Document:

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                                                                     EXHIBIT 4.1

                 THE DETROIT EDISON SECURITIZATION FUNDING LLC,
                      A MICHIGAN LIMITED LIABILITY COMPANY

                       LIMITED LIABILITY COMPANY AGREEMENT

DATED:   Effective November 20, 2000

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                 THE DETROIT EDISON SECURITIZATION FUNDING LLC,
                      A MICHIGAN LIMITED LIABILITY COMPANY

                       LIMITED LIABILITY COMPANY AGREEMENT

                                TABLE OF CONTENTS

<TABLE>
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ARTICLE AND SECTION                                                                          PAGE
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ARTICLE I
DEFINITIONS.....................................................................................1

ARTICLE II
CONTINUATION AND GENERAL MATTERS WITH  RESPECT TO THE COMPANY...................................6
2.1      Continuation; Filings..................................................................6
2.2      Name; Ownership of Property............................................................6
2.3      Office; Resident Agent.................................................................6
2.4      Purposes...............................................................................7
2.5      Term...................................................................................7
2.6      Special Covenants......................................................................7

ARTICLE III
IDENTITY OF MEMBER;  MEMBER'S CONTRIBUTIONS AND DISTRIBUTIONS..................................11
3.1      Member................................................................................11
3.2      Capital Contributions.................................................................12
3.3      Return of Capital Contributions; Interest on Capital Contributions....................12
3.4      Sale of Securitization Property.......................................................12
3.5      Approval of Member....................................................................12
3.6      Action by Member......................................................................13
3.7      Compensation and Reimbursement of Member..............................................13
3.8      Limited Liability of Member...........................................................13
3.9      Activities of Member..................................................................13
3.10     Member's Good Faith...................................................................13

ARTICLE IV
MANAGEMENT.....................................................................................14
4.1      Management by Managers................................................................14
4.2      Number and Appointment of Managers....................................................14
4.3      Independent Managers..................................................................15
4.4      Resignation or Removal of Managers....................................................16
4.5      Meetings of Managers..................................................................16
4.6      Quorum; Voting by Managers............................................................17
4.7      Written Approval of Managers in Lieu of Meeting.......................................17
4.8      Managers' Positions Within the Member.................................................18
4.9      Managers' Compensation and Reimbursement..............................................18
4.10     Managers' Duty to Devote Time.........................................................18
4.11     Managers' Standard of Care and Absence of Liability...................................18
4.12     Delegation to Officers................................................................18

ARTICLE V
ALLOCATIONS AND DISTRIBUTIONS TO MEMBER;
RECORD KEEPING AND TAX MATTERS.................................................................19
5.1      Allocations...........................................................................19
5.2      Distributions.........................................................................19
5.3      Expenses..............................................................................19
5.4      Books and Records.....................................................................20
5.5      Fiscal Year; Accounting Method........................................................20
5.6      Tax Information, Financial Statements and Reports.....................................20
5.7      Tax Matters Partner...................................................................20
</TABLE>

                                      (i)

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<TABLE>
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5.8      Bank Accounts.........................................................................21

ARTICLE VI
ASSIGNMENTS AND ACQUISITIONS OF MEMBERSHIP INTEREST............................................21
6.1      General Matters Regarding Assignments.................................................21
6.2      Disability Event as to Member.........................................................21
6.3      Admission of Substitution Member......................................................22
6.4      Admission of Additional Members.......................................................23
6.5      Merger or Consolidation of Member.....................................................23
6.6      Withdrawal............................................................................23

ARTICLE VII
EXCULPATION AND INDEMNIFICATION................................................................23
7.1      Exculpation...........................................................................23
7.2      Indemnification.......................................................................24
7.3      Advancement of Expenses...............................................................24
7.4      Indemnification of Employees and Agents...............................................25
7.5      Nonexclusivity of Rights and Other Matters............................................25
7.6      Insurance.............................................................................25
7.7      Saving Clause.........................................................................25
7.8      Contribution..........................................................................25

ARTICLE VIII
DISSOLUTION AND LIQUIDATION....................................................................26
8.1      Term..................................................................................26
8.2      Winding Up and Liquidation of the Company.............................................26
8.3      Certificate of Dissolution............................................................27

ARTICLE IX
MISCELLANEOUS PROVISIONS.......................................................................27
9.1      Offset................................................................................27
9.2      Nonpetition Covenant..................................................................27
9.3      Notices...............................................................................28
9.4      Construction..........................................................................28
9.5      Severability..........................................................................29
9.6      Waiver................................................................................29
9.7      No Conflict with Articles.............................................................29
9.8      Entire Agreement......................................................................29
9.9      Amendment.............................................................................30
9.10     Insertion of Agreement Provisions in Indenture........................................30
9.11     Binding Agreement.....................................................................30
9.12     Counterparts..........................................................................30
</TABLE>

Schedule I - Schedule of Managers

                                      (ii)

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                 THE DETROIT EDISON SECURITIZATION FUNDING LLC,
                      A MICHIGAN LIMITED LIABILITY COMPANY

                       LIMITED LIABILITY COMPANY AGREEMENT

         THIS LIMITED LIABILITY COMPANY AGREEMENT is made and entered into
effective as of November 20, 2000, by and among (i) THE DETROIT EDISON
SECURITIZATION FUNDING LLC, a Michigan limited liability company, whose address
is 2000 Second Avenue, Detroit, Michigan 48226 ("FUNDING"), (ii) THE DETROIT
EDISON COMPANY, a Michigan corporation, whose address is 2000 Second Avenue,
Detroit, Michigan 48226 ("DETROIT EDISON") and (iii) each of the managers of the
Company identified in Schedule I attached hereto and incorporated herein.

                                    RECITALS:

         A. On November 20, 2000, Detroit Edison, as the sole member, caused
Articles of Organization with respect to Funding (the "ORIGINAL ARTICLES") to be
filed with the Michigan Department of Consumer and Industry Services, Bureau of
Commercial Services, Corporation Division (the "DEPARTMENT"), thereby causing
Funding to be formed as a limited liability company (the "COMPANY") under and
subject to the LLC Act (as defined below).

         B.The parties hereto desire to set forth their agreements as to (i) the
terms and conditions of Detroit Edison's membership in the Company, including
without limitation, its obligation to contribute capital to the Company and its
right to receive distributions, (ii) the activities of the Company, including
the issuance of the Bonds in accordance with the Financing Order (as such terms
are defined below) and the satisfaction of the Company's obligations with
respect to such Bonds, (iii) certain indemnifications being provided by the
Company and (iv) the operation and management of the Company.

         Accordingly, the parties hereto agree as follows:

                                    ARTICLE I

                                   DEFINITIONS

         The following capitalized terms shall have the following meanings:

         "ADMINISTRATION AGREEMENT" shall mean the Administration Agreement,
dated                  , 2001, between the Company, as issuer, and Detroit
Edison, as administrator, with respect to the provision of corporate management
services to the Company, as the same may be amended, supplemented or otherwise
modified and in effect from time to time.

         "AFFILIATE", with respect to any specified Person, shall mean any other
Person controlling or controlled by or under common control with such specified
Person, where "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

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"CONTROLLING" and "CONTROLLED" shall have meanings correlative to the foregoing;
it being acknowledged by the parties hereto that the Company is not controlled
by and is not under common control with Detroit Edison, and, accordingly, is not
an Affiliate of Detroit Edison.

         "AGREEMENT" shall mean this Limited Liability Company Agreement, as the
same may be amended, supplemented, modified or restated from time to time in
accordance with the provisions hereof.

         "ARTICLES" has the meaning set forth in Section 2.1 hereof.

         "ASSIGN," "ASSIGNEE" and "ASSIGNMENT" have the meanings set forth in
Section 6.1(b) hereof.

         "ASSIGNEE" shall mean the Company as the assignee of Detroit Edison
under the Financing Order and with respect to the Securitization Property.

         "BASIC DOCUMENTS" shall mean the Governing Documents, the Indenture,
the Sale Agreement, the Bill of Sale, the Servicing Agreement, the
Administration Agreement, the Underwriting Agreement, the Hedge Agreements and
the Interest Rate Swap Agreements.

         "BILL OF SALE" shall mean the bill of sale dated as of          , 2001,
issued by Detroit Edison to the Company pursuant to the Sale Agreement, and any
other bill of sale delivered in accordance therewith.

         "BONDS" shall mean one or more Series of securitization bonds (each of
which may be comprised of one or more Classes) issued pursuant to the Financing
Order and the Indenture.

         "BUSINESS DAY" shall mean any day other than a Saturday, Sunday or
other day on which banks are authorized or required by law to be closed in the
City of Detroit, Michigan.

         "CLASS" shall mean any class of a Series of Bonds, and "CLASSES" shall
mean two or more classes, as the context requires.

         "CODE" shall mean the Internal Revenue Code of 1986, as amended from
time to time (or any successor law).

         "COMPANY" has the meaning set forth in Recital A.

         "COMPETITION ACT" shall mean, jointly, the Customer Choice and Electric
Reliability Act, Senate Bill No. 937, 2000 PA 141 and Enrolled Senate Bill No.
1253, 2000 PA 142, both effective June 5, 2000, both with respect to the
restructuring of the electric utility business in Michigan, which acts authorize
electric utilities to (i) recover qualified costs through irrevocable
non-bypassable securitization charges, (ii) assign such securitization charges
to special purpose entities and (iii) issue or have their assignees issue debt
securities secured by such securitization charges, as amended from time to time
(and any successor laws).

         "DAY" or "DAYS" shall mean each calendar day, including Saturdays,
Sundays and legal holidays; provided, however, that if the day on which a period
of time for consent or approval or other action ends is not a business day, such
period shall end on the next business day.

         "DEPARTMENT" has the meaning set forth in Recital A.

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         "DETROIT EDISON" has the meaning set forth in the introductory
paragraph hereof.

         "DISABILITY EVENT" has the meaning set forth in Section 6.2(a) hereof.

         "DISABLED MEMBER" has the meaning set forth in Section 6.2(a) hereof.

         "DISSOLUTION PROPOSAL" shall mean a written proposal unanimously
approved by the Managers with respect to the dissolution of the Company (i)
which contains a schedule regarding the use and distribution of liquidation
proceeds and (ii) to which have been attached the written consents of such
Persons as the Managers have determined it was necessary to obtain with respect
to the dissolution.

         "FINANCING ORDER" shall mean the opinion and order issued by MPSC on
November 2, 2000 as amended by opinion and order dated January 4, 2001 in MPSC
Case No. U-12478, pursuant to the Competition Act, providing for the creation of
the Securitization Property, the collection of the Securitization Charge with
respect to such Securitization Property, the periodic adjustment of the
Securitization Charge, and the creation of a special purpose entity to acquire
title to the Securitization Property and to issue bonds with respect thereto.

         "FUNDING" has the meaning set forth in the introductory paragraph
hereof.

         "GOVERNING DOCUMENTS" shall mean this Agreement and the Articles.

         "GOVERNMENTAL AUTHORITY" shall mean any Federal, state, local or
foreign court or governmental department, commission, board, bureau, agency,
authority, instrumentality or regulatory body.

         "HEDGE AGREEMENTS" shall mean, collectively, any agreements between the
Company and third party counterparties entered into to protect against interest
rate movements prior to the pricing of any of the Bonds, as the same may be
amended, supplemented or otherwise modified and in effect from time to time.

         "INDENTURE" shall mean the Indenture, dated as of                  ,
2001 between the Company and the Trustee, with respect to the issuance of the
Bonds pursuant to the Financing Order, the repayment of the Bonds and related
matters, as the same may be amended, modified or supplemented from time to time.

         "INDEPENDENT MANAGER" shall mean, with respect to the Company, a
Manager who is not, and within the five years prior to the date of his
appointment was not (except solely by virtue of such Person's serving as, or
being an Affiliate of any other Person serving as, an independent director or
manager, as applicable, of the Member or any bankruptcy-remote special purpose
entity that is an Affiliate of the Member or the Company), (i) a stockholder,
member, partner, director, officer, manager, employee, customer, supplier,
creditor, contractor, independent contractor or Affiliate of, or any Person that
has received any benefit in any form whatever from (other than in such Manager's
capacity as a ratepayer or customer of the Member in the ordinary course of
business), or any Person that has provided any service in any form whatsoever
to, or any major creditor (or any Affiliate of any major creditor) of, the
Company, the Member, or any of their Affiliates, or (ii) a Person owning
beneficially, directly or indirectly, any outstanding shares of common stock,
any limited liability company interests or any partnership interests, as
applicable, of the Company, the Member or any of their Affiliates, or of any
major creditor (or any Affiliate of any major creditor) of any of the foregoing,
or a stockholder, member, partner, director, officer, employee, customer,
supplier, creditor, contractor, independent contractor or Affiliate of, or any
Person that has received any benefit in any form whatever from (other than in
such Person's capacity as a ratepayer or customer of the Member in the ordinary
course of business), or any Person that has provided any service in any form

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whatever to, such beneficial owner or any of such beneficial owner's Affiliates,
(iii) a member of the immediate family of any person described above or (iv) is
a Person who otherwise controls the Company, the Member or any of their
Affiliates; provided that, the indirect or beneficial ownership of stock through
a mutual fund or similar diversified investment vehicle with respect to which
the owner does not have discretion or control over the investments held by such
diversified investment vehicle shall not preclude such owner from being an
Independent Manager. For purposes of this definition, "MAJOR CREDITOR" shall
mean a natural person or business entity to which the Company, the Member or any
of their Affiliates has outstanding indebtedness for borrowed money or credit on
open account in a sum sufficiently large as would reasonably be expected to
influence the judgment of the proposed Independent Manager adversely to the
interests of the Company when the interests of that Person are adverse to those
of the Company, and "INDEPENDENT MANAGERS" shall mean all the Independent
Managers, collectively.

         "INTEREST RATE SWAP AGREEMENTS" shall mean, collectively, any
agreements with respect to any Classes of floating rate Bonds between the
Company and recognized swap dealers, as swap counterparties, for interest rate
swap transactions, as the same may be amended, supplemented or otherwise
modified and in effect from time to time.

         "LLC ACT" shall mean the Michigan Limited Liability Company Act, MCLA
450.4101 et seq, as amended from time to time (and any successor law).

         "MANAGER" and "MANAGERS" have the meanings set forth in Section 4.1
hereof.

         "MEMBER" shall mean Detroit Edison, in its capacity as a Member of the
Company, or any successor in interest of Detroit Edison which is admitted to the
Company as a substitute Member in accordance with Section 6.3 hereof, or any
additional Person who is admitted as a Member of the Company in accordance with
Section 6.4 hereof.

         "MEMBERSHIP INTEREST" shall mean all of the right, title and interest
of the Member in its capacity as a member of the Company within the meaning of
the LLC Act and this Agreement.

         "MPSC" shall mean the Michigan Public Service Commission or any
successor Governmental Authority.

         "ORIGINAL ARTICLES" has the meaning set forth in Recital A.

         "PERSON" or "PERSONS" shall mean any natural person, corporation,
business trust, joint venture, association, company, partnership (general or
limited), limited liability company, joint stock company, trust, unincorporated
organization or Governmental Authority.

         "PROCEEDING" has the meaning set forth in Section 7.2(a) hereof.

         "REPRESENTATIVE" has the meaning set forth in Section 6.2(a) hereof.

         "SALE AGREEMENT" shall mean the Securitization Property Sale Agreement,
dated as of                  , 2001, between Detroit Edison, as seller, and the
Company, as issuer, with respect to the sale and assignment of the
Securitization Property to the Company, as the same may be amended, supplemented
or otherwise modified and in effect from time to time.

         "SECURITIZATION CHARGE" shall mean a non-bypassable charge provided for
in the Financing Order for the purpose of providing funds for the full recovery
of certain qualified costs of Detroit Edison or the

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Assignee, which shall be payable pursuant to, and as set forth in, the Financing
Order, or all such non-bypassable charges provided for in the Financing Order,
collectively, as the context may require.

         "SECURITIZATION PROPERTY" shall mean the irrevocable right of Detroit
Edison or the Assignee to impose, collect, receive and to be paid amounts from
the collections of the Securitization Charge; all rights of Detroit Edison or
the Assignee under the Financing Order, including, without limitation, all
rights to obtain periodic adjustments of such Securitization Charge, and all
revenues, collections, payments, money and proceeds arising under, or with
respect to, all of the foregoing; or all such rights and revenues, collectively,
as the context may require.

         "SERIES" shall mean each series of Bonds issued and authenticated
pursuant to the Financing Order and the Indenture and a related Supplement, or
two or more such series collectively, as the context may require.

         "SERVICING AGREEMENT" shall mean the Securitization Property Servicing
Agreement, dated as of                   , 2001, between the Company, as issuer,
and Detroit Edison, as servicer, whereby the servicer will manage, service,
administer and effect collection of the Securitization Charge, as the same may
be amended, supplemented or otherwise modified and in effect from time to time.

         "SPECIAL MEMBERS" and "SPECIAL MEMBER" have the meanings set forth in
Section 6.2(b) hereof.

         "SUPPLEMENT" shall mean a supplement to the Indenture complying (to the
extent applicable) with the terms of the Indenture.

         "TAX MATTERS PARTNER" has the meaning set forth in Section 5.7 hereof.

         "TREASURY REGULATION" shall mean a regulation, including a proposed or
temporary regulation, promulgated under the Code, or any other successor
Treasury Regulation. References herein to a specific provision of a proposed or
temporary regulation shall include the analogous provision of the final Treasury
Regulation.

         "TRUSTEE" shall mean the party named as such in the Indenture until a
successor replaces it in accordance with the applicable provisions of the
Indenture, and, thereafter, the successor.

         "UNDERWRITING AGREEMENT" shall mean the Underwriting Agreement, dated
as of                 , 2001, among the Company, Detroit Edison and Salomon
Smith Barney, Inc., on behalf of itself and as representative of the several
underwriters listed therein, with respect to the sale and purchase of the Bonds.

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                                   ARTICLE II

                                  CONTINUATION
                            AND GENERAL MATTERS WITH
                             RESPECT TO THE COMPANY

         2.1 CONTINUATION; FILINGS.

         By execution of this Agreement, the parties hereto agree to the
continuation of the Company as a limited liability company pursuant to and in
accordance with the LLC Act. Immediately following the execution of this
Agreement, the parties agree to the filing by the Company with the Department of
a restatement of the Original Articles (such restatement, as amended and/or
restated from time to time, is referred to herein as the "ARTICLES"), amending
and restating in their entirety the Original Articles. The parties further agree
to execute and deliver, or to the execution and/or delivery on behalf of the
Company of, such other certificates, instruments, notices and/or documents, and
to the filing, recording and publishing of such certificates, instruments,
notices and/or documents, and to the performance of such other acts, as may be
necessary or appropriate from time to time to comply with all applicable
requirements for the existence and continuation of the Company in the State of
Michigan and the carrying out of its activities. The parties agree that the
operation of the Company and the relationship of the Member and Managers to the
Company shall, subject to Section 9.7 hereof, be governed by the Governing
Documents.

         2.2 NAME; OWNERSHIP OF PROPERTY.

         (a) The name of the Company shall continue to be "THE DETROIT EDISON
SECURITIZATION FUNDING LLC." The Company may use such other names as may
subsequently be selected by the Managers from time to time, and may also conduct
its business under one or more assumed names selected by the Managers from time
to time.

         (b) All business of the Company shall be conducted in the name(s) or
assumed name(s) of the Company that has (have) been selected by the Managers in
accordance with subsection (a) above, and all contracts, property and other
assets of the Company shall be held in such name(s). The Member shall have and
own an undivided interest in the Company in accordance with the terms hereof;
provided, however, that the Member shall not have any specific ownership
interest in Company contracts, property or other assets, and shall not hold any
such Company contracts, property or other assets in its individual name, except
that the Member may temporarily hold the collected portions of the
Securitization Charge in its accounts (solely as servicer on behalf of the
Company, and not on its own behalf) pending delivery of the Securitization
Charge to the Company in accordance with the Servicing Agreement. The parties
acknowledge that the Member's Membership Interest shall be personal property for
all purposes.

         2.3 OFFICE; RESIDENT AGENT.

         (a) The principal office of the Company and the registered office which
the Company is required to maintain under the LLC Act shall be located at 2000
Second Avenue, Detroit, Michigan 48226 or at such other places within the State
of Michigan as may be selected by the Managers from time to time.

         (b) Susan M. Beale, whose address is 2000 Second Avenue, Detroit,
Michigan 48226-1279, or such other Person as may be selected by the Managers
from time to time, shall be the resident agent of the Company. If the resident
agent shall ever resign, the Managers shall promptly appoint a successor.

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         2.4 PURPOSES.

         The Company has been formed exclusively for the following purposes:

                  (1) to purchase, hold, own, manage, administer, service,
         collect amounts due on and otherwise deal with the Securitization
         Property, the Company's rights in any funds held by the Trustee, any
         other assets to be acquired pursuant to the Basic Documents, and any
         proceeds and rights associated therewith;

                  (2) to authorize, issue, sell and deliver the Bonds under the
         Indenture;

                  (3) to create security interests in and pledge the
         Securitization Property and the other collateral of the Company to the
         Trustee pursuant to the terms of the Competition Act, the Financing
         Order and the Indenture;

                  (4) to enter into arrangements to protect against interest
         rate movements prior to the pricing of Bonds and interest rate swap
         transactions;

                  (5) to negotiate, authorize, execute, deliver, assume the
         obligations under, and perform, the Basic Documents and any other
         agreement or instrument or document relating to the activities set
         forth in items (1), (2), (3) and (4) above; and to incur additional
         indebtedness or other liabilities payable to service providers and
         trade creditors in the ordinary course of business in connection with
         the foregoing activities;

                  (6) to invest the proceeds from the Securitization Property
         and the Company's other assets, capital and income in accordance with
         the Basic Documents, or otherwise in a manner not inconsistent with the
         Basic Documents; and

                  (7) to engage in and perform any activity and exercise any
         powers permitted to be exercised by limited liability companies under
         the laws of the State of Michigan that are related or incidental to the
         foregoing and necessary, suitable or convenient to accomplish the
         foregoing,

and for no other purposes.

         2.5 TERM.

         The term of the Company commenced on November 20, 2000 and shall be
continued until the Company is dissolved and liquidated in accordance with the
provisions of the Governing Documents.

         2.6 SPECIAL COVENANTS.

         (a) The Company covenants as follows:

                  (1) the Company shall (i) act and conduct business solely in
         its limited liability company name or assumed name(s) and through its
         duly authorized Member or Managers, (ii) take all reasonable steps to
         continue its identity as, and at all times hold itself out to other
         Persons as, a legal entity separate from the Member and any other
         Person, and make it apparent to other

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         Persons that it is an entity with assets and liabilities distinct from
         the Member and other Persons, (iii) conduct its business so as not to
         mislead others as to its identity or its assets, (iv) make it apparent
         to other Persons that, except for Federal and state tax purposes and
         certain internal accounting purposes, it is not a division of the
         Member or an Affiliate of the Member or any other Person and (v)
         correct any known misunderstanding regarding its separate identity;

                  (2) the Company shall observe all limited liability company
         and other formalities required by this Agreement;

                  (3) the Company shall maintain an arm's-length relationship
         with its Affiliates and the Member;

                  (4) the Company shall not form, or cause to be formed, any
         subsidiaries;

                  (5) except as otherwise provided in the Basic Documents, the
         funds and other assets of the Company shall not be commingled with
         those of any other Person, the accounts of the Company shall be kept
         separate from those of any other Person, the books and records of the
         Company (including business and accounting records) shall be maintained
         separately from those of the Member and shall reflect the Company's
         separate identity and its separate ownership of the Securitization
         Property, and the Company shall maintain separate financial statements
         from those of any other Person;

                  (6) the Company shall pay its own liabilities out of its own
         funds, including the fees and expenses of the administrator and
         servicer pursuant to the Administration Agreement and the Servicing
         Agreement, respectively;

                  (7) the Company shall use its own separate stationery,
         invoices, checks and other business forms;

                  (8) the Company shall allocate fairly and reasonably any
         overhead for office space, personnel and facilities shared with the
         Member or any other Person;

                  (9) the Company shall not (i) except as set forth in the Basic
         Documents, own, purchase, repurchase, acquire or agree to acquire any
         stock, obligations, assets or securities, or any interest in, or make
         capital contributions to, the Member or any Person (other than Eligible
         Investments as defined in the Basic Documents) or (ii) make any
         expenditure for capital assets or lease any capital assets other than
         the Securitization Property purchased pursuant to the Sale Agreement;

                  (10) the Company shall not (i) issue, incur or assume any
         indebtedness or any other obligations except for the Bonds and expenses
         related thereto, except as otherwise contemplated by the Basic
         Documents, (ii) guaranty, become obligated for, become liable on or
         hold itself out as being liable for (whether contingently or otherwise)
         the debts of the Member or any other Person, (iii) otherwise hold out
         its credit as being available to satisfy the obligations of the Member
         or any other Person, (iv) pledge its assets for the benefit of any
         Person other than the Trustee, (v) make loans or advances or extend
         credit to any Person or (vi) grant any lien, security interest,
         mortgage or encumbrance except as contemplated or permitted by the
         Basic Documents;

                  (11) the Company shall at all times ensure that its
         capitalization is adequate in light of its business and purpose;

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                  (12) the business and affairs of the Company shall be managed
         and operated in strict conformity with the Basic Documents;

                  (13) the Company shall (i) not permit the lien of the
         Indenture not to constitute a continuing valid first priority security
         interest in the collateral identified in the Indenture, (ii) take any
         action necessary or advisable to maintain and preserve the lien and
         security interest, and priority thereof, of the Indenture, (iii) not
         permit the validity of the Indenture to be impaired or the lien of the
         Indenture to be amended, subordinated, terminated or discharged, (iv)
         not permit any lien, charge, claim, security interest, mortgage or
         other encumbrance, other than the lien and security interest created by
         the Indenture, to be created on or to extend to or otherwise arise upon
         or burden the collateral or any part thereof or any proceeds thereof
         identified in the Indenture, (v) not permit any Person to be released
         from any covenants or obligations with respect to the Indenture except
         as expressly permitted by the Indenture and (vi) not, except as
         expressly permitted by Basic Documents, sell, transfer, exchange or
         dispose of any of the collateral identified in the Indenture unless
         directed to do so by the Trustee in accordance with the Indenture;

                  (14) the Bonds shall be secured by a security interest in all
         assets of the Company and shall be paid solely from the Securitization
         Charge and other assets of the Company; and there shall be no recourse
         to the Member for payments of principal, interest or any other amount
         owed or due under or in connection with the Bonds by bondholders, the
         Trustee, the Company or any other Person;

                  (15) the Company shall be operated in such a manner as the
         Managers deem reasonable and necessary or appropriate to preserve (i)
         the limited liability of Detroit Edison (or its successor) as the
         Member in the Company and (ii) until the expiration of the period of
         one year and one day after the termination of the Indenture and the
         payment in full of the Bonds, the bankruptcy-remote status of the
         Company; and

                  (16) the Company shall not make any payments, distributions or
         dividends to the Member in respect of its Membership Interest other
         than the amount released to the Company by the Trustee in accordance
         with the Indenture, except as otherwise provided in the Indenture.

         (b) The Member covenants as follows:

                  (1) this Agreement has been duly authorized, executed and
         delivered on behalf of the Company;

                  (2) except as otherwise provided in the Basic Documents, the
         funds and other assets of the Member shall not be commingled with those
         of the Company and the books and records of the Company shall be
         maintained separately from those of the Member and shall be clear and
         accurate so that another Person would have no difficulty in
         ascertaining the assets and liabilities of the Company and in
         segregating all of such assets and liabilities from those of the
         Member;

                  (3) the Member shall not (i) guaranty, become obligated for,
         become liable on or hold itself out as being liable for (whether
         contingently or otherwise) the debts of, or pledge its assets on behalf
         of, or hold out its credit as being available to satisfy the
         obligations of, the Company, (ii) seek or obtain credit or incur any
         obligation to any Person based on the assets of the Company, (iii)
         induce any third party to rely on the creditworthiness of the Company,
         (iv) maintain or publish consolidated financial statements with the
         Company unless the financial statements include footnotes indicating
         that the Securitization Property has been irrevocably sold to the
         Company and is not available to creditors of the Member under any
         circumstances, (v) finance the operations of the Company, (vi) borrow
         any money from or lend any money to the Company or (vii) fail to
         correct any known misunderstanding or misrepresentation with respect to
         any of the foregoing;

                                       9
<PAGE>   13

                  (4) the Member shall at all times (i) act in a way that
         insures that its creditors reasonably expect and rely upon only the
         Member's assets being available to secure, or serve as the source of
         payment of the obligations of, the Member, (ii) not act in a way that
         would lead any creditor to reasonably expect that the assets of the
         Member would be available to satisfy the obligations of the Company and
         (iii) not act in a way that would lead any creditor to reasonably
         expect that the assets of the Company would be available to satisfy the
         obligations of the Member;

                  (5) the Member shall have no liability for and shall incur no
         expense with respect to the credit enhancement obtained by the Company
         with respect to the Bonds;

                  (6) the capital contribution described in Section 3.2(a)
         hereof shall be made from the Member's separate funds and not from the
         proceeds of the sale of the Bonds; the capital contribution made by the
         Member to the Company shall be reflected on the books of the Member and
         the Company as a capital contribution and not as an obligation from the
         Company to the Member; there shall be no contractual obligation or
         legal compulsion on the part of the Company to repay the capital or any
         earnings thereon or any equivalent amount to the Member; and the
         Company shall have no legal or contractual obligation to pay any funds
         which were theretofore in the Capital Subaccount, the
         Overcollateralization Account or the Reserve Account (as those terms
         are defined in the Indenture) and earnings thereon not used to pay debt
         service on the Bonds and released to the Company, to the Member;

                  (7) the amounts payable to the Member for acting as the
         servicer under the Servicing Agreement and as the administrator under
         the Administration Agreement are fair and reasonable compensation for
         the services to be provided by it under those agreements;

                  (8) prior to the remittance of the Securitization Charge by
         the Member to the Company, the Securitization Charge shall be accounted
         for in the books and records of the Member as being the property of the
         Company;

                  (9) the Member shall retain certain tax charges identified in
         the Financing Order and the rights and interests arising under the
         Financing Order related thereto; the Member does not intend its
         retention of such tax charges to affect the treatment of the sale of
         the Securitization Property as a true sale and the absolute transfer to
         the Company of all the Member's rights to such property;

                  (10) the Member believes that the purchase price paid or
         payable by the Company for the Securitization Property, consisting of
         the net proceeds of the sale of the Bonds, is fair consideration for
         the absolute sale of such property by the Member and constitutes
         reasonably equivalent value therefor; the Member was not insolvent
         prior to the sale of the Securitization Property, was not rendered
         insolvent as a result of such sale, was not engaged in business or a
         transaction, nor was it about to engage in business or a transaction,
         for which any property remaining after such sale was an unreasonably
         small capital, and did not intend to incur debts that would be beyond
         the Member's ability to pay as such debts matured after such sale;

                  (11) the Member shall not amend, modify or otherwise change
         the Governing Documents in a manner that shall adversely affect the
         existence of the Company as a single purpose entity;

                  (12) the Member has not and the Company shall not encumber the
         Securitization Property except for the security interest granted to the
         Trustee for the holders of the Bonds;

                                       10
<PAGE>   14

                  (13) the Member expects the securitization transaction
         described in the Basic Documents to be classified on its financial
         statements as a financing, with the Bonds represented as either debt or
         deferred revenue. This accounting treatment is necessary to satisfy
         requirements of the United States Securities and Exchange Commission
         and/or the Internal Revenue Service; however, in its financial
         statements and internal records, the Member shall include footnotes
         and/or textual discussion indicating that the Securitization Property
         has been irrevocably sold to the Company and that it shall not be
         available to the Member or its creditors under any circumstances;

                  (14) the Member has not formed the Company or entered into the
         securitization transaction described in the Basic Documents with any
         intention of hindering, delaying or defrauding either present or future
         creditors;

                  (15) the Member shall not cause the Company to file a
         voluntary petition for relief under the Federal bankruptcy code;

                  (16) the Member shall not (i) file a voluntary petition for
         relief under the Federal bankruptcy code, (ii) file an answer or other
         pleading in response to an involuntary bankruptcy petition against the
         Member, consenting to or admitting or failing to contest the material
         allegations in the petition or (iii) dissolve until the expiration of
         one year and one day after the termination of the Indenture and the
         payment in full of the Bonds;

                  (17) the Member agrees that neither the Articles nor this
         Agreement is an executory contract under the Federal bankruptcy code;
         and

                  (18) the Member acknowledges that the management of the
         Company has been delegated to the Managers.

         (c) The Company and the Member shall use reasonable efforts to cause
the covenants set forth in subsections (a) and (b) hereof to be fulfilled.
Failure of the Company, the Member or any Manager on behalf of the Company to
comply with any of the foregoing covenants or any of the other covenants
contained in this Agreement shall not affect the status of the Company as a
separate legal entity or the limited liability of the Member or any Manager.

                                   ARTICLE III

                               IDENTITY OF MEMBER;
                             MEMBER'S CONTRIBUTIONS
                                AND DISTRIBUTIONS

         3.1 MEMBER.

         Detroit Edison is, as of the date hereof, the sole member of the
Company.

                                       11
<PAGE>   15

         3.2 CAPITAL CONTRIBUTIONS.

         (a) Contemporaneously with the issuance of the Series 2001-1 Bonds, the
Member shall contribute cash to the Company in the amount of $               .

         (b) The Member shall not have the obligation to make additional
contributions to the Company; however, at the option of the Member and with the
consent of the Managers, the Member may make additional capital contributions to
the Company from time to time.

         3.3 RETURN OF CAPITAL CONTRIBUTIONS; INTEREST ON CAPITAL CONTRIBUTIONS.

         (a) The Member shall not have the right to withdraw its capital
contributions or to demand or receive the return of its capital contributions or
any part thereof except as otherwise expressly provided in this Agreement.

         (b) To the extent that the Member shall ever have the right to withdraw
its capital contributions or to demand or receive the return of its capital
contributions, or any part thereof, neither the Company nor any other member
shall be personally liable or responsible for the return of such capital
contributions, and such return shall be made solely from the assets of the
Company.

         (c) No interest shall be paid by the Company on any of the Member's
capital contributions to the Company.

         3.4 SALE OF SECURITIZATION PROPERTY.

         Contemporaneously with the execution of this Agreement, the Member and
the Company have executed and delivered the Sale Agreement providing for the
sale and conveyance of the Securitization Property to the Company.

         3.5 APPROVAL OF MEMBER.

         The approval of the Member shall be required as to each of the
following matters:

                  (1) a change in the business of the Company;

                  (2) the sale, exchange, lease or other transfer of all or
         substantially all of the assets of the Company;

                  (3) the consolidation or merger of the Company with another
         business entity; and

                  (4) the amendment of the Articles.

         In addition, the approval of the Member to dissolve the Company shall
be required as described in Section 8.1(a) hereof.

                                       12
<PAGE>   16

         3.6 ACTION BY MEMBER.

         All actions of the Member shall be taken by means of the execution of a
written resolution of the Member, which resolution shall be signed on behalf of
the Member by an authorized officer of the Member and filed with the minutes and
permanent records of the Company.

         3.7 COMPENSATION AND REIMBURSEMENT OF MEMBER.

         (a) The Member shall not be entitled to any compensation from the
Company for its services to the Company, except that, while the Member is the
servicer under the Servicing Agreement or the administrator under the
Administration Agreement, it shall be entitled to the fees payable under those
agreements, which fees shall, (i) except as otherwise provided for therein, be
determined without regard to the income of the Company, (ii) not be deemed to
constitute distributions to the recipient of any profit, loss or capital of the
Company and (iii) be considered as operating expenses of the Company.

         (b) The Member shall be entitled to reimbursement for the reasonable
out of pocket costs and expenses incurred by it for or on behalf of the Company
or in furtherance of the Company's business, including, without limitation, the
fees paid to legal counsel, accountants, consultants, contractors and other
providers of services to the Company.

         3.8 LIMITED LIABILITY OF MEMBER.

         Except as otherwise provided by the LLC Act or expressly assumed, the
debts, obligations and liabilities of the Company, whether arising in contract,
tort or otherwise, shall be solely the debts, obligations and liabilities of the
Company, and the Member shall not be obligated personally for any such debt,
obligation or liability of the Company solely by reason of being a Member of the
Company.

         3.9 ACTIVITIES OF MEMBER.

         The Member and its Affiliates may engage in or possess an interest in
other business ventures of every kind and description, independently or with
others, which business ventures shall be separate from those of the Company. The
Company shall not have any rights in or to such independent ventures or the
income or profit therefrom.

         3.10 MEMBER'S GOOD FAITH.

         To the extent the Member takes any action with respect to the Company
(including, without limiting the generality of the foregoing, by means of its
appointment of an individual Manager or its control or appointment of any
individual Manager in any other capacity) the Member will act in good faith in
accordance with the terms of this Agreement, and make decisions with respect to
the business and daily operations of the Company to the extent applicable,
independent of, and not dictated by, any Affiliate of the Member.

                                       13
<PAGE>   17

                                   ARTICLE IV

                                   MANAGEMENT

         4.1 MANAGEMENT BY MANAGERS.

         (a) The business and affairs of the Company shall be managed by and
under the direction of managers (collectively, the "MANAGERS" and individually,
a "MANAGER"), who shall be the "managers" of the Company for purposes of the LLC
Act, and who, acting alone, shall have the full, exclusive and absolute right,
power and authority to manage and control the Company and the property, assets
and business thereof, to make all decisions affecting the Company, and to do all
acts necessary, convenient or incidental to or for the furtherance of the
purposes described herein, except for those decisions which pursuant to and in
accordance with the Articles, this Agreement or otherwise are required to be
approved by the Member. The Member acknowledges that all actions, decisions,
determinations, designations, directions, appointments, consents, approvals,
selections and the like made by the Managers in accordance with the authority
granted herein are intended to and shall be controlling and binding upon the
Company and the Member in its capacity as a member of the Company.

         (b) The Managers shall be the agents of the Company for the purpose of
the Company's business, and the acts of the Managers shall bind the Company as
set forth in, and in accordance with the provisions of, the LLC Act and the
Governing Documents.

         (c) All documents, contracts and agreements, including, without
limiting the generality of the foregoing, deeds, leases, easements, rights of
way, assignments, bonds, debentures, notes, obligations, evidences of
indebtedness, checks, drafts and mortgages, necessary or appropriate to be
executed on behalf of and in the name of the Company, including those providing
for the acquisition or disposition of the property of the Company, shall be
executed by any one (1) of the Managers without the joinder of any other
Managers, and, if so executed, shall be valid and binding on the Company.

         (d) It is hereby specifically agreed that the Managers, on behalf of
the Company, shall enter into and perform the Basic Documents and shall, except
as provided in Section 3.5 hereof, make all decisions of the Company concerning
the Securitization Property, and shall execute and deliver all documents,
agreements, certificates and/or financing statements contemplated thereby and
related thereto, all without further act, vote or approval of the Member.

         (e) By accepting his appointment as a Manager of the Company, each
Manager covenants that he will act in good faith in accordance with the terms of
this Agreement, and make decisions with respect to the business and daily
operations of the Company independent of, and not dictated by the Member or any
Affiliate of the Member, and free of any undue or excessive control exercised by
the Member, and each Manager acknowledges his primary fiduciary duty to the
Company.

         4.2 NUMBER AND APPOINTMENT OF MANAGERS.

         (a) The number of Managers of the Company shall not be less than three
(3) nor more than five (5), as may be determined by the Member from time to
time; provided, however, that no decrease in the number of Managers shall have
the effect of shortening the term of any incumbent Manager. Managers, other than
Independent Managers, may be employees or officers of the Member; however, no
Independent Manager and no more than one (1) of the other Managers may be a
member of the board of directors of the Member and/or DTE Energy Company, its
parent company. The Managers of the Company shall be appointed by the Member and
shall be deemed to have become Managers upon their execution of this Agreement,
in the case of the Managers appointed by the Member on or before the execution
date of this

                                       14
<PAGE>   18
Agreement, and upon execution of a counterpart of this Agreement, in the case of
Managers appointed by the Member subsequent to the execution date of this
Agreement. The Member acknowledges that (i) it heretofore appointed N.A. Khouri,
Larry G. Garberding and David E. Meador as Managers of the Company (and it
hereby reaffirms such appointments) and (ii) it is hereby appointing
                  and                   as Independent Managers of the Company.
A list of the Managers of the Company as of the date hereof and their addresses
is attached to this Agreement as Schedule I. The parties hereto acknowledge and
agree that the Company shall cause Schedule I to be updated from time to time,
as appropriate, to identify additional or replacement Managers, so that Schedule
I shall at all times set forth the identity of all of the then current Managers
of the Company.

         (b) A Manager appointed in accordance with this Agreement shall serve
in such capacity unless and until his successor has been selected by the Member,
as aforesaid, and qualified, or until he resigns, dies, becomes incapacitated,
is removed or such position otherwise become vacant. In such case, a replacement
Manager shall be appointed by the Member.

         4.3 INDEPENDENT MANAGERS.

         (a) While the Bonds are outstanding, at least two (2) Managers shall
continue to be Independent Managers. Schedule I shall, in addition to
identifying the then current Managers, also set forth which of the Managers
constitute Independent Managers. Independent Managers may not delegate their
duties, authorities or responsibilities hereunder. If an Independent Manager
resigns, dies, is removed or becomes incapacitated, or his position otherwise
becomes vacant, no action hereunder requiring the unanimous affirmative vote of
the Managers shall be taken until a successor Independent Manager has been
appointed by the Member and qualified, and such successor Independent Manager
has approved such action.

         (b) Notwithstanding any other provision of this Agreement or any
provision of law that otherwise so empowers the Company, the Member, any Manager
or any other Person, the Company shall not, and neither the Member nor any
Manager nor any other Person on behalf of the Company shall do, any of the
following without the prior unanimous affirmative vote of all Managers (such
affirmative vote to include the affirmative vote of both Independent Managers):

                  (1) consummate any of the items set forth in Section 3.5 which
         have been approved by the Member;

                  (2) engage in any business or activity other than that set
         forth in Article II hereof;

                  (3) except as provided in the Basic Documents, incur any
         indebtedness other than (A) the Bonds, (B) any obligations under
         agreements with third party credit enhancers and swap or hedge
         agreement counterparties relating to the Bonds and (C) ordinary course
         expenses as set forth in Section 5.3 hereof;

                  (4) assume or guarantee the indebtedness of any other Person;

                  (5) make a general assignment for the benefit of creditors or
         admit in writing the Company's inability to pay its debts generally as
         they come due, or take action in furtherance of any such action;

                  (6) file a voluntary petition for relief under the Federal
         bankruptcy code;

                                       15
<PAGE>   19

                  (7) file a petition or answer seeking consolidation,
         reorganization, arrangement, composition, readjustment, liquidation,
         dissolution or similar relief under any statute, law or regulation;

                  (8) seek the appointment of a trustee, receiver or liquidator
         of the Company or of all or a substantial part of its assets;

                  (9) file an answer or other pleading consenting to, admitting
         or failing to contest the material allegations of a petition filed
         against the Company in any proceeding petitioning for, or otherwise
         consent to or acquiesce in, an involuntary bankruptcy or any action
         seeking consolidation, reorganization, arrangement, composition,
         readjustment, liquidation, dissolution or similar relief under any
         statute, law or regulation, or the entry of any order appointing a
         trustee, liquidator or receiver of the Company or of all or a
         substantial portion of its assets;

                  (10) amend this Agreement or take action in furtherance of any
         such amendment;

                  (11) approve any proposed Dissolution Proposal; or

                  (12) dissolve, liquidate or wind up the Company.

         4.4 RESIGNATION OR REMOVAL OF MANAGERS.

         (a) A Manager shall be entitled to resign as a Manager by means of the
delivery of a written notice of resignation to the Company. The resignation of a
Manager shall be effective as of the date of the delivery of his written notice
of resignation, unless the notice sets forth a later date, in which event the
resignation shall be effective as of that later date.

         (b) A Manager may be removed with or without cause by the Member.
Removal of a Manager by a Member shall be effective on the date of delivery of a
written notice of removal from the Member to the Manager being removed; provided
that, an Independent Manager removed without cause shall continue to serve in
that capacity until a replacement Independent Manager has been selected and
qualified and has executed a counterpart of this Agreement.

         4.5 MEETINGS OF MANAGERS.

         (a) Except as otherwise provided in Section 4.7 hereof, any matters
subject to the approval of the Managers shall be decided at a meeting of the
Managers.

         (b) Meetings of Managers may be held at the principal office of the
Company or at such other location, and at such time, as may be agreed upon by
the Managers.

         (c) Meetings of Managers shall be called by means of a written notice
of meeting issued by the Member or any Manager, stating the place, date and time
of the meeting and the purpose for which it is being called. The notice of
meeting shall be given to each Manager at the address set forth on Schedule I
not less than two (2) business days prior to the date of such meeting. When a
notice is required to be given to the Managers hereunder, a waiver thereof in
writing signed by the Managers entitled to such notice, whether before, at or
after the time stated herein, shall be equivalent to the giving of such notice.

                                       16
<PAGE>   20

         (d) Managers may be present at a meeting in person or by means of
conference telephone or similar communications equipment through which all
Persons participating in the meeting may communicate with the other participants
and all participants are advised of the communications equipment and the names
of the participants in the conference.

         (e) If fewer than all Managers are present at a meeting, the business
transacted at any such meeting shall be confined to the business or purposes
stated in the aforesaid notice. If all Managers are present at a meeting, then,
in addition to the matters set forth in the notice, the Managers may discuss and
vote on any matters relating to the business of the Company subject to the vote
of Managers, whether or not such matters were set forth in the notice.

         (f) The Managers present at a meeting shall select one of their number
to preside at the meeting. The Managers present at a meeting shall also select
one of their number to be the secretary of the meeting to keep the minutes of
the meeting. Such minutes shall be filed with the minutes and permanent records
of the Company.

         (g) Voting shall be by voice vote unless a ballot vote is requested by
any Manager. If a ballot vote is requested, ballots shall be distributed to the
Managers for the purpose of recording each of their votes. Each ballot shall be
signed by the Manager casting it, shall be filed with the minutes of the
meeting, and shall be preserved with the minutes and permanent records of the
Company. A Manager who is not present at a meeting but wishes to vote on a
matter set forth in the notice of the meeting may vote by a writing submitted to
the Managers present at the meeting, such writing to be in such form as shall
have been designated by the unanimous approval of the Managers.

         4.6 QUORUM; VOTING BY MANAGERS.

         (a) At all meetings of the Managers, a majority in number of the
Managers shall constitute a quorum for the transaction of business. If a quorum
shall not be present at any meeting of the Managers, the Managers present at
such meeting shall adjourn the meeting from time to time, without notice other
than announcement at the meeting, until a quorum is present.

         (b) Except as otherwise provided in Sections 4.3 or 5.2 hereof or in
any other specific provision of this Agreement, the act of a majority in number
of the Managers shall be the act of the Managers.

         4.7 WRITTEN APPROVAL OF MANAGERS IN LIEU OF MEETING.

         Any action required or permitted to be taken at a meeting of the
Managers may be taken without a meeting, without prior notice, and without a
vote if approvals in writing, setting forth the action so taken, are executed by
a majority in number of the Managers (or such other number as may be required
pursuant to Sections 4.3, 5.2 or any other specific provision of this
Agreement). Every written approval shall bear the date and signature of the
Manager signing it and shall be filed with the minutes and permanent records of
the Company. Prompt notice of the taking of an action shall be given to all
Managers who did not execute a written approval of such action.

                                       17
<PAGE>   21

         4.8 MANAGERS' POSITIONS WITHIN THE MEMBER.

         The employment of Managers by the Member or its Affiliates shall not be
deemed a conflict of interest as to any Manager.

         4.9 MANAGERS' COMPENSATION AND REIMBURSEMENT.

         The Company may provide reasonable compensation to Independent Managers
(but not to Managers who are not Independent Managers) for their services on
behalf of the Company, from the revenues of the Company, in such amounts and at
such times as may be authorized by the Member. The Managers shall be entitled to
reimbursement by the Company for the reasonable out of pocket costs and expenses
paid or incurred by them for or on behalf of the Company or in furtherance of
the Company's business, including, without limitation, expenses and
disbursements of such agents, representatives, experts and counsel (including
legal counsel and accountants) as they may employ in connection with the
exercise and performance of their rights and duties under the Governing
Documents, the Indenture, the Sale Agreement and the Servicing Agreement. Such
amounts shall be treated as expenses of the Company and shall not be deemed to
constitute distributions of any profit, loss or capital of the Company.

         4.1 MANAGERS' DUTY TO DEVOTE TIME.

         A Manager shall devote such time, attention and effort to the Company
as he deems reasonably necessary for the proper management of the business of
the Company.

         4.11 MANAGERS' STANDARD OF CARE AND ABSENCE OF LIABILITY.

         (a) A Manager shall discharge his duties with respect to the Company's
business and affairs in good faith, with the care an ordinary prudent person in
a like position would exercise under similar circumstances, and in a manner he
reasonably believes to be in the best interests of the Company.

         (b) Except as otherwise expressly provided by the LLC Act, no Manager
shall be liable for the debts, obligations, or liabilities of the Company
(whether arising in contract, tort or otherwise), including, without limitation,
under a judgment, decree or order of a court, by reason of being a manager of
the Company.

         4.12 DELEGATION TO OFFICERS.

         The Managers are hereby authorized to appoint one or more officers and
to delegate operations of the Company to such officer(s); however, all major
decisions (including, without limiting the generality of the foregoing, the
decisions identified in Section 4.3(b) hereof) shall be made by the Managers and
the authority to make such decisions shall not be delegated to (an) officer(s).

                                       18
<PAGE>   22

                                    ARTICLE V

                    ALLOCATIONS AND DISTRIBUTIONS TO MEMBER;
                         RECORD KEEPING AND TAX MATTERS

         5.1 ALLOCATIONS.

         Except as may be required by section 704(c) of the Code and Treasury
Regulation ss.1.704-1(b)(2)(iv)(f)(4) issued thereunder, all items of income,
gain, loss, deduction, and credit of the Company for each fiscal year shall be
allocated to the Member.

         5.2 DISTRIBUTIONS.

         Subject to Section 8.2(a) below, distributions to the Member shall be
made as, when and to the extent that the Managers, in their sole discretion, by
unanimous vote, determine that the Company's cash on hand exceeds the current
and anticipated needs of the Company to fulfill its business purposes.
Notwithstanding the foregoing, no distribution shall be declared or made (i) if
a default has occurred or is otherwise continuing under the Indenture or any
Bonds then outstanding, (ii) such distribution shall result in a reduction or
withdrawal of the then current rating of any outstanding Class and/or Series of
Bonds by any Rating Agency (as defined in the Indenture), (iii) such
distribution shall otherwise violate any of the Basic Documents or (iv) if,
after giving it effect, the Company shall not be able to pay its debts as they
become due in the usual course of business or the Company's total assets shall
be less than the sum of its total liabilities.

         5.3 EXPENSES.

         Except as otherwise provided in this Agreement, and subject to the
provisions of the Basic Documents, the Company shall be responsible for all
expenses and the allocation thereof, including, without limitation:

                  (1) all expenses related to the issuance of the Bonds;

                  (2) all expenses related to the payment of the principal of
         and interest on the Bonds;

                  (3) all amounts payable to Detroit Edison as the administrator
         and servicer under the Administration Agreement and the Servicing
         Agreement, respectively, or any successor(s) to Detroit Edison under
         such agreements;

                  (4) all expenses related to the business of the Company and
         all routine administrative expenses of the Company, including the
         maintenance of books and records of the Company, and the preparation
         and dispatch to the Member of checks, financial reports, tax returns
         and notices required pursuant to this Agreement;

                  (5) all expenses incurred in connection with any litigation or
         arbitration involving the Company (including the cost of any
         investigation and preparation) and the amount of any judgment or
         settlement paid in connection therewith;

                  (6) all expenses of indemnity or contribution payable by the
         Company to any Person;

                                       19
<PAGE>   23

                  (7) all expenses incurred in connection with the collection of
         amounts due to the Company from any Person;

                  (8) all expenses incurred in connection with the preparation
         of amendments to this Agreement;

                  (9) all expenses incurred in connection with the liquidation,
         dissolution and winding up of the Company; and

                  (10) all expenses otherwise allocated in good faith to the
         Company by the Managers.

         5.4 BOOKS AND RECORDS.

         The Company shall maintain complete, accurate and separate books and
records of its business and affairs, which shall reflect all Company
transactions and which shall be appropriate and adequate for the Company's
business, including minutes of the meetings and other proceedings of the
Managers and the Member. Such books and records shall be kept at the Company's
principal office. The Member and its duly authorized representatives shall have
complete access to all books and records of the Company at the Company's
principal office, and the right to inspect and copy them, during normal business
hours.

         5.5 FISCAL YEAR; ACCOUNTING METHOD.

         The fiscal year of the Company for financial reporting and federal
income tax purposes shall, unless the Managers determine otherwise pursuant to
the requirements of the Code, be the calendar year. The Company shall utilize
the accrual method of accounting.

         5.6 TAX INFORMATION, FINANCIAL STATEMENTS AND REPORTS.

         As soon as practicable following the end of each fiscal year, the
Managers shall cause to be prepared and shall furnish to the Member (i) all
information relating to the Company that is necessary for the preparation of the
Member's Federal income tax return for such fiscal year and (ii) a balance
sheet, an income statement and a statement of changes in the Member's capital
account. The aforesaid financial statements shall be prepared in accordance with
the accounting method selected by the Managers, consistently applied (except as
therein noted), and shall be accompanied by an audit report from a nationally
recognized accounting firm. The Managers also may cause to be prepared or
delivered such other reports as they may deem appropriate. The Company shall
bear the cost of all such financial statements and reports.

         5.7 TAX MATTERS PARTNER.

         The Member is hereby designated as "TAX MATTERS PARTNER" for the
Company, with full power and authority to act as such for the Company, and with
all the rights and responsibilities of that position described in Sections 6222
through 6232 of the Code.

                                       20
<PAGE>   24

         5.8 BANK ACCOUNTS.

         The Managers or an authorized signatory designated by the Managers may
open and maintain one or more bank and/or investment accounts in the name of the
Company with such financial institutions and/or firms as the Managers shall
determine; may rent and obtain access to safety deposit boxes or vaults; may
purchase certificates of deposit; and may sign and deliver checks, written
directions or other instruments to withdraw all or any part of the funds
belonging to the Company and on deposit in any such bank or investment accounts.

                                   ARTICLE VI

               ASSIGNMENTS AND ACQUISITIONS OF MEMBERSHIP INTEREST

         6.1 GENERAL MATTERS REGARDING ASSIGNMENTS.

         (a) The Member may assign all or any portion of its Membership Interest
to another Person so long as, and only so long as, (i) such assignment is not
prohibited by and does not cause a breach under the Basic Documents or under any
other agreement by which the Member or the Company or any properties of the
Company is/are bound or affected and (ii) each Rating Agency (as defined in the
Indenture) then rating the Bonds of any Series and/or Class shall have confirmed
in writing to the Trustee and the Company that such transfer shall not result in
a reduction or withdrawal of the then current rating by such Rating Agency of
any outstanding Series and/or Class of Bonds. An assignment accomplished in
accordance with this provision shall be deemed to have occurred upon the
execution by the Member of a written assignment assigning its Membership
Interest to the assignee, and the assignee's written acceptance of such
assignment. An assignment accomplished in accordance with the first two (2)
sentences of this subsection (a) shall entitle the assignee to the distributions
to which the Member had been entitled prior to the assignment, but shall not
vest any other rights in the assignee, including any right to consent to or
otherwise control any matters subject to the consent of the Member, unless the
assignee is admitted as a member of the Company in accordance with Section 6.3
hereof, and the Member shall continue to remain liable for all of its
obligations and liabilities with respect to its Membership Interest. An
attempted assignment by the Member which is not in compliance with this
subsection (a) shall be null and void ab initio and the Company shall not be
required to recognize any such assignment.

         (b) For purposes of this Article VI, "ASSIGNMENT" means any assignment,
sale, conveyance, transfer, mortgage, pledge, encumbrance, hypothecation or
other disposition of any type or kind, (ii) "ASSIGN" means the making of an
assignment and (iii) "ASSIGNEE" means a person to whom or for whose benefit an
assignment is made.

         6.2 DISABILITY EVENT AS TO MEMBER.

         (a) The occurrence of a dissolution, bankruptcy, insolvency,
receivership or other similar proceeding by, as to or against the Member (such
proceeding being referred to as a "DISABILITY EVENT" and such member being
referred to as a "DISABLED MEMBER") shall not constitute a withdrawal of the
Member from the Company, shall not otherwise cause the Member to cease to be a
member of the Company nor cause the Member's Membership Interest to be
terminated, and shall not cause the Company to be dissolved or its affairs wound
up. Upon the occurrence of a Disability Event, the Member, or the liquidator,
trustee or other representative of the Disabled Member, as the case may be (the
"REPRESENTATIVE"), as its agent and attorney-in-fact, shall exercise the
Disabled Member's rights and powers with respect to the Company, including the
Disabled Member's right and power to assign its Membership Interest to an

                                       21
<PAGE>   25

assignee subject to and in accordance with Section 6.1 hereof and to cause such
assignee to be admitted to the Company as a substitute Member in accordance with
Section 6.3 hereof.

         (b) If, notwithstanding anything in subsection (a) to the contrary, and
subject to the approval of a court of competent jurisdiction if any is required,
a Disability Event as to the Member is, under any of the Basic Documents or
otherwise, deemed to cause or constitute a withdrawal or resignation of the
Member from the Company, so that such Member ceases to be a member of the
Company and there is no member of the Company, then it is hereby agreed that,
contemporaneously with such Disability Event, the Independent Managers shall be
admitted as special members of the Company (collectively, the "SPECIAL MEMBERS"
and individually, a "SPECIAL MEMBER"), such admission to occur without further
action of, and without the execution of any other documents by any Person. The
Member hereby consents to and approves the admission of the Special Members
under such circumstances effective as of the occurrence of such Disability
Event. The Special Members shall be deemed to be members of the Company until
the Representative has assigned all of the Disabled Member's Membership Interest
to an assignee and the assignee has been admitted to the Company as a substitute
member in accordance with the provisions of Section 6.3 hereof. By executing
this Agreement or a counterpart hereof, each Independent Manager hereby
acknowledges and agrees to his admission as a Special Member of the Company
subject to and in accordance with the provisions of this Section 6.2(b) and
undertakes to be bound by the terms and provisions of this Agreement and to
carry out his obligations hereunder as a Special Member. Special Members shall
have no obligation to make any capital contributions to the Company unless
contributions must be made in order for such Special Members to be deemed to be
members of the Company, and then only to the extent they are so required, and
the Special Members shall have no interest in the profits, losses or capital of
the Company or any right to receive any distributions from the Company unless
they are required to obtain an interest in or right to such items in order to be
deemed to be members of the Company, and then only to the extent so required.
While the Special Members are deemed to be members of the Company, any matters
subject to the consent or approval of the "Member" under this Agreement or the
Articles, and anything in the LLC subject to the vote of the members, shall
require the unanimous consent of the Special Members. Notwithstanding the
foregoing, immediately upon the admission of the assignee of the Disabled Member
as a substitute member in accordance with Section 6.3 hereof, the Special
Members shall be deemed to have withdrawn from, and shall thereupon no longer be
deemed to be members of, the Company.

         (c) If, notwithstanding anything contained in subsection (a) or (b) to
the contrary, the Company is deemed to have been dissolved upon the occurrence
of a Disability Event, then it is hereby agreed that (i) the Company shall be
immediately reconstituted as a limited liability company under the LLC Act, (ii)
the reconstituted entity shall continue its existence subject to and in
accordance with the terms and provisions of this Agreement (modified only to the
extent required so as to make them applicable to the reconstituted limited
liability company) and the Agreement as so modified shall be binding upon the
reconstituted limited liability company and its members and managers, (iii) the
reconstituted limited liability company's managers shall be the persons
identified in Schedule I and its members shall be the Independent Managers until
the admission of the assignee(s) described in Section 6.2(a) as its member(s),
and by execution of this Agreement the Managers hereby agree thereto, and (iv)
each of the undersigned hereby authorizes each of the Managers, acting alone, to
execute, deliver, file and/or record such articles, agreements and certificates
(including, without limitation, articles of organization or amendments or
restatements thereof) as shall be necessary to carry out the intent of this
subsection (c).

         6.3 ADMISSION OF SUBSTITUTE MEMBER.

         The assignee of the Member's Membership Interest pursuant to Sections
6.1 or 6.2 hereof may be admitted to the Company as a substitute Member in the
place of the assigning Member. Such admission shall be accomplished by means of
the assignee's execution and delivery to the Company of a counterpart of this
Agreement. Upon such admission, the assignee, as a substitute Member, shall be
deemed to have all of the rights and powers of, and shall be subject to all of
the restrictions, obligations and liabilities of, the assigning Member.

                                       22
<PAGE>   26

         6.4 ADMISSION OF ADDITIONAL MEMBERS.

         One or more additional members of the Company may be admitted to the
Company with the written consent of the Member; provided that, notwithstanding
the foregoing, so long as the Basic Documents are in effect, no additional
Member may be admitted to the Company unless Detroit Edison or its successors or
assigns that have been admitted to or are otherwise Members of the Company,
retain a majority interest in the Company and any Rating Agency Condition (as
defined in the Indenture) has been satisfied.

         6.5 MERGER OR CONSOLIDATION OF MEMBER.

         Any successor to the Member upon the merger or consolidation of the
Member into or with another Person, which merger or consolidation is not in
violation of the Basic Documents, shall, without further act, be deemed to be
the member hereunder in lieu of the original Member, and such merger or
consolidation shall not constitute an assignment for purposes of this Agreement.

         6.6 WITHDRAWAL.

         Except as otherwise set forth herein, the Member does not have the
right to withdraw from the Company. Any attempted withdrawal in violation of
this provision shall be null and void ab initio and the Company shall not be
obligated to recognize any such attempted withdrawal.

                                   ARTICLE VII

                         EXCULPATION AND INDEMNIFICATION

         7.1 EXCULPATION.

         (a) Neither the Member nor any director, officer, stockholder,
controlling person or employee of the Member (all of which, collectively, are
included within the definition of "MEMBER" for purposes of this Article VII)
shall be liable to the Company, any other member of the Company or any other
Person (and the interest of the Member in the Company, and in the property and
assets of the Company, shall be free of any claims by the Company, any other
member of the Company or any other Person) by reason of the fact that the Member
was serving in its capacity as a Member unless such liability is based on or
arises in connection with (i) willful misconduct or gross negligence by the
Member, (ii) receipt by the Member of distributions from the Company in
violation of the distribution provisions of this Agreement or the LLC Act, (iii)
knowing violation of law by the Member or (iv) violation by the Member of state
or Federal securities law.

         (b) No Manager shall be liable to the Company, the Member or any other
Person by reason of the fact that the Manager was serving in his capacity as a
Manager unless such liability is based on or arises in connection with (i)
willful misconduct or gross negligence by the Manager, (ii) approval by the
Manager of distributions from the Company in violation of the distribution
provisions of this Agreement or the LLC Act, (iii) knowing violation of law by
the Manager or (iv) receipt by the Manager of a financial benefit to which he is
not entitled.

                                       23
<PAGE>   27

         7.2 INDEMNIFICATION.

         (a) To the fullest extent permitted by law, as the same exists or may
hereafter be amended (but, in the case of any such amendment, only to the extent
that such amendment permits the Company to provide greater or broader
indemnification rights than such law permitted the Company to provide prior to
such amendment), the Member shall be fully protected and indemnified by the
Company against all liabilities, losses, expenses, claims and demands (including
amounts paid in respect of judgments, fines, penalties, expenses or settlement
of litigation and legal fees and expenses reasonably incurred) in connection
with any threatened, pending or completed action, suit or proceeding, whether
civil, criminal, administrative, arbitrative or investigative (individually, a
"PROCEEDING"), or any appeal in such a Proceeding, or any inquiry or
investigation that could lead to such a Proceeding, by reason of the fact that
the Member was serving in its capacity as a Member, unless such liability is
based on or arises in connection with (i) willful misconduct or gross negligence
by the Member, (ii) receipt by the Member of distributions from the Company in
violation of the distribution provisions of this Agreement or the LLC Act, (iii)
knowing violation of law by the Member or (iv) violation by the Member of state
or Federal securities law. Detroit Edison acknowledges that the indemnification
provided pursuant to this subsection (a) is not intended to apply to those
matters for which Detroit Edison has indemnified the Company under any of the
Basic Documents.

         (b) To the fullest extent permitted by agency law, as the same exists
or may hereafter be amended (but, in the case of any such amendment, only to the
extent that such amendment permits the Company to provide greater or broader
indemnification rights than such law permitted the Company to provide prior to
such amendment), each Manager shall be fully protected and indemnified by the
Company against all liabilities, losses, expenses, claims and demands (including
amounts paid in respect of judgments, fines, penalties, expenses or settlement
of litigation and legal fees and expenses reasonably incurred) in connection
with any Proceeding, or any appeal in such a Proceeding, or any inquiry or
investigation that could lead to such a Proceeding, by reason of the fact that
the Manager was serving in his capacity as a Manager, unless such liability is
based on or arises in connection with (i) willful misconduct or gross negligence
by the Manager, (ii) approval by the Manager of distributions from the Company
in violation of the distribution provisions of this Agreement or the LLC Act,
(iii) knowing violation of law by the Manager and (iv) receipt by the Manager of
a financial benefit to which he is not entitled. Any officer of the Company who
has been delegated authority by the Managers pursuant to Section 4.12 hereof
shall be entitled to indemnification in accordance with this subsection (b) as
to acts or omissions related to the authority delegated to him, and to
exculpation from liability in accordance with Section 7.1(b) hereof.

         (c) Notwithstanding anything herein to the contrary, for so long as any
Bonds are outstanding, no payment from funds of the Company (as distinct from
funds from other sources, such as insurance) with respect to any indemnity under
this Section 7.2 shall be payable except out of funds available for payment of
Company expenses as provided in the Indenture. Thereafter, any indemnity under
this Section 7.2 shall be provided out of and to the extent of Company assets
only, and the Member shall not have any personal liability on account thereof.
The indemnity provided under this Section 7.2 shall survive the liquidation,
dissolution and termination of the Company and the termination of this
Agreement.

         7.3 ADVANCEMENT OF EXPENSES.

         Expenses incurred by a Person which are of the type entitled to be
indemnified under Section 7.2 in defending any Proceeding shall be paid or
reimbursed by the Company in advance of the final disposition of the Proceeding,
without any determination as to such Person's ultimate entitlement to
indemnification under Section 7.2 hereof, upon receipt of a written affirmation
by such Person of such Person's good faith belief that such Person has met the
standard of conduct necessary for indemnification under applicable law and a
written undertaking by or on behalf of such Person to repay all amounts so
advanced if it shall ultimately be determined that such Person is not entitled
to be indemnified by the Company as authorized in Section 7.2 or otherwise. The
written undertaking shall be an unlimited general obligation of the Person but
need not be secured and shall be accepted without reference to financial ability
to make repayment.

                                       24
<PAGE>   28

         7.4 INDEMNIFICATION OF EMPLOYEES AND AGENTS.

         The Company shall indemnify and pay and advance expenses to an employee
or agent of the Company to the same extent and subject to the same conditions
under which it may indemnify and pay and advance expenses to a Manager under
this Article VII; and the Company shall indemnify and pay and advance expenses
to any Person who is or was an employee or agent of the Company and who is or
was serving at the request of the Company as a member, manager, director,
officer, partner, venturer, proprietor, trustee, employee, agent or similar
functionary of another foreign or domestic limited liability company,
partnership, corporation, joint venture, sole proprietorship, trust, employee
benefit plan or other enterprise against any liability asserted against such
Person and incurred by such Person in such a capacity or arising out of such
Person's status as such, to the same extent and subject to the same conditions
that the Company may indemnify and pay and advance expenses to the Manager under
this Article VII.

         7.5 NONEXCLUSIVITY OF RIGHTS AND OTHER MATTERS.

         The indemnification and advancement and payment of expenses provided by
this Article VII (i) shall not be deemed exclusive of any other rights to which
the Member, a Manager or other Person seeking indemnification and advancement of
payment of expenses may be entitled under any statute, agreement, or otherwise,
both as to actions in such Person's official capacity and as to actions in
another capacity while holding such position, (ii) shall continue as to any such
Person who has ceased to serve in the capacity which initially entitled such
Person to indemnity and advancement and payment of expenses and (iii) shall
inure to the benefit of the heirs, executors, administrators, successors and
assigns of such Member, Manager or other Person.

         7.6 INSURANCE.

         The Company may purchase and maintain insurance or another arrangement,
or both, at its expense, on behalf of itself or any Person who is or was serving
as the Member, Manager, employee or agent of the Company, or who is or was
serving at the request of the Company as a member, manager, director, officer,
partner, venturer, proprietor, trustee, employee, agent or similar functionary
of another foreign or domestic limited liability company, partnership,
corporation, partnership, joint venture, sole proprietorship, trust, employee
benefit plan or other enterprise, against any liability, expense or loss,
whether or not the Company would have had the power to indemnify such Person
against such liability under the provisions of this Article VII.

         7.7 SAVING CLAUSE.

         If this Article VII or any portion of this Agreement shall be
invalidated on any ground by any court of competent jurisdiction, then the
Company shall nevertheless indemnify and hold harmless the Member, each Manager
or any other Person indemnified pursuant to this Article VII as to costs,
charges and expenses (including, without limitation, attorneys' fees),
judgments, fines and amounts paid in settlement with respect to any action, suit
or proceeding, whether civil, criminal, administrative or investigative, to the
fullest extent permitted by any applicable law as to any portion of this Article
VII which was not invalidated.

         7.8 CONTRIBUTION.

         If the indemnification in favor of a Manager set forth in Section
7.2(b) hereof is for any reason deemed to be illegal or unenforceable, then, to
the fullest extent permitted by law, such Manager shall be entitled to
contribution from the Company as and to the extent available at law or in equity
for any matter for which such indemnification was deemed to be illegal or
unenforceable.

                                       25
<PAGE>   29

                                  ARTICLE VIII

                           DISSOLUTION AND LIQUIDATION

         8.1 TERM.

         (a) The term of the Company shall end, and the Company shall dissolve,
upon the occurrence of any of the following events:

                  (1) the vote of the Member to dissolve the Company,

                  (2) the sale or other disposition of all or substantially all
         of the assets of the Company, or

                  (3) the occurrence of any event which, under the LLC Act,
         results in the dissolution of the Company;

provided that, with respect to item (1) hereof and the LLC Act (to the extent
applicable), the vote of the Member to dissolve the Company shall mean the
Member's affirmative vote with respect to a Dissolution Proposal duly presented
for the Member's approval by the Managers, the consummation of which is approved
by the Managers' affirmative vote in accordance with item (1) of Section 4.3(b)
hereof; and provided further that, with respect to item (2) hereof and the LLC
Act (to the extent applicable), the sale or other disposition of all or
substantially all of the assets of the Company shall mean such sale or
disposition, the consummation of which is approved by the Managers' affirmative
vote in accordance with item (1) of Section 4.3(b) hereof.

         (b) The parties acknowledge that it is their intention that the Company
not be dissolved upon the commencement of or as a consequence of any bankruptcy,
insolvency, receivership or other similar proceeding by or against the Company.
Notwithstanding the foregoing, if, under the Basic Documents or otherwise, the
Company is dissolved upon the bankruptcy, insolvency, receivership or other
similar proceeding against the Company, then it shall immediately thereupon be
deemed to have been reconstituted in the manner set forth in Section 6.2(c)
hereof, except that the Member shall continue to be the sole Member thereof.

         8.2 WINDING UP AND LIQUIDATION OF THE COMPANY.

         (a) Upon the dissolution of the Company in accordance with Sections 8.1
and 4.3(b) hereof, unless it is reconstituted as provided in Section 6.2(c) or
8.1(b) hereof, the Managers shall proceed to wind up the affairs and liquidate
the property and assets of the Company, and shall apply and distribute the
proceeds of such liquidation in the following priority:

                  (1) to the expenses of liquidation;

                  (2) to the payment of all amounts payable under the Bonds and
         the Financing Order;

                                       26
<PAGE>   30

                  (3) to the payment of all debts and liabilities of the Company
         other than those set forth in item (2) hereof;

                  (4) to the establishment of such reserves as the Managers deem
         necessary or advisable to provide for any contingent or unforeseen
         liabilities or obligations of the Company, provided, however, that
         after the expiration of such period of time as the Managers deem
         appropriate, the balance of such reserves remaining after payment of
         such contingencies shall be distributed in the manner hereinafter set
         forth; and

                  (5) any remaining proceeds shall be distributed to the Member.

         (b) A reasonable time shall be allowed for the orderly liquidation of
the property and assets of the Company and the payment of the debts and
liabilities of the Company in order to minimize the normal losses attendant upon
a liquidation.

         (c) Anything contained in this Section 8.2 to the contrary
notwithstanding, if the Managers shall determine that a complete liquidation of
all the property and assets of the Company would involve substantial losses or
be impractical or ill-advised under the circumstances, the Managers shall
liquidate that portion of the assets of the Company sufficient to pay the
expenses of liquidation and the debts and liabilities of the Company (excluding
the debts and liabilities of the Company to the extent that they are adequately
secured by mortgages on or security interests in the assets of the Company), and
the remaining property and assets shall be distributed to the Member.

         8.3 CERTIFICATE OF DISSOLUTION.

         After the Company has been dissolved, a certificate of dissolution of
the Company shall be executed and filed with the Department.

                                   ARTICLE IX

                            MISCELLANEOUS PROVISIONS

         9.1 OFFSET.

         Whenever the Company is to pay any sum to the Member, any amounts the
Member owes the Company may be deducted from such sum before payment.

         9.2      NONPETITION COVENANT.

         (a) The Member and each Manager hereby covenants and agrees that,
except as otherwise required pursuant to the exercise of its or his fiduciary
duty with respect to the Company, prior to the date which is one year and one
day after the termination of the Indenture and the payment in full of the Bonds,
any other amounts owed under the Indenture, including, without limitation, any
amounts owed to third-party credit enhancers, and any amounts owed under the
Hedge Agreements or Interest Rate Swap Agreements, it (he) shall not (i)
acquiesce, petition or otherwise invoke or cause the Company to invoke the
process of

                                       27
<PAGE>   31

any court or government authority for the purpose of commencing or sustaining a
case against the Company 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 Company or any substantial part of
the property of the Company, (ii) consent to or approve, or make application
for, or constitute or maintain any action for the dissolution of the Company
under Sections 801 or 802 of the LLC Act or otherwise or (iii) order the winding
up or liquidation of the affairs of the Company; provided, however, that nothing
in this subsection (a) shall constitute a waiver of any right to
indemnification, reimbursement or other payment from the Company pursuant to
this Agreement.

         (b) In the event that the Member or any Manager takes any action in
violation of subsection (a) hereof, the Company agrees that it shall file an
answer with the court or otherwise properly contesting the taking of such action
and raising the defense that the Member or the Manager, as the case may be, has
agreed in writing not to take such action and should be estopped and precluded
therefrom, and such other defenses, if any, as its counsel advises that it may
assert.

         (c) The provisions of this Section 9.2 shall survive the termination of
this Agreement and the resignation, withdrawal or removal of the Member or any
Manager. Nothing herein contained shall preclude participation by the Member or
a Manager in the assertion or defense of its claims in any such proceeding
involving the Company.

         9.3 NOTICES.

         Any notice, offer, demand, consent or other communication required or
permitted to be given under any provision of this Agreement shall be deemed to
have been sufficiently given for all purposes if it is in writing, addressed to
the party to whom the same is directed at the address set forth below and (i)
delivered in person, (ii) sent by registered or certified United States mail,
return receipt requested, (iii) sent by receipted overnight courier, or (iv)
sent by facsimile transmission. Any such notice or other communication shall be
deemed to be delivered (i) upon personal delivery to the Person to whom it is
sent, (ii) on the second business day after the date on which the same was
deposited in a regularly maintained receptacle for the deposit of the United
States' mail, postage and charges prepaid, (iii) one business day following
delivery to the aforesaid overnight courier, with all charges prepaid, or (iv)
upon notification of receipt by the facsimile machine to which it is directed.
All notices, requests, and consents to be sent to the Member shall be sent to or
made to The Detroit Edison Company, 2000 Second Avenue, Detroit, Michigan
48226-1279, Attention: Treasurer. All notices, requests and consents to be sent
to the Company shall be sent to or made to The Detroit Edison Securitization
Funding LLC, 2000 Second Avenue, 850 WCB, Detroit, Michigan 48226-1279,
Attention: Susan M. Beale. All notices, requests and consents to a Manager shall
be sent to him at the address set forth on Schedule I. Any party may change his
address for purposes of this Agreement by giving the other parties notice of
such change in the manner hereinabove provided for the giving of notices.

         9.4 CONSTRUCTION.

         (a) The headings in this Agreement are inserted for convenience and
identification only, and are in no way intended to describe, interpret, define
or limit the scope, extent or intent of this Agreement or any of the provisions
hereof.

         (b) Any agreement, instrument, statute, law, regulation or rule defined
or referred to herein shall be deemed to mean such agreement, instrument,
statute, law, regulation or rule as from time to time amended, modified or
supplemented, and includes in the case of agreements and instruments, references
to all attachments thereto and instruments incorporated therein.

                                       28
<PAGE>   32

         (c) Whenever the singular number is used herein, the same shall include
the plural, and the masculine gender shall include the feminine and neuter
genders.

         (d) If any language is stricken or deleted from this Agreement, such
language shall be deemed never to have appeared herein and no other implication
shall be drawn therefrom.

         (e) References to a Person are also to his permitted successors and
assigns.

         (f) The parties hereto having participated fully and equally in the
negotiation and preparation hereof, this Agreement shall not be more strictly
construed nor any ambiguities within this Agreement resolved against any party
hereto.

         (g) This Agreement shall be construed and enforced in accordance with,
and governed by, the laws and decisions of the State of Michigan, excluding any
conflict of laws rule or principle that might refer the governance or other
construction of this Agreement to the law of another jurisdiction.

         9.5 SEVERABILITY.

         If any provision hereof shall be judicially determined to be illegal,
or if the application thereof to any person or in any circumstance shall, to any
extent, be judicially determined to be invalid or unenforceable, the remainder
of this Agreement, or the application of such provision to persons or in
circumstances other than those to which it has been judicially determined to be
invalid or unenforceable, shall not be affected thereby, and each provision of
this Agreement shall be valid and enforceable to the fullest extent permitted by
law.

         9.6 WAIVER.

         A waiver or consent, express or implied, to or of any breach or default
by any Person in the performance by such Person of its obligations with respect
to the Company shall not be a consent or waiver to or of any other breach or
default in the performance by such Person of the same or any other obligations
of such Person with respect to the Company.

         9.7 NO CONFLICT WITH ARTICLES.

         The provisions of this Agreement shall govern and control unless there
is a specific conflict with either the LLC Act or the Articles, in which event
the LLC Act or the Articles, as the case may be, shall govern and control.

         9.8 ENTIRE AGREEMENT.

         This Agreement constitutes the entire agreement of the parties hereto
with respect to the subject matter hereof. All prior agreements among the
parties hereto with respect to the subject matter hereof, whether written or
oral, are merged herein and shall be of no force or effect. This Agreement
cannot be modified or changed orally, but only by an agreement in writing.

                                       29
<PAGE>   33

         9.9 AMENDMENT.

         This Agreement may not be amended, except (i) by means of a writing
signed by the Member, the Company and the Managers and filed with the records of
the Company and (ii) while the Bonds are in effect, upon prior approval of the
Trustee and receipt of written confirmation by each Rating Agency (as defined in
the Indenture) then rating any Series and/or Class of Bonds, to the Trustee and
the Company, that such amendment will not result in a reduction or withdrawal of
the then current rating by any such Rating Agency of any outstanding Series
and/or Class of Bonds.

         9.10 INSERTION OF AGREEMENT PROVISIONS IN INDENTURE.

         Provisions of this Agreement may be included in the Indenture in favor
of the holders of the Bonds.

         9.11 BINDING AGREEMENT.

         This Agreement shall inure to the benefit of and be binding upon, the
parties hereto, and their heirs, successors and assigns.

         9.12 COUNTERPARTS.

         This Agreement may be executed in any number of counterparts, each of
which shall, for all purposes, constitute an original and all of which, taken
together, shall constitute one and the same Agreement.

         IN WITNESS WHEREOF, the parties hereto have executed or caused this
Agreement to be executed by their duly authorized representatives effective the
date first above stated.

                      "Company"

                      THE DETROIT EDISON SECURITIZATION
                      FUNDING LLC, a Michigan limited liability company

                      By:
                         --------------------------------------------------
                               N.A. Khouri
                      Its:     Manager

                 and By:
                        ---------------------------------------------------
                               Larry G. Garberding
                      Its:     Manager

                 and By:
                        ---------------------------------------------------
                               David E. Meador
                      Its:     Manager

                                       30
<PAGE>   34

                      "Member"

                      THE DETROIT EDISON COMPANY, a Michigan
                      corporation

                      By:
                         --------------------------------------------------

                      Its:
                               -----------------------------------

                               -----------------------------------

                      "Managers"

                      -----------------------------------------------------
                      N.A. Khouri

                      -----------------------------------------------------
                      Larry G. Garberding

                      -----------------------------------------------------
                      David E. Meador

                      -----------------------------------------------------

                      -----------------------------------

                      -----------------------------------------------------

                      -----------------------------------

                                       31
<PAGE>   35

                                   SCHEDULE I

                                    MANAGERS

N.A. Khouri
2000 Second Avenue
Detroit, Michigan  48226

Larry G. Garberding
2000 Second Avenue
Detroit, Michigan  48226

David E. Meador
2000 Second Avenue
Detroit, Michigan  48226

[NAME OF MANAGER]                                           Independent Manager
------------------------------------
[ADDRESS OF MANAGER]

[NAME OF MANAGER]                                           Independent Manager
------------------------------------
[ADDRESS OF MANAGER]<PAGE>   1

                                                                   EXHIBIT 4.2.1

CaS 710 (Rev. 10/00)
--------------------------------------------------------------------------------
              MICHIGAN DEPARTMENT OF CONSUMER & INDUSTRY SERVICES
                         BUREAU OF COMMERCIAL SERVICES
--------------------------------------------------------------------------------
Date Received                (FOR BUREAU USE ONLY)

-------------

     This document is effective on the date filed, unless
     a subsequent effective date within 90 days after
     received date is stated in the document.

--------------------------------------------------------------------------------
Name  C. Leslie Banas, Esq.
      Honigman Miller Schwartz and Cohn LLP
--------------------------------------------------------------------------------
Address
2290 First National Building, 660 Woodward Avenue
--------------------------------------------------------------------------------
City                  State                    Zip Code
Detroit               Michigan                 48226-3583
--------------------------------------------------------------------------------
EFFECTIVE DATE:
--------------------------------------------------------------------------------
       DOCUMENT WILL BE RETURNED TO THE NAME AND ADDRESS YOU ENTER ABOVE,
        IF LEFT BLANK DOCUMENT WILL BE MAILED TO THE REGISTERED OFFICE.

                       RESTATED ARTICLES OF ORGANIZATION
                FOR USE BY DOMESTIC LIMITED LIABILITY COMPANIES
            (Please read information and instructions on last page)

     Pursuant to the provisions of Act 23, Public Acts of 1993, the undersigned
limited liability company executes the following Restated Articles:
--------------------------------------------------------------------------------
1. The name of the limited liability company is:
   The Detroit Edison Securitization Funding LLC

2. The identification number assigned by the Bureau is B84-506

3. All former names of the limited liability company are:

4. The date of filing the original Articles of Organization was: November 20,
   2000
--------------------------------------------------------------------------------

     The following Restated Articles of Organization supersede the Articles of
Organization, as amended, and shall be the Articles of Organization for the
limited liability company.

ARTICLE I
--------------------------------------------------------------------------------
The name of the limited liability company is:
The Detroit Edison Securitization Funding LLC
--------------------------------------------------------------------------------

ARTICLE II
--------------------------------------------------------------------------------
The purpose or purposes for which the limited liability company is formed are:
See Attachment.
--------------------------------------------------------------------------------

<PAGE>   2

ARTICLE III

The duration of the limited liability company if other than perpetual is:
See Attachment.
---------------

ARTICLE IV

1.   The street address of the registered office is:

     2000 Second Avenue, 937 WCB             Detroit     , Michigan 48226-1279
     ----------------------------------------------------           ------------
       (Street Address)                      (City)                 (ZIP Code)

2.   The mailing address of the registered office if different than above:

                                                         , Michigan
     ----------------------------------------------------           ------------
       (Street Address or P.O. Box)          (City)                 (ZIP Code)

3.   The name of the resident agent is: Susan M. Beale
                                        ----------------------------------------

ARTICLE V (ADDITIONAL PROVISIONS, IF ANY, MAY BE INSERTED HERE; ATTACH
ADDITIONAL PAGES IF NEEDED).

See Attachment.

Complete section (a) if the Restated Articles only restate and integrate the
Articles of Organization, otherwise, complete section (b). DO NOT COMPLETE
BOTH. (Check one)

/ / (a) These Restated Articles of Organization only restate and integrate the
        Articles of Organization.

/x/ (b) These Restated Articles amend the Articles of Organization and were
        approved on the      day of                   in accordance with Section
        604 of the Act: (check one)

        /x/ by unanimous vote of all of the members entitled to vote.

        / / by a majority of the members entitled to vote if an operating
            agreement authorizes amendment of the Articles of Organization by
            majority vote.

This document is hereby signed as required by Section 103 of the Act.

                    Signed this           day of              , 2001
                                ---------        ------------   ----------------

                    By
                      ----------------------------------------------------------
                                   (Signature of Member or Manager)

                                                                 , Manager
                    ------------------------------------------------------------
                                        (Type or Print Name)

<PAGE>   3
Preparer's Name   C. Leslie Banas, Esq.
                 -------------------------------

Business Telephone Number  (313) 465-7310
                         ----------------------

                          INFORMATION AND INSTRUCTIONS

1. The Articles of Organization cannot be restated until this form, or a
   comparable document is submitted.

2. Submit one original of this document. Upon filing, the document will be added
   to the records of the Bureau of Commercial Services. The original will be
   returned to your registered office address, unless you enter a different
   address in the box on the front of this document.

   Since this document will be maintained on optical disk media, it is important
   that the filing be legible. Documents with poor black and white contrast, or
   otherwise illegible, will be rejected.

3. This document is to be used pursuant to section 604 of Act 23, P.A. 1993, for
   the purpose of restating the Articles of Organization of a domestic limited
   liability company. Restated Articles of Organization are an integration into
   a single instrument of the current provisions of the limited liability
   company's Articles of Organization along with any desired amendments to those
   Articles.

4. Restated Articles of Organization which do not amend the Articles of
   Organization may be adopted by the managers without a vote of the members.
   Restated Articles of Organization which amend the Articles of Organization
   require approval by the members.

5. Item 2 - Enter the identification number assigned by the Bureau.

6. If a domestic limited liability company is changing to a domestic
   professional service limited liability company

        a) Article I - The name shall contain the words "Professional Limited
            Liability Company" or the abbreviation "P.L.L.C.", "P.L.C.",
            "PLLC", or "PLC".

        b) Article II - State the specific professional service(s) for
            which the limited liability company is organized.

        c) Members and managers must be licensed to perform at least one of the
            service(s) for which the limited liability company is organized
            unless otherwise prohibited by law.

   If the professional limited liability company renders a professional service
   that is included within the public health code, Act No. 368 of the Public
   Acts of 1978, being 333.1101 to 333.25211 of the Michigan Compiled Laws,
   then all members of the limited liability company shall be licensed or
   legally authorized to render the same professional service.

   To assure the Restated Articles provide members and managers are properly
   licensed, the following or a similar statement must be included. "All members
   and managers will be duly licensed or otherwise legally authorized to render
   one or more of the professional service(s) for which this limited liability
   company is organized except as otherwise provided in Section 904 of this
   Act or prohibited".

7. This document is effective on the date endorsed "Filed" by the Bureau. A
   later effective date, no more than 90 days after the date of delivery, may be
   stated.

8. Restated Articles of Organization must be signed by a manager if management
   is vested in one or more managers. Otherwise, the signature of at least one
   member is required.

9. NONREFUNDABLE FEE Make remittance payable to the State of Michigan. Include
   limited liability company name and identification number on check or money
   order...............................................................$60.00

<TABLE>
<CAPTION>

<S>                                                  <C>
To submit of mail:                                   To submit in person:

 Michigan Department of Consumer & Industry Services   6546 Mercantile Way
 Bureau of Commercial Services                         Lansing, MI
 Corporation Division                                  Telephone: (517) 241-6400
 7160 Harris Drive
 P.O. Box 30054
 Lansing, MI 48909                                   Fees may be paid by VISA or
                                                     Mastercard when delivered
                                                     in person to our office

</TABLE>

To submit electronically:   (517) 334-8048

-To use this service complete a MICH-ELF application to provide your VISA or
Mastercard number. Include your assigned Filer number on your transmission. To
obtain an application for a filer number, contact (517) 241-6402 or visit our
WEB site at http//www.cis.state.mi.us/bcs/
<PAGE>   4

                                   ATTACHMENT

                                       TO

                        RESTATED ARTICLES OF ORGANIZATION

                                       OF

                  THE DETROIT EDISON SECURITIZATION FUNDING LLC

ARTICLE II

         The purposes for which the Company is formed are exclusively:

                  (1) to purchase, hold, own, manage, administer, service,
         collect amounts due on and otherwise deal with the Securitization
         Property, the Company's rights in any funds held by the Trustee, any
         other assets to be acquired pursuant to the Basic Documents, and any
         proceeds and rights associated therewith;

                  (2) to authorize, issue, sell and deliver the Bonds under the
         Indenture;

                  (3) to create security interests in and pledge the
         Securitization Property and the other collateral of the Company to the
         Trustee pursuant to the terms of the Competition Act, the Financing
         Order and the Indenture;

                  (4) to enter into arrangements to protect against interest
         rate movements prior to the pricing of Bonds and interest rate swap
         transactions;

                  (5) to negotiate, authorize, execute, deliver, assume the
         obligations under, and perform, the Basic Documents and any other
         agreement or instrument or document relating to the activities set
         forth in (1), (2), (3) and (4) above; and to incur additional
         indebtedness or other liabilities payable to service providers and
         trade creditors in the ordinary course of business in connection with
         the foregoing activities;

                  (6) to invest the proceeds from the Securitization Property
         and the Company's other assets, capital and income in accordance with
         the Basic Documents, or otherwise in a manner not inconsistent with the
         Basic Documents; and

                  (7) to engage in and perform any activity and exercise any
         powers permitted to be exercised by limited liability companies under
         the laws of the State of Michigan that are related or incidental to the
         foregoing and necessary, suitable or convenient to accomplish the
         foregoing,

and for no other purposes.

ARTICLE III

         The term of the Company commenced on November 20, 2000. The term of the
Company shall end, and the Company shall dissolve, upon the occurrence of any of
the following events:

                  (1) the vote of the Member to dissolve the Company,

                  (2) the sale or other disposition of all or substantially all
         of the assets of the Company, or

                  (3) the occurrence of any event which, under the LLC Act,
         results in the dissolution of the Company;

provided that, with respect to (1) above and the LLC Act (to the extent
applicable), the vote of the Member to dissolve the Company shall mean the
Member's affirmative vote with respect to a Dissolution Proposal duly presented
for the

<PAGE>   5

Member's approval by the Managers, the consummation of is approved by the
Managers' affirmative vote in accordance with Article V. A. 3.(b)(1) hereof; and
provided further that, with respect to (2) above and the LLC Act (to the extent
applicable), the sale or other disposition of all or substantially all of the
assets of the Company shall mean such sale or disposition, the consummation of
which is approved by the Managers' affirmative vote in accordance with Article
V. A. 3.(b)(1) hereof.

         It is the intention of the parties to the Agreement that the Company
not be dissolved upon the commencement of or as a consequence of any bankruptcy,
insolvency, receivership or other similar proceeding by or against the Company.
Notwithstanding the foregoing, if, under the Basic Documents or otherwise, the
Company is dissolved upon the bankruptcy, insolvency, receivership or other
similar proceeding against the Company, then it shall immediately thereupon be
deemed to have been reconstituted in the manner set forth in Article V. D. 2.(c)
hereof, except that the Member shall continue to be the sole member thereof.

ARTICLE V

         A.       MATTERS REGARDING MANAGEMENT

                  1.       MANAGEMENT BY MANAGERS

                  (a) The business and affairs of the Company shall be managed
         by and under the direction of managers (collectively, the "MANAGERS"
         and individually, a "MANAGER"), who shall be the "managers" of the
         Company for purposes of the LLC Act, and who, acting alone, shall have
         the full, exclusive and absolute right, power and authority to manage
         and control the Company and the property, assets and business thereof,
         to make all decisions affecting the Company, and to do all acts
         necessary, convenient or incidental to or for the furtherance of the
         purposes described herein, except for those decisions which pursuant to
         the Articles or the Agreement are required to be approved by the
         Member. All actions, decisions, determinations, designations,
         directions, appointments, consents, approvals, selections and the like
         made by the Managers in accordance with the authority granted herein
         are intended to and shall be controlling and binding upon the Company
         and the Member in its capacity as a member of the Company.

                  (b) The Managers shall be the agents of the Company for the
         purpose of the Company's business, and the acts of the Managers shall
         bind the Company as set forth in, and in accordance with the provisions
         of, the LLC Act and the Governing Documents.

                  (c) All documents, contracts and agreements including, without
         limiting the generality of the foregoing, deeds, leases, easements,
         rights of way, assignments, bonds, debentures, notes, obligations,
         evidences of indebtedness, checks, drafts and mortgages necessary or
         appropriate to be executed on behalf of and in the name of the Company,
         including those providing for the acquisition or disposition of the
         property of the Company, shall be executed by any one (1) of the
         Managers without the joinder of any other Manager, and, if so executed,
         shall be valid and binding on the Company.

                  (d) It is hereby specifically agreed that the Managers, on
         behalf of the Company, shall enter into and perform the Basic Documents
         and shall, except as provided in this Article V. A., make all decisions
         of the Company concerning the Securitization Property, and execute and
         deliver all documents, agreements, certificates and/or financing
         statements contemplated thereby and related thereto, all without
         further act, vote or approval of the Member.

                  (e) By accepting his appointment as a Manager of the Company,
         each Manager has covenanted that he will act in good faith in
         accordance with the terms of the Agreement, and make decisions with
         respect to the business and daily operations of the Company concerning
         the Securitization Property, and shall execute and deliver all
         documents, agreements, certificates and/or financing statements
         contemplated thereby and related thereto, all without further act, vote
         or approval of the Member.

                  2.       NUMBER AND APPOINTMENT OF MANAGERS

                  (a) The number of Managers of the Company shall not be less
         than three (3) nor more than five (5), as may be determined by the
         Member from time to time; provided, however, that no decrease in the
         number of Managers shall have the effect of shortening the term of any
         incumbent Manager. Managers, other than Independent Managers, may be
         employees or officers of the Member; however, no Independent

                                       2

<PAGE>   6

         Manager and no more than one (1) of the other Managers may be a member
         of the board of directors of the Member and/or DTE Energy Company, its
         parent company. The Managers of the Company shall be appointed by the
         Member and shall be deemed to have become Managers upon the execution
         date of the Agreement, in the case of the Managers appointed by the
         Member on or before the execution date of the Agreement, and upon
         execution of a counterpart of the Agreement, in the case of Managers
         appointed by the Member subsequent to the execution date of the
         Agreement.

                  (b) A Manager appointed in accordance herewith shall serve in
         such capacity unless and until his successor has been selected by the
         Member, as aforesaid, and qualified, or until he resigns, dies, becomes
         incapacitated, is removed or such position otherwise become vacant. In
         such case, a replacement Manager shall be appointed by the Member.

                  3.  INDEPENDENT MANAGERS

                  (a) While the Bonds are outstanding, at least two (2) Managers
         shall continue to be Independent Managers. Independent Managers may not
         delegate their duties, authorities or responsibilities. If an
         Independent Manager resigns, dies, is removed or becomes incapacitated,
         or his position otherwise becomes vacant, no action requiring the
         unanimous affirmative vote of the Managers shall be taken until a
         successor Independent Manager has been appointed by the Member and
         qualified, and such successor Independent Manager has approved such
         action.

                  (b) Notwithstanding any other provision of the Agreement or
         any provision of law that otherwise so empowers the Company, the
         Member, any Manager or any other Person, the Company shall not, and
         neither the Member nor any Manager nor any other Person on behalf of
         the Company shall do, any of the following without the prior unanimous
         affirmative vote of all Managers (such affirmative vote to include the
         affirmative vote of all Managers):

                           (1) consummate any of the items set forth in Article
                  V. B. which have been approved by the Member;

                           (2) engage in any business or activity other than
                  that set forth in Article II. above;

                           (3) except as provided in the Basic Documents, incur
                  any indebtedness other than (A) the Bonds, (B) any obligations
                  under agreements with third party credit enhancers and swap or
                  hedge agreement counterparties relating to the Bonds and (C)
                  any ordinary course expenses;

                           (4) assume or guarantee the indebtedness of any other
                  Person;

                           (5) make a general assignment for the benefit of
                  creditors or admit in writing the Company's inability to pay
                  its debts generally as they come due, or take action in
                  furtherance of any such action;

                           (6) file a voluntary petition for relief under the
                  Federal bankruptcy code;

                           (7) file a petition or answer seeking consolidation,
                  reorganization, arrangement, composition, readjustment,
                  liquidation, dissolution or similar relief under any statute,
                  law or regulation;

                           (8) seek the appointment of a trustee, receiver or
                  liquidator of the Company or of all or a substantial part of
                  its assets;

                           (9) file an answer or other pleading consenting to,
                  admitting or failing to contest the material allegations of a
                  petition filed against the Company in any proceeding
                  petitioning for, or otherwise consent to or acquiesce in, an
                  involuntary bankruptcy or any action seeking consolidation,
                  reorganization, arrangement, composition, readjustment,
                  liquidation, dissolution or similar relief under any statute,
                  law or regulation, or the entry of any order appointing a
                  trustee, liquidator or receiver of the Company or of all or a
                  substantial portion of its assets;

                           (10) amend the Agreement or take action in
                  furtherance of any such amendment;

                           (11) approve any proposed Dissolution Proposal; or

                                       3
<PAGE>   7

                     (12) dissolve, liquidate or wind up the Company.

                  4. REMOVAL OF MANAGERS

                  A Manager may be removed with or without cause by the Member.
         Removal of a Manager by a Member shall be effective on the date of
         delivery of a written notice of removal from the Member to the Manager
         being removed; provided that, an Independent Manager removed without
         cause shall continue to serve in that capacity until a replacement
         Independent Manager has been selected and qualified and has executed a
         counterpart of the Agreement.

                  5. QUORUM; VOTING BY MANAGERS

                  (a) At all meetings of the Managers, a majority in number of
         the Managers shall constitute a quorum for the transaction of business.
         If a quorum shall not be present at any meeting of the Managers, the
         Managers present at such meeting shall adjourn the meeting from time to
         time, without notice other than announcement at the meeting, until a
         quorum is present.

                  (b) Except as otherwise provided in Article V. A. 3.(b),
         Article V. C. hereof or in any other specific provision of the
         Agreement, the act of a majority in number of the Managers shall be the
         act of the Managers.

                  6. WRITTEN APPROVAL OF MANAGERS IN LIEU OF MEETING

                  Any action required or permitted to be taken at a meeting of
         the Managers may be taken without a meeting, without prior notice, and
         without a vote if approvals in writing, setting forth the action so
         taken, are executed by a majority in number of the Managers (or such
         other number as may be required pursuant to Article V. A. 3.(b) or
         Article V. C. or any other specific provision of the Agreement). Every
         written approval shall bear the date and signature of the Manager
         signing it and shall be filed with the minutes and permanent records of
         the Company. Prompt notice of the taking of an action shall be given to
         all Managers who did not execute a written approval of such action.

                  7. DELEGATION TO OFFICERS

                  The Managers are hereby authorized to appoint one or more
         officers and to delegate operations of the Company to such officer(s);
         however, all major decisions (including, without limiting the
         generality of the foregoing, the decisions identified in Article V. A.
         3.(b) hereof) shall be made by the Managers and the authority to make
         such decisions shall not be delegated to (an) officer(s).

         B.       MEMBER; MEMBER APPROVALS

         Detroit Edison is, as of the date hereof, the sole member of the
Company. The approval of the Member shall be required as to each of the
following matters:

                  (a) a change in the business of the Company;

                  (b) the sale, exchange, lease, transfer or other disposition
         of all or substantially all of the assets of the Company;

                  (c) the consolidation or merger of the Company with another
         business entity; and

                  (d) the amendment of the Articles.

         In addition, the approval of the Member to dissolve the Company shall
be required as described in Article III. hereof.

                                       4

<PAGE>   8

         C.       DISTRIBUTIONS

         Subject to Article V. I. below, distributions to the Member shall be
made as, when and to the extent that the Managers, in their sole discretion, by
unanimous vote, determine that the Company's cash on hand exceeds the current
and anticipated needs of the Company to fulfill its business purposes.
Notwithstanding the foregoing, no distribution shall be declared or made (i) if
a default has occurred or is otherwise continuing under the Indenture or any
Bonds then outstanding, (ii) such distribution shall result in a reduction or
withdrawal of the then current rating of any outstanding Class and/or Series of
Bonds by any Rating Agency (as defined in the Indenture), (iii) such
distribution shall otherwise violate any of the Basic Documents or (iv) if,
after giving it effect, the Company shall not be able to pay its debts as they
become due in the usual course of business or the Company's total assets shall
be less than the sum of its total liabilities.

         D.       ASSIGNMENTS OF MEMBERSHIP INTEREST

                  1.       GENERAL MATTERS

                  (a) The Member may assign all or any portion of its Membership
         Interest to another Person so long as, and only so long as, (i) such
         assignment is not prohibited by and does not cause a breach under the
         Basic Documents or under any other agreement by which the Member or the
         Company or any properties of the Company is/are bound or affected and
         (ii) each Rating Agency (as defined in the Indenture) then rating the
         Bonds of any Series and/or Class shall have confirmed in writing to the
         Trustee and the Company that such transfer shall not result in a
         reduction or withdrawal of the then current rating by such Rating
         Agency of any outstanding Series and/or Class of Bonds. An assignment
         accomplished in accordance with this provision shall be deemed to have
         occurred upon the execution by the Member of a written assignment
         assigning its Membership Interest to the assignee, and the assignee's
         written acceptance of such assignment. An assignment accomplished in
         accordance with the first two (2) sentences of this provision shall
         entitle the assignee to the distributions to which the Member had been
         entitled prior to the assignment, but shall not vest any other rights
         in the assignee, including any right to consent to or otherwise control
         any matters subject to the consent of the Member, unless the assignee
         is admitted as a member of the Company in accordance with Section D. 3.
         hereof, and the Member shall continue to remain liable for all of its
         obligations and liabilities with respect to its Membership Interest. An
         attempted assignment by the Member which is not in compliance with this
         provision shall be null and void ab initio and the Company shall not be
         required to recognize any such assignment.

                  (b) For purposes of this Article V. D., "ASSIGNMENT" means any
         assignment, sale, conveyance, transfer, mortgage, pledge, encumbrance,
         hypothecation or other disposition of any type or kind, (ii) "ASSIGN"
         means the making of an assignment and (iii) "ASSIGNEE" means a person
         to whom or for whose benefit an assignment is made.

                  2.       DISABILITY EVENT AS TO MEMBER

                  (a) The occurrence of a dissolution, bankruptcy, insolvency,
         receivership or other similar proceeding by, as to or against the
         Member (such proceeding being referred to as a "DISABILITY EVENT" and
         such member being referred to as a "DISABLED MEMBER") shall not
         constitute a withdrawal of the Member from the Company, shall not
         otherwise cause the Member to cease to be a member of the Company nor
         cause the Member's Membership Interest to be terminated, and shall not
         cause the Company to be dissolved or its affairs wound up. Upon the
         occurrence of a Disability Event, the Member, or the liquidator,
         trustee or other representative of the Disabled Member, as the case may
         be (the "REPRESENTATIVE"), as its agent and attorney-in-fact, shall
         exercise the Disabled Member's rights and powers with respect to the
         Company, including the Disabled Member's right and power to assign its
         Membership Interest to an assignee subject to and in accordance with
         Article V. D. 1.(a) and to cause such assignee to be admitted to the
         Company as a substitute Member in accordance with Article V. D. 3.
         hereof.

                  (b) If, notwithstanding anything in Article V. D. 2.(a) above
         to the contrary, and subject to the approval of a court of competent
         jurisdiction, if any is required, a Disability Event as to the Member
         is, under any of the Basic Documents or otherwise, deemed to cause or
         constitute a withdrawal or resignation of the Member from the Company,
         so that such Member ceases to be a member of the Company and there is
         no

                                       5

<PAGE>   9

         member of the Company, then, contemporaneously with such Disability
         Event, the Independent Managers shall be admitted as special members of
         the Company (collectively, the "SPECIAL MEMBERS" and individually, a
         "SPECIAL MEMBER"), such admission to occur without further action of,
         and without the execution of any other documents by, any Person. The
         Member has consented to and approved the admission of the Special
         Members under such circumstances effective as of the occurrence of such
         Disability Event. The Special Members shall be deemed to be members of
         the Company until the Representative has assigned all of the Disabled
         Member's Membership Interest to an assignee and the assignee has been
         admitted to the Company as a substitute member in accordance with the
         provisions of Article V. D. 3. hereof. By executing the Agreement or a
         counterpart thereof, each Independent Manager acknowledges and agrees
         to his admission as a Special Member of the Company subject to and in
         accordance with the provisions of this provision and undertakes to be
         bound by the terms and provisions of the Agreement and to carry out his
         obligations as a Special Member. Special Members shall have no
         obligation to make any capital contributions to the Company unless
         contributions must be made in order for such Special Members to be
         deemed to be members of the Company, and then only to the extent they
         are so required, and the Special Members shall have no interest in the
         profits, losses or capital of the Company or any right to receive any
         distributions from the Company unless they are required to obtain an
         interest in or right to such items in order to be deemed to be members
         of the Company, and then only to the extent so required. While the
         Special Members are deemed to be members of the Company, any matters
         subject to the consent or approval of the "Member" under the Agreement
         or the Articles, and anything in the LLC Act subject to the vote of the
         members, shall require the unanimous consent of the Special Members.
         Notwithstanding the foregoing, immediately upon the admission of the
         assignee of the Disabled Member as a substitute member in accordance
         with Article V. D. 3. hereof, the Special Members shall be deemed to
         have withdrawn from, and shall thereupon no longer be deemed to be
         members of, the Company.

                  (c) If, notwithstanding anything contained in Article V. D.
         2.(a) or (b) above to the contrary, the Company is deemed to have been
         dissolved upon the occurrence of a Disability Event, then it is hereby
         agreed that (i) the Company shall be immediately reconstituted as a
         limited liability company under the LLC Act, and (ii) the reconstituted
         entity shall continue its existence subject to and in accordance with
         the terms and provisions of the Agreement (modified only to the extent
         required so as to make them applicable to the reconstituted limited
         liability company) and the Agreement as so modified shall be binding
         upon the reconstituted limited liability company and its members and
         managers, (iii) the reconstituted limited liability company's managers
         shall be the persons identified as the Company's managers in the
         Agreement and its members shall be the Independent Managers until the
         admission of the assignee(s) described in Article V. D. 2.(a) as its
         member(s), and by execution of the Agreement the Managers agree thereto
         and (iv) each of the signatories of the Agreement shall authorize each
         of the Managers, acting alone, to execute, deliver, file and/or record
         such articles, agreements and certificates (including, without
         limitation, articles of organization or amendments or restatements
         thereof) as shall be necessary to carry out the intent of this
         provision.

                  3.       ADMISSION OF SUBSTITUTE MEMBER

                  The assignee of the Member's Membership Interest pursuant to
         Article V. D. 1. or Article V. D. 2. hereof may be admitted to the
         Company as a substitute Member in the place of the assigning Member.
         Such admission shall be accomplished by means of the assignee's
         execution and delivery to the Company of a counterpart of the
         Agreement. Upon such admission, the assignee, as a substitute Member,
         shall be deemed to have all of the rights and powers of, and shall be
         subject to all of the restrictions, obligations and liabilities of, the
         assigning Member.

                  4.       ADMISSION OF ADDITIONAL MEMBERS

                  One or more additional members of the Company may be admitted
         to the Company with the written consent of the Member; provided that,
         notwithstanding the foregoing, so long as the Basic Documents are in
         effect, no additional Member may be admitted to the Company unless
         Detroit Edison or its successors or assigns that have been admitted to
         or are otherwise Members of the Company, retain a majority interest in
         the Company and any Rating Agency Condition (as defined in the
         Indenture) has been satisfied.

                  5.       MERGER OR CONSOLIDATION OF MEMBER

                  Any successor to the Member upon the merger or consolidation
         of the Member into or with another Person, which merger or
         consolidation is not in violation of the Basic Documents, shall,
         without further act,

                                       6

<PAGE>   10

         be deemed to be the Member in lieu of the original Member, and such
         merger or consolidation shall not constitute an assignment of the
         Member's Membership Interest.

                  6.       WITHDRAWAL

                  Except as otherwise set forth herein, the Member does not have
         the right to withdraw from the Company. Any attempted withdrawal in
         violation of this provision shall be null and void ab initio and the
         Company shall not be obligated to recognize any such attempted
         withdrawal.

         E.       MEMBER'S GOOD FAITH

         To the extent the Member takes any action with respect to the Company
(including, without limiting the generality of the foregoing, by means of its
appointment of an individual Manager or its control or appointment of any
individual Manager in any other capacity) the Member will act in good faith in
accordance with the terms of the Agreement, and make decisions with respect to
the business and daily operations of the Company to the extent applicable,
independent of, and not dictated by, any Affiliate of the Member.

         F.       EXCULPATION AND INDEMNIFICATION

                  1.       EXCULPATION

                  (a) Neither the Member nor any director, officer, stockholder,
         controlling person or employee of the Member (all of which,
         collectively, are included within the definition of "MEMBER" for
         purposes of this Article V. F.) shall be liable to the Company, any
         other member of the Company or any other Person (and the interest of
         the Member in the Company, and in the property and assets of the
         Company, shall be free of any claims by the Company, any other member
         of the Company or any other Person) by reason of the fact that the
         Member was serving in its capacity as a Member unless such liability is
         based on or arises in connection with (i) willful misconduct or gross
         negligence by the Member, (ii) receipt by the Member of distributions
         from the Company in violation of the distribution provisions of the
         Agreement or the LLC Act, (iii) knowing violation of law by the Member
         or (iv) violation by the Member of state or Federal securities law.

                  (b) No Manager shall be liable to the Company, the Member or
         any other Person by reason of the fact that the Manager was serving in
         his capacity as a Manager unless such liability is based on or arises
         in connection with (i) willful misconduct or gross negligence by the
         Manager, (ii) approval by the Manager of distributions from the Company
         in violation of the distribution provisions of the Agreement or the LLC
         Act, (iii) knowing violation of law by the Manager or (iv) receipt by
         the Manager of a financial benefit to which he is not entitled.

                  2.       INDEMNIFICATION

                  (a) To the fullest extent permitted by law, as the same exists
         or may hereafter be amended (but, in the case of any such amendment,
         only to the extent that such amendment permits the Company to provide
         greater or broader indemnification rights than such law permitted the
         Company to provide prior to such amendment), the Member shall be fully
         protected and indemnified by the Company against all liabilities,
         losses, expenses, claims and demands (including amounts paid in respect
         of judgments, fines, penalties, expenses or settlement of litigation
         and legal fees and expenses reasonably incurred) in connection with any
         threatened, pending or completed action, suit or proceeding, whether
         civil, criminal, administrative, arbitrative or investigative
         (individually, a "PROCEEDING"), or any appeal in such a Proceeding, or
         any inquiry or investigation that could lead to such a Proceeding, by
         reason of the fact that the Member was serving in its capacity as a
         Member, unless such liability is based on or arises in connection with
         (i) willful misconduct or gross negligence by the Member, (ii) receipt
         by the Member of distributions from the Company in violation of the
         distribution provisions of the Agreement or the LLC Act, (iii) knowing
         violation of law by the Member or (iv) violation by the Member of state
         or Federal securities law. Detroit Edison has acknowledged that the
         indemnification provided pursuant to this provision is not intended to
         apply to those matters for which Detroit Edison has indemnified the
         Company under any of the Basic Documents.

                                       7

<PAGE>   11

                  (b) To the fullest extent permitted by agency law, as the same
         exists or may hereafter be amended (but, in the case of any such
         amendment, only to the extent that such amendment permits the Company
         to provide greater or broader indemnification rights than such law
         permitted the Company to provide prior to such amendment), each Manager
         shall be fully protected and indemnified by the Company against all
         liabilities, losses, expenses, claims and demands (including amounts
         paid in respect of judgments, fines, penalties, expenses or settlement
         of litigation and legal fees and expenses reasonably incurred) in
         connection with any Proceeding, or any appeal in such a Proceeding, or
         any inquiry or investigation that could lead to such a Proceeding, by
         reason of the fact that the Manager was serving in his capacity as a
         Manager, unless such liability is based on or arises in connection with
         (i) willful misconduct or gross negligence by the Manager, (ii)
         approval by the Manager of distributions from the Company in violation
         of the distribution provisions of the Agreement or the LLC Act, (iii)
         knowing violation of law by the Manager and (iv) receipt by the Manager
         of a financial benefit to which he is not entitled. Any officer of the
         Company who has been delegated authority by the Managers pursuant to
         Article V. A. 7. hereof shall be entitled to indemnification in
         accordance with this provision as to acts or omissions related to the
         authority delegated to him, and to exculpation from liability in
         accordance with Article V. F. 1.(b) hereof.

                  (c)      Notwithstanding  anything  herein  to  the  contrary,
         for so long as any Bonds are outstanding, no payment from funds of the
         Company (as distinct from funds from other sources, such as insurance)
         with respect to any indemnity under this Article V. F. 2. shall be
         payable except out of funds available for payment of Company expenses
         as provided in the Indenture. Thereafter, any indemnity under this
         Article V. F. 2. shall be provided out of and to the extent of Company
         assets only, and the Member shall not have any personal liability on
         account thereof. The indemnity provided under this Article V. F. 2.
         shall survive the liquidation, dissolution and termination of the
         Company and the termination of the Agreement.

                  3.       ADVANCEMENT OF EXPENSES

                  Expenses incurred by a Person which are of the type entitled
         to be indemnified under Article V. F. 2. in defending any Proceeding
         shall be paid or reimbursed by the Company in advance of the final
         disposition of the Proceeding, without any determination as to such
         Person's ultimate entitlement to indemnification under Article V. F. 2.
         hereof, upon receipt of a written affirmation by such Person of such
         Person's good faith belief that such Person has met the standard of
         conduct necessary for indemnification under applicable law and a
         written undertaking by or on behalf of such Person to repay all amounts
         so advanced if it shall ultimately be determined that such Person is
         not entitled to be indemnified by the Company as authorized in Article
         V. F. 2. or otherwise. The written undertaking shall be an unlimited
         general obligation of the Person but need not be secured and shall be
         accepted without reference to financial ability to make repayment.

                  4.       INDEMNIFICATION OF EMPLOYEES AND AGENTS

                  The Company shall indemnify and pay and advance expenses to an
         employee or agent of the Company to the same extent and subject to the
         same conditions under which it may indemnify and pay and advance
         expenses to a Manager under this Article V. F.; and the Company shall
         indemnify and pay and advance expenses to any Person who is or was an
         employee or agent of the Company and who is or was serving at the
         request of the Company as a member, manager, director, officer,
         partner, venturer, proprietor, trustee, employee, agent or similar
         functionary of another foreign or domestic limited liability company,
         partnership, corporation, joint venture, sole proprietorship, trust,
         employee benefit plan or other enterprise against any liability
         asserted against such Person and incurred by such Person in such a
         capacity or arising out of such Person's status as such, to the same
         extent and subject to the same conditions that the Company may
         indemnify and pay and advance expenses to the Manager under this
         Article V. F.

                  5.       NONEXCLUSIVITY OF RIGHTS AND OTHER MATTERS

                  The indemnification and advancement and payment of expenses
         provided by this Article V. F. (i) shall not be deemed exclusive of any
         other rights to which the Member, a Manager or other Person seeking
         indemnification and advancement of payment of expenses may be entitled
         under any statute, agreement, or otherwise, both as to actions in such
         Person's official capacity and as to actions in another capacity while
         holding such position, (ii) shall continue as to any such Person who
         has ceased to serve in the capacity which initially entitled such
         Person to indemnity and advancement and payment of expenses and (iii)
         shall

                                       8

<PAGE>   12

         inure to the benefit of the heirs, executors, administrators,
         successors and assigns of such Member, Manager or other Person.

                  6.       INSURANCE

                  The Company may purchase and maintain insurance or another
         arrangement, or both, at its expense, on behalf of itself or any Person
         who is or was serving as the Member, Manager, employee or agent of the
         Company, or who is or was serving at the request of the Company as a
         member, manager, director, officer, partner, venturer, proprietor,
         trustee, employee, agent or similar functionary of another foreign or
         domestic limited liability company, partnership, corporation,
         partnership, joint venture, sole proprietorship, trust, employee
         benefit plan or other enterprise, against any liability, expense or
         loss, whether or not the Company would have had the power to indemnify
         such Person against such liability under the provisions of this Article
         V. F.

                  7.       SAVING CLAUSE

                  If this Article V. F. or any portion of the Agreement shall be
         invalidated on any ground by any court of competent jurisdiction, then
         the Company shall nevertheless indemnify and hold harmless the Member,
         each Manager or any other Person indemnified pursuant to this Article
         V. F. as to costs, charges and expenses (including, without limitation,
         attorneys' fees), judgments, fines and amounts paid in settlement with
         respect to any action, suit or proceeding, whether civil, criminal,
         administrative or investigative, to the fullest extent permitted by any
         applicable law as to any portion of this Article V. F. which was not
         invalidated.

                  8.       CONTRIBUTION

                  If the indemnification in favor of a Manager set forth in
         Article V. F. 2.(b) hereof is for any reason deemed to be illegal or
         unenforceable, then, to the fullest extent permitted by law, such
         Manager shall be entitled to contribution from the Company as and to
         the extent available at law or in equity for any matter for which such
         indemnification was deemed to be illegal or unenforceable.

         G.       CERTAIN COVENANTS

                  1.       SPECIAL COVENANTS

                  (a)      The Company covenants as follows:

                           (1) the Company shall (i) act and conduct business
                  solely in its limited liability company name or assumed
                  name(s) and through its duly authorized Member or Managers,
                  (ii) take all reasonable steps to continue its identity as,
                  and at all times hold itself out to other Persons as, a legal
                  entity separate from the Member and any other Person, and make
                  it apparent to other Persons that it is an entity with assets
                  and liabilities distinct from the Member and other Persons,
                  (iii) conduct its business so as not to mislead others as to
                  its identity or its assets, (iv) make it apparent to other
                  Persons that, except for Federal and state tax purposes and
                  certain internal accounting purposes, it is not a division of
                  the Member or an Affiliate of the Member or any other Person
                  and (v) correct any known misunderstanding regarding its
                  separate identity;

                           (2)      the Company shall observe all limited
                  liability  company and other formalities required by the
                  Agreement;

                           (3)      the Company shall  maintain an  arm's-length
                  relationship  with its Affiliates  and the Member;

                           (4)      the Company shall not form, or cause to be
                  formed, any subsidiaries;

                           (5) except as otherwise provided in the Basic
                  Documents, the funds and other assets of the Company shall not
                  be commingled with those of any other Person, the accounts of
                  the Company shall be kept separate from those of any other
                  Person, the books and records of the

                                       9

<PAGE>   13

                  Company (including business and accounting records) shall be
                  maintained separately from those of the Member and shall
                  reflect the Company's separate identity and its separate
                  ownership of the Securitization Property, and the Company
                  shall maintain separate financial statements from those of any
                  other Person;

                           (6)      the Company shall pay its own liabilities
                  out of its own funds, including the fees and expenses of the
                  administrator and servicer pursuant to the Administration
                  Agreement and the Servicing Agreement, respectively;

                           (7)      the Company shall use its own separate
                  stationery, invoices, checks and other business forms;

                           (8)      the Company  shall  allocate  fairly and
                  reasonably any overhead for office space, personnel and
                  facilities shared with the Member or any other Person;

                           (9) the Company shall not (i) except as set forth in
                  the Basic Documents, own, purchase, repurchase, acquire or
                  agree to acquire any stock, obligations, assets or securities,
                  or any interest in, or make capital contributions to, the
                  Member or any Person (other than Eligible Investments as
                  defined in the Basic Documents) or (ii) make any expenditure
                  for capital assets or lease any capital assets other than the
                  Securitization Property purchased pursuant to the Sale
                  Agreement;

                           (10) the Company shall not (i) issue, incur or assume
                  any indebtedness or any other obligations except for the Bonds
                  and expenses related thereto, except as otherwise contemplated
                  by the Basic Documents, (ii) guaranty, become obligated for,
                  become liable on or hold itself out as being liable for
                  (whether contingently or otherwise) the debts of the Member or
                  any other Person, (iii) otherwise hold out its credit as being
                  available to satisfy the obligations of the Member or any
                  other Person, (iv) pledge its assets for the benefit of any
                  Person other than the Trustee, (v) make loans or advances or
                  extend credit to any Person or (vi) grant any lien, security
                  interest, mortgage or encumbrance except as contemplated or
                  permitted by the Basic Documents;

                           (11)     the Company  shall at all times ensure that
                  its capitalization is adequate in light of its business and
                  purpose;

                           (12)     the  business  and  affairs of the  Company
                  shall be managed and operated in strict conformity with the
                  Basic Documents;

                           (13) the Company shall (i) not permit the lien of the
                  Indenture not to constitute a continuing valid first priority
                  security interest in the collateral identified in the
                  Indenture, (ii) take any action necessary or advisable to
                  maintain and preserve the lien and security interest, and
                  priority thereof, of the Indenture, (iii) not permit the
                  validity of the Indenture to be impaired or the lien of the
                  Indenture to be amended, subordinated, terminated or
                  discharged, (iv) not permit any lien, charge, claim, security
                  interest, mortgage or other encumbrance, other than the lien
                  and security interest created by the Indenture, to be created
                  on or to extend to or otherwise arise upon or burden the
                  collateral or any part thereof or any proceeds thereof
                  identified in the Indenture, (v) not permit any Person to be
                  released from any covenants or obligations with respect to the
                  Indenture except as expressly permitted by the Indenture and
                  (vi) not, except as expressly permitted by Basic Documents,
                  sell, transfer, exchange or dispose of any of the collateral
                  identified in the Indenture unless directed to do so by the
                  Trustee in accordance with the Indenture;

                           (14) the Bonds shall be secured by a security
                  interest in all assets of the Company and shall be paid solely
                  from the Securitization Charge and other assets of the
                  Company; and there shall be no recourse to the Member for
                  payments of principal, interest or any other amount owed or
                  due under or in connection with the Bonds by bondholders, the
                  Trustee, the Company or any other Person;

                           (15) the Company shall be operated in such a manner
                  as the Managers deem reasonable and necessary or appropriate
                  to preserve (i) the limited liability of Detroit Edison (or
                  its successor) as the Member in the Company and (ii) until the
                  expiration of the period of one year and one day after the
                  termination of the Indenture and the payment in full of the
                  Bonds, the bankruptcy-remote status of the Company; and

                                       10

<PAGE>   14

                           (16) the Company shall not make any payments,
                  distributions or dividends to the Member in respect of its
                  Membership Interest other than the amount released to the
                  Company by the Trustee in accordance with the Indenture,
                  except as otherwise provided in the Indenture.

                  (b)      The Member covenants as follows:

                           (1)      the  Agreement  has been duly  authorized,
                  executed and delivered on behalf of the Company;

                           (2) except as otherwise provided in the Basic
                  Documents, the funds and other assets of the Member shall not
                  be commingled with those of the Company and the books and
                  records of the Company shall be maintained separately from
                  those of the Member and shall be clear and accurate so that
                  another Person would have no difficulty in ascertaining the
                  assets and liabilities of the Company and in segregating all
                  of such assets and liabilities from those of the Member;

                           (3) the Member shall not (i) guaranty, become
                  obligated for, become liable on or hold itself out as being
                  liable for (whether contingently or otherwise) the debts of,
                  or pledge its assets on behalf of, or hold out its credit as
                  being available to satisfy the obligations of, the Company,
                  (ii) seek or obtain credit or incur any obligation to any
                  Person based on the assets of the Company, (iii) induce any
                  third party to rely on the creditworthiness of the Company,
                  (iv) maintain or publish consolidated financial statements
                  with the Company unless the financial statements include
                  footnotes indicating that the Securitization Property has been
                  irrevocably sold to the Company and is not available to
                  creditors of the Member under any circumstances, (v) finance
                  the operations of the Company, (vi) borrow any money from or
                  lend any money to the Company or (vii) fail to correct any
                  known misunderstanding or misrepresentation with respect to
                  any of the foregoing;

                           (4) the Member shall at all times (i) act in a way
                  that insures that its creditors reasonably expect and rely
                  upon only the Member's assets being available to secure, or
                  serve as the source of payment of the obligations of, the
                  Member, (ii) not act in a way that would lead any creditor to
                  reasonably expect that the assets of the Member would be
                  available to satisfy the obligations of the Company and (iii)
                  not act in a way that would lead any creditor to reasonably
                  expect that the assets of the Company would be available to
                  satisfy the obligations of the Member;

                           (5) the Member shall have no liability for and shall
                  incur no expense with respect to the credit enhancement
                  obtained by the Company with respect to the Bonds;

                           (6) the capital contribution of the Member shall be
                  made from the Member's separate funds and not from the
                  proceeds of the sale of the Bonds; the capital contribution
                  made by the Member to the Company shall be reflected on the
                  books of the Member and the Company as a capital contribution
                  and not as an obligation from the Company to the Member; there
                  shall be no contractual obligation or legal compulsion on the
                  part of the Company to repay the capital or any earnings
                  thereon or any equivalent amount to the Member; and the
                  Company shall have no legal or contractual obligation to pay
                  any funds which were theretofore in the Capital Subaccount,
                  the Overcollateralization Account or the Reserve Account (as
                  those terms are defined in the Indenture) and earnings thereon
                  not used to pay debt service on the Bonds and released to the
                  Company, to the Member;

                           (7) the amounts payable to the Member for acting as
                  the servicer under the Servicing Agreement and as the
                  administrator under the Administration Agreement are fair and
                  reasonable compensation for the services to be provided by it
                  under those agreements;

                           (8) prior to the remittance of the Securitization
                  Charge by the Member to the Company, the Securitization Charge
                  shall be accounted for in the books and records of the Member
                  as being the property of the Company;

                           (9) the Member shall retain certain tax charges
                  identified in the Financing Order and the rights and interests
                  arising under the Financing Order related thereto; the Member
                  does not intend its retention of such tax charges to affect
                  the treatment of the sale of the Securitization Property as a
                  true sale and the absolute transfer to the Company of all the
                  Member's rights to such property;

                                       11

<PAGE>   15

                           (10) the Member believes that the purchase price paid
                  or payable by the Company for the Securitization Property,
                  consisting of the net proceeds of the sale of the Bonds, is
                  fair consideration for the absolute sale of such property by
                  the Member and constitutes reasonably equivalent value
                  therefor; the Member was not insolvent prior to the sale of
                  the Securitization Property, was not rendered insolvent as a
                  result of such sale, was not engaged in business or a
                  transaction, nor was it about to engage in business or a
                  transaction, for which any property remaining after such sale
                  was an unreasonably small capital, and did not intend to incur
                  debts that would be beyond the Member's ability to pay as such
                  debts matured after such sale;

                           (11) the Member shall not amend, modify or otherwise
                  change the Governing Documents in a manner that shall
                  adversely affect the existence of the Company as a single
                  purpose entity;

                           (12)     the  Member  has not and the  Company  shall
                  not encumber the Securitization Property except for the
                  security interest granted to the Trustee for the holders of
                  the Bonds;

                           (13) the Member expects the securitization
                  transaction described in the Basic Documents to be classified
                  on its financial statements as a financing, with the Bonds
                  represented as either debt or deferred revenue. This
                  accounting treatment is necessary to satisfy requirements of
                  the United States Securities and Exchange Commission and/or
                  the Internal Revenue Service; however, in its financial
                  statements and internal records, the Member shall include
                  footnotes and/or textual discussion indicating that the
                  Securitization Property has been irrevocably sold to the
                  Company and that it shall not be available to the Member or
                  its creditors under any circumstances;

                           (14) the Member has not formed the Company or entered
                  into the securitization transaction described in the Basic
                  Documents with any intention of hindering, delaying or
                  defrauding either present or future creditors;

                           (15)     the Member shall not cause the Company to
                  file a voluntary petition for relief under the Federal
                  bankruptcy code;

                           (16) the Member shall not (i) file a voluntary
                  petition for relief under the Federal bankruptcy code, (ii)
                  file an answer or other pleading in response to an involuntary
                  bankruptcy petition against the Member, consenting to or
                  admitting or failing to contest the material allegations in
                  the petition or (iii) dissolve until the expiration of one
                  year and one day after the termination of the Indenture and
                  the payment in full of the Bonds;

                           (17)     the Member  agrees that neither the Articles
                  nor the Agreement is an executory contract under the Federal
                  bankruptcy code; and

                           (18)     the Member  acknowledges  that the
                  management of the Company has been delegated to the Managers.

                  (c) The Company and the Member shall use reasonable efforts to
         cause the covenants set forth above to be fulfilled. Failure of the
         Company, the Member or any Manager on behalf of the Company to comply
         with any of the foregoing covenants or any of the other covenants
         contained in the Agreement shall not affect the status of the Company
         as a separate legal entity or the limited liability of the Member or
         any Manager.

                  2.  NONPETITION COVENANT

                  (a) The Member and each Manager hereby covenants and agrees
         that, except as otherwise required pursuant to the exercise of its or
         his fiduciary duty with respect to the Company, prior to the date which
         is one year and one day after the termination of the Indenture and the
         payment in full of the Bonds, any other amounts owed under the
         Indenture, including, without limitation, any amounts owed to
         third-party credit enhancers, and any amounts owed under the Hedge
         Agreements or Interest Rate Swap Agreements, it (he) shall not (i)
         acquiesce, petition or otherwise invoke or cause the Company to invoke
         the process of any court or government authority for the purpose of
         commencing or sustaining a case against the Company 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 Company or any substantial part of

                                       12

<PAGE>   16

         the property of the Company, (ii) consent to or approve, or make
         application for, or constitute or maintain any action for the
         dissolution of the Company under Sections 801 or 802 of the LLC Act or
         otherwise or (iii) order the winding up or liquidation of the affairs
         of the Company; provided, however, that nothing in this provision shall
         constitute a waiver of any right to indemnification, reimbursement or
         other payment from the Company pursuant to the Agreement.

                  (b) In the event that the Member or any Manager takes any
         action in violation of Article V. G. 2. (a) above, the Company agrees
         that it shall file an answer with the court or otherwise properly
         contest the taking of such action and raise the defense that the Member
         or the Manager, as the case may be, has agreed in writing not to take
         such action and should be estopped and precluded therefrom, and such
         other defenses, if any, as its counsel advises that it may assert.

                  (c) This provision shall survive the termination of the
         Agreement and the resignation, withdrawal or removal of the Member or
         any Manager. Nothing herein contained shall preclude participation by
         the Member or a Manager in the assertion or defense of its claims in
         any such proceeding involving the Company.

         H.       OWNERSHIP OF COMPANY PROPERTY

         The Member shall have and own an undivided interest in the Company in
accordance with the terms hereof; provided, however, that the Member shall not
have any specific ownership interest in Company contracts, property or other
assets, and shall not hold any such Company contracts, property or other assets
in its individual name, except that the Member may temporarily hold the
collected portions of the Securitization Charge in its accounts (solely as
servicer on behalf of the Company, and not on its own behalf) pending delivery
of the Securitization Charge to the Company in accordance with the Servicing
Agreement. The parties acknowledge that the Member's Membership Interest shall
be personal property for all purposes.

         I.       WINDING UP AND LIQUIDATION OF THE COMPANY

                  1.       WINDING UP AND LIQUIDATION; DISTRIBUTIONS

                  (a)      Upon the dissolution of the Company in accordance
         with Article III. and Article V. A. 3.(b) hereof, unless it is
         reconstituted as provided in Article V. D. 2.(c) or Article III.
         hereof, the Managers shall proceed to wind up the affairs and liquidate
         the property and assets of the Company, and shall apply and distribute
         the proceeds of such liquidation in the following priority:

                           (1) to the expenses of liquidation;

                           (2) to the payment of all amounts payable under the
                  Bonds and the Financing Order;

                           (3) to the payment of all debts and liabilities of
                  the Company other than those set forth in (2) hereof;

                           (4) to the establishment of such reserves as the
                  Managers deem necessary or advisable to provide for any
                  contingent or unforeseen liabilities or obligations of the
                  Company, provided, however, that after the expiration of such
                  period of time as the Managers deem appropriate, the balance
                  of such reserves remaining after payment of such contingencies
                  shall be distributed in the manner hereinafter set forth; and

                           (5) any remaining proceeds shall be distributed to
                  the Member.

                  A reasonable time shall be allowed for the orderly liquidation
         of the property and assets of the Company and the payment of the debts
         and liabilities of the Company in order to minimize the normal losses
         attendant upon a liquidation.

                  Anything contained in this Article V. I. to the contrary
         notwithstanding, if the Managers shall determine that a complete
         liquidation of all the property and assets of the Company would involve
         substantial losses or be impractical or ill-advised under the
         circumstances, the Managers shall liquidate that

                                       13

<PAGE>   17

         portion of the assets of the Company sufficient to pay the expenses of
         liquidation and the debts and liabilities of the Company (excluding the
         debts and liabilities of the Company to the extent that they are
         adequately secured by mortgages on or security interests in the assets
         of the Company), and the remaining property and assets shall be
         distributed to the Member.

                  2.       CERTIFICATE OF DISSOLUTION

                  After the Company has been dissolved, a certificate of
         dissolution of the Company shall be executed and filed with the
         Department.

         J.       MISCELLANEOUS

                  1.       SEVERABILITY

                  If any provision hereof shall be judicially determined to be
         illegal, or if the application thereof to any person or in any
         circumstance shall, to any extent, be judicially determined to be
         invalid or unenforceable, the remainder of these Restated Articles, or
         the application of such provision to persons or in circumstances other
         than those to which it has been judicially determined to be invalid or
         unenforceable, shall not be affected thereby, and each provision of
         these Restated Articles shall be valid and enforceable to the fullest
         extent permitted by law.

                  2.       NO CONFLICT

                  The parties agree that the operation of the Company and the
         relationship of the Member and Managers to the Company shall, subject
         to the following sentence, be governed by the Governing Documents. The
         provisions of the Agreement shall govern and control unless there is a
         specific conflict with either the LLC Act or these Restated Articles,
         in which event the LLC Act or these Restated Articles, as the case may
         be, shall govern and control.

                  3.       DEFINITIONS

                  The following capitalized terms shall have the following
meanings in these Restated Articles:

                  "ADMINISTRATION AGREEMENT" shall mean the Administration
         Agreement, dated                  , 2001, between the Company, as
         issuer, and Detroit Edison, as administrator, with respect to the
         provision of corporate management services to the Company, as the same
         may be amended, supplemented or otherwise modified and in effect from
         time to time.

                  "AFFILIATE", with respect to any specified Person, shall mean
         any other Person controlling or controlled by or under common control
         with such specified Person, where "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" shall have meanings correlative to the
         foregoing; it has been acknowledged that the Company is not controlled
         by and is not under common control with Detroit Edison, and,
         accordingly, is not an Affiliate of Detroit Edison.

                  "AGREEMENT" shall mean the Limited Liability Company Agreement
         of the Company, as the same may be amended, supplemented, modified or
         restated from time to time in accordance with the provisions thereof.

                  "ARTICLES" shall mean these Restated Articles, as amended
         and/or restated from time to time.

                  "ASSIGN," "ASSIGNEE" and "ASSIGNMENT" have the meanings set
         forth in Article V. D. 1.(b) hereof.

                  "ASSIGNEE" shall mean the Company as the assignee of Detroit
         Edison under the Financing Order and with respect to the Securitization
         Property.

                                       14

<PAGE>   18

                  "BASIC DOCUMENTS" shall mean the Governing Documents, the
         Indenture, the Sale Agreement, the Bill of Sale, the Servicing
         Agreement, the Administration Agreement, the Underwriting Agreement,
         the Hedge Agreements and the Interest Rate Swap Agreements.

                  "BILL OF SALE" shall mean the bill of sale issued by Detroit
         Edison to the Company as of                  , 2001 pursuant to the
         Sale Agreement, or any other bill of sale delivered in accordance
         therewith.

                  "BONDS" shall mean one or more Series of securitization bonds
         (each of which may be comprised of one or more Classes), issued
         pursuant to the Financing Order and the Indenture.

                  "BUSINESS DAY" shall mean any day other than a Saturday,
         Sunday or other day on which banks are authorized or required by law to
         be closed in the City of Detroit, Michigan.

                  "CLASS" shall mean any class of a Series of Bonds, and
         "CLASSES" shall mean two or more classes, as the context requires.

                  "CODE" shall mean the Internal Revenue Code of 1986, as
         amended from time to time (or any successor law).

                  "COMPANY" shall mean The Detroit Edison Securitization Funding
         LLC, a Michigan limited liability company.

                  "COMPETITION ACT" shall mean, jointly, the Customer Choice and
         Electric Reliability Act, Senate Bill No. 937, 2000 PA 141 and Enrolled
         Senate Bill No. 1253, 2000 PA 142, both effective June 5, 2000, both
         with respect to the restructuring of the electric utility business in
         Michigan, which acts authorize electric utilities to (i) recover
         qualified costs through irrevocable non-bypassable securitization
         charges, (ii) assign such securitization charges to special purpose
         entities and (iii) issue or have their assignees issue debt securities
         secured by such securitization charges, as amended from time to time
         (and any successor laws).

                  "DAY" or "DAYS" shall mean each calendar day, including
         Saturdays, Sundays and legal holidays; provided, however, that if the
         day on which a period of time for consent or approval or other action
         ends is not a business day, such period shall end on the next business
         day.

                  "DEPARTMENT" shall mean the Michigan Department of Consumer
         and Industry Services, Bureau of Commercial Services, Corporation
         Division.

                  "DETROIT EDISON" shall mean The Detroit Edison Company, a
         Michigan corporation.

                  "DISABILITY EVENT" has the meaning set forth in Article V. D.
         2.(a) hereof.

                  "DISABLED MEMBER" has the meaning set forth in Article V. D.
         2.(a) hereof.

                  "DISSOLUTION PROPOSAL" shall mean a written proposal
         unanimously approved by the Managers with respect to the dissolution of
         the Company (i) which contains a schedule regarding the use and
         distribution of liquidation proceeds and (ii) to which have been
         attached the written consents of such Persons as the Managers
         determined it was necessary to obtain with respect to the dissolution.

                  "FINANCING ORDER" shall mean the opinion and order issued by
         MPSC on November 2, 2000 as amended by opinion and order dated January
         4, 2001 in MPSC Case No. U-12478, pursuant to the Competition Act,
         providing for the creation of the Securitization Property, the
         collection of the Securitization Charge with respect to the
         Securitization Property, the periodic adjustment of the Securitization
         Charge, and the creation of a special purpose entity to acquire title
         to the Securitization Property and to issue the Bonds with respect
         thereto.

                  "GOVERNING DOCUMENTS" shall mean the Agreement and the
         Articles.

                  "GOVERNMENTAL AUTHORITY" shall mean any Federal, state, local
         or foreign court or governmental department, commission, board, bureau,
         agency, authority, instrumentality or regulatory body.

                                       15

<PAGE>   19

                  "HEDGE AGREEMENTS" shall mean, collectively, any agreements
         between the Company and third party counterparties entered into to
         protect against interest rate movements prior to the pricing of the
         Bonds, as the same may be amended, supplemented or otherwise modified
         and in effect from time to time.

                  "INDENTURE" shall mean the Indenture, dated as of
                          , 2001, between the Company and the Trustee, with
         respect to the issuance of the Bonds pursuant to the Financing Order,
         the repayment of the Bonds and related matters, as the same may be
         amended, modified or supplemented from time to time.

                  "INDEPENDENT MANAGER" shall mean, with respect to the Company,
         a Manager who is not, and within the five years prior to the date of
         his appointment was not (except solely by virtue of such Person's
         serving as, or being an Affiliate of any other Person serving as, an
         independent director or manager, as applicable, of the Member or any
         bankruptcy-remote special purpose entity that is an Affiliate of the
         Member or the Company), (i) a stockholder, member, partner, director,
         officer, manager, employee, customer, supplier, creditor, contractor,
         independent contractor or Affiliate of, or any Person that has received
         any benefit in any form whatever from (other than in such Manager's
         capacity as a ratepayer or customer of the Member in the ordinary
         course of business), or any Person that has provided any service in any
         form whatsoever to, or any major creditor (or any Affiliate of any
         major creditor) of, the Company, the Member, or any of their
         Affiliates, or (ii) a Person owning beneficially, directly or
         indirectly, any outstanding shares of common stock, any limited
         liability company interests or any partnership interests, as
         applicable, of the Company, the Member or any of their Affiliates, or
         of any major creditor (or any Affiliate of any major creditor) of any
         of the foregoing, or a stockholder, member, partner, director, officer,
         employee, customer, supplier, creditor, contractor, independent
         contractor or Affiliate of, or any Person that has received any benefit
         in any form whatever from (other than in such Person's capacity as a
         ratepayer or customer of the Member in the ordinary course of
         business), or any Person that has provided any service in any form
         whatever to, such beneficial owner or any of such beneficial owner's
         Affiliates, (iii) a member of the immediate family of any person
         described above or (iv) is a Person who otherwise controls the Company,
         the Member or any of their Affiliates; provided that, the indirect or
         beneficial ownership of stock through a mutual fund or similar
         diversified investment vehicle with respect to which the owner does not
         have discretion or control over the investments held by such
         diversified investment vehicle shall not preclude such owner from being
         an Independent Manager. For purposes of this definition, "MAJOR
         CREDITOR" shall mean a natural person or business entity to which the
         Company, the Member or any of their Affiliates has outstanding
         indebtedness for borrowed money or credit on open account in a sum
         sufficiently large as would reasonably be expected to influence the
         judgment of the proposed Independent Manager adversely to the interests
         of the Company when the interests of that Person are adverse to those
         of the Company, and "INDEPENDENT MANAGERS" shall mean all the
         Independent Managers, collectively.

                  "INTEREST RATE SWAP AGREEMENTS" shall mean, collectively, any
         agreements with respect to any Class of floating rate Bonds between the
         Company and recognized swap dealers, as swap counterparties, for
         interest rate swap transactions, as the same may be amended,
         supplemented or otherwise modified and in effect from time to time.

                  "LLC ACT" shall mean the Michigan Limited Liability Company
         Act, MCLA 450.4101 et seq, as amended from time to time (and any
         successor law).

                  "MANAGER" and "MANAGERS" have the meanings set forth in
         Article V. A. 1.(a) hereof.

                  "MEMBER" shall mean Detroit Edison, in its capacity as a
         Member of the Company, or any successor in interest of Detroit Edison
         which is admitted to the Company as a substitute Member in accordance
         with Article V. D. 3. hereof, or any additional Person which is
         admitted as a Member of the Company in accordance with Article V. D. 4.
         hereof.

                  "MEMBERSHIP INTEREST" shall mean all of the right, title and
         interest of the Member in its capacity as a member of the Company
         within the meaning of the LLC Act and the Agreement.

                  "MPSC" shall mean the Michigan Public Service Commission or
         any successor Governmental Authority.

                  "PERSON" or "PERSONS" shall mean any natural person,
         corporation, business trust, joint venture, association, company,
         partnership (general or limited), limited liability company, joint
         stock company, trust, unincorporated organization or Governmental
         Authority.

                                       16

<PAGE>   20

                  "PROCEEDING" has the meaning set forth in Article V. F.2.(a)
         hereof.

                  "REPRESENTATIVE" has the meaning set forth in Article V. D.2.
         hereof.

                  "RESTATED ARTICLES" means these Restated Articles of
         Organization.

                  "SALE AGREEMENT" shall mean the Securitization Property Sale
         Agreement, dated as of                  , 2001, between Detroit Edison,
         as seller, and the Company, as issuer, with respect to the sale and
         assignment of the Securitization Property to the Company, as the same
         may be amended, supplemented or otherwise modified and in effect from
         time to time.

                  "SECURITIZATION CHARGE" shall mean a non-bypassable charge
         provided for in the Financing Order for the purpose of providing funds
         for the full recovery of certain qualified costs of Detroit Edison or
         the Assignee, which shall be payable pursuant to, and as set forth in,
         the Financing Order, or all such non-bypassable charges provided for in
         the Financing Order, collectively, as the context may require.

                  "SECURITIZATION PROPERTY" shall mean the irrevocable right of
         Detroit Edison or the Assignee to impose, collect, receive and be paid
         amounts from the collections of the Securitization Charge; all rights
         of Detroit Edison or the Assignee under the Financing Order, including,
         without limitation, all rights to obtain periodic adjustments of such
         Securitization Charge, and all revenues, collections, payments, money
         and proceeds arising under, or with respect to, all of the foregoing;
         or all such rights and revenues, collectively, as the context may
         require.

                  "SERIES" shall mean each series of Bonds issued and
         authenticated pursuant to the Indenture and a related Supplement, or
         two or more such series collectively, as the context may require.

                  "SERVICING AGREEMENT" shall mean the Securitization Property
         Servicing Agreement, dated as of                   , 2001, between the
         Company, as issuer, and Detroit Edison, as servicer, whereby the
         servicer will manage, service, administer and effect collection of the
         Securitization Charge, as the same may be amended, supplemented or
         otherwise modified and in effect from time to time.

                  "SPECIAL MEMBERS" and "SPECIAL MEMBER" have the meaning set
         forth in Article V. D. 2.(b) hereof.

                  "SUPPLEMENT" shall **mean a supplement to the Indenture
         complying (to the extent applicable) with the terms of the Indenture.

                  "TRUSTEE" shall mean the party named as such in the Indenture
         until a successor replaces it in accordance with the applicable
         provisions of the Indenture, and, thereafter, the successor.

                  "UNDERWRITING AGREEMENT" shall mean the Underwriting
         Agreement, dated                 , 2001, among the Company, Detroit
         Edison and Salomon Smith Barney, Inc., on behalf of itself and as
         representative of the several underwriters listed therein, with respect
         to the sale and purchase of the Bonds.

                                       17

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