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EXHIBIT 99.5
INTER-CREDITOR AGREEMENT
INTER-CREDITOR AGREEMENT dated as of March __, 2001 among CITICORP
NORTH AMERICA, INC., a Delaware corporation with an office at ▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ("CNAI"), individually and as Agent for the
Investor, the Owners and the Bank under the RPA's (as hereinafter defined),
CITIBANK, N.A., a national banking association with an office at ▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (the "Bank"), THE BANK OF NEW YORK, a New York
banking corporation, with an office at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (the "Bond Trustee"), THE DETROIT EDISON SECURITIZATION FUNDING
LLC., a Michigan limited liability company with an office at ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ (the "Issuer") and THE DETROIT EDISON
COMPANY, a Michigan corporation with an office at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("Detroit Edison").
WHEREAS, pursuant to the terms of (i) that certain Trade Receivables
Purchase and Sale Agreement, dated as of February 28, 1989, as amended and
restated as of October 1, 1991 and as further amended and restated as of March
__, 2001 among Detroit Edison, CORPORATE ASSET FUNDING COMPANY, INC. (the
"Investor"), the Bank and CNAI, individually and as agent for the Investor and
the Owners and (ii) that certain Trade Receivables Purchase and Sale Agreement,
dated as of February 28, 1989, as amended and restated as of October 1, 1991,
and further amended through and including the amendment dated as of March ___,
2001, among Detroit Edison, the Bank and CNAI, individually and as agent for
itself and the Bank (said agreements as the same now exist and as they may
hereafter from time to time be amended, restated or modified, being the "RPA's";
CNAI, individually and as Agent under the RPA's, being hereinafter referred to
as "Agent"; certain terms which are capitalized and used throughout this
Agreement (in addition to those defined herein) having the meanings ascribed
thereto on this date in the RPA's), Detroit Edison has sold and may hereafter
sell interests in its accounts receivable referred to as Eligible Assets to the
Investor or the Bank, as the case may be; and
WHEREAS, pursuant to the terms of that certain Securitization Property
Sale Agreement, dated as of March __, 2001, between Detroit Edison and the
Issuer (said agreement as the same now exists and as it may hereafter from time
to time be amended, restated or modified, being the "Sale Agreement"), Detroit
Edison has sold to the Issuer certain assets known as Securitization Property
(as defined in the Sale Agreement) which includes the SB Charges (as defined in
the Servicing Agreement); and
WHEREAS, pursuant to the terms of that certain Indenture dated as of
March __, 2001 between the Issuer and the Bond Trustee (said indenture as the
same now exists and as it may hereafter from time to time be amended, restated
or modified and as supplemented from time to time by one or more Series
Supplements (the "Series Supplements") as of March __, 2001 (the Series
Supplements and the Indenture being the "Indenture"), the Issuer, among other
things, has granted to the Bond Trustee a security interest in certain of its
assets to secure certain Securitization Bonds issued pursuant to the Indenture
("Securitization Bonds"); and
WHEREAS, pursuant to the terms of that certain Securitization Property
Servicing Agreement, dated as of March __, 2001 between the Issuer and Detroit
Edison, as servicer (said agreement being, as the same now exists and as it may
hereafter from time to time be amended,
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restated or modified, being the "Servicing Agreement"), Detroit Edison has
agreed to provide for the benefit of the Issuer servicing functions with respect
to the collection of SB Charges; and
WHEREAS, pursuant to the terms of the RPA's, Detroit Edison has agreed
to provide for the benefit of the Investor or the Bank, as the case may be,
servicing functions with respect to Collections related to Eligible Assets; and
WHEREAS, Collections with respect to Eligible Assets and collections
with respect to SB Charges and related bank accounts as to which the same may be
deposited are the subject of the RPA's, the Sale Agreement, the Indenture and
the Servicing Agreement; and
WHEREAS, the parties hereto wish to agree upon their respective rights
relating to such Collections, collections and bank accounts, as well as other
matters of common interest to them which arise under or result from the
coexistence of the RPA's, the Sale Agreement, the Indenture and the Servicing
Agreement;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties hereto agree as follows:
1. The Agent and the Bank hereby acknowledge the ownership
interest of the Issuer in the SB Charges including revenues, collections,
payments, money and proceeds arising therefrom (the "Issuer Assets") and the
security interest in favor of the Bond Trustee in such assets (the "Bond Trustee
Collateral") as granted by the Issuer for itself or as agent for Detroit Edison
in the Granting Clause of the Indenture. The Bond Trustee and the Issuer hereby
acknowledge the ownership interest of the Investor, the Owners, the Bank and the
Agent in the Eligible Assets. The Agent and the Bank further acknowledge that,
notwithstanding anything in the RPA's to the contrary, none of the Agent, the
Bank, the Investor or the Owners has any interest in the Issuer Assets or the
Bond Trustee Collateral and each of the Bond Trustee and the Issuer further
acknowledge that, notwithstanding anything in the Sale Agreement or the
Indenture to the contrary, it has no interest in the Eligible Assets.
2. The Agent, the Bank and the Bond Trustee acknowledge that
Collections relating to the Eligible Assets shall be initially deposited into
either (a) account no. 1000-909620 at Comerica Bank, ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ABA #072-000096 or (b) account no. 11028-23 at Bank
One, Michigan at ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ABA #072-000326
(each, a "Deposit Account") and that collections with respect to SB Charges, as
servicer under the Servicing Agreement, will also initially be deposited into
the Deposit Accounts. The Bond Trustee and the Issuer waive any interest in
deposits to the Deposit Accounts to the extent that they relate to Collections
on account of Eligible Assets and the Agent and the Bank waive any interest in
deposits to the Deposit Accounts to the extent that they relate to collections
on account of SB Charges (as defined in the RPA's). Each of the parties hereto
acknowledges the respective security interests of the others in the Deposit
Accounts to the extent of their respective interests as described in this
Agreement.
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3. The Agent and the Bank hereby acknowledge that, notwithstanding
anything in the RPA's to the contrary, all collections of Issuer Assets are
property of the Issuer pledged to the Bond Trustee for the benefit of the Bond
Trustee and Securitization Bondholders and any Swap Counterparty (each as
defined in the Indenture). Each of the Issuer and the Bond Trustee hereby
acknowledge that, notwithstanding anything in the Sale Agreement or the
Indenture to the contrary, all Collections related to Eligible Assets, are the
property of the Bank, the Investor and the Owners, as the case may be, subject
to the terms of the RPA's.
4. The acknowledgments contained in Paragraphs 1, 2 and 3 of this
Agreement are applicable irrespective of the time or order of attachment or
perfection of security or ownership interests or the time or order of filing or
recording of financing statements or mortgages.
5. The parties hereto recognize the existence of rights in favor
of the Bond Trustee and the Agent under the Indenture and the RPA's, as the case
may be, to (i) replace Detroit Edison as servicer thereunder and (ii) to take
control over Collections relating to Eligible Assets and collections relating to
Issuer Assets by means, among other things, of notifying customers of Detroit
Edison to stop making payments to Detroit Edison on account of Eligible Assets
or Issuer Assets, as the case may be, and to direct that such payments be made
to a Person or a lock-box or bank account selected by the relevant party
(whether by means of court ordered sequestration or otherwise), in each case
subject to the terms of this paragraph 5.
In the event that either the Bond Trustee or the Agent is entitled to
and desires (i) to exercise its right to replace Detroit Edison or its successor
as servicer, the party desiring to exercise such right will consult with the
other with respect to the Person who would replace Detroit Edison or its
successor and/or (ii) to exercise its rights referred to in clause (ii) of the
prior paragraph, any redirection of funds will be either to (A) a replacement
servicer agreed to by both the Bond Trustee and the Agent in accordance with the
terms hereof or (B) to an account designated by the Bond Trustee or the Agent,
as the case may be, withdrawals from which cannot be made without the approval
of the other.
If in accordance with the previous paragraph a replacement servicer
cannot be agreed upon within five Business Days, each of the Bond Trustee and
the Agent at their own expense will appoint a Person to select a replacement
servicer for them and such Persons shall agree upon a replacement servicer. Such
replacement servicer shall be an "eligible" servicer which is a Person (i) which
is a financial institution having minimum capital of $50,000,000, experienced in
collecting utility company receivables and (ii) whose appointment is subject to
the Rating Agency Condition (as defined below).
Anything in this Agreement to the contrary notwithstanding, any action
taken by either the Bond Trustee or the Agent pursuant to this paragraph 5 shall
be subject to the Rating Agency Condition and the consent, if required by law,
of the MPSC. For the purposes of this Agreement, the Rating Agency Condition
means, with respect to any such action, notification to each rating agency then
rating any class or series of the Securitization Bonds of such action, and the
receipt of notification from each
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of Fitch and S&P (each as defined in the Indenture) that such action will not
result in a reduction or withdrawal of their rating on such Securitization
Bonds. The parties hereto acknowledge and agree that the approval or the consent
of the rating agencies which is required in order to satisfy the Rating Agency
Condition is not subject to any standard of commercial reasonableness, and the
parties are bound to satisfy this condition whether or not the rating agencies
are unreasonable or arbitrary.
6. The Agent, the Bond Trustee and Detroit Edison agree to
cooperate with each other and make available to each other or any replacement
servicer any and all records and other data relevant to the Issuer Assets and
Eligible Assets hereinabove mentioned which it may from time to time receive
from Detroit Edison (or its successor) including, without limitation, any and
all computer programs, data files, documents, instruments, files and records and
any receptacles and cabinets containing the same.
7. Nothing herein contained shall be deemed as effecting a joint
venture among the Agent, the Bank, Detroit Edison, the Issuer, the Investor, the
Owners and the Bond Trustee.
8. For the purpose of this Agreement only, the Agent and the Bank
hereby consent and agree to the method of (a) adjustment set forth in Section
4.01 of the Servicing Agreement and (b) calculation and allocation of payments
set forth in Section 4.03(a) of the Servicing Agreement and irrevocably waive
any right to object to or enjoin such adjustment, calculation, payment or
allocation. Such consent and agreement shall not relieve Detroit Edison of any
of its obligations to make payments in accordance with the terms of the RPA's.
9. This Agreement shall terminate upon the payment in full of
either the Securitization Bonds or the obligations under the RPA's, except that
the understandings and acknowledgments contained in paragraphs 1, 2, 3 and 4
shall survive the termination of this Agreement.
10. This Agreement shall be governed by the laws of the State of
New York.
11. The Agent, the Bank, Detroit Edison, the Issuer and the Bond
Trustee agree to execute any and all agreements, instruments, financing
statements, releases and any and all other documents reasonably requested by the
other in order to effectuate the intent of this Agreement. In each case where a
release is to be given pursuant to this Agreement, the term release shall
include any documents or instruments necessary to effect a release, as
contemplated by this Agreement. All releases, subordinations and other
instruments submitted to the executing party are to be prepared at no expense to
such party.
12. This Agreement is solely for the benefit of the Agent, the
Bank, Detroit Edison, the Issuer, the Investor, the Owners and the Bond Trustee
for the benefit of the Securitization Bondholders, the Bond Trustee and any Swap
Counterparty and no other person or entity shall have any rights, benefits,
priority or interest under or because of the existence of this Agreement.
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13. This Agreement may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed and delivered shall be deemed to be an original and all
of which taken together shall constitute but one and the same instrument.
Delivery of an executed counterpart of a signature page to this Agreement by
telecopier shall be effective as delivery of a manually executed counterpart of
this Agreement.
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IN WITNESS WHEREOF, the parties have caused this Agreement to
be executed by their respective officers thereunto duly authorized, as of the
date first above written.
CITICORP NORTH AMERICA, INC.,
Individually and as Agent
By:
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Name:
Vice President
CITIBANK, N.A.
By:
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Name:
Vice President
THE DETROIT EDISON COMPANY
By:
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Name:
Title:
THE BANK OF NEW YORK
as Bond Trustee
By:
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Name:
Title:
THE DETROIT EDISON SECURITIZATION
FUNDING LLC
By:
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Name:
Title: