements
with respect to any Series or Class of Securitization Bonds which bears
a floating rate of interest or any Series or Class with specified
credit enhancement; provided, however, that:
(A) such action shall not, as evidenced by an Opinion
of Counsel, adversely affect in any material respect the
interests of any Securitization Bondholder or any counterparty
under any Interest Rate Swap Agreement and
(B) the Rating Agency Condition shall have been
satisfied with respect thereto; or
(x) to authorize the appointment of any listing agent,
transfer agent or paying agent or additional registrar for any Class of
any Series of Securitization Bonds required or advisable in connection
with the listing of any Class or any Series of Securitization Bonds on
the Luxembourg Stock Exchange or any other stock exchange, and
otherwise to amend this Indenture to incorporate any changes requested
or required by any governmental authority, stock exchange authority,
listing agent, transfer agent or paying agent or additional registrar
for any Class or any Series of Securitization Bonds in connection with
that listing.
(b) The Trustee is hereby authorized to join in the execution
of any such Supplemental Indenture and to make any further appropriate
agreements and stipulations that may be therein contained.
SECTION 9.02 SUPPLEMENTAL INDENTURES WITH CONSENT OF
SECURITIZATION BONDHOLDERS. (a) The Issuer and the Trustee, when authorized by
an Issuer Order, also may, upon satisfaction of the Rating Agency Condition (in
each case, accompanied by the form of the proposed supplemental indenture) and
with the consent of the Holders of not less than a majority of the Outstanding
Amount of the Securitization Bonds of each Series or Class to be affected, by
Act of such Holders delivered to the Issuer and the Trustee, enter into an
indenture or indentures supplemental hereto for the purpose of adding any
provisions to, or changing in any manner or eliminating any of the provisions
of, this Indenture or of modifying in any manner the rights of the Holders of
the Securitization Bonds under this Indenture; provided, however, that no such
Supplemental Indenture shall, without the consent of the Holder of each
Outstanding Securitization Bond of each Series or Class and each counterparty
under any Interest Rate Swap Agreement affected thereby:
(i) change the date of payment of any instalment of
principal of or interest on any Securitization Bond, or reduce the
principal amount thereof, the interest rate thereon or the Redemption
Price with respect thereto, change the provisions of the Interest Rate
Swap Agreement relating to the amount, calculation or timing of
payments, change the provisions of any Hedge Agreement or Interest Rate
Swap Agreement relating to the amount, calculation or timing of
payments, change the provisions of this Indenture
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and the related applicable Supplemental Indenture or Series Supplement
relating to the application of collections on, or the proceeds of the
sale of, the Collateral to payment of principal of or interest on the
Securitization Bonds, or change the currency in which, any
Securitization Bond or the interest thereon is payable;
(ii) impair the right to institute suit for the
enforcement of the provisions of this Indenture requiring the
application of funds available therefor, as provided in Article V, to
the payment of any such amount due on the Securitization Bonds on or
after the respective due dates thereof (or, in the case of redemption,
on or after the Redemption Date);
(iii) reduce the percentage of the Outstanding Amount of
the Securitization Bonds or of a Series or Class thereof, the consent
of the Holders of which is required for any such Supplemental
Indenture, or the consent of the Holders of which is required for any
waiver of compliance with provisions of this Indenture or defaults
hereunder and their consequences provided for in this Indenture or
modify or alter the provisions of the proviso to the definition of the
term "Outstanding";
(iv) reduce the percentage of the Outstanding Amount of
the Securitization Bonds required to direct the Trustee to direct the
Issuer to sell or liquidate the Collateral pursuant to Section 5.04 or
to preserve the Collateral pursuant to Section 5.05;
(v) reduce the percentage of the Outstanding Amount of a
Series or Class of Securitization Bonds, the consent of the Holders of
which is required for any amendments to the Sale Agreement, the
Administration Agreement, the Servicing Agreement or any Interest Rate
Swap Agreement;
(vi) modify any of the provisions of this Indenture in
such manner so as to affect the amount of any payment of interest or
principal payable on any Securitization Bond on any Payment Date or
change the Redemption Dates, Expected Amortization Schedules or Final
Maturity Date of any Series or Class of Securitization Bonds;
(vii) decrease the Overcollateralization Amount or
Required Capital Amount with respect to any Series or the Scheduled
Overcollateralization Level with respect to any Payment Date;
(viii) modify or alter the provisions of this Indenture
regarding the voting of Securitization Bonds held by the Issuer, the
Seller, an Affiliate of either of them or any obligor on the
Securitization Bonds;
(ix) decrease the percentage of the aggregate principal
amount of Securitization Bonds required to amend the sections of this
Indenture which specify the applicable percentage of the aggregate
principal amount of the Securitization Bonds necessary to amend this
Indenture or any other Basic Documents; or
(x) permit the creation of any Lien ranking prior to or
on a parity with the Lien of this Indenture with respect to any part of
the Collateral or, except as otherwise
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permitted or contemplated herein, terminate the Lien of this Indenture
on any property at any time subject hereto or deprive the Holder of any
Securitization Bond of the security provided by the Lien of this
Indenture.
(b) It shall not be necessary for any Act of Securitization
Bondholders under this Section 9.02 to approve the particular form of any
proposed Supplemental Indenture, but it shall be sufficient if such Act shall
approve the substance thereof.
(c) Promptly after the execution by the Issuer and the
Trustee of any Supplemental Indenture pursuant to this Section 9.02, the Trustee
shall mail to the Holders of the Securitization Bonds to which such amendment or
Supplemental Indenture relates a notice setting forth in general terms the
substance of such Supplemental Indenture. Any failure of the Trustee to mail
such notice, or any defect therein, shall not, however, in any way impair or
affect the validity of any such Supplemental Indenture. If any Securitization
Bonds are listed on the Luxembourg Stock Exchange and the rules of such exchange
so require, the Trustee shall arrange for publication in an Authorized Newspaper
that such notice shall be available with the Issuer's listing agent in
Luxembourg appointed pursuant to Section 3.02(b).
SECTION 9.03 EXECUTION OF SUPPLEMENTAL INDENTURES. In
executing, or permitting the additional trusts created by, any Supplemental
Indenture permitted by this Article IX or the modifications thereby of the
trusts created by this Indenture, the Trustee shall be entitled to receive, and
subject to Sections 6.01 and 6.02, shall be fully protected in relying upon, an
Issuer Opinion of Counsel stating that the execution of such Supplemental
Indenture is authorized or permitted by this Indenture. The Trustee may, but
shall not be obligated to, enter into any such Supplemental Indenture that
affects the Trustee's own rights, duties, liabilities or immunities under this
Indenture or otherwise.
SECTION 9.04 EFFECT OF SUPPLEMENTAL INDENTURE. Upon the
execution of any Supplemental Indenture pursuant to the provisions hereof, this
Indenture shall be and be deemed to be modified and amended in accordance
therewith with respect to each Series or Class of Securitization Bonds affected
thereby, and the respective rights, limitations of rights, obligations, duties,
liabilities and immunities under this Indenture of the Trustee, the Issuer, the
Holders of the Securitization Bonds and any counterparty under any Hedge
Agreement or Interest Rate Swap Agreement shall thereafter be determined,
exercised and enforced hereunder subject in all respects to such modifications
and amendments, and all the terms and conditions of any such Supplemental
Indenture shall be and be deemed to be part of the terms and conditions of this
Indenture for any and all purposes.
SECTION 9.05 CONFORMITY WITH TRUST INDENTURE ACT. Every
amendment of this Indenture and every Supplemental Indenture executed pursuant
to this Article IX shall conform to the requirements of the TIA as then in
effect so long as this Indenture shall then be qualified under the TIA.
SECTION 9.06 REFERENCE IN SECURITIZATION BONDS TO
SUPPLEMENTAL INDENTURES. Securitization Bonds authenticated and delivered after
the execution of any Supplemental Indenture pursuant to this Article IX may, and
if required by the Trustee shall, bear a notation in form approved by the
Trustee as to any matter provided for in such
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Supplemental Indenture. If the Issuer or the Trustee shall so determine, new
Securitization Bonds so modified as to conform, in the opinion of the Trustee
and the Issuer, to any such Supplemental Indenture may be prepared and executed
by the Issuer and authenticated and delivered by the Trustee in exchange for
Outstanding Securitization Bonds.
ARTICLE X
REDEMPTION OF SECURITIZATION BONDS
SECTION 10.01 OPTIONAL REDEMPTION BY ISSUER. If so provided
in the related Series Supplement and provided that there is no Interest Rate
Swap Agreement with respect to any Class of that Series in effect, the Issuer
may, at its option, redeem all, but not less than all, of the Securitization
Bonds of a Series on any Payment Date if, after giving effect to payments that
would otherwise be made on such Payment Date, the Outstanding Amount of any such
Series of Securitization Bonds has been reduced to less than five percent (5%)
of the initial principal balance of such Series. The redemption price in any
case shall be equal to the Outstanding Amount of the Series to be redeemed plus
accrued and unpaid interest thereon at the Interest Rate to the Redemption Date
(the "Redemption Price," for purposes of this Section 10.01). If the Issuer
elects to redeem the Securitization Bonds of a Series pursuant to this Section
10.01, it shall furnish notice of such election to (a) the Trustee, not later
than twenty-five (25) days prior to the Redemption Date for such redemption and
(b) the Rating Agencies, not later than ten (10) days prior to such Redemption
Date, whereupon all such Securitization Bonds shall be due and payable on such
Redemption Date upon the furnishing of a notice complying with Section 10.03 to
each Holder of the Securitization Bonds of such Series pursuant to this Section
10.01.
SECTION 10.02 MANDATORY REDEMPTION BY ISSUER. The Issuer
shall redeem the Securitization Bonds of a Series on the Redemption Date, if
any, in the amounts required, if any, and at the redemption price specified in
the Series Supplement for such Series, which in any case shall be not less than
the Outstanding Amount of the Series to be redeemed, plus accrued and unpaid
interest thereon to such Redemption Date (the "Redemption Price," for purposes
of this Section 10.02). If the Issuer is required to redeem the Securitization
Bonds of a Series pursuant to this Section 10.02, it shall furnish notice of
such requirement to the Trustee not later than twenty-five (25) days prior to
the Redemption Date for such redemption, whereupon all such Securitization Bonds
shall be due and payable on the Redemption Date upon the furnishing of a notice
complying with Section 10.03 to each Holder of the Securitization Bonds of such
Series pursuant to this Section 10.02.
SECTION 10.03 FORM OF REDEMPTION NOTICE. (a) Unless otherwise
specified in the Series Supplement relating to a Series of Securitization Bonds,
notice of redemption under Sections 10.01 or 10.02 shall be given by the Trustee
by first-class mail, postage prepaid, mailed not less than five days nor more
than forty-five (45) days prior to the applicable Redemption Date to each Holder
of Securitization Bonds to be redeemed, as of the close of business on the
Record Date preceding the applicable Redemption Date at such Holder's address
appearing in the Securitization Bond Register.
(b) All notices of redemption shall state:
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(i) the Redemption Date;
(ii) the Series and amount of such Securitization Bonds
to be redeemed;
(iii) the Redemption Price; and
(iv) the place where such Securitization Bonds are to be
surrendered for payment of the Redemption Price and accrued interest
(which shall be the office or agency of the Issuer to be maintained as
provided in Section 3.02).
(c) Notice of redemption of the Securitization Bonds to be
redeemed shall be given by the Trustee in the name and at the expense of the
Issuer. For so long as any Securitization Bonds are listed on the Luxembourg
Stock Exchange and the rules of such exchange so require, the Trustee shall
arrange that such notice will also be given by publication in an Authorized
Newspaper at least ten (10) days prior to the Redemption Date. Failure to give
notice of redemption, or any defect therein, to any Holder of any Securitization
Bond selected for redemption shall not impair or affect the validity of the
redemption of any other Securitization Bond. Notice of optional redemption shall
be irrevocable once given.
SECTION 10.04 PAYMENT OF REDEMPTION PRICE. If notice of
redemption has been duly mailed or duly waived by the Holders of all
Securitization Bonds called for redemption, then the Securitization Bonds called
for redemption shall be payable on the applicable Redemption Date at the
applicable Redemption Price. No further interest will accrue on the principal
amount of any Securitization Bonds called for redemption after the Redemption
Date, and the Holders of such Securitization Bonds will have no rights with
respect thereto, if payment of the Redemption Price has been duly provided for
on or before the Redemption Date declared therefor. Notwithstanding the
foregoing, the Holders of the Securitization Bonds shall be entitled to payment
of interest on the Redemption Price accrued at the related Interest Rates to the
extent the Issuer fails to pay the Redemption Price on the Redemption Date.
Payment of the Redemption Price shall be made by the Trustee to or upon the
order of the Holders of the Securitization Bonds called for redemption upon
surrender of such Securitization Bonds, and the Securitization Bonds so redeemed
shall cease to be of further effect and the Lien hereunder shall be released
with respect to such Securitization Bonds.
ARTICLE XI
MISCELLANEOUS
SECTION 11.01 COMPLIANCE CERTIFICATES AND OPINIONS, ETC. (a)
Upon any application or request by the Issuer to the Trustee to take any action
under any provision of this Indenture, the Issuer shall furnish to the Trustee
(i) an Issuer Officer's Certificate stating that all conditions precedent, if
any, provided for in this Indenture relating to the proposed action have been
complied with, (ii) an Issuer Opinion of Counsel stating that in the opinion of
such counsel all such conditions precedent, if any, have been complied with and
(iii) (if required by the TIA) an Independent Certificate from a firm of
certified public accountants meeting the applicable requirements of this Section
11.01, except that, in the case of any such application or
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request as to which the furnishing of such documents is specifically required by
any provision of this Indenture, no additional certificate or opinion need be
furnished.
(b) Every certificate or opinion with respect to compliance
with a condition or covenant provided for in this Indenture shall include:
(i) statement that each signatory of such certificate or
opinion has read or has caused to be read such covenant or condition
and the definitions herein relating thereto;
(ii) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(iii) a statement that, in the opinion of each such
signatory, such signatory has made such examination or investigation as
is necessary to enable such signatory to express an informed opinion as
to whether or not such covenant or condition has been complied with;
and
(iv) a statement as to whether, in the opinion of each
such signatory, such condition or covenant has been complied with.
SECTION 11.02 FORM OF DOCUMENTS DELIVERED TO TRUSTEE. (a) In
any case where several matters are required to be certified by, or covered by an
opinion of, any specified Person, it is not necessary that all such matters be
certified by, or covered by the opinion of, only one such Person, or that they
be so certified or covered by only one document, but one such Person may certify
or give an opinion with respect to some matters and one or more other such
Persons as to other matters, and any such Person may certify or give an opinion
as to such matters in one or several documents.
(b) Any certificate or opinion of an Authorized Officer of
the Issuer may be based, insofar as it relates to legal matters, upon a
certificate or opinion of, or representations by, counsel, unless such officer
knows, or in the exercise of reasonable care should know, that the certificate
or opinion or representations with respect to the matters upon which his
certificate or opinion is based are erroneous. Any such certificate of an
Authorized Officer or Issuer Opinion of Counsel may be based, insofar as it
relates to factual matters, upon a certificate or opinion of, or representations
by, an officer or officers of the Servicer or the Seller or a Manager or
Managers of the Issuer, stating that the information with respect to such
factual matters is in the possession of the Servicer, the Seller or the Issuer,
unless such Authorized Officer or counsel knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to such matters are erroneous.
(c) Where any Person is required to make, give or execute two
or more applications, requests, consents, certificates, statements, opinions or
other instruments under this Indenture, they may, but need not, be consolidated
and form one instrument.
(d) Whenever in this Indenture, in connection with any
application or certificate or report to the Trustee, it is provided that the
Issuer shall deliver any document as a condition of
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the granting of such application, or as evidence of the Issuer's compliance with
any term hereof, it is intended that the truth and accuracy, at the time of the
granting of such application or at the effective date of such certificate or
report (as the case may be), of the facts and opinions stated in such document
shall in such case be conditions precedent to the right of the Issuer to have
such application granted or to the sufficiency of such certificate or report.
The foregoing shall not, however, be construed to affect the Trustee's right to
rely upon the truth and accuracy of any statement or opinion contained in any
such document as provided in Article VI.
SECTION 11.03 ACTS OF SECURITIZATION BONDHOLDERS. (a) Any
request, demand, authorization, direction, notice, consent, waiver or other
action provided by this Indenture to be given or taken by Securitization
Bondholders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Securitization Bondholders in person
or by agents duly appointed in writing; and except as herein otherwise expressly
provided such action shall become effective when such instrument or instruments
are delivered to the Trustee, and, where it is hereby expressly required, to the
Issuer. Such instrument or instruments (and the action embodied therein and
evidenced thereby) are herein sometimes referred to as the "Act" of the
Securitization Bondholders signing such instrument or instruments. Proof of
execution of any such instrument or of a writing appointing any such agent shall
be sufficient for any purpose of this Indenture and (subject to Section 6.01)
conclusive in favor of the Trustee and the Issuer, if made in the manner
provided in this Section 11.03.
(b) The fact and date of the execution by any person of any
such instrument or writing may be proved in any manner that the Trustee deems
sufficient.
(c) The ownership of Securitization Bonds shall be proved by
the Securitization Bond Register.
(d) Any request, demand, authorization, direction, notice,
consent, waiver or other action by the Holder of any Securitization Bonds shall
bind the Holder of every Securitization Bond issued upon the registration
thereof or in exchange therefor or in lieu thereof, in respect of anything done,
omitted or suffered to be done by the Trustee or the Issuer in reliance thereon,
whether or not notation of such action is made upon such Securitization Bond.
SECTION 11.04 NOTICES, ETC., TO TRUSTEE, ISSUER AND RATING
AGENCIES. (a) Any request, demand, authorization, direction, notice, consent,
waiver or Act of Securitization Bondholders or other documents provided or
permitted by this Indenture to be made upon, given or furnished to or filed
with:
(i) the Trustee by any Securitization Bondholder or by
the Issuer, or
(ii) the Issuer by the Trustee or by any Securitization
Bondholder,
shall be sufficient for every purpose hereunder if in English and in writing,
and sent by United States first-class mail, reputable overnight courier service,
facsimile transmission or electronic mail (confirmed by telephone, United States
first-class mail or reputable overnight courier service in the case of notice by
facsimile transmission or electronic mail) or any other customary means of
communication, and any such request, demand, authorization, direction, notice,
consent, waiver or Act shall be effective when delivered or transmitted, or if
mailed, five days
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after deposit in the United States first-class mail with proper postage for
first-class mail prepaid, in the case of the Trustee, addressed to the Trustee
at its Corporate Trust Office, and in the case of the Issuer, addressed to: The
Detroit Edison Securitization Funding LLC, 2000 2nd Avenue, 850 WCB, Detroit,
Michigan 48226-1279, Attention: Secretary, or at any other address previously
furnished in writing to the Trustee by the Issuer. The Issuer shall promptly
transmit any notice received by it from the Securitization Bondholders to the
Trustee.
(b) Notices required to be given to the Rating Agencies by
the Issuer, the Trustee or a Manager shall be in writing, delivered personally,
via facsimile transmission, by reputable overnight courier or by first-class
mail, postage prepaid, to: (i) in the case of Moody's: Moody's Investors
Service, Inc., Attention: ABS Monitoring Department, 99 Church Street, New York,
New York 10007; (ii) in the case of Standard & Poor's: Standard & Poor's Ratings
Services, 55 Water Street, New York, NY 10041, Attention: Asset Backed
Surveillance Department and (iii) in the case of Fitch: Fitch, Inc., 1 State
Street Plaza, New York, New York 10004, Attention: ABS Surveillance.
SECTION 11.05 NOTICES TO SECURITIZATION BONDHOLDERS; WAIVER.
(a) Where this Indenture provides for notice to Securitization Bondholders of
any event, such notice shall be sufficiently given (unless otherwise herein
expressly provided) if in writing and delivered by first-class mail, postage
prepaid, to each Securitization Bondholder affected by such event, at the
address of such Securitization Bondholder as it appears on the Securitization
Bond Register, not later than the latest date, and not earlier than the earliest
date, prescribed for the giving of such notice. In any case where notice to
Securitization Bondholders is given by mail, neither the failure to mail such
notice nor any defect in any notice so mailed to any particular Securitization
Bondholder shall affect the sufficiency of such notice with respect to other
Securitization Bondholders, and any notice that is mailed in the manner herein
provided shall conclusively be presumed to have been duly given.
(b) Where this Indenture provides for notice in any manner,
such notice may be waived in writing by any Person entitled to receive such
notice, either before or after the event, and such waiver shall be the
equivalent of such notice. Waivers of notice by Securitization Bondholders shall
be filed with the Trustee but such filing shall not be a condition precedent to
the validity of any action taken in reliance upon such a waiver.
(c) In case it shall be impractical to deliver notice in
accordance with clause (a) of this Section 11.05 to the Holders of
Securitization Bonds when such notice is required to be given pursuant to any
provision of this Indenture, then any manner of giving such notice as shall be
satisfactory to the Trustee shall be deemed to be a sufficient giving of such
notice.
(d) Where this Indenture provides for notice to the Rating
Agencies, failure to give such notice shall not affect any other rights or
obligations created hereunder, and shall not under any circumstance constitute a
Default or Event of Default.
SECTION 11.06 NOTICES TO LUXEMBOURG STOCK EXCHANGE. (a) For
so long as any Securitization Bonds are listed on the Luxembourg Stock Exchange
and to the extent the rules of such exchange so require, the Issuer shall notify
the Luxembourg Stock Exchange and any agent appointed pursuant to Section
3.02(b) if any rating assigned to such Securitization
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Bonds is reduced or withdrawn and shall arrange for such notice to be published
in an Authorized Newspaper.
(b) For so long as any Securitization Bonds are listed on the
Luxembourg Stock Exchange and the rules of such exchange so require, the Trustee
shall make available to the Holders of such Securitization Bonds and shall
deposit on file with the Issuer's listing agent in Luxembourg appointed pursuant
to Section 3.02(b), copies of the Basic Documents, all reports provided to
Securitization Bondholders pursuant to this Indenture, the prospectus related to
such Securitization Bonds, the reports of independent certified public
accountants obtained with respect to the Issuer pursuant to this Indenture, the
financial information regarding Detroit Edison in its annual report on Form 10-K
for the fiscal year ended December 31, 2000 and copies of each annual report of
Detroit Edison on Form 10-K for subsequent fiscal years. The Trustee shall
deposit with the Chief Registrar of the District Court of Luxembourg prior to
listing on the Luxembourg Stock Exchange a copy of the Issuer Articles of
Organization, the Issuer LLC Agreement and any legal notices relating to the
issuance of such Securitization Bonds.
SECTION 11.07 ALTERNATE PAYMENT AND NOTICE PROVISIONS.
Notwithstanding any provision of this Indenture or any of the Securitization
Bonds to the contrary, the Issuer may enter into any agreement with any Holder
of a Securitization Bond providing for a method of payment, or notice by the
Trustee or any Paying Agent to such Holder, that is different from the methods
provided for in this Indenture for such payments or notices. The Issuer will
furnish to the Trustee a copy of each such agreement and the Trustee will cause
payments to be made and notices to be given in accordance with such agreements.
SECTION 11.08 CONFLICT WITH TRUST INDENTURE ACT. (a) If any
provision hereof limits, qualifies or conflicts with another provision hereof
that is required to be included in this Indenture by any of the provisions of
the TIA, such required provision shall control.
(b) The provisions of TIA Sections 310 through 317 that
impose duties on any person (including the provisions automatically deemed
included herein unless expressly excluded by this Indenture) are a part of and
govern this Indenture, whether or not physically contained herein.
SECTION 11.09 EFFECT OF HEADINGS AND TABLE OF CONTENTS. The
Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.
SECTION 11.10 SUCCESSORS AND ASSIGNS. (a) All covenants and
agreements in this Indenture and the Securitization Bonds by the Issuer shall
bind its successors and permitted assigns, whether so expressed or not.
(b) All agreements of the Trustee in this Indenture shall
bind its successors.
(c) The Trustee shall provide prior notice to the Rating
Agencies of any assignment of the obligations under this Agreement.
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SECTION 11.11 SEVERABILITY. In case any provision in this
Indenture or in the Securitization Bonds shall be invalid, illegal or
unenforceable, the validity, legality, and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
SECTION 11.12 BENEFITS OF INDENTURE. Nothing in this
Indenture or in the Securitization Bonds, express or implied, shall give to any
Person, other than the parties hereto and their successors hereunder, and the
Securitization Bondholders, and any other party secured hereunder, and any other
Person with an ownership interest in any part of the Collateral, any benefit or
any legal or equitable right, remedy or claim under this Indenture.
SECTION 11.13 LEGAL HOLIDAYS. In any case where the date on
which any payment is due shall not be a Business Day, then (notwithstanding any
other provision of the Securitization Bonds or this Indenture) payment need not
be made on such date, but may be made on the next succeeding Business Day with
the same force and effect as if made on the date on which nominally due, and no
interest shall accrue for the period from and after any such nominal date.
SECTION 11.14 GOVERNING LAW. THIS INDENTURE SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF MICHIGAN, WITHOUT
REFERENCE TO ITS CONFLICT OF LAWS PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND
REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH
LAWS.
SECTION 11.15 COUNTERPARTS. This 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.
