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EXHIBIT 4.3
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WEST PENN FUNDING LLC,
Issuer
and
[ ],
Bond Trustee
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INDENTURE
Dated as of [ ], 1999
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Securing Transition Bonds
Issuable in Series
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TABLE OF CONTENTS
Page
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ARTICLE I Definitions and Incorporation by Reference
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SECTION 1.01. Definitions........................................................................2
SECTION 1.02. Incorporation by Reference of Trust Indenture Act.................................11
SECTION 1.03. Rules of Construction.............................................................11
ARTICLE II
The Transition Bonds
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SECTION 2.01. Form..............................................................................11
SECTION 2.02. Execution, Authentication and Delivery............................................12
SECTION 2.03. Denominations; Transition Bonds Issuable in Series................................12
SECTION 2.04. Temporary Transition Bonds........................................................13
SECTION 2.05. Registration; Registration of Transfer and Exchange...............................14
SECTION 2.06. Mutilated, Destroyed, Lost or Stolen Transition Bonds.............................15
SECTION 2.07. Persons Deemed Owner..............................................................15
SECTION 2.08. Payment of Principal, Premium, if any, and Interest; Interest on Overdue
Principal and Premium, if any; Principal, Premium and Interest Rights
Preserved........................................................................16
SECTION 2.09. Cancelation.......................................................................16
SECTION 2.10. Authentication and Delivery of Transition Bonds...................................17
SECTION 2.11. Book-Entry Transition Bonds.......................................................21
SECTION 2.12. Notices to Clearing Agency........................................................22
SECTION 2.13. Definitive Transition Bonds.......................................................22
ARTICLE III
Covenants
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SECTION 3.01. Payment of Principal, Premium, if any, and Interest...............................22
SECTION 3.02. Maintenance of Office or Agency...................................................22
SECTION 3.03. Money for Payments To Be Held in Trust............................................23
SECTION 3.04. Existence.........................................................................24
SECTION 3.05. Protection of Collateral..........................................................24
SECTION 3.06. Opinions as to Collateral.........................................................24
SECTION 3.07. Performance of Obligations........................................................25
SECTION 3.08. Negative Covenants................................................................25
SECTION 3.09. Annual Statement as to Compliance.................................................26
SECTION 3.10. Issuer May Consolidate, etc., Only on Certain Terms...............................26
SECTION 3.11. Successor or Transferee...........................................................27
SECTION 3.12. No Other Business.................................................................27
SECTION 3.13. No Borrowing......................................................................27
SECTION 3.14. Guarantees, Loans, Advances and Other Liabilities.................................27
SECTION 3.15. Capital Expenditures..............................................................27
SECTION 3.16. Restricted Payments...............................................................28
SECTION 3.17. Notice of Events of Default.......................................................28
SECTION 3.18. Inspection........................................................................28
SECTION 3.19. Adjusted Overcollateralization Schedules..........................................28
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SECTION 3.20. Transfer Agreement, Sale Agreement and Servicing Agreement
Covenants........................................................................28
SECTION 3.21. Taxes.............................................................................30
SECTION 3.22. Separate Entity...................................................................30
ARTICLE IV
Satisfaction and Discharge; Defeasance
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SECTION 4.01. Satisfaction and Discharge of Indenture; Defeasance...............................30
SECTION 4.02. Conditions to Defeasance..........................................................32
SECTION 4.03. Application of Trust Money........................................................33
SECTION 4.04. Repayment of Moneys Held by Paying Agent..........................................33
ARTICLE V
Remedies
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SECTION 5.01. Events of Default.................................................................33
SECTION 5.02. Acceleration of Maturity; Rescission and Annulment................................34
SECTION 5.03. Collection of Indebtedness and Suits for Enforcement by Bond Trustee..............35
SECTION 5.04. Remedies; Priorities..............................................................36
SECTION 5.05. Optional Preservation of the Collateral...........................................37
SECTION 5.06. Limitation of Proceedings.........................................................37
SECTION 5.07. Unconditional Rights of Transition Bondholders To Receive
Principal, Premium, if any, and Interest.........................................38
SECTION 5.08. Restoration of Rights and Remedies................................................38
SECTION 5.09. Rights and Remedies Cumulative....................................................38
SECTION 5.10. Delay or Omission Not a Waiver....................................................39
SECTION 5.11. Control by Transition Bondholders.................................................39
SECTION 5.12. Waiver of Past Defaults...........................................................39
SECTION 5.13. Undertaking for Costs.............................................................39
SECTION 5.14. Waiver of Stay or Extension Laws..................................................40
SECTION 5.15. Action on Transition Bonds........................................................40
ARTICLE VI
The Bond Trustee
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SECTION 6.01. Duties and Liabilities of Bond Trustee............................................40
SECTION 6.02. Rights of Bond Trustee............................................................41
SECTION 6.03. Individual Rights of Bond Trustee.................................................42
SECTION 6.04. Bond Trustee's Disclaimer.........................................................42
SECTION 6.05. Notice of Defaults................................................................42
SECTION 6.06. Reports by Bond Trustee to Holders................................................42
SECTION 6.07. Compensation and Indemnity........................................................43
SECTION 6.08. Replacement of Bond Trustee.......................................................43
SECTION 6.09. Successor Bond Trustee by Merger..................................................44
SECTION 6.10. Appointment of Co-Trustee or Separate Trustee.....................................44
SECTION 6.11. Eligibility; Disqualification.....................................................45
SECTION 6.12. Preferential Collection of Claims Against Issuer..................................45
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ARTICLE VII
Transition Bondholders' Lists and Reports
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SECTION 7.01. Issuer To Furnish Bond Trustee Names and Addresses of
Transition Bondholders...........................................................46
SECTION 7.02. Preservation of Information; Communications to Transition Bondholders.............46
SECTION 7.03. Reports by Issuer.................................................................46
SECTION 7.04. Reports by Bond Trustee...........................................................47
SECTION 7.05. Provision of Servicer Reports.....................................................47
ARTICLE VIII
Accounts, Disbursements and Releases
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SECTION 8.01. Collection of Money...............................................................47
SECTION 8.02. Collection Account................................................................47
SECTION 8.03. Release of Collateral.............................................................50
SECTION 8.04. Opinion of Counsel................................................................51
SECTION 8.05. Reports by Independent Accountants................................................51
ARTICLE IX
Supplemental Indentures
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SECTION 9.01. Supplemental Indentures Without Consent of Transition Bondholders.................51
SECTION 9.02. Supplemental Indentures with Consent of Transition Bondholders....................53
SECTION 9.03. Execution of Supplemental Indentures..............................................54
SECTION 9.04. Effect of Supplemental Indenture..................................................54
SECTION 9.05. Conformity with Trust Indenture Act...............................................54
SECTION 9.06. Reference in Transition Bonds to Supplemental Indentures..........................55
ARTICLE X
Redemption of Transition Bonds
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SECTION 10.01. Optional Redemption by Issuer.....................................................55
SECTION 10.02. Form of Redemption Notice.........................................................55
SECTION 10.03. Payment of Redemption Price.......................................................56
ARTICLE XI
Miscellaneous
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SECTION 11.01. Compliance Certificates and Opinions, etc.........................................56
SECTION 11.02. Form of Documents Delivered to Bond Trustee.......................................57
SECTION 11.03. Acts of Transition Bondholders....................................................57
SECTION 11.04. Notices, etc., to Bond Trustee, Issuer and Rating Agencies........................58
SECTION 11.05. Notices to Transition Bondholders; Waiver.........................................58
SECTION 11.06. Alternate Payment and Notice Provisions...........................................59
SECTION 11.07. Conflict with Trust Indenture Act.................................................59
SECTION 11.08. Effect of Headings and Table of Contents..........................................59
SECTION 11.09. Successors and Assigns............................................................59
SECTION 11.10. Separability......................................................................59
SECTION 11.11. Benefits of Indenture.............................................................59
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SECTION 11.12. Legal Holidays....................................................................59
SECTION 11.13. GOVERNING LAW.....................................................................60
SECTION 11.14. Counterparts......................................................................60
SECTION 11.15. Issuer Obligation.................................................................60
SECTION 11.16. No Petition.......................................................................60
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INDENTURE dated as of [ ], 1999, between WEST
PENN FUNDING LLC, a Delaware limited liability company (the
"Issuer"), and [ ], a [ ], as trustee (the "Bond
Trustee").
The Issuer has duly authorized the execution and delivery of this
Indenture to provide for one or more Series of Transition Bonds, issuable as
provided in this Indenture. Each such Series of Transition Bonds will be issued
only under a separate Series Supplement to this Indenture duly executed and
delivered by the Issuer and the Bond Trustee. The Issuer is entering into this
Indenture, and the Bond Trustee is accepting the trusts created hereby, each for
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged and each intending to be legally bound hereby.
GRANTING CLAUSE
The Issuer hereby Grants to the Bond Trustee as trustee for the
benefit of the Holders of the Transition Bonds from time to time issued and
outstanding, all of the Issuer's right, title and interest in and to (a) the
Intangible Transition Property transferred by the Seller to the Issuer from time
to time pursuant to the Sale Agreement and all proceeds thereof, (b) the
Transfer Agreement except for Section 5.01 thereof solely to the extent such
Section provides for indemnification of the Seller and the Issuer, (c) all Bills
of Sale delivered by the Transferor pursuant to the Transfer Agreement, (d) the
Sale Agreement except for Section 5.01 thereof solely to the extent such Section
provides for indemnification of the Issuer, (e) all Bills of Sale delivered by
the Seller pursuant to the Sale Agreement, (f) the Servicing Agreement except
for Section 5.02(b) thereof solely to the extent such Section provides for
indemnification of the Issuer, (g) the Collection Account and all amounts on
deposit therein from time to time, (h) any Swap Agreements to which the Issuer
is a party, (i) all other property of whatever kind owned from time to time by
the Issuer including all accounts, accounts receivable and chattel paper, (j)
all present and future claims, demands, causes and choses in action in respect
of any or all of the foregoing and (k) all payments on or under and all proceeds
of every kind and nature whatsoever in respect of any or all of the foregoing,
including all proceeds of the conversion, voluntary or involuntary, into cash or
other liquid property, all cash proceeds, accounts, accounts receivable, general
intangibles, notes, drafts, acceptances, chattel paper, checks, deposit
accounts, insurance proceeds, condemnation awards, rights to payment of any and
every kind, and other forms of obligations and receivables, instruments and
other property which at any time constitute all or part of or are included in
the proceeds of any of the foregoing (collectively, the "Collateral"); provided
that cash or other property distributed to the Issuer from the Collection
Account in accordance with the provisions of this Indenture will not be subject
to the lien of this Indenture.
To have and to hold in trust to secure the payment of principal of
and premium, if any, and interest on, and any other amounts (including all fees,
expenses, counsel fees and other amounts due and owing to the Bond Trustee)
owing in respect of, the Transition Bonds equally and ratably without prejudice,
preference, priority or distinction, except as expressly provided in this
Indenture and to secure performance by the Issuer of all of the Issuer's
obligations under this Indenture with respect to the Transition Bonds, all as
provided in this Indenture.
The Bond Trustee, as trustee on behalf of the Holders of the
Transition Bonds, acknowledges such Grant, accepts the trusts hereunder in
accordance with the provisions hereof and agrees to perform its duties herein
required.
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ARTICLE I
Definitions and Incorporation by Reference
SECTION 1.01. Definitions. (a) Except as otherwise specified
herein or as the context may otherwise require, each of the following terms has
the respective meaning set forth below for all purposes of this Indenture.
"Act" has the meaning specified in Section 11.03(a).
"Adjustment Date" means, with respect to any Series of Transition
Bonds, the date or dates specified as such in the Series Supplement therefor.
"Administration Agreements" has the meaning specified in the
Servicing Agreement.
"Administrative Agent" means Allegheny Power Service Corporation,
as administrative agent, under the Administration Agreements, and its permitted
successors and assigns thereunder.
"Affiliate" means, with respect to any specified Person, any other
Person controlling or controlled by or under common control with such specified
Person. For the purposes of this definition, "control" when used with respect to
any specified Person means the power to direct the management and policies of
such Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"Authorized Initial Denominations" means, with respect to any
Series of Transition Bonds, $1,000 and integral multiples thereof, or such other
denominations as may be specified in the Series Supplement therefor.
"Authorized Officer" means the Manager of the Issuer, or any
officer who is authorized to act for the Issuer and who is identified on the
list of Authorized Officers delivered by the Issuer to the Bond Trustee as of
the date hereof (as such list may be modified or supplemented from time to time
thereafter).
"Basic Documents" means the Certificate of Formation, the LLC
Agreement, the Transfer Agreement, the Sale Agreement, the Servicing Agreement
and any Bills of Sale.
"Bills of Sale" means any bills of sale delivered by the
Transferor pursuant to the Transfer Agreement and any bills of sale delivered by
the Seller pursuant to the Sale Agreement.
"Bond Rate" means, with respect to any Series or Class, the rate
at which interest accrues on the principal balance of Transition Bonds of such
Series or Class, as specified in the Series Supplement therefor.
"Bond Trustee" means [ ], a [ ] or any successor bond
trustee under this Indenture, not in its individual capacity but solely as bond
trustee under this Indenture.
"Book-Entry Transition Bonds" means beneficial interests in the
Transition Bonds, ownership and transfers of which shall be made through book
entries by a Clearing Agency as described in Section 2.11.
"Business Day" has the meaning specified in the Servicing
Agreement.
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"Calculated Overcollateralization Level" means, with respect to
any Series of Transition Bonds, the amount specified as such in the Series
Supplement therefor.
"Calculation Date" means, with respect to any Series of Transition
Bonds, such date or dates specified as such in the Series Supplement therefor.
"Capital Subaccount" has the meaning specified in Section 8.02(a).
"Certificate of Formation" means the certificate of formation of
the Issuer substantially in the form of Exhibit [ ] to the LLC Agreement.
"Class" means, with respect to any Series, any one of the classes
of Transition Bonds of that Series.
"Class Termination Date" means, with respect to any Class, the
termination date therefor, as specified in the Series Supplement therefor.
"Clearing Agency" means an organization registered as a "clearing
agency" pursuant to Section 17A of the Exchange Act.
"Clearing Agency Participant" means a broker, dealer, bank, other
financial institution or other Person for whom from time to time a Clearing
Agency effects book-entry transfers and pledges of securities deposited with
the Clearing Agency.
"Code" means the Internal Revenue Code of 1986, as amended from
time to time, and Treasury Regulations promulgated thereunder.
"Collateral" has the meaning specified in the granting clause of
this Indenture.
"Collection Account" has the meaning specified in Section 8.02(a).
"Collection Period" has the meaning specified in the Servicing
Agreement.
"Corporate Trust Office" means the principal office of the Bond
Trustee at which at any particular time its corporate trust business shall be
administered, which office at date of the execution of this Indenture is located
at [ ], Attention: [ ] or at such other address as the Bond Trustee may
designate from time to time by notice to the Transition Bondholders and the
Issuer, or the principal corporate trust office of any successor Bond Trustee
(the address of which the successor Bond Trustee will notify the Transition
Bondholders and the Issuer).
"Covenant Defeasance Option" has the meaning specified in Section
4.01(b).
"Counterparty" means the counterparty with respect to any Swap
Agreement.
"Default" means any occurrence that is, or with notice or the
lapse of time or both would become, an Event of Default.
"Defeasance Subaccount" has the meaning specified in Section
8.02(a).
"Definitive Transition Bonds" has the meaning specified in Section
2.11.
"DTC Agreement" means the agreement between the Issuer, the Bond
Trustee and The Depository Trust Company, as the initial Clearing Agency, dated
as of the Closing Date, relating to the Transition Bonds, substantially in the
form of Exhibit C hereto, as the same may be amended and supplemented from time
to time.
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"Eligible Deposit Account" means either (a) a segregated account
with an 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 State (or any domestic branch of a
foreign bank), having corporate trust powers and acting as trustee for funds
deposited in such account, so long as any of the securities of such depository
institution shall have a credit rating from each Rating Agency in one of its
generic rating categories which signifies investment grade.
"Eligible Guarantor Institution" means a firm or other entity
identified in Rule 17Ad-15 under the Exchange Act as "an eligible guarantor
institution," including (as such terms are defined therein) (i) a bank; (ii) a
broker, dealer, municipal securities broker or dealer or government securities
broker or dealer; (iii) a credit union; (iv) a national securities exchange,
registered securities association or clearing agency; or (v) a savings
association that is a participant in a securities transfer association.
"Eligible Institution" means (a) the corporate trust department of
the Bond Trustee 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), which (i) has (A) a long-term unsecured debt rating of "AAA" by Standard
& Poor's and "Aa3" by Moody's and (B) a short-term rating of "A-1+" by Standard
& Poor's and "P-1" by Moody's, or any other long-term, short-term or certificate
of deposit rating acceptable to the Rating Agencies and (ii) whose deposits are
insured by the FDIC.
"Eligible Investments" mean book-entry securities, negotiable
instruments or securities represented by instruments in bearer or registered
form which evidence:
(a) direct obligations of, or 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 any Eligible Institution; provided, however, that
at the time of the investment or contractual commitment to invest therein
such Eligible Institution shall have the credit ratings set forth in
clause (i) of the Definition of Eligible Institution.
(c) commercial paper (other than commercial paper of the Seller or
the Servicer or any of their affiliates) having, at the time of the
investment or contractual commitment to invest therein, a rating from
each of the Rating Agencies in the highest rating category granted
thereby;
(d) investments in money market funds having a rating from each of
the Rating Agencies in the highest rating category granted thereby
(including funds for which the Bond 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 of America,
in either case entered into with an Eligible Institution; and
(f) any other investment permitted by each of the Rating Agencies;
provided, however, that (i) any book-entry security, instrument or security
having a maturity of one month or less that would be an Eligible Investment but
for its failure (or the failure of the obligor thereon) to have the rating
specified above shall be an Eligible Investment if such book-entry security,
instrument or security (or the obligor thereon) has a long-term unsecured debt
rating of at least "A2" by Moody's (or the equivalent thereof by the other
Rating Agencies) or a short-term rating of at least "P-1" by Moody's (or the
equivalent thereof by the other Rating
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Agencies), and (ii) any book-entry security, instrument or security having a
maturity of greater than one month that would be an Eligible Investment but for
its failure (or the failure of the obligor thereon) to have the rating
specified above shall be an Eligible Investment if such book-entry security,
instrument or security (or the obligor thereon) has a long-term unsecured debt
rating of at least "A1" by Moody's (or the equivalent thereof by the other
Rating Agencies) and a short-term rating of at least "P-1" by Moody's (or the
equivalent thereof by the other Rating Agencies).
"Event of Default" has the meaning specified in Section 5.01.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Executive Officer" means, with respect to any corporation, the
Chief Executive Officer, Chief Operating Officer, Chief Financial Officer,
President, Executive Vice President, any Vice President, the Secretary or the
Treasurer of such corporation; and with respect to any partnership, any general
partner thereof.
"Expected Amortization Schedule" means, with respect to any Series
of Transition Bonds, the expected amortization schedule for principal thereof,
as specified in the Series Supplement therefor.
"Expected Final Payment Date" means, with respect to any Series or
Class of Transition Bonds, the expected final payment date therefor, as
specified in the Series Supplement therefor.
"FDIC" means the Federal Deposit Insurance Corporation or any
successor.
"Financing Issuance" means an issuance of a new Series of
Transition Bonds hereunder to provide funds to finance the purchase by the
Issuer of Intangible Transition Property.
"Fitch IBCA" has the meaning specified in the Servicing Agreement.
"General Subaccount" has the meaning specified in Section 8.02(a).
"Grant" means mortgage, pledge, bargain, sell, warrant, alienate,
remise, 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 principal,
interest and other 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 "Transition Bondholder" means the Person in whose name
a Transition Bond is registered on the Transition Bond Register.
"Indemnity Amounts" means any amounts paid by the Transferor, the
Seller or the Servicer to the Bond Trustee, for itself or on behalf of the
Transition Bondholders, pursuant to Section 5.01(b), 5.0l(c)(ii) and 5.01(e) of
the Transfer Agreement, Section 5.01(b), Section 5.01(c)(ii) and Section 5.01(d)
of the Sale Agreement or Section 5.02(b) of the Servicing Agreement or by the
Issuer to the Bond Trustee pursuant to Section 5.07 of this Indenture;
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provided, however, that Indemnity Amounts shall exclude any Deferred Repurchase
Price paid pursuant to Section 5.01(c)(ii) of the Transfer Agreement.
"Indenture" or "this Indenture" means this instrument as
originally 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 Transition Bonds established hereunder.
"Independent" means, when used with respect to any specified
Person, that the Person (a) is in fact independent of the Issuer, any other
obligor upon the Transition Bonds, the Transferor, the Seller and any Affiliate
of any of the foregoing Persons, (b) does not have any direct financial interest
or any material indirect financial interest in the Issuer, any such other
obligor, the Transferor, the Seller or any Affiliate of any of the foregoing
Persons and (c) is not connected with the Issuer, any such other obligor, the
Transferor, the Seller or any Affiliate of any of the foregoing Persons as an
officer, employee, promoter, underwriter, trustee, partner, director or person
performing similar functions.
"Independent Certificate" means a certificate or opinion to be
delivered to the Bond 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
approved by the Bond Trustee in the exercise of reasonable care, 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.
"Intangible Transition Charges Adjustment Process" means the
process by which Intangible Transition Charges are adjusted pursuant to the
Servicing Agreement and the Statute.
"Issuer" means the party named as such in this Indenture until a
successor replaces it and, thereafter, means the successor and, for purposes of
any provision contained herein and required by the TIA, each other obligor on
the Transition Bonds.
"Issuer Order" and "Issuer Request" means a written order or
request signed in the name of the Issuer by any one of its Authorized Officers
and delivered to the Bond Trustee.
"Legal Defeasance Option" has the meaning specified in Section
4.01(b).
"Lien" has the meaning specified in the Servicing Agreement.
"LLC Agreement" means the Amended and Restated Limited Liability
Company Agreement of the Issuer dated as of [ ], 1999, as amended and
supplemented from time to time.
"Loss Amounts" means any amounts remitted by the Transferor to the
Bond Trustee pursuant to Section 5.01(c)(i) of the Transfer Agreement and any
amounts remitted by the Seller to the Bond Trustee pursuant to Section
5.01(c)(i) of the Sale Agreement.
"Loss Subaccount" has the meaning specified in Section 8.02(a).
"Manager" means [ ], as manager of the Issuer pursuant to the LLC
Agreement.
"Xxxxx'x" has the meaning specified in the Servicing Agreement.
"Officer's Certificate" means a certificate signed by any
Authorized Officer of the Issuer, under the circumstances described in, and
otherwise complying with, the applicable
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requirements of Section 11.01, and delivered to the Bond 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 Issuer.
"Operating Expenses" means all fees, costs, expenses and indemnity
payments owed by the Issuer, including all amounts owed by the Issuer to the
Bond Trustee, the Servicing Fee, the fees owed under the Administration
Agreements, and legal and accounting fees, costs and expenses of the Issuer.
"Opinion of Counsel" means one or more written opinions of counsel
who may, except as otherwise expressly provided in this Indenture, be employees
of or counsel to the Issuer and who shall be reasonably satisfactory to the Bond
Trustee, and which opinion or opinions shall be addressed to the Bond Trustee,
as Bond Trustee, and shall comply with any applicable requirements of Section
11.01, and shall be in a form reasonably satisfactory to the Bond Trustee.
"Outstanding" means, as of the date of determination, all
Transition Bonds theretofore authenticated and delivered under this Indenture
except:
(i) Transition Bonds theretofore canceled by the Transition Bond
Registrar or delivered to the Transition Bond Registrar for cancelation;
(ii) Transition Bonds or portions thereof the payment for which
money in the necessary amount has been theretofore deposited with the
Bond Trustee or any Paying Agent in trust for the Holders of such
Transition Bonds; (provided, however, that if such Transition Bonds are
to be redeemed, notice of such redemption has been duly given pursuant to
this Indenture or provision therefor, satisfactory to the Bond Trustee,
made); and
(iii) Transition Bonds in exchange for or in lieu of other
Transition Bonds which have been authenticated and delivered pursuant to
this Indenture unless proof satisfactory to the Bond Trustee is presented
that any such Transition Bonds are held by a bona fide purchaser;
provided that in determining whether the Holders of the requisite Outstanding
Amount of the Transition Bonds or any Series or Class thereof have given any
request, demand, authorization, direction, notice, consent or waiver hereunder
or under any Basic Document, Transition Bonds owned by the Issuer, any other
obligor upon the Transition Bonds, the Transferor, 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 Bond Trustee shall be
protected in relying upon any such request, demand, authorization, direction,
notice, consent or waiver, only Transition Bonds that the Bond Trustee knows to
be so owned shall be so disregarded. Transition Bonds so owned that have been
pledged in good faith may be regarded as Outstanding if the pledgee establishes
to the satisfaction of the Bond Trustee the pledgee's right so to act with
respect to such Transition Bonds and that the pledgee is not the Issuer, any
other obligor upon the Transition Bonds, the Transferor, the Seller or any
Affiliate of any of the foregoing Persons.
"Outstanding Amount" means the aggregate principal amount of all
Transition Bonds or, if the context requires, all Transition Bonds of a Series
or Class Outstanding at the date of determination.
"Overcollateralization" means, with respect to any Payment Date,
an amount that, if deposited to the Overcollateralization Subaccount, would
cause the balance in such subaccount to equal the Calculated
Overcollateralization Level for such Payment Date, without regard to investment
earnings.
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"Overcollateralization Amount" means, with respect to any Series
of Transition Bonds, the amount specified as such in the Series Supplement
therefor.
"Overcollateralization Subaccount" has the meaning specified in
Section 8.02(a).
"Paying Agent" means the Bond Trustee or any other Person that
meets the eligibility standards for the Bond Trustee specified in Section 6.11
and is authorized by the Issuer to make the payments of principal of or premium,
if any, or interest on the Transition Bonds on behalf of the Issuer.
"Payment Date" means, with respect to any Series or Class, each
date or dates specified as Payment Dates for such Series or Class in the Series
Supplement therefor.
"Person" means any individual, corporation, estate, partnership,
joint venture, association, joint stock company, trust (including any
beneficiary thereof), business trust, unincorporated organization or government
or any agency or political subdivision thereof.
"Predecessor Transition Bond" means, with respect to any
particular Transition Bond, every previous Transition Bond evidencing all or a
portion of the same debt as that evidenced by such particular Transition Bond;
and, for the purpose of this definition, any Transition Bond authenticated and
delivered under Section 2.06 in lieu of a mutilated, lost, destroyed or stolen
Transition Bond shall be deemed to evidence the same debt as the mutilated,
lost, destroyed or stolen Transition Bond.
"Proceeding" means any suit in equity, action at law or other
judicial or administrative proceeding.
"Projected Transition Bond Balance" means, as of any date, the sum
of the amounts provided for in the Expected Amortization Schedules for each
outstanding Series of Transition Bonds and such date.
"Rating Agency" means any rating agency rating the Transition
Bonds of any Class or Series at the time of issuance thereof at the request of
the Issuer . If no such organization or successor is any longer in existence,
"Rating Agency" shall be a nationally recognized statistical rating organization
or other comparable Person designated by the Issuer, notice of which designation
shall be given to the Bond Trustee and the Servicer.
"Rating Agency Condition" means, with respect to any action, the
notification in writing by each Rating Agency to the Transferor, the Seller, the
Servicer, the Bond Trustee and the Issuer that such action will not result in a
reduction or withdrawal of the then current rating by such Rating Agency of any
outstanding Series or Class of Transition Bonds.
"Record Date" means, with respect to any Payment Date for a
Series, the date set forth as such in the Series Supplement therefor.
"Redemption Date" means, with respect to any Series or Class, the
date for the redemption of the Transition Bonds of such Series or Class pursuant
to Section 10.01 or the Series Supplement for such Series or Class.
"Redemption Price" has the meaning specified in Section 10.01.
"Refunding Issuance" means issuance of a new Series of Transition
Bonds hereunder to pay the cost of refunding, through redemption or payment on
the Expected Final Payment Date for a Series or Class of Transition Bonds, all
or part of the Transition Bonds of such Series or Class to the extent permitted
by the terms thereof.
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"Registered Holder" means, as of any date, the Person in whose
name a Transition Bond is registered on the Transition Bond Register on such
date.
"Required Capital Amount" means, for each Outstanding Series of
Transition Bonds, the amount specified as such in the Series Supplement
therefor.
"Reserve Subaccount" has the meaning specified in Section 8.02(a).
"Responsible Officer" means, with respect to the Bond Trustee, any
officer within the Corporate Trust Office of the Bond Trustee, including any
Vice President, Assistant Vice President, Secretary, Assistant Secretary, or any
other officer of the Bond 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 of and familiarity with the particular
subject.
"Retiring Bond Trustee" has the meaning specified in Section 6.08.
"Sale Agreement" means the Intangible Transition Property Sale
Agreement dated as of [ ], 1999, between the Issuer and the Seller, as
amended and supplemented from time to time.
"Schedule Revision Date" means (i) the date on which a new Series
of Transition Bonds is issued or any outstanding Series of Transition Bonds is
redeemed or defeased, (ii) any Adjustment Date on which the Intangible
Transition Charges are changed or revised and (iii) any Payment Date on which
payments are not made in accordance with the Expected Amortization Schedule.
"Series" means any series of Transition Bonds issued and
authenticated pursuant to this Indenture.
"Series Issuance Date" means, with respect to any Series, the date
on which the Transition Bonds of such Series are to be originally issued in
accordance with Section 2.10 and the Series Supplement for such Series.
"Series Supplement" means an indenture supplemental to this
Indenture that authorizes a particular Series of Transition Bonds.
"Series Termination Date" means, with respect to any Series, the
termination date therefor, as specified in the Series Supplement for such
Series.
"Servicing Agreement" means the Servicing Agreement dated as of [
], 1999, between the Issuer and the Servicer, as amended and supplemented from
time to time.
"Servicing Fee" means, with respect to any Series of Transition
Bonds, the fee payable to the Servicer on each Payment Date for services
rendered, determined pursuant to Section 5.07 of the Servicing Agreement.
"Standard & Poor's" has the meaning specified in the Servicing
Agreement.
"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 3.20(h).
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"Swap Agreement" means any ISDA Master Agreement, interest rate
swap agreement or agreement with respect to any hedge or similar transaction
entered into by the Issuer.
"Transfer Agreement" means the Intangible Transition Property
Transfer Agreement dated as of [ ], 1999, between the Transferor and the
Seller, as amended and supplemented from time to time.
"Transition Bond" means any of the transition bonds (as defined in
the Statute) issued and authenticated pursuant to this Indenture.
"Transition Bond Balance" means, as of any date, the aggregate
outstanding principal amount of all Series of Transition Bonds on such date.
"Transition Bond Owner" means, with respect to a Book-Entry
Transition Bond, the Person who is the beneficial owner of such Book-Entry
Transition Bond, as reflected on the books of the Clearing Agency, or on the
books of a Person maintaining an account with such Clearing Agency (directly as
a Clearing Agency Participant or as an indirect participant, in each case in
accordance with the rules of such Clearing Agency).
"Transition Bond Register" and "Transition Bond Registrar" have
the respective meanings specified in Section 2.05.
"Trust Indenture Act" or "TIA" means the Trust Indenture Act of
1939 as in force on the date hereof, unless otherwise specifically provided.
"UCC" has the meaning specified in the Servicing Agreement.
"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 issuer's option.
(b) Except as otherwise specified herein or as the context may
otherwise require, each of the following terms has the meaning set forth in the
Transfer Agreement 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:
Term Section of Transfer Agreement
---- -----------------------------
Deferred Repurchase Price........................... Section 1.01(a)
Initial Intangible Transition Property.............. Section 1.01(a)
Intangible Transition Charges....................... Section 1.01(a)
Intangible Transition Property...................... Section 1.01(a)
ITC Collections..................................... Section 1.01(a)
PUC ................................................ Section 1.01(a)
Qualified Rate Order ............................... Section 1.01(a)
Seller ............................................. Section 1.01(a)
Servicer ........................................... Section 1.01(a)
Servicer Default ................................... Section 1.01(a)
Statute ............................................ Section 1.01(a)
Subsequent Intangible Transition Property........... Section 1.01(a)
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Term Section of Transfer Agreement
---- -----------------------------
Transferor.......................................... Section 1.01(a)
Transferred Intangible Transition Property.......... Section 1.01(a)
SECTION 1.02. Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture. Each of the
following TIA terms used in this Indenture has the following meaning:
"Commission" means the Securities and Exchange Commission.
"indenture securities" means the Transition Bonds.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Bond
Trustee.
All other TIA terms used in this Indenture that are defined by the
TIA, defined by TIA reference to another statute or defined by Commission rule
have the meaning assigned to them by such definitions.
SECTION 1.03. Rules of Construction. Unless the context otherwise
requires:
(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 Transition Bonds
SECTION 2.01. Form. The Transition Bonds and the Bond Trustee's
certificate of authentication shall be in substantially the forms set forth in
Exhibit A hereto, with such appropriate insertions, omissions, substitutions and
other variations as are required or permitted by this Indenture or by the
related Series Supplement and may have such letters, numbers or other marks of
identification and such legends or endorsements placed thereon as may,
consistently herewith, be determined by the Authorized Officers of the Issuer
executing such Transition Bonds, as evidenced by their execution of such
Transition Bonds. Any portion of the text of any Transition Bond may be set
forth on the reverse thereof, with an appropriate reference thereto on the face
of the Transition Bond. Each Transition Bond shall be dated the date of its
authentication.
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The Transition Bonds shall be typewritten, printed, lithographed
or engraved or produced by any combination of these methods (with or without
steel engraved borders), all as determined by the Authorized Officers of the
Issuer executing such Transition Bonds, as evidenced by their execution of such
Transition Bonds.
Each Transition Bond shall bear upon its face the designation so
selected for the Series or Class to which it belongs. The terms of all
Transition Bonds of the same Series shall be the same, unless such Series is
comprised of one or more Classes, in which case the terms of all Transition
Bonds of the same Class shall be the same.
All Definitive Transition Bonds shall bear the legend set forth in
Exhibit A to the applicable Series Supplement.
SECTION 2.02. Execution, Authentication and Delivery. The
Transition Bonds shall be executed on behalf of the Issuer by an Authorized
Officer of the Issuer. The signature of any such Authorized Officer on the
Transition Bonds may be manual or facsimile.
Transition Bonds bearing the manual or facsimile signature of
individuals who were at any time Authorized Officers of the Issuer shall bind
the Issuer, notwithstanding that such individuals or any of them have ceased to
hold such offices prior to the authentication and delivery of such Transition
Bonds or did not hold such offices at the date of such Transition Bonds.
At any time and from time to time after the execution and delivery
of this Indenture, the Issuer may deliver Transition Bonds executed on behalf of
the Issuer to the Bond Trustee pursuant to an Issuer Order for authentication;
and the Bond Trustee shall authenticate and deliver such Transition Bond as in
this Indenture provided and not otherwise.
No Transition Bond shall be entitled to any benefit under this
Indenture or be valid or obligatory for any purpose, unless there appears on
such Transition Bond a certificate of authentication substantially in the form
provided for herein executed by the Bond Trustee by the manual signature of one
of its authorized signatories, and such certificate upon any Transition Bond
shall be conclusive evidence, and the only evidence, that such Transition Bond
has been duly authenticated and delivered hereunder.
SECTION 2.03. Denominations; Transition Bonds Issuable in Series.
The Transition Bonds of each Series shall be issuable as registered Transition
Bonds in the Authorized Initial Denominations specified in the Series Supplement
therefor.
The Transition Bonds may, at the election of and as authorized by
an Authorized Officer of the Issuer, and set forth in a Series Supplement, be
issued in one or more Series (each comprised of one or more Classes), and shall
be designated generally as the "Transition Bonds" of the Issuer, with such
further particular designations added or incorporated in such title for the
Transition Bonds of any particular Series or Class as an Authorized Officer of
the Issuer may determine and be set forth in the Series Supplement therefor.
Each Series of Transition Bonds shall be created by a Series
Supplement authorized by an Authorized Officer of the Issuer and establishing
the terms and provisions of such Series. The several Series and Classes thereof
may differ as between Series and Classes, in respect of any of the following
matters:
(i) designation of the Series and, if applicable, the Classes
thereof;
(ii) the aggregate principal amount of the Transition Bonds of the
Series and, if applicable, each Class thereof;
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(iii) the Bond Rate of the Series and, if applicable, each Class
thereof or the formula, if any, used to calculate the applicable Bond
Rate or Bond Rates for the Series;
(iv) the Payment Dates for the Series;
(v) the Expected Final Payment Date of the Series, and, if
applicable, each Class thereof;
(vi) the Series Termination Date for the Series and, if
applicable, the Class Termination Dates for each Class thereof;
(vii) the Series Issuance Date for the Series;
(viii) the place or places for payments with respect to the
Series;
(ix) the Authorized Initial Denominations for the Series;
(x) the provisions, if any, for redemption of the Series by the
Issuer;
(xi) the Expected Amortization Schedule for the Series;
(xii) the Overcollateralization Amount with respect to the Series
and the Calculated Overcollateralization Level for each Payment Date;
(xiii) the Required Capital Amount;
(xiv) the Calculation Dates and Adjustment Dates for the Series;
(xv) the credit enhancement applicable to the Series; and
(xvi) any other terms of the Series or Class that are not
inconsistent with the provisions of this Indenture.
SECTION 2.04. Temporary Transition Bonds. Pending the preparation
of definitive Transition Bonds, or by agreement of the purchasers of all
Transition Bonds or, in the case of Transition Bonds held in a book-entry only
system by a Clearing Agency, the Issuer may execute, and upon receipt of an
Issuer Order the Bond Trustee shall authenticate and deliver, temporary
Transition Bonds which are printed, lithographed, typewritten, mimeographed or
otherwise produced, of the tenor of the definitive Transition Bonds in lieu of
which they are issued and with such variations not inconsistent with the terms
of this Indenture as the Authorized Officers of the Issuer executing such
Transition Bonds may determine, as evidenced by their execution of such
Transition Bonds.
If temporary Transition Bonds are issued, the Issuer will cause
definitive Transition Bonds to be prepared without unreasonable delay except
where temporary Transition Bonds are held by a Clearing Agency. After the
preparation of definitive Transition Bonds, the temporary Transition Bonds shall
be exchangeable for definitive Transition Bonds upon surrender of the temporary
Transition Bonds at the office or agency of the Issuer to be maintained as
provided in Section 3.02, without charge to the Holder. Upon surrender for
cancelation of any one or more temporary Transition Bonds, the Issuer shall
execute and the Bond Trustee shall authenticate and deliver in exchange therefor
a like initial principal amount of definitive Transition Bonds in Authorized
Initial Denominations. Until so exchanged, the temporary Transition Bonds shall
in all respects be entitled to the same benefits under this Indenture as
definitive Transition Bonds.
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SECTION 2.05. Registration; Registration of Transfer and Exchange.
The Issuer shall cause to be kept a register (the "Transition Bond Register") in
which, subject to such reasonable regulations as it may prescribe, the Issuer
shall provide for the registration of Transition Bonds and the registration of
transfers of Transition Bonds. The Bond Trustee shall be "Transition Bond
Registrar" for the purpose of registering Transition Bonds and transfers of
Transition Bonds as herein provided. Upon any resignation of any Transition Bond
Registrar, the Issuer shall promptly appoint a successor or, if it elects not to
make such an appointment, assume the duties of Transition Bond Registrar.
If a Person other than the Bond Trustee is appointed by the Issuer
as Transition Bond Registrar, the Issuer will give the Bond Trustee prompt
written notice of the appointment of such Transition Bond Registrar and of the
location, and any change in the location, of the Transition Bond Register, and
the Bond Trustee shall have the right to inspect the Transition Bond Register at
all reasonable times and to obtain copies thereof, and the Bond Trustee shall
have the right to rely upon a certificate executed on behalf of the Transition
Bond Registrar by an Authorized Officer thereof as to the names and addresses of
the Holders of the Transition Bonds and the principal amounts and number of such
Transition Bonds.
Upon surrender for registration of transfer of any Transition Bond
at the office or agency of the Issuer to be maintained as provided in Section
3.02, the Issuer shall execute, and the Bond Trustee shall authenticate and the
Transition Bondholder shall obtain from the Bond Trustee, in the name of the
designated transferee or transferees, one or more new Transition Bonds in any
Authorized Initial Denominations, of a like Series (and, if applicable, Class)
and aggregate initial principal amount.
At the option of the Holder, Transition Bonds may be exchanged for
other Transition Bonds of a like Series (and, if applicable, Class) and
aggregate initial principal amount in Authorized Initial Denominations, upon
surrender of the Transition Bonds to be exchanged at such office or agency.
Whenever any Transition Bonds are so surrendered for exchange, the Issuer shall
execute, and the Bond Trustee shall authenticate and the Transition Bondholder
shall obtain from the Bond Trustee, the Transition Bonds which the Transition
Bondholder making the exchange is entitled to receive.
All Transition Bonds issued upon any registration of transfer or
exchange of Transition Bonds shall be the valid obligations of the Issuer,
evidencing the same debt, and entitled to the same benefits under this
Indenture, as the Transition Bonds surrendered upon such registration of
transfer or exchange.
Every Transition Bond presented or surrendered for registration of
transfer or exchange shall be duly endorsed by, or be accompanied by a written
instrument of transfer in the form set forth in Exhibit A hereto or such other
form as is satisfactory to the Bond Trustee duly executed by, the Holder thereof
or such Holder's attorney duly authorized in writing, with such signature
guaranteed by an Eligible Guarantor Institution in the form set forth in such
Transition Bond.
No service charge shall be made to a Holder for any registration
of transfer or exchange of Transition Bonds, but, other than in respect of
exchanges pursuant to Section 2.04 or 9.06 not involving any transfer, the
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 Transition Bonds.
The preceding provisions of this Section notwithstanding, the
Issuer shall not be required to make, and the Transition Bond Registrar need not
register, transfers or exchanges of Transition Bonds selected for redemption or
transfers or exchanges of any Transition Bond for a period of 15 days preceding
the date on which final payment of principal is to be made with respect to such
Transition Bond.
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SECTION 2.06. Mutilated, Destroyed, Lost or Stolen Transition
Bonds. If (i) any mutilated Transition Bond is surrendered to the Bond Trustee,
or the Bond Trustee receives evidence to its satisfaction of the destruction,
loss or theft of any Transition Bond, and (ii) there is delivered to the Bond
Trustee such security or indemnity as may be required by it to hold the Issuer
and the Bond Trustee harmless, then, in the absence of notice to the Issuer, the
Transition Bond Registrar or the Bond Trustee that such Transition Bond has been
acquired by a bona fide purchaser, the Issuer shall execute, and upon the
Issuer's request the Bond Trustee shall authenticate and deliver, in exchange
for or in lieu of any such mutilated, destroyed, lost or stolen Transition Bond,
a replacement Transition Bond of like Series (and, if applicable, Class), tenor
and initial principal amount in Authorized Initial Denominations, bearing a
number not contemporaneously outstanding; provided, however, that if any such
destroyed, lost or stolen Transition Bond, but not a mutilated Transition Bond,
shall have become or within seven days shall be due and payable, or shall have
been called for redemption, instead of issuing a replacement Transition Bond,
the Issuer may pay such destroyed, lost or stolen Transition Bond when so due or
payable or upon the Redemption Date without surrender thereof. If, after the
delivery of such replacement Transition Bond or payment of a destroyed, lost or
stolen Transition Bond pursuant to the proviso to the preceding sentence, a bona
fide purchaser of the original Transition Bond in lieu of which such replacement
Transition Bond was issued presents for payment such original Transition Bond,
the Issuer and the Bond Trustee shall be entitled to recover such replacement
Transition Bond (or such payment) from the Person to whom it was delivered or
any Person taking such replacement Transition Bond from such Person to whom such
replacement Transition Bond was delivered or any assignee of such Person, except
a bona fide purchaser, and shall be entitled to recover upon the security or
indemnity provided therefor to the extent of any loss, damage, cost or expense
incurred by the Issuer or the Bond Trustee in connection therewith.
Upon the issuance of any replacement Transition Bond under this
Section, the Issuer may require the payment by the Holder of such Transition
Bond 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 Bond Trustee) connected therewith.
Every replacement Transition Bond issued pursuant to this Section
in replacement of any mutilated, destroyed, lost or stolen Transition Bond shall
constitute an original additional contractual obligation of the Issuer, whether
or not the mutilated, destroyed, lost or stolen Transition Bond shall be at any
time enforceable by anyone, and shall be entitled to all the benefits of this
Indenture equally and proportionately with any and all other Transition Bonds
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 Transition Bonds.
SECTION 2.07. Persons Deemed Owner. Prior to due presentment for
registration of transfer of any Transition Bond, the Issuer, the Bond Trustee
and any agent of the Issuer or the Bond Trustee may treat the Person in whose
name any Transition Bond is registered (as of the day of determination) as the
owner of such Transition Bond for the purpose of receiving payments of principal
of and premium, if any, and interest on such Transition Bond and for all other
purposes whatsoever, whether or not such Transition Bond be overdue, and neither
the Issuer, the Bond Trustee nor any agent of the Issuer or the Bond Trustee
shall be affected by notice to the contrary.
SECTION 2.08. Payment of Principal, Premium, if any, and Interest;
Interest on Overdue Principal and Premium, if any; Principal, Premium and
Interest Rights Preserved. (a) The Transition Bonds shall accrue interest as
provided in the form of Transition Bond attached to the Series Supplement for
such Transition Bonds, at the applicable Bond Rate
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specified therein, and such interest shall be payable on each Payment Date as
specified therein. Any instalment of interest, principal or premium, if any,
payable on any Transition Bond which is punctually paid or duly provided for by
the Issuer on the applicable Payment Date shall be paid to the Person in whose
name such Transition Bond (or one or more Predecessor Transition Bonds) 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
Transition Bond Register on such Record Date or in such other manner as may be
provided in the related Series Supplement, except that with respect to
Transition Bonds registered on a Record Date in the name of the nominee of the
Clearing Agency (initially, such nominee to be Cede & Co.), payments will be
made by wire transfer in immediately available funds to the account designated
by such nominee and except for the final instalment of principal and premium, if
any, payable with respect to such Transition Bond on a Payment Date which shall
be payable as provided in clause (b) 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 Transition Bond of each Series (and, if
applicable, Class) shall be payable in instalments on each Payment Date
specified in the Expected Amortization Schedule included in the form of
Transition Bond attached to the Series Supplement for such Transition Bonds, but
only to the extent that moneys are available for such payment pursuant to
Section 8.02. Failure to pay in accordance with such Expected Amortization
Schedule because moneys are not so available pursuant to Section 8.02 to make
such payments shall not constitute a Default or Event of Default under this
Indenture. Notwithstanding the foregoing, the entire unpaid principal amount of
the Transition Bonds of any Series or Class shall be due and payable, if not
previously paid (i) on the Series Termination Date (or, if applicable, Class
Termination Date) therefor, (ii) on the date on which the Transition Bonds of
all Series have been declared immediately due and payable in accordance with
Section 5.02 or (iii) on the Redemption Date, if any, therefor. The Bond Trustee
shall notify the Person in whose name a Transition Bond is registered at the
close of business on the Record Date second preceding the Payment Date on which
the Issuer expects that the final instalment of principal of and premium, if
any, and interest on such Transition Bond 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 instalment of principal and premium, if any, will be
payable to the Person in whose name a Transition Bond is registered at the close
of business on the Record Date immediately preceding such final Payment Date and
only upon presentation and surrender of such Transition Bond and shall specify
the place where such Transition Bond may be presented and surrendered for
payment of such instalment. Notices in connection with redemptions of Transition
Bonds shall be mailed to Transition Bondholders as provided in Section 10.03.
(c) If the Issuer defaults in a payment of interest on the
Transition Bonds of any Series, the Issuer shall pay defaulted interest (plus
interest on such defaulted interest at the applicable Bond Rate to the extent
lawful) in any lawful manner. The Issuer may pay such defaulted interest to the
Persons who are Transition Bondholders on a subsequent special record date,
which date shall be at least five Business Days prior to the payment date. The
Issuer shall fix or cause to be fixed any such special record date and payment
date, and, at least 15 days before any such special record date, the Issuer
shall mail to each affected Transition Bondholder a notice that states the
special record date, the payment date and the amount of defaulted interest to be
paid.
SECTION 2.09. Cancelation. All Transition Bonds surrendered for
payment, registration of transfer, exchange or redemption shall, if surrendered
to any Person other than the Bond Trustee, be delivered to the Bond Trustee and
shall be promptly canceled by the Bond Trustee. The Issuer may at any time
deliver to the Bond Trustee for cancelation any Transition Bonds previously
authenticated and delivered hereunder which the Issuer may have acquired in any
manner whatsoever, and all Transition Bonds so delivered shall be promptly
canceled by the Bond Trustee. No Transition Bonds shall be authenticated in lieu
of or in exchange for any Transition Bonds canceled as provided in this Section,
except as expressly permitted by this
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Indenture. All canceled Transition Bonds may be held or disposed of by the Bond
Trustee in accordance with its standard retention or disposal policy as in
effect at the time unless the Issuer shall direct by an Issuer Order that they
be destroyed or returned to it; provided that such Issuer Order is timely and
the Transition Bonds have not been previously disposed of by the Bond Trustee.
SECTION 2.10. Authentication and Delivery of Transition Bonds. The
Issuer may issue Transition Bonds of a new Series from time to time as a
Financing Issuance or a Refunding Issuance.
Transition Bonds of a new Series may from time to time be executed
by the Issuer and delivered to the Bond Trustee for authentication and thereupon
the same shall be authenticated and delivered by the Bond Trustee upon Issuer
Request and upon delivery by the Issuer, at the Issuer's expense, to the Bond
Trustee of the following:
(1) Trust Action. An Issuer Order authorizing and directing the
execution, authentication and delivery of the Transition Bonds by the
Bond Trustee and specifying the principal amount of Transition Bonds to
be authenticated.
(2) Authorizations. Either (i) a certificate of authentication or
other official document evidencing the due authorization, approval or
consent of any governmental body or bodies at the time having
jurisdiction, together with an Opinion of Counsel that the Bond Trustee
is entitled to rely on that the authorization, approval, or consent of no
other governmental body is required for the valid issuance,
authentication and delivery of such Transition Bonds, or (ii) an Opinion
of Counsel that no such authorization, approval, or consent of any
governmental body is required, except for, in the case of (i) and (ii),
such registrations as are required under the Blue Sky and securities laws
of any State.
(3) Authorizing Certificate. A certified resolution of the Issuer
authorizing the execution and delivery of the Series Supplement for the
Transition Bonds applied for and the execution, authentication and
delivery of such Transition Bonds.
(4) A Series Supplement for the Series of Transition Bonds applied
for, which shall set forth the provisions and form of the Transition
Bonds of such Series (and, if applicable, each Class thereof).
(5) Certificates of the Issuer. (a) An Officer's Certificate from
the Issuer, dated as of the Series Issuance Date, stating: (i) that no
Default has occurred and is continuing under this Indenture and that the
issuance of the Transition Bonds applied for will not result in any
Default; (ii) that the Issuer has appointed the firm of independent
certified public accountants as contemplated in Section 8.05; (iii) that
attached thereto are duly executed, true and complete copies of the
Transfer Agreement, the Sale Agreement and the Servicing Agreement; (iv)
that all filings with the PUC pursuant to the Statute and all UCC
financing statements with respect to the Collateral which are required to
be filed by the terms of the Transfer Agreement, the Sale Agreement, the
Servicing Agreement or this Indenture have been filed as required; and
(v) that all conditions precedent provided in the Indenture relating to
the authentication and delivery of the Transition Bonds have been
complied with.
(b) An Officer's Certificate from the Transferor, dated as of the
Series Issuance Date, to the effect that, in the case of the Intangible
Transition Property to be transferred to the Seller on such date
immediately prior to the conveyance thereof to the Seller pursuant to the
Transfer Agreement:
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(i) the Transferor is the sole owner of such Intangible
Transition Property; such Intangible Transition Property has been
validly transferred and sold to the Seller free and clear of all
Liens (other than Liens created by the Issuer pursuant to this
Indenture); the Transferor has the corporate power and authority
to own, sell and assign such Intangible Transition Property to the
Seller; and the Transferor has duly authorized such sale and
assignment to the Seller by all necessary corporate action; and
(ii) the attached copy of the Qualified Rate Order creating
such Intangible Transition Property is true and correct and is in
full force and effect.
(c) An Officer's Certificate from the Seller, dated as of the
Series Issuance Date, to the effect that, in the case of the Intangible
Transition Property to be transferred to the Issuer on such date
immediately prior to the conveyance thereof to the Issuer pursuant to the
Sale Agreement: the Seller is the sole owner of such Intangible
Transition Property; such Intangible Transition Property has been validly
transferred and sold to the Issuer free and clear of all Liens (other
than Liens created by the Issuer pursuant to this Indenture); the Seller
has the corporate power and authority to own, sell and assign such
Intangible Transition Property to the Issuer; and the Seller has duly
authorized such sale and assignment to the Issuer by all necessary
corporate action.
(6) Opinion of Counsel. An Opinion of Counsel, portions of which
may be delivered by counsel for the Issuer and portions of which may be
delivered by counsel for the Transferor, the Seller and the Servicer,
dated as of the Series Issuance Date, to the collective effect that:
(a) the Issuer has the power and authority to execute and
deliver the Series Supplement and this Indenture and to issue the
Transition Bonds applied for, each of the Series Supplement and
this Indenture, and the Transition Bonds applied for have been
duly authorized and executed, and the Issuer is duly organized and
in good standing under the laws of the jurisdiction of its
organization;
(b) the Transition Bonds applied for, when authenticated in
accordance with the provisions of the Indenture and delivered,
will constitute valid and binding obligations of the Issuer
entitled to the benefits of the Indenture and the related Series
Supplement;
(c) the Indenture (including the related Series
Supplement), the Sale Agreement and the Servicing Agreement are
valid and binding agreements of the 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);
(d) the Transfer Agreement is a valid and binding agreement
of the Transferor, enforceable against the Transferor 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);
(e) 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
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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);
(f) the Servicing Agreement is a valid and binding
agreement of the Servicer, enforceable against the Servicer in
accordance with its terms except as such enforceability may be
subject to bankruptcy, insolvency, reorganization and other
similar laws affecting the rights of creditors generally and
general principles of equity (regardless of whether such
enforcement is considered in a proceeding in equity or at law);
(g) upon the delivery of a fully executed Xxxx of Sale
delivered to the Issuer pursuant to Section 2.03(i) of the
Transfer Agreement in connection with the issuance of Transition
Bonds applied for and the payment of the purchase price of the
related Intangible Transition Property by the Seller to the
Transferor pursuant to such Xxxx of Sale and the Transfer
Agreement, then (I) the transfer of the Intangible Transition
Property purported to be conveyed thereby by the Transferor to the
Seller pursuant to such Xxxx of Sale and the Transfer Agreement
conveys all of the Transferor's right, title and interest in such
Intangible Transition Property to the Seller and will be treated
under state law as an absolute transfer of all of the Transferor's
right, title, and interest in such Intangible Transition Property,
other than for federal and state income tax purposes, (II) such
transfer of such Intangible Transition Property is perfected,
(III) such transfer has a priority over any other assignment or
transfer of such Intangible Transition Property, and (IV) such
Intangible Transition Property is free and clear of all liens
created prior to its transfer to the Seller pursuant to such Xxxx
of Sale and the Transfer Agreement;
(h) upon the delivery of a fully executed Xxxx of Sale
delivered to the Issuer pursuant to Section 2.03(i) of the Sale
Agreement in connection with the issuance of Transition Bonds
applied for and the payment of the purchase price of the related
Intangible Transition Property by the Issuer to the Seller
pursuant to such Xxxx of Sale and the Sale Agreement, then (I) the
transfer of the Intangible Transition Property purported to be
conveyed thereby by the Seller to the Issuer pursuant to such Xxxx
of Sale and the Sale Agreement conveys all of the Seller's right,
title and interest in such Intangible Transition Property to the
Issuer and will be treated under state law as an absolute transfer
of all of the Seller's right, title, and interest in such
Intangible Transition Property, other than for federal and state
income tax purposes, (II) such transfer of such Intangible
Transition Property is perfected, (III) such transfer has a
priority over any other assignment or transfer of such Intangible
Transition Property, and (IV) such Intangible Transition Property
is free and clear of all liens created prior to its transfer to
the Issuer pursuant to such Xxxx of Sale and the Sale Agreement;
(i)(I) to the extent that the provisions of Section 2812 of
the Statute apply to the grant of a security interest by the
Issuer in the Collateral pursuant to this Indenture, then upon the
giving of value by the Bond Trustee to the Issuer with respect to
the Collateral, (A) this Indenture creates in favor of the Bond
Trustee a security interest in the rights of the Issuer in the
Collateral, (B) such security interest is valid and enforceable
against the Issuer and third parties (subject to the rights of any
third parties holding security interests in such Collateral
perfected in the manner described in Section 2812 of the Statute),
and has attached, (C) such security interest is perfected, and (D)
such perfected security interest is of first priority; and (II) to
the extent that the provisions of Section 2812 of the Statute do
not apply to the grant of a security interest by the Issuer in the
Collateral pursuant to this Indenture, then upon the giving of
value
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by the Bond Trustee to the Issuer with respect to the Collateral,
(A) this Indenture creates in favor of the Bond Trustee a security
interest in the rights of the Issuer in the Collateral, (B) such
security interest is enforceable against the Issuer and third
parties with respect to such Collateral, (C) such security
interest is perfected, and (D) such perfected security interest is
of first priority;
(j) the Indenture has been duly qualified under the Trust
Indenture Act and either the Series Supplement for the Transition
Bonds applied for has been duly qualified under the Trust
Indenture Act or no such qualification of such Series Supplement
is necessary;
(k) the Issuer is not an "investment company" or under the
"control" of an "investment company" as such terms are defined
under the Investment Company Act of 1940, as amended;
(l) all instruments furnished to the Bond Trustee conform
to the requirements of this Indenture and constitute all the
documents required to be delivered hereunder for the Bond Trustee
to authenticate and deliver the Transition Bonds applied for, and
all conditions precedent provided for in this Indenture relating
to the authentication and delivery of the Transition Bonds have
been complied with;
(m) either (A) the registration statement covering the
Transition Bonds is effective under the Securities Act of 1933
and, to the best of such counsel's knowledge and information, no
stop order suspending the effectiveness of such registration
statement has been issued under the Securities Act of 1933 nor
have proceedings therefor been instituted or threatened by the
Commission or (B) the Transition Bonds are exempt from the
registration requirements under the Securities Act of 1933;
(n) the Indenture (including the related Series Supplement)
has been duly authorized, executed and delivered by the Issuer;
and
(o) the Transfer Agreement, the Sale Agreement and the
Servicing Agreement have been duly authorized, executed and
delivered by the Issuer, the Transferor, the Seller and the
Servicer as applicable.
(7) Accountant's Certificate or Opinion. A certificate or opinion,
addressed to the Issuer and the Bond Trustee complying with the
requirements of Section 11.01 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 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 Intangible Transition Charges with respect to the Transferred
Intangible Transition Property or, if applicable, the most recent revised
Intangible Transition Charges with respect to the Transferred Intangible
Transition Property, and taking into account amounts on deposit in the
Reserve Subaccount, 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 Intangible Transition Charges are sufficient to
(a) pay Operating Expenses when incurred, (b) pay interest on each Series
of Transition Bonds at their respective Bond Rates when due[, or, with
respect to Classes or Series for which a Swap Agreement is in effect and
any payments due thereunder from the applicable Counterparty are being
received by the Issuer, regular fixed payments due to the related
Counterparties (not including any breakage or termination
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payments)], (c) pay principal of the Transition Bonds of all Series in
accordance with their respective Expected Amortization Schedules, (d)
replenish the Capital Subaccount up to the Required Capital Amount as of
each Payment Date and (e) fund the Calculated Overcollateralization Level
as of each Payment Date.
(8) Rating Agency Condition. The Bond Trustee shall receive
written notice from each Rating Agency that the Rating Agency Condition
will be satisfied with respect to the issuance of such new Series.
(9) Bills of Sale. If the issuance of an additional Series of
Transition Bonds is a Financing Issuance, the Xxxx of Sale delivered to
the Issuer under the Sale Agreement and the Xxxx of Sale delivered to the
Seller under the Transfer Agreement, in each case with respect to the
Intangible Transition Property being purchased with the proceeds of such
Financing Issuance.
(10) Moneys for Refunding. If the issuance of a Series of
Transition Bonds is a Refunding Issuance, the amount of money necessary
to pay the outstanding principal balance of, and premium and interest on,
the Transition Bonds being refunded to either the Redemption Date for
Transition Bonds being refunded upon redemption, such money to be
deposited into a separate account with the Bond Trustee.
SECTION 2.11. Book-Entry Transition Bonds. Unless otherwise specified in
the related Series Supplement, each Series of Transition Bonds, upon original
issuance, will be issued in the form of a typewritten Transition Bond or
Transition Bonds representing the Book-Entry Transition Bonds, to be delivered
to The Depository Trust Company, the initial Clearing Agency, by, or on behalf
of, the Issuer. Such Transition Bond shall initially be registered on the
Transition Bond Register in the name of Cede & Co., the nominee of the initial
Clearing Agency, and no Transition Bond Owner will receive a definitive
Transition Bond representing such Transition Bond Owner's interest in such
Transition Bond, except as provided in Section 2.13. Unless and until
definitive, fully registered Transition Bonds (the "Definitive Transition
Bonds") have been issued to Transition Bond Owners pursuant to Section 2.13:
(i) the provisions of this Section shall be in full force and
effect;
(ii) the Transition Bond Registrar and the Bond Trustee shall be
entitled to deal with the Clearing Agency for all purposes of this
Indenture (including the payment of principal of and premium, if any, and
interest on the Transition Bonds and the giving of instructions or
directions hereunder) as the sole holder of the Transition Bonds, and
shall have no obligation to the Transition Bond Owners;
(iii) to the extent that the provisions of this Section conflict
with any other provisions of this Indenture, the provisions of this
Section shall control;
(iv) the rights of Transition Bond Owners shall be exercised only
through the Clearing Agency and shall be limited to those established by
law and agreements between such Transition Bond Owners and the Clearing
Agency or the Clearing Agency Participants. Pursuant to the DTC
Agreement, unless and until Definitive Transition Bonds are issued
pursuant to Section 2.13, the initial Clearing Agency will make
book-entry transfers among the Clearing Agency Participants and receive
and transmit payments of principal of and premium, if any, and interest
on the Transition Bonds to such Clearing Agency Participants; and
(v) whenever this Indenture requires or permits actions to be
taken based upon instructions or directions of Holders of Transition
Bonds evidencing a specified percentage of the Outstanding Amount of the
Transition Bonds or a Series or Class thereof, the Clearing Agency shall
be deemed to represent such percentage only to the
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extent that it has received instructions to such effect from Transition
Bond Owners or Clearing Agency Participants owning or representing,
respectively, such required percentage of the beneficial interest in the
Transition Bonds or such Series or Class and has delivered such
instructions to the Bond Trustee.
SECTION 2.12. Notices to Clearing Agency. Whenever a notice or
other communication to the Transition Bondholders is required under this
Indenture, unless and until Definitive Transition Bonds shall have been issued
to Transition Bond Owners pursuant to Section 2.13, the Bond Trustee shall give
all such notices and communications specified herein to be given to Transition
Bondholders to the Clearing Agency, and shall have no obligation to the
Transition Bond Owners.
SECTION 2.13. Definitive Transition Bonds. If (i) the Issuer
advises the Bond Trustee in writing that the Clearing Agency is no longer
willing or able to properly discharge its responsibilities as depository with
respect to any Series or Class of Transition Bonds and the Issuer is unable to
locate a qualified successor, (ii) the Issuer, at its option, advises the Bond
Trustee in writing that it elects to terminate the book-entry system through the
Clearing Agency with respect to any Series or Class of Transition Bonds or (iii)
after the occurrence of an Event of Default, Transition Bond Owners representing
beneficial interests aggregating at least a majority of the Outstanding Amount
of the Transition Bonds of all Series advise the Bond Trustee through the
Clearing Agency in writing that the continuation of a book-entry system through
the Clearing Agency is no longer in the best interests of the Transition Bond
Owners, then the Clearing Agency shall notify all affected Transition Bond
Owners and the Bond Trustee of the occurrence of any such event and of the
availability of Definitive Transition Bonds to affected Transition Bond Owners
requesting the same. Upon surrender to the Bond Trustee of the typewritten
Transition Bond or Transition Bonds representing the Book-Entry Transition Bonds
by the Clearing Agency, accompanied by registration instructions, the Issuer
shall execute and the Bond Trustee shall authenticate the Definitive Transition
Bonds in accordance with the instructions of the Clearing Agency. None of the
Issuer, the Transition Bond Registrar or the Bond Trustee shall be liable for
any delay in delivery of such instructions and may conclusively rely on, and
shall be protected in relying on, such instructions. Upon the issuance of
Definitive Transition Bonds, the Bond Trustee shall recognize the Holders of the
Definitive Transition Bonds as Transition Bondholders.
ARTICLE III
Covenants
SECTION 3.01. Payment of Principal, Premium, if any, and Interest.
The Issuer will duly and punctually pay the principal of and premium, if any,
and interest on the Transition Bonds in accordance with the terms of the
Transition Bonds and this Indenture; provided that except on the Series
Termination Date, the Class Termination Date, or the Redemption Date for a
Series or Class of Transition Bonds or upon the acceleration of the Transition
Bonds following the occurrence of an Event of Default, the Issuer shall only be
obligated to pay the principal of such Transition Bonds on each Payment Date
therefor to the extent moneys are available for such payment pursuant to Section
8.02. Amounts properly withheld under the Code by any Person from a payment to
any Transition Bondholder of interest or principal or premium, if any, shall be
considered as having been paid by the Issuer to such Transition Bondholder for
all purposes of this Indenture.
SECTION 3.02. Maintenance of Office or Agency. The Issuer will
maintain in the Borough of Manhattan, the City of New York, an office or agency
where Transition Bonds may be surrendered for registration of transfer or
exchange, and where notices and demands to or upon the Issuer in respect of the
Transition Bonds and this Indenture may be served. The Issuer hereby initially
appoints the Bond Trustee to serve as its agent for the foregoing purposes. The
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Issuer will give prompt written notice to the Bond Trustee of the location, and
of any change in the location, of any such office or agency. If at any time the
Issuer shall fail to maintain any such office or agency or shall fail to furnish
the Bond Trustee with the address thereof, such surrenders, notices and demands
may be made or served at the Corporate Trust Office, and the Issuer hereby
appoints the Bond Trustee as its agent to receive all such surrenders, notices
and demands.
SECTION 3.03. Money for Payments To Be Held in Trust. As provided
in Section 8.02(a), all payments of principal of, or premium and interest on,
the Transition Bonds that are to be made from amounts withdrawn from the
Collection Account pursuant to Section 8.02(d), (e) or (f) or Section 4.03 shall
be made on behalf of the Issuer by the Bond Trustee or by another Paying Agent,
and no amounts so withdrawn from the Collection Account for payments of
Transition Bonds shall be paid over to the Issuer except as provided in this
Section and in Section 8.02.
The Issuer will cause each Paying Agent other than the Bond
Trustee to execute and deliver to the Bond Trustee an instrument in which such
Paying Agent shall agree with the Bond Trustee (and if the Bond 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 principal of, or
premium or interest on, the Transition Bonds in trust for the benefit of
the Persons entitled thereto until such sums shall be paid to such
Persons or otherwise disposed of as herein provided and pay such sums to
such Persons as herein provided;
(ii) give the Bond Trustee notice of any Default by the Issuer (or
any other obligor upon the Transition Bonds) of which the Paying Agent
has actual knowledge in the making of any payment required to be made
with respect to the Transition Bonds;
(iii) at any time during the continuance of any such Default, upon
the written request of the Bond Trustee, forthwith pay to the Bond
Trustee all sums so held in trust by such Paying Agent;
(iv) immediately resign as a Paying Agent and forthwith pay to the
Bond Trustee all sums held by the Paying Agent in trust for the payment
of Transition Bonds if at any time the Paying Agent ceases to meet the
standards required to be met by a Paying Agent at the time of its
appointment; and
(v) comply with all requirements of the Code with respect to the
withholding from any payments made by it on any Transition Bonds of any
applicable withholding taxes imposed thereon and with respect to any
applicable reporting requirements in connection therewith.
The Issuer may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, by Issuer
Order direct any Paying Agent to pay to the Bond Trustee all sums held in trust
by such Paying Agent, such sums to be held by the Bond 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 Bond 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 Bond Trustee or any Paying Agent in trust for the payment of
any amount of principal of, premium on, if any, or interest on any Transition
Bond and remaining unclaimed for two years after such amount has become due and
payable shall be discharged from such trust and be paid to the Issuer; and the
Holder of such Transition Bond shall thereafter, as an unsecured general
creditor, look only to the Issuer for payment thereof (but only to the extent of
the amounts so
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paid to the Issuer), and all liability of the Bond Trustee or such Paying Agent
with respect to such trust money shall thereupon cease; provided, however, that
the Bond Trustee or such Paying Agent, before being required to make any such
repayment, may at the expense of the Issuer cause to be published once, in a
newspaper published in the English language, customarily published on each
Business Day and of general circulation in the City of New York, notice that
such money remains 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 Issuer. The Bond
Trustee may also adopt and employ, at the expense of the Issuer, any other
reasonable means of notification of such repayment (including mailing notice of
such repayment to Holders whose Transition Bonds have been called but have not
been surrendered for redemption or whose right to or interest in moneys due and
payable but not claimed is determinable from the records of the Bond Trustee or
of any Paying Agent, at the last address of record for each such Holder).
SECTION 3.04. Existence. Subject to Section 3.10, the Issuer will
keep in full effect its existence, rights and franchises as a limited liability
company under the laws of the State of Delaware (unless it becomes, or any
successor Issuer hereunder is or becomes, organized under the laws of any other
State or of the United States of America, in which case the Issuer will keep in
full effect its existence, rights and franchises under the laws of such other
jurisdiction) and will obtain and preserve its qualification to do business in
each jurisdiction in which such qualification is or shall be necessary to
protect the validity and enforceability of this Indenture, the Transition Bonds,
the Collateral and each other instrument or agreement included therein.
SECTION 3.05. Protection of Collateral. The Issuer will from time
to time execute and deliver all such supplements and amendments hereto and all
such filings (including filings with the PUC pursuant to the Statute), financing
statements, continuation statements, instruments of further assurance and other
instruments, and will take such other action necessary or advisable to:
(i) maintain and 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 Bond Trustee and the Transition Bondholders in the Collateral against
the claims of all Persons and parties; or
(v) pay any and all taxes levied or assessed up on all or any part
of the Collateral.
The Issuer hereby designates the Bond Trustee its agent and attorney-in-fact to
execute any filing with the PUC, financing statement, continuation statement or
other instrument required by the Bond Trustee pursuant to this Section.
SECTION 3.06. Opinions as to Collateral. (a) On or before [July
1st] in each calendar year, beginning at least 3 months after the issuance of
the first Series of the Transition Bonds while any Series is outstanding, the
Issuer shall furnish to the Bond 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 PUC pursuant to the
Statute, financing statements and continuation
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statements as is necessary to maintain the lien and security interest, and the
first priority thereof, created by this Indenture and reciting the details of
such action or stating that in the opinion of such counsel no such action is
necessary to maintain such lien and security interest, and the first priority
thereof. 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 PUC, 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 [July 1] in the following calendar year.
(b) Prior to the effectiveness of any amendment to the Transfer
Agreement, the Sale Agreement or the Servicing Agreement, the Issuer shall
furnish to the Bond Trustee an Opinion of Counsel either (A) stating that, in
the opinion of such counsel, all filings, including filings with the PUC
pursuant to the Statute, have been executed and filed that are necessary fully
to preserve and protect the interest of the Issuer and the Bond Trustee in the
Transferred Intangible 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. (a) The 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 Transfer Agreement, the
Sale Agreement or the Servicing Agreement or such other instrument or agreement.
(b) The Issuer may contract with other Persons to assist it in
performing its duties under this Indenture, and any performance of such duties
by a Person identified to the Bond Trustee in an Officer's Certificate of the
Issuer shall be deemed to be action taken by the Issuer. Initially, the Issuer
has contracted with the Servicer and the Administrative Agent to assist the
Issuer in performing its duties under this Indenture.
(c) The Issuer will punctually perform and observe all of its
obligations and agreements contained in the Sale Agreement, the Servicing
Agreement and in all other instruments and agreements included in the
Collateral.
(d) Without derogating from the absolute nature of the assignment
granted to the Bond Trustee under this Indenture or the rights of the Bond
Trustee hereunder, but subject to Section 3.20, the Issuer agrees that it will
not, without the prior written consent of the Bond Trustee or the Holders of at
least a majority in Outstanding Amount of the Transition Bonds 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. If any such amendment,
modification, supplement or waiver shall be so consented to by the Bond Trustee
or such Holders, the Issuer agrees to execute and deliver, in its own name and
at its own expense, such agreements, instruments, consents and other documents
as shall be necessary or appropriate in the circumstances. The Issuer agrees
that no such amendment, modification, supplement or waiver shall adversely
affect the rights of the Holders of the Transition Bonds outstanding at the time
of any such amendment, modification, supplement or waiver.
SECTION 3.08. Negative Covenants. The Issuer shall not:
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(i) except as expressly permitted by this Indenture or the Sale
Agreement or the Servicing Agreement, sell, transfer, exchange or
otherwise dispose of any of the Collateral, unless directed to do so by
the Bond 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 Transition
Bonds (other than amounts properly withheld from such payments under the
Code) or assert any claim against any present or former Transition
Bondholder by reason of the payment of taxes levied or assessed upon the
Issuer or any part of the Collateral;
(iii) 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 Transition Bonds 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 and
security interest created by this Indenture) 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) permit the lien
of this Indenture not to constitute a continuing valid first priority
security interest in the Collateral.
SECTION 3.09. Annual Statement as to Compliance. The Issuer will
deliver to the Bond Trustee, within 120 days after the end of each fiscal year
of the Issuer (commencing with the fiscal year 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 Issuer during such year (or
relevant portion thereof) 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 Issuer has complied with all conditions and covenants
under this Indenture throughout such calendar year (or relevant portion
thereof), or, if there has been a default in complying with any such
condition or covenant, describing each such default and the nature and
status thereof.
SECTION 3.10. Issuer May Consolidate, etc., Only on Certain
Terms. The Issuer shall not consolidate or merge with or into any other Person
or sell substantially all of its assets to any other Person, unless:
(i) the Person (if other than the Issuer) formed by or surviving
such consolidation or merger or to whom substantially all of such assets
are sold shall be a Person organized and existing under the laws of the
United States of America or any State and shall expressly assume by an
indenture supplemental hereto, executed and delivered to the Bond
Trustee, in form satisfactory to the Bond Trustee, the due and punctual
payment of the principal of and premium, if any, and interest on all
Transition Bonds and the performance or observance of every agreement and
covenant of this Indenture on the part of the Issuer to be performed or
observed, all as provided herein and in the applicable Series Supplement
or Series Supplements;
(ii) the Person (if other than the Issuer) formed by or surviving
such consolidation or merger or to whom substantially all of such assets
are sold shall expressly assume all obligations and succeed to all rights
of the Issuer under the Transfer Agreement, the Sale Agreement and the
Servicing Agreement pursuant to an assignment and assumption agreement
executed and delivered to the Bond Trustee, in form satisfactory to the
Bond Trustee;
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(iii) immediately after giving effect to such consolidation or
merger or sale, no Default or Event of Default shall have occurred and be
continuing;
(iv) the Rating Agency Condition shall have been satisfied with
respect to such consolidation or merger or sale by each Rating Agency
[except Moody's (and the Issuer shall have furnished Moody's with prior
written notice of such consolidation, merger or sale)];
(v) the Issuer shall have received an Opinion of Counsel (and
shall have delivered copies thereof to the Bond Trustee) to the effect
that such consolidation or merger or sale (a) will not have any material
adverse tax consequence to the Issuer or any Transition Bondholder, (b)
complies with this Indenture and all of the conditions precedent herein
relating to such transaction and (c) will result in the Bond Trustee
maintaining a continuing valid first priority security interest in the
Collateral;
(vi) none of the Intangible Transition Property, the Qualified
Rate Order, the Transferor's, the Seller's, the Servicer's or the
Issuer's rights under the Statute or the Qualified Rate Order are
impaired thereby; and
(vii) any action as is necessary to maintain the lien and security
interest created by this Indenture shall have been taken.
SECTION 3.11. Successor or Transferee. (a) Upon any consolidation
or merger of the Issuer in accordance with Section 3.10, the Person formed by or
surviving such consolidation or merger (if other than the Issuer) shall succeed
to, and be substituted for, and may exercise every right and power of, the
Issuer under this Indenture with the same effect as if such Person had been
named as the Issuer herein.
(b) Upon any sale by the Issuer of substantially all of its assets
in a sale which complies with Section 3.10, West Penn Funding LLC will be
released from every covenant and agreement of this Indenture to be observed or
performed on the part of the Issuer with respect to the Transition Bonds and
from every covenant and agreement of the Sale Agreement and the Servicing
Agreement to be observed or performed on the part of the Issuer.
SECTION 3.12. No Other Business. The Issuer shall not engage in
any business other than purchasing and owning Intangible Transition Property,
issuing Transition Bonds from time to time, pledging its interest in the
Collateral to the Bond Trustee under this Indenture in order to secure the
Transition Bonds and performing activities that are necessary, suitable or
convenient to accomplish these purposes or are incidental thereto.
SECTION 3.13. No Borrowing. The Issuer shall not issue, incur,
assume, guarantee or otherwise become liable, directly or indirectly, for any
indebtedness except for the Transition Bonds.
SECTION 3.14. Guarantees, Loans, Advances and Other Liabilities.
Except as contemplated by the Sale Agreement, the Servicing Agreement, this
Indenture or the LLC Agreement, the 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, except that the
Issuer may invest funds in Eligible Investments.
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SECTION 3.15. Capital Expenditures. The Issuer shall not make any
expenditure (by long-term or operating lease or otherwise) for capital assets
(either realty or personalty) other than Intangible Transition Property
purchased from the Seller pursuant to, and in accordance with, the Sale
Agreement.
SECTION 3.16. Restricted Payments. The Issuer shall not, directly
or indirectly, (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 Issuer or otherwise with
respect to any ownership or equity interest in, or ownership security of, the
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. The Issuer will not, directly or
indirectly, make payments to or distributions from the Collection Account except
in accordance with this Indenture and the Basic Documents.
SECTION 3.17. Notice of Events of Default. The Issuer agrees to
deliver to the Bond Trustee and the Rating Agencies written notice in the form
of an Officer's Certificate of any Default or Event of Default hereunder, its
status and what action the Issuer is taking or proposes to take with respect
thereto within five days after the occurrence thereof.
SECTION 3.18. Inspection. The Issuer agrees that, on reasonable
prior notice, it will permit any representative of the Bond Trustee, during the
Issuer's normal business hours, to examine all the books of account, records,
reports, and other papers of the Issuer, to make copies and extracts therefrom,
to cause such books to be audited annually by Independent certified public
accountants, and to discuss the Issuer's affairs, finances and accounts with the
Issuer's officers, employees, and Independent certified public accountants, all
at such reasonable times and as often as may be reasonably requested. The Bond
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 Bond Trustee may reasonably determine that such disclosure
is consistent with its obligations hereunder.
SECTION 3.19. Adjusted Overcollateralization Schedules. Not later
than each Schedule Revision Date, the Issuer shall deliver to the Bond Trustee a
replacement Schedule A to the Series Supplement, adjusted to reflect the event
giving rise to such Schedule Revision Date and setting forth the Calculated
Overcollateralization Level for each Payment Date.
SECTION 3.20. Transfer Agreement, Sale Agreement and Servicing
Agreement Covenants. (a) The Issuer agrees to take all such lawful actions to
enforce its rights under the Transfer Agreement, the Sale Agreement and the
Servicing Agreement and to compel or secure the performance and observance by
the Transferor, the Seller and the Servicer, of each of their obligations to the
Issuer under or in connection with the Transfer Agreement, the Sale Agreement
and the Servicing Agreement, respectively, in accordance with the terms thereof.
So long as no Event of Default occurs and is continuing, but subject to Section
3.20(f ), the Issuer may exercise any and all rights, remedies, powers and
privileges lawfully available to the Issuer under or in connection with the
Transfer Agreement, the Sale Agreement and the Servicing Agreement.
(b) If an Event of Default occurs and is continuing, the Bond
Trustee may, and, at the direction (which direction shall be in writing or by
telephone (confirmed in writing promptly thereafter)) of the Holders of a
majority of the Outstanding Amount of the Transition Bonds of all Series shall,
exercise all right, remedies, powers, privileges and claims of the Issuer
against the Transferor, the Seller or the Servicer under or in connection with
the Transfer Agreement, 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 Transferor, the Seller or the Servicer
of each of their obligations to the Issuer thereunder and to give any
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consent, request, notice, direction, approval, extension or waiver under the
Transfer Agreement, the Sale Agreement and the Servicing Agreement, and any
right of the Issuer to take such action shall be suspended.
(c) With the consent of the Bond Trustee, the Transfer Agreement,
the Sale Agreement and the Servicing Agreement may be amended, at any time and
from time to time, without the consent of the Transition Bondholders, provided
that (i) such amendment shall not, as evidenced by an Officer's Certificate,
adversely affect the interest of any Transition Bondholder or change the
Intangible Transition Charges Adjustment Process and (ii) the Rating Agency
Condition is satisfied in connection therewith by each Rating Agency other than
Moody's (and the Issuer shall have furnished Moody's with written notice of such
amendment prior to the effectiveness thereof).
(d) No amendment, modification, supplement, termination, waiver or
surrender of, the terms of the Transfer Agreement, the Sale Agreement or the
Servicing Agreement, or waiver of timely performance or observance by the
Transferor, the Servicer or the Seller under the Transfer Agreement, the Sale
Agreement or the Servicing Agreement, respectively, in each case in such a way
as would adversely affect the interests of Transition Bondholders is permitted
nor shall the Bond Trustee consent thereto. If the Issuer, the Transferor, the
Seller or the Servicer shall otherwise propose to amend, modify, waive,
supplement, terminate or surrender, or agree to any amendment, modification,
supplement, termination, waiver or surrender of, the terms of the Transfer
Agreement, the Sale Agreement or the Servicing Agreement or waive timely
performance or observance by the Transferor, the Seller or the Servicer under
the Transfer Agreement, the Sale Agreement or Servicing Agreement, respectively,
the Issuer shall notify the Bond Trustee and the Bond Trustee shall notify the
Transition Bondholders thereof. The Bond Trustee shall consent to such proposed
amendment, modification, supplement or waiver only with the consent of the
Holders of at least a majority of the Outstanding Amount of the Transition Bonds
of each Series or Class. If any such amendment, modification, supplement or
waiver shall be so consented to by the Bond Trustee or such Holders, the Issuer
agrees to execute and deliver, in its own name and at its own expense, such
agreements, instruments, consents and other documents as shall be necessary or
appropriate in the circumstances.
(e) If the Issuer and the Transferor, the Seller or Servicer
propose to amend, modify, waive, supplement, terminate or surrender, or agree to
any amendment, modification, supplement, termination, waiver or surrender of,
the Intangible Transition Charges Adjustment Process, the Issuer shall notify
the Bond Trustee and the Bond Trustee shall notify Transition Bondholders of
such proposal and the Bond Trustee shall consent thereto only with the consent
of the Holder of each Outstanding Transition Bond of each Series or Class
affected thereby.
(f) Promptly following a default by any of the Transferor, the
Seller or Servicer under the Transfer Agreement, the Sale Agreement or the
Servicing Agreement, respectively, and at the Issuer's expense, the Issuer
agrees to take all such lawful actions as the Bond Trustee may request to compel
or secure the performance and observance by the Transferor, the Seller or the
Servicer, as applicable, of each of their obligations to the Issuer under or in
connection with the Transfer Agreement, the Sale Agreement or the Servicing
Agreement in accordance with the terms thereof, and to exercise any and all
rights, remedies, powers and privileges lawfully available to the Issuer under
or in connection with the Transfer Agreement, the Sale Agreement or the
Servicing Agreement to the extent and in the manner directed by the Bond
Trustee, including the transmission of notices of default on the part of the
Transferor, the Seller or the Servicer thereunder and the institution of legal
or administrative actions or proceedings to compel or secure performance by the
Transferor, the Seller or the Servicer of each of their obligations under the
Transfer Agreement, the Sale Agreement and the Servicing Agreement.
(g) If the Issuer shall have knowledge of the occurrence of a
Servicer Default under the Servicing Agreement, the Issuer shall promptly give
written notice thereof to the Bond Trustee and the Rating Agencies, and shall
specify in such notice the action, if any, the Issuer is
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taking with respect to 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 Intangible Transition Property or the
Intangible Transition Charges, the Issuer shall take all reasonable steps
available to it to remedy such failure. The Issuer shall not take any action to
terminate the Servicer's rights and powers under the Servicing Agreement
following a Servicer Default without the prior written consent of the Bond
Trustee or of the Holders of Transition Bonds evidencing not less than 25% of
the Outstanding Amount of the Transition Bonds of all Series and the consent,
not to be unreasonably withheld, of any Counterparties affected thereby.
(h) As promptly as possible after the giving of notice of
termination to the Servicer and the Rating Agencies of the Servicer's rights and
powers pursuant to Section 6.01 of the Servicing Agreement, the Bond Trustee
shall, together with such other Persons, if any, as are specified in Section
6.01 of the Servicing Agreement, appoint a successor Servicer (the "Successor
Servicer"), and such Successor Servicer shall accept its appointment by a
written assumption in a form acceptable to the Issuer and the Bond Trustee. A
person shall qualify as a Successor Servicer only if such Person satisfies the
requirements of Section 6.04 of the Servicing Agreement. If within 30 days after
the delivery of the notice referred to above, a Successor Servicer shall not
have been appointed and accepted its appointment as such, the Bond Trustee may
petition the PUC or a court of competent jurisdiction to appoint a Successor
Servicer. In connection with any such appointment, the Issuer may make such
arrangements for the compensation of such Successor Servicer as it and such
Successor Servicer shall agree, subject to the limitations set forth below and
in the Servicing Agreement, and in accordance with Section 6.04 of the Servicing
Agreement, the Issuer shall enter into an agreement with such Successor Servicer
for the servicing of the Intangible Transition Property (such agreement to be in
form and substance satisfactory to the Bond Trustee).
(i) Upon termination of the Servicer's rights and powers pursuant
to the Servicing Agreement, the Bond Trustee shall promptly notify the Issuer,
the Transition Bondholders and the Rating Agencies. As soon as a Successor
Servicer is appointed, the Issuer shall notify the Bond Trustee, the Transition
Bondholders and the Rating Agencies of such appointment, specifying in such
notice the name and address of such Successor Servicer.
SECTION 3.21. Taxes. So long as any of the Transition Bonds are
outstanding, the Issuer shall pay all material taxes, including gross receipts
taxes, assessments and governmental charges imposed upon it or any of its
properties or assets or with respect to any of its franchises, business, income
or property before any penalty accrues thereon if the failure to pay any such
taxes, assessments and governmental charges would, after any applicable grace
periods, notices or other similar requirements, result in a Lien on the
Collateral.
SECTION 3.22. Separate Entity. The Issuer shall take all
reasonable steps to continue its identity as a separate legal entity and to make
it apparent to third persons that it is an entity with assets and liabilities
distinct from those of the Transferor and the Seller, other affiliates or any
other Person, and that, except for financial reporting purposes (to the extent
required by generally accepted accounting principles) and for state and Federal
income and franchise tax purposes, it is not a division of the Transferor, the
Seller or any of its affiliated entities or any other Person.
ARTICLE IV
Satisfaction and Discharge; Defeasance
SECTION 4.01. Satisfaction and Discharge of Indenture; Defeasance.
(a) The Transition Bonds of any Series, all moneys payable with respect thereto
and this Indenture as it applies to such Series shall cease to be of further
effect and the lien hereunder shall be released with respect to such Series,
interest shall cease to accrue on the Transition Bonds of such Series and the
Bond Trustee, on demand of and at the expense of the Issuer, shall execute
proper
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instruments acknowledging satisfaction and discharge of this Indenture with
respect to the Transition Bonds of such Series, when
(A) either
(1) all Transition Bonds of such Series theretofore
authenticated and delivered (other than (i) Transition Bonds that
have been destroyed, lost or stolen and that have been replaced or
paid as provided in Section 2.06 and (ii) Transition Bonds for
whose payment money has theretofore been deposited in trust or
segregated and held in trust by the Issuer and thereafter repaid
to the Issuer or discharged from such trust, as provided in
Section 3.03) have been delivered to the Bond Trustee for
cancelation; or
(2) the Expected Final Payment Date or Redemption Date has
occurred with respect to all Transition Bonds of such Series not
theretofore delivered to the Bond Trustee for cancelation, and the
Issuer has irrevocably deposited or caused to be irrevocably
deposited with the Bond Trustee cash, in trust for such purpose,
in an amount sufficient to pay and discharge the entire
indebtedness on such Transition Bonds not theretofore delivered to
the Bond Trustee on the Expected Final Payment Date or Redemption
Date, as applicable, therefor;
(B) the Issuer has paid or caused to be paid all other sums
payable hereunder by the Issuer with respect to such Series; and
(C) the Issuer has delivered to the Bond Trustee an Officer's
Certificate, an Opinion of Counsel and (if required by the TIA or the
Bond Trustee) an Independent Certificate from a firm of certified public
accountants, each meeting the applicable requirements of Section 11.01
and each stating that all conditions precedent herein provided for
relating to the satisfaction and discharge of this Indenture with respect
to Transition Bonds of such Series have been complied with.
(b) Subject to Sections 4.01(c) and 4.02, the Issuer at any time
may terminate (i) all its obligations under this Indenture with respect to the
Transition Bonds 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, 3.18, 3.19 and 3.20 and the operation of Section
5.01(iv) ("Covenant Defeasance Option") with respect to any Series of Transition
Bonds. The Issuer may exercise the Legal Defeasance Option with respect to any
Series of Transition Bonds notwithstanding its prior exercise of the Covenant
Defeasance Option with respect to such Series.
If the Issuer exercises the Legal Defeasance Option with respect
to any Series, the maturity of the Transition Bonds of such Series may not be
(a) accelerated because of an Event of Default or (b) except as provided in
Section 4.02, redeemed. If the Issuer exercises the Covenant Defeasance Option
with respect to any Series, the maturity of the Transition Bonds 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 Transition Bonds, the Bond Trustee, on demand of and at
the expense of the Issuer, shall execute proper instruments acknowledging
satisfaction and discharge of the obligations that are terminated pursuant to
such exercise.
(c) Notwithstanding Sections 4.01(a) and 4.01(b) above, (i) rights
of registration of transfer and exchange, (ii) rights of substitution of
mutilated, destroyed, lost or stolen Transition Bonds, (iii) rights of
Transition Bondholders to receive payments of principal, premium, if any, and
interest, but only from the amounts deposited with the Bond Trustee for
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such payments, (iv) Sections 4.03 and 4.04, (v) the rights, obligations and
immunities of the Bond Trustee hereunder (including the rights of the Bond
Trustee under Section 6.07 and the obligations of the Bond Trustee under Section
4.03) and (vi) the rights of Transition Bondholders under this Indenture with
respect to the property deposited with the Bond Trustee payable to all or any of
them, shall survive until the Transition Bonds of the Series as to which this
Indenture or certain obligations hereunder have be satisfied and discharged
pursuant to Section 4.01(a) or 4.01(b) and have been paid in full. Thereafter,
the obligations in Sections 6.07 and 4.04 with respect to such Series shall
survive.
SECTION 4.02. Conditions to Defeasance. The Issuer may exercise
the Legal Defeasance Option or the Covenant Defeasance Option with respect to
any Series of Transition Bonds only if:
(a) the Issuer irrevocably deposits or causes to be deposited in
trust with the Bond Trustee cash or U.S. Government Obligations for the
payment of principal of and premium, if any, and interest on such
Transition Bonds to the Expected Payment Date or Redemption Date
therefor, as applicable, such deposit to be made in the Defeasance
Subaccount for such Series of Transition Bonds;
(b) the Issuer delivers to the Bond 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
Transition Bonds 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 Redemption Price therefor on the Redemption
Date therefor and (iii) interest when due;
(c) in the case of the Legal Defeasance Option, 95 days pass after
the deposit is made and during the 95-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 the Legal Defeasance Option, the Issuer
delivers to the Bond Trustee an Opinion of Counsel stating that (i) the
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 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 Transition Bonds of such Series
will not recognize income, gain or loss for Federal income tax purposes
as a result of the exercise of such Legal Defeasance Option and will be
subject to Federal income tax on the same amounts, in the 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 the Covenant Defeasance Option, the Issuer
delivers to the Bond Trustee an Opinion of Counsel to the effect that the
Holders of the Transition Bonds of such Series will not recognize income,
gain or loss for Federal income tax purposes as a result of the exercise
of such Covenant Defeasance Option and will be subject to Federal income
tax on the same amounts, in the same manner and at the same times as
would have been the case if such Covenant Defeasance had not occurred;
and
(g) the Issuer delivers to the Bond Trustee an Officer's
Certificate and an Opinion of Counsel, each stating that all conditions
precedent to the satisfaction and
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discharge of the Transition Bonds of such Series to the extent
contemplated by this Article IV have been complied with.
Notwithstanding any other provision of this Section 4.02 to the
contrary, no delivery of cash or U.S. Government Obligations to the Bond Trustee
under this Section shall terminate any obligations of the Issuer under this
Indenture with respect of any Transition Bonds which are to be redeemed prior to
the Expected Final Payment Date therefor until such Transition Bonds shall have
been irrevocably called or designated for redemption on a date thereafter on
which such Transition Bonds may be redeemed in accordance with the provisions of
this Indenture and proper notice of such redemption shall have been given in
accordance with the provisions of this Indenture or the Issuer shall have given
the Bond Trustee, in form satisfactory to the Bond Trustee, irrevocable
instructions to give, in the manner and at the times prescribed herein, notice
of redemption of such Series.
SECTION 4.03. Application of Trust Money. All moneys or U.S.
Government Obligations deposited with the Bond Trustee pursuant to Section 4.01
or 4.02 hereof with respect to any Series of Transition Bonds shall be held in
trust in the Defeasance Subaccount for such Series and applied by it, in
accordance with the provisions of the Transition Bonds and this Indenture, to
the payment, either directly or through any Paying Agent, as the Bond Trustee
may determine, to the Holders of the particular Transition Bonds for the payment
or redemption of which such moneys have been deposited with the Bond Trustee, of
all sums due and to become due thereon for principal, premium, if any, and
interest. Such moneys will be segregated and held apart solely for paying such
Transition Bonds and such Transition Bonds shall not entitled to any amounts on
deposit in the Collection Account other than amounts on deposit in the
Defeasance Subaccount for such Transition Bonds.
SECTION 4.04. Repayment of Moneys Held by Paying Agent. In
connection with the satisfaction and discharge of this Indenture or the Covenant
Defeasance Option or Legal Defeasance Option with respect to the Transition
Bonds of any Series, all moneys then held by any Paying Agent other than the
Bond Trustee under the provisions of this Indenture with respect to such
Transition Bonds shall, upon demand of the Issuer, be paid to the Bond 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
SECTION 5.01. Events of Default. "Event of Default" wherever used
herein, means any one of the following events (whatever the reason for such
Event of Default and whether it shall be voluntary or involuntary or be effected
by operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body):
(i) default in the payment of any interest on any Transition Bond
when the same becomes due and payable, and such default shall continue
for a period of five days;
(ii) default in the payment of the then unpaid principal of any
Transition Bond of any Series on the Series Termination Date for such
Series or, if applicable, any Class on the Class Termination Date for
such Class;
(iii) default in the payment of the Redemption Price for any
Transition Bond on the Redemption Date therefor;
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(iv) default in the observance or performance of any covenant
or agreement of the Issuer made in this Indenture (other than a
covenant or agreement, a default in the observance or performance of
which is specifically dealt with in clause (i), (ii) or (iii) above),
and such default shall continue or not be cured, for a period of 30
days after there shall have been given, by registered or certified
mail, to the Issuer by the Bond Trustee or to the Issuer and the Bond
Trustee by the Holders of at least 25% of the Outstanding Amount of the
Transition Bonds of any 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;
(v) the filing of a decree or order for relief by a court
having jurisdiction in the premises in respect of the Issuer or any
substantial part of the Collateral in an involuntary case 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
Issuer or for any substantial part of the Collateral, or ordering the
winding-up or liquidation of the Issuer's affairs, and such decree or
order shall remain unstayed and in effect for a period of 90
consecutive days; or
(vi) the commencement by the Issuer of a voluntary case under
any applicable Federal or state bankruptcy, insolvency or other similar
law now or hereafter in effect, or the consent by the Issuer to the
entry of an order for relief in an involuntary case under any such law,
or the consent by the Issuer to the appointment or taking possession by
a receiver, liquidator, assignee, custodian, trustee, sequestrator or
similar official of the Issuer or for any substantial part of the
Collateral, or the making by the Issuer of any general assignment for
the benefit of creditors, or the failure by the Issuer generally to pay
its debts as such debts become due, or the taking of action by the
Issuer in furtherance of any of the foregoing.
SECTION 5.02. Acceleration of Maturity; Rescission and
Annulment. If an Event of Default occurs and is continuing, then and in every
such case either the Bond Trustee or the Holders of Transition Bonds
representing not less than a majority of the Outstanding Amount of the
Transition Bonds of all Series may, but need not, declare all the Transition
Bonds to be immediately due and payable, by a notice in writing to the Issuer
(and to the Bond Trustee if given by Transition Bondholders), and upon any such
declaration the unpaid principal amount of the Transition Bonds 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 Bond Trustee as hereinafter in this Article V provided, the
Holders of Transition Bonds representing a majority of the Outstanding Amount of
the Transition Bonds of all Series, by written notice to the Issuer and the Bond
Trustee, may rescind and annul such declaration and its consequences if:
(i) the Issuer has paid or deposited with the Bond Trustee,
for deposit in the General Subaccount of the Collection Account, a sum
sufficient to pay
(A) all payments of principal of and premium, if any,
and interest on all Transition Bonds of all Series and all
other amounts that would then be due hereunder or upon such
Transition Bonds if the Event of Default giving rise to such
acceleration had not occurred; and
(B) all sums paid or advanced by the Bond Trustee
hereunder and the reasonable compensation, expenses,
disbursements and advances of the Bond Trustee and its agents
and counsel; and
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(ii) all Events of Default, other than the nonpayment of the
principal of the Transition Bonds 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 Bond Trustee. (a) The Issuer covenants that if (i) Default is
made in the payment of any interest on any Transition Bond when such interest
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
Transition Bond on the Series Termination Date or Class Termination Date, as
applicable, therefor or (iii) Default is made in the payment of the Redemption
Price or for any Transition Bond on the Redemption Date therefor, the Issuer
will, upon demand of the Bond Trustee, pay to it, for the benefit of the Holders
of the Transition Bonds of such Series, such amount as shall be sufficient to
cover the costs and expenses of collection, including the reasonable
compensation, expenses, disbursements and advances of the Bond Trustee and its
agents and counsel and the whole amount then due and payable on such Transition
Bonds 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 instalments of interest,
at the respective Bond Rate of such Series or the applicable Class of such
Series.
(b) In case the Issuer shall fail forthwith to pay the amounts
specified in clause (a) above upon such demand, the Bond Trustee, in its own
name and as trustee of an express trust, may institute a Proceeding for the
collection of the sums so due and unpaid, and may prosecute such Proceeding to
judgment or final decree, and may enforce the same against the Issuer or other
obligor upon such Transition Bonds and collect in the manner provided by law out
of the property of the Issuer or other obligor upon such Transition Bonds,
wherever situated, the moneys adjudged or decreed to be payable.
(c) If an Event of Default occurs and is continuing, the Bond
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 Transition
Bondholders, by such appropriate Proceedings as the Bond 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 Bond Trustee by this Indenture or by law
including foreclosing or otherwise enforcing the lien on the Intangible
Transition Property securing the Transition Bonds or applying to the PUC for
sequestration of revenues arising with respect to such Intangible Transition
Property.
(d) In case there shall be pending, relative to the Issuer or
any other obligor upon the Transition Bonds or any Person having or claiming an
ownership interest in the Collateral, Proceedings under Title 11 of the United
States Code or any other applicable Federal or state bankruptcy, insolvency or
other similar law, or in case a receiver, assignee or trustee in bankruptcy or
reorganization, liquidator, sequestrator or similar official shall have been
appointed for or taken possession of the Issuer or its property or such other
obligor or Person, or in case of any other comparable judicial Proceedings
relative to the Issuer or other obligor upon the Transition Bonds, or to the
creditors or property of the Issuer or such other obligor, the Bond Trustee,
irrespective of whether the principal of any Transition Bonds shall then be due
and payable as therein expressed or by declaration or otherwise and irrespective
of whether the Bond 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 Transition Bonds and to file such other papers or documents as
may be necessary or advisable in order to have
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the claims of the Bond Trustee (including any claim for reasonable
compensation to the Bond Trustee and each predecessor Bond Trustee,
and their respective agents, attorneys and counsel, and for
reimbursement of all expenses and liabilities incurred, and all
advances made, by the Bond Trustee and each predecessor Bond Trustee,
except as a result of negligence or bad faith) and of the Transition
Bondholders allowed in such Proceedings;
(ii) unless prohibited by applicable law and regulations, to
vote on behalf of the Holders of Transition Bonds in any election of a
trustee, a standby trustee or Person performing similar functions in
any such Proceedings;
(iii) to collect and receive any moneys or other property
payable or deliverable on any such claims and to distribute all amounts
received with respect to the claims of the Transition Bondholders and
of the Bond Trustee on their behalf; and
(iv) to file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims
of the Bond Trustee or the Holders of Transition Bonds allowed in any
judicial proceedings relative to the Issuer, its creditors and its
property;
and any trustee, receiver, liquidator, custodian or other similar official in
any such Proceeding is hereby authorized by each of such Transition Bondholders
to make payments to the Bond Trustee, and, in the event that the Bond Trustee
shall consent to the making of payments directly to such Transition Bondholders,
to pay to the Bond Trustee such amounts as shall be sufficient to cover
reasonable compensation to the Bond Trustee, each predecessor Bond Trustee and
their respective agents, attorneys and counsel, and all other expenses and
liabilities incurred, and all advances made, by the Bond Trustee and each
predecessor Bond Trustee except as a result of negligence or bad faith.
(e) Nothing herein contained shall be deemed to authorize the
Bond Trustee to authorize or consent to or vote for or accept or adopt on behalf
of any Transition Bondholder any plan of reorganization, arrangement, adjustment
or composition affecting the Transition Bonds or the rights of any Holder
thereof or to authorize the Bond Trustee to vote in respect of the claim of any
Transition Bondholder in any such proceeding except, as aforesaid, to vote for
the election of a trustee in bankruptcy or similar Person.
(f) All rights of action and of asserting claims under this
Indenture, or under any of the Transition Bonds, may be enforced by the Bond
Trustee without the possession of any of the Transition Bonds or the production
thereof in any trial or other Proceedings relative thereto, and any such action
or proceedings instituted by the Bond 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 Bond Trustee,
each predecessor Bond Trustee and their respective agents and attorneys, shall
be for the ratable benefit of the Holders of the Transition Bonds.
(g) In any Proceedings brought by the Bond Trustee (and also
any Proceedings involving the interpretation of any provision of this Indenture
to which the Bond Trustee shall be a party), the Bond Trustee shall be held to
represent all the Holders of the Transition Bonds, and it shall not be necessary
to make any Transition Bondholder a party to any such Proceedings.
SECTION 5.04. Remedies; Priorities. If an Event of Default
occurs and is continuing, the Bond 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
Transition Bonds or under this Indenture with respect thereto, whether
by declaration or otherwise, enforce any
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judgment obtained, and collect from the Issuer and any other obligor
upon such Transition Bonds moneys adjudged due;
(ii) institute Proceedings from time to time for the complete
or partial foreclosure of this Indenture with respect to the
Collateral;
(iii) exercise any remedies of a secured party under the UCC or
the Statute or any other applicable law and take any other appropriate
action to protect and enforce the rights and remedies of the Bond
Trustee and the Holders of the Transition Bonds of such Series;
(iv) sell the Collateral or any portion thereof or rights or
interest therein, at one or more public or private sales called and
conducted in any manner permitted by law; and
(v) exercise all rights, remedies, powers, privileges and
claims of the Issuer against the Transferor, the Seller or the Servicer
under or in connection with the Transfer Agreement, the Sale Agreement
or the Servicing Agreement as provided in Section 3.20(b);
provided, however, that the Bond 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% of the Outstanding Amount of the Transition Bonds
of all Series consent thereto, (B) the proceeds of such sale or liquidation
distributable to the Transition Bondholders of all Series are sufficient to
discharge in full all amounts then due and unpaid upon such Transition Bonds for
principal, premium, if any, and interest or (C) the Bond Trustee determines that
the Collateral will not continue to provide sufficient funds for all payments on
the Transition Bonds of all Series as they would have become due if the
Transition Bonds had not been declared due and payable, and the Bond Trustee
obtains the consent of Holders of 66-2/3% of the Outstanding Amount of the
Transition Bonds of each Series. In determining such sufficiency or
insufficiency with respect to clause (B) and (C), the Bond Trustee may, but need
not, obtain and rely upon an opinion of an Independent investment banking or
accounting firm of national reputation as to the feasibility of such proposed
action and as to the sufficiency of the Collateral for such purpose.
SECTION 5.05. Optional Preservation of the Collateral. If the
Transition Bonds have been declared to be due and payable under Section 5.02
following an Event of Default and such declaration and its consequences have not
been rescinded and annulled, the Bond Trustee may, but need not, elect, as
provided in Section 5.11(iii), to maintain possession of the Collateral and not
sell or liquidate the same. It is the desire of the parties hereto and the
Transition Bondholders that there be at all times sufficient funds for the
payment of principal of and premium, if any, and interest on the Transition
Bonds, and the Bond Trustee shall take such desire into account when determining
whether or not to maintain possession of the Collateral or sell or liquidate the
same. In determining whether to maintain possession of the Collateral or sell or
liquidate the same, the Bond Trustee may, but need not, obtain and rely upon an
opinion of an Independent investment banking or accounting firm of national
reputation as to the feasibility of such proposed action and as to the
sufficiency of the Collateral for such purpose.
SECTION 5.06. Limitation of Proceedings. No Holder of any
Transition Bond of any Series shall have any right to institute any Proceeding,
judicial or otherwise, or to avail itself of the remedies provided in Section
2812(d)(3)(v) of the Statute, with respect to this Indenture, or for the
appointment of a receiver or trustee, or for any other remedy hereunder, unless:
(i) such Holder has previously given written notice to the
Bond Trustee of a continuing Event of Default;
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(ii) the Holders of not less than 25% of the Outstanding
Amount of the Transition Bonds of each Series have made written request
to the Bond Trustee to institute such Proceeding in respect of such
Event of Default in its own name as Bond Trustee hereunder;
(iii) such Holder or Holders have offered to the Bond Trustee
security or indemnity reasonably satisfactory to the Bond Trustee
against the costs, expenses and liabilities to be incurred in complying
with such request;
(iv) the Bond 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 Bond Trustee during such 60-day period by the Holders
of a majority of the Outstanding Amount of the Transition Bonds of all
Series;
it being understood and intended that no one or more Holders of Transition Bonds
shall have any right in any manner whatever by virtue of, or by availing of, any
provision of this Indenture to affect, disturb or prejudice the rights of any
other Holders of Transition Bonds or to obtain or to seek to obtain priority or
preference over any other Holders or to enforce any right under this Indenture,
except in the manner herein provided.
In the event the Bond Trustee shall receive conflicting or
inconsistent requests and indemnity from two or more groups of Holders of
Transition Bonds, each representing less than a majority of the Outstanding
Amount of the Transition Bonds of all Series, the Bond 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 Transition Bondholders
To Receive Principal, Premium, if any, and Interest. Notwithstanding any other
provisions in this Indenture, the Holder of any Transition Bond shall have the
right, which is absolute and unconditional, (a) to receive payment of (i) the
interest, if any, on such Transition Bond on or after the due dates thereof
expressed in such Transition Bond or in this Indenture, (ii) the unpaid
principal, if any, of such Transition Bonds on or after the Series Termination
Date or Class Termination Date therefor or (iii) in the case of redemption,
receive payment of the unpaid principal, if any, of and premium, if any, and
interest, if any, on such Transition Bond on or after the Redemption Date
therefor and (b) to institute suit for the enforcement of any such payment, and
such right shall not be impaired without the consent of such Holder.
SECTION 5.08. Restoration of Rights and Remedies. If the Bond
Trustee or any Transition Bondholder has instituted any Proceeding to enforce
any right or remedy under this Indenture and such Proceeding has been
discontinued or abandoned for any reason or has been determined adversely to the
Bond Trustee or to such Transition Bondholder, then and in every such case the
Issuer, the Bond Trustee and the Transition Bondholders shall, subject to any
determination in such Proceeding, be restored severally and respectively to
their former positions hereunder, and thereafter all rights and remedies of the
Bond Trustee and the Transition Bondholders shall continue as though no such
Proceeding had been instituted.
SECTION 5.09. Rights and Remedies Cumulative. No right or
remedy herein conferred upon or reserved to the Bond Trustee or to the
Transition Bondholders is intended to be exclusive of any other right or remedy,
and every right and remedy shall, to the extent permitted by law, be cumulative
and in addition to every other right and remedy given hereunder or now or
hereafter existing at law or in equity or otherwise. The assertion or employment
of any right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
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SECTION 5.10. Delay or Omission Not a Waiver. No delay or
omission of the Bond Trustee or any Transition Bondholder to exercise any right
or remedy accruing upon any Default or Event of Default shall impair any such
right or remedy or constitute a waiver of any such Default or Event of Default
or an acquiescence therein. Every right and remedy given by this Article V or by
law to the Bond Trustee or to the Transition Bondholders may be exercised from
time to time, and as often as may be deemed expedient, by the Bond Trustee or by
the Transition Bondholders, as the case may be.
SECTION 5.11. Control by Transition Bondholders. The Holders
of a majority of the Outstanding Amount of the Transition Bonds of all Series
(or, if less than all Series or Classes are affected, the affected Series or
Class or Classes) shall have the right to direct the time, method and place of
conducting any Proceeding for any remedy available to the Bond Trustee with
respect to the Transition Bonds of such Series or Class or Classes or exercising
any trust or power conferred on the Bond Trustee with respect to such Series or
Class or Classes; 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 Bond Trustee to sell or liquidate the Collateral shall
be by the Holders of Transition Bonds representing not less than 100%
of the Outstanding Amount of the Transition Bonds of all Series;
(iii) if the conditions set forth in Section 5.05 have been
satisfied and the Bond Trustee elects to retain the Collateral pursuant
to such Section and not sell or liquidate the same, then any direction
to the Bond Trustee by Holders of Transition Bonds representing less
than 100% of the Outstanding Amount of the Transition Bonds of all
Series to sell or liquidate the Collateral shall be of no force and
effect; and
(iv) the Bond Trustee may take any other action deemed proper
by the Bond Trustee that is not inconsistent with such direction;
provided, however, that, subject to Section 6.01, the Bond Trustee need not take
any action that it determines might involve it in liability or might materially
adversely affect the rights of any Transition Bondholders not consenting to such
action.
SECTION 5.12. Waiver of Past Defaults. Prior to the
declaration of the acceleration of the maturity of the Transition Bonds of all
Series as provided in Section 5.02, the Holders of not less than a majority of
the Outstanding Amount of the Transition Bonds of all Series may waive any past
Default or Event of Default and its consequences except a Default (i) in payment
of principal of or premium, if any, or interest on any of the Transition Bonds
or (ii) in respect of a covenant or provision hereof which cannot be modified or
amended without the consent of the Holder of each Transition Bond of all Series
or Classes affected. In the case of any such waiver, the Issuer, the Bond
Trustee and the Holders of the Transition Bonds shall be restored to their
former positions and rights hereunder, respectively; but no such waiver shall
extend to any subsequent or other Default or impair any right consequent
thereto.
Upon any such waiver, such Default shall cease to exist and be
deemed to have been cured and not to have occurred, and any Event of Default
arising therefrom shall be deemed to have been cured and not to have occurred,
for every purpose of this Indenture; but no such waiver shall extend to any
subsequent or other Default or Event of Default or impair any right consequent
thereto.
SECTION 5.13. Undertaking for Costs. All parties to this
Indenture agree, and each Holder of any Transition Bond by such Holder's
acceptance thereof shall be deemed to have
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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 Bond Trustee for any action taken, suffered or omitted by it as Bond
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 Bond Trustee, (b) any
suit instituted by any Transition Bondholder, or group of Transition
Bondholders, in each case holding in the aggregate more than 10% of the
Outstanding Amount of the Transition Bonds of a Series or (c) any suit
instituted by any Transition Bondholder for the enforcement of the payment of
(i) interest on any Transition Bond on or after the due dates expressed in such
Transition Bond and in this Indenture, (ii) the unpaid principal, if any, of any
Transition Bond on or after the Series Termination Date or Class Termination
Date, if applicable, therefor or (iii) in the case of redemption, the unpaid
principal of and premium, if any, and interest on any Transition Bond on or
after the Redemption Date therefor.
SECTION 5.14. Waiver of Stay or Extension Laws. The Issuer
covenants (to the extent that it may lawfully do so) that it will not at any
time insist upon, or plead or in any manner whatsoever, claim or take the
benefit or advantage of, any stay or extension law wherever enacted, now or at
any time hereafter in force, that may affect the covenants or the performance of
this Indenture; and the Issuer (to the extent that it may lawfully do so) hereby
expressly waives all benefit or advantage of any such law, and covenants that it
will not hinder, delay or impede the execution of any power herein granted to
the Bond 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 Transition Bonds. The Bond Trustee's
right to seek and recover judgment on the Transition Bonds or under this
Indenture shall not be affected by the seeking, obtaining or application of any
other relief under or with respect to this Indenture. Neither the lien of this
Indenture nor any rights or remedies of the Bond Trustee or the Transition
Bondholders shall be impaired by the recovery of any judgment by the Bond
Trustee against the Issuer or by the levy of any execution under such judgment
upon any portion of the Collateral or upon any of the assets of the Issuer.
ARTICLE VI
The Bond Trustee
SECTION 6.01. Duties and Liabilities of Bond Trustee. (a) If
an Event of Default has occurred and is continuing, the Bond 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 Bond 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 Bond Trustee; and
(ii) in the absence of bad faith on its part, the Bond 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 Bond Trustee and conforming to the
requirements of this Indenture.
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(c) The Bond Trustee may not be relieved from liability for
its own negligent action, its own negligent failure to act or its own wilful
misconduct, except that:
(i) this paragraph does not limit the effect of paragraph (b)
of this Section;
(ii) the Bond Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer unless it is
proved that the Bond Trustee was negligent in ascertaining the
pertinent facts; and
(iii) the Bond 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 Bond Trustee is subject to paragraphs (a), (b) and (c) of this Section
6.01.
(e) The Bond Trustee shall not be liable for interest on any
money received by it except as the Bond Trustee may agree in writing with the
Issuer.
(f) Money held in trust by the Bond Trustee need not be
segregated from other funds except to the extent required by law or the terms of
this Indenture or the Transfer Agreement, the Sale Agreement or the Servicing
Agreement.
(g) No provision of this Indenture shall require the Bond
Trustee to expend or risk its own funds or otherwise incur financial liability
in the performance of any of its duties hereunder or in the exercise of any of
its rights or powers, if it shall have reasonable grounds to believe that
repayments of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it.
(h) Every provision of this Indenture relating to the conduct
or affecting the liability of or affording protection to the Bond Trustee shall
be subject to the provisions of this Section and to the provisions of the TIA.
(i) Under no circumstances shall the Bond Trustee be liable
for any indebtedness evidenced by or arising under the Transition Bonds or any
Basic Document.
SECTION 6.02. Rights of Bond Trustee. (a) The Bond Trustee
may rely on any document believed by it to be genuine and to have been signed or
presented by the proper Person. The Bond Trustee need not investigate any fact
or matter stated in the document.
(b) Before the Bond Trustee acts or refrains from acting, it
may require an Officer's Certificate or an Opinion of Counsel. The Bond Trustee
shall not be liable for any action it takes or omits to take in good faith in
reliance on an Officer's Certificate or an Opinion of Counsel.
(c) The Bond 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 Bond 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 Bond 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 Bond Trustee's conduct
does not constitute wilful misconduct, negligence or bad faith.
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(e) The Bond Trustee may consult with counsel, and the advice
or opinion of counsel with respect to legal matters relating to this Indenture
and the Transition Bonds shall be full and complete authorization and protection
from liability in respect to any action taken, omitted or suffered by it
hereunder in good faith and in accordance with the advice or opinion of such
counsel.
SECTION 6.03. Individual Rights of Bond Trustee. The Bond
Trustee in its individual or any other capacity may become the owner or pledgee
of Transition Bonds and may otherwise deal with the Issuer or its affiliates
with the same rights it would have if it were not Bond Trustee. Any Paying
Agent, Transition Bond Registrar, co-registrar or co-paying agent may do the
same with like rights. However, the Bond Trustee must comply with Sections 6.11
and 6.12.
SECTION 6.04. Bond Trustee's Disclaimer. The Bond Trustee
shall not be responsible for and makes no representation as to the validity or
adequacy of this Indenture or the Transition Bonds. The Bond Trustee shall not
be accountable for the Issuer's use of the proceeds from the Transition Bonds,
and the Bond Trustee shall not be responsible for any statement of the Issuer in
the Indenture or in any document issued in connection with the sale of the
Transition Bonds or in the Transition Bonds other than the Bond Trustee's
certificate of authentication. The Bond Trustee shall not be responsible for the
form, character, genuineness, sufficiency, value or validity of any of the
Collateral, or for or in respect of the validity or sufficiency of the
Transition Bonds (other than the certificate of authentication for the
Transition Bonds) or the Basic Documents and the Bond Trustee shall in no event
assume or incur any liability, duty or obligation to any Holder of a Transition
Bond, other than is expressly provided for in this Indenture. The Bond Trustee
shall not be liable for the default or misconduct of the Issuer, the Transferor,
the Seller or the Servicer under any Basic Document or otherwise and the Bond
Trustee shall have no obligation or liability to perform the obligations of the
Issuer.
SECTION 6.05. Notice of Defaults. If a Default occurs and is
continuing with respect to any Series and if it is known to a Responsible
Officer of the Bond Trustee, the Bond Trustee shall mail to each Holder of
Transition Bonds 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 or premium,
if any, or interest on any Transition Bond, the Bond Trustee may withhold the
notice if and so long as a committee of its Responsible Officers in good faith
determines that withholding the notice is in the interests of Transition
Bondholders.
SECTION 6.06. Reports by Bond Trustee to Holders. (a) The Bond
Trustee shall deliver to each Holder of Transition Bonds such information as may
be required to enable such Holder to prepare its Federal and state income tax
returns.
(b) With respect to each Series of Transition Bonds, on or
prior to each Payment Date therefor, the Bond Trustee will deliver a statement
prepared by the Bond Trustee to each Holder of Transition Bonds which will
include (to the extent applicable) the following information (and any other
information so specified in the Series Supplement for such Series) as to the
Transition Bonds of such Series with respect to such Payment Date or the period
since the previous Payment Date, as applicable:
(i) the amount paid to Holders of such Transition Bonds in
respect of principal, such amount to be expressed as a dollar amount
per thousand;
(ii) the amount paid to Holders of such Transition Bonds in
respect of interest, such amount to be expressed as a dollar amount per
thousand;
(iii) the Transition Bond Balance and the Projected Transition
Bond Balance, in each case for such Series and as of the most recent
Payment Date;
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(iv) the amount on deposit in the Overcollateralization
Subaccount and the Calculated Overcollateralization Level, in each case
for all Series and as of the most recent Payment Date;
(v) the amount on deposit in the Capital Subaccount and the
Required Capital Amount, in each case as of the most recent Payment
Date; and
(vi) the amount, if any, on deposit in the Reserve Subaccount
as of the most recent Payment Date.
(c) The Bond Trustee's responsibility for disbursing the
information described in subsection (b) above to Holders of Transition Bonds is
limited to the availability, timeliness and accuracy of the information provided
by the Servicer pursuant to Section 3.04 and Annex 1 of the Servicing Agreement.
SECTION 6.07. Compensation and Indemnity. The Issuer shall pay
to the Bond Trustee from time to time reasonable compensation for its services.
The Bond Trustee's compensation shall not be limited by any law on compensation
of a trustee of an express trust. The Issuer shall reimburse the Bond Trustee
for all reasonable out-of-pocket expenses, disbursements and advances incurred
or made by it, including costs of collection, in addition to the compensation
for its services. Such expenses shall include the reasonable compensation and
expenses, disbursements and advances of the Bond Trustee's agents, counsel,
accountants and experts. The Issuer shall indemnify and hold harmless the Bond
Trustee from and against any and all costs, damages, expenses, losses,
liabilities or other amounts whatsoever (including counsel fees) incurred by the
Bond Trustee in connection with the administration of this trust, the
enforcement of this trust and all of the Bond Trustee's rights, powers and
duties under this Indenture and the performance by the Bond Trustee of the
duties and obligations of the Bond Trustee under or pursuant to this Indenture.
The Bond Trustee shall notify the Issuer promptly of any claim for which it may
seek indemnity. Failure by the Bond Trustee to so notify the Issuer shall not
relieve the Issuer of its obligations hereunder. The Issuer shall defend the
claim and the Bond Trustee may have separate counsel and the Issuer shall pay
the fees and expenses of such counsel. The Issuer need not reimburse any expense
or indemnify against any loss, liability or expense incurred by the Bond Trustee
(i) through the Bond Trustee's own wilful misconduct, negligence or bad faith or
(ii) to the extent the Bond Trustee was reimbursed for or indemnified against
any such loss, liability or expense by the Transferor pursuant to the Transfer
Agreement, the Seller pursuant to the Sale Agreement or by the Servicer pursuant
to the Servicing Agreement.
When the Bond Trustee incurs expenses after the occurrence of
a Default specified in Section 5.01(v) or (vi) with respect to the Issuer, the
expenses are intended to constitute expenses of administration under Title 11 of
the United States Code or any other applicable Federal or state bankruptcy,
insolvency or similar law.
SECTION 6.08. Replacement of Bond Trustee. The Bond Trustee
may resign at any time by so notifying the Issuer. The Holders of a majority in
Outstanding Amount of the Transition Bonds of all Series may remove the Bond
Trustee by so notifying the Issuer and the Bond Trustee and may appoint a
successor Bond Trustee. The Issuer shall remove the Bond Trustee if:
(i) the Bond Trustee fails to comply with Section 6.11;
(ii) the Bond Trustee is adjudged a bankrupt or insolvent;
(iii) a receiver or other public officer takes charge of the
Bond Trustee or its property; or
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(iv) the Bond Trustee otherwise becomes incapable of acting.
If the Bond Trustee resigns or is removed or if a vacancy
exists in the office of Bond Trustee for any reason (the Bond Trustee in such
event being referred to herein as the "Retiring Bond Trustee"), the Issuer shall
promptly appoint a successor Bond Trustee.
A successor Bond Trustee shall deliver a written acceptance of
its appointment to the Retiring Bond Trustee and to the Issuer. Thereupon the
resignation or removal of the Retiring Bond Trustee shall become effective, and
the successor Bond Trustee shall have all the rights, powers and duties of the
Bond Trustee under this Indenture. The successor Bond Trustee shall mail a
notice of its succession to Transition Bondholders. The Retiring Bond Trustee
shall promptly transfer all property held by it as Bond Trustee to the successor
Bond Trustee.
If a successor Bond Trustee does not take office within 60
days after the Retiring Bond Trustee resigns or is removed, the Retiring Bond
Trustee, the Issuer or the Holders of a majority in Outstanding Amount of the
Transition Bonds of all Series may petition any court of competent jurisdiction
for the appointment of a successor Bond Trustee.
If the Bond Trustee fails to comply with Section 6.11, any
Transition Bondholder may petition any court of competent jurisdiction for the
removal of the Bond Trustee and the appointment of a successor Bond Trustee.
The Issuer shall promptly furnish written notification of the
appointment of any successor Bond Trustee pursuant to this Section 6.08 to each
of the Rating Agencies.
Notwithstanding the replacement of the Bond Trustee pursuant
to this Section 6.08, the Issuer's obligations under Section 6.07 shall continue
for the benefit of the Retiring Bond Trustee.
SECTION 6.09. Successor Bond Trustee by Merger. If the Bond
Trustee consolidates with, merges or converts into, or transfers all or
substantially all its corporate trust business or assets to, another corporation
or banking association, the resulting, surviving or transferee corporation or
banking association shall, without any further act, be the successor Bond
Trustee. The Issuer shall promptly furnish written notification of any such
successor Bond Trustee to each of the Rating Agencies.
In case at the time such successor or successors by merger,
conversion consolidation or transfer shall succeed to the trusts created by this
Indenture any of the Transition Bonds shall have been authenticated but not
delivered, any such successor to the Bond Trustee may adopt the certificate of
authentication of any Retiring Bond Trustee, and deliver such Transition Bonds
so authenticated; and in case at that time any of the Transition Bonds shall not
have been authenticated, any successor to the Bond Trustee may authenticate such
Transition Bonds either in the name of any Retiring Bond Trustee hereunder or in
the name of the successor to the Bond Trustee; and in all such cases such
certificates shall have the full force which it is anywhere in the Transition
Bonds or in this Indenture provided that the certificate of the Bond 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 Collateral may at the time be located, the Bond Trustee shall have the
power and may execute and deliver all instruments to appoint one or more Persons
to act as a co-trustee or co-trustees, or separate trustee or separate trustees,
of all or any part of the Collateral, and to vest in such Person or Persons, in
such capacity and for the benefit of the Transition Bondholders, such title to
the Collateral, or any part hereof, and, subject to the other provisions of this
Section, such powers, duties, obligations, rights and trusts as the Bond Trustee
may consider necessary or desirable. No co-trustee or
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separate trustee hereunder shall be required to meet the terms of eligibility as
a successor trustee under Section 6.11 and no notice to Transition Bondholders
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:
(i) all rights, powers, duties and obligations conferred or
imposed upon the Bond Trustee shall be conferred or imposed upon and
exercised or performed by the Bond 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 Bond 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 Bond 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 Bond Trustee;
(ii) no trustee hereunder shall be personally liable by reason
of any act or omission of any other trustee hereunder; and
(iii) the Bond 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 Bond
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
Bond 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 Bond Trustee. Every such instrument shall be filed with the
Bond Trustee.
(d) Any separate trustee or co-trustee may at any time
constitute the Bond Trustee, its agent or attorney-in-fact with full power and
authority, to the extent not prohibited by law, to do any lawful act under or in
respect of this Agreement on its behalf and in its name. If any 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 Bond Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee.
SECTION 6.11. Eligibility; Disqualification. The Bond Trustee
shall at all times satisfy the requirements of TIA Section 310(a). The Bond
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 "Baa3" or better by Xxxxx'x and "BBB-" by Fitch IBCA
(if currently rated by Fitch IBCA). The Bond Trustee shall comply with TIA
Section 310(b), including the optional provision permitted by the second
sentence of TIA Section 310(b)(9); provided, however, that there shall be
excluded from the operation of TIA Section 310(b)(1) any indenture or indentures
under which other securities of the Issuer are outstanding if the requirements
for such exclusion set forth in TIA Section 310(b)(1) are met.
SECTION 6.12. Preferential Collection of Claims Against
Issuer. The Bond Trustee shall comply with TIA Section 311(a), excluding any
creditor relationship listed in TIA Section 311(b). A Bond Trustee who has
resigned or been removed shall be subject to TIA Section 311(a) to the extent
indicated.
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ARTICLE VII
Transition Bondholders' Lists and Reports
SECTION 7.01. Issuer To Furnish Bond Trustee Names and
Addresses of Transition Bondholders. The Issuer will furnish or cause to be
furnished to the Bond 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 Bond
Trustee may reasonably require, of the names and addresses of the Holders of
Transition Bonds of such Series as of such Record Date, (b) at such other times
as the Bond Trustee may request in writing, within 30 days after receipt by the
Issuer of any such request, a list of similar form and content as of a date not
more than 10 days prior to the time such list is furnished; provided, however,
that so long as the Bond Trustee is the Transition Bond Registrar, no such list
shall be required to be furnished.
SECTION 7.02. Preservation of Information; Communications to
Transition Bondholders. (a) The Bond Trustee shall preserve, in as current a
form as is reasonably practicable, the names and addresses of the Holders of
Transition Bonds contained in the most recent list furnished to the Bond Trustee
as provided in Section 7.01 and the names and addresses of Holders of Transition
Bonds received by the Bond Trustee in its capacity as Transition Bond Registrar.
The Bond Trustee may destroy any list furnished to it as provided in such
Section 7.01 upon receipt of a new list so furnished.
(b) Transition Bondholders may communicate pursuant to TIA
Section 312(b) with other Transition Bondholders with respect to their rights
under this Indenture or under the Transition Bonds.
(c) The Issuer, the Bond Trustee and the Transition Bond
Registrar shall have the protection of TIA Section 312(c).
SECTION 7.03. Reports by Issuer. (a) The Issuer shall:
(i) file with the Bond Trustee, within 15 days after the
Issuer is required to file the same with the Commission, copies of the
annual reports and of the information, documents and other reports (or
copies of such portions of any of the foregoing as the Commission may
from time to time by rules and regulations prescribe) which the Issuer
may be required to file with the Commission pursuant to Section 13 or
15(d) of the Exchange Act;
(ii) file with the Bond Trustee and the Commission in
accordance with rules and regulations prescribed from time to time by
the Commission such additional information, documents and reports with
respect to compliance by the Issuer with the conditions and covenants
of this Indenture as may be required from time to time by such rules
and regulations; and
(iii) supply to the Bond Trustee (and the Bond Trustee shall
transmit by mail to all Transition Bondholders described in TIA Section
313(c)) such summaries of any information, documents and reports
required to be filed by the Issuer pursuant to clauses (i) and (ii) of
this Section 7.03(a) as may be required by rules and regulations
prescribed from time to time by the Commission.
(b) Unless the Issuer otherwise determines, the fiscal year of
the Issuer shall end on December 31 of each year.
SECTION 7.04. Reports by Bond Trustee. If required by TIA
Section 313(a), within 60 days after January 1st of each year, commencing with
the year after the issuance of the
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Transition Bonds of any Series, the Bond Trustee shall mail to each Holder of
Transition Bonds of such Series as required by TIA Section 313(c) a brief report
dated as of such date that complies with TIA Section 313(a). The Bond Trustee
also shall comply with TIA Section 313(b); provided, however, that the initial
report so issued shall be delivered not more than 12 months after the initial
issuance of each Series.
A copy of each report at the time of its mailing to Transition
Bondholders shall be filed by the Bond Trustee with the Commission and each
stock exchange, if any, on which the Transition Bonds are listed. The Issuer
shall notify the Bond Trustee if and when the Transition Bonds are listed on any
stock exchange.
SECTION 7.05. Provision of Servicer Reports. Upon the written
request of any Transition Bondholder to the Bond Trustee addressed to the
Corporate Trust Office, the Bond Trustee shall provide such Transition
Bondholder with a copy of the Officer's Certificate referred to in Section 3.05
of the Servicing Agreement and the Annual Accountant's Report referred to in
Section 3.06 of the Servicing Agreement.
ARTICLE VIII
Accounts, Disbursements and Releases
SECTION 8.01. Collection of Money. Except as otherwise
expressly provided herein, the Bond 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 Bond Trustee pursuant to this Indenture. The Bond
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 Bond Trustee may take such action as may be
appropriate to enforce such payment or performance, including the institution
and prosecution of appropriate Proceedings. Any such action shall be without
prejudice to any right to claim a Default or Event of Default under this
Indenture and any right to proceed thereafter as provided in Article V.
SECTION 8.02. Collection Account. (a) On or prior to the
Series Issuance Date for the first Series issued hereunder, the Issuer shall
open, at the Bond Trustee's Corporate Trust Office, or at another Eligible
Institution, one or more segregated trust accounts in the Bond Trustee's name
(collectively, the "Collection Account"). The Collection Account will initially
be divided into subaccounts, which need not be separate bank accounts: a general
subaccount (the "General Subaccount"), an Overcollateralization subaccount (the
"Overcollateralization Subaccount"), a capital subaccount (the "Capital
Subaccount") and a reserve subaccount (the "Reserve Subaccount"). Prior to
depositing funds or U.S. Government Obligations in the Collection Account
pursuant to Sections 4.01 or 4.02, the Issuer shall establish defeasance
subaccounts (each a "Defeasance Subaccount") for each Series for which funds
shall be deposited, as subaccounts of the Collection Account. Prior to any Loss
Amounts being deposited in the Collection Account, the Issuer shall establish a
loss subaccount (the "Loss Subaccount") as a subaccount of the Collection
Account. All amounts in the Collection Account not allocated to any other
subaccount 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 Sections
4.01, 4.02, 4.03 and 8.02(c), (d), (e) and (f). The Collection Account shall at
all times be maintained in an Eligible Deposit Account and only the Bond 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
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investments made in Eligible Investments with such moneys, including all income
or other gain from such investments, shall be held by the Bond Trustee in the
Collection Account as part of the Collateral as herein provided.
(b) So long as no Default or Event of Default has occurred and
is continuing, all or a portion of the funds in the Collection Account shall be
invested in Eligible Investments and reinvested by the Bond 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 such Series or
Class, (ii) such Eligible Investments shall not be sold, liquidated or otherwise
disposed of at a loss prior to the maturity thereof, and (iii) no funds in the
Defeasance Subaccount for any Series of Transition Bonds shall be invested in
Eligible Investments or otherwise, except that U.S. Government Obligations
deposited by the Issuer with the Bond Trustee pursuant to Sections 4.01 or 4.02
shall remain as such. All income or other gain from investments of moneys
deposited in the Collection Account shall be deposited by the Bond Trustee in
the Collection Account, and any loss resulting from such investments shall be
charged to the Collection Account. The Issuer will not direct the Bond 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 Bond Trustee to make any such investment or
sale, if requested by the Bond Trustee, the Issuer shall deliver to the Bond
Trustee an Opinion of Counsel, acceptable to the Bond Trustee, to such effect.
Subject to Section 6.01(c), the Bond Trustee shall not in any way be held liable
for the selection of Eligible Investments or for investment losses incurred
thereon except for losses attributable to the Bond Trustee's failure to make
payments on such Eligible Investments issued by the Bond Trustee, in its
commercial capacity as principal obligor and not as Bond Trustee, in accordance
with their terms. The Bond Trustee shall have no liability in respect of losses
incurred as a result of the liquidation of any Eligible Investment prior to its
stated maturity or the failure of the Issuer to provide timely written
investment direction. The Bond 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, however, if (i) the Issuer shall have
failed to give investment directions for any funds on deposit in the Collection
Account to the Bond Trustee by 11:00 a.m. Eastern Time (or such other time as
may be agreed by the Issuer and Bond Trustee) on any Business Day; or (ii) a
Default or Event of Default shall have occurred and be continuing but the
Transition Bonds shall not have been declared due and payable pursuant to
Section 5.02; then the Bond Trustee shall, to the fullest extent practicable,
invest and reinvest funds in the Collection Account in one or more Eligible
Investments.
(c) ITC Collections remitted by the Servicer to the Bond
Trustee, any Deferred Repurchase Price remitted by the Transferor to the Bond
Trustee and Indemnity Amounts remitted to the Bond Trustee by the Transferor,
the Seller or the Servicer or otherwise received by the Bond Trustee or the
Issuer shall be deposited in the General Subaccount. Loss Amounts remitted by
the Transferor or the Seller to the Bond Trustee shall be deposited in the Loss
Subaccount.
(d) On each Payment Date, the Bond Trustee shall by 12:00 noon
(New York City time) apply all amounts on deposit in the General Subaccount of
the Collection Account and any investment earnings on each of the subaccounts of
the Collection Account in the following priority:
(i) all amounts owed to the Bond Trustee (including legal
fees and expenses, Indemnity Amounts and Loss Amounts) shall be paid to
the Bond Trustee;
(ii) the Servicing Fee and all unpaid Servicing Fees from
prior Payment Dates shall be paid to the Servicer;
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(iii) the fees owed to the Administrative Agent under the
Administration Agreements shall be paid to the Administrative Agent;
(iv) so long as no Event of Default has occurred and is
continuing or would be caused by such payment, all Operating Expenses
other than (i), (ii) and (iii) above shall be paid to the Persons
entitled thereto, provided that the amount paid on any Payment Date
pursuant to this clause (iv) may not exceed $[12,500] in the aggregate
for all Series;
(v) interest due and payable on the Transition Bonds,
together with any overdue interest at the applicable Bond Rate and, to
the extent permitted by law, interest thereon, will be paid to the
Transition Bondholders;
(vi) any principal of any Series or Class of Transition Bonds
payable as a result of acceleration pursuant to Section 5.02, any
principal of any Series or Class of Transition Bonds payable on a
Series Termination Date or Class Termination Date, as applicable, and
any principal of and premium on a Series or Class of Transition Bonds
payable on a Redemption Date shall be paid to the Transition
Bondholders;
(vii) an amount up to the principal amount of the Transition
Bonds that is scheduled to be paid by such Payment Date in accordance
with the Expected Amortization Schedule shall be paid to the Transition
Bondholders in respect of principal on the Transition Bonds;
(viii) all unpaid Operating Expenses, Indemnity Amounts and Loss
Amounts shall be paid to the Persons entitled thereto;
(ix) an amount, if any, necessary to fund the balance of the
Capital Subaccount up to the Required Capital Amount shall be
transferred to the Capital Subaccount;
(x) Overcollateralization with respect to all Series of
Transition Bonds for such Payment Date shall be transferred to the
Overcollateralization Subaccount;
(xi) the balance, if any, will be allocated to the Reserve
Subaccount; and
(xii) following repayment of all outstanding Series of
Transition Bonds, the balance, if any, will be released to the Issuer,
free from the lien of this Indenture.
If, on any Payment Date funds on deposit in the General
Subaccount are insufficient to make the payments or transfers contemplated by
clauses (i) through (x) above, the Bond Trustee will draw from amounts on
deposit in the following subaccounts up to the amount of such shortfall, in
order to make such payments and transfers:
(i) from the Loss Subaccount, with respect to the payments or
transfers contemplated by clauses (i) through (viii) above only; and
(ii) thereafter, from the Reserve Subaccount, then from the
Overcollateralization Subaccount and finally from the Capital
Subaccount.
All payments to the Transition Bondholders of a Series
pursuant to clauses (v) or (vi) of the first paragraph of Section 8.02(d) shall
be made pro rata based on the respective principal amounts of Transition Bonds
of such Series held by such Holders, unless, in the case of a Series comprised
of two or more Classes, the Series Supplement for such Series provides
otherwise. All payments to Transition Bondholders of a Class pursuant to clause
(v) or (vi) of the first paragraph of Section 8.02(d) shall be made pro rata
based on the respective principal amounts of Transition Bonds of such Class held
by such Holders.
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SECTION 8.03. Release of Collateral. (a) All money and other
property withdrawn from the Collection Account by the Bond Trustee for payment
to the Issuer as provided in this Indenture in accordance with Section 8.02
hereof shall be deemed released from the Indenture when so withdrawn and applied
in accordance with the provisions of Article VIII, without further notice to, or
release or consent by, the Bond Trustee.
(b) So long as the Issuer is not in default hereunder, the
Issuer, through the Servicer, may collect, liquidate, sell or otherwise dispose
of the Transferred Intangible Transition Property, at any time and from time to
time, without any notice to, or release or consent by, the Bond Trustee, but
only as and to the extent permitted by the Basic Documents; provided, however,
that any and all proceeds of such dispositions shall become Collateral and be
deposited to the General Subaccount immediately upon receipt thereof by the
Issuer or any other Person, including the Servicer.
(c) Other than as provided for in clauses (a) and (b) above,
the Bond Trustee shall release property from the lien of this Indenture only
upon receipt of an Issuer Request accompanied by an Officer's Certificate, an
Opinion of Counsel and Independent Certificates in accordance with TIA Sections
314(c) and 314(d)(1) meeting the applicable requirements of Section 11.01 or an
Opinion of Counsel in lieu of such Independent Certificates to the effect that
the TIA does not require any such Independent Certificate.
(d) Subject to the payment of its fees and expenses pursuant
to Section 6.07, the Bond 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 Bond 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 Bond Trustee as
provided in this Article VIII shall be bound to ascertain the Bond Trustee's
authority, inquire into the satisfaction of any conditions precedent or see to
the application of any moneys.
(e) Subject to Section 8.03(c), the Bond Trustee shall, at
such time as there are no Transition Bonds Outstanding and all sums due the Bond
Trustee pursuant to Section 6.07 have been paid, release any remaining portion
of the Collateral that secured the Transition Bonds from the lien of this
Indenture and release to the Issuer or any other Person entitled thereto any
funds then on deposit in the Collection Account.
SECTION 8.04. Opinion of Counsel. The Bond Trustee shall
receive at least five Business Days notice when requested by the Issuer to take
any action pursuant to Section 8.03, accompanied by copies of any instruments
involved, and the Bond Trustee shall also require, as a condition to such
action, an Opinion of Counsel, in form and substance satisfactory to the Bond
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 Transition Bonds
or the rights of the Transition Bondholders 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
Bond Trustee in connection with any such action.
SECTION 8.05. Reports by Independent Accountants. The Issuer
shall appoint a firm of Independent certified public accountants of recognized
national reputation for purposes of preparing and delivering the reports or
certificates of such accountants required by this Indenture and the related
Series Supplements. Upon any resignation by such firm the Issuer shall promptly
appoint a successor thereto that shall also be a firm of Independent certified
public accountants of recognized national reputation. If the Issuer shall fail
to appoint a successor to a firm of Independent certified public accountants
that has resigned within 15 days after such resignation, the Bond Trustee shall
promptly notify the Issuer of such failure in
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writing. If the Issuer shall not have appointed a successor within 10 days
thereafter the Bond Trustee shall promptly appoint a successor firm of
Independent certified public accountants of recognized national reputation. The
fees of such firm of Independent certified public accountants and its successor
shall be payable by the Issuer.
ARTICLE IX
Supplemental Indentures
SECTION 9.01. Supplemental Indentures Without Consent of
Transition Bondholders. (a) Without the consent of the Holders of any Transition
Bonds but with prior notice to the Rating Agencies, the Issuer and the Bond
Trustee, when authorized by an Issuer Order, at any time and from time to time,
may enter into one or more indentures supplemental hereto (which shall conform
to the provisions of the Trust Indenture Act as in force at the date of the
execution thereof), in form satisfactory to the Bond Trustee, for any of the
following purposes:
(i) to correct or amplify the description of the Collateral,
or to better assure, convey and confirm unto the Bond Trustee the
Collateral, or to subject to the lien of this Indenture additional
property;
(ii) to evidence the succession, in compliance with the
applicable provisions hereof, of another person to the Issuer, and the
assumption by any such successor of the covenants of the Issuer herein
and in the Transition Bonds contained;
(iii) to add to the covenants of the Issuer, for the benefit of
the Holders of the Transition Bonds, or to surrender any right or power
herein conferred upon the Issuer;
(iv) to convey, transfer, assign, mortgage or pledge any
property to or with the Bond 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, however, that (i) such action shall not, as
evidenced by an Opinion of Counsel, adversely affect in any material
respect the interests of any Transition Bondholder and (ii) the Rating
Agency Condition shall have been satisfied with respect thereto by all
Rating Agencies other than Xxxxx'x (and prior written notice of such
action shall be provided to Xxxxx'x);
(vi) to evidence and provide for the acceptance of the
appointment hereunder by a successor bond trustee with respect to the
Transition Bonds and to add to or change any of the provisions of this
Indenture as shall be necessary to facilitate the administration of the
trusts hereunder by more than one bond 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;
(viii) to set forth the terms of any Series that has not
theretofore been authorized by a Series Supplement; or
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(ix) to provide for any hedge or swap transactions with
respect to any floating rate Series or Class of Transition Bonds or any
Series or Class specific credit enhancement; provided, however, that
(i) such action shall not, as evidenced by an opinion of counsel,
adversely affect in any material respect the interests of any
Transition Bondholder and (ii) the Rating Agency Condition shall have
been satisfied with respect thereto by all Rating Agencies other than
Xxxxx'x (and prior written notice of such action shall be provided to
Xxxxx'x).
The Bond 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 Issuer and the Bond Trustee, when authorized by an
Issuer Order, may, also without the consent of any of the Holders of the
Transition Bonds, 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 Transition Bonds under this Indenture;
provided, however, that (i) such action shall not, as evidenced by an Opinion of
Counsel, adversely affect the interests of any Transition Bondholder and (ii)
the Rating Agency Condition shall have been satisfied with respect thereto.
SECTION 9.02. Supplemental Indentures with Consent of
Transition Bondholders. The Issuer and the Bond Trustee, when authorized by an
Issuer Order, also may, with prior notice to the Rating Agencies and with the
consent of the Holders of not less than a majority of the Outstanding Amount of
the Transition Bonds of each Series or Class to be affected, by Act of such
Holders delivered to the Issuer and the Bond Trustee, enter into an indenture or
indentures supplemental hereto for the purpose of adding any provisions to, or
changing in any manner or eliminating any of the provisions of, this Indenture
or of modifying in any manner the rights of the Holders of the Transition Bonds
under this Indenture; provided, however, that no such supplemental indenture
shall, without the consent of the Holder of each Outstanding Transition Bond of
each Series or Class affected thereby:
(i) change the date of payment of any instalment of principal
of or premium, if any, or interest on any Transition Bond, or reduce
the principal amount thereof, the interest rate thereon or the
redemption price or the 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 Transition Bonds, or change any
place of payment where, or the coin or currency in which, any
Transition Bond or the interest thereon is payable;
(ii) impair the right to institute suit for the enforcement of
the provisions of this Indenture requiring the application of funds
available therefor, as provided in Article V, to the payment of any
such amount due on the Transition Bonds on or after the respective due
dates thereof (or, in the case of redemption, on or after the
Redemption Date);
(iii) reduce the percentage of the Outstanding Amount of the
Transition Bonds or of a Series or Class thereof, the consent of the
Holders of which is required for any such supplemental indenture, or
the consent of the Holders of which is required for any waiver of
compliance with certain provisions of this Indenture or certain
defaults hereunder and their consequences provided for in this
Indenture or modify or alter the provisions of the proviso to the
definition of the term "Outstanding";
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(iv) reduce the percentage of the Outstanding Amount of the
Transition Bonds required to direct the Bond Trustee to direct the
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
Transition Bond affected thereby;
(vi) modify any of the provisions of this Indenture in such
manner as to affect the amount of any payment of interest, principal or
premium, if any, payable on any Transition Bond on any Payment Date or
to affect the rights of the Holders of Transition Bonds to the benefit
of any provisions for the mandatory redemption of the Transition Bonds
contained herein or change the Redemption Dates, Expected Amortization
Schedules or Series Termination Dates or Class Termination Dates of any
Transition Bonds;
(vii) decrease the Overcollateralization Amount or Required
Capital Amount with respect to any Series or the Calculated
Overcollateralization Level with respect to any Payment Date;
(viii) modify or alter the provisions of this Indenture
regarding the voting of Transition Bonds held by the Issuer, the
Transferor, the Seller, an Affiliate of any of them or any obligor on
the Transition Bonds;
(ix) decrease the percentage of the aggregate principal amount
of Transition Bonds required to amend the sections of this Indenture
which specify the applicable percentage of the aggregate principal
amount of the Transition Bonds necessary to amend this Indenture or
certain other related agreements; or
(x) permit the creation of any lien ranking prior to or on a
parity with the lien of this Indenture with respect to any part of the
Collateral or, except as otherwise permitted or contemplated herein,
terminate the lien of this Indenture on any property at any time
subject hereto or deprive the Holder of any Transition Bond of the
security provided by the lien of this Indenture.
It shall not be necessary for any Act of Transition
Bondholders 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 Issuer and the Bond
Trustee of any supplemental indenture pursuant to this Section, the Bond Trustee
shall mail to the Holders of the Transition Bonds to which such amendment or
supplemental indenture relates, a notice setting forth in general terms the
substance of such supplemental indenture. Any failure of the Bond 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 Bond 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 Bond Trustee may, but shall
not be obligated to, enter into any such supplemental indenture that affects the
Bond Trustee's own rights, duties, liabilities or immunities under this
Indenture or otherwise.
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SECTION 9.04. Effect of Supplemental Indenture. Upon the
execution of any supplemental indenture pursuant to the provisions hereof, this
Indenture shall be and be deemed to be modified and amended in accordance
therewith with respect to each Series or Class of Transition Bonds affected
thereby, and the respective rights, limitations of rights, obligations, duties,
liabilities and immunities under this Indenture of the Bond Trustee, the Issuer
and the Holders of the Transition Bonds shall thereafter be determined,
exercised and enforced hereunder subject in all respects to such modifications
and amendments, and all the terms and conditions of any such supplemental
indenture shall be and be deemed to be part of the terms and conditions of this
Indenture for any and all purposes.
SECTION 9.05. Conformity with Trust Indenture Act. Every
amendment of this Indenture and every supplemental indenture executed pursuant
to this Article IX shall conform to the requirements of the TIA as then in
effect so long as this Indenture shall then be qualified under the TIA.
SECTION 9.06. Reference in Transition Bonds to Supplemental
Indentures. Transition Bonds authenticated and delivered after the execution of
any supplemental indenture pursuant to this Article IX may, and if required by
the Bond Trustee shall, bear a notation in form approved by the Bond Trustee as
to any matter provided for in such supplemental indenture. If the Issuer or the
Bond Trustee shall so determine, new Transition Bonds so modified as to conform,
in the opinion of the Bond Trustee and the Issuer, to any such supplemental
indenture may be prepared and executed by the Issuer and authenticated and
delivered by the Bond Trustee in exchange for Outstanding Transition Bonds.
ARTICLE X
Redemption of Transition Bonds
SECTION 10.01. Optional Redemption by Issuer. The Issuer may,
at its option, redeem the Transition Bonds of a Series, in whole or from time to
time in part, as permitted by the related Series Supplement on any Redemption
Date at a price specified in such Series Supplement (such price being called the
"Redemption Price") plus interest accrued on the Transition Bonds to be redeemed
to such Redemption Date. If the Issuer shall elect to redeem the Transition
Bonds of a Series pursuant to this Section 10.01, it shall furnish notice of
such election to the Bond Trustee not later than 25 days prior to the Redemption
Date for such redemption and shall deposit with the Bond Trustee the Redemption
Price of the Transition Bonds to be redeemed plus interest accrued thereon to
such Redemption Date on or prior to such Redemption Date whereupon all such
Transition Bonds shall be due and payable on such Redemption Date upon the
furnishing of a notice complying with Section 10.02 hereof to each Holder of the
Transition Bonds of such Series pursuant to this Section 10.01.
SECTION 10.02. Form of Redemption Notice. Unless otherwise
specified in the Series Supplement relating to a Series of Transition Bonds,
notice of redemption under Section 10.01 hereof shall be given by the Bond
Trustee by first-class mail, postage prepaid, mailed not less than five days nor
more than 45 days prior to the applicable Redemption Date to each Holder of
Transition Bonds to be redeemed, as of the close of business on the Record Date
preceding the applicable Redemption Date at such Holder's address appearing in
the Transition Bond Register.
All notices of redemption shall state:
(1) the Redemption Date;
(2) the amount of such Transition Bonds to be redeemed;
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(3) the Redemption Price; and
(4) the place where such Transition Bonds are to be
surrendered for payment of the Redemption Price and accrued interest
(which shall be the office or agency of the Issuer to be maintained as
provided in Section 3.02 hereof).
Notice of redemption of the Transition Bonds to be redeemed
shall be given by the Bond Trustee in the name and at the expense of the Issuer.
Failure to give notice of redemption, or any defect therein, to any Holder of
any Transition Bond selected for redemption shall not impair or affect the
validity of the redemption of any other Transition Bond. Any notice of optional
redemption may be conditioned upon the deposit of sufficient moneys to pay the
Redemption Price and accrued interest with the Bond Trustee before the date
fixed for redemption and such notice shall be of no effect unless such moneys
are so deposited.
SECTION 10.03. Payment of Redemption Price. If (a)
unconditional notice of redemption has been duly mailed or duly waived by the
Holders of all Transition Bonds called for redemption or (b) conditional notice
of redemption has been so mailed or waived and the redemption moneys have been
duly deposited with the Bond Trustee, then in either case the Transition Bonds
called for redemption shall be payable on the applicable Redemption Date at the
applicable Redemption Price. No further interest will accrue on the principal
amount of any Transition Bonds called for redemption after the Redemption Date
for such redemption if payment of the Redemption Price thereof has been duly
provided for, and the Holder of such Transition Bonds will have no rights with
respect thereto, except to receive payment of the Redemption Price thereof and
unpaid interest accrued to the Redemption Date. Payment of the Redemption Price
together with accrued interest shall be made by the Bond Trustee to or upon the
order of the Holders of the Transition Bonds called for redemption upon
surrender of such Transition Bonds, and the Transition Bonds so redeemed shall
cease to be of further effect and the Lien hereunder shall be released with
respect to such Transition Bonds.
ARTICLE XI
Miscellaneous
SECTION 11.01. Compliance Certificates and Opinions, etc. Upon
any application or request by the Issuer to the Bond Trustee to take any action
under any provision of this Indenture, the Issuer shall furnish to the Bond
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 and (iii)
(if required by the TIA) an Independent Certificate from a firm of certified
public accountants meeting the applicable requirements of this Section, 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:
(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;
(b) 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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(c) 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
(d) a statement as to whether, in the opinion of each such
signatory, such condition or covenant has been complied with.
SECTION 11.02. Form of Documents Delivered to Bond 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
Issuer may be based, insofar as it relates to legal matters, upon a certificate
or opinion of, or representations by, counsel, unless such officer knows, or in
the exercise of reasonable care should know, that the certificate or opinion or
representations with respect to the matters upon which his certificate or
opinion is based are erroneous. Any such certificate of an Authorized Officer or
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 Transferor, the Seller or the Issuer, stating that the
information with respect to such factual matters is in the possession of the
Servicer, the Transferor, the Seller or the Issuer, unless such Authorized
Officer or counsel knows, or in the exercise of reasonable care should know,
that the certificate or opinion or representations with respect to such matters
are erroneous.
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.
Whenever in this Indenture, in connection with any application
or certificate or report to the Bond Trustee, it is provided that the Issuer
shall deliver any document as a condition of the granting of such application,
or as evidence of the Issuer's compliance with any term hereof, it is intended
that the truth and accuracy, at the time of the granting of such application or
at the effective date of such certificate or report (as the case may be), of the
facts and opinions stated in such document shall in such case be conditions
precedent to the right of the Issuer to have such application granted or to the
sufficiency of such certificate or report. The foregoing shall not, however, be
construed to affect the Bond Trustee's right to rely upon the truth and accuracy
of any statement or opinion contained in any such document as provided in
Article VI.
SECTION 11.03. Acts of Transition Bondholders. (a) Any
request, demand, authorization, direction, notice, consent, waiver or other
action provided by this Indenture to be given or taken by Transition Bondholders
may be embodied in and evidenced by one or more instruments of substantially
similar tenor signed by such Transition Bondholders in person or by agents duly
appointed in writing; and except as herein otherwise expressly provided such
action shall become effective when such instrument or instruments are delivered
to the Bond Trustee, and, where it is hereby expressly required, to the Issuer.
Such instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Transition
Bondholders signing such instrument or instruments. Proof of execution of any
such instrument or of a writing appointing any such agent shall be sufficient
for any purpose of this Indenture and (subject to Section 6.01) conclusive in
favor of the Bond Trustee and the Issuer, if made in the manner provided in this
Section.
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(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 Bond Trustee
deems sufficient.
(c) The ownership of Transition Bonds shall be proved by the
Transition Bond Register.
(d) Any request, demand, authorization, direction, notice,
consent, waiver or other action by the Holder of any Transition Bonds shall bind
the Holder of every Transition Bond issued upon the registration thereof or in
exchange therefor or in lieu thereof, in respect of anything done, omitted or
suffered to be done by the Bond Trustee or the Issuer in reliance thereon,
whether or not notation of such action is made upon such Transition Bond.
SECTION 11.04. Notices, etc., to Bond Trustee, Issuer and
Rating Agencies. Any request, demand, authorization, direction, notice, consent,
waiver or Act of Transition Bondholders or other documents provided or permitted
by this Indenture to be made upon, given or furnished to or filed with:
(a) the Bond Trustee by any Transition Bondholder or by the
Issuer shall be sufficient for every purpose hereunder if made, given,
furnished or filed in writing, delivered personally, via facsimile
transmission, by reputable overnight courier or by first-class mail,
postage prepaid, to the Bond Trustee at its Corporate Trust Office, or
(b) the Issuer by the Bond Trustee or by any Transition
Bondholder shall be sufficient for every purpose hereunder if in
writing, delivered personally, via facsimile transmission, by reputable
overnight courier or by first-class mail, postage prepaid, to the
Issuer addressed to: West Penn Funding LLC, 000 Xxxxx Xxxx Xxxxx,
Xxxxxxxxxx, XX 00000, Attention: [ ], or at any other address
previously furnished in writing to the Bond Trustee by the Issuer. The
Issuer shall promptly transmit any notice received by it from the
Transition Bondholders to the Bond Trustee.
Notices required to be given to the Rating Agencies by the
Issuer or the Bond Trustee shall be in writing, delivered personally, via
facsimile transmission, by reputable overnight courier or by first-class mail,
postage prepaid, to (i) in the case of Fitch IBCA, at the following address:
Fitch IBCA, Inc., 0 Xxxxx Xxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx IBCA 10004,
Attention: ABS Surveillance, (ii) in the case of Moody's, at the following
address: Xxxxx'x Investors Service, Inc., Attention: ABS Monitoring Department,
00 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 and (iii) in the case of Standard &
Poor's, at the following address: Standard & Poor's Corporation, 00 Xxxxxxxx
(00xx Xxxxx), Xxx Xxxx, Xxx Xxxx 00000, Attention: Asset Backed Surveillance
Department.
SECTION 11.05. Notices to Transition Bondholders; Waiver.
Where this Indenture provides for notice to Transition Bondholders of any event,
such notice shall be sufficiently given (unless otherwise herein expressly
provided) if in writing and delivered by first-class mail, postage prepaid, to
each Transition Bondholder affected by such event, at their address as it
appears on the Transition Bond Register, not later than the latest date, and not
earlier than the earliest date, prescribed for the giving of such notice. In any
case where notice to Transition Bondholders is given by mail, neither the
failure to mail such notice nor any defect in any notice so mailed to any
particular Transition Bondholder shall affect the sufficiency of such notice
with respect to other Transition Bondholders, 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 Transition Bondholders shall be filed with the
Bond Trustee but such filing shall not be a condition precedent to the validity
of any action taken in reliance upon such a waiver.
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In case it shall be impractical to deliver notice in
accordance with the first paragraph of this Section 11.05 to the Holders of
Transition Bonds when such notice is required to be given pursuant to any
provision of this Indenture, then any manner of giving such notice as shall be
satisfactory to the Bond Trustee shall be deemed to be a sufficient giving of
such notice.
Where this Indenture provides for notice to the Rating
Agencies, failure to give such notice shall not affect any other rights or
obligations created hereunder, and shall not under any circumstance constitute a
Default or Event of Default.
SECTION 11.06. Alternate Payment and Notice Provisions.
Notwithstanding any provision of this Indenture or any of the Transition Bonds
to the contrary, the Issuer may enter into any agreement with any Holder of a
Transition Bond providing for a method of payment, or notice by the Bond Trustee
or any Paying Agent to such Holder, that is different from the methods provided
for in this Indenture for such payments or notices. The Issuer will furnish to
the Bond Trustee a copy of each such agreement and the Bond Trustee will cause
payments to be made and notices to be given in accordance with such agreements.
SECTION 11.07. Conflict with Trust Indenture Act. If any
provision hereof limits, qualifies or conflicts with another provision hereof
that is required to be included in this Indenture by any of the provisions of
the TIA, such required provision shall control.
The provisions of TIA Sections 310 through 317 that impose
duties on any person (including the provisions automatically deemed included
herein unless expressly excluded by this Indenture) are a part of and govern
this Indenture, whether or not physically contained herein.
SECTION 11.08. 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 11.09. Successors and Assigns. All covenants and
agreements in this Indenture and the Transition Bonds by the Issuer shall bind
its successors and permitted assigns, whether so expressed or not.
All agreements of the Bond Trustee in this Indenture shall
bind its successors.
SECTION 11.10. Separability. In case any provision in this
Indenture or in the Transition Bonds shall be invalid, illegal or unenforceable,
the validity, legality, and enforceability of the remaining provisions shall not
in any way be affected or impaired thereby.
SECTION 11.11. Benefits of Indenture. Nothing in this
Indenture or in the Transition Bonds, express or implied, shall give to any
Person, other than the parties hereto and their successors hereunder, and the
Transition Bondholders, and any other party secured hereunder, and any other
Person with an ownership interest in any part of the Collateral, any benefit or
any legal or equitable right, remedy or claim under this Indenture.
SECTION 11.12. 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 Transition Bonds or this Indenture) payment need not be
made on such date, but may be made on the next succeeding Business Day with the
same force and effect as if made on the date on which nominally due, and no
interest shall accrue for the period from and after any such nominal date.
SECTION 11.13. GOVERNING LAW. THIS INDENTURE SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT
REFERENCE TO ITS CONFLICT OF LAW
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PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER
SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
SECTION 11.14. Counterparts. This Indenture may be executed
in any number of counterparts, each of which so executed shall be deemed to be
an original, but all such counterparts shall together constitute but one and
the same instrument.
SECTION 11.15. Issuer Obligation. No recourse may be taken,
directly or indirectly, with respect to the obligations of the Issuer or the
Bond Trustee on the Transition Bonds or under this Indenture or any certificate
or other writing delivered in connection herewith or therewith, against (i) any
owner of a beneficial interest in the Issuer or (ii) any partner, owner,
beneficiary, agent, officer, director, employee or agent of the Bond Trustee,
any holder of a beneficial interest in the Issuer or the Bond Trustee or of any
successor or assign of the Bond Trustee, except as any such Person may have
expressly agreed (it being understood that none of the Bond Trustee's
obligations are in its individual capacity).
SECTION 11.16. No Petition. The Bond Trustee, by entering into
this Indenture, and each Transition Bondholder, by accepting a Transition Bond,
hereby covenant and agree that they will not at any time institute against the
Issuer, or join in any institution against the Issuer of, any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings, or other
proceedings under any United States Federal or state bankruptcy or similar law
in connection with any obligations relating to the Transition Bonds, this
Indenture or any of the Basic Documents.
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IN WITNESS WHEREOF, the Issuer and the Bond 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.
WEST PENN FUNDING LLC,
by [ ], as Manager,
by
--------------------------------------
Name:
Title:
[Trustee],
by
--------------------------------------
Name:
Title:
66
================================================================================
WEST PENN FUNDING LLC,
Issuer
and
[ ],
Bond Trustee
------------------------------
SERIES SUPPLEMENT
Dated as of [ ], 1999
------------------------------
================================================================================
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TABLE OF CONTENTS
Page
----
SECTION 1. Definitions......................................................................2
SECTION 2. Designation; Series Issuance Dates...............................................4
SECTION 3. Initial Principal Amount; Bond Rate; Expected
Final Payment Date; Series or Class
Termination Date.................................................................4
SECTION 4. Payment Dates; Expected Amortization Schedule
for Principal; Interest; Overcollateralization
Amount; Required Capital Amount..................................................5
SECTION 5. Authorized Initial Denominations.................................................7
SECTION 6. Redemption.......................................................................7
SECTION 7. Credit Enhancement...............................................................7
SECTION 8. Delivery and Payment for the Series 1999-A
Transition Bonds; Form of the Series 1999-A
Transition Bonds.................................................................7
SECTION 9. Confirmation of Indenture........................................................7
SECTION 10. Counterparts.....................................................................7
SECTION 11. Governing Law....................................................................7
SECTION 12. Issuer Obligation................................................................8
Schedule A Calculated Overcollateralization Level
Schedule B Expected Amortization Schedule
Exhibit A Form of Transition Bonds
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SERIES SUPPLEMENT dated as of [ ], 1999 (this "Supplement"), by
and between WEST PENN FUNDING LLC, a Delaware limited liability
company (the "Issuer"), and [ ], a [ ] (the "Bond Trustee"),
as Bond Trustee under the Indenture dated as of [ ], 1999,
between the Issuer and the Bond Trustee (the "Indenture").
PRELIMINARY STATEMENT
Section 9.01 of the Indenture provides, among other things, that the Issuer
and the Bond Trustee may at any time and from time to time enter into one or
more indentures supplemental to the Indenture for the purposes of authorizing
the issuance by the Issuer of a Series of Transition Bonds and specifying the
terms thereof. The Issuer has duly authorized the execution and delivery of this
Supplement and the creation of a Series of Transition Bonds with an initial
aggregate principal amount of $[ ] to be known as the Issuer's
Transition Bonds, Series 1999-A (the "Series 1999-A Transition Bonds"). All acts
and all things necessary to make the Series 1999-A Transition Bonds, when duly
executed by the Issuer and authenticated by the Bond Trustee as provided in the
Indenture and this Supplement and issued by the Issuer, the valid, binding and
legal obligations of the Issuer and to make this Supplement a valid and
enforceable supplement to the Indenture have been done, performed and fulfilled
and the execution and delivery hereof have been in all respects duly and
lawfully authorized. The Issuer and the Bond Trustee are executing and
delivering this Supplement in order to provide for the Series 1999-A Transition
Bonds.
In order to secure the payment of principal of and interest on the Series
1999-A Transition Bonds issued and to be issued under the Indenture and/or any
Series Supplement, the Issuer hereby Grants to the Bond Trustee as trustee for
the benefit of the Holders of the Transition Bonds from time to time issued and
outstanding, all of the Issuer's right, title and interest in and to (a) the
Intangible Transition Property transferred by the Seller to the Issuer from time
to time pursuant to the Sale Agreement and all proceeds thereof, (b) the
Transfer Agreement except for Section 5.01 thereof solely to the extent such
Section provides for indemnification of the Seller and the Issuer, (c) all Bills
of Sale delivered by the Transferor pursuant to the Transfer Agreement, (d) the
Sale Agreement except for Section 5.01 thereof solely to the extent such Section
provides for
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indemnification of the Issuer, (e) all Bills of Sale delivered by the Seller
pursuant to the Sale Agreement, (f) the Servicing Agreement except for Section
5.02(b) thereof solely to the extent such Section provides for indemnification
of the Issuer, (g) the Collection Account and all amounts on deposit therein
from time to time, (h) all Swap Agreements with respect to the Series 1999-A
Transition Bonds, (i) all other property of whatever kind owned from time to
time by the Issuer including all accounts, accounts receivable and chattel
paper, (j) all present and future claims, demands, causes and choses in action
in respect of any or all of the foregoing and (k) all payments on or under and
all proceeds of every kind and nature whatsoever in respect of any or all of the
foregoing, including all proceeds of the conversion, voluntary or involuntary,
into cash or other liquid property, all cash proceeds, accounts, accounts
receivable, general intangibles, notes, drafts, acceptances, chattel paper,
checks, deposit accounts, insurance proceeds, condemnation awards, rights to
payment of any and every kind, and other forms of obligations and receivables,
instruments and other property which at any time constitute all or part of or
are included in the proceeds of any of the foregoing (collectively, the
"Collateral"); provided that cash or other property distributed to the Issuer
from the Collection Account in accordance with the provisions of the Indenture
will not be subject to the lien of the Indenture.
To have and to hold in trust to secure the payment of principal of and
premium, if any, and interest on, and any other amounts (including all fees,
expenses, counsel fees and other amounts due and owing to the Bond Trustee)
owing in respect of, the Transition Bonds equally and ratably without prejudice,
preference, priority or distinction, except as expressly provided in the
Indenture or any Series Supplement and to secure performance by the Issuer of
all of the Issuer's obligations under the Indenture and all Series Supplements
with respect to the Transition Bonds, all as provided in the Indenture.
The Bond Trustee, as trustee on behalf of the Holders of the Transition
Bonds, acknowledges such Grant, accepts the trusts hereunder in accordance with
the provisions hereof and agrees to perform its duties required in the Indenture
and this Supplement.
SECTION 1. Definitions. (a) Article One of the Indenture provides that the
meanings of certain defined terms used in the Indenture shall, when applied to
the Transition Bonds of a particular Series, be as defined in Article One but
with such additional provisions as are
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specified in the related Series Supplement. With respect to the Series 1999-A
Transition Bonds, the following definitions shall apply:
"Adjustment Date" shall mean initially each January 1, until October 1,
2007 and on such date and thereafter, the 1st day of each month.
"Authorized Initial Denominations" shall mean $1,000 and integral multiples
thereof.
"Bond Rate" has the meaning set forth in Section 3 of this Supplement.
"Calculated Overcollateralization Level" means, with respect to any Payment
Date, the amount set forth as such in Schedule A hereto, as such Schedule has
been adjusted in accordance with Section 4(d)(ii) hereof.
"Calculation Date" means initially each October 1, until September 1, 2007
and on such date and thereafter the 1st day of each month.
"Class Termination Date" means, with respect to any Class of the Series
1999-A Transition Bonds, the termination date therefor, as specified in Section
3 of this Supplement.
"Expected Amortization Schedule" means Schedule B to this Supplement.
"Expected Final Payment Date" means, with respect to any Class of the
Series 1999-A Transition Bonds, the expected final payment date therefor, as
specified in Section 3 of this Supplement.
"Interest Accrual Period" means, with respect to any Payment Date, the
period from and including the preceding Payment Date (or, in the case of the
first Payment Date, from and including the Series Issuance Date) to and
excluding such Payment Date.
"Overcollateralization Amount" has the meaning set forth in Section 4(d)(i)
of this Supplement.
"Payment Date" has the meaning set forth in Section 4(a) of this
Supplement.
"Record Date" shall mean, with respect to any Payment Date, the close of
business on the day prior to such Payment Date.
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"Required Capital Amount" has the meaning set forth in Section 4(e) of this
Supplement.
"Series Issuance Date" has the meaning set forth in Section 2(b) of this
Supplement.
"Series Termination Date" has the meaning set forth in Section 3 of this
Supplement.
"Servicing Fee Rate" shall mean [0.25]% per annum so long as ITC Charges
are included in electric bills otherwise sent to Customers or, if ITC Charges
are not included in such bills, [1.50]% per annum.
(b) All terms used in this Supplement that are defined in the Indenture,
either directly or by reference therein, have the meanings assigned to them
therein, except to the extent such terms are defined or modified in this
Supplement or the context clearly requires otherwise.
SECTION 2. Designation; Series Issuance Dates. (a) Designation. The Series
1999-A Transition Bonds shall be designated generally as the Issuer's Transition
Bonds, Series 1999-A and further denominated as Classes A-1 through A-[5].
(b) Series Issuance Date. The Series 1999-A Transition Bonds that are
authenticated and delivered by the Bond Trustee to or upon the order of the
Issuer on [ ], 1999 (the "Series Issuance Date") shall have as their date of
authentication [ ], 1999. Each other Series 1999-A Transition Bond shall be
dated the date of its authentication.
SECTION 3. Initial Principal Amount; Bond Rate; Expected Final Payment
Date; Series or Class Termination Date. The Transition Bonds of each Class of
the Series 1999-A Transition Bonds shall have the initial principal amounts,
bear interest at the rates per annum and shall have
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Expected Final Payment Dates and Class Termination Dates as set forth below:
Initial Principal Bond Expected Final Class
Class Amount Rate Payment Date Termination Date
----- ------ ---- ------------ ----------------
X-0
X-0
X-0
X-0
[A-5]
The Bond Rate shall be computed on the basis of a 360-day year of twelve
30-day months.
SECTION 4. Payment Dates; Expected Amortization Schedule for Principal;
Interest; Overcollateralization Amount; Required Capital Amount. (a) Payment
Dates. The Payment Dates for each Class of the Series 1999-A Transition Bonds
are [ ], [ ], [ ] and [ ] of each year or, if any such date
is not a Business Day, the next succeeding Business Day, commencing on [ ],
1999 and continuing until the earlier of repayment of such Class in full and the
applicable Class Termination Date.
(b) Expected Amortization Schedule for Principal. Unless an Event of
Default shall have occurred and be continuing and the unpaid principal amount of
all Series of Transition Bonds has been declared to be due and payable together
with accrued and unpaid interest thereon, on each Payment Date, the Bond Trustee
shall distribute to the Series 1999-A Transition Bondholders of record as of the
related Record Date amounts payable in respect of the Series 1999-A Transition
Bonds pursuant to Section 8.02(d) of the Indenture as principal, in accordance
with the Expected Amortization Schedule. To the extent that more than one Class
of the Series 1999-A Transition Bonds is to receive payments of principal in
accordance with the Expected Amortization Schedule on any Payment Date, such
amounts will be allocated pro rata between such Classes based on the principal
scheduled to be paid to such Classes in accordance with the Expected
Amortization Schedule on such Payment Date; provided, however, that if one or
more Classes did not receive principal on the prior Payment Date and as a result
their Class Principal Balance was not
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reduced to the balance indicated in the Expected Amortization Schedule on such
Payment Date, then such Classes will be (i) allocated funds to make up such
shortfalls prior to any Classes receiving funds in respect of principal
scheduled to be paid on the current Payment Date and (ii) allocated funds in
respect of prior shortfalls on a pro rata basis based on the amount of such
shortfalls; provided, however, that other than in the event of a redemption in
no event shall a principal payment pursuant to this Section 4(b) on any Class on
a Payment Date be greater than the amount that reduces the Outstanding Amount of
such Class of Series 1999-A Transition Bonds to the amount specified in the
Expected Amortization Schedule which is attached as Schedule B hereto for such
Class and Payment Date. Not later than each Schedule Revision Date, the Issuer
shall deliver to the Bond Trustee a replacement Schedule B hereto, adjusted to
reflect the event giving rise to such Schedule Revision Date and setting forth
the Expected Amortization Schedule for each Payment Date; provided, however,
that no such replacement schedule shall be required if the event giving rise to
such Schedule Revision Date is a redemption of the Series 1999-A Transition
Bonds in whole.
(c) Interest. Interest will be payable on each Class of the Series 1999-A
Transition Bonds on each Payment Date in an amount equal to one-[quarter] of the
product of (i) the applicable Bond Rate and (ii) the Outstanding Amount of the
related Class of Transition Bonds as of the close of business on the preceding
Payment Date after giving effect to all payments of principal made to the
holders of the related Class of Series 1999-A Transition Bonds on such preceding
Payment Date; and provided, further, that with respect to the initial Payment
Date or, if no payment has yet been made, interest on the outstanding principal
balance will accrue from and including the Series Issuance Date to, but
excluding, the following Payment Date.
(d) Overcollateralization Amount. (i) The Overcollateralization Amount for
the Series 1999-A Transition Bonds shall be $[ ].
(ii) Not later than each Schedule Revision Date, the Issuer shall deliver
to the Bond Trustee a replacement Schedule A hereto, adjusted to reflect the
event giving rise to such Schedule Revision Date and setting forth the
Calculated Overcollateralization Level for each Payment Date; provided, however,
that no such replacement schedule shall be required if the event giving rise to
such Schedule Revision Date is a redemption of the Series 1999-A Transition
Bonds in whole.
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(e) Required Capital Amount. The Required Capital Amount for the Series
1999-A Transition Bonds shall be equal to 0.50% of the initial principal amount
thereof, or $[ ].
SECTION 5. Authorized Initial Denominations. The Series 1999-A Transition
Bonds shall be issuable in the Authorized Initial Denominations.
SECTION 6. Redemption. (a) Mandatory Redemption. The Series 1999-A
Transition Bonds shall not be subject to mandatory redemption.
(b) Optional Redemption. The Series 1999-A Transition Bonds shall not be
subject to optional redemption by the Issuer except that the Series 1999-A
Transition Bonds may be redeemed in whole at a Redemption Price equal to the
principal amount thereof plus interest at the applicable Bond Rate accrued to
the Redemption Date on any Payment Date on which the Outstanding Amount thereof
(after giving effect to payments that would otherwise be made on such Payment
Date) has been reduced to less than 5% of the initial principal balance thereof.
SECTION 7. Credit Enhancement. No credit enhancement (other than the
Overcollateralization Amount) is provided for the Series 1999-A Transition
Bonds.
SECTION 8. Delivery and Payment for the Series 1999-A Transition Bonds;
Form of the Series 1999-A Transition Bonds. The Bond Trustee shall deliver the
Series 1999-A Transition Bonds to the Issuer when authenticated in accordance
with Section 2.02 of the Indenture. The Series 1999-A Transition Bonds of each
Class shall be in the form of Exhibits A-1 through A-[5] hereto.
SECTION 9. Confirmation of Indenture. As supplemented by this Supplement,
the Indenture is in all respects ratified and confirmed and the Indenture, as so
supplemented by this Supplement, shall be read, taken, and construed as one and
the same instrument.
SECTION 10. Counterparts. This Supplement may be executed in any number of
counterparts, each of which so executed shall be deemed to be an original, but
all of such counterparts shall together constitute but one and the same
instrument.
SECTION 11. Governing Law. This Supplement shall be construed in accordance
with the laws of the State of New York without reference to its conflict of law
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provisions, and the obligations, rights and remedies of the parties hereunder
shall be determined in accordance with such laws.
SECTION 12. Issuer Obligation. No recourse may be taken, directly or
indirectly, with respect to the obligations of the Issuer or the Bond Trustee on
the Transition Bonds or under this Supplement or any certificate or other
writing delivered in connection herewith or therewith, against (i) any owner of
a beneficial interest in the Issuer or (ii) any partner, owner, beneficiary,
agent, officer, director or employee of the Bond Trustee, any holder of a
beneficial interest in the Issuer or the Bond Trustee or of any successor or
assign of the Bond Trustee, except as any such Person may have expressly agreed
(it being understood that none of the Bond Trustee's obligations are in its
individual capacity).
IN WITNESS WHEREOF, the Issuer and the Bond Trustee have caused this
Supplement to be duly executed by their respective officers thereunto duly
authorized as of the first day of the month and year first above written.
WEST PENN FUNDING LLC,
by [ ],
as Manager,
by
---------------------------------------
Name:
Title:
[ ], not in its individual
capacity but solely as Bond Trustee on behalf
of the Transition Bondholders,
by
---------------------------------------
Name:
Title:
