EXHIBIT (4)(C)
SPPC FUNDING LLC,
Note Issuer
and
BANKERS TRUST COMPANY OF CALIFORNIA, N.A.,
Note Trustee
INDENTURE
Dated as of April 9, 1999
Issuable in Series
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TABLE OF CONTENTS
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Page
ARTICLE I DEFINITIONS AND INCORPORATION BY REFERENCE........................................... 2
SECTION 1.01. Definitions................................................................. 2
SECTION 1.02. Rules of Construction....................................................... 12
ARTICLE II THE NOTES........................................................................... 13
SECTION 2.01. Form........................................................................ 13
SECTION 2.02. Denominations; Notes Issuable in Series..................................... 13
SECTION 2.03. Execution, Authentication and Delivery...................................... 15
SECTION 2.04. Temporary Notes............................................................. 15
SECTION 2.05. Registration; Registration of Transfer and Exchange......................... 15
SECTION 2.06. Xxxxxxxxx, Xxxxxxxxx, Lost or Stolen Notes.................................. 17
SECTION 2.07. Persons Deemed Owner........................................................ 18
SECTION 2.08. Payment of Principal, Premium, if any, and Interest; Interest on Overdue
Principal; Principal, Premium, if any, and Interest Rights Preserved.... 18
SECTION 2.09. Cancellation................................................................ 19
SECTION 2.10. Amount Unlimited; Authentication and Delivery of Notes...................... 20
SECTION 2.11. Release of Collateral....................................................... 26
ARTICLE III COVENANTS.......................................................................... 26
SECTION 3.01. Payment of Principal, Premium, if any, and Interest......................... 26
SECTION 3.02. Maintenance of Office or Agency............................................. 26
SECTION 3.03. Money for Payments To Be Held in Trust...................................... 26
SECTION 3.04. Existence................................................................... 28
SECTION 3.05. Protection of Collateral.................................................... 28
SECTION 3.06. Opinions as to Collateral................................................... 29
SECTION 3.07. Performance of Obligations; Servicing....................................... 29
SECTION 3.08. Negative Covenants.......................................................... 31
SECTION 3.09. Annual Statement as to Compliance........................................... 32
SECTION 3.10. Note Issuer May Consolidate, etc., Only on Certain Terms.................... 32
SECTION 3.11. Successor or Transferee..................................................... 34
SECTION 3.12. No Other Business........................................................... 35
SECTION 3.13. No Borrowing................................................................ 35
SECTION 3.14. Servicer's Obligations...................................................... 35
SECTION 3.15. Guarantees, Loans, Advances and Other Liabilities........................... 35
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SECTION 3.16. Capital Expenditures........................................................ 35
SECTION 3.17. Non-Routine True-Up Adjustment.............................................. 35
SECTION 3.18. Restricted Payments......................................................... 35
SECTION 3.19. Notice of Events of Default................................................. 36
SECTION 3.20. Further Instruments and Acts................................................ 36
SECTION 3.21. Purchase of Subsequent Transition Property.................................. 36
ARTICLE IV SATISFACTION AND DISCHARGE; DEFEASANCE.............................................. 37
SECTION 4.01. Satisfaction and Discharge of Indenture; Defeasance......................... 37
SECTION 4.02. Conditions to Defeasance.................................................... 39
SECTION 4.03. Application of Trust Money.................................................. 40
SECTION 4.04. Repayment of Moneys Held by Paying Agent.................................... 40
ARTICLE V REMEDIES............................................................................. 41
SECTION 5.01. Events of Default........................................................... 41
SECTION 5.02. Acceleration of Maturity; Rescission and Annulment.......................... 42
SECTION 5.03. Collection of Indebtedness and Suits for Enforcement by Note Trustee........ 43
SECTION 5.04. Remedies; Priorities........................................................ 45
SECTION 5.05. Optional Preservation of the Collateral..................................... 46
SECTION 5.06. Limitation of Suits......................................................... 46
SECTION 5.07. Unconditional Rights of Noteholders To Receive Principal, Premium,
if any, and Interest.................................................... 47
SECTION 5.08. Restoration of Rights and Remedies.......................................... 47
SECTION 5.09. Rights and Remedies Cumulative.............................................. 47
SECTION 5.10. Delay or Omission Not a Waiver.............................................. 47
SECTION 5.11. Control by Noteholders...................................................... 48
SECTION 5.12. Waiver of Past Defaults..................................................... 48
SECTION 5.13. Undertaking for Costs....................................................... 49
SECTION 5.14. Waiver of Stay or Extension Laws............................................ 49
SECTION 5.15. Action on Notes............................................................. 49
SECTION 5.16. Performance and Enforcement of Certain Obligations.......................... 49
ARTICLE VI THE NOTE TRUSTEE..................................................................... 50
SECTION 6.01. Duties of Note Trustee...................................................... 50
SECTION 6.02. Rights of Note Trustee...................................................... 51
SECTION 6.03. Individual Rights of Note Trustee........................................... 52
SECTION 6.04. Note Trustee's Disclaimer................................................... 52
SECTION 6.05. Notice of Defaults.......................................................... 52
SECTION 6.06. Reports by Note Trustee to Holders.......................................... 53
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SECTION 6.07. Compensation and Indemnity.................................................. 53
SECTION 6.08. Replacement of Note Trustee................................................. 54
SECTION 6.09. Successor Note Trustee by Merger............................................ 55
SECTION 6.10. Appointment of Co-Trustee or Separate Trustee............................... 55
SECTION 6.11. Eligibility; Disqualification............................................... 56
SECTION 6.12. Representations and Warranties of Note Trustee.............................. 56
ARTICLE VII NOTEHOLDERS' LISTS AND REPORTS..................................................... 57
SECTION 7.01. Note Issuer To Furnish Note Trustee Names and Addresses of Noteholders...... 57
SECTION 7.02. Preservation of Information; Communications to Noteholders.................. 57
ARTICLE VIII ACCOUNTS, DISBURSEMENTS AND RELEASES.............................................. 57
SECTION 8.01. Collection of Money......................................................... 57
SECTION 8.02. Collection Account.......................................................... 58
SECTION 8.03. General Provisions Regarding the Collection Account......................... 61
SECTION 8.04. Release of Collateral....................................................... 62
SECTION 8.05. Opinion of Counsel.......................................................... 62
SECTION 8.06. Reports by Independent Accountants.......................................... 62
SECTION 8.07. Letter of Credit............................................................ 63
ARTICLE IX SUPPLEMENTAL INDENTURES............................................................. 63
SECTION 9.01. Supplemental Indentures Without Consent of Noteholders...................... 63
SECTION 9.02. Supplemental Indentures with Consent of Noteholders......................... 64
SECTION 9.03. Execution of Supplemental Indentures........................................ 66
SECTION 9.04. Effect of Supplemental Indenture............................................ 66
SECTION 9.05. Reference in Notes to Supplemental Indentures............................... 66
ARTICLE X REDEMPTION OF NOTES.................................................................. 67
SECTION 10.01. Optional Redemption by Note Issuer......................................... 67
SECTION 10.02. Form of Optional Redemption Notice......................................... 67
SECTION 10.03. Notes Payable on Optional Redemption Date or Payment Date.................. 68
SECTION 10.04. Mandatory Redemption by Note Issuer........................................ 68
SECTION 10.05. Form of Mandatory Redemption Notice........................................ 68
SECTION 10.06. Notes Payable on Mandatory Redemption Date or Date......................... 69
ARTICLE XI MISCELLANEOUS....................................................................... 69
SECTION 11.01. Compliance Certificates and Opinions, etc.................................. 69
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SECTION 11.02. Form of Documents Delivered to Note Trustee................................ 71
SECTION 11.03. Acts of Noteholders........................................................ 72
SECTION 11.04. Notices, etc., to Note Trustee, Note Issuer, Infrastructure Bank
and Moody's............................................................. 72
SECTION 11.05. Notices to Noteholders; Xxxxxx............................................. 73
SECTION 11.06. Effect of Headings and Table of Contents................................... 73
SECTION 11.07. Successors and Assigns..................................................... 73
SECTION 11.08. Separability............................................................... 74
SECTION 11.09. Benefits of Indenture...................................................... 74
SECTION 11.10. Legal Holidays............................................................. 74
SECTION 11.11. Governing Law.............................................................. 74
SECTION 11.12. Counterparts............................................................... 74
SECTION 11.13. Recording of Indenture..................................................... 74
SECTION 11.14. Trust Obligation........................................................... 74
SECTION 11.15. No Recourse to Note Issuer................................................. 75
SECTION 11.16. Inspection................................................................. 75
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Exhibits
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Exhibit A-1 Form of Sale Agreement
Exhibit A-2 Form of Servicing Agreement
Exhibit B Form of Note
Exhibit C Form of Series Supplement
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INDENTURE
INDENTURE dated as of April 9, 1999, between SPPC FUNDING LLC, a Delaware
limited liability company (the "Note Issuer"), and BANKERS TRUST COMPANY OF
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CALIFORNIA, N.A., a national banking association, as trustee (the "Note
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Trustee").
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The Note Issuer has duly authorized the execution and delivery of this
Indenture to provide for one or more Series of Notes, issuable as provided in
this Indenture. Each such Series of Notes will be issued only under a separate
Series Supplement to this Indenture duly executed and delivered by the Note
Issuer and the Note Trustee. The Note Issuer is entering into this Indenture,
and the Note Trustee is accepting the trusts created hereby, for good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged.
GRANTING CLAUSE
The Note Issuer hereby Grants to the Note Trustee at the Closing Date, as
Note Trustee for the benefit of the Holders of the Notes from time to time
issued and outstanding, all of the Note Issuer's right, title and interest in
and to (a) the Transition Property transferred by the Seller to the Note Issuer
pursuant to the Sale Agreement and all proceeds thereof, (b) any Subsequent
Transition Property transferred by the Seller to the Note Issuer pursuant to
each Subsequent Sale Agreement and all proceeds thereof, (c) the Sale Agreement
and each Subsequent Sale Agreement, (d) the Servicing Agreement, (e) the
Collection Account (including all subaccounts thereof) and all amounts or
investment property on deposit therein or credited thereto from time to time,
(f) all other property of whatever kind owned from time to time by the Note
Issuer, (g) all present and future claims, demands, causes and choses in action
in respect of any or all of the foregoing and all payments on or under and all
proceeds of every kind and nature whatsoever in respect of any or all of the
foregoing, including all proceeds of the conversion, voluntary or involuntary,
into cash or other liquid property, all cash proceeds, accounts, accounts
receivable, notes, drafts, acceptances, chattel paper, checks, deposit accounts,
insurance proceeds, condemnation awards, rights to payment of any and every
kind, and other forms of obligations and receivables, instruments and other
property that at any time constitute all or part of or are included in the
proceeds of any of the foregoing and (h) all proceeds of the foregoing
(collectively, the "Collateral"; it being understood that the following do not
constitute Collateral: (i) the cash contributed to the Note Issuer by the Seller
that is not held in the Capital Subaccount, including cash that has been
released to the Note Issuer pursuant to Section 8.02(d) following retirement of
a Series of Notes, (ii) net investment earnings that have been released to the
Note Issuer pursuant to Section 8.02(d), (iii) the Overcollateralization Amount
with respect to a Series of Notes that has been released to the Note Issuer
pursuant to Section 8.02(d) following retirement of such Series of Notes) and
(iv) amounts deposited with the Note Issuer on the Closing Date for payment of
costs of issuance with respect to the Notes or the Certificates as set forth on
the flow of funds memorandum delivered on the Closing Date (together with any
interest earnings thereon),
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it being understood that such amounts described in this clause (iv) shall not be
subject to Section 3.15.
The foregoing Grant is made in trust to secure the payment of principal of
and premium, if any, interest on, and any other amounts owing in respect of, the
Notes equally and ratably without prejudice, priority or distinction, except as
expressly provided in this Indenture, and to secure compliance with the
provisions of this Indenture with respect to the Notes, all as provided in this
Indenture.
The Note Trustee, as trustee on behalf of the Holders of the Notes,
acknowledges such grant, accepts the trusts hereunder in accordance with the
provisions hereof and agrees to perform its duties herein required.
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
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SECTION 1.01. Definitions.
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(a) Except as otherwise specified herein or as the context may otherwise
require, the following terms have the respective meanings set forth below for
all purposes of this Indenture.
"Act" has the meaning specified in Section 11.03(a).
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"Actual FTA Collections" means, with respect to any Collection Period, FTA
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Collections actually received with respect to such Collection Period.
"Administrative Services Agreement" means the Administrative Services
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Agreement dated as of April 9, 1999, as the same may be amended and supplemented
from time to time, between the Administrator and the Note Issuer.
"Administrator" means Sierra Pacific Power Company, or any successor
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Administrator under the Administrative Services Agreement.
"Affiliate" means, with respect to any specified Person, any other Person
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controlling or controlled by or under common control with such specified Person.
For the purposes of this definition, "control" when used with respect to any
specified Person means the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"Authorized Officer" means, with respect to the Note Issuer, any officer of
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the Note Issuer who is authorized to act for the Note Issuer in matters relating
to the Note Issuer and who is identified on the list of Authorized Officers
delivered by the Note Issuer to the
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Note Trustee on the Closing Date (as such list may be modified or supplemented
from time to time thereafter).
"Basic Documents" means this Indenture, the Trust Agreement, the Sale
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Agreement, the Servicing Agreement, the Administrative Services Agreement, the
Note Purchase Agreement, the DTC Agreement, the Fee and Indemnity Agreement, the
Purchase Agreement and all other documents and certificates delivered in
connection therewith and, with respect to any subsequent Series of Notes and
Certificates, the comparable documents for each of the foregoing.
"Business Day" means any day other than a Saturday, a Sunday or a day on
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which banking institutions or trust companies in New York, New York or San
Francisco, California are authorized or obligated by law, regulation or
executive order to remain closed.
"Capital Subaccount" has the meaning set forth in Section 8.02(a).
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"Certificate Trustee" means the Person acting as certificate trustee under
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the Trust Agreement.
"Certificates" has the meaning set forth in the Trust Agreement.
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"Closing Date" means April 9, 1999.
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"Code" means the Internal Revenue Code of 1986, as amended from time to
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time, and Treasury Regulations promulgated thereunder.
"Collateral" has the meaning specified in the Granting Clause of this
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Indenture.
"Collection Account" has the meaning specified in Section 8.02(a).
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"Collection Period" means each calendar month immediately preceding the
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respective Remittance Date.
"Corporate Trust Office" means the principal office of the Note Trustee at
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which at any particular time its corporate trust business shall be administered,
which office at the date of the execution of this Indenture is located at Four
Albany Street, New York, NY 10006, Attention: Structured Finance Group, or at
such other address as the Note Trustee may designate from time to time by notice
to the Noteholders and the Note Issuer, or the principal corporate trust office
of any successor Note Trustee (the address of which the successor Note Trustee
will notify the Noteholders and the Note Issuer).
"Covenant Defeasance Option" has the meaning specified in Section 4.01(b).
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"Default" means any occurrence that is, or with notice or the lapse of time
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or both would become, an Event of Default.
"Delaware Trustee" means the Person acting as Delaware trustee under the
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Trust Agreement.
"DTC Agreement" has the meaning set forth in the Trust Agreement.
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"Eligible Deposit Account" means either (a) a segregated account with an
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Eligible Institution or (b) a segregated trust account with the corporate trust
department of a depository institution organized under the laws of the United
States of America or any one of the states thereof or the District of Columbia
(or any domestic branch of a foreign bank), having corporate trust powers and
acting as trustee for funds deposited in such account, so long as any of the
securities of such depository institution shall have a credit rating from
Xxxxx'x in one of its generic rating categories that signifies investment grade.
"Eligible Institution" means (a) the corporate trust department of the Note
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Trustee, provided that an account with the Note Trustee will only be an Eligible
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Deposit Account if it is a segregated trust account, or (b) a depository
institution organized under the laws of the United States of America or any
State (or any domestic branch of a foreign bank), that (i) has either (A) a
long-term unsecured debt rating of A2 by Moody's or (B) a certificate of deposit
rating of P-1 by Moody's, or any other long-term, short-term or certificate of
deposit rating acceptable to Moody's and (ii) whose deposits are insured by the
FDIC. If so qualified under clause (b) above, the Note Trustee may be
considered an Eligible Institution for the purposes of clause (a) of this
definition.
"Eligible Investments" mean instruments or investment property that
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evidence:
(a) direct obligations of, and obligations fully and unconditionally
guaranteed as to timely payment by, the United States of America;
(b) demand deposits, time deposits, certificates of deposit or bankers'
acceptances of depository institutions meeting the requirements of clause (b) of
the definition of Eligible Institutions;
(c) commercial paper (other than commercial paper of the Seller) having, at
the time of the investment or contractual commitment to invest therein, a rating
from Xxxxx'x in the highest investment category granted thereby;
(d) investments in money market funds having a rating from Xxxxx'x in the
highest investment category granted thereby (including funds for which the Note
Trustee or any of its Affiliates is investment manager or advisor);
(e) repurchase obligations with respect to any security that is a direct
obligation of, or fully guaranteed by, the United States of America or any
agency or instrumentality thereof the obligations of which are backed by the
full faith and credit of the United States
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of America, in either case entered into with depository institutions meeting the
requirements of clause (b) of the definition of Eligible Institutions; and
(f) any other investment permitted by Moody's.
"Estimated FTA Collections" means the amount of FTA Payments the Servicer
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is required to remit to the Collection Account on or before the eighteenth day
of each calendar month (or, if such eighteenth day is not a Business Day, the
Business Day immediately following such eighteenth day) pursuant to Section 6(e)
of Annex I to the Servicing Agreement.
"Event of Default" has the meaning specified in Section 5.01.
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"Exchange Act" means the Securities Exchange Act of 1934, as amended.
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"FDIC" means the Federal Deposit Insurance Corporation or any successor.
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"Fee and Indemnity Agreement" has the meaning set forth in the Trust
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Agreement.
"Final Maturity Date" means, with respect to any Series of Notes, the Final
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Maturity Date therefor as specified in the Series Supplement relating to such
Series of Notes.
"FTA Collections" means FTA Payments received by the Servicer that are
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remitted to the Collection Account.
"FTA Payments" means the payments made by the California Customers based on
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the FTA Charges.
"General Subaccount" has the meaning set forth in Section 8.02(a).
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"Grant" means mortgage, pledge, bargain, sell, warrant, alienate, remise,
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release, convey, assign, transfer, create, and xxxxx x xxxx upon and a security
interest in and right of set-off against, deposit, set over and confirm pursuant
to this Indenture. A Grant of the Collateral or of any other agreement or
instrument shall include all rights, powers and options (but none of the
obligations) of the Granting party thereunder, including the immediate and
continuing right to claim for, collect, receive and give receipt for payments in
respect of the Collateral and all other moneys payable thereunder, to give and
receive notices and other communications, to make waivers or other agreements,
to exercise all rights and options, to bring Proceedings in the name of the
Granting party or otherwise and generally to do and receive anything that the
Granting party is or may be entitled to do or receive thereunder or with respect
thereto.
"Holder" or "Noteholder" means the Person in whose name a Note is
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registered on the Note Register.
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"Indenture" or "this Indenture" means this instrument as originally
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executed and, as from time to time supplemented or amended by one or more
indentures supplemental hereto entered into pursuant to the applicable
provisions hereof, as so supplemented or amended, or both, and shall include the
forms and terms of the Notes established hereunder.
"Independent" means, when used with respect to any specified Person, that
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the Person (a) is in fact independent of the Note Issuer, any other obligor upon
the Notes, the Seller, the Servicer and any Affiliate of any of the foregoing
Persons, (b) does not have any direct financial interest or any material
indirect financial interest in the Note Issuer, any such other obligor, the
Seller, the Servicer or any Affiliate of any of the foregoing Persons and (c) is
not connected with the Note Issuer, any such other obligor, the Seller, the
Servicer or any Affiliate of any of the foregoing Persons as an officer,
employee, promoter, underwriter, trustee, partner, director or person performing
similar functions.
"Independent Certificate" means a certificate or opinion to be delivered to
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the Note Trustee under the circumstances described in, and otherwise complying
with, the applicable requirements of Section 11.01, made by an Independent
appraiser or other expert appointed by an Issuer Order and consented to by the
Note Trustee, and such opinion or certificate shall state that the signer has
read the definition of "Independent" in this Indenture and that the signer is
Independent within the meaning thereof.
"Infrastructure Bank" means the California Infrastructure and Economic
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Development Bank or any successor in interest.
"Issuer Order" and "Issuer Request" means a written order or request signed
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in the name of the Note Issuer by any one of its Authorized Officers and
delivered to the Note Trustee.
"Legal Defeasance Option" has the meaning specified in Section 4.01(b).
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"Letter of Credit" means the letter of credit, dated as of April 9, 1999,
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from the Letter of Credit Bank for the benefit of the Note Issuer and the Note
Trustee, as the same may be amended and supplemented from time to time.
"Letter of Credit Bank" means Xxxxx Fargo Bank, N. A. or another financial
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institution with a short-term debt rating of at least "P-1."
"Mandatory Redemption Date" has the meaning specified in Section 10.04.
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"Mandatory Redemption Price" has the meaning specified in Section 10.04.
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"Minimum Denomination" means, with respect to any Series of Notes, the
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minimum denomination therefor specified in the Series Supplement relating to
such Series
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of Notes, which minimum denomination shall be not less than $1,000 and, except
as otherwise provided in such Series Supplement, integral multiples thereof.
"Moody's" means Xxxxx'x Investors Service Inc. or its successor or, if no
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such organization or successor is any longer in existence, "Xxxxx'x" shall mean
a nationally recognized statistical rating organization or other comparable
Person designated by the Note Issuer, written notice of which designation shall
be given to the Note Trustee, the Certificate Trustee and the Servicer.
"Note Interest Rate" means, with respect to any Series of Notes, the rate
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at which interest accrues on the Notes of such Series, as specified in the
Series Supplement relating to the Notes of such Series.
"Note Issuer" means the party named as such in this Indenture until a
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successor replaces it and, thereafter, means the successor.
"Note Purchase Agreement" has the meaning set forth in the Trust Agreement.
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"Note Register" and "Note Registrar" have the respective meanings specified
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in Section 2.05.
"Note Trustee" means Bankers Trust Company of California, N.A., a national
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banking association, as Note Trustee under this Indenture, or any successor Note
Trustee under this Indenture.
"Notes" has the meaning specified in Section 2.02.
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"Officer's Certificate" means a certificate signed by any Authorized
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Officer of the Note Issuer, under the circumstances described in, and otherwise
complying with, the applicable requirements of Section 11.01, and delivered to
the Note Trustee. Unless otherwise specified, any reference in this Indenture
to an Officer's Certificate shall be to an Officer's Certificate of any
Authorized Officer of the Note Issuer.
"Operating Expenses" means all fees, costs and expenses of the Note Issuer,
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including all amounts owed by the Note Issuer to the Note Trustee, the
Certificate Trustee, the Delaware Trustee and the Infrastructure Bank, the
Servicing Fee, the Quarterly Administration Fee, any fees, costs and expenses
payable or reimbursable by the Note Issuer to the Administrator and legal and
accounting fees, costs and expenses of the Note Issuer and the Trust.
"Opinion of Counsel" means one or more written opinions of counsel who may,
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except as otherwise expressly provided in this Indenture, be employees of or
counsel to the Note Issuer and who shall be satisfactory to the Note Trustee,
and which opinion or opinions shall be addressed to the Note Trustee as trustee,
shall comply with any applicable
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requirements of Section 11.01, and shall be in form and substance satisfactory
to the Note Trustee.
"Optional Redemption Date" means, with respect to any Series, the Payment
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Date specified by the Note Issuer for the redemption of the Notes of such Series
pursuant to Section 10.01.
"Optional Redemption Price" has the meaning specified in Section 10.01.
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"Outstanding" means, as of the date of determination, all Notes theretofore
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authenticated and delivered under this Indenture except:
(i) Notes theretofore canceled by the Note Registrar or delivered to
the Note Registrar for cancellation;
(ii) Notes or portions thereof the payment for which money in the
necessary amount has been theretofore deposited with the Note Trustee or any
Paying Agent in trust for the Holders of such Notes, provided, however, that if
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such Notes are to be redeemed, notice of such redemption has been duly given
pursuant to this Indenture or provision therefor, satisfactory to the Note
Trustee, has been made; and
(iii) Notes in exchange for or in lieu of other Notes which have been
authenticated and delivered pursuant to this Indenture unless proof satisfactory
to the Note Trustee is presented that any such Notes are held by a bona fide
purchaser;
provided that in determining whether the Holders of the requisite Outstanding
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Amount of the Notes or any Series thereof have given any request, demand,
authorization, direction, notice, consent or waiver hereunder or under any Basic
Document, Notes owned by the Note Issuer, any other obligor upon the Notes, the
Seller or any Affiliate of any of the foregoing Persons shall be disregarded and
deemed not to be Outstanding, except that, in determining whether the Note
Trustee shall be protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only Notes that the Note
Trustee actually knows to be so owned shall be so disregarded. Notes so owned
that have been pledged in good faith may be regarded as Outstanding if the
pledgee establishes to the satisfaction of the Note Trustee that the pledgee has
the right so to act with respect to such Notes and that the pledgee is not the
Note Issuer, any other obligor upon the Notes, the Seller or any Affiliate of
any of the foregoing Persons.
"Outstanding Amount" means the aggregate principal amount of all Notes or,
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if the context requires, all Notes of a Series, Outstanding at the date of
determination.
"Overcollateralization Subaccount" has the meaning specified in Section
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8.02(a).
"Paying Agent" means the Note Trustee or any other Person that meets the
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eligibility standards for the Note Trustee specified in Section 6.11 and is
authorized by the
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Note Issuer to make payment of principal of or premium, if any, or interest on
the Notes on behalf of the Note Issuer.
"Payment Date" means, with respect to any Series of Notes, the Payment
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Dates therefor specified in the Series Supplement relating to such Series of
Notes, provided that if any such date is not a Business Day, the Payment Date
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shall be the Business Day immediately succeeding such date.
"Person" means any individual, corporation, limited liability company,
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estate, partnership, joint venture, association, joint stock company, trust
(including any beneficiary thereof), unincorporated organization or government
or any agency or political subdivision thereof.
"Predecessor Note" means, with respect to any particular Note, every
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previous Note evidencing all or a portion of the same debt as that evidenced by
such particular Note, and, for the purpose of this definition, any Note
authenticated and delivered under Section 2.06 in lieu of a mutilated, lost,
destroyed or stolen Note shall be deemed to evidence the same debt as the
mutilated, lost, destroyed or stolen Note.
"Proceeding" means any suit in equity, action at law or other judicial or
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administrative proceeding.
"Purchase Agreement" means the Purchase Agreement, dated as of April 9,
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1999, among the Seller, the Note Issuer, the Trust, the Infrastructure Bank, the
California State Treasurer's Office and the initial purchasers named therein.
"Quarterly Administration Fee" shall mean $1,250.00 per calendar quarter.
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"Quarterly Interest" means, with respect to any Payment Date and any Series
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of Notes, the quarterly interest for such Payment Date and Series of Notes as
specified in the Series Supplement relating to such Series of Notes.
"Quarterly Principal" means, with respect to any Payment Date and any
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Series of Notes, the excess, if any, of the Outstanding Amount of such Series of
Notes over the outstanding principal balance specified for such Payment Date on
the applicable Expected Amortization Schedule.
"Rating Agency Condition" means, with respect to any action, that Moody's
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shall have been given ten days prior notice thereof and that Moody's shall have
notified the Servicer, the Note Issuer and the Note Trustee in writing that such
action will not result in a reduction or withdrawal of Moody's then current
rating of either any Series of the Notes or any Series of the Certificates.
"Record Date" means, with respect to a Payment Date, Optional Redemption
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Date or Mandatory Redemption Date, the close of business on the last day of the
calendar month preceding the calendar month
15
preceding the calendar month in which such Payment Date, Optional Redemption
Date or Mandatory Redemption Date occurs.
"Registered Holder" means the Person in whose name a Note is registered on
-----------------
the Note Register on the applicable Record Date.
"Remittance Date" means the eighteenth day of each calendar month or, if
---------------
such day is not a Business Day, the next succeeding Business Day.
"Repurchase Date" has the meaning specified in the Sale Agreement.
---------------
"Required Capital Level" means, as of any Payment Date, the sum of 0.5% of
----------------------
the initial principal amount of each then-outstanding Series of Notes issued
pursuant to this Indenture prior to that Payment Date.
"Required Overcollateralization Level" means, as of any Payment Date with
------------------------------------
respect to a Series of Notes, the amount required to be on deposit in the
Overcollateralization Subaccount as specified in the Series Supplement relating
to such Series of Notes.
"Reserve Subaccount" has the meaning specified in Section 8.02(a).
------------------
"Responsible Officer" means any officer within the Corporate Trust Office,
-------------------
including any Managing Director, Vice President, Assistant Vice President,
Secretary, Assistant Secretary or Assistant Treasurer or any other officer of
the Note Trustee customarily performing functions similar to those performed by
any of the above designated officers and also, with respect to a particular
matter, any other officer to whom such matter is referred because of such
officer's knowledge and familiarity with the particular subject.
"Sale Agreement" means the Transition Property Purchase and Sale Agreement,
--------------
dated as of April 9, 1999, between the Note Issuer and the Seller, in the form
of Exhibit A-1, as amended and supplemented from time to time.
"Scheduled Maturity Date" means, with respect to any Series of Notes, the
-----------------------
Scheduled Maturity Date therefor, as specified in the Series Supplement relating
to such Series of Notes.
"SEC" or "Commission" means the Securities and Exchange Commission.
--- ----------
"Securities Act" means the Securities Act of 1933, as amended.
--------------
"Series" means each series of Notes issued and authenticated pursuant to
------
this Indenture and a related Series Supplement.
16
"Series Issuance Date" means, with respect to any Series of Notes, the date
--------------------
on which the Notes of such Series are to be originally issued in accordance with
Section 2.10 and the Series Supplement relating to such Series of Notes.
"Series Supplement" means an indenture supplemental to this Indenture that
-----------------
authorizes a particular Series of Notes.
"Servicing Agreement" means the Transition Property Servicing Agreement,
-------------------
dated as of April 9, 1999, between the Note Issuer and the Servicer, in the form
of Exhibit A-2, as amended and supplemented from time to time.
"State" means any one of the 50 states of the United States of America or
-----
the District of Columbia.
"Successor Servicer" has the meaning specified in Section 3.07(e).
------------------
"Trust" has the meaning set forth in the Trust Agreement.
-----
"Trust Agreement" means the Amended and Restated Declaration and Agreement
---------------
of Trust, dated as of April 9, 1999, among the Infrastructure Bank, the Delaware
Trustee and the Certificate Trustee, as the same may be further amended and
supplemented from time to time.
"Trust Indenture Act" or "TIA" means the Trust Indenture Act of 1939 as in
------------------- ---
force on the date hereof, unless otherwise specifically provided.
"UCC" means, unless the context otherwise requires, the Uniform Commercial
---
Code, as in effect in the relevant jurisdiction, as amended from time to time.
"U.S. Government Obligations" means direct obligations (or certificates
---------------------------
representing an ownership interest in such obligations) of the United States of
America (including any agency or instrumentality thereof) for the payment of
which the full faith and credit of the United States of America is pledged and
which are not callable at the Note Issuer's option.
(b) Except as otherwise specified herein or as the context may otherwise
require, the following terms have the respective meanings set forth in Section
1.01 of the Servicing Agreement as in effect on the Closing Date for all
purposes of this Indenture, and the definitions of such terms are equally
applicable both to the singular and plural forms of such terms:
(i) Advice Letters,
(ii) Annual Adjustment Filing Date,
17
(iii) California Customers,
(iv) CPUC,
(v) CPUC Regulations,
(vi) Excess Remittance,
(vii) Expected Amortization Schedule,
(viii) Financing Order,
(ix) FTA Charges,
(x) Non-Routine True-Up Adjustment,
(xi) Overcollateralization Amount,
(xii) Principal Balance,
(xiii) Projected Principal Balance,
(xiv) PU Code,
(xv) Remittance Shortfall,
(xvi) Seller,
(xvii) Seller Mortgage,
(xviii) Servicer,
(xix) Servicer Default,
(xx) Servicing Fee,
(xxi) Subsequent Sale Agreement,
(xxii) Subsequent Sale Date,
(xxiii) Subsequent Transition Property, and
(xiv) Transition Property.
SECTION 1.02. Rules of Construction. Unless the context otherwise
---------------------
requires:
18
(i) a term has the meaning assigned to it;
(ii) an accounting term not otherwise defined has the meaning
assigned to it in accordance with generally accepted accounting principles as in
effect from time to time;
(iii) "or" is not exclusive;
(iv) "including" means including without limitation;
(v) words in the singular include the plural, and words in the
plural include the singular; and
(vi) the words "herein," "hereof," "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision.
ARTICLE II
THE NOTES
SECTION 2.01. Form. The Notes and the Note Trustee's certificate of
----
authentication shall be in substantially the forms set forth in Exhibit B, with
such appropriate insertions, omissions, substitutions and other variations as
are required or permitted by this Indenture or by a related Series Supplement
and may have such letters, numbers or other marks of identification and such
legends or endorsements placed thereon as may, consistently herewith, be
determined by the officers executing such Notes, as evidenced by their execution
of such Notes. Any portion of the text of any Note may be set forth on the
reverse thereof, with an appropriate reference thereto on the face of the Note.
The Notes shall be typewritten, printed, lithographed or engraved or
produced by any combination of these methods (with or without steel engraved
borders), all as determined by the officers executing such Notes, as evidenced
by their execution of such Notes.
Each Note shall be dated the date of its authentication. The terms of the
Notes set forth in Exhibit B are part of the terms of this Indenture.
SECTION 2.02. Denominations; Notes Issuable in Series. The Notes shall be
---------------------------------------
issuable as registered definitive Notes in the Minimum Denomination specified in
the applicable Series Supplement and, except as otherwise provided in such
Series Supplement, in integral multiples thereof.
19
The Notes may, at the election of and as authorized by an Authorized
Officer of the Note Issuer, be issued in one or more Series, and shall be
designated generally as the "Notes" of the Note Issuer, with such further
-----
particular designations added or incorporated in such title for the Notes of any
particular Series as an Authorized Officer of the Note Issuer may determine.
Each Note shall bear upon its face the designation so selected for the Series to
which it belongs. All Notes of the same Series shall be identical in all
respects except for the denominations thereof. All Notes of a particular Series
issued under this Indenture, shall be in all respects equally and ratably
entitled to the benefits hereof without preference, priority, or distinction on
account of the actual time or times of authentication and delivery, all in
accordance with the terms and provisions of this Indenture.
Each Series of Notes shall be created by a Series Supplement authorized by
an Authorized Officer of the Note Issuer and establishing the terms and
provisions of such Series. The several Series thereof may differ as between
Series, in respect of any of the following matters:
(1) designation of the Series;
(2) the principal amount;
(3) the Note Interest Rate;
(4) the Payment Dates;
(5) the Scheduled Maturity Date;
(6) the Final Maturity Date;
(7) the Series Issuance Date;
(8) the place or places for the payment of interest, principal and
premium, if any;
(9) the Minimum Denominations;
(10) the provisions for optional redemption by the Note Issuer;
(11) the Expected Amortization Schedule;
(12) the Required Overcollateralization Level for each Payment Date;
(13) provisions with respect to the definitions set forth in Article
One hereof; and
20
(14) any other provisions expressing or referring to the terms and
conditions upon which the Notes of the applicable Series are to be issued
under this Indenture that are not in conflict with the provisions of this
Indenture and as to which the Rating Agency Condition is satisfied.
21
SECTION 2.03. Execution, Authentication and Delivery. The Notes shall be
--------------------------------------
executed on behalf of the Note Issuer by any of its Authorized Officers. The
signature of any such Authorized Officer on the Notes may be manual or
facsimile.
Notes bearing the manual or facsimile signature of individuals who were at
any time Authorized Officers of the Note Issuer shall bind the Note Issuer,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Notes or did not hold
such offices at the date of such Notes.
At any time and from time to time after the execution and delivery of this
Indenture, the Note Issuer may deliver Notes executed by the Note Issuer to the
Note Trustee pursuant to an Issuer Order for authentication, and the Note
Trustee shall authenticate and deliver such Notes as in this Indenture provided
and not otherwise.
Each Note shall be dated the date of its authentication.
No Note shall be entitled to any benefit under this Indenture or be valid
or obligatory for any purpose, unless there appears on such Note a certificate
of authentication substantially in the form provided for herein executed by the
Note Trustee by the manual signature of one of its authorized signatories, and
such certificate upon any Note shall be conclusive evidence, and the only
evidence, that such Note has been duly authenticated and delivered hereunder.
SECTION 2.04. Temporary Notes. Pending the preparation of definitive
---------------
Notes, the Note Issuer may execute, and upon receipt of an Issuer Order the Note
Trustee shall authenticate and deliver, temporary Notes which are printed,
lithographed, typewritten, mimeographed or otherwise produced, of the tenor of
the definitive Notes in lieu of which they are issued and with such variations
not inconsistent with the terms of this Indenture as the officers executing such
Notes may determine, as evidenced by their execution of such Notes.
If temporary Notes are issued, the Note Issuer will cause definitive Notes
to be prepared without unreasonable delay. After the preparation of definitive
Notes, the temporary Notes shall be exchangeable for definitive Notes upon
surrender of the temporary Notes at the office or agency of the Note Issuer to
be maintained as provided in Section 3.02, without charge to the Holder. Upon
surrender for cancellation of any one or more temporary Notes, the Note Issuer
shall execute and the Note Trustee shall authenticate and deliver in exchange
therefor a like principal amount of definitive Notes of Minimum Denominations.
Until so exchanged, the temporary Notes shall in all respects be entitled to the
same benefits under this Indenture as definitive Notes.
SECTION 2.05. Registration; Registration of Transfer and Exchange. The
---------------------------------------------------
Note Issuer shall cause to be kept a register (the "Note Register") in which,
-------------
subject to such reasonable regulations as it may prescribe, the Note Issuer
shall provide for the registration of Notes and the registration of transfers of
Notes. The Note Trustee shall be
22
"Note Registrar" for the purpose of registering Notes and transfers of Notes as
--------------
herein provided. Upon any resignation of any Note Registrar, the Note Issuer
shall promptly appoint a successor or, if it elects not to make such an
appointment, assume the duties of Note Registrar.
If a Person other than the Note Trustee is appointed by the Note Issuer as
Note Registrar, the Note Issuer will give the Note Trustee prompt written notice
of the appointment of such Note Registrar and of the location, and any change in
the location, of the Note Register, and the Note Trustee shall have the right to
inspect the Note Register at all reasonable times and to obtain copies thereof,
and the Note Trustee shall have the right to rely upon a certificate executed on
behalf of the Note Registrar by a Responsible Officer thereof as to the names
and addresses of the Holders of the Notes and the principal amounts and number
of such Notes.
Subject to this Section 2.05, upon surrender for registration of transfer
of any Note at the office or agency of the Note Issuer to be maintained as
provided in Section 3.02, the Note Issuer shall execute, and the Note Trustee
shall authenticate and the Noteholder shall obtain from the Note Trustee, in the
name of the designated transferee or transferees, one or more new Notes in any
Minimum Denominations, of a like Series and aggregate principal amount.
No resale or transfer of a Note shall be made unless the registration
requirements of the Securities Act and any applicable state securities laws are
complied with, or such registration of transfer is exempt from the registration
requirements under the Securities Act and such state securities laws. In the
event that a transfer is to be made in reliance upon an exemption from the
Securities Act and such state securities laws in connection with such
registration of such transfer, such resale, pledge or transfer may only be made
to a person whom the transferor reasonably believes is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act
that purchases for its own account or for the account of a qualified
institutional buyer who is aware that the resale or other transfer is being made
in reliance on Rule 144A. The transferor will, and each subsequent transferor
is required to, notify any purchaser from it of the resale restrictions set
forth above. The Holder of a Note desiring to effect such registration of
transfer shall, and does hereby agree to, indemnify the Note Trustee, the Note
Issuer and the Servicer and their respective officers, directors, agents and
employees against any liability that may result if the transfer is not so exempt
from, or is not made in accordance with, the Securities Act and such state laws.
The preceding sentence shall survive the termination of this Indenture and the
earlier removal or resignation of the Note Trustee. None of the Note Issuer,
the Note Trustee or the Servicer is under any obligation to register the Notes
under the Securities Act or any state securities laws.
At the option of the Holder, Notes may be exchanged for other Notes in any
Minimum Denominations, of a like Series and aggregate principal amount, upon
surrender of the Notes to be exchanged at such office or agency. Whenever any
Notes are so surrendered for exchange, the Note Issuer shall execute, and the
Note Trustee shall
23
authenticate and the Noteholder shall obtain from the Note Trustee, the Notes
which the Noteholder making the exchange is entitled to receive.
All Notes issued upon any registration of transfer or exchange of Notes
shall be the valid obligations of the Note Issuer, evidencing the same debt, and
entitled to the same benefits under this Indenture, as the Notes surrendered
upon such registration of transfer or exchange.
Every Note presented or surrendered for registration of transfer or
exchange shall be duly endorsed by, or be accompanied by (a) a written
instrument of transfer in form satisfactory to the Note Trustee duly executed
by, the Holder thereof or such Xxxxxx's attorney duly authorized in writing,
with such signature guaranteed by an institution which is a member of one of the
following recognized Signature Guaranty Programs: (i) The Securities Transfer
Agent Medallion Program (STAMP); (ii) The New York Stock Exchange Medallion
Program (MSP); (iii) The Stock Exchange Medallion Program (SEMP); or (iv) in
such other guarantee program acceptable to the Note Trustee, and (b) such other
documents as the Note Trustee may require.
No service charge shall be made to a Holder for any registration of
transfer or exchange of Notes, but the Note Issuer may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any registration of transfer or exchange of Notes, other than
exchanges pursuant to Section 2.04 or 9.05 not involving any transfer.
The preceding provisions of this Section notwithstanding, the Note Issuer
shall not be required to make and the Note Registrar need not register transfers
or exchanges of Notes selected for redemption or of any Note for a period of 15
days preceding the due date for any payment with respect to the Note.
SECTION 2.06. Mutilated, Destroyed, Lost or Stolen Notes. If (i) any
------------------------------------------
mutilated Note is surrendered to the Note Trustee, or the Note Trustee receives
evidence to its satisfaction of the destruction, loss or theft of any Note, and
(ii) there is delivered to the Note Trustee such security or indemnity as may be
required by it to hold the Note Issuer and the Note Trustee harmless, then, in
the absence of notice to the Note Issuer, the Note Registrar or the Note Trustee
that such Note has been acquired by a protected purchaser, the Note Issuer shall
execute and, upon its request, the Note Trustee shall authenticate and deliver,
in exchange for or in lieu of any such mutilated, destroyed, lost or stolen
Note, a replacement Note of like Series, tenor and principal amount, bearing a
number not contemporaneously outstanding; provided, however, that if any such
destroyed, lost or stolen Note, but not a mutilated Note, shall have become or
within seven days shall be due and payable, or shall have been called for
redemption, instead of issuing a replacement Note, the Note Issuer may pay such
destroyed, lost or stolen Note when so due or payable or upon the Optional
Redemption Date or Mandatory Redemption Date, as applicable, without surrender
thereof. If, after the delivery of such replacement Note or payment of a
destroyed, lost or stolen Note pursuant to the proviso to the preceding
sentence, a protected
24
purchaser of the original Note in lieu of which such replacement Note was issued
presents for payment such original Note, the Note Issuer and the Note Trustee
shall be entitled to recover such replacement Note (or such payment) from the
Person to whom it was delivered or any Person taking such replacement Note from
such Person to whom such replacement Note was delivered or any assignee of such
Person, except a protected purchaser, and shall be entitled to recover upon the
security or indemnity provided therefor to the extent of any loss, damage, cost
or expense incurred by the Note Issuer or the Note Trustee in connection
therewith.
Upon the issuance of any replacement Note under this Section, the Note
Issuer may require the payment by the Holder of such Note of a sum sufficient to
cover any tax or other governmental charge that may be imposed in relation
thereto and any other reasonable expenses (including the fees and expenses of
the Note Trustee) connected therewith.
Every replacement Note issued pursuant to this Section in replacement of
any mutilated, destroyed, lost or stolen Note shall constitute an original
additional contractual obligation of the Note Issuer, whether or not the
mutilated, destroyed, lost or stolen Note shall be at any time enforceable by
anyone, and shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Notes duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Notes.
SECTION 2.07. Persons Deemed Owner. Prior to due presentment for
--------------------
registration of transfer of any Note, the Note Issuer, the Note Trustee and any
agent of the Note Issuer or the Note Trustee may treat the Person in whose name
any Note is registered (as of the day of determination) as the owner of such
Note for the purpose of receiving payments of principal of and premium, if any,
and interest on such Note and for all other purposes whatsoever, whether or not
such Note be overdue, and neither the Note Issuer, the Note Trustee nor any
agent of the Note Issuer or the Note Trustee shall be affected by notice to the
contrary.
SECTION 2.08. Payment of Principal, Premium, if any, and Interest;
----------------------------------------------------
Interest on Overdue Principal; Principal, Premium, if any, and Interest Rights
------------------------------------------------------------------------------
Preserved.
---------
(a) The Notes shall accrue interest as provided in the related Series
Supplement which shall be substantially in the form set forth in Exhibit C
hereto, at the applicable Note Interest Rate specified therein, and such
interest shall be payable on each Payment Date as specified therein. Any
installment of interest, principal or premium, if any, payable on any Note which
is punctually paid or duly provided for by the Note Issuer on the applicable
Payment Date shall be paid to the Person in whose name such Note (or one or more
Predecessor Notes) is registered on the Record Date for such Payment Date, by
check mailed first-class, postage prepaid to such Person's address as it appears
on the Note
25
Register on such Record Date or in such other manner as may be provided in the
related Series Supplement, except that, with respect to Notes registered on the
Record Date in the name of the Certificate Trustee, payments will be made by
wire transfer in immediately available funds to the account designated by the
Certificate Trustee and except that the final installment of principal and
premium, if any, payable with respect to such Note on a Payment Date will be
payable as provided below. The funds represented by any such checks returned
undelivered shall be held in accordance with Section 3.03 hereof.
(b) The principal of each Note of each Series shall be paid, to the extent
funds are available therefor in the Collection Account, in installments on each
Payment Date specified in the related Series Supplement. Notwithstanding the
foregoing, the entire unpaid principal amount of the Notes of a Series shall be
due and payable, if not previously paid, on the date on which an Event of
Default shall have occurred and be continuing with respect to such Series, if
the Note Trustee or the Holders of the Notes representing not less than a
majority of the Outstanding Amount of the Notes of all Series have declared the
Notes to be immediately due and payable in the manner provided in Section 5.02.
All payments of principal and premium, if any, on the Notes of any Series shall
be made pro rata to the Noteholders entitled thereto. The Note Trustee shall
notify the Person in whose name a Note is registered at the close of business on
the Record Date preceding the Payment Date on which the Note Issuer expects that
the final installment of principal of and premium, if any, and interest on such
Note will be paid. Such notice shall be mailed no later than five days prior to
such final Payment Date and shall specify that such final installment will be
payable only upon presentation and surrender of such Note and shall specify the
place where such Note may be presented and surrendered for payment of such
installment. Notices in connection with redemptions of Notes shall be mailed to
Noteholders as provided in Section 10.02.
(c) If the Note Issuer defaults in a payment of interest on the Notes of
any Series when due, the Note Issuer shall pay such defaulted interest (plus
interest on such defaulted interest at the applicable Note Interest Rate to the
extent lawful). The Note Issuer may pay such defaulted interest (plus interest
on such defaulted interest) to the Persons who are Noteholders on a subsequent
special record date, which date shall be at least five Business Days prior to
the payment date. The Note Issuer shall fix or cause to be fixed any such
special record date and payment date, and, at least 20 days before any such
special record date, the Note Issuer shall mail to each affected Noteholder a
notice that states the special record date, the payment date and the amount of
defaulted interest (plus interest on such defaulted interest) to be paid.
SECTION 2.09. Cancellation. All Notes surrendered for payment,
------------
registration of transfer, exchange or redemption shall, if surrendered to any
Person other than the Note Trustee, be delivered to the Note Trustee and shall
be promptly canceled by the Note Trustee. The Note Issuer may at any time
deliver to the Note Trustee for cancellation any Notes previously authenticated
and delivered hereunder that the Note Issuer may have acquired in any manner
whatsoever, and all Notes so delivered shall be promptly canceled by the Note
Trustee. No Notes shall be authenticated in lieu of or in exchange for any
26
Notes canceled as provided in this Section, except as expressly permitted by
this Indenture. All canceled Notes may be held or disposed of by the Note
Trustee in accordance with its standard retention or disposal policy as in
effect at the time.
SECTION 2.10. Amount Unlimited; Authentication and Delivery of Notes. The
------------------------------------------------------
aggregate principal amount of Notes that may be authenticated and delivered
under this Indenture is unlimited.
Notes of a new Series may from time to time be executed by the Note Issuer
and delivered to the Note Trustee for authentication, and thereupon the same
shall be authenticated and delivered by the Note Trustee upon Issuer Request and
upon delivery by the Note Issuer to the Note Trustee, and receipt by the Note
Trustee, or the causing to occur by the Note Issuer, of the following; provided,
however, that compliance with such conditions and delivery of such documents
shall only be required in connection with the original issuance of a Note or
Notes of such Series:
(1) Note Issuer Action. An Issuer Order authorizing and
directing the execution, authentication and delivery of the Notes by
the Note Trustee and specifying the principal amount of Notes to be
authenticated.
(2) Authorizations. (a) An Opinion of Counsel that no
authorization, approval or consent of any governmental body or bodies
at the time having jurisdiction in the premises is required for the
valid issuance, authentication and delivery of such Notes, except for
such registrations as are required under the Blue Sky and securities
laws of any State or such authorizations, approvals or consents of
governmental bodies that have been obtained and copies of which have
been delivered with such Opinion of Counsel.
(b) An Opinion of Counsel that no authorization, approval
or consent of any governmental body or bodies at the time having
jurisdiction in the premises is required for the valid execution
and delivery by the Note Issuer of each of the Basic Documents to
which the Note Issuer is a party, except for such authorizations,
approvals or consents of governmental bodies that have been
obtained and copies of which have been delivered with such
Opinion of Counsel.
(3) Authorizing Certificate. A certificate of an Authorized
Officer of the Note Issuer certifying (i) that the Note Issuer has
duly authorized the execution and delivery of this Indenture and the
related Series Supplement and the execution, authentication and
delivery of the Notes of such Series and (ii) that the Series
Supplement for such Series of Notes shall be in the form attached
thereto, which Series Supplement shall comply with the requirements of
Section 2.02 hereof.
27
(4) The Collateral. The Note Issuer shall have caused all
Collateral to have been Granted to the Note Trustee or, if requested
by the Note Trustee, its nominee and will have caused all related
filings with the CPUC pursuant to the PU Code and other filings in
connection with such Grant to have been duly made.
(5) Certificates of the Note Issuer and the Seller. (a) An
Officer's Certificate from the Note Issuer, dated as of the Series
Issuance Date:
(i) to the effect that the Note Issuer is not in Default
under this Indenture and that, after giving effect to the release
of the lien of the Seller Mortgage, the issuance of the Notes
applied for will not result in any Default or in any breach of
any of the terms, conditions or provisions of or constitute a
default under any indenture, mortgage, deed of trust or other
agreement or instrument to which the Note Issuer is a party or by
which it or its property is bound or any order of any court or
administrative agency entered in any Proceeding to which the Note
Issuer is a party or by which it or its property may be bound or
to which it or its property may be subject; and that all
conditions precedent provided in this Indenture relating to the
authentication and delivery of the Notes applied for have been
complied with;
(ii) to the effect that, after giving effect to the
release of the lien of the Seller Mortgage: (A) the Note Issuer
has not assigned any interest or participation in the Collateral
except for the lien of this Indenture; (B)the Note Issuer has the
power and right to Grant the Collateral to the Note Trustee as
security hereunder, and (C) the Note Issuer, subject to the terms
of this Indenture, has Granted to the Note Trustee all of its
right, title and interest in and to such Collateral free and
clear of any lien, mortgage, pledge, charge, security interest,
adverse claim or other encumbrance arising as a result of actions
of the Note Issuer or through the Note Issuer, except the lien of
this Indenture;
(iii) to the effect that the Note Issuer has appointed the
firm of Independent certified public accountants as contemplated
in Section 8.06 hereof;
(iv) to the effect that attached thereto are duly
executed, true and complete copies of the Sale Agreement or
Subsequent Sale Agreement, as applicable, and the Servicing
Agreement; and
(v) stating that all filings with the CPUC pursuant to
the PU Code and all UCC financing statements with respect to the
28
Collateral that are required to be filed by the terms of the Sale
Agreement or Subsequent Sale Agreement, as applicable, the
Servicing Agreement or this Indenture have been filed as
required.
(b) An Officer's Certificate (as defined in the Sale
Agreement) from the Seller, dated as of the Series Issuance Date,
to the effect that, in the case of the Transition Property
immediately prior to the conveyance thereof to the Note Issuer
pursuant to the Sale Agreement:
(i) after giving effect to the release of the lien of the
Seller Mortgage: (A) the Seller was the owner of such Transition
Property, free and clear of any lien, mortgage, pledge, charge,
security interest, adverse claim or other encumbrance (subject to
any statutory lien in favor of the holders of the rate reduction
bonds issued pursuant to the Financing Order and the trustee or
the representative for such holders pursuant to Section 843(g) of
the PU Code), (B) the Seller had not assigned any interest or
participation in such Transition Property and the proceeds
thereof other than to the Note Issuer pursuant to the Sale
Agreement (or, if assigned, it has been released), (C) the Seller
has the power and right to convey such Transition Property and
the proceeds thereof to the Note Issuer, and (D) the Seller,
subject to the terms of the Sale Agreement, has validly conveyed
to the Note Issuer all of its right, title and interest in and to
such Transition Property and the proceeds thereof, free and clear
of any lien, mortgage, pledge, charge, security interest, adverse
claim or other encumbrance; and
(ii) the attached copies of the Financing Order and Issuance
Advice Letter creating such Transition Property are true and
correct.
(6) Opinion of Counsel. Unless otherwise specified in a Series
Supplement, an Opinion of Counsel, portions of which may be delivered
by counsel for the Note Issuer, portions of which may be delivered by
counsel for the Seller and the Servicer, and portions of which may be
delivered by counsel for the Trust, dated the Series Issuance Date, in
each case subject to the customary exceptions, qualifications and
assumptions contained therein, to the collective effect that:
(a) it is not necessary in connection with the offer, sale
and delivery of (i) the Certificates by the Trust or (ii) the
Notes by the Note Issuer to the Trust pursuant to the Note
Purchase Agreement to register the Certificates or Notes under
the Securities Act or to qualify an indenture in respect thereof
under the Trust Indenture Act;
29
(b) all instruments furnished to the Note Trustee pursuant
to this Indenture conform to the requirements set forth in this
Indenture and constitute all of the documents required to be
delivered hereunder for the Note Trustee to authenticate and
deliver the Notes applied for, and all conditions precedent
provided for in this Indenture relating to the authentication and
delivery of the Notes have been complied with;
(c) the Note Issuer has the power and authority to execute
and deliver the Series Supplement and this Indenture and to
issue the Notes, and each of the Series Supplement and this
Indenture, and the Notes have been duly authorized and the Note
Issuer is duly formed and is validly existing in good standing
under the laws of the jurisdiction of its organization;
(d) the Series Supplement and the Indenture have been duly
authorized, executed and delivered by the Note Issuer;
(e) the Notes applied for have been duly authorized and
executed and, when authenticated in accordance with the
provisions of the Indenture and delivered against payment of the
purchase price therefor, will constitute valid and binding
obligations of the Note Issuer, entitled to the benefits of the
Indenture and the related Series Supplement;
(f) this Indenture, the Sale Agreement or the Subsequent
Sale Agreement, as applicable, the Servicing Agreement and the
related Series Supplement are valid and binding agreements of the
Note Issuer, enforceable in accordance with their respective
terms, except as such enforceability may be subject to
bankruptcy, insolvency, reorganization and other similar laws
affecting the rights of creditors generally and general
principles of equity (regardless of whether such enforceability
is considered in a proceeding in equity or at law);
(g) (I) to the extent that the provisions of Section 843 of
the PU Code apply to the grant of a security interest by the Note
Issuer in the Collateral pursuant to this Indenture, then after
giving effect to the release of the lien of the Seller Mortgage
and upon the giving of value by the Note Trustee to the Note
Issuer with respect to the Collateral, (A) this Indenture creates
in favor of the Note Trustee a security interest in the rights of
the Note Issuer in the Collateral, (B) such security interest is
valid and enforceable against the Note Issuer and third parties
(subject to the rights of any third parties holding security
interests in such Collateral perfected in the manner described
30
in Section 843 of the PU Code), and has attached, (C) such
security interest is perfected, and (D) such perfected security
interest is of first priority (subject to any statutory lien in
favor of the holders of the rate reduction bonds issued pursuant
to the Financing Order and the trustee or the representative for
such holders pursuant to Section 843(g) of the PU Code). (II) To
the extent that the provisions of Section 843 of the PU Code do
not apply to the grant of a security interest by the Note Issuer
in the Collateral pursuant to this Indenture, then after giving
effect to the release of the lien of the Seller Mortgage and upon
the giving of value by the Note Trustee to the Note Issuer with
respect to the Collateral, (A) this Indenture creates in favor of
the Note Trustee a security interest in the rights of the Note
Issuer in the Collateral, and such security interest is
enforceable against the Note Issuer with respect to such
Collateral, (B) such security interest is perfected, and (C) such
perfected security interest is of first priority (subject to any
statutory lien in favor of the holders of the rate reduction
bonds issued pursuant to the Financing Order and the trustee or
the representative for such holders pursuant to Section 843(g) of
the PU Code);
(h) the Notes and the Certificates are exempt from the
registration requirements under the Securities Act;
(i) the Note Issuer is not now and, assuming that the Note
Issuer uses the proceeds of the sale of the Notes for the purpose
of acquiring Transition Property in accordance with the terms of
the Sale Agreement, following the sale of the Notes to the Trust
and the Certificates to the underwriter(s), initial purchaser(s),
placement agent(s) or similar Person(s), neither the Note Issuer
nor the Trust will be required to be registered under the
Investment Company Act of 1940, as amended;
(j) the Sale Agreement is a valid and binding agreement of
the Seller enforceable against the Seller in accordance with its
terms except as such enforceability may be subject to bankruptcy,
insolvency, reorganization and other similar laws affecting the
rights of creditors generally and general principles of equity
(regardless of whether such enforcement is considered in a
proceeding in equity or at law);
(k) the Servicing Agreement is a valid and binding agreement
of the Servicer enforceable against the Servicer in accordance
with its terms except as such enforceability may be subject to
bankruptcy, insolvency, reorganization and other similar laws
affecting the rights of creditors generally and general
principles of
31
equity (regardless of whether such enforcement is considered in a
proceeding in equity or at law);
(l) after giving effect to the release of the Seller
Mortgage and upon the delivery of the fully executed Sale
Agreement to the Note Issuer and the payment of the purchase
price of the Transition Property by the Note Issuer to the Seller
pursuant to the Sale Agreement, then (I) the transfer of the
Transition Property by the Seller to the Note Issuer pursuant to
the Sale Agreement conveys the Seller's right, title and interest
in the Transition Property to the Note Issuer and will be treated
under state law as an absolute transfer of all of the Seller's
right, title, and interest in the Transition Property, other than
for federal and state income and franchise tax purposes, (II)
such transfer of the Transition Property is perfected, (III) such
transfer has priority over any other assignment of the Transition
Property and (IV) the Transition Property is free and clear of
all liens created prior to its transfer to the Note Issuer
pursuant to the Sale Agreement; and
(m) such other matters as the Note Trustee may reasonably
require.
(7) Accountant's Certificate or Opinion. Unless otherwise
specified in a Series Supplement, a certificate or opinion, addressed
to the Note Issuer and the Note Trustee complying with the
requirements of Section 11.01(a) hereof, of a firm of Independent
certified public accountants of recognized national reputation to the
effect that (a) such accountants are Independent with respect to the
Note Issuer within the meaning of the Indenture, and are independent
public accountants within the meaning of the standards of The American
Institute of Certified Public Accountants and (b) with respect to the
Collateral, they have made such calculations as they deemed necessary
for the purpose and determined that, based on the assumptions used in
calculating the initial FTA Charges or, if applicable, the most recent
revised FTA Charges, as of the Series Issuance Date for such Series
(after giving effect to the issuance of such Series and the
application of the proceeds therefrom) such FTA Charges are sufficient
to pay (a) Operating Expenses when incurred, plus (b) the
Overcollateralization Amount, plus (c) interest on each Series of
Notes at their respective Note Interest Rates when due, plus (d)
principal of each Series of Notes in accordance with the Expected
Amortization Schedule.
(8) Rating Agency Condition. The Note Trustee shall receive
evidence reasonably satisfactory to it that the Rating Agency
Condition will be satisfied with respect to the issuance of such new
Series.
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(9) Requirements of Series Supplement. Such other funds,
accounts, documents certificates, agreements, instruments or opinions
as may be required by the terms of the Series Supplement creating such
Series.
(10) Other Requirements. Such other documents, certificates,
agreements, instruments or opinions as the Note Trustee may reasonably
require.
SECTION 2.11. Release of Collateral. Subject to Section 11.01, the Note
---------------------
Trustee shall release property from the lien of this Indenture only as specified
in Section 8.02(d) or upon receipt of an Issuer Request accompanied by an
Officer's Certificate, an Opinion of Counsel.
ARTICLE III
COVENANTS
SECTION 3.01. Payment of Principal, Premium, if any, and Interest. The
---------------------------------------------------
Note Issuer will duly and punctually pay the principal of and premium, if any,
and interest on the Notes in accordance with the terms of the Notes and this
Indenture. Amounts properly withheld under the Code by any Person from a
payment to any Noteholder of interest or principal or premium, if any, shall be
considered as having been paid by the Note Issuer to such Noteholder for all
purposes of this Indenture.
SECTION 3.02. Maintenance of Office or Agency. The Note Issuer will
-------------------------------
maintain in the Borough of Manhattan, The City of New York, an office or agency
where Notes may be surrendered for registration of transfer or exchange. The
Note Issuer hereby initially appoints the Note Trustee to serve as its agent for
the foregoing purposes. The Note Issuer will give prompt written notice to the
Note Trustee of the location, and of any change in the location, of any such
office or agency. If at any time the Note Issuer shall fail to maintain any
such office or agency or shall fail to furnish the Note Trustee with the address
thereof, such surrenders may be made at the Corporate Trust Office, and the Note
Issuer hereby appoints the Note Trustee as its agent to receive all such
surrenders.
SECTION 3.03. Money for Payments To Be Held in Trust. As provided in
--------------------------------------
Section 8.02(a), all payments of amounts due and payable with respect to any
Notes that are to be made from amounts withdrawn from the Collection Account
pursuant to Section 8.02(d) shall be made on behalf of the Note Issuer by the
Note Trustee or by another Paying Agent, and no amounts so withdrawn from the
Collection Account for payments of Notes shall be paid over to the Note Issuer
except as provided in this Section and Section 8.02.
The Note Issuer will cause each Paying Agent other than the Note Trustee to
execute and deliver to the Note Trustee an instrument in which such Paying Agent
shall agree with
33
the Note Trustee (and if the Note Trustee acts as Paying Agent, it hereby so
agrees), subject to the provisions of this Section, that such Paying Agent will:
(i) hold all sums held by it for the payment of amounts due with
respect to the Notes in trust for the benefit of the Persons entitled
thereto until such sums shall be paid to such Persons or otherwise disposed
of as herein provided and pay such sums to such Persons as herein provided;
(ii) give the Note Trustee notice of any default by the Note Issuer
(or by any other obligor upon the Notes) of which such Paying Agent has
actual knowledge in the making of any payment required to be made with
respect to the Notes;
(iii) at any time during the continuance of any such default, upon
the written request of the Note Trustee, forthwith pay to the Note Trustee
all sums so held in trust by such Paying Agent;
(iv) immediately resign as a Paying Agent and forthwith pay to the
Note Trustee all sums held by it in trust for the payment of Notes if at
any time it ceases to meet the standards required to be met by a Paying
Agent at the time of its appointment; and
(v) comply with all requirements of the Code with respect to the
withholding from any payments made by it on any Notes of any applicable
withholding taxes imposed thereon and with respect to any applicable
reporting requirements in connection therewith.
The Note Issuer may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, by Issuer
Order direct any Paying Agent to pay to the Note Trustee all sums held in trust
by such Paying Agent, such sums to be held by the Note Trustee upon the same
trusts as those upon which the sums were held by such Paying Agent; and upon
such payment by any Paying Agent to the Note Trustee, such Paying Agent shall be
released from all further liability with respect to such money.
Subject to applicable laws with respect to escheat of funds, any money held
by the Note Trustee or any Paying Agent in trust for the payment of any amount
due with respect to any Note and remaining unclaimed for two years after such
amount has become due and payable shall be discharged from such trust and be
paid to the Note Issuer on Issuer Request; and, subject to Section 11.18, the
Holder of such Note shall thereafter, as an unsecured general creditor, look
only to the Note Issuer for payment thereof (but only to the extent of the
amounts so paid to the Note Issuer), and all liability of the Note Trustee or
such Paying Agent with respect to such trust money shall thereupon cease;
provided, however, that the Note Trustee or such Paying Agent, before being
required to make any such repayment, may at the expense of the Note Issuer cause
to be published once, in a newspaper published in the English language,
customarily published on each Business Day and of general circulation in The
City of New York, notice that such money remains
34
unclaimed and that, after a date specified therein, which shall not be less than
30 days from the date of such publication, any unclaimed balance of such money
then remaining will be repaid to the Note Issuer. The Note Trustee may also
adopt and employ, at the expense of the Note Issuer, any other reasonable means
of notification of such repayment (including mailing notice of such repayment to
Holders whose Notes have been called but have not been surrendered for
redemption or whose right to or interest in moneys due and payable but not
claimed is determinable from the records of the Note Trustee or of any Paying
Agent, at the last address of record for each such Holder).
SECTION 3.04. Existence. The Note Issuer will keep in full its existence,
---------
rights and franchises as a limited liability company under the laws of the State
of Delaware (unless it becomes, or any successor Note Issuer hereunder is or
becomes, organized under the laws of any other State or of the United States of
America, in which case the Note Issuer will keep in full effect its existence,
rights and franchises under the laws of such other jurisdiction) and will obtain
and preserve its qualification to do business in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Indenture, the Notes, the Collateral and each other
instrument or agreement included in the Collateral.
SECTION 3.05. Protection of Collateral. The Note Issuer will from time to
------------------------
time execute and deliver all such supplements and amendments hereto and all such
filings with the CPUC pursuant to the PU Code, financing statements,
continuation statements, instruments of further assurance and other instruments,
and will take such other action necessary or advisable to:
(i) maintain or preserve the lien and security interest (and the
priority thereof) of this Indenture or carry out more effectively the
purposes hereof;
(ii) perfect, publish notice of or protect the validity of any Grant
made or to be made by this Indenture;
(iii) enforce any of the Collateral;
(iv) preserve and defend title to the Collateral and the rights of
the Note Trustee and the Noteholders in such Collateral against the claims
of all Persons and parties, including the challenge by any party to the
validity or enforceability of the Financing Order, any Advice Letter or the
Transition Property or any proceeding relating thereto and institute any
action or proceeding necessary to compel performance by the CPUC or the
State of California of any of its obligations or duties under the PU Code,
the Financing Order or any Advice Letter; or
(v) pay any and all taxes levied or assessed upon all or any part
of the Collateral.
35
The Note Issuer hereby designates the Note Trustee its agent and attorney-
in-fact to execute any filings with the CPUC, financing statement, continuation
statement or other instrument required by the Note Trustee pursuant to this
Section, it being understood that the Note Trustee shall have no such
obligation.
SECTION 3.06. Opinions as to Collateral.
-------------------------
(a) On the Series Issuance Date for each Series, the Note Issuer shall
furnish to the Note Trustee an Opinion of Counsel either stating that, in the
opinion of such counsel, such action has been taken with respect to the
recording and filing of this Indenture, any indentures supplemental hereto, and
any other requisite documents, and with respect to the execution and filing of
any filings with the CPUC pursuant to the PU Code, financing statements and
continuation statements, as are necessary to perfect and make effective the lien
and security interest of this Indenture and reciting the details of such action,
or stating that, in the opinion of such counsel, no such action is necessary to
make such lien and security interest effective.
(b) On or before September 30 in each calendar year, while any Series is
outstanding, beginning at least three months after the issuance of the first
Series of the Notes, the Note Issuer shall furnish to the Note Trustee an
Opinion of Counsel either stating that, in the opinion of such counsel, such
action has been taken with respect to the recording, filing, re-recording and
refiling of this Indenture, any indentures supplemental hereto and any other
requisite documents and with respect to the execution and filing of any filings
with the CPUC pursuant to the PU Code, financing statements and continuation
statements as is necessary to maintain the lien and security interest created by
this Indenture and reciting the details of such action or stating that in the
opinion of such counsel no such action is necessary to maintain such lien and
security interest. Such Opinion of Counsel shall also describe the recording,
filing, re-recording and refiling of this Indenture, any indentures supplemental
hereto and any other requisite documents and the execution and filing of any
filings with the CPUC, financing statements and continuation statements that
will, in the opinion of such counsel, be required to maintain the lien and
security interest of this Indenture until September 30 in the following calendar
year.
(c) Prior to the effectiveness of any Subsequent Sale Agreement or any
amendment to the Sale Agreement, the Note Issuer shall furnish to the Note
Trustee an Opinion of Counsel either (A) stating that, in the opinion of such
counsel, all filings, including filings with the CPUC pursuant to the PU Code,
have been executed and filed that are necessary fully to preserve and protect
the interest of the Note Issuer and the Note Trustee in the Transition Property
and the proceeds thereof, and reciting the details of such filings or referring
to prior Opinions of Counsel in which such details are given, or (B) stating
that, in the opinion of such counsel, no such action shall be necessary to
preserve and protect such interest.
SECTION 3.07. Performance of Obligations; Servicing.
-------------------------------------
36
(a) The Note Issuer (i) will diligently pursue any and all actions to
enforce its rights under each instrument or agreement included in the Collateral
and (ii) will not take any action and will use its best efforts not to permit
any action to be taken by others that would release any Person from any of such
Person's covenants or obligations under any such instrument or agreement or that
would result in the amendment, hypothecation, subordination, termination or
discharge of, or impair the validity or effectiveness of, any such instrument or
agreement, except, in each case, as expressly provided in this Indenture, the
Sale Agreement, the Servicing Agreement or such other instrument or agreement.
(b) The Note Issuer may contract with other Persons to assist it in
performing its duties under this Indenture, and any performance of such duties
by a Person identified to the Note Trustee in an Officer's Certificate of the
Note Issuer shall be deemed to be action taken by the Note Issuer. Initially,
the Note Issuer has contracted with the Servicer to assist the Note Issuer in
performing its duties under this Indenture.
(c) The Note Issuer will punctually perform and observe all of its
obligations and agreements contained in this Indenture, the Basic Documents and
in the instruments and agreements included in the Collateral, including filing
or causing to be filed all filings with the CPUC pursuant to the PU Code, UCC
financing statements and continuation statements required to be filed by it by
the terms of this Indenture, the Sale Agreement and the Servicing Agreement in
accordance with and within the time periods provided for herein and therein.
Except as otherwise expressly permitted therein, the Note Issuer shall not
waive, amend, modify, supplement or terminate any Basic Document or any
provision thereof without the written consent of the Note Trustee (which consent
shall not be withheld if (i) the Note Trustee shall have received an Officer's
Certificate stating that such waiver, amendment, modification, supplement or
termination shall not adversely affect in any material respect the interests of
the Noteholders or the holders of Certificates and (ii) the Rating Agency
Condition shall have been satisfied with respect thereto) or the Holders of at
least a majority of the Outstanding Amount of Notes of all Series.
(d) If the Note Issuer shall have knowledge of the occurrence of a Servicer
Default under the Servicing Agreement, the Note Issuer shall promptly give
written notice thereof to the Note Trustee, the Infrastructure Bank and Moody's,
and shall specify in such notice the action, if any, the Note Issuer is taking
with respect of such default. If a Servicer Default shall arise from the
failure of the Servicer to perform any of its duties or obligations under the
Servicing Agreement with respect to the Transition Property or the FTA Charges,
the Note Issuer shall take all reasonable steps available to it to remedy such
failure.
(e) As promptly as possible after the giving of notice of termination to
the Servicer and Moody's, the Servicer's rights and powers pursuant to Section
7.01 of the Servicing Agreement, the Note Issuer shall appoint a successor
Servicer (the "Successor Servicer") with the Note Trustee's prior written
------------------
consent thereto (which consent shall not be unreasonably withheld), and such
Successor Servicer shall accept its appointment by a written assumption in a
form acceptable to the Note Issuer and the Note Trustee. A Person
37
shall qualify as a Successor Servicer only if such Person satisfies the
requirements of the Servicing Agreement. If within 30 days after the delivery of
the notice referred to above, the Note Issuer shall not have obtained such a new
Servicer, the Note Trustee may petition the CPUC or a court of competent
jurisdiction to appoint a Successor Servicer. In connection with any such
appointment, the Note Issuer may make such arrangements for the compensation of
such successor as it and such successor shall agree, subject to the limitations
set forth below and in the Servicing Agreement, and in accordance with Section
7.02 of the Servicing Agreement, the Note Issuer shall enter into an agreement
with such successor for the servicing of the Transition Property (such agreement
to be in form and substance satisfactory to the Note Trustee).
(f) Upon any termination of the Servicer's rights and powers pursuant to
the Servicing Agreement, the Note Trustee shall promptly notify the Note Issuer,
the Noteholders, the Infrastructure Bank and Moody's. As soon as a Successor
Servicer is appointed, the Note Issuer shall notify the Note Trustee, the
Noteholders and Moody's of such appointment, specifying in such notice the name
and address of such Successor Servicer.
(g) Without derogating from the absolute nature of the assignment granted
to the Note Trustee under this Indenture or the rights of the Note Trustee
hereunder, the Note Issuer agrees that it will not, without the prior written
consent of the Note Trustee or the Holders of at least a majority in Outstanding
Amount of the Notes of all Series, amend, modify, waive, supplement, terminate
or surrender, or agree to any amendment, modification, supplement, termination,
waiver or surrender of, the terms of any Collateral or the Basic Documents, or
waive timely performance or observance by the Seller or the Servicer under the
Sale Agreement or the Servicing Agreement, respectively. If any such amendment,
modification, supplement or waiver shall be so consented to by the Note Trustee
or such Holders, the Note Issuer agrees to execute and deliver, in its own name
and at its own expense, such agreements, instruments, consents and other
documents as shall be necessary or appropriate in the circumstances. The Note
Issuer agrees that no such amendment, modification, supplement or waiver shall
adversely affect the rights of the Holders of the Notes outstanding at the time
of any such amendment, modification, supplement or waiver.
(h) The Note Issuer shall furnish to the Noteholders and to prospective
investors, upon the request of such Noteholders and prospective investors, any
information required to be delivered pursuant to Rule 144A(d)(4) under the
Securities Act for so long as the Notes are not freely transferable under the
Securities Act, and, in any event, such information shall include all
information that the Note Issuer would be required to file with the SEC if the
Notes were not exempt from registration.
(i) The Note Issuer shall make all filings required under the Statute
relating to the transfer of the ownership or security interest in the Transition
Property other than those required to be made by the Seller pursuant to the
Basic Documents.
38
SECTION 3.08. Negative Covenants. For so long as any Notes are
------------------
Outstanding, the Note Issuer shall not:
(i) except as expressly permitted by this Indenture, sell,
transfer, exchange or otherwise dispose of any of the properties or assets
of the Note Issuer, including those included in the Collateral, unless
directed to do so by the Note Trustee in accordance with Article V;
(ii) claim any credit on, or make any deduction from the principal
or premium, if any, or interest payable in respect of, the Notes (other
than amounts properly withheld from such payments under the Code) or assert
any claim against any present or former Noteholder by reason of the payment
of the taxes levied or assessed upon any part of the Collateral;
(iii) terminate its existence or dissolve or liquidate in whole or in
part; or
(iv) (A) permit the validity or effectiveness of this Indenture to
be impaired, or permit the lien of this Indenture to be amended,
hypothecated, subordinated, terminated or discharged, or permit any Person
to be released from any covenants or obligations with respect to the Notes
under this Indenture except as may be expressly permitted hereby, (B)
permit any lien, charge, excise, claim, security interest, mortgage or
other encumbrance (other than the lien of this Indenture and any statutory
lien under Section 843(g) of the PU Code) to be created on or extend to or
otherwise arise upon or burden the Collateral or any part thereof or any
interest therein or the proceeds thereof or (C) subject to any statutory
lien under Section 843(g) of the PU Code, permit the lien of this Indenture
not to constitute a valid first priority security interest in the
Collateral.
SECTION 3.09. Annual Statement as to Compliance. The Note Issuer will
---------------------------------
deliver to the Note Trustee, the Certificate Trustee and Moody's not later than
September 30 of each year (commencing with September 30, 1999), an Officer's
Certificate stating, as to the Authorized Officer signing such Officer's
Certificate, that
(i) a review of the activities of the Note Issuer during the
preceding twelve months ended June 30 and of performance under this
Indenture has been made under such Authorized Officer's supervision; and
(ii) to the best of such Authorized Officer's knowledge, based on
such review, the Note Issuer has complied with all conditions and covenants
under this Indenture throughout such twelve month period, or, if there has
been a default in the compliance of the Note Issuer with any such condition
or covenant, specifying each such default known to such Authorized Officer
and the nature and status thereof.
SECTION 3.10. Note Issuer May Consolidate, etc., Only on Certain Terms.
--------------------------------------------------------
39
(a) The Note Issuer shall not consolidate or merge with or into any other
Person, unless
(i) the Person (if other than the Note Issuer) formed by or
surviving such consolidation or merger shall be a Person organized and
existing under the laws of the United States of America or any State and
shall expressly assume, by an indenture supplemental hereto, executed and
delivered to the Note Trustee, in form and substance satisfactory to the
Note Trustee, the due and punctual payment of the principal of and premium,
if any, and interest on all Notes and the performance or observance of
every agreement and covenant of this Indenture on the part of the Note
Issuer to be performed or observed, all as provided herein and in the
applicable Series Supplement or Series Supplements;
(ii) immediately after giving effect to such transaction, no Default
or Event of Default shall have occurred and be continuing;
(iii) the Rating Agency Condition shall have been satisfied with
respect to such transaction;
(iv) the Note Issuer shall have received an Opinion of Counsel (and
shall have delivered copies thereof to the Note Trustee) to the effect that
such transaction will not have any material adverse tax consequence to the
Note Issuer, the Trust, any Noteholder or any Certificateholder;
(v) any action as is necessary to maintain the lien and security
interest created by this Indenture shall have been taken; and
(vi) the Note Issuer shall have delivered to the Note Trustee an
Officer's Certificate and an Opinion of Counsel each stating that such
consolidation or merger and such supplemental indenture comply with this
Section 3.10 and that all conditions precedent herein provided for relating
to such transaction have been complied with (including any filing required
by the Exchange Act).
(b) Except as specifically provided herein, the Note Issuer shall not
convey or transfer any of its properties or assets, including those
included in the Collateral, to any Person, unless
(i) the Person that acquires by conveyance or transfer the
properties and assets of the Note Issuer the conveyance or transfer of
which is hereby restricted shall (A) be a United States citizen or a Person
organized and existing under the laws of the United States of America or
any State, (B) expressly assumes, by an indenture supplemental hereto,
executed and delivered to the Note Trustee, in form and substance
satisfactory to the Note Trustee, the due and punctual payment of the
principal of and premium, if any, and interest on all Notes and the
performance or
40
observance of every agreement and covenant of this Indenture on the part of
the Note Issuer to be performed or observed, all as provided herein and in
the applicable Series Supplement or Series Supplements, (C) expressly
agrees by means of such supplemental indenture that all right, title and
interest so conveyed or transferred shall be subject and subordinate to the
rights of Holders of the Notes, (D) unless otherwise provided in the
supplemental indenture referred to in clause (B) above, expressly agrees to
indemnify, defend and hold harmless the Note Issuer against and from any
loss, liability or expense arising under or related to this Indenture and
the Notes and (E) expressly agrees by means of such supplemental indenture
that such Person (or if a group of Persons, then one specified Person)
shall deliver any information required to be delivered pursuant to Rule
144A(d)(4) under the Securities Act;
(ii) immediately after giving effect to such transaction, no Default
or Event of Default shall have occurred and be continuing;
(iii) the Rating Agency Condition shall have been satisfied with
respect to such transaction;
(iv) the Note Issuer shall have received an Opinion of Counsel (and
shall have delivered copies thereof to the Note Trustee) to the effect that
such transaction will not have any material adverse tax consequence to the
Note Issuer, the Trust, any Noteholder or any Certificateholder;
(v) any action as is necessary to maintain the lien and security
interest created by this Indenture shall have been taken; and
(vi) the Note Issuer shall have delivered to the Note Trustee an
Officer's Certificate and an Opinion of Counsel each stating that such
conveyance or transfer and such supplemental indenture comply with this
Section 3.10 and that all conditions precedent herein provided for relating
to such transaction have been complied with.
SECTION 3.11. Successor or Transferee.
-----------------------
(a) Upon any consolidation or merger of the Note Issuer in accordance with
Section 3.10(a), the Person formed by or surviving such consolidation or merger
(if other than the Note Issuer) shall succeed to, and be substituted for, and
may exercise every right and power of, the Note Issuer under this Indenture with
the same effect as if such Person had been named as the Note Issuer herein.
(b) Except as set forth in Section 6.07, upon a conveyance or transfer of
all the assets and properties of the Note Issuer pursuant to Section 3.10(b),
SPPC Funding LLC will be released from every covenant and agreement of this
Indenture to be observed or performed on the part of the Note Issuer with
respect to the Notes immediately upon the
41
delivery of written notice to the Note Trustee stating that SPPC Funding LLC is
to be so released.
SECTION 3.12. No Other Business. The Note Issuer shall not engage any
-----------------
business other than financing, purchasing, owning and managing the Transition
Property in the manner contemplated by this Indenture and the Basic Documents
and activities incidental thereto.
SECTION 3.13. No Borrowing. The Note Issuer shall not issue, incur,
------------
assume, guarantee or otherwise become liable, directly or indirectly, for any
indebtedness except for the Notes.
SECTION 3.14. Servicer's Obligations. The Note Issuer shall enforce the
----------------------
Servicer's compliance with all of the Servicer's material obligations under the
Servicing Agreement.
SECTION 3.15. Guarantees, Loans, Advances and Other Liabilities. Except
-------------------------------------------------
as otherwise contemplated by the Sale Agreement, the Servicing Agreement or this
Indenture, the Note Issuer shall not make any loan or advance or credit to, or
guarantee (directly or indirectly or by an instrument having the effect of
assuring another's payment or performance on any obligation or capability of so
doing or otherwise), endorse or otherwise become contingently liable, directly
or indirectly, in connection with the obligations, stocks or dividends of, or
own, purchase, repurchase or acquire (or agree contingently to do so) any stock,
obligations, assets or securities of, or any other interest in, or make any
capital contribution to, any other Person.
SECTION 3.16. Capital Expenditures. Other than expenditures in an
--------------------
aggregate amount not to exceed $25,000 in any calendar year, the Note Issuer
shall not make any expenditure (by long-term or operating lease or otherwise)
for capital assets (either realty or personalty).
SECTION 3.17. Non-Routine True-Up Adjustment. The Note Issuer agrees that
------------------------------
it shall not consent to a Non-Routine True-Up Adjustment pursuant to Section
4.01(c) of the Servicing Agreement unless the Rating Agency Condition shall have
been satisfied.
SECTION 3.18. Restricted Payments. The Note Issuer shall not, directly or
-------------------
indirectly, (i) pay any dividend or make any distribution (by reduction of
capital or otherwise), whether in cash, property, securities or a combination
thereof, to any owner of a beneficial interest in the Note Issuer or otherwise
with respect to any ownership or equity interest or security in or of the Note
Issuer, (ii) redeem, purchase, retire or otherwise acquire for value any such
ownership or equity interest or security or (iii) set aside or otherwise
segregate any amounts for any such purpose; provided, however, that, if no Event
of Default shall have occurred and be continuing, the Note Issuer may make, or
cause to be made, any such distributions to any owner of a beneficial interest
in the Note Issuer or otherwise with respect to any ownership or equity interest
or security in or of the Note Issuer using funds distributed to the Note Issuer
pursuant to Section 8.02(d) to the
42
extent that such distributions would not cause the book value of the remaining
equity in the Note Issuer to decline below 0.5 percent of the original principal
amount of all Series of Notes which remain outstanding. The Note Issuer will
not, directly or indirectly, make payments to or distributions from the
Collection Account except in accordance with this Indenture and the Basic
Documents.
SECTION 3.19. Notice of Events of Default. The Note Issuer agrees give
---------------------------
the Note Trustee and Moody's prompt written notice of each Event of Default
hereunder and each default on the part of the Seller or the Servicer of its
obligations under the Sale Agreement or the Servicing Agreement, respectively.
SECTION 3.20. Further Instruments and Acts. Upon request of the Note
----------------------------
Trustee, the Note Issuer will execute and deliver such further instruments and
do such further acts as may be reasonably necessary or proper to carry out more
effectively the purpose of this Indenture.
SECTION 3.21. Purchase of Subsequent Transition Property.
------------------------------------------
(a) The Note Issuer may from time to time purchase Subsequent Transition
Property from the Seller pursuant to a Subsequent Sale Agreement, subject to the
conditions specified in paragraph (b) below.
(b) The Note Issuer shall be permitted to purchase from the Seller
Subsequent Transition Property and the proceeds thereof only upon the
satisfaction of each of the following conditions on or prior to the related
Subsequent Sale Date:
(i) the Seller shall have provided the Note Issuer, the Note
Trustee and Moody's with written notice, which shall be given not later
than 10 days prior to the related Subsequent Sale Date, specifying the
Subsequent Sale Date for such Subsequent Transition Property and the
aggregate amount of the FTA Charges related to such Subsequent Transition
Property, and shall have provided any information reasonably requested by
any of the foregoing Persons with respect to the Subsequent Transition
Property then being conveyed to the Note Issuer;
(ii) the Seller and the Note Issuer shall have delivered to the Note
Trustee a duly executed Subsequent Sale Agreement in substantially the form
of the Sale Agreement;
(iii) as of such Subsequent Sale Date, the Seller was not insolvent
and will not have been made insolvent by such transfer and the Seller is
not aware of any pending insolvency with respect to itself;
(iv) the Rating Agency Condition shall have been satisfied with
respect to such conveyance;
43
(v) such conveyance will not result in an adverse tax consequence
to the Note Issuer, the Trust, the Noteholders or the Certificateholders;
(vi) as of such Subsequent Sale Date, no breach by the Seller of its
representations, warranties or covenants in the Sale Agreement and no
Servicer Default shall exist;
(vii) as of such Subsequent Sale Date, the Note Issuer shall have
sufficient funds available to pay the purchase price for the Subsequent
Transition Property to be conveyed on such date and all conditions to the
issuance of one or more Series of Notes intended to provide such funds set
forth in Section 2.10 of this Indenture shall have been satisfied;
(viii) the Note Issuer shall have delivered to the Note Trustee an
Officer's Certificate confirming the satisfaction of each condition
precedent specified in this paragraph (b);
(ix) (A) the Note Issuer shall have delivered to Moody's any
Opinions of Counsel requested by Moody's and (B) the Note Issuer shall have
delivered to the Note Trustee the Opinion of Counsel required by Section
3.06(c) of this Indenture; and
(x) subject to any statutory lien under Section 843(g) of the PU
Code, the Seller and the Note Issuer shall have taken any action required
to maintain the first perfected ownership interest of the Note Issuer in
the Transition Property and the proceeds thereof, and the Note Issuer shall
have taken any action required to maintain first perfected security
interest of the Note Trustee in the Transition Property and the proceeds
thereof.
ARTICLE IV
SATISFACTION AND DISCHARGE; DEFEASANCE
--------------------------------------
SECTION 4.01.
(a) Satisfaction and Discharge of Indenture; Defeasance. This Indenture
---------------------------------------------------
shall cease to be of further effect with respect to the Notes of any Series, and
the Note Trustee, on reasonable demand of and at the expense of the Note Issuer,
shall execute proper instruments acknowledging satisfaction and discharge of
this Indenture with respect to the Notes of such Series, when
(A) either
(1) all Notes of such Series theretofore authenticated and
delivered (other than (i) Notes that have been destroyed, lost or
stolen and that have
44
been replaced or paid as provided in Section 2.06 and (ii) Notes for
whose payment money has theretofore been deposited in trust or
segregated and held in trust by the Note Issuer and thereafter repaid
to the Note Issuer or discharged from such trust, as provided in
Section 3.03) have been delivered to the Note Trustee for
cancellation; or
(2) the Scheduled Maturity Date has occurred with respect to all
Notes of such Series not theretofore delivered to the Note Trustee for
cancellation, and the Note Issuer has irrevocably deposited or caused
to be irrevocably deposited with the Note Trustee cash, in trust for
such purpose, in an amount sufficient to pay and discharge the entire
indebtedness on such Notes not theretofore delivered to the Note
Trustee for cancellation on the Scheduled Maturity Date therefor;
(B) the Note Issuer has paid or caused to be paid all other sums
payable hereunder by the Note Issuer with respect to such Series; and
(C) the Note Issuer has delivered to the Note Trustee an Officer's
Certificate, an Opinion of Counsel and (if required by the Note Trustee) an
Independent Certificate from a firm of certified public accountants, each
meeting the applicable requirements of Section 11.01(a) and each stating
that all conditions precedent herein provided for relating to the
satisfaction and discharge of this Indenture with respect to Notes of such
Series have been complied with.
(b) Subject to Sections 4.01(c) and 4.02, the Note Issuer at any time may
terminate (i) all its obligations under this Indenture with respect to the Notes
of any Series ("Legal Defeasance Option") or (ii) its obligations under Sections
-----------------------
3.04, 3.05, 3.06, 3.07, 3.08, 3.09, 3.10, 3.12, 3.13, 3.14, 3.15, 3.16, 3.17 and
3.18 and the operation of Section 5.01(iv) ("Covenant Defeasance Option") with
--------------------------
respect to any Series of Notes. The Note Issuer may exercise the Legal
Defeasance Option with respect to any Series of Notes notwithstanding its prior
exercise of the Covenant Defeasance Option with respect to such Series.
If the Note Issuer exercises the Legal Defeasance Option with respect to
any Series, the maturity of the Notes of such Series may not be accelerated
because of an Event of Default. If the Note Issuer exercises the Covenant
Defeasance Option with respect to any Series, the maturity of the Notes of such
Series may not be accelerated because of an Event of Default specified in
Section 5.01(iv).
Upon satisfaction of the conditions set forth herein to the exercise of the
Legal Defeasance Option or the Covenant Defeasance Option with respect to any
Series of Notes the Note Trustee, on reasonable demand of and at the expense of
the Note Issuer, shall execute proper instruments acknowledging satisfaction and
discharge of the obligations that are terminated pursuant to such exercise.
45
(c) Notwithstanding Sections 4.01(a) and 4.01(b) above, (i) rights of
registration of transfer and exchange, (ii) substitution of mutilated,
destroyed, lost or stolen Notes, (iii) rights of Noteholders to receive payments
of principal, premium, if any, and interest, (iv) Sections 4.03 and 4.04, (v)
the rights, obligations and immunities of the Note Trustee hereunder (including
the rights of the Note Trustee under Section 6.07 and the obligations of the
Note Trustee under Section 4.03) and (vi) the rights of Noteholders as
beneficiaries hereof with respect to the property deposited with the Note
Trustee payable to all or any of them, shall survive until the Notes of the
Series as to which this Indenture or certain obligations hereunder have been
satisfied and discharged pursuant to Section 4.01(a) or 4.01(b) have been paid
in full. Thereafter, the obligations in Sections 6.07 and 4.04 with respect to
such Series shall survive.
SECTION 4.02. Conditions to Defeasance. The Note Issuer may exercise the
------------------------
Legal Defeasance Option or the Covenant Defeasance Option with respect to any
Series of Notes only if:
(a) the Note Issuer irrevocably deposits or causes to be deposited in
trust with the Note Trustee cash or U.S. Government Obligations for the
payment of principal of and premium, if any, and interest on such Notes to
the Scheduled Maturity Dates, Optional Redemption Date or Mandatory
Redemption Date therefor, as applicable;
(b) the Note Issuer delivers to the Note Trustee a certificate from a
nationally recognized firm of Independent accountants expressing its
opinion that the payments of principal and interest when due and without
reinvestment on the deposited U.S. Government Obligations plus any
deposited cash without investment will provide cash at such times and in
such amounts (but, in the case of the Legal Defeasance Option only, not
more than such amounts) as will be sufficient to pay in respect of the
Notes of such Series (i) subject to clause (ii), principal in accordance
with the Expected Amortization Schedule therefor, (ii) if such Series is to
be redeemed, the Optional Redemption Price or Mandatory Redemption Price,
as applicable, therefor on the Optional Redemption Date or Mandatory
Redemption Date, as applicable, therefor and (iii) interest when due;
(c) in the case of the Legal Defeasance Option, 91 days pass after
the deposit is made and during the 91-day period no Default specified in
Section 5.01(v) or (vi) occurs which is continuing at the end of the
period;
(d) no Default has occurred and is continuing on the day of such
deposit and after giving effect thereto;
(e) in the case of an exercise of the Legal Defeasance Option, the
Note Issuer shall have delivered to the Note Trustee an Opinion of Counsel
stating that (i) the Note Issuer has received from, or there has been
published by, the Internal Revenue Service a ruling, or (ii) since the date
of execution of this Indenture, there
46
has been a change in the applicable Federal income tax law, in either case
to the effect that, and based thereon such opinion shall confirm that, the
Holders of the Notes of such Series will not recognize income, gain or loss
for Federal income tax purposes as a result of such legal defeasance and
will be subject to Federal income tax on the same amounts, in the same
manner and at the same times as would have been the case if such legal
defeasance had not occurred;
(f) in the case of an exercise of the Covenant Defeasance Option, the
Note Issuer shall have delivered to the Note Trustee an Opinion of Counsel
to the effect that the Holders of the Notes of such Series will not
recognize income, gain or loss for Federal income tax purposes as a result
of such covenant defeasance and will be subject to Federal income tax on
the same amounts, in the same manner and at the same times as would have
been the case if such covenant defeasance had not occurred; and
(g) the Note Issuer delivers to the Note Trustee an Officer's
Certificate and an Opinion of Counsel, each stating that all conditions
precedent to the satisfaction and discharge of the Notes of such Series to
the extent contemplated by this Article IV have been complied with.
Before or after a deposit pursuant to this Section 4.02 with respect to any
Series of Notes, the Note Issuer may make arrangements satisfactory to the Note
Trustee for the redemption of such Notes at a future date in accordance with
Article X.
SECTION 4.03. Application of Trust Money. All moneys or U.S. Government
--------------------------
Obligations deposited with the Note Trustee pursuant to Section 4.01 or 4.02
hereof shall be held in trust and applied by it, in accordance with the
provisions of the Notes and this Indenture, to the payment, either directly or
through any Paying Agent, as the Note Trustee may determine, to the Holders of
the particular Notes for the payment or redemption of which such moneys have
been deposited with the Note Trustee, of all sums due and to become due thereon
for principal, premium, if any, and interest; but such moneys need not be
segregated from other funds except to the extent required herein or in the
Servicing Agreement or required by law.
SECTION 4.04. Repayment of Moneys Held by Paying Agent. In connection
----------------------------------------
with the satisfaction and discharge of this Indenture or the Covenant Defeasance
Option or Legal Defeasance Option with respect to the Notes of any Series, all
moneys then held by any Paying Agent other than the Note Trustee under the
provisions of this Indenture with respect to such Notes shall, upon demand of
the Note Issuer, be paid to the Note Trustee to be held and applied according to
Section 3.03 and thereupon such Paying Agent shall be released from all further
liability with respect to such moneys.
ARTICLE V
REMEDIES
47
SECTION 5.01. Events of Default. "Event of Default" with respect to any
----------------- ----------------
Series, wherever used herein, means any one of the following events (whatever
the reason for such Event of Default and whether it shall be voluntary or
involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
(i) default in the payment of any interest on any Note when the
same becomes due and payable, and such default shall continue for a period
of five days; or
(ii) default in the payment of the then unpaid principal of any Note
of any Series on the Final Maturity Date for such Series; or
(iii) default in the payment of the Optional Redemption Price for any
Note on the Optional Redemption Date therefor, or a default in the payment
of the Mandatory Redemption Price for the Notes on the Mandatory Redemption
Date;
(iv) default in the observance or performance of any covenant or
agreement of the Note Issuer made in this Indenture (other than a covenant
or agreement, a default in the observance or performance of which is
elsewhere in this Section specifically dealt with), or any representation
or warranty of the Note Issuer made in this Indenture or in any certificate
or other writing delivered pursuant hereto or in connection herewith
proving to have been incorrect in any material respect as of the time when
the same shall have been made, and such default shall continue or not be
cured, or the circumstance or condition in respect of which such
misrepresentation or warranty was incorrect shall not have been eliminated
or otherwise cured, for a period of 30 days after there shall have been
given, by registered or certified mail, to the Note Issuer by the Note
Trustee or to the Note Issuer and the Note Trustee by the Holders of at
least 25 percent of the Outstanding Amount of the Notes of such Series, a
written notice specifying such default or incorrect representation or
warranty and requiring it to be remedied and stating that such notice is a
"Notice of Default" hereunder; or
-----------------
(v) the filing of a decree or order for relief by a court having
jurisdiction in the premises in respect of the Note Issuer or any
substantial part of the Collateral in an involuntary case under any
applicable Federal or state bankruptcy, insolvency or other similar law now
or hereafter in effect, or appointing a receiver, liquidator, assignee,
custodian, trustee, sequestrator or similar official of the Note Issuer or
for any substantial part of the Collateral, or ordering the winding-up or
liquidation of the Note Issuer's affairs, and such decree or order shall
remain unstayed and in effect for a period of 60 consecutive days; or
(vi) the commencement by the Note Issuer of a voluntary case under
any applicable Federal or state bankruptcy, insolvency or other similar law
now or
48
hereafter in effect, or the consent by the Note Issuer to the entry of an
order for relief in an involuntary case under any such law, or the consent
by the Note Issuer to the appointment or taking possession by a receiver,
liquidator, assignee, custodian, trustee, sequestrator or similar official
of the Note Issuer or for any substantial part of the Collateral, or the
making by the Note Issuer of any general assignment for the benefit of
creditors, or the failure by the Note Issuer generally to pay its debts as
such debts become due, or the taking of action by the Note Issuer in
furtherance of any of the foregoing.
The Note Issuer shall deliver to a Responsible Officer of the Note Trustee
and Moody's, within five days after an Authorized Officer has knowledge of the
occurrence thereof, written notice in the form of an Officer's Certificate of
any event which with the giving of notice and the lapse of time would become an
Event of Default under clause (iv), its status and what action the Note Issuer
is taking or proposes to take with respect thereto.
SECTION 5.02. Acceleration of Maturity; Rescission and Annulment. If an
--------------------------------------------------
Event of Default should occur and be continuing with respect to any Series, then
and in every such case the Note Trustee or the Holders of Notes representing not
less than a majority of the Outstanding Amount of the Notes of all Series may
declare all the Notes to be immediately due and payable, by a notice in writing
to the Note Issuer (and to the Note Trustee if given by Note holders), and upon
any such declaration the unpaid principal amount of the Notes of all Series,
together with accrued and unpaid interest thereon through the date of
acceleration, shall become immediately due and payable.
At any time after such declaration of acceleration of maturity has been
made and before a judgment or decree for payment of the money due has been
obtained by the Note Trustee as hereinafter in this Article V provided, the
Holders of Notes representing a majority of the Outstanding Amount of the Notes
of all Series, by written notice to the Note Issuer and the Note Trustee, may
rescind and annul such declaration and its consequences if:
(i) the Note Issuer has paid or deposited with the Note Trustee a sum
sufficient to pay
(A) all payments of principal of and premium, if any, and
interest on all Notes of all Series and all other amounts that would
then be due hereunder or upon such Notes if the Event of Default
giving rise to such acceleration had not occurred; and
(B) all sums paid or advanced by the Note Trustee hereunder and
the reasonable compensation, expenses, disbursements and advances of
the Note Trustee and its agents and counsel; and
49
(ii) all Events of Default with respect to all Series, other than the
nonpayment of the principal of the Notes of all Series that has become due
solely by such acceleration, have been cured or waived as provided in
Section 5.12.
No such rescission shall affect any subsequent default or impair any right
consequent thereto.
SECTION 5.03. Collection of Indebtedness and Suits for Enforcement by Note
------------------------------------------------------------
Trustee.
-------
(a) The Note Issuer covenants that if (i) default is made in the payment
of any interest on any Note of a Series when the same becomes due and payable,
and such default continues for a period of five days, (ii) default is made in
the payment of the then unpaid principal of any Note of any Series on the Final
Maturity Date for such Note or (iii) default is made in the payment of the
Optional Redemption Price or Mandatory Redemption Price, as applicable, for any
Note on the Optional Redemption Date or Mandatory Redemption Date, as
applicable, therefor, the Note Issuer will, upon demand of the Note Trustee, pay
to it, for the benefit of the Holders of the Notes of such Series, the whole
amount then due and payable on such Notes for principal, premium, if any, and
interest, with interest upon the overdue principal and premium, if any, and, to
the extent payment at such rate of interest shall be legally enforceable, upon
overdue installments of interest, at the respective rate borne by the Notes of
such Series and in addition thereto such further amount as shall be sufficient
to cover the costs and expenses of collection, including the reasonable
compensation, expenses, disbursements and advances of the Note Trustee and its
agents and counsel.
(b) Subject to Section 11.18, in case the Note Issuer shall fail forthwith
to pay such amounts upon such demand, the Note Trustee, in its own name and as
trustee of an express trust, may institute a Proceeding for the collection of
the sums so due and unpaid, and may prosecute such Proceeding to judgment or
final decree, and may enforce the same against the Note Issuer or other obligor
upon such Notes and collect in the manner provided by law out of the property of
the Note Issuer or other obligor upon such Notes, wherever situated, the moneys
adjudged or decreed to be payable.
(c) If an Event of Default occurs and is continuing with respect to any
Series, the Note Trustee may, as more particularly provided in Section 5.04, in
its discretion, proceed to protect and enforce its rights and the rights of the
Noteholders of such Series, by such appropriate Proceedings as the Note Trustee
shall deem most effective to protect and enforce any such rights, whether for
the specific enforcement of any covenant or agreement in this Indenture or in
aid of the exercise of any power granted herein, or to enforce any other proper
remedy or legal or equitable right vested in the Note Trustee by this Indenture
or by law.
(d) In case there shall be pending, relative to the Note Issuer or any
other obligor upon the Notes or any Person having or claiming an ownership
interest in the Collateral,
50
Proceedings under Title 11 of the United States Code or any other applicable
Federal or state bankruptcy, insolvency or other similar law, or in case a
receiver, assignee or trustee in bankruptcy or reorganization, liquidator,
sequestrator or similar official shall have been appointed for or taken
possession of the Note Issuer or its property or such other obligor or Person,
or in case of any other comparable judicial Proceedings relative to the Note
Issuer or other obligor upon the Notes of any Series, or to the creditors or
property of the Note Issuer or such other obligor, the Note Trustee,
irrespective of whether the principal of any Notes of any Series shall then be
due and payable as therein expressed or by declaration or otherwise and
irrespective of whether the Note Trustee shall have made any demand pursuant to
the provisions of this Section, shall be entitled and empowered, by intervention
in such Proceedings or otherwise:
(i) to file and prove a claim or claims for the whole amount of
principal, premium, if any, and interest owing and unpaid in respect of the
Notes and to file such other papers or documents as may be necessary or
advisable in order to have the claims of the Note Trustee (including any
claim for reasonable compensation to the Note Trustee and each predecessor
Note Trustee, and their respective agents, attorneys and counsel, and for
reimbursement of all expenses and liabilities incurred, and all advances
made, by the Note Trustee and each predecessor Note Trustee, except as a
result of negligence or bad faith) and of the Noteholders allowed in such
Proceedings;
(ii) unless prohibited by applicable law and regulations, to vote on
behalf of the Holders of Notes in any election of a trustee, a standby
trustee or Person performing similar functions in any such Proceedings; and
(iii) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute all amounts received with
respect to the claims of the Noteholders and of the Note Trustee on their
behalf; and any trustee, receiver, liquidator, custodian or other similar
official in any such Proceeding is hereby authorized by each of such
Noteholders to make payments to the Note Trustee, and, in the event that
the Note Trustee shall consent to the making of payments directly to such
Noteholders, to pay to the Note Trustee such amounts as shall be sufficient
to cover reasonable compensation to the Note Trustee, each predecessor Note
Trustee and their respective agents, attorneys and counsel, and all other
expenses and liabilities incurred, and all advances made, by the Note
Trustee and each predecessor Note Trustee except as a result of negligence
or bad faith.
(e) Nothing herein contained shall be deemed to authorize the Note Trustee
to authorize or consent to or vote for or accept or adopt on behalf of any
Noteholder any plan of reorganization, arrangement, adjustment or composition
affecting the Notes or the rights of any Holder thereof or to authorize the Note
Trustee to vote in respect of the claim of any Noteholder in any such proceeding
except, as aforesaid, to vote for the election of a trustee in bankruptcy or
similar Person.
51
(f) All rights of action and of asserting claims under this Indenture, or
under any of the Notes of any Series, may be enforced by the Note Trustee
without the possession of any of the Notes of such Series or the production
thereof in any trial or other Proceedings relative thereto, and any such action
or proceedings instituted by the Note Trustee shall be brought in its own name
as trustee of an express trust, and any recovery of judgment, subject to the
payment of the expenses, disbursements and compensation of the Note Trustee,
each predecessor Note Trustee and their respective agents and attorneys, shall
be for the ratable benefit of the Holders of the Notes of such Series.
(g) In any Proceedings brought by the Note Trustee (and also any
Proceedings involving the interpretation of any provision of this Indenture to
which the Note Trustee shall be a party), the Note Trustee shall be held to
represent all the Holders of the Notes, and it shall not be necessary to make
any Noteholder a party to any such Proceedings.
SECTION 5.04. Remedies; Priorities.
--------------------
(a) If an Event of Default shall have occurred and be continuing with
respect to a Series, the Note Trustee may do one or more of the following
(subject to Section 5.05):
(i) institute Proceedings in its own name and as trustee of an
express trust for the collection of all amounts then payable on the Notes
of such Series or under this Indenture with respect thereto, whether by
declaration or otherwise, enforce any judgment obtained, and collect from
the Note Issuer and any other obligor upon such Notes moneys adjudged due;
(ii) institute Proceedings from time to time for the complete or
partial foreclosure of this Indenture with respect to the Collateral;
(iii) exercise any remedies of a secured party under the UCC or the
PU Code and take any other appropriate action to protect and enforce the
rights and remedies of the Note Trustee and the Holders of the Notes of
such Series; and
(iv) sell the Collateral or any portion thereof or rights or
interest therein, at one or more public or private sales called and
conducted in any manner permitted by law; provided, however, that the Note
-------- -------
Trustee may not sell or otherwise liquidate any portion of the Collateral
following an Event of Default, other than an Event of Default described in
Section 5.01(i), (ii) or (iii), with respect to any Series unless (A) the
Holders of 100 percent of the Outstanding Amount of the Notes of all Series
consent thereto, (B) the proceeds of such sale or liquidation distributable
to the Noteholders of all Series are sufficient to discharge in full all
amounts then due and unpaid upon such Notes for principal, premium, if any,
and interest after taking into account payment of all amounts due prior
thereto pursuant to the priorities set forth in Section 8.02(d) or (C) the
Note Trustee determines that the Collateral will not continue to provide
sufficient funds for all payments on the Notes of all Series as they would
have become due if the Notes had not been declared
52
due and payable, and the Note Trustee obtains the consent of Holders of 66-
2/3 percent of the Outstanding Amount of the Notes of all Series. In
determining such sufficiency or insufficiency with respect to clause (B)
and (C), the Note Trustee may, but need not, obtain and conclusively rely
upon an opinion of an Independent investment banking or accounting firm of
national reputation as to the feasibility of such proposed action and as to
the sufficiency of the Collateral for such purpose.
(b) If the Note Trustee collects any money pursuant to this Article V, it
shall pay out such money in accordance with the priorities set forth in Section
8.02(d).
SECTION 5.05. Optional Preservation of the Collateral. If the Notes of
---------------------------------------
all Series have been declared to be due and payable under Section 5.02 following
an Event of Default and such declaration and its consequences have not been
rescinded and annulled, the Note Trustee may, but need not, elect to maintain
possession of the Collateral. It is the desire of the parties hereto and the
Noteholders that there be at all times sufficient funds for the payment of
principal of and premium, if any, and interest on the Notes, and the Note
Trustee shall take such desire into account when determining whether or not to
maintain possession of the Collateral. In determining whether to maintain
possession of the Collateral, the Note Trustee may, but need not, obtain and
conclusively rely upon an opinion of an Independent investment banking or
accounting firm of national reputation as to the feasibility of such proposed
action and as to the sufficiency of the Collateral for such purpose.
SECTION 5.06. Limitation of Suits. No Holder of any Note of any Series
-------------------
shall have any right to institute any Proceeding, judicial or otherwise, with
respect to this Indenture, or for the appointment of a receiver or trustee, or
for any other remedy hereunder, unless:
(i) such Holder previously has given written notice to the Note
Trustee of a continuing Event of Default with respect to such Series;
(ii) the Holders of not less than 25 percent of the Outstanding
Amount of the Notes of all Series have made written request to the Note
Trustee to institute such Proceeding in respect of such Event of Default in
its own name as Note Trustee hereunder;
(iii) such Holder or Holders have offered to the Note Trustee
indemnity satisfactory to it against the costs, expenses and liabilities to
be incurred in complying with such request;
(iv) the Note Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute such Proceedings;
and
(v) no direction inconsistent with such written request has been
given to the Note Trustee during such 60-day period by the Holders of a
majority of the Outstanding Amount of the Notes of all Series; it being
understood and intended that no one or more Holders of Notes shall have any
right in any manner whatever
53
by virtue of, or by availing of, any provision of this Indenture to affect,
disturb or prejudice the rights of any other Holders of Notes or to obtain
or to seek to obtain priority or preference over any other Holders or to
enforce any right under this Indenture, except in the manner herein
provided.
In the event the Note Trustee shall receive conflicting or inconsistent
requests and indemnity from two or more groups of Holders of Notes, each
representing less than a majority of the Outstanding Amount of the Notes of all
Series, the Note Trustee in its sole discretion may determine what action, if
any, shall be taken, notwithstanding any other provisions of this Indenture.
SECTION 5.07. Unconditional Rights of Noteholders To Receive Principal,
---------------------------------------------------------
Premium, if any, and Interest. Notwithstanding any other provisions in this
-----------------------------
Indenture, the Holder of any Note shall have the right, which is absolute and
unconditional, (a) to receive payment of (i) the interest, if any, on such Note
on or after the due dates thereof expressed in such Note or in this Indenture,
(ii) the unpaid principal, if any, of such Notes on or after the Final Maturity
Date therefor or (iii) in the case of redemption, receive payment of the unpaid
principal and premium, if any, and interest, if any, on such Note on or after
the Optional Redemption Date or Mandatory Redemption Date, as applicable,
therefor and (b) to institute suit for the enforcement of any such payment, and
such right shall not be impaired without the consent of such Holder.
SECTION 5.08. Restoration of Rights and Remedies. If the Note Trustee or
----------------------------------
any Noteholder has instituted any Proceeding to enforce any right or remedy
under this Indenture and such Proceeding has been discontinued or abandoned for
any reason or has been determined adversely to the Note Trustee or to such
Noteholder, then and in every such case the Note Issuer, the Note Trustee and
the Noteholders shall, subject to any determination in such Proceeding, be
restored severally and respectively to their former positions hereunder, and
thereafter all rights and remedies of the Note Trustee and the Noteholders shall
continue as though no such Proceeding had been instituted.
SECTION 5.09. Rights and Remedies Cumulative. No right or remedy herein
------------------------------
conferred upon or reserved to the Note Trustee or to the Noteholders is intended
to be exclusive of any other right or remedy, and every right and remedy shall,
to the extent permitted by law, be cumulative and in addition to every other
right and remedy given hereunder or now or hereafter existing at law or in
equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
SECTION 5.10. Delay or Omission Not a Waiver. No delay or omission of the
------------------------------
Note Trustee or any Noteholder to exercise any right or remedy accruing upon any
Default or Event of Default shall impair any such right or remedy or constitute
a waiver of any such Default or Event of Default or an acquiescence therein.
Every right and remedy given by this Article V or by law to the Note Trustee or
to the Noteholders may be exercised from
54
time to time, and as often as may be deemed expedient, by the Note Trustee or by
the Noteholders, as the case may be.
SECTION 5.11. Control by Noteholders. The Holders of a majority of the
----------------------
Outstanding Amount of the Notes of all Series (or, if less than all Series are
affected, the affected Series) shall have the right to direct the time, method
and place of conducting any Proceeding for any remedy available to the Note
Trustee with respect to the Notes of such Series or exercising any trust or
power conferred on the Note Trustee with respect to such Series; provided that
--------
(i) such direction shall not be in conflict with any rule of law or
with this Indenture;
(ii) subject to the express terms of Section 5.04, any direction to
the Note Trustee to sell or liquidate the Collateral shall be by the
Holders of Notes representing not less than 100 percent of the Outstanding
Amount of the Notes of all Series;
(iii) if the conditions set forth in Section 5.05 have been satisfied
and the Note Trustee elects to retain the Collateral pursuant to such
Section, then any direction to the Note Trustee by Holders of Notes
representing less than 100 percent of the Outstanding Amount of the Notes
of all Series to sell or liquidate the Collateral shall be of no force and
effect; and
(iv) the Note Trustee may take any other action deemed proper by the
Note Trustee that is not inconsistent with such direction; provided,
--------
however, that, subject to Section 6.01, the Note Trustee need not take any
-------
action that it determines might involve it in liability or might materially
adversely affect the rights of any Noteholders not consenting to such
action.
SECTION 5.12. Waiver of Past Defaults. Prior to the declaration of the
-----------------------
acceleration of the maturity of the Notes of all Series as provided in Section
5.02, the Holders of Notes of not less than a majority of the Outstanding Amount
of the Notes of all Series may waive any past Default or Event of Default and
its consequences except a Default (a) in payment of principal of or premium, if
any, or interest on any of the Notes or (b) in respect of a covenant or
provision hereof which cannot be modified or amended without the consent of the
Holder of each Note of all Series affected. In the case of any such waiver, the
Note Issuer, the Note Trustee and the Holders of the Notes shall be restored to
their former positions and rights hereunder, respectively; but no such waiver
shall extend to any subsequent or other Default or impair any right consequent
thereto.
Upon any such waiver, such Default shall cease to exist and be deemed to
have been cured and not to have occurred, and any Event of Default arising
therefrom shall be deemed to have been cured and not to have occurred, for every
purpose of this Indenture;
55
but no such waiver shall extend to any subsequent or other Default or Event of
Default or impair any right consequent thereto.
SECTION 5.13. Undertaking for Costs. All parties to this Indenture agree,
---------------------
and each Holder of any Note by such Holder's acceptance thereof shall be deemed
to have agreed, that any court may in its discretion require, in any suit for
the enforcement of any right or remedy under this Indenture, or in any suit
against the Note Trustee for any action taken, suffered or omitted by it as Note
Trustee, the filing by any party litigant in such suit of an undertaking to pay
the costs of such suit, and that such court may in its discretion assess
reasonable costs, including reasonable attorneys' fees, against any party
litigant in such suit, having due regard to the merits and good faith of the
claims or defenses made by such party litigant; but the provisions of this
Section shall not apply to (a) any suit instituted by the Note Trustee, (b) any
suit instituted by any Noteholder, or group of Noteholders, in each case holding
in the aggregate more than 10 percent of the Outstanding Amount of the Notes of
a Series or (c) any suit instituted by any Noteholder for the enforcement of the
payment of (i) interest on any Note on or after the due dates expressed in such
Note and in this Indenture, (ii) the unpaid principal, if any, of any Note on or
after the Final Maturity Date therefor or (iii) in the case of redemption, the
unpaid principal of and premium, if any, and interest on any Note on or after
the Optional Redemption Date or Mandatory Redemption Date, as applicable,
therefor.
SECTION 5.14. Waiver of Stay or Extension Laws. The Note Issuer covenants
--------------------------------
(to the extent that it may lawfully do so) that it will not at any time insist
upon, or plead or in any manner whatsoever, claim or take the benefit or
advantage of, any stay or extension law wherever enacted, now or at any time
hereafter in force, that may affect the covenants or the performance of this
Indenture; and the Note Issuer (to the extent that it may lawfully do so) hereby
expressly waives all benefit or advantage of any such law, and covenants that it
will not hinder, delay or impede the execution of any power herein granted to
the Note Trustee, but will suffer and permit the execution of every such power
as though no such law had been enacted.
SECTION 5.15. Action on Notes. The Note Trustee's right to seek and
---------------
recover judgment on the Notes or under this Indenture shall not be affected by
the seeking, obtaining or application of any other relief under or with respect
to this Indenture. Neither the lien of this Indenture nor any rights or
remedies of the Note Trustee or the Noteholders shall be impaired by the
recovery of any judgment by the Note Trustee against the Note Issuer or by the
levy of any execution under such judgment upon any portion of the Collateral or
upon any of the assets of the Note Issuer.
SECTION 5.16. Performance and Enforcement of Certain Obligations.
--------------------------------------------------
(a) Promptly following a request from the Note Trustee to do so and at the
Note Issuer's expense, the Note Issuer agrees to take all such lawful action as
the Note Trustee may request to compel or secure the performance and observance
by the Seller and the Servicer, as applicable, of each of their obligations to
the Note Issuer under or in
56
connection with the Sale Agreement and the Servicing Agreement, respectively, in
accordance with the terms thereof, and to exercise any and all rights, remedies,
powers and privileges lawfully available to the Note Issuer under or in
connection with the Sale Agreement and the Servicing Agreement, respectively, to
the extent and in the manner directed by the Note Trustee, including the
transmission of notices of default on the part of the Seller or the Servicer
thereunder and the institution of legal or administrative actions or proceedings
to compel or secure performance by the Seller or the Servicer of each of their
obligations under the Sale Agreement and the Servicing Agreement, respectively.
(b) If an Event of Default has occurred, the Note Trustee may, and, at the
direction (which direction shall be in writing or by telephone (confirmed in
writing promptly thereafter)) of the Holders of 66-2/3 percent of the
Outstanding Amount of the Notes of all Series shall, subject to Article VI,
exercise all rights, remedies, powers, privileges and claims of the Note Issuer
against the Seller or the Servicer under or in connection with the Sale
Agreement and the Servicing Agreement, respectively, including the right or
power to take any action to compel or secure performance or observance by the
Seller or the Servicer of each of their obligations to the Note Issuer
thereunder and to give any consent, request, notice, direction, approval,
extension or waiver under the Sale Agreement or the Servicing Agreement,
respectively, and any right of the Note Issuer to take such action shall be
suspended.
ARTICLE VI
THE NOTE TRUSTEE
SECTION 6.01. Duties of Note Trustee.
----------------------
(a) If an Event of Default has occurred and is continuing, the Note
Trustee shall exercise the rights and powers vested in it by this Indenture and
use the same degree of care and skill in their exercise as a prudent person
would exercise or use under the circumstances in the conduct of such person's
own affairs.
(b) Except during the continuance of an Event of Default:
(i) the Note Trustee undertakes to perform such duties and only
such duties as are specifically set forth in this Indenture and no implied
covenants or obligations shall be read into this Indenture against the Note
Trustee; and
(ii) in the absence of bad faith on its part, the Note Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions furnished to
the Note Trustee and conforming to the requirements of this Indenture;
however, the Note Trustee shall examine the certificates and opinions to
determine whether or not they conform to the requirements of this
Indenture.
57
(c) The Note Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own willful
misconduct, except that:
(i) this paragraph does not limit the effect of paragraph (b) of
this Section;
(ii) the Note Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer unless it is proved that the
Note Trustee was negligent in ascertaining the pertinent facts; and
(iii) the Note Trustee shall not be liable with respect to any action
it takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 5.11.
(d) Every provision of this Indenture that in any way relates to the Note
Trustee is subject to paragraphs (a), (b) and (c) of this Section.
(e) The Note Trustee shall not be liable for interest on any money received
by it except as the Note Trustee may agree in writing with the Note Issuer.
(f) Money held in trust by the Note Trustee need not be segregated from
other funds except to the extent required by law or the terms of this Indenture,
the Sale Agreement and the Servicing Agreement.
(g) No provision of this Indenture shall require the Note Trustee to expend
or risk its own funds or otherwise incur financial liability in the performance
of any of its duties hereunder or in the exercise of any of its rights or
powers, if it shall have reasonable grounds to believe that repayments of such
funds or indemnity satisfactory to it against such risk or liability is not
reasonably assured to it.
(h) Every provision of this Indenture relating to the conduct or affecting
the liability of or affording protection to the Note Trustee shall be subject to
the provisions of this Section.
(i) In the event that the Trustee is also acting as Paying Agent or Note
Registrar hereunder, this Article VI shall also be afforded to such Paying Agent
or Note Registrar.
SECTION 6.02. Rights of Note Trustee.
----------------------
(a) The Note Trustee may conclusively rely and shall be fully protected in
relying on any document believed by it to be genuine and to have been signed or
presented by the proper person. The Note Trustee need not investigate any fact
or matter stated in the document.
58
(b) Before the Note Trustee acts or refrains from acting, it may require an
Officer's Certificate or an Opinion of Counsel. The Note Trustee shall not be
liable for any action it takes or omits to take in good faith in reliance on the
Officer's Certificate or Opinion of Counsel.
(c) The Note Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys or a custodian or nominee, and the Note Trustee shall not be
responsible for any misconduct or negligence on the part of, or for the
supervision of, any such agent, attorney, custodian or nominee appointed with
due care by it hereunder.
(d) The Note Trustee shall not be liable for any action it takes or omits
to take in good faith which it believes to be authorized or within its rights or
powers; provided, however, that the Note Trustee's conduct does not constitute
-------- -------
wilful misconduct, negligence or bad faith.
(e) The Note Trustee may consult with counsel, and the advice or opinion of
counsel with respect to legal matters relating to this Indenture and the Notes
shall be full and complete authorization and protection from liability in
respect to any action taken, omitted or suffered by it hereunder in good faith
and in accordance with the advice or opinion of such counsel.
SECTION 6.03. Individual Rights of Note Trustee. The Note Trustee in its
---------------------------------
individual or any other capacity may become the owner or pledgee of Notes and
may otherwise deal with the Note Issuer or its affiliates with the same rights
it would have if it were not Note Trustee. Any Paying Agent, Note Registrar,
co-registrar or co-paying agent may do the same with like rights. However, the
Note Trustee must comply with Sections 6.11.
SECTION 6.04. Note Trustee's Disclaimer. The Note Trustee shall not be
-------------------------
responsible for and makes no representation as to the validity or adequacy of
this Indenture or the Notes, it shall not be accountable for the Note Issuer's
use of the proceeds from the Notes, and it shall not be responsible for any
statement of the Note Issuer in the Indenture or in any document issued in
connection with the sale of the Notes or in the Notes other than the Note
Trustee's certificate of authentication.
SECTION 6.05. Notice of Defaults. If a Default occurs and is continuing
------------------
with respect to any Series and if it is actually known to a Responsible Officer
of the Note Trustee, the Note Trustee shall mail to each Holder of Notes of all
Series notice of the Default within 90 days after it occurs. Except in the case
of a Default in payment of principal of and premium, if any, or interest on any
Note, the Note Trustee may withhold the notice if and for so long as a committee
of its Responsible Officers in good faith determines that withholding the notice
is in the interests of Noteholders.
SECTION 6.06. Reports by Note Trustee to Holders.
----------------------------------
59
(a) For so long as the Note Trustee is the Note Registrar and Paying Agent,
it shall deliver to each Noteholder such information in its possession as may be
required to enable such holder to prepare its Federal and state income tax
returns.
(b) With respect to each Series of Notes, on or prior to each Payment Date
therefor, the Note Trustee will deliver to each Holder of Notes on such Payment
Date a statement as provided and prepared by the Servicer which will include (to
the extent applicable) the following information (and any other information so
specified in the applicable Series Supplement) as to the Notes of such Series
with respect to such Payment Date or the period since the previous Payment Date,
as applicable:
(i) the amount of the distribution to Noteholders allocable to
principal;
(ii) the amount of the distribution to Noteholders allocable to
interest;
(iii) the aggregate outstanding Principal Balance of the Notes, after
giving effect to payments allocated to principal reported under (i) above;
and
(iv) the Principal Balance and the Projected Principal Balance as of
such Payment Date, after giving effect to distributions to be made on such
Payment Date.
(c) The Note Issuer shall send a copy of each of the Certificate of
Compliance delivered to it pursuant to Section 3.03 of the Servicing Agreement
and the Annual Accountant's Report delivered to it pursuant to Section 3.04 of
the Servicing Agreement to Moody's. A copy of such certificate and report may
be obtained by any Noteholder by a request in writing to the Note Trustee.
SECTION 6.07. Compensation and Indemnity. The Note Issuer shall pay to
--------------------------
the Note Trustee from time to time reasonable compensation for its services.
The Note Trustee's compensation shall not be limited by any law on compensation
of a trustee of an express trust. The Note Issuer shall reimburse the Note
Trustee for all reasonable out-of-pocket expenses incurred or made by it,
including costs of collection, in addition to the compensation for its services.
Such expenses shall include the reasonable compensation and expenses,
disbursements and advances of the Note Trustee's agents, counsel, accountants
and experts. The Note Issuer shall indemnify the Note Trustee and its officers,
directors, employees and agents against any and all loss, liability or expense
(including attorneys' fees and expenses) incurred by it in connection with the
administration of this trust and the performance of its duties hereunder.
Note Trustee shall notify the Note Issuer as soon as is reasonably
practicable of any claim for which it may seek indemnity. Failure by the Note
Trustee to so notify the Note Issuer shall not relieve the Note Issuer of its
obligations hereunder. The Note Issuer shall defend the claim and the Note
Trustee may have separate counsel and the Note Issuer shall pay the fees and
expenses of such counsel. The Note Issuer need not reimburse any expense
60
or indemnify against any loss, liability or expense incurred by the Note Trustee
through the Note Trustee's own wilful misconduct, negligence or bad faith.
The Note Issuer's payment obligations to the Note Trustee pursuant to this
Section shall survive the discharge of this Indenture or the earlier resignation
or removal of the Note Trustee. When the Note Trustee incurs expenses after the
occurrence of a Default specified in Section 5.01(v) or (vi) with respect to the
Note Issuer, the expenses are intended to constitute expenses of administration
under Title 11 of the United States Code or any other applicable Federal or
state bankruptcy, insolvency or similar law.
SECTION 6.08. Replacement of Note Trustee. The Note Trustee may resign at
---------------------------
any time by so notifying the Note Issuer, provided that no such resignation
shall be effective until either (a) the Collateral has been completely
liquidated and the proceeds of the liquidation distributed to the Noteholders or
(b) a successor trustee having the qualifications set forth in Section 6.11 has
been designated and has accepted such trusteeship. The Holders of a majority in
Outstanding Amount of the Notes of all Series may remove the Note Trustee by so
notifying the Note Trustee and may appoint a successor Note Trustee. The Note
Issuer shall remove the Note Trustee if:
(i) the Note Trustee fails to comply with Section 6.11;
(ii) the Note Trustee is adjudged a bankrupt or insolvent;
(iii) a receiver or other public officer takes charge of the Note
Trustee or its property; or
(iv) the Note Trustee otherwise becomes incapable of acting.
If the Note Trustee resigns or is removed or if a vacancy exists in the
office of Note Trustee for any reason (the Note Trustee in such event being
referred to herein as the retiring Note Trustee), the Note Issuer shall promptly
appoint a successor Note Trustee.
A successor Note Trustee shall deliver a written acceptance of its
appointment to the retiring Note Trustee and to the Note Issuer. Thereupon the
resignation or removal of the retiring Note Trustee shall become effective, and
the successor Note Trustee shall have all the rights, powers and duties of the
Note Trustee under this Indenture. The successor Note Trustee shall mail a
notice of its succession to Noteholders. The retiring Note Trustee shall
promptly transfer all property held by it as Note Trustee to the successor Note
Trustee.
If a successor Note Trustee does not take office within 60 days after the
retiring Note Trustee resigns or is removed, the retiring Note Trustee, the Note
Issuer or the Holders of a majority in Outstanding Amount of the Notes of all
Series may petition any court of competent jurisdiction for the appointment of a
successor Note Trustee.
61
If the Note Trustee fails to comply with Section 6.11, any Noteholder may
petition any court of competent jurisdiction for the removal of the Note Trustee
and the appointment of a successor Note Trustee.
Notwithstanding the replacement of the Note Trustee pursuant to this
Section, the Note Issuer's obligations under Section 6.07 shall continue for the
benefit of the retiring Note Trustee.
SECTION 6.09. Successor Note Trustee by Xxxxxx. If the Note Trustee
--------------------------------
consolidates with, merges or converts into, or transfers all or substantially
all its corporate trust business or assets to, another corporation or banking
association, the resulting, surviving or transferee corporation without any
further act shall be the successor Note Trustee.
In case at the time such successor or successors by merger, conversion or
consolidation to the Note Trustee shall succeed to the trusts created by this
Indenture any of the Notes shall have been authenticated but not delivered, any
such successor to the Note Trustee may adopt the certificate of authentication
of any predecessor trustee, and deliver such Notes so authenticated; and in case
at that time any of the Notes shall not have been authenticated, any successor
to the Note Trustee may authenticate such Notes either in the name of any
predecessor hereunder or in the name of the successor to the Note Trustee; and
in all such cases such certificates shall have the full force which it is
anywhere in the Notes or in this Indenture provided that the certificate of the
Note Trustee shall have.
SECTION 6.10. Appointment of Co-Trustee or Separate Trustee.
---------------------------------------------
(a) Notwithstanding any other provisions of this Indenture, at any time,
for the purpose of meeting any legal requirement of any jurisdiction in which
any part of the Trust may at the time be located, the Note Trustee shall have
the power and may execute and deliver all instruments to appoint one or more
Persons to act as a co-trustee or co-trustees, or separate trustee or separate
trustees, of all or any part of the Trust, and to vest in such Person or
Persons, in such capacity and for the benefit of the Noteholders, such title to
the Trust, or any part hereof, and, subject to the other provisions of this
Section, such powers, duties, obligations, rights and trusts as the Note Trustee
may consider necessary or desirable. No co-trustee or separate trustee
hereunder shall be required to meet the terms of eligibility as a successor
trustee under Section 6.11 and no notice to Noteholders of the appointment of
any co-trustee or separate trustee shall be required under Section 6.08 hereof.
(b) Every separate trustee and co-trustee shall, to the extent permitted by
law, be appointed and act subject to the following provisions and conditions:
62
(i) all rights, powers, duties and obligations conferred or imposed
upon the Note Trustee shall be conferred or imposed upon and exercised or
performed by the Note Trustee and such separate trustee or co-trustee
jointly (it being understood that such separate trustee or co-trustee is
not authorized to act separately without the Note Trustee joining in such
act), except to the extent that under any law of any jurisdiction in which
any particular act or acts are to be performed the Note Trustee shall be
incompetent or unqualified to perform such act or acts, in which event such
rights, powers, duties and obligations (including the holding of title to
the Collateral or any portion thereof in any such jurisdiction) shall be
exercised and performed singly by such separate trustee or co-trustee, but
solely at the direction of the Note Trustee;
(ii) no trustee hereunder shall be personally liable by reason of
any act or omission of any other trustee hereunder; and
(iii) the Note Trustee may at any time accept the resignation of or
remove any separate trustee or co-trustee.
(c) Any notice, request or other writing given to the Note Trustee shall
be deemed to have been given to each of the then separate trustees and co-
trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Indenture and
the conditions of this Article VI. Each separate trustee and co-trustee, upon
its acceptance of the trusts conferred, shall be vested with the estates or
property specified in its instrument of appointment, either jointly with the
Note Trustee or separately, as may be provided therein, subject to all the
provisions of this Indenture, specifically including every provision of this
Indenture relating to the conduct of, affecting the liability of, or affording
protection to, the Note Trustee. Every such instrument shall be filed with the
Note Trustee.
(d) Any separate trustee or co-trustee may at any time constitute the Note
Trustee, its agent or attorney-in-fact with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Indenture on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Note Trustee, to the extent permitted by law, without the appointment of a new
or successor trustee.
SECTION 6.11. Eligibility; Disqualification. The Note Trustee shall at
-----------------------------
all times satisfy the requirements of Section 26(a)(i) of the Investment Company
Act of 1940. The Note Trustee shall have a combined capital and surplus of at
least $50,000,000 as set forth in its most recent published annual report of
condition and it shall have a long term debt rating of A2 (or the equivalent
thereof) or better by Moody's.
SECTION 6.12. Representations and Warranties of Note Trustee. The Note
----------------------------------------------
Trustee hereby represents and warrants that:
63
(a) The Note Trustee is a national banking association, validly existing
and in good standing under the laws of the United States; and
(b) The Note Trustee has full power, authority and legal rights to execute,
deliver and perform this Indenture and the Basic Documents to which the Note
Trustee is a party and has taken all necessary action to authorize the
execution, delivery, and performance by it of this Indenture and such Basic
Documents.
ARTICLE VII
NOTEHOLDERS' LISTS AND REPORTS
SECTION 7.01. Note Issuer To Furnish Note Trustee Names and Addresses of
----------------------------------------------------------
Noteholders. The Note Issuer will furnish or cause to be furnished to the Note
-----------
Trustee (a) not more than five days after the earlier of (i) each Record Date
with respect to each Series and (ii) three months after the last Record Date
with respect to each Series, a list, in such form as the Note Trustee may
reasonably require, of the names and addresses of the Holders of Notes of such
Series as of such Record Date, (b) at such other times as the Note Trustee may
request in writing, within 30 days after receipt by the Note Issuer of any such
request, a list of similar form and content as of a date not more than 10 days
prior to the time such list is furnished; provided, however, that so long as the
-------- -------
Note Trustee is the Note Registrar, no such list shall be required to be
furnished.
SECTION 7.02. Preservation of Information; Communications to Noteholders.
----------------------------------------------------------
The Note Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of the Holders of Notes contained in the
most recent list furnished to the Note Trustee as provided in Section 7.01 and
the names and addresses of Holders of Notes received by the Note Trustee in its
capacity as Note Registrar. The Note Trustee may destroy any list furnished to
it as provided in such Section 7.01 upon receipt of a new list so furnished.
ARTICLE VIII
ACCOUNTS, DISBURSEMENTS AND RELEASES
SECTION 8.01. Collection of Money. Except as otherwise expressly provided
-------------------
herein, the Note Trustee may demand payment or delivery of, and shall receive
and collect, directly and without intervention or assistance of any fiscal agent
or other intermediary, all money and other property payable to or receivable by
the Note Trustee pursuant to this Indenture. The Note Trustee shall apply all
such money received by it as provided in this Indenture. Except as otherwise
expressly provided in this Indenture, if any default occurs in the making of any
payment or performance under any agreement or instrument that is part of the
Collateral, the Note Trustee may take such action as may be appropriate to
64
enforce such payment or performance, subject to Article VI, including the
institution and prosecution of appropriate Proceedings. Any such action shall
be without prejudice to any right to claim a Default or Event of Default under
this Indenture and any right to proceed thereafter as provided in Article V.
SECTION 8.02. Collection Account.
------------------
(a) Prior to the Series Issuance Date for the first Series issued
hereunder, the Note Issuer shall open, at the Note Trustee's Corporate Trust
Office, or at another Eligible Institution, one or more segregated trust
accounts in the Note Trustee's name for the deposit of Estimated FTA Collections
(collectively, the "Collection Account"). The Collection Account will consist
------------------
of four subaccounts: a general subaccount (the "General Subaccount"), a reserve
------------------
subaccount (the "Reserve Subaccount"), a subaccount for the
------------------
Overcollateralization Amount (the "Overcollateralization Subaccount") and a
--------------------------------
capital subaccount (the "Capital Subaccount"). All amounts in the Collection
------------------
Account not allocated to any other subaccount shall be allocated to the General
Subaccount. Prior to the initial Payment Date, all amounts in the Collection
Account (other than funds deposited into the Capital Subaccount, up to the
Required Capital Level) shall be allocated to the General Subaccount. All
references to the Collection Account shall be deemed to include reference to all
subaccounts contained therein. Withdrawals from and deposits to each of the
foregoing subaccounts of the Collection Account shall be made as set forth in
Section 8.02(d) and (e). The Collection Account shall at all times be
maintained in an Eligible Deposit Account and only the Note Trustee shall have
access to the Collection Account for the purpose of making deposits in and
withdrawals from the Collection Account in accordance with this Indenture.
Funds in the Collection Account shall not be commingled with any other moneys.
All moneys deposited from time to time in the Collection Account, all deposits
therein pursuant to this Indenture, and all investments made in Eligible
Investments with such moneys, including all income or other gain from such
investments, shall be held by the Note Trustee in the Collection Account as part
of the Collateral as herein provided.
(b) The Note Trustee shall have sole dominion and exclusive control over
all moneys in the Collection Account and shall apply such amounts therein as
provided in this Section 8.02. The Note Trustee shall also pay from the
Collection Account any amounts requested to be paid by the Servicer pursuant to
Section 6.11(d)(ii) of the Servicing Agreement.
(c) FTA Collections shall be deposited in the General Subaccount as
provided in Section 6.11 of the Servicing Agreement. All deposits to and
withdrawals from the Collection Account and all allocations to the subaccounts
of the Collection Account shall be made by the Note Trustee in accordance with
the written instructions provided by the Servicer in the Monthly Servicer's
Certificate and the Quarterly Servicer's Certificate, as applicable.
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(d) On each Payment Date for any Series of Notes, the Note Trustee shall
apply all amounts on deposit in the Collection Account, including all net
earnings thereon, to pay the following amounts, in accordance with the Quarterly
Servicer's Certificate, in the following priority:
(i) all amounts owed by the Note Issuer to the Note Trustee
(including legal fees and expenses) shall be paid to the Note Trustee
(subject to Section 6.07) and all amounts owed to the Certificate Trustee
and the Delaware Trustee under the Trust Agreement shall be paid to the
Certificate Trustee and Delaware Trustee, as appropriate;
(ii) the Servicing Fee for such Payment Date and all unpaid
Servicing Fees for prior Payment Dates shall be paid to the Servicer;
(iii) the Quarterly Administration Fee and all unpaid Quarterly
Administration Fees from prior Payment Dates shall be paid to the
Administrator;
(iv) for so long as no Default or Event of Default shall have
occurred and be continuing or would result from such payment, all other
Operating Expenses shall be paid to the Persons entitled thereto or, if
such have been previously paid by the Note Issuer, to the Note Issuer in
reimbursement thereof; provided that the amount paid on each Payment Date
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pursuant to this clause (iv) shall not exceed $100,000;
(v) any overdue Quarterly Interest (together with, to the extent
lawful, interest on such overdue Quarterly Interest at the applicable Note
Interest Rate) and then Quarterly Interest for such Payment Date with
respect to each Series of Notes shall be paid to the Noteholders of such
Series of Notes;
(vi) principal due and payable on the Notes of any Series as a
result of an Event of Default or on the Final Maturity Date of the Notes of
such Series, shall be paid to the Noteholders of such Series of Notes;
(vii) Quarterly Principal for such Payment Date with respect to each
Series of Notes shall be paid to the Noteholders of such Series of Notes;
(viii) unpaid Operating Expenses shall be paid to the Persons
entitled thereto or, if such have been previously paid by the Note Issuer,
to the Note Issuer in reimbursement thereof;
(ix) the amount, if any, by which the Required Overcollateralization
Level exceeds the amount in the Overcollateralization Subaccount as of such
Payment Date shall be allocated to the Overcollateralization Subaccount;
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(x) the amount, if any, by which the Required Capital Level with
respect to all Outstanding Series of Notes exceeds the amount in the
Capital Subaccount as of such Payment Date shall be allocated to the
Capital Subaccount;
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(xi) funds up to the amount of net earnings on amounts in the
Collection Account for the prior quarter without cumulation shall be paid
to the Note Issuer, free from the lien of this Indenture;
(xii) if any Series of Notes has been paid in full as of such Payment
Date, the amount by which the amount in the Overcollateralization
Subaccount exceeds the aggregate Required Overcollateralization Level with
respect to all Series of Notes remaining outstanding shall be paid to the
Note Issuer, free from the lien of this Indenture;
(xiii) if any Series of Notes has been paid in full as of such Payment
Date, the amount by which the amount in the Capital Subaccount exceeds the
aggregate Required Capital Level with respect to all Series of Notes
remaining outstanding shall be paid to the Note Issuer, free from the lien
of this Indenture;
(xiv) the balance, if any, shall be allocated to the Reserve
Subaccount for distribution on subsequent Payment Dates; and
(xv) after principal of and premium, if any, and interest on all
Notes of all Series, and all of the other foregoing amounts, have been paid
in full, the balance, if any, shall be paid to the Note Issuer, free from
the lien of this Indenture.
All payments to the Noteholders of a Series pursuant to clauses (v), (vi)
and (vii) above or, in the case of clause (vi), if there is more than one Series
of Notes outstanding all payments to the Noteholders of all Series, shall be
made to such holders pro rata based on the respective principal amounts of Notes
of such Series held by such Holders.
(e) If on any Payment Date funds on deposit in the General Subaccount are
insufficient to make the payments contemplated by clauses (i) through (vii) of
Section 8.02(d) above, the Note Trustee shall (i) first, draw from amounts on
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deposit in the Reserve Subaccount, (ii) second, draw from amounts on deposit in
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the Overcollateralization Subaccount and (iii) third, draw from amounts on
-----
deposit in the Capital Subaccount, in each case, up to the amount of such
shortfall in order to make the payments contemplated by clauses (i) through
(vii) of Section 8.02(d). In addition, if on any Payment Date funds on deposit
in the General Subaccount are insufficient to make the allocations contemplated
by clauses (ix) and (x) above, the Note Trustee shall draw from amounts on
deposit in the Reserve Subaccount to make such allocations notwithstanding the
fact that on such Payment Date the allocation contemplated by clause (viii)
above may not have been fully satisfied.
(f) On any Mandatory Redemption Date, the Note Trustee shall pay to the
Noteholders the Mandatory Redemption Price.
SECTION 8.03. General Provisions Regarding the Collection Account.
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(a) For so long as no Default or Event of Default shall have occurred and
be continuing, all or a portion of the funds in the Collection Account shall be
invested in Eligible Investments and reinvested by the Note Trustee upon Issuer
Order; provided, however, that (i) such Eligible Investments shall not mature
later than the Business Day prior to the next Payment Date for the related
Series of Notes, (ii) such Eligible Investments shall not be sold, liquidated or
otherwise disposed of at a loss prior to the maturity thereof and (iii) if such
Eligible Investments have a maturity of one month or less, such Eligible
Investments (or the provider thereof) must have a long-term unsecured debt
rating of at least A2 by Xxxxx'x or a certificate of deposit rating of at least
P-1 by Xxxxx'x, and if such Eligible Investments have a maturity of greater than
one month, such Eligible Investments (or the provider thereof) must have a long-
term unsecured debt rating of at least A1 by Xxxxx'x and a certificate of
deposit rating of at least P-1 by Xxxxx'x. All income or other gain from
investments of moneys deposited in the Collection Account shall be deposited by
the Note Trustee in the Collection Account, and any loss resulting from such
investments shall be charged to the Collection Account. The Note Issuer will
not direct the Note Trustee to make any investment of any funds or to sell any
investment held in the Collection Account unless the security interest Granted
and perfected in such account will continue to be perfected in such investment
or the proceeds of such sale, in either case without any further action by any
Person, and, in connection with any direction to the Note Trustee to make any
such investment or sale, if requested by the Note Trustee, the Note Issuer shall
deliver to the Note Trustee an Opinion of Counsel, acceptable to the Note
Trustee, to such effect. In no event shall the Note Trustee be liable for the
selection of Eligible Investments or for investment losses incurred thereon. The
Note Trustee shall haveno liability in respect of losses incurred as a result of
the liquidation of any Eligible Investment prior to its stated maturity or the
failure of the Note Issuer to provide timely written investment direction. The
Note Trustee shall have no obligation to invest or reinvest any amounts held
hereunder in the absence of written investment direction pursuant to an Issuer
Order.
(b) Subject to Section 6.01(c), the Note Trustee shall not in any way be
held liable by reason of any insufficiency in the Collection Account resulting
from any loss on any Eligible Investment included therein except for losses
attributable to the Note Trustee's failure to make payments on such Eligible
Investments issued by the Note Trustee, in its commercial capacity as principal
obligor and not as trustee, in accordance with their terms.
(c) If (i) the Note Issuer shall have failed to give written investment
directions for any funds on deposit in the Collection Account to the Note
Trustee by 11:00 a.m. Eastern Time (or such other time as may be agreed by the
Note Issuer and Note Trustee) on any Business Day; or (ii) a Default or Event of
Default shall have occurred and be continuing with respect to the Notes of any
Series but the Notes of such Series shall not have been declared due and payable
pursuant to Section 5.02; then the Note Trustee shall, to the fullest extent
practicable, invest and reinvest funds in the Collection Account in one or more
investments which qualify as investments in money market funds described under
paragraph (d) of the definition of Eligible Investments.
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SECTION 8.04. Release of Collateral.
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(a) The Note Trustee may, and when required by the provisions of this
Indenture shall, execute instruments to release property from the lien of this
Indenture, or convey the Note Trustee's interest in the same, in a manner and
under circumstances that are not inconsistent with the provisions of this
Indenture. No party relying upon an instrument executed by the Note Trustee as
provided in this Article VIII shall be bound to ascertain the Note Trustee's
authority, inquire into the satisfaction of any conditions precedent or see to
the application of any moneys.
(b) The Note Trustee shall, at such time as there are no Notes Outstanding,
release any remaining portion of the Collateral that secured the Notes from the
lien of this Indenture and release to the Note Issuer or any other Person
entitled thereto any funds then on deposit in the Collection Account. The Note
Trustee shall release property from the lien of this Indenture pursuant to this
Section 8.04(b) only upon receipt of an Issuer Request accompanied by an
Officer's Certificate, an Opinion of Counsel meeting the applicable requirements
of Section 11.01.
SECTION 8.05. Opinion of Counsel. The Note Trustee shall receive at least
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seven days' notice when requested by the Note Issuer to take any action pursuant
to Section 8.04(a), accompanied by copies of any instruments involved, and the
Note Trustee shall also require, as a condition to such action, an Opinion of
Counsel, in form and substance satisfactory to the Note Trustee, stating the
legal effect of any such action, outlining the steps required to complete the
same, and concluding that all conditions precedent to the taking of such action
have been complied with and such action will not materially and adversely impair
the security for the Notes or the rights of the Noteholders in contravention of
the provisions of this Indenture; provided, however, that such Opinion of
Counsel shall not be required to express an opinion as to the fair value of the
Collateral. Counsel rendering any such opinion may rely, without independent
investigation, on the accuracy and validity of any certificate or other
instrument delivered to the Note Trustee in connection with any such action.
SECTION 8.06. Reports by Independent Accountants. As of the initial
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Series Issuance Date, the Note Issuer shall appoint a firm of Independent
certified public accountants of recognized national reputation for purposes of
preparing and delivering the reports or certificates of such accountants
required by this Indenture and the related Series Supplements. In the event
such firm requires the Note Trustee to agree to the procedures performed by such
firm, the Note Issuer shall direct the Note Trustee in writing to so agree; it
being understood and agreed that the Note Trustee will deliver such letter of
agreement in conclusive reliance upon the direction of the Note Issuer, and the
Note Trustee makes no independent inquiry or investigation to, and shall have no
obligation or liability in respect of, the sufficiency, validity or correctness
of such procedures. Upon any resignation by such firm the Note Issuer shall
provide written notice thereof to the Note Trustee and shall promptly appoint a
successor thereto that shall also be a firm of
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Independent certified public accountants of recognized national reputation. If
the Note Issuer shall fail to appoint a successor to a firm of Independent
certified public accountants that has resigned within 15 days after such
resignation, the Note Trustee shall promptly notify the Note Issuer of such
failure in writing. If the Note Issuer shall not have appointed a successor
within 10 days thereafter the Note Trustee shall promptly appoint a successor
firm of Independent certified public accountants of recognized national
reputation; provided that the Note Trustee shall have no liability with respect
to such appointment if the Note Trustee acted with due care with respect
thereto. The fees of such Independent certified public accountants and its
successor shall be payable by the Note Issuer.
SECTION 8.07. Letter of Credit. The Note Issuer shall establish and, for
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so long as may be required to satisfy the Rating Agency Condition, maintain an
irrevocable Letter of Credit in an initial amount of $500,000 for the benefit of
the Note Issuer and the Note Trustee. The Note Issuer and the Note Trustee
shall have the right to draw under the Letter of Credit solely in the event and
to the extent that the Aggregate Remittance Amount is not remitted pursuant to
Section 6.11 of the Servicing Agreement. If by 6:00 p.m. Eastern Time on such
Remittance Date the Note Trustee shall not have received the Aggregate
Remittance Amount, the Note Trustee shall draw on the Letter of Credit as set
forth in Section 6.11(f) of the Servicing Agreement. Amounts drawn under the
Letter of Credit by the Note Issuer or the Note Trustee shall be deposited in
the Collection Account and shall be applied as set forth in Section 8.02 hereof.
The Letter of Credit may be increased at any time in order to satisfy the
requirement of Section 6.11(d) of the Servicing Agreement.
ARTICLE IX
SUPPLEMENTAL INDENTURES
SECTION 9.01. Supplemental Indentures Without Consent of Noteholders.
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(a) Without the consent of the Holders of any Notes but with prior notice
to Xxxxx'x, the Note Issuer and the Note Trustee, when authorized by an Issuer
Order, at any time and from time to time, may enter into one or more indentures
supplemental hereto, in form satisfactory to the Note Trustee, for any of the
following purposes:
(i) to correct or amplify the description of any property at any
time subject to the lien of this Indenture, or better to assure, convey and
confirm unto the Note Trustee any property subject or required to be
subjected to the lien of this Indenture, or to subject to the lien of this
Indenture additional property;
(ii) to evidence the succession, in compliance with the applicable
provisions hereof, of another person to the Note Issuer, and the assumption
by any such successor of the covenants of the Note Issuer herein and in the
Notes contained;
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(iii) to add to the covenants of the Note Issuer, for the benefit of
the Holders of the Notes, or to surrender any right or power herein
conferred upon the Note Issuer;
(iv) to convey, transfer, assign, mortgage or pledge any property to
or with the Note Trustee;
(v) to cure any ambiguity, to correct or supplement any provision
herein or in any supplemental indenture which may be inconsistent with any
other provision herein or in any supplemental indenture or to make any
other provisions with respect to matters or questions arising under this
Indenture or in any supplemental indenture; provided that such action shall
not adversely affect the interests of the Holders of the Notes or holders
of the Certificates;
(vi) to evidence and provide for the acceptance of the appointment
hereunder by a successor trustee with respect to the Notes and to add to or
change any of the provisions of this Indenture as shall be necessary to
facilitate the administration of the trusts hereunder by more than one
trustee, pursuant to the requirements of Article VI;
(vii) to modify, eliminate or add to the provisions of this Indenture
to such extent as shall be necessary to effect the qualification of this
Indenture under the TIA or under any similar Federal statute hereafter
enacted and to add to this Indenture such other provisions as may be
expressly required by the TIA; or
(viii) to set forth the terms of any Series that has not theretofore
been authorized by a Series Supplement.
The Note Trustee is hereby authorized to join in the execution of any such
supplemental indenture and to make any further appropriate agreements and
stipulations that may be therein contained.
(b) The Note Issuer and the Note Trustee, when authorized by an Issuer
Order, may, also without the consent of any of the Holders of the Notes, enter
into an indenture or indentures supplemental hereto for the purpose of adding
any provisions to, or changing in any manner or eliminating any of the
provisions of, this Indenture or of modifying in any manner the rights of the
Holders of the Notes under this Indenture; provided, however, that (i) such
action shall not, as evidenced by an Opinion of Counsel, adversely affect in any
material respect the interests of the Noteholders or the holders of Certificates
and (ii) the Rating Agency Condition shall have been satisfied with respect
thereto.
SECTION 9.02. Supplemental Indentures with Consent of Noteholders. The
---------------------------------------------------
Note Issuer and the Note Trustee, when authorized by an Issuer Order, also may,
with prior notice to Xxxxx'x and with the consent of the Holders of not less
than a majority of the Outstanding Amount of the Notes of each Series to be
affected, by Act of such Holders
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delivered to the Note Issuer and the Note Trustee, enter into an indenture or
indentures supple- mental hereto for the purpose of adding any provisions to, or
changing in any manner or eliminating any of the provisions of, this Indenture
or of modifying in any manner the rights of the Holders of the Notes under this
Indenture; provided, however, that no such supplemental indenture shall, without
-------- -------
the consent of the Holder of each Outstanding Note of each Series affected
thereby:
(i) change the date of payment of any installment of principal of or
premium, if any, or interest on any Note, or reduce the principal amount
thereof, the interest rate thereon or premium, if any, with respect thereto,
change the provisions of this Indenture and the related applicable Series
Supplement relating to the application of collections on, or the proceeds of the
sale of, the Collateral to payment of principal of or premium, if any, or
interest on the Notes, or change any place of payment where, or the coin or
currency in which, any Note or the interest thereon is payable, or impair the
right to institute suit for the enforcement of the provisions of this Indenture
requiring the application of funds available therefor, as provided in Article V,
to the payment of any such amount due on the Notes on or after the respective
due dates thereof (or, in the case of optional or mandatory redemption, on or
after the Optional Redemption Date or Mandatory Redemption Date, as applicable);
(ii) reduce the percentage of the Outstanding Amount of the Notes or of a
Series thereof, the consent of the Holders of which is required for any such
supplemental indenture, or the consent of the Holders of which is required for
any waiver of compliance with certain provisions of this Indenture or certain
defaults hereunder and their consequences provided for in this Indenture;
(iii) modify or alter the provisions of the proviso to the definition of
the term "Outstanding";
(iv) reduce the percentage of the Outstanding Amount of the Notes
required to direct the Note Trustee to direct the Note Issuer to sell or
liquidate the Collateral pursuant to Section 5.04;
(v) modify any provision of this Section except to increase any
percentage specified herein or to provide that certain additional provisions of
this Indenture or the Basic Documents cannot be modified or waived without the
consent of the Holder of each Outstanding Note affected thereby;
(vi) modify any of the provisions of this Indenture in such manner as to
affect the calculation of the amount of any payment of interest, principal or
premium, if any, due on any Note on any Payment Date (including the calculation
of any of the individual components of such calculation) or to affect the rights
of the Holders of Notes to the benefit of any provisions for the mandatory
redemption of the Notes contained herein; or
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(vii) permit the creation of any lien ranking prior to or on a parity with
the lien of this Indenture with respect to any part of the Collateral or, except
as otherwise permitted or contemplated herein, terminate the lien of this
Indenture on any property at any time subject hereto or deprive the Holder of
any Note of the security provided by the lien of this Indenture.
The Note Trustee may in its discretion determine whether or not any Notes
or Certificates of a Series would be affected by any supplemental indenture and
any such determination shall be conclusive upon the Holders of all Notes and
holders of all Certificates of such Series, whether theretofore or thereafter
authenticated and delivered hereunder. The Note Trustee shall not be liable for
any such determination made in good faith.
It shall not be necessary for any Act of Noteholders under this Section to
approve the particular form of any proposed supplemental indenture, but it shall
be sufficient if such Act shall approve the substance thereof.
Promptly after the execution by the Note Issuer and the Note Trustee of any
supplemental indenture pursuant to this Section, the Note Issuer shall mail to
Xxxxx'x and the Holders of the Notes to which such amendment or supplemental
indenture relates a notice setting forth in general terms the substance of such
supplemental indenture. Any failure of the Note Trustee to mail such notice, or
any defect therein, shall not, however, in any way impair or affect the validity
of any such supplemental indenture.
SECTION 9.03. Execution of Supplemental Indentures. In executing, or
------------------------------------
permitting the additional trusts created by, any supplemental indenture
permitted by this Article IX or the modifications thereby of the trusts created
by this Indenture, the Note Trustee shall be entitled to receive, and subject to
Sections 6.01 and 6.02, shall be fully protected in relying upon, an Opinion of
Counsel stating that the execution of such supplemental indenture is authorized
or permitted by this Indenture. The Note Trustee may, but shall not be
obligated to, enter into any such supplemental indenture that affects the Note
Trustee's own rights, duties, liabilities or immunities under this Indenture or
otherwise.
SECTION 9.04. Effect of Supplemental Indenture. Upon the execution of any
--------------------------------
supplemental indenture pursuant to the provisions hereof, this Indenture shall
be and be deemed to be modified and amended in accordance therewith with respect
to each Series of Notes affected thereby, and the respective rights, limitations
of rights, obligations, duties, liabilities and immunities under this Indenture
of the Note Trustee, the Note Issuer and the Holders of the Notes shall
thereafter be determined, exercised and enforced hereunder subject in all
respects to such modifications and amendments, and all the terms and conditions
of any such supplemental indenture shall be and be deemed to be part of the
terms and conditions of this Indenture for any and all purposes.
SECTION 9.05. Reference in Notes to Supplemental Indentures. Notes
---------------------------------------------
authenticated and delivered after the execution of any supplemental indenture
pursuant to
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this Article IX may, and if required by the Note Trustee shall, bear a notation
in form approved by the Note Trustee as to any matter provided for in such
supplemental indenture. If the Note Issuer or the Note Trustee shall so
determine, new Notes so modified as to conform, in the opinion of the Note
Trustee and the Note Issuer, to any such supplemental indenture may be prepared
and executed by the Note Issuer and authenticated and delivered by the Note
Trustee in exchange for Outstanding Notes.
ARTICLE X
REDEMPTION OF NOTES
SECTION 10.01. Optional Redemption by Note Issuer. The Note Issuer may,
----------------------------------
at its option, redeem all, but not less than all, of the Notes of a Series on
any Payment Date if, after giving effect to payments that would otherwise be
made on such Payment Date, the Outstanding Amount of any such Series of Notes
has been reduced to less than five percent of the initial principal balance
thereof on any Optional Redemption Date at a price equal to the outstanding
principal amount of the Notes to be redeemed plus accrued and unpaid interest
thereon at the Note Interest Rate to the Optional Redemption Date (such price
being called the "Optional Redemption Price"). If the Note Issuer shall elect
-------------------------
to redeem the Notes of a Series pursuant to this Section 10.01, it shall furnish
written notice (which notice shall state all items listed in Section 10.02) of
such election to the Note Trustee and Moody's not later than 25 days prior to
the Optional Redemption Date and shall deposit with the Note Trustee not later
than one Business Day prior to the Optional Redemption Date the Optional
Redemption Price of the Notes to be redeemed whereupon all such Notes shall be
due and payable on the Optional Redemption Date upon the furnishing of a notice
complying with Section 10.02 hereof to each Holder of the Notes of such Series
pursuant to this Section 10.01.
SECTION 10.02. Form of Optional Redemption Notice. Unless otherwise
----------------------------------
specified in the Series Supplement relating to a Series of Notes, notice of
redemption under Section 10.01 hereof shall be given by the Note Trustee by
first-class mail, postage prepaid, mailed not less than five days nor more than
25 days prior to the applicable Optional Redemption Date to each Holder of Notes
to be redeemed, as of the close of business on the Record Date preceding the
applicable Optional Redemption Date at such Holder's address appearing in the
Note Register.
All notices of redemption shall state:
(1) the Optional Redemption Date;
(2) the Optional Redemption Price; and
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(3) the place where such Notes are to be surrendered for payment of
the Optional Redemption Price (which shall be the office or agency of the
Note Issuer to be maintained as provided in Section 3.02 hereof).
Notice of redemption of the Notes to be redeemed shall be given by the Note
Trustee in the name and at the expense of the Note Issuer. Failure to give
notice of redemption, or any defect therein, to any Holder of any Note selected
for redemption shall not impair or affect the validity of the redemption of any
other Note.
SECTION 10.03. Notes Payable on Optional Redemption Date or Payment Date.
---------------------------------------------------------
Notice of redemption having been given as provided in Section 10.02 hereof, the
Notes to be redeemed shall on the Optional Redemption Date become due and
payable at the Optional Redemption Price and (unless the Note Issuer shall
default in the payment of the Optional Redemption Price) no interest shall
accrue on the Optional Redemption Price for any period after the date to which
accrued interest is calculated for purposes of calculating the Optional
Redemption Price.
SECTION 10.04. Mandatory Redemption by Note Issuer. If the Seller is
-----------------------------------
required to repurchase the Transition Property pursuant to Section 5.01(b) of
the Sale Agreement, the Note Issuer shall be required to redeem all outstanding
Series of Notes on or before the fifth Business Day following the Repurchase
Date (such date of mandatory redemption, the "Mandatory Redemption Date") for a
-------------------------
purchase price equal to the then outstanding principal amount of the Notes plus
accrued and unpaid interest thereon at the Note Interest Rate to the Mandatory
Redemption Date (such price being called the "Mandatory Redemption Price"). If
--------------------------
the Note Issuer is required to redeem the Notes pursuant to this Section 10.04,
it shall furnish written notice (which notice shall state all items listed in
Section 10.05) of such redemption to the Note Trustee and Moody's not later than
one Business Day before such Repurchase Date and shall deposit with the Note
Trustee, not later than one Business Day prior to the Mandatory Redemption Date,
the Mandatory Redemption Price of the Notes to be redeemed whereupon all such
Notes shall be due and payable on the Mandatory Redemption Date upon the
furnishing of a notice complying with Section 10.05 hereof to each Holder of the
Notes of all such Series pursuant to this Section 10.04.
SECTION 10.05. Form of Mandatory Redemption Notice. Notice of redemption
-----------------------------------
under Section 10.04 hereof shall be given by the Note Trustee by first-class
mail, postage prepaid, mailed not less than five days prior to the Mandatory
Redemption Date to each Holder of Notes to be redeemed, as of the close of
business on the Record Date preceding the Mandatory Redemption Date at such
Xxxxxx's address appearing in the Note Register.
All notices of redemption shall state:
(1) the Mandatory Redemption Date;
(2) the Mandatory Redemption Price; and
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(3) the place where such Notes are to be surrendered for payment of
the Mandatory Redemption Price (which shall be the office or agency of the
Note Issuer to be maintained as provided in Section 3.02 hereof).
Notice of redemption of the Notes to be redeemed shall be given by the Note
Trustee in the name and at the expense of the Note Issuer. Failure to give
notice of redemption, or any defect therein, to any Holder of any Note selected
for redemption shall not impair or affect the validity of the redemption of any
other Note.
SECTION 10.06. Notes Payable on Mandatory Redemption Date or Date. Notice
--------------------------------------------------
of redemption having been given as provided in Section 10.05 hereof, the Notes
to be redeemed shall on the Mandatory Redemption Date become due and payable at
the Mandatory Redemption Price and (unless the Note Issuer shall default in the
payment of the Mandatory Redemption Price) no interest shall accrue on the
Mandatory Redemption price for any period after the date to which accrued
interest is calculated for purposes of calculating the Mandatory Redemption
Price.
ARTICLE XI
MISCELLANEOUS
SECTION 11.01. Compliance Certificates and Opinions, etc.
-----------------------------------------
(a) Upon any application or request by the Note Issuer to the Note Trustee
to take any action under any provision of this Indenture, the Note Issuer shall
furnish to the Note Trustee (i) an Officer's Certificate stating that all
conditions precedent, if any, provided for in this Indenture relating to the
proposed action have been complied with, (ii) an Opinion of Counsel stating that
in the opinion of such counsel all such conditions precedent, if any, have been
complied with, except that, in the case of any such application or request as to
which the furnishing of such documents is specifically required by any provision
of this Indenture, no additional certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture shall include:
(i) a statement that each signatory of such certificate or opinion
has read or has caused to be read such covenant or condition and the
definitions herein relating thereto;
(ii) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;
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(iii) a statement that, in the opinion of each such signatory, such
signatory has made such examination or investigation as is necessary to
enable such signatory to express an informed opinion as to whether or not
such covenant or condition has been complied with; and
(iv) a statement as to whether, in the opinion of each such
signatory, such condition or covenant has been complied with.
(b) (i) Prior to the deposit of any Collateral or other property or
securities with the Note Trustee that is to be made the basis for the release of
any property or securities subject to the lien of this Indenture, the Note
Issuer shall, in addition to any obligation imposed in Section 11.01(a) or
elsewhere in this Indenture, furnish to the Note Trustee an Officer's
Certificate certifying or stating the opinion of each person signing such
certificate as to the fair value (within 90 days of such deposit) to the Note
Issuer of the Collateral or other property or securities to be so deposited.
(ii) Whenever the Note Issuer is required to furnish to the Note
Trustee an Officer's Certificate certifying or stating the opinion of any
signer thereof as to the matters described in clause (i) above, the Note
Issuer shall also deliver to the Note Trustee an Independent Certificate as
to the same matters, if the fair value to the Note Issuer of the securities
to be so deposited and of all other such securities made the basis of any
such withdrawal or release since the commencement of the then-current
fiscal year of the Note Issuer, as set forth in the certificates delivered
pursuant to clause (i) above and this clause (ii), is ten percent or more
of the Outstanding Amount of the Notes of all Series, but such a
certificate need not be furnished with respect to any securities so
deposited, if the fair value thereof to the Note Issuer as set forth in the
related Officer's Certificate is less than $25,000 or less than one percent
of the Outstanding Amount of the Notes of all Series.
(iii) Whenever any property or securities are to be released from the
lien of this Indenture other than pursuant to Section 8.02(d), the Note
Issuer shall also furnish to the Note Trustee an Officer's Certificate
certifying or stating the opinion of each person signing such certificate
as to the fair value (within 90 days of such release) of the property or
securities proposed to be released and stating that in the opinion of such
person the proposed release will not impair the security under this
Indenture in contravention of the provisions hereof.
(iv) Whenever the Note Issuer is required to furnish to the Note
Trustee an Officer's Certificate certifying or stating the opinion of any
signer thereof as to the matters described in clause (iii) above, the Note
Issuer shall also furnish to the Note Trustee an Independent Certificate as
to the same matters if the fair value of the property or securities and of
all other property with respect to such Series, or securities released from
the lien of this Indenture (other than pursuant to Section 8.02(d) hereof)
since the commencement of the then-current calendar year, as set forth in
the certificates required by clause (iii) above and this clause (iv),
equals 10 percent or more of the Outstanding Amount of the Notes of all
Series, but such
78
certificate need not be furnished in the case of any release of property or
securities if the fair value thereof as set forth in the related Officer's
Certificate is less than $25,000 or less than one percent of the then
Outstanding Amount of the Notes of all Series.
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(v) Notwithstanding Section 2.11 or any other provision of this
Section, the Note Issuer may (A) collect, liquidate, sell or otherwise
dispose of the Transition Property and the FTA Charges as and to the extent
permitted or required by the Basic Documents and (B) make cash payments out
of the Collection Account as and to the extent permitted or required by the
Basic Documents.
SECTION 11.02. Form of Documents Delivered to Note Trustee. In any case
-------------------------------------------
where several matters are required to be certified by, or covered by an opinion
of, any specified Person, it is not necessary that all such matters be certified
by, or covered by the opinion of, only one such Person, or that they be so
certified or covered by only one document, but one such Person may certify or
give an opinion with respect to some matters and one or more other such Persons
as to other matters, and any such Person may certify or give an opinion as to
such matters in one or several documents.
Any certificate or opinion of an Authorized Officer of the Note Issuer may
be based, insofar as it relates to legal matters, upon a certificate or opinion
of, or representations by, counsel, unless such officer knows, or in the
exercise of reasonable care should know, that the certificate or opinion or
representations with respect to the matters upon which his or her certificate or
opinion is based are erroneous. Any such certificate of an Authorized Officer or
Opinion of Counsel may be based, insofar as it relates to factual matters, upon
a certificate or opinion of, or representations by, an officer or officers of
the Servicer, the Seller, the Note Issuer or the Administrator, stating that the
information with respect to such factual matters is in the possession of the
Servicer, the Seller, the Note Issuer or the Administrator, unless such counsel
knows, or in the exercise of reasonable care should know, that the certificate
or opinion or representations with respect to such matters are erroneous.
Whenever in this Indenture, in connection with any application or
certificate or report to the Note Trustee, it is provided that the Note Issuer
shall deliver any document as a condition of the granting of such application,
or as evidence of the Note Issuer's compliance with any term hereof, it is
intended that the truth and accuracy, at the time of the granting of such
application or at the effective date of such certificate or report (as the case
may be), of the facts and opinions stated in such document shall in such case be
conditions precedent to the right of the Note Issuer to have such application
granted or to the sufficiency of such certificate or report. The foregoing
shall not, however, be construed to affect the Note Trustee's right to rely upon
the truth and accuracy of any statement or opinion contained in any such
document as provided in Article VI.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
SECTION 11.03. Acts of Noteholders.
-------------------
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(a) Any request, demand, authorization, direction, notice, consent, waiver
or other action provided by this Indenture to be given or taken by Noteholders
may be embodied in and evidenced by one or more instruments of substantially
similar tenor signed by such Noteholders in person or by agents duly appointed
in writing; and except as herein otherwise expressly provided such action shall
become effective when such instrument or instruments are delivered to the Note
Trustee, and, where it is hereby expressly required, to the Note Issuer. Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Noteholders
---
signing such instrument or instruments. Proof of execution of any such
instrument or of a writing appointing any such agent shall be sufficient for any
purpose of this Indenture and (subject to Section 6.01) conclusive in favor of
the Note Trustee and the Note Issuer, if made in the manner provided in this
Section.
(b) The fact and date of the execution by any person of any such instrument
or writing may be proved in any manner that the Note Trustee deems sufficient.
(c) The ownership of Notes shall be proved by the Note Register.
(d) Any request, demand, authorization, direction, notice, consent, waiver
or other action by the Holder of any Notes shall bind the Holder of every Note
issued upon the registration thereof or in exchange therefor or in lieu thereof,
in respect of anything done, omitted or suffered to be done by the Note Trustee
or the Note Issuer in reliance thereon, whether or not notation of such action
is made upon such Note.
SECTION 11.04. Notices, etc., to Note Trustee, Note Issuer, Infrastructure
-----------------------------------------------------------
Bank and Moody's.
----------------
(a) Any request, demand, authorization, direction, notice, consent, waiver
or Act of Noteholders or other documents provided or permitted by this Indenture
to be made upon, given or furnished to or filed with:
(i) the Note Trustee by any Noteholder or by the Note Issuer shall be
sufficient for every purpose hereunder if made, given, furnished or filed
in writing by facsimile transmission, first-class mail or overnight
delivery service to or with the Note Trustee at its Corporate Trust Office,
or
(ii) the Note Issuer by the Note Trustee or by any Noteholder shall be
sufficient for every purpose here under if in writing and mailed, first-
class, postage prepaid, to the Note Issuer addressed to: SPPC Funding LLC,
0000 Xxxx Xxxx, X.X. Box 30150, Attention: President, or at any other
address previously furnished in writing to the Note Trustee by the Note
Issuer. The Note Issuer shall promptly transmit any notice received by it
from the Noteholders to the Note Trustee.
(b) Notices required to be given to Moody's or the Infrastructure Bank by
the Note Issuer or the Note Trustee shall be in writing, personally delivered or
mailed by certified mail, return receipt requested (i) in the case of Moody's,
to Moody's Investors
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Service, Inc., ABS Monitoring Department, 00 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000 and (ii) in the case of the Infrastructure Bank, to California
Infrastructure and Economic Development Bank, c/o California Trade and Commerce
Agency, 000 X Xxxxxx, Xxxxx 0000, Xxxxxxxxxx, XX 00000, Attention: Executive
Director.
SECTION 11.05. Notices to Noteholders; Waiver. Where this Indenture
------------------------------
provides for notice to Noteholders of any event, such notice shall be
sufficiently given (unless otherwise herein expressly provided) if in writing
and mailed, first-class, postage prepaid to each Noteholder affected by such
event, at such Noteholder's address as it appears on the Note Register, not
later than the latest date, and not earlier than the earliest date, prescribed
for the giving of such notice. In any case where notice to Noteholders is given
by mail, neither the failure to mail such notice nor any defect in any notice so
mailed to any particular Noteholder shall affect the sufficiency of such notice
with respect to other Noteholders, and any notice that is mailed in the manner
herein provided shall conclusively be presumed to have been duly given.
Where this Indenture provides for notice in any manner, such notice may be
waived in writing by any Person entitled to receive such notice, either before
or after the event, and such waiver shall be the equivalent of such notice.
Waivers of notice by Noteholders shall be filed with the Note Trustee but such
filing shall not be a condition precedent to the validity of any action taken in
reliance upon such a waiver.
In case, by reason of the suspension of regular mail service as a result of
a strike, work stoppage or similar activity, it shall be impractical to mail
notice of any event of Noteholders when such notice is required to be given
pursuant to any provision of this Indenture, then any manner of giving such
notice as shall be satisfactory to the Note Trustee shall be deemed to be a
sufficient giving of such notice.
Where this Indenture provides for notice to Moody's, failure to give such
notice shall not affect any other rights or obligations created hereunder, and
shall not under any circumstance constitute a Default or Event of Default.
SECTION 11.06. Effect of Headings and Table of Contents. The Article and
----------------------------------------
Section headings herein and the Table of Contents are for convenience only and
shall not affect the construction hereof.
SECTION 11.07. Successors and Assigns. All covenants and agreements in
----------------------
this Indenture and the Notes by the Note Issuer shall bind its successors and
assigns, whether so expressed or not.
All agreements of the Note Trustee in this Indenture shall bind its
successors.
SECTION 11.08. Separability. In case any provision in this Indenture or
------------
in the Notes shall be invalid, illegal or unenforceable, the validity, legality,
and enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.
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SECTION 11.09. Benefits of Indenture. Nothing in this Indenture or in the
---------------------
Notes, express or implied, shall give to any Person, other than the parties
hereto and their successors hereunder, and the Noteholders, and any other party
secured hereunder, and any other Person with an ownership interest in any part
of the Collateral, any benefit or any legal or equitable right, remedy or claim
under this Indenture.
SECTION 11.10. Legal Holidays. In any case where the date on which any
--------------
payment is due shall not be a Business Day, then (notwithstanding any other
provision of the Notes or this Indenture) payment need not be made on such date,
but may be made on the next succeeding Business Day with the same force and
effect as if made on the date on which nominally due, and no interest shall
accrue for the period from and after any such nominal date.
SECTION 11.11. Governing Law. THIS INDENTURE SHALL BE CONSTRUED IN
-------------
ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
SECTION 11.12. Counterparts. This Indenture may be executed in a number
------------
of counterparts, each of which so executed shall be deemed to be an original,
but all such counterparts shall together constitute but one and the same
instrument.
SECTION 11.13. Recording of Indenture. If this Indenture is subject to
----------------------
recording in any appropriate public recording offices, such recording is to be
effected by the Note Issuer and at its expense accompanied by an Opinion of
Counsel (which may be counsel to the Note Trustee or any other counsel
reasonably acceptable to the Note Trustee) to the effect that such recording is
necessary either for the protection of the Noteholders or any other Person
secured hereunder or for the enforcement of any right or remedy granted to the
Note Trustee under this Indenture.
SECTION 11.14. Trust Obligation. No recourse may be taken, or indirectly,
----------------
with respect to the obligations of the Note Issuer or the Note Trustee on the
Notes or under this Indenture or any certificate or other writing delivered in
connection herewith or therewith, against (i) the Note Trustee in its individual
capacity, (ii) any owner of a beneficial interest in the Note Issuer or (iii)
any partner, owner, beneficiary, agent, officer, director or employee of the
Note Trustee in its individual capacity, any holder of a beneficial interest in
the Note Issuer or the Note Trustee or of any successor or assign of the Note
Trustee in its individual capacity, except as any such Person may have expressly
agreed (it being understood that the Note Trustee has no such obligations in its
individual capacity).
SECTION 11.15. No Recourse to Note Issuer. Notwithstanding any provision
--------------------------
of this Indenture or any Series Supplement to the contrary, Noteholders shall
have no recourse against the Note Issuer, but shall look only to the Collateral,
with respect to any amounts due to the Noteholders hereunder.
83
SECTION 11.16. Inspection. The Note Issuer agrees that, on reasonable
----------
prior notice, it will permit any representative of the Note Trustee, during the
Note Issuer's normal business hours, to examine all the books of account,
records, reports, and other papers of the Note Issuer, to make copies and
extracts therefrom, to cause such books to be audited by Independent certified
public accountants, and to discuss the Note Issuer's affairs, finances and
accounts with the Note Issuer's officers, employees, and Independent certified
public accountants, all at such reasonable times and as often as may be
reasonably requested. The Note Trustee shall and shall cause its representatives
to hold in confidence all such information except to the extent disclosure may
be required by law (and all reasonable applications for confidential treatment
are unavailing) and except to the extent that the Note Trustee may reasonably
determine that such disclosure is consistent with its obligations hereunder.
Notwithstanding anything herein to the contrary, the foregoing shall not be
construed to prohibit (i) disclosure of any and all information that is or
becomes publicly known, or information obtained by the Note Trustee from sources
other than the Note Issuer, provided such parties are rightfully in possession
of such information, (ii) disclosure of any and all information (A) if required
to do so by any applicable statute, law, rule or regulation, (B) pursuant to any
subpoena, civil investigative demand or similar demand or request of any court
or regulatory authority exercising its proper jurisdiction, (C) in any
preliminary or final offering circular, registration statement or contract or
other document pertaining to the transactions contemplated by this Indenture or
the Basic Documents approved in advance by the Note Issuer or (D) to any
affiliate, independent or internal auditor, agent, employee or attorney of the
Note Trustee having a need to know the same, provided that such parties agree to
be bound by the confidentiality provisions contained in this Secton 11.19, or
(iii) any other disclosure authorized by the Note Issuer.
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IN WITNESS WHEREOF, the Note Issuer and the Note Trustee have caused this
Indenture to be duly executed by their respective officers, thereunto duly
authorized and duly attested, all as of the day and year first above written.
SPPC FUNDING LLC,
By:
Name:
Title:
BANKERS TRUST COMPANY OF CALIFORNIA, N.A., not in
its individual capacity but solely as Note
Trustee,
By:
Name:
Title:
85
STATE OF NEVADA, )
) ss.:
COUNTY OF WASHOE )
On the ____ day of April, 1999, before me, Xxxx Xxxxxx, a Notary Public in
and for said county and state, personally appeared Xxxx X. Xxxxxx, personally
known to me (or proved to me on the basis of satisfactory evidence) to be the
person and officer whose name is subscribed to the within instrument and
acknowledged to me that he executed the same in his authorized capacity, and
that by his signature on the instrument SPPC Funding LLC, a Delaware limited
liability company and the entity upon which the person acted, executed this
instrument.
WITNESS my hand and official seal.
By
Notary Public
My commission expires:
STATE OF ______________, )
) ss.:
COUNTY OF ___________, )
On the ____ day of April, 1999, before me, __________ a Notary Public in
and for said county and state, personally appeared _____________, personally
known to me (or proved to me on the basis of satisfactory evidence) to be the
person and officer whose name is subscribed to the within instrument and
acknowledged to me that he executed the same in his authorized capacity, and
that by his signature on the instrument _________________, a national banking
association and the entity upon which the person acted, executed this
instrument.
WITNESS my hand and official seal.
Notary Public
My commission expires:
86
Exhibit A-1
[FORM OF SALE AGREEMENT]
87
Exhibit A-2
[FORM OF SERVICING AGREEMENT]
88
Exhibit B
[FORM OF NOTE]
89
Exhibit C
[FORM OF SERIES SUPPLEMENT]
90