SECTION 11.16 ISSUER OBLIGATION. No recourse may be taken,
directly or indirectly, with respect to the obligations of the Issuer or the
Trustee on the Securitization Bonds or under this Indenture or any certificate
or other writing delivered in connection herewith or therewith, against (i) the
Member or any Manager, employee or agent of the Issuer or (ii) any stockholder,
officer, director, employee or agent of the Trustee (it being understood that
none of the Trustee's obligations are in its individual capacity).
SECTION 11.17 NO PETITION. The Trustee, by entering into this
Indenture, and each Securitization Bondholder, by accepting a Securitization
Bond, hereby covenants and agrees (or shall be deemed to have covenanted and
agreed) that it shall not at any time institute against the Issuer, or join in
the institution against the Issuer of, or acquiesce, petition or otherwise
invoke or cause the Issuer to invoke the process of any court or government
authority for the purpose of commencing or sustaining a case against the Issuer
under any federal or state bankruptcy, insolvency or similar law or appointing a
receiver, liquidator, assignee, trustee, custodian, sequestrator or other
similar official of the Issuer or any substantial part of the property of the
Issuer or ordering the winding up or liquidation of the affairs of the Issuer.
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IN WITNESS WHEREOF, the Issuer and the Trustee have caused
this Indenture to be duly executed and delivered by a Manager and an officer,
respectively, thereof, each thereunto duly authorized, all as of the day and
year first above written.
THE DETROIT EDISON SECURITIZATION
FUNDING LLC,
as Issuer
By:__________________________
Name:
Title: Manager
THE BANK OF NEW YORK,
as Trustee
By:__________________________
Name:
Title:
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APPENDIX A
MASTER DEFINITIONS
To be used in connection with the Servicing
Agreement, the Sale Agreement, the Administration
Agreement and the Indenture.
The definitions contained in this Appendix A are applicable to the singular as
well as the plural forms of such terms.
Act has the meaning specified in Section 11.03 of the Indenture.
Actual Charge-Off Percent means the Servicer's actual system-wide
charge-off percentage.
Adjustment Request means any filing made with the MPSC by the Servicer
on behalf of the Issuer for a Periodic Adjustment.
Administration Agreement means the Administration Agreement dated as of
[ ], 2001, between the Administrator and the Issuer, as the same may be
amended or supplemented from time to time.
Administrator means Detroit Edison, as administrator under the
Administration Agreement, and each successor to Detroit Edison, in the
same capacity, pursuant to Section 14 of the Administration Agreement.
AES means an alternative energy supplier pursuant to the Statute.
Affiliate means, with respect to any specified Person, any other Person
controlling or controlled by or under common control with such
specified Person. For the purposes of this definition, control when
used with respect to any specified Person means the power to direct the
management and policies of such Person, directly or indirectly, whether
through the ownership of voting securities, by contract or otherwise;
and the terms controlling and controlled have meanings correlative to
the foregoing.
Annual Accountant's Report has the meaning set forth in Section 3.04 of
the Servicing Agreement.
Annual Reconciliation Report has the meaning set forth in Section
4.03(b) of the Servicing Agreement.
Authorized Denominations means, with respect to any Series or Class of
Securitization Bonds, $1,000 and integral multiples of $1.00 above that
amount, provided, however, that one bond of each Class may have a
denomination of less than $1,000, or such other denominations as may be
specified in the Series Supplement therefor.
Authorized Newspaper means the Luxemburger Wort or any other newspaper
published in Luxembourg on a daily basis.
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Authorized Officer means,
(a) with respect to the Issuer, (i) any Manager and (ii)
any person authorized by the Managers pursuant to the
Issuer LLC Agreement;
(b) with respect to the Servicer, the chief executive
officer, the president, the vice chairman of the
board, any vice president, the treasurer, any
assistant treasurer, the secretary, any assistant
secretary, the controller or any assistant controller
of the Servicer;
(c) with respect to the Trustee, any officer within the
Corporate Trust Office of the Trustee, including any
vice president, assistant vice president, secretary,
assistant secretary, or any other officer of the
Trustee customarily performing functions similar to
those performed by any of the designated officers in
this clause (c) and also, with respect to a
particular matter, any other officer to whom such
matter is referred because of such officer's
knowledge of and familiarity with the particular
subject; and
(d) with respect to any other corporation, the chief
executive officer, chief operating officer, chief
financial officer, chief information officer,
president, executive vice president, any vice
president, the secretary or the treasurer of such
corporation; and with respect to any limited
liability company, any manager thereof.
Basic Documents means the Formation Documents, the Sale Agreement, any
Bills of Sale, the Servicing Agreement, the Administration Agreement,
the Indenture, the Underwriting Agreement and any Interest Rate Swap
Agreement, as each may be amended or supplemented from time to time.
Bill of Sale means any bill of sale issued by the Seller to the Issuer
pursuant to the Sale Agreement evidencing the sale of Securitization
Property by the Seller to the Issuer.
Billed SB Charges means the dollar amounts billed to Customers in
respect of the SB Charge.
Bills means each of the regular monthly bills, summary bills and other
bills issued to Customers by Detroit Edison on its own behalf and in
its capacity as Servicer.
Book-Entry Securitization Bonds means beneficial interests in the
Securitization Bonds, ownership and transfers of which shall be made
through book entries by a Clearing Agency as described in Section 2.11
of the Indenture.
Business Day means any day other than a Saturday or Sunday or a day on
which banking institutions in Detroit, Michigan, or in New York, New
York or, with respect to any Securitization Bonds listed on the
Luxembourg Stock Exchange, in Luxembourg, are required or authorized by
law or executive order to remain closed.
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Capital Subaccount has the meaning specified in Section 8.02(a) of the
Indenture.
Certificate of Compliance has the meaning set forth in Section 3.03 of
the Servicing Agreement.
Class means, with respect to any Series, any one of the classes of
Securitization Bonds of that Series, as specified in the Series
Supplement for that Series.
Class Final Maturity Date means the Final Maturity Date of a Class, as
specified in the Series Supplement for the related Series.
Class Subaccount has the meaning specified in Section 8.02(a) of the
Indenture.
Clearing Agency means an organization registered as a "clearing agency"
pursuant to Section 17A of the Exchange Act.
Clearing Agency Participant means a broker, dealer, bank, other
financial institution or other Person for whom from time to time a
Clearing Agency effects book-entry transfers and pledges of securities
deposited with the Clearing Agency.
Code means the Internal Revenue Code of 1986, as amended from time to
time, and Treasury Regulations promulgated thereunder.
Collateral has the meaning specified in the Granting Clause of the
Indenture.
Collection Account has the meaning specified in Section 8.02(a) of the
Indenture.
Commission means the U.S. Securities and Exchange Commission, and any
successor thereof.
Corporate Trust Office means the designated office of the Trustee at
which at any particular time its corporate trust business shall be
administered, which office at the date of the execution of this
Indenture is located at 101 Barclay Street, Floor 12 East, New York,
New York 10286, Attention: CDO Unit, or at such other address as the
Trustee may designate from time to time by notice to the Securitization
Bondholders and the Issuer, or the principal corporate trust office of
any successor Trustee (the address of which the successor Trustee will
notify the Securitization Bondholders and the Issuer in writing).
Covenant Defeasance Option has the meaning specified in Section 4.01(b)
of the Indenture.
Customer means a person that is an electric customer taking delivery of
electricity from Detroit Edison or from its successor on its
MPSC-approved rate schedules or under special contracts.
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Deemed SB Charge Payments means the amount, calculated by the Servicer
on or before [ ] of each year, equal to the product of the Billed SB
Charges for such Remittance Period multiplied by the result of one
hundred percent (100%) less the Actual Charge-Off Percent.
Default means any occurrence that is, or with notice or the lapse of
time or both would become, an Event of Default.
Defeasance Subaccount has the meaning specified in Section 8.02(a) of
the Indenture.
Definitive Securitization Bonds has the meaning specified in Section
2.11 of the Indenture.
Detroit Edison means The Detroit Edison Company, a Michigan
corporation, or its successor.
DTC Agreement means the agreement between the Issuer, the Trustee and
The Depository Trust Company, as the initial Clearing Agency, dated on
or about [ ], 2001, relating to the Securitization Bonds, as the same
may be amended or supplemented from time to time.
Eligible Guarantor Institution means a firm or other entity identified
in Rule 17Ad-15 under the Exchange Act as "an eligible guarantor
institution," including (as such terms are defined therein):
(a) a bank;
(b) a broker, dealer, municipal securities broker or
dealer or government securities broker or dealer;
(c) a credit union;
(d) a national securities exchange, registered securities
association or clearing agency; or
(e) a savings association that is a participant in a
securities transfer association.
Eligible Institution means:
(a) the corporate trust department of the Trustee, so
long as any of the securities of the Trustee have a
credit rating from each Rating Agency in one of its
generic rating categories which signifies investment
grade, or
(b) a depositary institution organized under the laws of
the United States of America or any state (or any
domestic branch of a foreign bank), which
(i) has either
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(A) with respect to any Eligible
Investment having a maturity of
greater than one month, a long-term
unsecured debt rating of "AAA" by
Standard & Poor's and Fitch and
"Aaa" by Moody's, or
(B) with respect to any Eligible
Investment having a maturity of one
month or less, a short-term or
certificate of deposit rating of
"A-1+" by Standard & Poor's and
"P-1" by Moody's, or any other
long-term, short-term or
certificate of deposit rating
acceptable to the Rating Agencies,
and
(ii) whose deposits are insured by the FDIC.
Eligible Investments mean book-entry securities, negotiable instruments
or securities represented by instruments in bearer or registered form
which evidence:
(a) direct obligations of, and obligations fully and
unconditionally guaranteed as to timely payment by,
the United States of America;
(b) demand deposits, time deposits or certificates of
deposit of any depository institution or trust
company (any depositary institution or trust company
being referred to in this definition as a "financial
institution") incorporated under the laws of the
United States of America or any state thereof (or any
domestic branch of a foreign bank) and subject to
supervision and examination by federal or state
banking or depositary institution authorities;
provided, however, that at the time of the investment
or contractual commitment to invest therein, the
commercial paper or other short-term unsecured debt
obligations (other than such obligations the rating
of which is based on the credit of a Person other
than such depositary institution or trust company)
thereof shall have a credit rating from each of the
Rating Agencies in the highest investment category
granted thereby;
(c) commercial paper or other short-term obligations of
any corporation organized under the laws of the
United States of America (other than Detroit Edison)
whose ratings, at the time of the investment or
contractual commitment to invest therein, from each
of the Rating Agencies are in the highest investment
category granted thereby;
(d) demand deposits, time deposits and certificates of
deposit which are fully insured by the Federal
Deposit Insurance Corporation;
(e) investments in money market funds having a rating
from each of the Rating Agencies in the highest
investment category granted thereby (including funds
for which the Trustee or any of its Affiliates act as
investment manager or advisor);
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(f) bankers' acceptances issued by any depositary
institution or trust company referred to in clause
(b) above;
(g) repurchase obligations with respect to any security
that is a direct obligation of, or fully guaranteed
by, the United States of America or any agency or
instrumentality thereof the obligations of which are
backed by the full faith and credit of the United
States of America, in either case entered into with a
depositary institution or trust company (acting as
principal) described in clause (b) above;
(h) repurchase obligations with respect to any security
or whole loan entered into with
(i) a financial institution (acting as
principal) described in clause (b) above,
(ii) a broker/dealer (acting as principal)
registered as a broker or dealer under
Section 15 of the Exchange Act (any
broker/dealer being referred to in this
definition as a "broker/dealer"), the
unsecured short-term debt obligations of
which are rated P-1 by Moody's and A-1+ by
Standard & Poor's at the time of entering
into the repurchase obligation, or
(iii) an unrated broker/dealer, acting as
principal, that is a wholly-owned subsidiary
of a non-bank or bank holding company the
unsecured short-term debt obligations of
which are rated P-1 by Moody's and A-1+ by
Standard & Poor's at the time of purchase;
or
(i) any other investment permitted by each Rating Agency;
provided, however, that, with respect to Moody's only, the obligor
related to clauses (b), (c), (d), (f), (g) and (h) above must have both
a long term rating of at least A1 and a short term rating of at least
P1, and provided further, that, unless otherwise permitted by each
Rating Agency, upon the failure of any Eligible Institution to maintain
any applicable rating set forth in this definition or the definition of
Eligible Institution, the related investments at such institution shall
be reinvested in Eligible Investments at a successor Eligible
Institution within 10 days, and provided further, that any Eligible
Investment must not:
(j) be sold, liquidated or otherwise disposed of at a
loss, prior to the maturity thereof, or
(k) mature later than the date on which the proceeds of
such Eligible Investment will be required to be on
deposit in the Collection Account in order for the
Trustee to make all required and scheduled payments
and deposits into Subaccounts under the Indenture, if
such Eligible Investment is held by an Affiliate of
the Trustee, or (ii) the Business Day prior to the
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date on which the proceeds of such Eligible
Investment will be required to be on deposit in the
Collection Account in order for the Trustee to make
all required and scheduled payments and deposits into
Subaccounts under the Indenture, if such Eligible
Investment is not held by an Affiliate of the
Trustee.
Eligible Securities Account means either:
(a) a segregated trust account with an Eligible
Institution or
(b) a segregated trust account with the corporate trust
department of a depositary institution organized
under the laws of the United States of America or any
state (or any domestic branch of a foreign bank),
having corporate trust powers and acting as trustee
for funds deposited in such account, so long as any
of the securities of such depositary institution
shall have a credit rating from each Rating Agency in
one of its generic rating categories which signifies
investment grade.
Estimated Charge-Off Percent means the Servicer's good faith estimate
of the Actual Charge-Off Percent.
Estimated SB Charge Payments means an amount equal to the product of
the Billed SB Charges for a particular billing date multiplied by the
result of one hundred percent (100%) less the Estimated Charge-Off
Percent.
Event of Default has the meaning specified in Section 5.01 of the
Indenture.
Event of Investment Ineligibility has the meaning specified in the
Trade Receivables Purchase and Sale Agreement dated as of February 28,
1989, as later amended and restated, among The Detroit Edison Company,
Corporate Asset Funding Company, Inc., Citibank, N.A., and Citicorp
North America, Inc., individually and as agent.
Event of Termination has the meaning specified in the Trade Receivables
Purchase and Sale Agreement dated as of February 28, 1989, as later
amended and restated, among The Detroit Edison Company, Citibank, N.A.,
and Citicorp North America, Inc., individually and as agent.
Exchange Act means the Securities Exchange Act of 1934, as amended.
Expected Amortization Schedule means, with respect to each Series or,
if applicable, each Class of Securitization Bonds, the expected
amortization schedule for principal thereof, as specified in the Series
Supplement therefor.
Expected Final Payment Date means, with respect to each Series or, if
applicable, each Class of Securitization Bonds, the date when all
interest and principal is scheduled to be paid with respect to that
Series or Class in accordance with the Expected Amortization Schedule,
as specified in the Series Supplement therefor.
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FDIC means the Federal Deposit Insurance Corporation or its successor.
Final Maturity Date means, for each Series or, if applicable, each
Class of Securitization Bonds, the date by which all principal of and
interest on such Series or Class of Securitization Bonds is required to
be paid, as specified in the Series Supplement therefor.
Financing Issuance means an issuance of a new Series of Securitization
Bonds under the Indenture to provide funds to finance the purchase by
the Issuer of Securitization Property.
Financing Order means, collectively, the order of the MPSC, Case No.
U-12478, issued on November 2, 2000, as clarified by the opinion and
order of the MPSC issued on January 4, 2001.
Fitch means Fitch, Inc., or its successor.
Formation Documents means, collectively, the Issuer LLC Agreement and
the Issuer Articles of Organization, as each may be amended or
supplemented from time to time.
General Subaccount has the meaning specified in Section 8.02(a) of the
Indenture.
Grant means mortgage, pledge, bargain, sell, warrant, alienate, remise,
release, convey, assign, transfer, create, and grant a lien upon and a
security interest in and right of set-off against, deposit, set over
and confirm. Grant, used as a noun, and Granting, used as an adjective,
have correlative meanings consistent with preceding sentence. A Grant
of the Collateral or of any other agreement or instrument shall include
all rights, powers and options (but none of the obligations) of the
Granting party thereunder, including the immediate and continuing right
to claim for, collect, receive and give receipt for principal, interest
and other payments in respect of the Collateral or such other agreement
or instrument and all other moneys payable thereunder, to give and
receive notices and other communications, to make waivers or other
agreements, to exercise all rights and options, to bring Proceedings in
the name of the Granting party or otherwise and generally to do and
receive anything that the Granting party is or may be entitled to do or
receive thereunder or with respect thereto.
Holder or Securitization Bondholder means the Person in whose name a
Securitization Bond of any Series or Class is registered in the
Securitization Bond Register.
Indemnification Event means an event which triggers Detroit Edison's
obligation to indemnify the Issuer and the Trustee, for itself and on
behalf of the Securitization Bondholders, and each of their respective
managers, officers, directors and agents, pursuant to Section 5.01 of
the Sale Agreement.
Indemnity Amount means the amount of any indemnification obligation
payable under the Basic Documents.
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Indenture means the Indenture dated as of [ ], 2001, between the Issuer
and the Trustee, as the same may be amended and supplemented from time
to time by one or more Supplemental Indentures, and shall include each
Series Supplement and the forms and terms of the Securitization Bonds
established thereunder.
Independent means, when used with respect to any specified Person, that
the Person
(a) is in fact independent of the Issuer, any other
obligor on the Securitization Bonds, Detroit Edison
and any Affiliate of any of the foregoing Persons,
(b) does not have any direct financial interest or any
material indirect financial interest in the Issuer,
any such other obligor, Detroit Edison or any
Affiliate of any of the foregoing Persons, and
(c) is not connected with the Issuer, any such other
obligor, Detroit Edison or any Affiliate of any of
the foregoing Persons as an officer, employee,
promoter, underwriter, trustee, partner, director or
person performing similar functions.
Independent Certificate means a certificate or opinion to be delivered
to the Trustee under the circumstances described in, and otherwise
complying with, the applicable requirements of Section 11.01 of the
Indenture, made by an Independent appraiser or other expert appointed
by an Issuer Order and approved by the Trustee in the exercise of
reasonable care, and such certificate or opinion shall state that the
signer has read the definition of "Independent" in this Appendix A and
that the signer is Independent within the meaning thereof.
Independent Manager has the meaning set forth in the Issuer LLC
Agreement.
Initial Securitization Property means the Securitization Property sold
by the Seller to the Issuer as of the Initial Transfer Date pursuant to
the Sale Agreement and the Bill of Sale delivered on or prior to the
Initial Transfer Date as identified in such Bill of Sale.
Initial Transfer Date means the Series Issuance Date for the first
Series of Securitization Bonds.
Insolvency Event means, with respect to a specified Person,
(a) the filing of a decree or order for relief by a court
having jurisdiction in the premises in respect of
such Person or any substantial part of its property
in an involuntary case under any applicable federal
or state bankruptcy, insolvency or other similar law
now or hereafter in effect, or appointing a receiver,
liquidator, assignee, custodian, trustee,
sequestrator or similar official for such Person or
for any substantial part of its property, or ordering
the winding-up or liquidation of such Person's
affairs, and such decree or order shall remain
unstayed and in effect for a period of 90 consecutive
days or
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(b) the commencement by such Person of a voluntary case
under any applicable federal or state bankruptcy,
insolvency or other similar law now or hereafter in
effect, or the consent by such Person to the entry of
an order for relief in an involuntary case under any
such law, or the consent by such Person to the
appointment of a receiver, liquidator, assignee,
custodian, trustee, sequestrator or similar official
for such Person or for any substantial part of its
property, or the making by such Person of any general
assignment for the benefit of creditors, or the
failure by such Person generally to pay its debts as
such debts become due, or the taking of action by
such Person in furtherance of any of the foregoing.
Interest means, for any Payment Date for any Series or Class of
Securitization Bonds, the sum, without duplication, of:
(a) an amount equal to the amount of interest accrued at
the applicable Interest Rate from the prior Payment
Date with respect to that Series or Class;
(b) any unpaid interest, to the extent permitted by
applicable law, plus any interest accrued on such
unpaid interest at the applicable Interest Rate, to
the extent permitted by applicable law;
(c) if the Securitization Bonds have been declared due
and payable, all accrued and unpaid interest thereon;
and
(d) with respect to a Series or Class to be redeemed
prior to the next Payment Date, the amount of
interest that will be payable as interest on such
Series or Class upon such redemption.
Interest Rate means, with respect to each Series or Class of
Securitization Bonds, the rate at which interest accrues on the
principal balance of Securitization Bonds of such Series or Class, as
specified in the Series Supplement therefor.
Interest Rate Swap Agreement means any ISDA Master Agreement, together
with the related Schedule and Confirmation, between the Issuer and a
Swap Counterparty, as same may be amended or supplemented from time to
time.
Issuer means The Detroit Edison Securitization Funding LLC, a Michigan
limited liability company, or its successor under the Indenture or the
party named as such in the Indenture until a successor replaces it and,
thereafter, means the successor.
Issuer Articles of Organization means the Articles of Organization of
the Issuer which were filed with the Bureau of Commercial Services,
Corporation Division, of the Michigan Department of Consumer and
Industry Services (the "Department") on November 20, 2000, as amended
by the Restated Articles of Organization of the Issuer, which were
filed with the Department on [ ], 2001.
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Issuer LLC Agreement means the Limited Liability Company Agreement
between the Issuer, Detroit Edison, as sole Member, and the Managers
dated as of November 20, 2000, as the same may be amended or
supplemented from time to time.
Issuer Officer's Certificate means a certificate signed by any
Authorized Officer of the Issuer, under the circumstances described in,
and otherwise complying with, the applicable requirements of Section
11.01 of the Indenture, and delivered to the Trustee. Unless otherwise
specified, any reference in the Indenture to an Officer's Certificate
shall be to an Issuer Officer's Certificate.
Issuer Opinion of Counsel means one or more written opinions of counsel
who may, except as otherwise expressly provided in the Indenture, be an
employee of or counsel to the Issuer or the Seller and who shall be
reasonably satisfactory to the Trustee, and which opinion or opinions
shall be addressed to the Trustee, and shall be in a form reasonably
satisfactory to the Trustee.
Issuer Order or Issuer Request means a written order or request,
respectively, signed in the name of the Issuer by any one of its
Authorized Officers and delivered to the Trustee.
Legal Defeasance Option has the meaning specified in Section 4.01(b) of
the Indenture.
Lien means a security interest, lien, charge, pledge or encumbrance of
any kind.
Losses means, collectively, any and all liabilities, obligations,
losses, damages, payments, costs or expenses of any kind whatsoever.
Manager has the meaning set forth in the Issuer LLC Agreement.
Member means Detroit Edison, as the sole member of the Issuer, in its
capacity as such member under the Issuer LLC Agreement.
Michigan UCC means the Uniform Commercial Code, as in effect in the
State of Michigan, as amended from time to time.
Monthly Servicer Certificate has the meaning assigned to that term in
Section 4.01(d)(ii) of the Servicing Agreement.
Moody's means Moody's Investors Service, Inc., or its successor.
MPSC means the Michigan Public Service Commission and any successor
thereto.
MPSC Regulations means any applicable regulations, orders or rules
promulgated, issued or adopted by the MPSC, as in effect from time to
time.
Non-Routine True-Up Adjustment has the meaning set forth in Section
4.01(c)(i) of the Servicing Agreement.
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Non-Routine True-Up Adjustment Request means an Adjustment Request
filed with the MPSC in accordance with the Financing Order with respect
to any Non-Routine True-Up Adjustment, pursuant to which the related
Non-Routine True-Up Adjustment will become effective upon the review
and approval of the MPSC.
Officer's Certificate means a certificate of the Servicer signed by an
Authorized Officer.
Ongoing Other Qualified Costs has the meaning assigned to that term in
the Financing Order.
Operating Expenses means, with respect to the Issuer, all fees, costs,
expenses and indemnity payments owed by the Issuer, including, without
limitation, all amounts owed by the Issuer to the Trustee, the
Servicing Fee, the fees and expenses payable by the Issuer to the
Administrator under the Administration Agreement, the fees and expenses
payable by the Issuer to the Independent Managers and Special Members
of the Issuer, fees of the Rating Agencies, legal fees and expenses of
the Servicer pursuant to Section 5.02(d) of the Servicing Agreement,
legal and accounting fees, costs and expenses of the Issuer, and legal,
accounting or other fees, costs and expenses of the Seller (including,
without limitation, any costs and expenses incurred by the Seller
pursuant to Section 4.08 of the Sale Agreement) under or in connection
with the Basic Documents or the Financing Order.
Opinion of Counsel means one or more written opinions of counsel who
may be an employee of or counsel to Detroit Edison, the Issuer or any
other Person (as the context may require), which counsel shall be
reasonably acceptable to the Trustee, the Issuer or the Rating
Agencies, as applicable, and which shall be in form reasonably
satisfactory to the Trustee, if applicable, according to context.
Outstanding with respect to Securitization Bonds means, as of the date
of determination, all Securitization Bonds theretofore authenticated
and delivered under the Indenture except:
(a) Securitization Bonds theretofore canceled by the
Securitization Bond Registrar or delivered to the
Securitization Bond Registrar for cancellation;
(b) Securitization Bonds or portions thereof for the
payment of which money in the necessary amount has
been theretofore deposited with the Trustee or any
Paying Agent in trust for the Holders of such
Securitization Bonds; provided, however, that if such
Securitization Bonds are to be redeemed, notice of
such redemption has been duly given pursuant to the
Indenture or provision therefor, satisfactory to the
Trustee, made; and
(c) Securitization Bonds in exchange for or in lieu of
other Securitization Bonds which have been
authenticated and delivered pursuant to the Indenture
unless proof satisfactory to the Trustee is presented
that any such Securitization Bonds are held by a
protected purchaser;
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provided that in determining whether the Holders of the requisite
Outstanding Amount of the Securitization Bonds or any Series or Class
thereof have given any request, demand, authorization, direction,
notice, consent or waiver under any Basic Document, Securitization
Bonds owned by the Issuer, any other obligor upon the Securitization
Bonds, Detroit Edison or any Affiliate of any of the foregoing Persons
shall be disregarded and deemed not to be Outstanding, except that, in
determining whether the Trustee shall be protected in relying upon any
such request, demand, authorization, direction, notice, consent or
waiver, only Securitization Bonds that the Trustee knows to be so owned
shall be so disregarded. Securitization Bonds so owned that have been
pledged in good faith may be regarded as Outstanding if the pledgee
establishes to the satisfaction of the Trustee the pledgee's right so
to act with respect to such Securitization Bonds and that the pledgee
is not the Issuer, any other obligor upon the Securitization Bonds,
Detroit Edison or any Affiliate of any of the foregoing Persons.
Outstanding Amount means the aggregate principal amount of all
Outstanding Securitization Bonds or, if the context requires, all
Securitization Bonds of a Series or Class Outstanding at the date of
determination.
Overcollateralization means, with respect to any Payment Date, an
amount that, if deposited to the Overcollateralization Subaccount,
would cause the balance in such subaccount to equal the Scheduled
Overcollateralization Level for such Payment Date.
Overcollateralization Amount means, with respect to any Series of
Securitization Bonds, the amount specified as such in the Series
Supplement therefor.
Overcollateralization Subaccount has the meaning specified in Section
8.02(a) of the Indenture.
Paying Agent means the Trustee or any other Person, including any
Person appointed pursuant to Section 3.02(b) of the Indenture, that
meets the eligibility standards for the Trustee specified in Section
6.11 of the Indenture and is authorized by the Issuer to make the
payments of principal of or premium, if any, or interest on the
Securitization Bonds on behalf of the Issuer.
Payment Date means, with respect to each Series or Class of
Securitization Bonds, each date or dates respectively specified as
Payment Dates for such Series or Class in the Series Supplement
therefor.
Periodic Adjustment means each Routine True-Up Adjustment and
Non-Routine True-Up Adjustment made pursuant to the terms of the
Financing Order and in accordance with Section 4.01 of the Servicing
Agreement.
Person means any individual, corporation, estate, partnership, joint
venture, association, joint stock company, trust (including any
beneficiary thereof), business trust, limited liability company,
unincorporated organization or government or any agency or political
subdivision thereof.
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Predecessor Securitization Bond means, with respect to any particular
Securitization Bond, every previous Securitization Bond evidencing all
or a portion of the same debt as that evidenced by such particular
Securitization Bond; and, for the purpose of this definition, any
Securitization Bond authenticated and delivered under Section 2.06 of
the Indenture in lieu of a mutilated, lost, destroyed or stolen
Securitization Bond shall be deemed to evidence the same debt as the
mutilated, lost, destroyed or stolen Securitization Bond.
Principal means, with respect to any Payment Date and each Series or
Class of Securitization Bonds:
(a) the amount of principal scheduled to be paid on such
Payment Date in accordance with the Expected
Amortization Schedule;
(b) the amount of principal due on the Final Maturity
Date of such Series or Class if such Payment Date is
the Final Maturity Date;
(c) the amount of principal due as a result of the
occurrence and continuance of an Event of Default and
acceleration of the Securitization Bonds;
(d) the amount of principal and premium, if any, due as a
result of a redemption of Securitization Bonds on
such Payment Date; and
(e) any overdue payments of principal.
Principal Balance means, as of any Payment Date, the Outstanding Amount
of the Securitization Bonds.
Proceeding means any suit in equity, action at law or other judicial or
administrative proceeding.
Projected Principal Balance means, as of any Payment Date, the
projected Outstanding Amount for such Payment Date set forth in the
Expected Amortization Schedule.
Qualified Costs means those qualified costs approved for recovery in
the Financing Order.
Rating Agency means, as of any date, any rating agency rating the
Securitization Bonds of any Class or Series at the time of original
issuance thereof at the request of the Issuer, or any successor to such
rating agency. If such organization or successor is no longer in
existence, in lieu thereof "Rating Agency" means a nationally
recognized statistical rating organization or other comparable Person
designated by the Issuer, notice of which designation shall be given to
the Trustee, the Member and the Servicer.
Rating Agency Condition means, with respect to any action, the
notification to each Rating Agency and the Trustee of such action, and
the notification from each of Fitch and S&P to the Trustee and the
Issuer that such action will not result in a reduction or
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withdrawal of the then current rating by such Rating Agency of any
Outstanding Series or Class of Securitization Bonds.
Reconciliation Period means the twelve-month period commencing on
[January 1 of each year and ending on December 31 of each year;
provided, however, that the initial Reconciliation Period shall
commence on the first Series Issuance Date and end on December 31,
2001.]
Record Date has the meaning set forth in each Supplemental Indenture.
Redemption Date means, with respect to each Series or Class of
Securitization Bonds, the date for the redemption of the Securitization
Bonds of such Series or Class pursuant to Sections 10.01 or 10.02 of
the Indenture or the Series Supplement for such Series or Class, which
in each case shall be a Payment Date.
Redemption Price has the meaning set forth in Section 10.01 or Section
10.02 of the Indenture, as applicable.
Refunding Issuance means an issuance of a new Series of Securitization
Bonds under the Indenture to pay the cost of refunding, through
redemption or payment on the Expected Final Payment Date for a Series
or Class of Securitization Bonds, all or part of the Securitization
Bonds of such Series or Class to the extent permitted by the terms
thereof.
Registered Holder means, as of any date, the Person in whose name a
Securitization Bond is registered in the Securitization Bond Register
on such date.
Released Parties has the meaning specified in Section 6.02(f) of the
Servicing Agreement.
Remittance means each remittance under the Servicing Agreement of
Estimated SB Charge Payments by the Servicer to the Trustee.
Remittance Date means each Servicer Business Day on which a Remittance
is to be made by the Servicer pursuant to Section 4.03 of the Servicing
Agreement.
Remittance Excess means the amount, if any, calculated for a particular
Reconciliation Period, by which all Estimated SB Charge Payments during
such Reconciliation Period exceed Deemed SB Charge Payments during such
Reconciliation Period.
Remittance Period means the period established by the Financing Order
commencing on [ ] of each year and ending on the last day of [ ] of
each year; provided, however, that the initial Remittance Period shall
commence on the first Series Issuance Date and end on [ ].
Remittance Shortfall means, the amount, if any, calculated for a
particular Reconciliation Period, by which Deemed SB Charge Payments
during such Reconciliation Period exceed Estimated SB Charge Payments
during such Reconciliation Period.
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Required Capital Amount means, with respect to any Series, the amount
required to be deposited in the Capital Subaccount on the Series
Issuance Date of such Series, as specified in the related Series
Supplement.
Required Debt Service means, for any Remittance Period, the total
dollar amount calculated by the Servicer in accordance with Section
4.01(b)(i) of the Servicing Agreement as necessary to be remitted to
the Collection Account during such Remittance Period (after giving
effect to (a) the allocation and distribution of amounts on deposit in
the Reserve Subaccount at the time of calculation and which are
available for payments on the Securitization Bonds, (b) any shortfalls
in Required Debt Service for any prior Remittance Period, (c) the
required payment or credit of any Remittance Excess or Remittance
Shortfall during such Remittance Period and (d) any Remittances based
upon the SB Charge in effect in the prior Remittance Period that are
expected to be realized in such Remittance Period) in order to ensure
that, as of the Payment Date immediately following the end of such
period, (i) all accrued and unpaid interest on the Securitization Bonds
then due shall have been paid in full, (ii) the Principal Balance of
the Securitization Bonds is equal to the Projected Principal Balance of
the Securitization Bonds for that Payment Date, (iii) the balance on
deposit in the Capital Subaccount equals the aggregate Required Capital
Amount, (iv) the balance on deposit in the Overcollateralization
Subaccount equals the aggregate Scheduled Overcollateralization Level
and (v) all other fees, expenses and indemnities due and owing and
required or allowed to be paid under Section 8.02 of the Indenture as
of such date shall have been paid in full; provided, however, that,
with respect to any Periodic Adjustment occurring after the last
Expected Final Payment Date for any Securitization Bonds, the Required
Debt Service shall be calculated to ensure that sufficient amounts will
be collected to retire such Securitization Bonds in full as of the
earlier of (x) the next Payment Date and (y) the Final Maturity Date
for such Securitization Bonds.
Reserve Subaccount has the meaning specified in Section 8.02(a) of the
Indenture.
Retirement of the Securitization Bonds means the day on which the final
payment is made to the Trustee in respect of the last outstanding
Securitization Bond.
Retiring Trustee means a Trustee that resigns or vacates the office of
Trustee for any reason.
Routine True-Up Adjustment has the meaning set forth in Section
4.01(b)(iii) of the Servicing Agreement.
Routine True-Up Adjustment Request means an Adjustment Request filed
with the MPSC in respect of a Routine True-Up Adjustment, substantially
in the form of Exhibit B to the Servicing Agreement. Pursuant to the
Financing Order, the Routine True-Up Adjustment Request will become
effective within 45 days after the filing of such Routine True-Up
Adjustment Request.
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Sale Agreement means the Securitization Property Sale Agreement dated
as of [ ], 2001, between the Seller and the Issuer, as the same may be
amended and supplemented from time to time.
SB Charge means the securitization charge designated and approved
pursuant to the Financing Order as constituting part of the
Securitization Property, as the same may be adjusted from time to time
as provided in the Servicing Agreement and in accordance the Financing
Order.
Scheduled Overcollateralization Level means, with respect to each
Series and any Payment Date, the amount with respect to such Series set
forth as such in Schedule I of the Indenture, as such Schedule has been
adjusted in accordance with Section 3.19 of the Indenture to reflect
redemptions or defeasances of Securitization Bonds and issuances of
additional Series of Securitization Bonds.
Securitization Bond means any of the securitization bonds (as approved
in the Financing Order) issued by the Issuer pursuant to the Indenture.
Securitization Bond Balance means, as of any date, the aggregate
Outstanding Amount of all Series of Securitization Bonds on such date.
Securitization Bond Owner means, with respect to a Book-Entry
Securitization Bond, the Person who is the beneficial owner of such
Book-Entry Securitization Bond, as reflected on the books of the
Clearing Agency, or on the books of a Person maintaining an account
with such Clearing Agency (directly as a Clearing Agency Participant or
as an indirect participant, in each case in accordance with the rules
of such Clearing Agency).
Securitization Bond Register has the meaning specified in Section
2.05(a) of the Indenture.
Securitization Bond Registrar has the meaning specified in Section
2.05(a) of the Indenture.
Securitization Charge means the Securitization Charge authorized by the
MPSC to be imposed on all Customers by Detroit Edison to recover
Qualified Costs pursuant to the Financing Order.
Securitization Property means the Securitization Property that exists
under the Financing Order and is sold by the Seller to the Issuer under
the Sale Agreement.
Securitization Property Records has the meaning assigned to that term
in Section 5.01 of the Servicing Agreement.
Seller means Detroit Edison, in its capacity as seller of the
Securitization Property to the Issuer pursuant to the Sale Agreement.
Semiannual Servicer Certificate has the meaning assigned to that term
in Section 4.01(d)(iii) of the Servicing Agreement.
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Series means any series of Securitization Bonds issued by the Issuer
and authenticated by the Trustee pursuant to the Indenture and the
Financing Order, as specified in the Series Supplement therefor.
Series Capital Subaccount has the meaning set forth in Section 8.02(a)
of the Indenture.
Series Final Maturity Date means the Final Maturity Date for a Series.
Series Issuance Date means, with respect to the first Series of
Securitization Bonds, [ ], 2001, and with respect to any other Series,
the date on which the Securitization Bonds of such Series are to be
issued in accordance with Section 2.10 of the Indenture and the Series
Supplement for such Series.
Series Overcollateralization Subaccount has the meaning specified in
Section 8.02(a) of the Indenture.
Series Subaccount has the meaning specified in Section 8.02(a) of the
Indenture.
Series Supplement means an indenture supplemental to the Indenture that
authorizes a particular Series of Securitization Bonds, as the same may
be amended or supplemented from time to time.
Servicer means Detroit Edison, as the servicer of the Securitization
Property, and each successor to Detroit Edison (in the same capacity)
pursuant to Section 6.03 or 7.04 of the Servicing Agreement.
Servicer Business Day means any Business Day on which the Servicer's
offices in the State of Michigan are open for business.
Servicer Default means an event specified in Section 7.01 of the
Servicing Agreement.
Servicer Policies and Practices means, with respect to the Servicer's
duties under Annex I to the Servicing Agreement, the policies and
practices of the Servicer applicable to such duties that the Servicer
follows with respect to comparable assets that it services for itself
or others, as in effect from time to time and in accordance with MPSC
Regulations. The Servicer shall provide ten days' prior written notice
to the Rating Agencies of any amendment to the Servicer Policies and
Practices that would adversely affect in any material respect the
Securitization Bondholders.
Servicing Agreement means the Servicing Agreement dated as of [ ],
2001, between the Issuer and the Servicer, as the same may be amended
and supplemented from time to time.
Servicing Fee means the fee payable to the Servicer for services
rendered, in accordance with Section 6.07 of the Servicing Agreement.
Special Member has the meaning set forth in the Issuer LLC Agreement.
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Standard & Poor's, or S&P, means Standard & Poor's Ratings Services, a
division of The McGraw-Hill Companies, or its successor.
Statute means, collectively, Enrolled Senate Bill No. 937, 2000 PA 141
and Enrolled Senate Bill No. 1253, 2000 PA 142, both of which became
effective June 5, 2000.
Subaccount means any of the subaccounts of the Collection Account
specified in Section 8.02 of the Indenture.
Subsequent Sale means the sale of additional Securitization Property by
the Seller to the Issuer after the Initial Transfer Date, subject to
the satisfaction of the applicable conditions specified in the Sale
Agreement and the Indenture.
Subsequent Securitization Property means Securitization Property sold
by the Seller to the Issuer as of a Subsequent Transfer Date pursuant
to the Sale Agreement and the Bill of Sale delivered on or prior to the
Subsequent Transfer Date, as identified in such Bill of Sale.
Subsequent Transfer Date means the date that a sale of Subsequent
Securitization Property will be effective, as specified in a written
notice provided by the Seller to the Issuer pursuant to the Sale
Agreement.
Successor Servicer means a successor Servicer appointed by the Trustee
pursuant to Section 7.04 of the Servicing Agreement which succeeds to
all the rights and duties of the Servicer under the Servicing
Agreement.
Supplemental Indenture means a supplemental indenture entered into by
the Issuer and the Trustee pursuant to Article IX of the Indenture.
Swap Counterparty means, with respect to any Interest Rate Swap
Agreement, the swap counterparty under that Interest Rate Swap
Agreement.
Termination Notice has the meaning assigned to that term in Section
7.01 of the Servicing Agreement.
Transfer Date means the Initial Transfer Date or any Subsequent
Transfer Date, as applicable.
Trust Indenture Act or TIA means the Trust Indenture Act of 1939, as in
force on the date hereof, unless otherwise specifically provided.
Trustee means The Bank of New York, a New York banking corporation or
its successor, as trustee under the Indenture, or any successor Trustee
under the Indenture.
Underwriting Agreement means the Underwriting Agreement dated as of [
], 2001, among the Seller, the Issuer and Salomon Smith Barney, Inc.,
on behalf of itself and as the representative of the several
underwriters named therein.
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U.S. Government Obligations means direct obligations (or certificates
representing an ownership interest in such obligations) of the United
States of America (including any agency or instrumentality thereof) for
the timely payment of which the full faith and credit of the United
States of America is pledged and which are not callable at the issuer's
option.
Weighted Average Days Outstanding means the weighted average number of
days Detroit Edison's monthly retail customer bills remain outstanding
during the calendar year immediately preceding the calculation thereof
pursuant to Section 4.01(b)(i) of the Servicing Agreement. The
calculation of Weighted Average Days Outstanding pursuant to Section
4.01(b)(i) of the Servicing Agreement shall become effective on [ ] of
each year. The initial Weighted Average Days Outstanding shall be 45
days until updated pursuant to Section 4.01(b)(i) of the Servicing
Agreement.
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SCHEDULE I
SCHEDULED OVERCOLLATERALIZATION LEVELS
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