EXHIBIT 4.3.1
INDENTURE
PSE&G TRANSITION FUNDING LLC,
Issuer
and
THE BANK OF NEW YORK,
Trustee
---------------------
INDENTURE
Dated as of January 31, 2001
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Securing Transition Bonds
Issuable in Series
TABLE OF CONTENTS
ARTICLE I
Definitions and Incorporation by Reference
SECTION 1.01 Definitions....................................................................2
SECTION 1.02 Incorporation by Reference of the Trust Indenture Act..........................2
SECTION 1.03 Rules of Construction..........................................................3
ARTICLE II
The Transition Bonds
SECTION 2.01 Form...........................................................................3
SECTION 2.02 Execution, Authentication and Delivery.........................................4
SECTION 2.03 Denominations; Transition Bonds Issuable in Series.............................4
SECTION 2.04 Temporary Transition Bonds.....................................................6
SECTION 2.05 Registration; Registration of Transfer and Exchange............................6
SECTION 2.06 Mutilated, Destroyed, Lost or Stolen Transition Bonds..........................8
SECTION 2.07 Persons Deemed Owner...........................................................9
SECTION 2.08 Payment of Principal and Interest; Interest on Overdue Principal;
Principal and Interest Rights Preserved........................................9
SECTION 2.09 Cancellation..................................................................10
SECTION 2.10 Amount; Authentication and Delivery of Transition Bonds.......................10
SECTION 2.11 Book-Entry Transition Bonds...................................................16
SECTION 2.12 Notices to Clearing Agency....................................................17
SECTION 2.13 Definitive Transition Bonds...................................................17
ARTICLE III
Covenants
SECTION 3.01 Payment of Principal and Interest.............................................18
SECTION 3.02 Maintenance of Office or Agency...............................................18
SECTION 3.03 Money for Payments To Be Held in Trust........................................19
SECTION 3.04 Existence.....................................................................20
SECTION 3.05 Protection of Collateral......................................................20
SECTION 3.06 Opinions as to Collateral.....................................................21
SECTION 3.07 Performance of Obligations....................................................21
SECTION 3.08 Negative Covenants............................................................22
SECTION 3.09 Annual Statement as to Compliance.............................................22
SECTION 3.10 Issuer May Consolidate, etc., Only on Certain Terms...........................23
SECTION 3.11 Successor or Transferee.......................................................24
SECTION 3.12 No Other Business.............................................................24
SECTION 3.13 No Borrowing..................................................................24
SECTION 3.14 Guarantees, Loans, Advances and Other Liabilities.............................24
SECTION 3.15 Capital Expenditures..........................................................24
SECTION 3.16 Restricted Payments...........................................................25
SECTION 3.17 Notice of Events of Default...................................................25
SECTION 3.18 Inspection....................................................................25
SECTION 3.19 Adjusted Overcollateralization Balance Schedules..............................25
SECTION 3.20 Sale Agreement, Servicing Agreement and Swap Agreement Covenants..............26
SECTION 3.21 Taxes.........................................................................29
ARTICLE IV
Satisfaction and Discharge; Defeasance
SECTION 4.01 Satisfaction and Discharge of Indenture; Defeasance...........................29
SECTION 4.02 Conditions to Defeasance......................................................31
SECTION 4.03 Application of Trust Money....................................................32
SECTION 4.04 Repayment of Moneys Held by Paying Agent......................................33
ARTICLE V
Remedies
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 Trustee...............35
SECTION 5.04 Remedies......................................................................37
SECTION 5.05 Optional Preservation of the Collateral.......................................38
SECTION 5.06 Limitation of Proceedings.....................................................39
SECTION 5.07 Unconditional Rights of Transition Bondholders
To Receive Principal and Interest.............................................40
SECTION 5.08 Restoration of Rights and Remedies............................................40
SECTION 5.09 Rights and Remedies Cumulative................................................40
SECTION 5.10 Delay or Omission Not a Waiver................................................40
SECTION 5.11 Control by Transition Bondholders.............................................40
SECTION 5.12 Waiver of Past Defaults.......................................................41
SECTION 5.13 Undertaking for Costs.........................................................42
SECTION 5.14 Waiver of Stay or Extension Laws..............................................42
SECTION 5.15 Action on Transition Bonds....................................................42
ARTICLE VI
The Trustee
SECTION 6.01 Duties and Liabilities of Trustee.............................................43
SECTION 6.02 Rights of Trustee.............................................................44
SECTION 6.03 Individual Rights of Trustee..................................................45
SECTION 6.04 Trustee's Disclaimer..........................................................45
SECTION 6.05 Notice of Defaults............................................................45
SECTION 6.06 Reports by Trustee to Holders.................................................45
SECTION 6.07 Compensation and Indemnity....................................................47
SECTION 6.08 Replacement of Trustee........................................................47
SECTION 6.09 Successor Trustee by Merger...................................................48
SECTION 6.10 Appointment of Co-Trustee or Separate Trustee.................................49
SECTION 6.11 Eligibility; Disqualification.................................................50
SECTION 6.12 Preferential Collection of Claims Against Issuer..............................50
SECTION 6.13 Representations and Warranties of the Trustee.................................50
ARTICLE VII
Transition Bondholders' Lists and Reports
SECTION 7.01 Issuer To Furnish Trustee Names and Addresses of Transition Bondholders.......51
SECTION 7.02 Preservation of Information; Communications to Transition Bondholders.........51
SECTION 7.03 Reports by Issuer.............................................................51
SECTION 7.04 Reports by Trustee............................................................52
SECTION 7.05 Provision of Servicer Reports.................................................52
ARTICLE VIII
Accounts, Disbursements and Releases
SECTION 8.01 Collection of Money...........................................................53
SECTION 8.02 Collection Account............................................................53
SECTION 8.03 Release of Collateral.........................................................60
SECTION 8.04 Issuer Opinion of Counsel.....................................................60
SECTION 8.05 Reports by Independent Accountants............................................61
ARTICLE IX
Supplemental Indentures
SECTION 9.01 Supplemental Indentures Without Consent of Transition Bondholders.............61
SECTION 9.02 Supplemental Indentures with Consent of Transition Bondholders................63
SECTION 9.03 Execution of Supplemental Indentures..........................................65
SECTION 9.04 Effect of Supplemental Indenture..............................................65
SECTION 9.05 Conformity with Trust Indenture Act...........................................65
SECTION 9.06 Reference in Transition Bonds to Supplemental Indentures......................65
ARTICLE X
Redemption of Transition Bonds
SECTION 10.01 Optional Redemption by Issuer................................................66
SECTION 10.02 Mandatory Redemption by Issuer...............................................66
SECTION 10.03 Form of Redemption Notice....................................................66
SECTION 10.04 Payment of Redemption Price..................................................67
ARTICLE XI
Miscellaneous
SECTION 11.01 Compliance Certificates and Opinions, etc....................................67
SECTION 11.02 Form of Documents Delivered to Trustee.......................................68
SECTION 11.03 Acts of Transition Bondholders...............................................69
SECTION 11.04 Notices, etc., to Trustee, Issuer and Rating Agencies........................69
SECTION 11.05 Notices to Transition Bondholders; Waiver....................................70
SECTION 11.06 Notices to Luxembourg Stock Exchange.........................................71
SECTION 11.07 Alternate Payment and Notice Provisions......................................71
SECTION 11.08 Conflict with Trust Indenture Act............................................71
SECTION 11.09 Effect of Headings and Table of Contents.....................................72
SECTION 11.10 Successors and Assigns.......................................................72
SECTION 11.11 Severability.................................................................72
SECTION 11.12 Benefits of Indenture........................................................72
SECTION 11.13 Legal Holidays...............................................................72
SECTION 11.14 GOVERNING LAW................................................................72
SECTION 11.15 Counterparts.................................................................72
SECTION 11.16 Issuer Obligation............................................................73
SECTION 11.17 No Petition..................................................................73
APPENDIX A MASTER DEFINITIONS
SCHEDULE I SCHEDULED OVERCOLLATERALIZATION LEVELS
INDENTURE, dated as of January 31, 2001, by and between PSE&G
TRANSITION FUNDING LLC, a Delaware limited liability company, as Issuer,
and THE BANK OF NEW YORK, a New York banking corporation, in its capacity
as trustee for the benefit of the Holders of the Transition Bonds and as
agent for itself and any Swap Counterparty (collectively, the "Trustee").
The Issuer has duly authorized the execution and delivery of this
Indenture to provide for one or more Series of 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 Trustee. The Issuer is
entering into this Indenture, and the Trustee is accepting the trusts
created hereby, each for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged and each intending to be
legally bound hereby.
GRANTING CLAUSE
The Issuer hereby Grants to the Trustee for the benefit of (i)
the Holders of the Transition Bonds from time to time issued and
outstanding, (ii) the Trustee and (iii) any Swap Counterparty, all of the
Issuer's right, title and interest whether now owned or hereafter acquired,
in, to and under: (a) all Bondable Transition Property, including, without
limitation, the Bondable Transition Property transferred by the Seller to
the Issuer from time to time pursuant to the Sale Agreement and all
proceeds thereof; (b) the Sale Agreement; (c) all Bills of Sale delivered
by the Seller pursuant to the Sale Agreement; (d) the Servicing Agreement;
(e) the Administration Agreement; (f) any Interest Rate Swap Agreement; (g)
the Collection Account and all sub-accounts thereof (including, without
limitation, the General Subaccount, each Series Overcollateralization
Subaccount, each Series Capital Subaccount, the Reserve Subaccount, each
Series Subaccount, any Class Subaccount and any Defeasance Subaccount, but
excluding the Capital Reserve Subaccount) and all cash, securities,
instruments, investment property or other assets deposited in or credited
to the Collection Account or any subaccount thereof (other than the Capital
Reserve Subaccount) from time to time or purchased with funds therefrom;
(h) all investment property and all other property of whatever kind owned
from time to time by the Issuer other than: (w) any cash released to any
Swap Counterparty by the Trustee from the related Class Subaccount pursuant
to Section 8.02(f), (x) any cash released to the Issuer by the Trustee from
any Series Capital Subaccount pursuant to Section 8.02(g)(x), (y) any
payment received by the Issuer pursuant to any Hedge Agreement and (z) the
proceeds from the sale of the Transition Bonds used to pay (1) the costs of
issuance of the Transition Bonds and the Upfront Transaction Costs and
Capital Reduction Costs (as those terms are defined in the Financing
Order), (2) any amount paid by the Issuer under any Hedge Agreement and (3)
the purchase price of the Bondable Transition Property paid pursuant to the
Sale Agreement; (i) all present and future claims, demands, causes and
choses in action in respect of any or all of the foregoing; and (j) 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").
Such Grants are made to the Trustee to have and to hold in trust
to secure the payment of principal of, and interest on, and any other
amounts owing in respect of, the Transition Bonds and all fees, expenses,
counsel fees and other amounts due and owing to the Trustee and, if and to
the extent provided in any Series Supplement, any amounts due and owing to
any Swap Counterparty (collectively, the "Secured Obligations"), equally
and ratably without prejudice, preference, priority or distinction, except
as expressly provided in this Indenture and to secure performance by the
Issuer of all of the Issuer's obligations under this Indenture with respect
to the Transition Bonds, all as provided in this Indenture.
The 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.
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01 DEFINITIONS. Capitalized terms used but not
otherwise defined in this Indenture have the respective meanings set forth
in Appendix A hereto unless the context otherwise requires.
SECTION 1.02 INCORPORATION BY REFERENCE OF THE TRUST INDENTURE
ACT. Whenever this Indenture refers to a provision of the TIA, the
provision is incorporated by reference in and made a part of this
Indenture. Each of the following TIA terms used in this Indenture has the
following meaning:
"Commission" means the Securities and Exchange Commission.
"indenture securities" means the Transition Bonds.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the 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.
(a) An accounting term not otherwise defined has the meaning
assigned to it in accordance with generally accepted accounting principles
as in effect from time to time;
(b) "including" means including without limitation;
(c) with respect to terms defined in Appendix A hereto, words in
the singular include the plural and words in the plural include the
singular;
(d) unless otherwise specified, references herein to Sections or
Articles are to Sections or Articles of this Indenture; and
(e) the words "herein", "hereof", "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision.
ARTICLE II
THE TRANSITION BONDS
SECTION 2.01 FORM. (a) The Transition Bonds and the Trustee's
certificate of authentication shall be in substantially the forms set forth
in Exhibit A to the related Series Supplement, with such appropriate
insertions, omissions, substitutions and other variations as are required
or permitted by this Indenture or by the related Series Supplement and may
have such letters, numbers or other marks of identification and such
legends or endorsements placed thereon as may, consistently herewith, be
determined by the Managers of the Issuer executing such 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.
(b) 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 Managers
of the Issuer executing such Transition Bonds, as evidenced by their
execution of such Transition Bonds.
(c) Each Transition Bond shall bear upon its face the
designation so selected for the Series and Class, if any, to which it
belongs. The terms of all 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.
(d) Each Transition Bond shall state that the Competition Act
provides that the State of New Jersey pledges and agrees with the holders
of the Transition Bonds that "the State will not limit, alter or impair any
bondable transition property or other rights vested in an electric public
utility or an assignee or pledgee thereof or a financing entity or vested
in the holders of any transition bonds pursuant to a bondable stranded
costs rate order until such transition bonds, together with the interest
and acquisition or redemption premium, if any, thereon, are fully paid and
discharged or until such agreements are fully performed on the part of the
electric public utility, any assignee or pledgee thereof or the financing
entity or in any way limit, alter, impair or reduce the value or amount of
the bondable transition property approved by a bondable stranded costs rate
order".
SECTION 2.02 EXECUTION, AUTHENTICATION AND DELIVERY. (a) The
Transition Bonds shall be executed on behalf of the Issuer by a Manager.
The signature of any such Manager on the Transition Bonds may be manual or
facsimile.
(b) Transition Bonds bearing the manual or facsimile signature
of individuals who were at any time Managers shall bind the Issuer,
notwithstanding that such individuals or any of them have ceased to hold
such offices prior to the authentication and delivery of such Transition
Bonds.
(c) 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 Trustee pursuant to an Issuer Order
for authentication; and the Trustee shall authenticate and deliver such
Transition Bond as in this Indenture provided and not otherwise.
(d) 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 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.
(e) To the extent any of the Transition Bonds are listed on the
Luxembourg Stock Exchange and the rules and regulations of such exchange so
require, a transfer or other agent appointed pursuant to Section 3.02(b)
shall be authorized on behalf of the Trustee to execute and deliver such
certificate of authentication.
SECTION 2.03 DENOMINATIONS; TRANSITION BONDS ISSUABLE IN SERIES.
(a) The Transition Bonds of each Series shall be issuable as registered
Transition Bonds in the Authorized Denominations specified in the Series
Supplement therefor.
(b) The Transition Bonds may, at the election of and as
authorized by a Manager and set forth in a Series Supplement, be issued in
one or more Series (each of which may be comprised of one or more Classes),
and shall be designated generally as the "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 a
Manager of the Issuer may determine and be set forth in the Series
Supplement therefor.
(c) Each Series of Transition Bonds shall be created by a Series
Supplement authorized by a Manager and establishing the terms and
provisions of such Series and, if applicable, any Classes thereof. The
several Series and any Classes thereof may differ as between Series and
Classes, in respect of any of the following matters:
(i) designation of the Series and each Class thereof;
(ii) the aggregate initial principal amount of the
Transition Bonds of the Series and each Class thereof;
(iii) the Interest Rate of the Series and each Class
thereof or the formula, if any, used to calculate the applicable
Interest Rate or Interest Rates for the Series and each Class
thereof;
(iv) the Payment Dates of the Series and each Class
thereof;
(v) the Expected Final Payment Date of the Series and each
Class thereof;
(vi) the Final Maturity Date of the Series and each Class
thereof;
(vii) the Series Issuance Date of the Series;
(viii) the place or places for payments with respect to the
Series and each Class thereof;
(ix) the Authorized Denominations for the Series and each
Class thereof;
(x) the provisions, if any, for redemption by the Issuer of
the Series and each Class thereof;
(xi) the Expected Amortization Schedule for the Series and
each Class thereof;
(xii) the Overcollateralization Amount with respect to the
Series;
(xiii) the Required Capital Amount with respect to the
Series;
(xiv) the Calculation Dates and Adjustment Dates for the
Series;
(xv) the credit enhancement, if any, applicable to the
Series and each Class thereof; and
(xvi) any other terms of the Series or each Class that are
not inconsistent with the provisions of this Indenture.
SECTION 2.04 TEMPORARY TRANSITION BONDS. (a) Pending the
preparation of definitive Transition Bonds pursuant to Section 2.13 or, in
the case of Transition Bonds held in a book-entry only system by a Clearing
Agency, a Manager on behalf of the Issuer may execute, and upon receipt of
an Issuer Order the Trustee shall authenticate and deliver, temporary
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 Manager executing such Transition
Bonds may determine, as evidenced by their execution of such Transition
Bonds.
(b) 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 any
Holder. Upon surrender for cancellation of any one or more temporary
Transition Bonds, a Manager on behalf of the Issuer shall execute and the
Trustee shall authenticate and deliver in exchange therefor a like Series
(and if applicable, Class) and aggregate initial principal amount of
definitive Transition Bonds in Authorized 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.
SECTION 2.05 REGISTRATION; REGISTRATION OF TRANSFER AND
EXCHANGE. (a) 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 Trustee shall be the registrar (the Trustee or any
successor thereof in such capacity, the "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.
(b) If a Person other than the Trustee is appointed by the
Issuer as Transition Bond Registrar, the Issuer shall give the Trustee and
any transfer, paying or listing agent of the Issuer appointed pursuant to
Section 3.02(b) prompt written notice of the appointment of such Transition
Bond Registrar and of the location, and any change in the location, of the
Transition Bond Register; the Trustee and any such agent shall have the
right to inspect the Transition Bond Register at all reasonable times and
to obtain copies thereof; and the Trustee and any such agent shall have the
right to rely upon a certificate executed on behalf of the Transition Bond
Registrar by a duly authorized officer thereof as to the names and
addresses of the Holders of the Transition Bonds and the original and
Outstanding principal amounts and number of such Transition Bonds
(separately stated by Series and, if applicable, Class).
(c) 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, a Manager on behalf of the Issuer shall execute,
and the Trustee shall authenticate and the Transition Bondholder shall
obtain from the Trustee, in the name of the designated transferee or
transferees, one or more new Transition Bonds in any Authorized
Denominations, of a like Series (and, if applicable, Class) and aggregate
initial principal amount.
(d) At the option of the Holder, Transition Bonds may be
exchanged for other Transition Bonds of a like Series (and, if applicable,
Class) and aggregate initial principal amount in Authorized Denominations,
upon surrender of the Transition Bonds to be exchanged at such office or
agency as provided in Section 3.02. Whenever any Transition Bonds are so
surrendered for exchange, a Manager on behalf of the Issuer shall execute,
and the Trustee shall authenticate and the Transition Bondholder shall
obtain from the Trustee, the Transition Bonds which the Transition
Bondholder making the exchange is entitled to receive.
(e) 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.
(f) 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 form satisfactory to the
Trustee duly executed by the Holder thereof or such Holder's attorney duly
authorized in writing, with such signature guaranteed by an Eligible
Guarantor Institution in the form set forth in such Transition Bond.
(g) No service charge shall be made to a Holder for any
registration of transfer or exchange of Transition Bonds (except as may be
required by the rules and regulations of the Luxembourg Stock Exchange with
respect to any Transition Bonds listed thereon), but, other than in respect
of exchanges pursuant to Sections 2.04 or 9.06 not involving any transfer,
the Issuer may require payment by such Holder of a sum sufficient to cover
any tax or other governmental charge that may be imposed in connection with
any registration of transfer or exchange of Transition Bonds, including the
fees and expenses of the Trustee.
(h) The preceding provisions of this Section 2.05
notwithstanding, except to the extent otherwise required by the rules and
regulations of the Luxembourg Stock Exchange with respect to any Transition
Bonds listed thereon, 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 fifteen (15) days preceding the date on
which final payment of principal is to be made with respect to such
Transition Bond.
SECTION 2.06 MUTILATED, DESTROYED, LOST OR STOLEN TRANSITION
BONDS. (a) If (i) any mutilated Transition Bond is surrendered to the
Trustee, or the Trustee receives evidence to its satisfaction of the
destruction, loss or theft of any Transition Bond, and (ii) there is
delivered to the Trustee such security or indemnity as may be required by
it to hold the Issuer and the Trustee harmless, then, in the absence of
notice to the Issuer, the Transition Bond Registrar or the Trustee that
such Transition Bond has been acquired by a protected purchaser, a Manager
on behalf of the Issuer shall execute, and upon a Manager's request the
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 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 protected 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 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 protected purchaser, and shall be entitled to recover upon
the security or indemnity provided therefor to the extent of any loss,
damage, cost or expense incurred by the Issuer or the Trustee in connection
therewith.
(b) Every replacement Transition Bond issued pursuant to this
Section 2.06 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.
(c) The provisions of this Section 2.06 are exclusive and shall
preclude (to the extent lawful) all other rights and remedies with respect
to the replacement or payment of mutilated, destroyed, lost or stolen
Transition Bonds.
SECTION 2.07 PERSONS DEEMED OWNER. Prior to due presentment for
registration of transfer of any Transition Bond, the Issuer, the Trustee
and any agent of the Issuer or the 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 interest on such Transition Bond and for all other
purposes whatsoever, whether or not such Transition Bond be overdue, and
neither the Issuer, the Trustee nor any agent of the Issuer or the Trustee
shall be affected by notice to the contrary.
SECTION 2.08 PAYMENT OF PRINCIPAL AND INTEREST; INTEREST ON
OVERDUE PRINCIPAL; PRINCIPAL AND INTEREST RIGHTS PRESERVED. (a) The
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 Interest Rate specified therein, and such interest
shall be payable on each Payment Date as specified therein. Any instalment
of interest or principal payable on any 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, in the manner specified in the related Series
Supplement, and if not specified therein, either (i) 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 (ii) 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, except for the final instalment of principal
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 or other amounts returned undelivered shall be held in
accordance with Section 3.03.
(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; provided that instalments of principal not paid
when scheduled to be paid shall be paid upon receipt of moneys available
for such purpose, in the sequential order set forth in the applicable
Expected Amortization Schedule. Failure to pay in accordance with such
Expected Amortization Schedule because moneys are not so available pursuant
to Section 8.02 to make such payments shall not constitute a Default or
Event of Default under this Indenture. Notwithstanding the foregoing, the
entire Outstanding principal amount of the Transition Bonds of any Series
or Class shall be due and payable, if not previously paid, either: (i) on
the Final Maturity Date therefor, (ii) on the date on which the 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 Trustee shall notify the Person in whose name a Transition
Bond is registered, and any other Person required under the relevant Series
Supplement, at the close of business on the second Record Date preceding the
Payment Date on which the Issuer expects that the final instalment of
principal of and interest on such Transition Bond will be paid. Such
notice shall be mailed no later than five (5) days prior to such final
Payment Date and shall specify that such final instalment of principal will
be payable only upon presentation and surrender of such Transition Bond and
shall specify the place where such Transition Bond may be presented and
surrendered for payment of such instalment, which, so long as any
Transition Bonds are listed on the Luxembourg Stock Exchange, shall include
the office of the paying agent in Luxembourg appointed pursuant to Section
3.02(b). The Trustee shall also arrange for such notice to be published in
an Authorized Newspaper, not later than the fifth day of the month of the
expected payment of such final instalment. Notices in connection with
redemptions of Transition Bonds also 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, or in a default of any amount payable to
any Swap Counterparty, the Issuer shall pay defaulted interest, plus
interest on such defaulted interest at the applicable Interest Rate in any
lawful manner (subject to the availability of such amounts in the related
Class Subaccount, in the case of interest owed with respect to any
Securitization Bonds which have a floating rate of interest). The Issuer
may pay such defaulted interest to the Persons who are Transition
Bondholders and to any Swap Counterparty, as applicable, at the rate
specified in the related Series Supplement or Interest Rate Swap Agreement,
respectively, on a subsequent special record date, which date shall be at
least five Business Days prior to the payment date. The Issuer shall fix
or cause to be fixed any such special record date and payment date, and, at
least fifteen (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 CANCELLATION. All Transition Bonds surrendered for
payment, registration of transfer, exchange or redemption shall, if
surrendered to any Person other than the Trustee, be delivered to the
Trustee and shall be promptly canceled by the Trustee. The Issuer may at
any time deliver to the Trustee for cancellation any 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 Trustee. No Transition Bonds shall be
authenticated in lieu of or in exchange for any Transition Bonds canceled
as provided in this Section 2.09, except as expressly permitted by this
Indenture. All canceled Transition Bonds may be held or disposed of by the
Trustee in accordance with its standard retention or disposal policy as in
effect at the time unless the Issuer shall direct by an Issuer Order that
they be destroyed or returned to it; provided that such Issuer Order is
timely and the Transition Bonds have not been previously disposed of by the
Trustee.
SECTION 2.10 AMOUNT; AUTHENTICATION AND DELIVERY OF TRANSITION
BONDS. (a) The aggregate principal amount of Transition Bonds that may be
authenticated and delivered under this Indenture shall not exceed
$2,525,000,000 plus the amount of any Refunding Issuance. The Issuer may
issue Transition Bonds of a new Series as a Financing Issuance or a
Refunding Issuance.
(b) Transition Bonds of a new Series may from time to time be
executed by a Manager on behalf of the Issuer and delivered to the Trustee
for authentication and thereupon the same shall be authenticated and
delivered by the Trustee upon Issuer Request and upon delivery by the
Issuer, at the Issuer's expense, to the Trustee of the following:
(i) Trust Action. An Issuer Order authorizing and directing
the authentication and delivery of the Transition Bonds by the
Trustee and specifying the principal amount of Transition Bonds to be
authenticated.
(ii) Authorizing Certificate. A certified resolution of the
Managers 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.
(iii) Series Supplement. A Series Supplement for the Series
of Transition Bonds being issued, which shall set forth the
provisions and form of the Transition Bonds of such Series (and, if
applicable, each Class thereof).
(iv) Certificates of the Issuer and the Seller.
(A) An Issuer Officer's Certificate dated as of the
Series Issuance Date, stating:
(1) that no Default has occurred and is
continuing under this Indenture and that the issuance of the
Transition Bonds being issued will not result in any
Default;
(2) that the Issuer has not assigned any interest
or participation in the Collateral except for the Grant
contained in this Indenture; that the Issuer has the power
and authority to Grant the Collateral to the Trustee as
security hereunder; and that the Issuer, subject to the
terms of this Indenture, has Granted to the Trustee a
perfected security interest in all right, title and interest
in, to and under the Collateral free and clear of any Lien,
except the Lien of this Indenture;
(3) that the Issuer has appointed the firm of
independent certified public accountants as contemplated in
Section 8.05;
(4) that attached thereto are duly executed, true
and complete copies of the Sale Agreement and the Servicing
Agreement;
(5) that all financing statements with respect to
the Collateral which are required to be filed under the New
Jersey UCC or the uniform commercial code of any other
jurisdiction by the terms of the Sale Agreement, the
Servicing Agreement or this Indenture will be filed as
required; and
(6) that all conditions precedent provided in
this Indenture relating to the authentication and delivery
of the Transition Bonds have been complied with.
(B) An Officer's Certificate from the Seller, dated as
of the Series Issuance Date, to the effect that, in the case of
the Bondable 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:
(1) the Seller was the sole owner of such
Bondable Transition Property and such ownership interest was
perfected; such Bondable Transition Property will be validly
transferred and sold to the Issuer free and clear of all
Liens (other than Liens created by the Issuer pursuant to
this Indenture) and such transfer will be perfected; the
Seller has the power and authority to own, sell and assign
such Bondable Transition Property to the Issuer; the Seller
has duly authorized such sale and assignment to the Issuer;
and the Seller has its chief executive office in the State
of New Jersey; and
(2) the attached copy of the Financing Order
creating such Bondable Transition Property is true and
correct and is in full force and effect; and
(v) Issuer Opinion of Counsel. An Issuer Opinion of
Counsel, portions of which may be delivered by counsel for the Issuer
and portions of which may be delivered by counsel for the Seller
and/or the Servicer, dated as of the Series Issuance Date, subject to
customary qualifications, 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 being issued, each of the Series Supplement
and this Indenture and such Transition Bonds have been duly
authorized, executed and delivered, and the Issuer is duly
organized, is validly existing as a limited liability company and
in good standing under the laws of the jurisdiction of its
organization and is in good standing in any jurisdiction where it
is required to be qualified;
(B) no authorization, approval or consent of any
governmental body is required for the valid issuance,
authentication or delivery of such Transition Bonds, except for
any such authorization, approval or consent as has already been
obtained and such registrations as are required under the Blue
Sky and securities laws of any State;
(C) the Transition Bonds being issued, when executed
and authenticated in accordance with the provisions of this
Indenture and delivered, will constitute valid and binding
obligations of the Issuer entitled to the benefits of this
Indenture and the related Series Supplement;
(D) the Financing Order is final and non-appealable;
(E) this Indenture (including the related Series
Supplement), the Sale Agreement and the Servicing Agreement are
valid and binding agreements of the Issuer, enforceable against
the Issuer in accordance with their respective terms except as
such enforceability may be subject to bankruptcy, insolvency,
reorganization and other similar laws affecting the rights of
creditors generally and general principles of equity (regardless
of whether such enforceability is considered in a proceeding in
equity or at law);
(F) the Sale Agreement is a valid and binding
agreement of the Seller, enforceable against the Seller in
accordance with its terms except as such enforceability may be
subject to bankruptcy, insolvency, reorganization and other
similar laws affecting the rights of creditors generally and
general principles of equity (regardless of whether such
enforcement is considered in a proceeding in equity or at law);
(G) the Servicing Agreement is a valid and binding
agreement of the Servicer, enforceable against the Servicer in
accordance with its terms except as such enforceability may be
subject to bankruptcy, insolvency, reorganization and other
similar laws affecting the rights of creditors generally and
general principles of equity (regardless of whether such
enforcement is considered in a proceeding in equity or at law);
(H)
(1) the provisions of the Sale Agreement together
with the Xxxx of Sale are effective to create, in favor of
the Issuer, a valid security interest (as such term is
defined in Section 1-201 of the New Jersey UCC) in the
Seller's rights in the Bondable Transition Property
described in the Xxxx of Sale (the "Transferred Bondable
Transition Property"), which security interest if
characterized as a transfer for security will secure the
amount paid by the Issuer for such Transferred Bondable
Transition Property; it being noted that the term "security
interest" includes both a sale and a transfer for security
of an account and no opinion is expressed as to the proper
characterization of the transfer of the Transferred Bondable
Transition Property by the Seller to the Issuer;
(2) the security interest in favor of the Issuer
in the Transferred Bondable Transition Property has been
perfected; and
(3) no other security interest of any other
creditor of the Seller is equal or prior to the security
interest of the Issuer in the Transferred Bondable
Transition Property;
(I) upon the giving of value by the Trustee to the
Issuer with respect to the Collateral,
(1) this Indenture creates in favor of the
Trustee, to secure payment of the Transition Bonds, a valid
security interest in the rights of the Issuer in, to and
under that portion of the Collateral subject to Article 9 of
the New Jersey UCC, including the Bondable Transition
Property (the "Article 9 Collateral"),
(2) upon filing of the related financing
statement in accordance with the New Jersey UCC, such
security interest will be perfected, and
(3) based solely on a review of the UCC Search
Reports, no other security interest of any other creditor of
the Issuer is equal or prior to the security interest of the
Trustee for the benefit of the Transition Bondholders in the
Article 9 Collateral;
(J) this 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) all instruments furnished to the Trustee conform
to the requirements of this Indenture and constitute all of the
documents required to be delivered hereunder for the 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;
(L) either
(1) 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
(2) the Transition Bonds are exempt from the
registration requirements under the Securities Act of 1933;
(M) this Indenture (including the related Series
Supplement) has been duly authorized, executed and delivered by
the Issuer and constitutes the legal, valid and binding
obligation of the Issuer, enforceable against the Issuer in
accordance with its terms;
(N) the Sale Agreement and the Servicing Agreement
have been duly authorized, executed and delivered by each of the
parties thereto; and
(O) the Issuer is not now and, following the issuance
of the Transition Bonds will not be, required to be registered
under the Investment Company Act of 1940, as amended.
(vi) Accountant's Certificate or Opinion. A letter
addressed to the Issuer and the Trustee complying with the
requirements of Section 11.01, of a firm of Independent certified
public accountants of recognized national reputation to the effect
that (A) such accountants are Independent with respect to the Issuer
within the meaning of this Indenture, and are independent public
accountants within the meaning of the standards of The American
Institute of Certified Public Accountants, and (B) with respect to the
Collateral, they have made certain specified recalculations of
calculations and information provided by the Issuer for the purpose of
determining that, based on certain specified assumptions used in
calculating the Transition Bond Charge with respect to the related
Transferred Bondable Transition Property, as of the Series Issuance
Date for such Series, the Transition Bond Charge will be sufficient to
pay (1) assumed Operating Expenses when incurred, plus (2) any amounts
due under any Hedge Agreement and any Interest Rate Swap Agreement
when due, plus (3) the Overcollateralization Amount for such Series
set forth in the Final Prospectus (as such term is defined in the
Underwriting Agreement), plus (4) interest on the Transition Bonds at
their respective Interest Rates when due as set forth in the Final
Prospectus, plus (5) principal of the Transition Bonds in accordance
with the Expected Amortization Schedule set forth in the Final
Prospectus, and found such calculations to be mathematically correct.
(vii) Required Capital Amount. Evidence satisfactory to
the Trustee that the Required Capital Amount for such Series has been
credited to the Capital Subaccount for such Series, provided that in
the case of the initial Series of Transition Bonds, $100,000 of the
Required Capital Amount for such Series shall have been deposited to
the credit of the Capital Reserve Subaccount.
(viii) Rating Agency Approval. Written notice from each
Rating Agency that such action will not result in a reduction or
withdrawal of the then current rating by such Rating Agency of any
Outstanding Series or Class of Transition Bonds.
(ix) Xxxx 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 with respect to the
Bondable Transition Property being purchased with the proceeds of such
Financing Issuance.
(x) 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 interest on
the Transition Bonds being refunded to the Redemption Date for the
Transition Bonds being refunded upon redemption, such money to be
deposited into a separate account with the 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 Bondholders pursuant to Section 2.13:
(a) the provisions of this Section 2.11 shall be in full force
and effect;
(b) the Transition Bond Registrar and the Trustee shall be
entitled to deal with the Clearing Agency for all purposes of this
Indenture (including the payment of principal of and interest on the
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;
(c) to the extent that the provisions of this Section 2.11
conflict with any other provisions of this Indenture, the provisions of
this Section shall control;
(d) the rights of 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 interest on the Transition Bonds to such Clearing Agency
Participants; and
(e) whenever this Indenture requires or permits actions to be
taken based upon instructions or directions of Holders of 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 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 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 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. (a) If (i) the
Issuer advises the Trustee in writing that the Clearing Agency is no longer
willing or able to properly discharge its responsibilities as depository
with respect to any Series or Class of Transition Bonds and the Issuer is
unable to locate a qualified successor, (ii) the Issuer, at its option,
advises the Trustee in writing that it elects to terminate the book-entry
system through the Clearing Agency with respect to any Series or Class of
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 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
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 Trustee of the typewritten Transition Bond
or Transition Bonds representing the Book-Entry Transition Bonds by the
Clearing Agency, accompanied by registration instructions, a Manager on
behalf of the Issuer shall execute and the Trustee shall authenticate the
Definitive Transition Bonds in accordance with the instructions of the
Clearing Agency. None of the Issuer, the Transition Bond Registrar or the
Trustee shall be liable for any delay in delivery of such instructions and
may conclusively rely on, and shall be protected in relying on, such
instructions. Any Definitive Transition Bonds listed on the Luxembourg
Stock Exchange shall be made available to the Transition Bond Owners
through the office of the transfer agent appointed pursuant to Section
3.02(b). Upon the issuance of Definitive Transition Bonds, the Trustee
shall recognize the Holders of the Definitive Transition Bonds as
Transition Bondholders.
(b) Definitive Transition Bonds will be transferable and
exchangeable at the offices of the Transition Bond Registrar or, with
respect to any Transition Bonds listed on the Luxembourg Stock Exchange, at
the offices of the transfer agent appointed pursuant to Section 3.02(b).
With respect to any transfer of such listed Transition Bonds, the new
Definitive Transition Bonds registered in the names specified by the
transferee and the original transferor shall be available at the offices of
such transfer agent.
ARTICLE III
COVENANTS
SECTION 3.01 PAYMENT OF PRINCIPAL AND INTEREST. The Issuer will
duly and punctually pay the principal of and interest on the Transition
Bonds in accordance with the terms of the Transition Bonds and this
Indenture; provided that except on the Final Maturity Date or the
Redemption Date for a Series or Class of Transition Bonds or upon the
acceleration of the Transition Bonds pursuant to Section 5.02, 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 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. (a) 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 Trustee to serve as its agent for the
foregoing purposes. The Issuer will give prompt written notice to the
Trustee and any agent appointed pursuant to clause (b) below of the
location and identity, and of any change in the location or identity, of
any such office or agency. If at any time the Issuer shall fail to
maintain any such office or agency or shall fail to furnish the Trustee and
each such agent with the address thereof, such surrenders, notices and
demands may be made or served at the Corporate Trust Office, and the Issuer
hereby appoints the Trustee as its agent to receive all such surrenders,
notices and demands.
(b) To the extent any of the Transition Bonds are listed on the
Luxembourg Stock Exchange and the rules of such exchange so require, (i)
the Issuer will maintain in Luxembourg (A) an office and a transfer agent
where Transition Bonds may be surrendered for registration of transfer or
exchange, (B) an office and a listing agent where notices and demands to or
upon the Issuer in respect of the Transition Bonds and this Indenture may
be served, and (C) an office and a paying agent where payments in respect
of the Transition Bonds may be made and (ii) any reference in this
Indenture to the office or agency of the Issuer referenced in Section
3.02(a) or 3.02(b) shall also refer to such offices, and the transfer,
listing and paying agents, of the Issuer in Luxembourg, as applicable. The
Issuer shall give the Trustee and any other agent appointed under this
Section 3.02(b) prompt written notice of the location and identity, and of
any change in the location or identity, of any such office or agency.
SECTION 3.03 MONEY FOR PAYMENTS TO BE HELD IN TRUST. (a) As
provided in Section 8.02(a), all payments of principal of and interest on
the Transition Bonds that are to be made from amounts withdrawn from the
Collection Account pursuant to Section 8.02(g), or Section 4.03 shall be
made on behalf of the Issuer by the Trustee or by another Paying Agent, and
no amounts so withdrawn from the Collection Account for payments of
Transition Bonds shall be paid over to the Issuer except as provided in
this Section 3.03 and in Section 8.02.
(b) The Issuer shall cause each Paying Agent other than the
Trustee to execute and deliver to the Trustee an instrument in which such
Paying Agent shall agree with the Trustee (and if the Trustee acts as
Paying Agent, it hereby so agrees), subject to the provisions of this
Section 3.03, that such Paying Agent will:
(i) hold all sums held by it for the payment of principal
of or interest on the 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 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 Trustee, forthwith pay to
the Trustee all sums so held in trust by such Paying Agent;
(iv) immediately resign as a Paying Agent and forthwith pay
to the Trustee all sums held by the Paying Agent in trust for the
payment of 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.
(c) The Issuer may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, by
Issuer Order direct any Paying Agent to pay to the Trustee all sums held in
trust by such Paying Agent, such sums to be held by the Trustee upon the
same trusts as those upon which the sums were held by such Paying Agent;
and upon such payment by any Paying Agent to the Trustee, such Paying Agent
shall be released from all further liability with respect to such money.
(d) Subject to applicable laws with respect to escheat of funds,
any money held by the Trustee or any Paying Agent in trust for the payment
of any amount of principal of or interest on any 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 paid to the Issuer), and all liability of the
Trustee or such Paying Agent with respect to such trust money shall
thereupon cease; provided, however, that the Trustee or such Paying Agent,
before being required to make any such repayment, may at the expense of the
Issuer cause to be published once, in a newspaper published in the English
language, customarily published on each Business Day and of general
circulation in the City of New York, and in an Authorized Newspaper, notice
that such money remains unclaimed and that, after a date specified therein,
which shall not be less than thirty (30) days from the date of such
publication, any unclaimed balance of such money then remaining will be
repaid to the Issuer. The Trustee may also adopt and employ, at the
expense of the Issuer, any other reasonable means of notification of such
repayment (including mailing notice of such repayment to Holders whose
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 Trustee or of any Paying
Agent, at the last address of record for each such Holder).
SECTION 3.04 EXISTENCE. Subject to Section 3.10, the Issuer
shall keep in full effect its existence, rights and franchises as a
statutory limited liability company under the laws of the State of 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. (a) The Issuer shall
from time to time execute and deliver all such supplements and amendments
hereto and all such filings, financing statements, continuation statements,
instruments of further assurance and other instruments, and shall take such
other action necessary or advisable to:
(i) maintain and preserve the Grant, 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, including any Interest
Rate Swap Agreement;
(iv) preserve and defend title to the Collateral and the
rights of the 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 upon all or
any part of the Collateral.
(b) The Issuer hereby designates the Trustee its agent and
attorney-in-fact to execute any filing with the BPU, financing statement,
continuation statement or other instrument required by the Trustee pursuant
to this Section 3.05.
SECTION 3.06 OPINIONS AS TO COLLATERAL. (a) On or before March
31 in each calendar year, while any Series is outstanding, commencing March
31, 2002, the Issuer shall furnish to the Trustee an Issuer Opinion of
Counsel either stating that, in the opinion of such counsel, such action
has been taken with respect to the execution and filing of any filings
pursuant to the New Jersey UCC of financing statements and continuation
statements as is necessary to maintain the Lien and security interest, and
the first priority thereof, created by this Indenture and reciting the
details of such action or stating that in the opinion of such counsel no
such action is necessary to maintain such Grant, Lien and security
interest, and the first priority thereof. Such Issuer Opinion of Counsel
shall also describe the execution and filing of any filings pursuant to the
New Jersey UCC of financing statements and continuation statements that
will, in the opinion of such counsel, be required to maintain the Grant,
Lien and security interest of this Indenture until March 31 in the
following calendar year.
(b) Prior to the effectiveness of any amendment to the Sale
Agreement or the Servicing Agreement, the Issuer shall furnish to the
Trustee an Issuer Opinion of Counsel either (i) stating that, in the
opinion of such counsel, all filings, including filings pursuant to the New
Jersey UCC, have been executed and filed that are necessary fully to
preserve and protect the interest of the Issuer and the Trustee in the
Transferred Bondable 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 (ii) stating that, in the
opinion of such counsel, no such action shall be necessary to preserve and
protect such interest.
SECTION 3.07 PERFORMANCE OF OBLIGATIONS. (a) The Issuer (i)
shall diligently pursue any and all actions to enforce its rights under
each instrument or agreement included in the Collateral and (ii) shall not
take any action and will use its best efforts not to permit any action to
be taken by others that would release any Person from any of such Person's
covenants or obligations under any such instrument or agreement or that
would result in the amendment, hypothecation, subordination, termination or
discharge of, or impair the validity or effectiveness of, any such
instrument or agreement, except, in each case, as expressly provided in
this Indenture, the Sale Agreement, the Servicing Agreement, any Hedge
Agreement, any Interest Rate Swap Agreement or any other Basic Document.
(b) The Issuer may contract with other Persons to assist it in
performing its duties under this Indenture, and any performance of such
duties by a Person identified to the Trustee in an Issuer Officer's
Certificate of the Issuer shall be deemed to be action taken by the Issuer.
Initially, the Issuer has contracted with the Administrator to assist the
Issuer in performing its duties under this Indenture.
(c) The Issuer shall punctually perform and observe all of its
obligations and agreements contained in the Sale Agreement, the Servicing
Agreement, any Hedge Agreement, any Interest Rate Swap Agreement and in all
other instruments and agreements included in the Collateral.
SECTION 3.08 NEGATIVE COVENANTS. The Issuer shall not:
(a) except as expressly permitted by this Indenture, the Sale
Agreement, the Servicing Agreement, any Hedge Agreement, any Interest Rate
Swap Agreement or any other Basic Document, sell, transfer, exchange or
otherwise dispose of any of the Collateral, unless directed to do so by the
Trustee in accordance with Article V;
(b) claim any credit on, or make any deduction from the
principal or interest payable in respect of, the Transition Bonds (other
than amounts properly withheld from such payments under the Code or
pursuant to any Interest Rate Swap Agreement) 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; or
(c) (i) permit the validity or effectiveness of this Indenture
to be impaired, or permit the Lien of this Indenture to be amended,
hypothecated, subordinated, terminated or discharged, or permit any Person
to be released from any covenants or obligations with respect to the
Transition Bonds under this Indenture except as may be expressly permitted
hereby, (ii) permit any Lien (other than the Lien created by this
Indenture) to be created on or extend to or otherwise arise upon or burden
the Collateral or any part thereof, any interest therein or the proceeds
thereof or (iii) permit the Lien of this Indenture not to constitute a
continuing valid first priority security interest in the Collateral.
SECTION 3.09 ANNUAL STATEMENT AS TO COMPLIANCE. The Issuer will
deliver to the Trustee, within 120 days after the end of each fiscal year
of the Issuer (commencing with the fiscal year 2001), an Issuer Officer's
Certificate stating, as to the Manager signing such Issuer Officer's
Certificate, that
(a) a review of the activities of the Issuer during such year
(or relevant portion thereof) and of performance under this Indenture has
been made under such Manager's supervision; and
(b) to the best of such Manager's knowledge, based on such
review, the Issuer has complied with all conditions and covenants under
this Indenture throughout such 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 or
dissolve, unless:
(a) the Person (if other than the Issuer) formed by or surviving
such consolidation or merger or to whom substantially all of such assets
are sold shall be a Person organized and existing under the laws of the
United States of America or any State and shall expressly assume by an
indenture supplemental hereto, executed and delivered to the Trustee, in
form satisfactory to the Trustee, the due and punctual payment of the
principal of and interest on all 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;
(b) the Person (if other than the Issuer) formed by or surviving
such consolidation or merger or to whom substantially all of such assets
are sold shall expressly assume all obligations and succeed to all rights
of the Issuer under the Sale Agreement, the Administration Agreement, the
Servicing Agreement, any Hedge Agreement and any Interest Rate Swap
Agreement pursuant to an assignment and assumption agreement executed and
delivered to the Trustee, in form satisfactory to the Trustee;
(c) immediately after giving effect to such consolidation,
merger or sale, no Default or Event of Default shall have occurred and be
continuing;
(d) the Rating Agency Condition shall have been satisfied with
the respect to such consolidation or merger or sale;
(e) the Issuer shall have received an Issuer Opinion of Counsel
(and shall have delivered copies thereof to the Trustee) to the effect that
such consolidation, merger or sale (i) will not have any material adverse
tax consequence to the Issuer or any Transition Bondholder, (ii) complies
with this Indenture and all of the conditions precedent herein relating to
such transaction and (iii) will result in the Trustee maintaining a
continuing valid first priority perfected security interest in the
Collateral;
(f) neither the Bondable Transition Property nor the Financing
Order nor the rights of the Seller, the Servicer or the Issuer under the
Competition Act or the Financing Order shall be impaired thereby; and
(g) any action as is necessary to maintain the Lien created by
this Indenture shall have been taken.
SECTION 3.11 SUCCESSOR OR TRANSFEREE. (a) Upon any
consolidation or merger of the Issuer in accordance with Section 3.10, the
Person formed by or surviving such consolidation or merger (if other than
the Issuer) shall succeed to, and be substituted for, and may exercise
every right and power of, the Issuer under this Indenture with the same
effect as if such Person had been named as the Issuer herein.
(b) Upon any sale by the Issuer of substantially all of its
assets in a sale which complies with Section 3.10, PSE&G Transition 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, the Administration Agreement, the Servicing Agreement, any Hedge
Agreement and any Interest Rate Swap Agreement to be observed or performed
on the part of the Issuer.
SECTION 3.12 NO OTHER BUSINESS. The Issuer shall not engage in
any business other than purchasing and owning Bondable Transition Property,
issuing Transition Bonds from time to time, pledging its interest in the
Collateral to the Trustee under this Indenture in order to secure the
Transition Bonds, entering into the Basic Documents relating to the
Transition Bonds and performing its obligations thereunder and performing
activities that are necessary, suitable or convenient to accomplish these
purposes or are incidental thereto and other than as contemplated by the
Basic Documents.
SECTION 3.13 NO BORROWING. The Issuer shall not issue, incur,
assume, guarantee or otherwise become liable, directly or indirectly, for
any indebtedness except for the Transition Bonds and except as contemplated
by the Basic Documents.
SECTION 3.14 GUARANTEES, LOANS, ADVANCES AND OTHER LIABILITIES.
Except as contemplated by the Basic Documents, Issuer shall not make any
loan or advance or credit to, or guarantee (directly or indirectly or by an
instrument having the effect of assuring another's payment or performance
on any obligation or capability of so doing or otherwise), endorse or
otherwise become contingently liable, directly or indirectly, in connection
with the obligations, stocks or dividends of, or own, purchase, repurchase
or acquire (or agree contingently to do so) any stock, obligations, assets
or securities of, or any other interest in, or make any capital
contribution to, any other Person, other than any Eligible Investments.
SECTION 3.15 CAPITAL EXPENDITURES. The Issuer shall not make
any expenditure (by long-term or operating lease or otherwise) for capital
assets (either realty or personalty) other than Bondable 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, (a) pay any dividend or make any distribution (by
reduction of capital or otherwise), whether in cash, property, securities
or a combination thereof, to any owner of a beneficial interest in the
Issuer or otherwise with respect to any ownership or equity interest in, or
ownership security of, the Issuer, (b) redeem, purchase, retire or
otherwise acquire for value any such ownership or equity interest or
security or (c) set aside or otherwise segregate any amounts for any such
purpose; provided, however, that if no Event of Default shall have occurred
and be continuing or would otherwise result from such payment, the Issuer
may make, or cause to be made, any such distributions to any owner of a
beneficial interest in the Issuer or otherwise with respect to any
ownership or equity interest or security in or of the Issuer using funds
either distributed to the Issuer pursuant to Section 8.02(g) or which are
not otherwise subject to the Lien of this Indenture, to the extent that
such distributions would not cause the book value of the remaining equity
in the Issuer to decline below 0.5% of the original principal amount of all
Series of Transition Bonds which remain outstanding. The Issuer will not,
directly or indirectly, make payments to or distributions from the
Collection Account except in accordance with this Indenture and the Basic
Documents.
SECTION 3.17 NOTICE OF EVENTS OF DEFAULT. The Issuer agrees to
deliver to the Trustee, the Rating Agencies and (to the extent the rules
and regulations of the Luxembourg Stock Exchange so require) any agent in
Luxembourg appointed pursuant to Section 3.02(b) written notice in the form
of an Issuer Officer's Certificate of any Default or Event of Default
hereunder or under any of the Basic Documents, its status and what action
the Issuer is taking or proposes to take with respect thereto within five
Business Days after the occurrence thereof.
SECTION 3.18 INSPECTION. The Issuer agrees that, on reasonable
prior notice, it will permit any representative of the Trustee, during the
Issuer's normal business hours, to examine all the books of account,
records, reports and other papers of the Issuer, to make copies and
extracts therefrom, to cause such books to be audited annually by
Independent certified public accountants, and to discuss the Issuer's
affairs, finances and accounts with the Issuer's officers, employees and
Independent certified public accountants, all at such reasonable times and
as often as may be reasonably requested. The Trustee shall and shall cause
its representatives to hold in confidence all such information except to
the extent disclosure may be required by law (and all reasonable
applications for confidential treatment are unavailing) and except to the
extent that the Trustee may reasonably determine that such disclosure is
consistent with its obligations hereunder.
SECTION 3.19 ADJUSTED OVERCOLLATERALIZATION BALANCE SCHEDULES.
Not later than the date on which a new Series of Transition Bonds is issued
or any outstanding Series of Transition Bonds is redeemed or defeased, the
Issuer shall deliver to the Trustee a replacement Schedule 1 hereto,
adjusted to reflect such issuance, redemption or defeasance and setting
forth the Scheduled Overcollateralization Level for each Payment Date with
respect to each Series.
SECTION 3.20 SALE AGREEMENT, SERVICING AGREEMENT AND SWAP
AGREEMENT COVENANTS. (a) The Issuer agrees to take all such lawful
actions to enforce its rights under the Sale Agreement, the Servicing
Agreement and any Interest Rate Swap Agreement and to compel or secure the
performance and observance by the Seller, the Servicer and any Swap
Counterparty, of each of their obligations to the Issuer under or in
connection with the Sale Agreement, the Servicing Agreement and any
Interest Rate Swap Agreement, respectively, in accordance with the terms
thereof. So long as no Event of Default occurs and is continuing, but
subject to Section 3.20(f), the Issuer may exercise any and all rights,
remedies, powers and privileges lawfully available to the Issuer under or
in connection with the Sale Agreement, the Servicing Agreement and any
Interest Rate Swap Agreement.
(b) If an Event of Default occurs and is continuing, the Trustee
may, and, at the direction (which direction shall be in writing or by
telephone (confirmed in writing promptly thereafter)) of (i) with respect
to the Sale Agreement or the Servicing Agreement, the Holders of a majority
of the Outstanding Amount of the Transition Bonds of all Series or (ii)
with respect to any Interest Rate Swap Agreement, the Holders of that
percentage of the Outstanding Amount of the Transition Bonds of the related
Class specified in the related Series Supplement, shall, exercise all
right, remedies, powers, privileges and claims of the Issuer against the
Seller, the Servicer or any Swap Counterparty under or in connection with
the Sale Agreement, the Servicing Agreement and any Interest Rate Swap
Agreement, respectively, including the right or power to take any action to
compel or secure performance or observance by the Seller, the Servicer or
any Swap Counterparty of each of their obligations to the Issuer thereunder
and to give any consent, request, notice, direction, approval, extension or
waiver under the Sale Agreement, the Servicing Agreement and any Interest
Rate Swap Agreement, and any right of the Issuer to take such action shall
be suspended.
(c) With the consent of the Trustee, the Sale Agreement and the
Servicing Agreement may be amended, so long as the Rating Agency Condition
is satisfied in connection therewith, at any time and from time to time,
without the consent of the Transition Bondholders, or the counterparty
under any Hedge Agreement or Interest Rate Swap Agreement. However, such
amendment may not adversely affect in any material respect the interest of
any Transition Bondholder or any counterparty under any Hedge Agreement or
Interest Rate Swap Agreement without the consent of the Holders of a
majority of the Outstanding Amount of the Transition Bonds of each Series
or Class, and each such counterparty, materially and adversely affected
thereby. Further, with the consent of the Trustee and the related
counterparty under any Interest Rate Swap Agreement, any Interest Rate Swap
Agreement may be amended, at any time and from time to time, so long as the
Rating Agency Condition is satisfied in connection therewith. However,
such amendment may not adversely affect in any material respect the
interest of any Transition Bondholder or counterparty under any Hedge
Agreement or other Interest Rate Swap Agreement without the consent of
sixty-six and two-thirds percent (66 2/3%) of the Holders of the
Outstanding Amount of the Transition Bonds of each Series or Class and each
such other counterparty materially and adversely affected thereby.
(d) If the Issuer, the Seller or the Servicer proposes to amend,
modify, waive, supplement, terminate or surrender, or agree to any
amendment, modification, waiver, supplement, termination, or surrender of,
the terms of the Sale Agreement, the Servicing Agreement or any Interest
Rate Swap Agreement, or waive timely performance or observance thereunder
by the Seller, the Servicer or any Swap Counterparty, respectively, in each
case in such a way as would materially and adversely affect the interests
of any Class of any Series of Transition Bondholders or the counterparty
under any Hedge Agreement or Interest Rate Swap Agreement, the Issuer shall
first notify the Rating Agencies of the proposed amendment, modification,
termination or surrender. Upon receiving notification regarding whether
the Rating Agency Condition has been satisfied, the Issuer shall notify the
Trustee, and the Trustee shall notify the Transition Bondholders and each
counterparty under any Hedge Agreement or Interest Rate Swap Agreement, of
the proposal and whether the Rating Agency Condition has been satisfied
with respect thereto. With respect to any such proposed action related to
the Sale Agreement and the Servicing Agreement, the Trustee shall consent
to such proposed action only (i) with the consent of the Holders of a
majority of the Outstanding Amount of the Transition Bonds of each Class of
each Series, and each counterparty under any Hedge Agreement or Interest
Rate Swap Agreement, materially and adversely affected thereby and (ii)
upon satisfaction of the Rating Agency Condition. With respect to any such
proposed action related to any Interest Rate Swap Agreement, the Trustee
shall consent to such proposed action only (y) with the consent of the
Holders representing 66 2/3% of the Outstanding Amount of the Transition
Bonds of the related Class, and each counterparty under any Hedge Agreement
and any other Interest Rate Swap Agreement, materially and adversely
affected thereby and (z) upon satisfaction of the Rating Agency Condition.
If any such amendment, modification, supplement or waiver shall be so
consented to by the 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. For so long as any of the Transition
Bonds are listed on the Luxembourg Stock Exchange and the rules of that
exchange so require, notice of such proposed action will be published by an
agent to be appointed by the Issuer in an Authorized Newspaper promptly
following its effectiveness.
(e) If the Issuer or the Servicer proposes to amend, modify,
waive, supplement, terminate or surrender in any material respect, or to
agree to any material amendment, modification, waiver, supplement,
termination or surrender of, the Transition Bond Charge Adjustment Process,
the Issuer shall notify the Trustee and the Trustee shall notify Transition
Bondholders of such proposal and the Trustee shall consent thereto only
with the consent of the Holders a majority of the Outstanding Amount of the
Transition Bonds of each Series materially and adversely affected thereby
and only if the Rating Agency Condition has been satisfied with respect
thereto.
(f) Promptly following a default by either the Seller, the
Servicer or any Swap Counterparty under the Sale Agreement, the Servicing
Agreement or any Interest Rate Swap Agreement, respectively, and at the
Issuer's expense, the Issuer agrees to take all such lawful actions as the
Trustee may request to compel or secure the performance and observance by
the Seller, the Servicer or any Swap Counterparty, as applicable, of each
of their obligations to the Issuer under or in connection with the Sale
Agreement, the Servicing Agreement or any Interest Rate Swap Agreement in
accordance with the terms thereof, and to exercise any and all rights,
remedies, powers and privileges lawfully available to the Issuer under or
in connection with the Sale Agreement, the Servicing Agreement or any
Interest Rate Swap Agreement, respectively, to the extent and in the manner
directed by the Trustee, including the transmission of notices of default
on the part of the Seller, the Servicer or any Swap Counterparty thereunder
and the institution of legal or administrative actions or proceedings to
compel or secure performance by the Seller, the Servicer or any Swap
Counterparty of each of their respective obligations under the Sale
Agreement, the Servicing Agreement and any Interest Rate Swap Agreement.
(g) If the Issuer shall have knowledge of the occurrence of a
Servicer Default under the Servicing Agreement or an event of default,
termination event or downgrade event under any Interest Rate Swap
Agreement, the Issuer shall promptly give written notice thereof to the
Trustee and the Rating Agencies, and shall specify in such notice the
action, if any, the Issuer is taking with respect to such default or event.
(h) If a Servicer Default shall arise from the failure of the
Servicer to perform any of its duties or obligations under the Servicing
Agreement with respect to the Bondable Transition Property or the
Transition Bond Charge, the Issuer shall take all reasonable steps
available to it to remedy such failure. The Issuer shall not take any
action to terminate the Servicer's rights and powers under the Servicing
Agreement following a Servicer Default without the prior written consent of
the Trustee and of the Holders of a majority of the Outstanding Amount of
the Transition Bonds of all Series.
(i) As promptly as possible after the giving of notice of
termination to the Servicer and the Rating Agencies of the Servicer's
rights and powers pursuant to Section 6.01 of the Servicing Agreement, the
Trustee, with the consent of the Holders of Transition Bonds evidencing not
less than a majority of the Outstanding Amount of the Transition Bonds of
all Series, may appoint a successor Servicer (the "Successor Servicer"),
and such Successor Servicer shall accept its appointment by a written
assumption in a form acceptable to the Issuer and the Trustee. A person
shall qualify as a Successor Servicer only if such Person satisfies the
requirements of Section 6.04 of the Servicing Agreement. 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 Bondable Transition Property (such
agreement to be in form and substance satisfactory to the Trustee).
(j) Upon termination of the Servicer's rights and powers
pursuant to the Servicing Agreement, the Trustee shall promptly notify the
Issuer, the Transition Bondholders and the Rating Agencies of such
termination. As soon as a Successor Servicer is appointed, the Issuer
shall notify the Trustee, the Transition Bondholders and the Rating
Agencies of such appointment, specifying in such notice the name and
address of such Successor Servicer.
(k) The Issuer shall not take any action to terminate or assign
the Swap Counterparty's rights and powers under any Interest Rate Swap
Agreement or replace any Swap Counterparty following an event of default,
termination event or downgrade event under any Interest Rate Swap Agreement
without (i) the prior written consent of the Trustee and of the Holders of
that percentage of the Outstanding Amount of the Transition Bonds, if any
such consent is required under the related Series Supplement, of the
related Series and Class, if any, specified in the related Series
Supplement, and (ii) satisfying any other requirements set forth in the
related Series Supplement and Interest Rate Swap Agreement.
(l) Upon termination or assignment of any Swap Counterparty's
rights and powers, pursuant to any Interest Rate Swap Agreement, the
Trustee shall promptly inform the Issuer, the Transition Bondholders of the
related Class and the Rating Agencies of such termination or assignment.
As soon as a replacement Swap Counterparty is appointed, the Issuer shall
notify the Trustee, the Transition Bondholders of the related Class and the
Rating Agencies of such appointment, specifying in such notice the name and
address of such replacement Swap Counterparty.
SECTION 3.21 TAXES. So long as any of the Transition Bonds are
outstanding, the Issuer shall pay all material taxes, assessments and
governmental charges imposed upon it or any of its properties or assets or
with respect to any of its franchises, business, income or property before
any penalty accrues thereon if the failure to pay any such taxes,
assessments and governmental charges would, after any applicable grace
periods, notices or other similar requirements, result in a Lien on the
Collateral.
ARTICLE IV
SATISFACTION AND DISCHARGE; DEFEASANCE
SECTION 4.01 SATISFACTION AND DISCHARGE OF INDENTURE;
DEFEASANCE. (a) The 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 Trustee, on demand of and at the expense of
the Issuer, shall execute proper instruments acknowledging satisfaction and
discharge of this Indenture with respect to the Transition Bonds of such
Series, when
(i) either
(A) all Transition Bonds of such Series theretofore
authenticated and delivered (other than (1) Transition Bonds that
have been destroyed, lost or stolen and that have been replaced
or paid as provided in Section 2.06 and (2) 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 Trustee for
cancellation; or
(B) the Expected Final Payment Date or Redemption Date
has occurred with respect to all Transition Bonds of such Series
not theretofore delivered to the Trustee for cancellation, and
the Issuer has irrevocably deposited or caused to be irrevocably
deposited with the Trustee cash, in trust for such purpose, in an
amount sufficient to pay and discharge the entire indebtedness on
such Transition Bonds not theretofore delivered to the Trustee on
the Expected Final Payment Date or Redemption Date, as
applicable, therefor;
(ii) the Issuer has paid or caused to be paid all other sums
payable hereunder by the Issuer with respect to such Series; and
(iii) the Issuer has delivered to the Trustee an Issuer
Officer's Certificate, an Issuer Opinion of Counsel and (if required
by the TIA or the Trustee) an Independent Certificate from a firm of
certified public accountants, each meeting the applicable requirements
of Section 11.01 and each stating that all conditions precedent herein
provided for relating to the satisfaction and discharge of this
Indenture with respect to 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 (other than with respect to
amounts in the Defeasance Account), 3.07, 3.08, 3.09, 3.10, 3.12, 3.13,
3.14, 3.15, 3.16, 3.17, 3.18, 3.19 and 3.20 and the operation of Section
5.01(d) ("Covenant Defeasance Option") with respect to any Series of
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.
(c) 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 (i) accelerated pursuant to Section 5.02 or (ii) 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(d).
(d) Upon satisfaction of the conditions set forth herein to the
exercise of the Legal Defeasance Option or the Covenant Defeasance Option
with respect to any Series of Transition Bonds, the Trustee, on demand of
and at the expense of the Issuer, shall execute proper instruments
acknowledging satisfaction and discharge of the obligations that are
terminated pursuant to such exercise.
(e) Notwithstanding Sections 4.01(a) and 4.01(b) above, (i)
rights of registration of transfer and exchange, (ii) rights of
substitution of mutilated, destroyed, lost or stolen Transition Bonds,
(iii) rights of Transition Bondholders to receive payments of principal and
interest, but only from the amounts deposited with the Trustee for such
payments, (iv) Sections 4.03 and 4.04, (v) the rights, obligations and
immunities of the Trustee hereunder (including the rights of the Trustee
under Section 6.07 and the obligations of the Trustee under Section 4.03)
and (vi) the rights of Transition Bondholders under this Indenture with
respect to the property deposited with the 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 been satisfied and
discharged pursuant to Section 4.01(a) or 4.01(b) and have been paid in
full. Thereafter, the obligations in Sections 6.07 and 4.04 with respect
to such Series shall survive.
SECTION 4.02 CONDITIONS TO DEFEASANCE. (a) The Issuer may
exercise the Legal Defeasance Option or the Covenant Defeasance Option with
respect to any Series of Transition Bonds only if:
(i) the Issuer irrevocably deposits or causes to be
deposited in trust with the Trustee cash or U.S. Government
Obligations for the payment of principal of and interest on such
Series of 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;
(ii) the Issuer delivers to the Trustee a certificate from a
nationally recognized firm of Independent accountants expressing its
opinion that the payments of principal and interest when due and
without reinvestment on the deposited U.S. Government Obligations plus
any deposited cash without investment will provide cash at such times
and in such amounts (but, in the case of the Legal Defeasance Option
only, not more than such amounts) as will be sufficient to pay in
respect of the Transition Bonds of such Series (A) subject to clause
(B), principal in accordance with the Expected Amortization Schedule
therefor, (B) if such Series is to be redeemed, the Redemption Price
therefor on the Redemption Date therefor and (C) interest when due;
(iii) in the case of the Legal Defeasance Option,
ninety-five (95) days pass after the deposit is made and during such
ninety-five (95) day period no Default specified in Section 5.01(e) or
5.01(f) occurs which is continuing at the end of the period; provided,
however, that in determining whether a default under Section 5.01(e)
has occurred, the requirement that the decree or order shall remain
unstayed and in effect for ninety (90) days shall be disregarded;
(iv) no Default has occurred and is continuing on the day of
such deposit and after giving effect thereto;
(v) in the case of the Legal Defeasance Option, the Issuer
delivers to the Trustee an Issuer Opinion of Counsel stating that (A)
the Issuer has received from, or there has been published by, the
Internal Revenue Service a ruling, or (B) since the date of execution
of this Indenture, there has been a change in the applicable federal
income tax law, in either case to the effect that, and based thereon
such opinion shall confirm that, the Holders of the 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;
(vi) in the case of the Covenant Defeasance Option, the
Issuer delivers to the Trustee an Issuer Opinion of Counsel to the
effect that the Holders of the 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
(vii) the Issuer delivers to the Trustee an Issuer
Officer's Certificate and an Issuer Opinion of Counsel, each stating
that all conditions precedent to the satisfaction and discharge of the
Transition Bonds of such Series to the extent contemplated by this
Article IV have been complied with.
(b) Notwithstanding any other provision of this Section 4.02 to
the contrary, no delivery of cash or U.S. Government Obligations to the
Trustee under this Section 4.02 shall terminate any obligations of the
Issuer under this Indenture with respect to any 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 Trustee, in
form satisfactory to the Trustee, irrevocable instructions to give, in the
manner and at the times prescribed herein, notice of redemption of such
Series.
SECTION 4.03 APPLICATION OF TRUST MONEY. All moneys or U.S.
Government Obligations deposited with the Trustee pursuant to Sections 4.01
or 4.02 with respect to any Series of 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 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
Trustee, of all sums due and to become due thereon for principal and
interest. Such moneys shall be segregated and held apart solely for paying
such Transition Bonds and such Transition Bonds shall not be entitled to
any amounts on deposit in the Collection Account other than amounts on
deposit in the Defeasance Subaccount for such 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 Trustee under the provisions of this Indenture with respect
to such Transition Bonds shall, upon demand of the Issuer, be paid to the
Trustee to be held and applied according to Section 3.03 and thereupon such
Paying Agent shall be released from all further liability with respect to
such moneys.
ARTICLE V
REMEDIES
SECTION 5.01 EVENTS OF DEFAULT. "Event of Default" wherever
used herein, means any one of the following events (whatever the reason for
such Event of Default and whether it shall be voluntary or involuntary or
be effected by operation of law or pursuant to any judgment, decree or
order of any court or any order, rule or regulation of any administrative
or governmental body):
(a) default in the payment of any interest on any Transition
Bond when the same becomes due and payable and the continuation of such
default for five Business Days;
(b) default in the payment of the then unpaid principal of any
Transition Bond of any Series or Class on the Final Maturity Date therefor;
(c) default in the payment of the Redemption Price for any
Transition Bond on the Redemption Date therefor;
(d) default in the observance or performance of any covenant or
agreement of the Issuer made in this Indenture (other than a covenant or
agreement, a default in the observance or performance of which is
specifically dealt with in clause (a), (b) or (c) above), or any
representation or warranty of the Issuer made in this Indenture or in any
certificate or other writing delivered pursuant hereto or in connection
herewith proving to have been incorrect in any material respect as of the
time when made, and any such default shall continue or not be cured, for a
period of thirty (30) days after the earliest of (i) there shall have been
given, by registered or certified mail, to the Issuer by the Trustee or to
the Issuer and the Trustee by the Holders of at least twenty-five percent
(25%) of the Outstanding Amount of the Transition Bonds of any Series or
Class, a written notice specifying such default or incorrect representation
or warranty and requiring it to be remedied and stating that such notice is
a "Notice of Default" hereunder or (ii) the date the Issuer has knowledge
of the default;
(e) the filing of a decree or order for relief by a court having
jurisdiction in the premises in respect of the Issuer or any substantial
part of the Collateral in an involuntary case or proceeding under any
applicable federal or state bankruptcy, insolvency or other similar law now
or hereafter in effect, or appointing a receiver, liquidator, assignee,
custodian, trustee, sequestrator or similar official for the Issuer or for
any substantial part of the Collateral, or ordering the winding-up or
liquidation of the Issuer's affairs, and such decree or order shall remain
unstayed and in effect for a period of ninety (90) consecutive days;
(f) the commencement by the Issuer of a voluntary case or
proceeding under any applicable federal or state bankruptcy, insolvency or
other similar law now or hereafter in effect, or the consent by the Issuer
to the entry of an order for relief in an involuntary case under any such
law, or the consent by the Issuer to the appointment or taking possession
by a receiver, liquidator, assignee, custodian, trustee, sequestrator or
similar official for the Issuer or for any substantial part of the
Collateral, or the making by the Issuer of any assignment for the benefit
of creditors, or the failure by the Issuer generally to pay its debts as
such debts become due, or the taking of action by the Issuer in furtherance
of any of the foregoing; or
(g) any act or failure to act by the State of New Jersey or any
of its agencies (including the BPU), officers or employees that violates or
is not in accordance with the pledge and agreement of the State of New
Jersey in Section 17.a of the Competition Act.
SECTION 5.02 ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT
(a) If an Event of Default (other than an Event of Default under Section
5.01(g)) occurs and is continuing, then and in every such case either the
Trustee or the Holders of 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 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.
(b) At any time after such declaration of acceleration of
maturity has been made and before a judgment or decree for payment of the
money due has been obtained by the Trustee as hereinafter in this Article
V, 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 Trustee, may rescind and annul such declaration and
its consequences, provided that:
(i) the Issuer has paid or deposited with the Trustee, for
deposit in the General Subaccount of the Collection Account, a sum
sufficient to pay
(A) all payments of principal of and interest on all
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 Trustee hereunder
and the reasonable compensation, expenses, disbursements and
advances of the Trustee and its agents and counsel; and
(ii) all Events of Default, other than the nonpayment of the
principal of the Transition Bonds of all Series that has become due
solely by such acceleration, have been cured or waived as provided in
Section 5.12.
(c) No such rescission shall affect any subsequent Default or
impair any right consequent thereto.
SECTION 5.03 COLLECTION OF INDEBTEDNESS AND SUITS FOR
ENFORCEMENT BY TRUSTEE. (a) The Issuer covenants that if (i) Default is
made in the payment of any interest on any Transition Bond when such
interest becomes due and payable and such Default continues for five
Business Days, (ii) Default is made in the payment of the then unpaid
principal of any Transition Bond on the Final Maturity Date 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 shall, upon
demand of the 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 Trustee and its
agents and counsel and the whole amount then due and payable on such
Transition Bonds for principal and interest, with interest upon the overdue
principal and, to the extent payment at such rate of interest shall be
legally enforceable, upon overdue instalments of interest, at the
respective Interest Rate of such Series or the applicable Class of such
Series.
(b) In case the Issuer shall fail forthwith to pay the amounts
specified in clause (a) above upon such demand, the Trustee, in its own
name and as trustee of an express trust, may institute a Proceeding for the
collection of the sums so due and unpaid, and may prosecute such Proceeding
to judgment or final decree, and may enforce the same against the Issuer or
other obligor upon such 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 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 Trustee shall deem most
effective to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in this Indenture or in aid of the
exercise of any power granted herein, or to enforce any other proper remedy
or legal or equitable right vested in the Trustee by this Indenture or by
law including foreclosing or otherwise enforcing the Lien on the Bondable
Transition Property securing the Transition Bonds or applying to the BPU or
a court of competent jurisdiction for sequestration of revenues arising
with respect to such Bondable 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 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 Trustee shall have made any demand pursuant to the provisions
of this Section 5.03, shall be entitled and empowered, by intervention in
such Proceedings or otherwise:
(i) to file and prove a claim or claims for the whole
amount of principal and interest owing and unpaid in respect of the
Transition Bonds and to file such other papers or documents as may be
necessary or advisable in order to have the claims of the Trustee
(including any claim for reasonable compensation to the Trustee and
each predecessor Trustee, and their respective agents, attorneys and
counsel, and for reimbursement of all expenses and liabilities
incurred, and all advances made, by the Trustee and each predecessor
Trustee, except as a result of negligence or bad faith) and of the
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 Trustee on their behalf; and
(iv) to file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the
claims of the Trustee or the Holders of 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 Trustee, and, in the event that the
Trustee shall consent to the making of payments directly to such Transition
Bondholders, to pay to the Trustee such amounts as shall be sufficient to
cover reasonable compensation to the Trustee, each predecessor Trustee and
their respective agents, attorneys and counsel, and all other expenses and
liabilities incurred, and all advances made, by the Trustee and each
predecessor Trustee except as a result of negligence or bad faith.
(e) Nothing herein contained shall be deemed to authorize the
Trustee to authorize or consent to or vote for or accept or adopt on behalf
of any 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 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
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 Trustee shall be brought
in its own name as trustee of an express trust, and any recovery of
judgment, subject to the payment of the expenses, disbursements and
compensation of the Trustee, each predecessor Trustee and their respective
agents and attorneys, shall be for the ratable benefit of the Holders of
the Transition Bonds.
(g) In any Proceedings brought by the Trustee (and also any
Proceedings involving the interpretation of any provision of this Indenture
to which the Trustee shall be a party), the Trustee shall be held to
represent all the Holders of the Transition Bonds, and it shall not be
necessary to make any Transition Bondholder a party to any such
Proceedings.
SECTION 5.04 REMEDIES. (a) If an Event of Default other than
Section 5.01(g) occurs and is continuing, the Trustee may do one or more of
the following (subject to Section 5.05):
(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 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
New Jersey UCC or the Competition Act or any other applicable law and
take any other appropriate action to protect and enforce the rights
and remedies of the Trustee and the Holders of the 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 Seller, the Administrator, the
Servicer or any Swap Counterparty under or in connection with the
Sale Agreement, the Administration Agreement, the Servicing Agreement
or any Interest Rate Swap Agreement, respectively, as provided in
Section 3.20(b);
provided, however, that the Trustee may not sell or otherwise liquidate any
portion of the Collateral following an Event of Default, other than an
Event of Default described in Section 5.01(a), 5.01(b) or 5.01(c), with
respect to any Series unless (A) the Holders of one hundred percent (100%)
of the Outstanding Amount of the 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
and interest, or (C) the 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 Trustee obtains the consent
of Holders of sixty-six and two-thirds percent (66 2/3%) of the Outstanding
Amount of the Transition Bonds of all Series. In determining such
sufficiency or insufficiency with respect to clause (B) and (C), the
Trustee may, but need not, obtain and rely upon an opinion of an
Independent investment banking or accounting firm of national reputation as
to the feasibility of such proposed action and as to the sufficiency of the
Collateral for such purpose.
(b) If an Event of Default under Section 5.01(g) occurs and is
continuing, the Trustee, for the benefit of the Holders, shall be entitled
and empowered to the extent permitted by applicable law to institute or
participate in Proceedings reasonably necessary to compel performance of or
to enforce the pledge and agreement of the State of New Jersey in Section
17.a of the Competition Act and to collect any monetary damages incurred by
the Holders or the Trustee as a result of any such Event of Default, and
may prosecute any such Proceeding to final judgment or decree. Such remedy
shall be the only remedy that the Trustee may exercise if the only Event of
Default that has occurred and is continuing is an Event of Default under
Section 5.01(g).
SECTION 5.05 OPTIONAL PRESERVATION OF THE COLLATERAL. If the
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 Trustee may, but
need not, elect, as provided in Section 5.11(c), to maintain possession of
the Collateral and not sell or liquidate the same. It is the desire of the
parties hereto and the Transition Bondholders that there be at all times
sufficient funds for the payment of principal of and interest on the
Transition Bonds, and the Trustee shall take such desire into account when
determining whether or not to maintain possession of the Collateral or sell
or liquidate the same. In determining whether to maintain possession of
the Collateral or sell or liquidate the same, the Trustee may, but need
not, obtain and rely upon an opinion of an Independent investment banking
or accounting firm of national reputation as to the feasibility of such
proposed action and as to the sufficiency of the Collateral for such
purpose.
SECTION 5.06 LIMITATION OF PROCEEDINGS. (a) No Holder of any
Transition Bond of any Series shall have any right to institute any
Proceeding, judicial or otherwise, or to avail itself of any remedies
provided in the Competition Act, with respect to this Indenture, or for the
appointment of a receiver or trustee, or for any other remedy hereunder,
unless:
(i) such Holder has previously given written notice to the
Trustee of a continuing Event of Default;
(ii) the Holders of not less than twenty-five percent (25%)
of the Outstanding Amount of the Transition Bonds of all Series have
made written request to the Trustee to institute such Proceeding in
respect of such Event of Default in its own name as Trustee
hereunder;
(iii) such Holder or Holders have offered to the Trustee
security or indemnity reasonably satisfactory to the Trustee against
the costs, expenses and liabilities to be incurred in complying with
such request;
(iv) the Trustee for sixty (60) days after its receipt of
such notice, request and offer of indemnity has failed to institute
such Proceedings; and
(v) no direction inconsistent with such written request has
been given to the Trustee during such sixty (60) day period by the
Holders of a majority of the Outstanding Amount of the 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.
(b) In the event the 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 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 AND INTEREST. Notwithstanding any other provisions in
this Indenture, the Holder of any Transition Bond shall have the right,
which is absolute and unconditional, and shall not be impaired without the
consent of each such Holder, (a) to receive payment of (i) the interest, if
any, on such 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 Final Maturity Date therefor
or (iii) in the case of redemption, receive payment of the unpaid
principal, if any, and interest, if any, on such 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 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 Trustee or to such Transition Bondholder, then and in every such
case the Issuer, the 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 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 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.
SECTION 5.10 DELAY OR OMISSION NOT A WAIVER. No delay or
omission of the 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 Trustee or to the Transition Bondholders may be
exercised from time to time, and as often as may be deemed expedient, by
the 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 Trustee
with respect to the Transition Bonds of such Series or Class or Classes or
exercising any trust or power conferred on the Trustee with respect to such
Series or Class or Classes; provided that
(a) such direction shall not be in conflict with any rule of law
or with this Indenture;
(b) subject to the express terms of Section 5.04, any direction
to the Trustee to sell or liquidate the Collateral shall be by the Holders
of Transition Bonds representing not less than one hundred percent (100%)
of the Outstanding Amount of the Transition Bonds of all Series;
(c) if the conditions set forth in Section 5.05 have been
satisfied and the Trustee elects to retain the Collateral pursuant to such
Section and elects not to sell or liquidate the same, then any direction to
the Trustee by Holders of Transition Bonds representing less than one
hundred percent (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
(d) the Trustee may take any other action deemed proper by the
Trustee that is not inconsistent with such direction;
provided, however, that, subject to Section 6.01, the Trustee need not take
any action that it determines might involve it in liability for which it
reasonably believes it will not be adequately indemnified against the
costs, expenses and liabilities which might be incurred by it in complying
with this request. The Trustee also need not take any action that it
determines might materially and adversely affect the rights of any
Transition Bondholders not consenting to such action.
SECTION 5.12 WAIVER OF PAST DEFAULTS. (a) Prior to the
declaration of the acceleration of the maturity of the 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 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 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.
(b) Upon any such waiver, such Default shall cease to exist and
be deemed to have been cured and not to have occurred, and any Event of
Default arising therefrom shall be deemed to have been cured and not to
have occurred, for every purpose of this Indenture; but no such waiver
shall extend to any subsequent or other Default or Event of Default or
impair any right consequent thereto.
SECTION 5.13 UNDERTAKING FOR COSTS. All parties to this
Indenture agree, and each Holder of any Transition Bond by such Holder's
acceptance thereof shall be deemed to have agreed, that any court may in
its discretion require, in any suit for the enforcement of any right or
remedy under this Indenture, or in any suit against the Trustee for any
action taken, suffered or omitted by it as Trustee, the filing by any party
litigant in such suit of an undertaking to pay the costs of such suit, and
that such court may in its discretion assess reasonable costs, including
reasonable attorneys' fees, against any party litigant in such suit, having
due regard to the merits and good faith of the claims or defenses made by
such party litigant; but the provisions of this Section 5.13 shall not
apply to (a) any suit instituted by the Trustee, (b) any suit instituted by
any Transition Bondholder, or group of Transition Bondholders, in each case
holding in the aggregate more than ten percent (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 Final Maturity Date therefor or
(iii) in the case of redemption, the unpaid principal of 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 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 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 Trustee or the Transition
Bondholders shall be impaired by the recovery of any judgment by the
Trustee against the Issuer or by the levy of any execution under such
judgment upon any portion of the Collateral or upon any of the assets of
the Issuer.
ARTICLE VI
THE TRUSTEE
SECTION 6.01 DUTIES AND LIABILITIES OF TRUSTEE. (a) If an
Event of Default has occurred and is continuing, the Trustee shall exercise
the rights and powers vested in it by this Indenture and use the same
degree of care and skill in their exercise as a prudent Person would
exercise or use under the circumstances in the conduct of such Person's own
affairs.
(b) Except during the continuance of an Event of Default:
(i) the Trustee undertakes to perform such duties and only
such duties as are specifically set forth in this Indenture and no
implied covenants or obligations shall be read into this Indenture
against the Trustee; and
(ii) in the absence of bad faith on its part, the Trustee
may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements
of this Indenture.
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own wilful
misconduct, except that:
(i) this clause (c) does not limit the effect of clause (b)
of this Section 6.01;
(ii) the Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer unless it is
proved that the Trustee was negligent in ascertaining the pertinent
facts; and
(iii) the Trustee shall not be liable with respect to any
action it takes or omits to take in good faith in accordance with a
direction received by it pursuant to Section 5.11.
(d) Every provision of this Indenture that in any way relates to
the Trustee is subject to clauses (a), (b) and (c) of this Section 6.01.
(e) The Trustee shall not be liable for interest on any money
received by it except as provided in this Indenture or as the Trustee may
agree in writing with the Issuer.
(f) Money held in trust by the Trustee need not be segregated
from other funds held by the Trustee except to the extent required by law
or the terms of this Indenture, the Sale Agreement, the Servicing Agreement
or any Interest Rate Swap Agreement.
(g) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur financial liability in the
performance of any of its duties hereunder or in the exercise of any of its
rights or powers, if it shall have reasonable grounds to believe that
repayments of such funds or adequate indemnity against such risk or
liability is not reasonably assured to it.
(h) Every provision of this Indenture relating to the conduct or
affecting the liability of or affording protection to the Trustee shall be
subject to the provisions of this Section 6.01 and to the provisions of the
TIA.
(i) Under no circumstances shall the Trustee be liable for any
indebtedness of the Issuer, the Servicer or the Seller evidenced by or
arising under the Transition Bonds or any Basic Document.
SECTION 6.02 RIGHTS OF TRUSTEE. (a) The Trustee may rely on
any document believed by it to be genuine and to have been signed or
presented by the proper Person. The Trustee need not investigate any fact
or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may
require an Issuer Officer's Certificate or an Issuer Opinion of Counsel.
The Trustee shall not be liable for any action it takes or omits to take in
good faith in reliance on an Issuer Officer's Certificate or an Issuer
Opinion of Counsel.
(c) The Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents or attorneys or a custodian or nominee, and the Trustee shall not be
responsible for any misconduct or negligence on the part of, or for the
supervision of, any such agent attorney, custodian, or nominee appointed
with due care by it thereunder.
(d) The Trustee shall not be liable for any action it takes or
omits to take in good faith which it believes to be authorized or within
its rights or powers; provided, however, that the Trustee's conduct does
not constitute wilful misconduct, negligence or bad faith.
(e) The Trustee may consult with counsel, and the advice or
opinion of counsel with respect to legal matters relating to this Indenture
and the 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 TRUSTEE. The 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 Trustee. Any Paying
Agent, Transition Bond Registrar, co-registrar or co-paying agent, or agent
appointed pursuant to Section 3.02(b) may do the same with like rights.
However, the Trustee must comply with Sections 6.11 and 6.12.
SECTION 6.04 TRUSTEE'S DISCLAIMER. The Trustee shall not be
responsible for and makes no representation as to the validity or adequacy
of this Indenture or the Transition Bonds. The Trustee shall not be
accountable for the Issuer's use of the proceeds from the Transition Bonds,
and the Trustee shall not be responsible for any statement of the Issuer in
this Indenture or in any document issued in connection with the sale of the
Transition Bonds or in the Transition Bonds other than the Trustee's
certificate of authentication. The Trustee shall not be responsible for
the form, character, genuineness, sufficiency, value or validity of any of
the Collateral, or for or in respect of the validity or sufficiency of the
Transition Bonds (other than the certificate of authentication for the
Transition Bonds) or the Basic Documents and the Trustee shall in no event
assume or incur any liability, duty or obligation to any Holder of a
Transition Bond, other than as expressly provided for in this Indenture.
The Trustee shall not be liable for the default or misconduct of the
Issuer, the Seller, the Servicer or the Member or any Manager of the Issuer
under any Basic Document or otherwise, or the default or misconduct of any
counterparty under any Hedge Agreement or Interest Rate Swap Agreement, and
the Trustee shall have no obligation or liability to perform the
obligations of the Issuer.
SECTION 6.05 NOTICE OF DEFAULTS. If a Default occurs and is
continuing with respect to any Class or Series and if it is known to a
Responsible Officer of the Trustee, the Trustee shall mail to each Rating
Agency and to each Holder of Transition Bonds of all Series notice of the
Default within ninety (90) days after it occurs. Except in the case of a
Default in payment of principal of or interest on any Transition Bond, the
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 TRUSTEE TO HOLDERS. (a) The 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 and Class of Transition Bonds,
on or prior to each Payment Date therefor, the Trustee shall deliver a
statement prepared by the Trustee to each Holder of Transition Bonds of
such Series and Class which shall include (to the extent applicable) the
following information (and any other information so specified in the Series
Supplement for such Series) as to the Transition Bonds of such Series and
Class with respect to such Payment Date or the period since the previous
Payment Date, as applicable:
(i) the amount paid to Holders of the Transition Bonds of
such Series and Class in respect of principal; such amount to be
expressed as a dollar amount per thousand;
(ii) the amount paid to Holders of the Transition Bonds of
such Series and Class in respect of interest; such amount to be
expressed as a dollar amount per thousand;
(iii) the Transition Bond Balance, after giving effect to
the payments to be made on such Payment Date, and the Projected
Transition Bond Balance, in each case for such Series and Class and
as of such Payment Date;
(iv) the amount on deposit in the Overcollateralization
Subaccount for such Series and the Scheduled Overcollateralization
Level for such Series as of such Payment Date;
(v) the amount on deposit in the Capital Subaccount for
such Series as of such Payment Date;
(vi) the amount, if any, on deposit in the Reserve
Subaccount as of such Payment Date;
(vii) the amount to be paid to any Hedge or Swap
Counterparty;
(viii) the amounts to be paid to the Trustee since the
preceding Payment Date;
(ix) the amounts paid to the Servicer since the preceding
Payment Date; and
(x) any other transfers and payments made pursuant to this
Indenture.
(c) If any Transition Bonds are listed on the Luxembourg Stock
Exchange and rules of such exchange so require, the Trustee shall arrange
for publication in an Authorized Newspaper that such statement shall be
available with the Issuer's listing agent in Luxembourg appointed pursuant
to Section 3.02(b).
(d) The Trustee's responsibility for disbursing the information
described in clause (b) above to Holders of Transition Bonds is limited to
the availability, timeliness and accuracy of the information provided by
the Servicer pursuant to Section 3.05 and Annex 1 of the Servicing
Agreement.
SECTION 6.07 COMPENSATION AND INDEMNITY. (a) The Issuer shall
pay to the Trustee from time to time reasonable compensation for its
services. The Trustee's compensation shall not be limited by any law on
compensation of a trustee of an express trust. The Issuer shall reimburse
the Trustee for all reasonable out-of-pocket expenses, disbursements and
advances incurred or made by it, including costs of collection, in addition
to the compensation for its services. Such expenses shall include the
reasonable compensation and expenses, disbursements and advances of the
Trustee's agents, counsel, accountants and experts. The Issuer shall
indemnify and hold harmless the Trustee from and against any and all costs,
damages, expenses, losses, liabilities or other amounts whatsoever
(including counsel fees) incurred by the Trustee in connection with the
administration of this trust, the enforcement of this trust and all of the
Trustee's rights, powers and duties under this Indenture and the
performance by the Trustee of the duties and obligations of the Trustee
under or pursuant to this Indenture. The Trustee shall notify the Issuer
promptly of any claim for which it may seek indemnity. Failure by the
Trustee to so notify the Issuer shall not relieve the Issuer of its
obligations hereunder.
(b) The Issuer shall defend the claim and the Trustee may have
separate counsel and the Issuer shall pay the fees and expenses of such
counsel. The Issuer need not reimburse any expense or indemnify against
any loss, liability or expense incurred by the Trustee (i) through the
Trustee's own wilful misconduct, negligence or bad faith or (ii) to the
extent the Trustee was reimbursed for or indemnified against any such loss,
liability or expense by the Seller pursuant to the Sale Agreement or by the
Servicer pursuant to the Servicing Agreement.
(c) When the Trustee incurs expenses after the occurrence of a
Default specified in Section 5.01(e) or 5.01(f) with respect to the Issuer,
the expenses are intended to constitute expenses of administration under
Title 11 of the United States Code or any other applicable federal or state
bankruptcy, insolvency or similar law.
SECTION 6.08 REPLACEMENT OF TRUSTEE. (a) The Trustee may
resign at any time upon thirty (30) days' prior written notice by so
notifying the Issuer. The Issuer may remove the Trustee with or without
cause at any time, with prior notice to the Rating Agencies, upon thirty
(30) days' prior written notice, and shall remove the Trustee if:
(i) the Trustee fails to comply with Section 6.11;
(ii) the Trustee is adjudged a bankrupt or insolvent;
(iii) a receiver or other public officer takes charge of
the Trustee or its property; or
(iv) the Trustee otherwise becomes incapable of acting.
(b) If the Trustee resigns or is removed or if a vacancy exists
in the office of Trustee for any reason (the Trustee in such event being
referred to herein as the "Retiring Trustee"), the Issuer shall promptly
appoint a successor Trustee.
(c) In addition, the Holders of a majority in Outstanding Amount
of the Transition Bonds of all Series may remove the Trustee by so
notifying the Issuer and the Trustee and such Holders may appoint a
successor Trustee.
(d) A successor Trustee shall deliver a written acceptance of
its appointment to the Retiring Trustee and to the Issuer. Thereupon the
resignation or removal of the Retiring Trustee shall become effective, and
the successor Trustee shall have all the rights, powers and duties of the
Trustee under this Indenture. No resignation or removal of the Trustee
shall become effective until the acceptance of the appointment by a
successor Trustee. The successor Trustee shall mail a notice of its
succession to Transition Bondholders. The Retiring Trustee shall promptly
transfer all property held by it as Trustee to the successor Trustee.
(e) If a successor Trustee does not take office within sixty
(60) days after the Retiring Trustee resigns or is removed, the Retiring
Trustee, the Issuer or the Holders of a majority in Outstanding Amount of
the Transition Bonds of all Series may petition any court of competent
jurisdiction for the appointment of a successor Trustee.
(f) If the Trustee fails to comply with Section 6.11, any
Transition Bondholder may petition any court of competent jurisdiction for
the removal of the Trustee and the appointment of a successor Trustee.
(g) Notwithstanding the replacement of the Trustee pursuant to
this Section 6.08, the Issuer's obligations under Section 6.07 shall
continue for the benefit of the Retiring Trustee.
SECTION 6.09 SUCCESSOR TRUSTEE BY MERGER. (a) If the Trustee
consolidates with, merges or converts into, or transfers all or
substantially all its corporate trust business or assets to, another
corporation or banking association, the resulting, surviving or transferee
corporation or banking association shall, without any further act be the
successor Trustee. Notice of any such event shall be promptly given to
each Rating Agency by the successor Trustee and any agent in Luxembourg
appointed pursuant to Section 3.02(b).
(b) In case at the time such successor or successors by merger,
conversion, consolidation or transfer shall succeed to the trusts created
by this Indenture any of the Transition Bonds shall have been authenticated
but not delivered, any such successor to the Trustee may adopt the
certificate of authentication of any Retiring Trustee, and deliver such
Transition Bonds so authenticated; and in case at that time any of the
Transition Bonds shall not have been authenticated, any successor to the
Trustee may authenticate such Transition Bonds either in the name of any
Retiring Trustee hereunder or in the name of the successor to the Trustee;
and in all such cases such certificates shall have the full force and
effect granted by the Transition Bonds or by this Indenture and this force
and effect shall be equal to any certificate issued by the Trustee.
SECTION 6.10 APPOINTMENT OF CO-TRUSTEE OR SEPARATE TRUSTEE. (a)
Notwithstanding any other provisions of this Indenture, at any time, for
the purpose of meeting any legal requirement of any jurisdiction in which
any part of the Collateral may at the time be located, the Trustee shall
have the power and may execute and deliver all instruments to appoint one
or more Persons to act as a co-trustee or co-trustees, or separate trustee
or separate trustees, of all or any part of the Collateral, and to vest in
such Person or Persons, in such capacity and for the benefit of the
Transition Bondholders, such title to the Collateral, or any part hereof,
and, subject to the other provisions of this Section 6.10, such powers,
duties, obligations, rights and trusts as the Trustee may consider
necessary or desirable. No co-trustee or separate trustee hereunder shall
be required to meet the terms of eligibility as a successor trustee under
Section 6.11 and no notice to Transition Bondholders of the appointment of
any co-trustee or separate trustee shall be required under Section 6.08.
Notice of any such appointment shall be promptly given to each Rating
Agency by the Trustee.
(b) Every separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following provisions
and conditions:
(i) all rights, powers, duties and obligations conferred or
imposed upon the Trustee shall be conferred or imposed upon and
exercised or performed by the Trustee and such separate trustee or
co-trustee jointly (it being understood that such separate trustee or
co-trustee is not authorized to act separately without the Trustee
joining in such act), except to the extent that under any law of any
jurisdiction in which any particular act or acts are to be performed
the Trustee shall be incompetent or unqualified to perform such act or
acts, in which event such rights, powers, duties and obligations
(including the holding of title to the Collateral or any portion
thereof in any such jurisdiction) shall be exercised and performed
singly by such separate trustee or co-trustee, but solely at the
direction of the Trustee;
(ii) no trustee hereunder shall be personally liable by
reason of any act or omission of any other trustee hereunder; and
(iii) the Trustee may at any time accept the resignation of
or remove any separate trustee or co-trustee.
(c) Any notice, request or other writing given to the Trustee
shall be deemed to have been given to each of the then separate trustees
and co-trustees, as effectively as if given to each of them. Every
instrument appointing any separate trustee or co-trustee shall refer to
this Indenture and the conditions of this Article VI. Each separate
trustee and co-trustee, upon its acceptance of the trusts conferred, shall
be vested with the estates or property specified in its instrument of
appointment, either jointly with the Trustee or separately, as may be
provided therein, subject to all the provisions of this Indenture,
specifically including every provision of this Indenture relating to the
conduct of, affecting the liability of, or affording protection to, the
Trustee. Every such instrument shall be filed with the Trustee.
(d) Any separate trustee or co-trustee may at any time
constitute the Trustee, its agent or attorney-in-fact with full power and
authority, to the extent not prohibited by law, to do any lawful act under
or in respect of this Agreement on its behalf and in its name. If any
separate trustee or co-trustee shall die, become incapable of acting,
resign or be removed, all of its estates, properties, rights, remedies and
trusts shall vest in and be exercised by the Trustee, to the extent
permitted by law, without the appointment of a new or successor trustee.
SECTION 6.11 ELIGIBILITY; DISQUALIFICATION. The Trustee shall
at all times satisfy the requirements of TIA Section 310(a) and Section
26(a)(i) of the Investment Company Act of 1940. The Trustee shall have a
combined capital and surplus of at least $50,000,000 as set forth in its
most recent published annual report of condition and it shall have a long
term debt rating of "BBB-" or better by Standard & Xxxx'x, "Xxx0" or better
by Xxxxx'x and "BBB-" or better by Fitch. The Trustee shall comply with
TIA Section 310(b), including the optional provision permitted by the
second sentence of TIA Section 310(b)(9); provided, however, that there
shall be excluded from the operation of TIA Section 310(b)(1) any indenture
or indentures under which other securities of the Issuer are outstanding if
the requirements for such exclusion set forth in TIA Section 310(b)(1) are
met.
SECTION 6.12 PREFERENTIAL COLLECTION OF CLAIMS AGAINST ISSUER.
The Trustee shall comply with TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b). A Trustee who has resigned or
been removed shall be subject to TIA Section 311(a) to the extent
indicated.
SECTION 6.13 REPRESENTATIONS AND WARRANTIES OF THE TRUSTEE. The
Trustee hereby represents and warrants that:
(a) the Trustee is a banking corporation validly existing in
good standing under the laws of the State of New York; and
(b) the Trustee has full power, authority and legal right to
execute, deliver and perform this Indenture and the Basic Documents to
which the Trustee is a party and has taken all necessary action to
authorize the execution, delivery and performance by it of this Indenture
and such Basic Documents.
ARTICLE VII
TRANSITION BONDHOLDERS' LISTS AND REPORTS
SECTION 7.01 ISSUER TO FURNISH TRUSTEE NAMES AND ADDRESSES OF
TRANSITION BONDHOLDERS. The Issuer shall furnish or cause to be furnished
to the Trustee (a) not more than five days after the earlier of (i) each
Record Date with respect to each Series and (ii) three months after the
last Record Date with respect to each Series, a list, in such form as the
Trustee may reasonably require, of the names and addresses of the Holders
of Transition Bonds of such Series as of such Record Date, (b) at such
other times as the Trustee may request in writing, within thirty (30) days
after receipt by the Issuer of any such request, a list of similar form and
content as of a date not more than ten (10) days prior to the time such
list is furnished; provided, however, that so long as the Trustee is the
Transition Bond Registrar, no such list shall be required to be furnished.
In addition, the Issuer shall furnish such list to any listing, transfer or
paying agent appointed under Section 3.02(b) to the extent such information
is required by the rules and regulations of the Luxembourg Stock Exchange.
SECTION 7.02 PRESERVATION OF INFORMATION; COMMUNICATIONS TO
TRANSITION BONDHOLDERS. (a) The 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
Trustee as provided in Section 7.01 and the names and addresses of Holders
of Transition Bonds received by the Trustee in its capacity as Transition
Bond Registrar. The Trustee may destroy any list furnished to it as
provided in such Section 7.01 upon receipt of a new list so furnished.
(b) Transition Bondholders may communicate with other Transition
Bondholders pursuant to Section 312(b) of the TIA, with respect to their
rights under this Indenture or under the Transition Bonds.
(c) The Issuer, the Trustee and the Transition Bond Registrar
shall have the protection of Section 312(c) of the TIA.
SECTION 7.03 REPORTS BY ISSUER. (a) The Issuer shall:
(i) file with the Trustee and, so long as any Transition
Bonds are listed on the Luxembourg Stock Exchange and its rules so
require, with the listing agent of the Issuer in Luxembourg appointed
pursuant to Section 3.02(b), within fifteen (15) days after the Issuer
is required to file the same with the Commission, copies of the annual
reports and of the information, documents and other reports (or copies
of such portions of any of the foregoing as the Commission may from
time to time by rules and regulations prescribe) which the Issuer may
be required to file with the Commission pursuant to Section 13 or
15(d) of the Exchange Act;
(ii) file with the Trustee, the Commission and, so long as
any Transition Bonds are listed on the Luxembourg Stock Exchange, the
listing agent in Luxembourg appointed pursuant to Section 3.02(b), in
accordance with rules and regulations prescribed from time to time by
the Commission or the Luxembourg Stock Exchange, respectively, such
additional information, documents and reports with respect to
compliance by the Issuer with the conditions and covenants of this
Indenture as may be required from time to time by such rules and
regulations; and
(iii) supply to the Trustee (and the Trustee shall
transmit by mail to all Transition Bondholders described in TIA
Section 313(c)) and, so long as any Transition Bonds are listed on the
Luxembourg Stock Exchange and its rules so require, to the listing
agent of the Issuer in Luxembourg appointed pursuant to Section
3.02(b), such summaries of any information, documents and reports
required to be filed by the Issuer pursuant to clauses (i) and (ii) of
this Section 7.03(a) as may be required by rules and regulations
prescribed from time to time by the Commission.
(b) Unless the Issuer otherwise determines, the fiscal year of
the Issuer shall end on December 31 of each year.
SECTION 7.04 REPORTS BY TRUSTEE. (a) If required by TIA
Section 313(a), within sixty (60) days after the end of each fiscal year of
the Issuer, commencing with the year after the issuance of the Transition
Bonds of any Series, the 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 Trustee also
shall comply with TIA Section 313(b); provided, however, that the initial
report so issued shall be delivered not more than twelve (12) months after
the initial issuance of each Series.
(b) A copy of each report at the time of its mailing to
Transition Bondholders shall be filed by the Trustee with the Commission
and each stock exchange, if any, on which the Transition Bonds are listed
(to the extent required by the rules of such exchange). The Issuer shall
notify the 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 Trustee addressed to the
Corporate Trust Office, the Trustee shall provide such Transition
Bondholder with a copy of the Issuer 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. If any Transition
Bonds are listed on the Luxembourg Stock Exchange and rules of such
exchange so require, the Trustee shall also arrange for publication in an
Authorized Newspaper that a copy of such Issuer Officer's Certificate and
such Annual Accountant's Report shall be available with the Issuer's
listing agent in Luxembourg appointed pursuant to Section 3.02(b).
ARTICLE VIII
ACCOUNTS, DISBURSEMENTS AND RELEASES
SECTION 8.01 COLLECTION OF MONEY. Except as otherwise expressly
provided herein, the Trustee may demand payment or delivery of, and shall
receive and collect, directly and without intervention or assistance of any
fiscal agent or other intermediary, all money and other property payable to
or receivable by the Trustee pursuant to this Indenture. The Trustee shall
apply all such money received by it as provided in this Indenture. Except
as otherwise expressly provided in this Indenture, if any default occurs in
the making of any payment or performance under any agreement or instrument
that is part of the Collateral, the Trustee may take such action as may be
appropriate to enforce such payment or performance, including the
institution and prosecution of appropriate Proceedings. Any such action
shall be without prejudice to any right to claim a Default or Event of
Default under this Indenture and any right to proceed thereafter as
provided in Article V.
SECTION 8.02 COLLECTION ACCOUNT. (a)(i) On or prior to the
Series Issuance Date for the first Series issued hereunder, the Issuer
shall open, at the Trustee's Corporate Trust Office, or at another Eligible
Institution, one or more segregated trust accounts in the Trustee's name
for the benefit of the Holders (collectively, the "Collection Account").
The Collection Account shall initially be divided into subaccounts, which
need not be separate bank accounts: a general subaccount (the "General
Subaccount"), an overcollateralization subaccount for each Series of
Transition Bonds (each, an "Overcollateralization Subaccount" or the
"Series Overcollateralization Subaccount"), a capital subaccount for each
Series of Transition Bonds (each, a "Capital Subaccount" or the "Series
Capital Subaccount"), a capital reserve subaccount (the "Capital Reserve
Subaccount"), a reserve subaccount (the "Reserve Subaccount"), a series
subaccount for each Series of Transition Bonds (each, a "Series
Subaccount") and a class subaccount for any Class of any Series of
Transition Bonds which has a floating rate of interest as specified in any
Series Supplement (each, a "Class Subaccount"). If so provided in any
Series Supplement, the Series Capital Subaccount for the related Series may
be divided into separate subaccounts bearing the designations specified in
such Series Supplement for the purpose of tracing deposits to and
withdrawals from such Series Capital Subaccount, provided that in such case
the terms Series Capital Subaccount and Capital Subaccount with respect to
such Series shall refer collectively to all such subaccounts except as
specified in such Series Supplement for purposes of such tracing. On or
prior to the Series Issuance Date for each Series issued after the Series
Issuance Date for the first Series issued hereunder, the Issuer shall
establish an additional Series Subaccount therefor and a Class Subaccount
for any Class of such Series which has a floating rate of interest and in
respect of which the Issuer has entered into an Interest Rate Swap
Agreement, as Subaccounts of the Collection Account. Prior to depositing
funds or U.S. Government Obligations in the Collection Account pursuant to
Sections 4.01 or 4.02, the Issuer shall establish defeasance subaccounts
(each, a "Defeasance Subaccount") for each Series for which funds shall be
deposited, as subaccounts of the Collection Account. All amounts in the
Collection Account not allocated to any other Subaccount shall be allocated
to the General Subaccount. Prior to the Initial Payment Date, all amounts
in the Collection Account (other than funds deposited into the Capital
Subaccount, up to the Required Capital Amount) shall be allocated to the
General Subaccount. All payments received by the Trustee from any Swap
Counterparty at any time shall be deposited in the related Class
Subaccount. All references to the Collection Account shall be deemed to
include reference to all subaccounts contained therein. Withdrawals from
and deposits to each of the foregoing subaccounts of the Collection Account
shall be made as set forth in Sections 4.01, 4.02, 4.03 and 8.02(d) through
(o). The Collection Account shall at all times be maintained in an
Eligible Securities Account and only the Trustee shall have access to the
Collection Account for the purpose of making deposits in and withdrawals
from the Collection Account in accordance with this Indenture. Funds in
the Collection Account shall not be commingled by the Issuer with any other
moneys, and shall not be commingled by the Trustee. All moneys deposited
from time to time in the Collection Account, all deposits therein pursuant
to this Indenture, and all investments made in Eligible Investments with
such moneys, including all income or other gain from such investments,
shall be held by the Trustee in the Collection Account as part of the
Collateral as herein provided, with the exception of any amount up to
$100,000 held at any time in the Capital Reserve Subaccount. The Capital
Reserve Subaccount shall be funded with $100,000 from amounts contributed
to the Capital Subaccount for the initial Series of Transition Bonds.
Amounts on deposit in the Capital Reserve Subaccount shall be available,
upon request of the Issuer, to pay any expenses of the Issuer.
(ii) Notwithstanding any other provision of this Indenture, the
Collection Account shall be a securities account and shall be
established only with a securities intermediary (as defined in Section
8-102(a)(13) of the New Jersey UCC) that agrees with the Trustee that
(A) the Collection Account shall be a securities account of the
Trustee, (B) all property credited to the Collection Account shall be
treated as a financial asset, (C) such securities intermediary shall
treat the Trustee as entitled to exercise the rights that comprise
each financial asset credited to the Collection Account, (D) such
securities intermediary shall comply with entitlement orders
originated by the Trustee without the further consent of any other
person or entity, (E) such securities intermediary shall not agree
with any person other than the Trustee to comply with entitlement
orders originated by such other person, (F) the Collection Account and
all property credited to it shall not be subject to any Lien, security
interest, right of set-off in favor of such securities intermediary or
anyone claiming through it (other than the Trustee), and (G) such
agreement shall be governed by the laws of the State of New Jersey.
The Collection Account shall be under the control (within the meaning
of Section 8-106 of the New Jersey UCC) of the Trustee. If at any
time the Collection Account ceases to be an Eligible Securities
Account, the Trustee shall, within ten (10) days, establish a new
Collection Account as an Eligible Securities Account.
(b) All or a portion of the funds in the Collection Account
shall be invested in Eligible Investments and reinvested by the Trustee
upon Issuer Order; provided, however, that 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 Trustee pursuant to Sections 4.01 or 4.02 shall
remain as such. Except as provided in Section 8.02(g)(x), all income or
other gain from investments of moneys deposited in the Collection Account
shall be deposited by the Trustee in the Collection Account, and any loss
resulting from such investments shall be charged to the Collection Account.
The Issuer shall not direct the Trustee to make any investment of any funds
or to sell any investment held in the Collection Account unless the
security interest granted and perfected in such account will continue to be
perfected in such investment or the proceeds of such sale, in either case
without any further action by any Person, and, in connection with any
direction to the Trustee to make any such investment or sale, if requested
by the Trustee, the Issuer shall deliver to the Trustee an Issuer Opinion
of Counsel, acceptable to the Trustee, to such effect. Subject to Section
6.01(c), the Trustee shall not in any way be held liable for the selection
of Eligible Investments or for investment losses incurred thereon except
for losses attributable to the Trustee's failure to make payments on such
Eligible Investments issued by the Trustee, in its commercial capacity as
principal obligor and not as Trustee, in accordance with their terms. The
Trustee shall have no liability in respect of losses incurred as a result
of the liquidation of any Eligible Investment prior to its stated maturity
or the failure of the Issuer to provide timely written investment
direction. The Trustee shall have no obligation to invest or reinvest any
amounts held hereunder in the absence of written investment direction
pursuant to an Issuer Order; provided, however, that if (i) the Issuer
shall have failed to give investment directions for any funds on deposit in
the Collection Account to the Trustee by 11:00 a.m. (prevailing New York
City time) (or such other time as may be agreed by the Issuer and Trustee)
on any Business Day, or (ii) a Default or Event of Default shall have
occurred and be continuing but the Transition Bonds shall not have been
declared due and payable pursuant to Section 5.02, then the Trustee shall,
to the fullest extent practicable, invest and reinvest funds in the
Collection Account in one or more Eligible Investments of the kind
described in clause (e) of the definition thereof.
(c) Any TBC Collections remitted by the Servicer to the Trustee,
any Indemnity Amounts remitted to the Trustee by the Seller or the Servicer
or otherwise received by the Trustee or the Issuer, any other proceeds of
Collateral received by the Servicer, the Issuer or the Trustee, and any
amounts paid by any counterparty under any Hedge Agreement or Interest Rate
Swap Agreement received by the Servicer, the Issuer or the Trustee, shall
be deposited in the General Subaccount.
(d) Monthly, on the 13th day of each calendar month, or if such
day is not a Business Day, the preceding Business Day, beginning March
2001, the fee owed to the Trustee in an amount equal to $1,250 for such
month, plus any expenses, including legal fees and expenses, Indemnity
Amounts (up to a maximum of $10,000,000 in the aggregate for the then
current and all prior Payment Dates and for all Series unless the Issuer
has received confirmation from S&P that a further amount will not result in
a reduction or withdrawal of the then current rating of the Outstanding
Transition Bonds) and any other amounts due and owing to the Trustee
pursuant to the Basic Documents for such month so long as no Event of
Default would result from the payment of such Indemnity Amounts (as limited
above) or such other amounts, shall, at the direction of the Servicer, be
paid to the Trustee.
(e) After the distribution made pursuant to clause (d) above,
monthly, 13th day of each calendar month, or if such day is not a Business
Day, the preceding Business Day, beginning March 2001, the Monthly
Servicing Fee and any unpaid Monthly Servicing Fees shall, at the direction
of the Servicer, be paid to the Servicer to the extent that such amounts
have not been withheld by the Servicer from TBC Collections pursuant to
Section 5.07 of the Servicing Agreement.
(f) On each Payment Date, or such other date related to such
Payment Date as may be specified in the related Series Supplement, the
Trustee, at the direction of the Servicer, shall allocate to each Class
Subaccount from the related Series Subaccount the amounts specified in the
related Series Supplement. Such amounts shall be so allocated after taking
into account all allocations required in connection with such Payment Date
under clauses (d) and (e) above and (g)(i) through (iii) below; provided
that in the event of any shortfall of amounts to be allocated pursuant to
clause (g)(iii) among more than one Class of the applicable Series, amounts
shall be allocated to such Class Subaccount on a Pro Rata basis with all
other Classes of the relevant Series. Amounts in each Class Subaccount
shall be applied as provided in the related Series Supplement.
(g) Except as otherwise provided in any Series Supplement with
respect to any floating rate Class, on each Payment Date, by 12:00 noon
(prevailing New York City time), or if such day is not a Business Day, on
the following Business Day, the Trustee shall, at the direction of the
Servicer, apply all amounts on deposit in the General Subaccount of the
Collection Account and any investment earnings on the subaccounts in the
Collection Account, after distribution in accordance with clauses (d) and
(e) above, and, subject to the qualifications therein, after allocation to
any Class Subaccount and payment to any related Swap Counterparty in
accordance with clause (f) above, in the following priority:
(i) the administration fee payable under the Administration
Agreement, as specified in the related Series Supplement, shall be
paid to the Administrator; and fees payable to the Independent
Managers in an amount equal to $2,250 for such Payment Date, shall be
paid to the Independent Managers;
(ii) so long as no Event of Default has occurred and is
continuing or would be caused by such payment, all Operating Expenses
other than distributions in accordance with clauses (d), (e) and
(g)(i) above shall be paid to the Persons entitled thereto, provided
that the amount paid on such Payment Date pursuant to this clause
(g)(ii) may not exceed $100,000 in the aggregate for all Series;
(iii) an amount equal to Interest payable on each Class of
each Series of Transition Bonds on such Payment Date shall be
allocated to the corresponding Series Subaccount, (provided, that, to
the extent provided in any Series Supplement with respect to interest
on any floating rate Class, such amount shall be equal to the
applicable amount specified in the related Series Supplement payable
with respect to that Class) and if there are insufficient funds to
make such allocation in full, amounts will be allocated Pro Rata to
the corresponding Class Subaccount;
(iv) an amount equal to any Principal of each Class of each
Series 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 the Final Maturity Date of such Series or
Class, and any Principal of a Series or Class of Transition Bonds
payable on the Redemption Date for such Series or Class shall be
allocated to the corresponding Series Subaccount and, to the extent
there are insufficient funds to make such allocation in full, amounts
shall be allocated on a Pro Rata basis;
(v) an amount equal to Principal scheduled to be paid on
each Class of each Series of Transition Bonds on such Payment Date
according to the Expected Amortization Schedule, excluding any
amounts provided for pursuant to clause (g)(iv) above, shall be
allocated to the corresponding Series Subaccount and, if there are
insufficient funds for such Principal payment, shall be allocated on
a Pro Rata basis;
(vi) all remaining unpaid Operating Expenses and Indemnity
Amounts shall be paid to the Persons entitled thereto;
(vii) any amount necessary to replenish any shortfalls in
the Capital Subaccount for each Series below the Required Capital
Amount for such Series shall be allocated to the Capital Subaccount
for such Series, Pro Rata, based on the Outstanding principal balance
of each Series;
(viii) an amount shall be allocated to the
Overcollateralization Subaccount for each Series sufficient to cause
the amount in the Overcollateralization Subaccount for such Series to
equal the Scheduled Overcollateralization Level for such Series as of
that Payment Date, Pro Rata, based on the Outstanding principal
balance of each Series;
(ix) any amounts payable by the Issuer under any Hedge
Agreement on such Payment Date shall be paid to the Persons entitled
thereto (provided, however, that for the avoidance of doubt, payments
under this clause (ix) shall be paid on an unsecured basis and shall
be paid after payment on such Payment Date of all amounts provided in
(d), (e), (f) and (g) (i) though (viii) above);
(x) so long as no Event of Default has occurred and is
continuing, an amount equal to investment earnings on amounts in the
Capital Subaccount shall be released to the Issuer;
(xi) the balance, if any, shall be allocated to the Reserve
Subaccount; and
(xii) following repayment of all outstanding Series of
Transition Bonds, the balance, if any, shall be released to the
Issuer free from the Lien of this Indenture.
(h) For purposes of allocations among Series prior to an
acceleration of the Transition Bonds pursuant to Section 5.02, except as
otherwise provided in any Series Supplement, "Pro Rata" means with respect
to any Series a ratio, (i) in the case of a payment of Interest on any
Payment Date, the numerator of which is the amount of Interest payable on
such Series on such Payment Date and, with respect to any Class of such
Series of floating rate Transition Bonds, the Gross Fixed Amount for that
class (as such term is defined by the related Series Supplement) on such
Payment Date and the denominator of which is the aggregate amount of
Interest payable on all Series on such Payment Date; (ii) in the case of a
payment of Principal on any Payment Date, the numerator of which is the
aggregate amount of Principal scheduled to be paid or payable, as the case
may be, on such Payment Date with respect to such Series and the
denominator of which is the sum of the aggregate amounts of Principal
scheduled to be paid or payable, as the case may be, with respect to all
Outstanding Series on such Payment Date; and (iii) in the case of a payment
or allocation on any Payment Date other than of Interest or Principal, the
numerator of which is the Outstanding principal amount of such Series
immediately prior such Payment Date and the denominator of which is the
aggregate Outstanding principal amount of all Series immediately prior such
Payment Date.
(i) If, on any Payment Date, funds on deposit in the General
Subaccount are insufficient to make the payments and allocations
contemplated by subclauses (d), (e), (f) and (g)(i) through (v), (vii) and
(viii) above for all Series, the Trustee shall, at the direction of the
Servicer, draw from amounts on deposit in the following subaccounts in the
following order up to the amount of such shortfall, in order to make such
payments and allocations:
(i) from the Reserve Subaccount for all Series, Pro
Rata, for payments and allocations contemplated by subclauses
(d), (e), (f) and (g)(i) through (v), (vii) and (viii),
(ii) from the Overcollateralization Subaccount for
such Series, Pro Rata, for payments and allocations contemplated
by subclauses (d), (e), (f) and (g)(i) through (v), and
(iii)from the Capital Subaccount for such Series, Pro
Rata, for payments and allocations contemplated by subclauses
(d), (e), (f) and (g)(i) through (v);
provided that no amounts from the Reserve Subaccount, the
Overcollateralization Subaccount for such Series or the Capital Subaccount
for such Series shall by allocated to any Class Subaccount pursuant to
subclause (g)(iii) to the extent a shortfall in amounts available to pay
interest due on the related Class of Transition Bonds is due solely to any
failure by a Swap Counterparty to make payments due under the related
Interest Rate Swap Agreement.
(j) On each Payment Date for any Series prior to an acceleration
of the Transition Bonds pursuant to Section 5.02, the amounts on deposit in
the Series Subaccount shall be allocated, at the direction of the Servicer,
in the following order of priority: (i) to pay Interest due and payable on
the Transition Bonds of such Series with respect to such Payment Date to
the Holders of Transition Bonds of such Series, and (ii) the balance, if
any, up to the amount of Principal scheduled to be paid or payable on the
Transition Bonds of such Series on such Payment Date, to pay such Principal
to the Holders of Transition Bonds of such Series.
(k) Prior to an acceleration of the Transition Bonds pursuant to
Section 5.02, all allocations of Principal and Interest with respect to any
Series comprised of two or more Classes shall be allocated among the
Classes within such Series on a Pro Rata basis. All payments of Principal
shall be made in the order set forth in the Expected Amortization Schedule
established with respect to each Series and within such Series, in order of
Class, and any payments of Principal that were not made on the scheduled
Payment Date therefor shall be made in the order that they were scheduled
for payment.
(l) For purposes of allocations among Classes within a single
Series prior to an acceleration of the Transition Bonds pursuant to Section
5.02, except as otherwise provided in any Series Supplement, "Pro Rata"
means with respect to any Class a ratio, (i) in the case of a payment of
Interest with respect to any Payment Date, the numerator of which is the
amount of interest payable to such Class on such Payment Date, or in the
case of any Class of floating rate Transition Bonds, the Gross Fixed Amount
for that class (as such term is defined by the related Series Supplement)
on such Payment Date, and the denominator of which is the aggregate amount
of interest payable on all Classes within such Series on such Payment Date;
and (ii) in the case of a payment of Principal on any Payment Date, the
numerator of which is the aggregate amount of Principal scheduled to be
paid or payable, as the case may be, on such Payment Date with respect to
such Class and the denominator of which is the sum of the aggregate amounts
of Principal scheduled to be paid or payable, as the case may be, with
respect to all Outstanding Classes within such Series on such Payment Date.
(m) Prior to an acceleration of the Transition Bonds pursuant to
Section 5.02, all payments of Principal and Interest to Holders of
Transition Bonds of a single Class, or of a single Series without Classes,
shall be made on a proportionate basis based on the respective principal
amounts of such Transition Bonds held by such Holders.
(n) Upon an acceleration of the maturity of the Transition Bonds
pursuant to Section 5.02, the aggregate amount of principal of and interest
accrued on each Transition Bond shall be payable, without priority of
interest over principal or of principal over interest and without regard to
Series or Class, in the proportion that the aggregate amount of principal
of and interest accrued on such Transition Bond bears to the aggregate
amount of principal of and interest accrued on all Transition Bonds.
(o) Notwithstanding any other provision in this Indenture to the
contrary, in the event of an acceleration of the Transition Bonds and a
subsequent liquidation of the Collateral in accordance with Section
5.04(a), if so provided in any Interest Rate Swap Agreement, the proceeds
of such liquidation allocated to the related Class of floating rate
Transition Bonds in accordance with this Section 8.03 shall be deposited in
the related Class Subaccount and allocated between and paid to the holders
of such floating rate Class, on the one hand, and the related Swap
Counterparty, on the other hand, pro rata based on the aggregate amount of
principal and interest due and payable on such floating rate Class and the
aggregate amount payable to the related Swap Counterparty in accordance
with such Interest Rate Swap Agreement.
SECTION 8.03 RELEASE OF COLLATERAL. (a) All money and other
property withdrawn from the Collection Account by the Trustee for payment
to the Issuer as provided in this Indenture in accordance with Section 8.02
shall be deemed released from this Indenture when so withdrawn and applied
in accordance with the provisions of Article VIII, without further notice
to, or release or consent by, the Trustee.
(b) Other than as provided for in clause (a) above, the Trustee
shall release property from the Lien of this Indenture only as and to the
extent permitted by the Basic Documents and only upon receipt of an Issuer
Request accompanied by an Issuer Officer's Certificate, an Issuer Opinion
of Counsel and Independent Certificates in accordance with TIA Sections
314(c) and 314(d)(1) meeting the applicable requirements of Section 11.01
or an Issuer Opinion of Counsel in lieu of such Independent Certificates to
the effect that the TIA does not require any such Independent Certificate.
(c) Subject to the payment of its fees and expenses pursuant to
Section 6.07, the Trustee may, and when required by the provisions of this
Indenture shall, execute instruments to release property from the Lien of
this Indenture, or convey the Trustee's interest in the same, in a manner
and under circumstances that are not inconsistent with the provisions of
this Indenture. No party relying upon an instrument executed by the
Trustee as provided in this Article VIII shall be bound to ascertain the
Trustee's authority, inquire into the satisfaction of any conditions
precedent or see to the application of any moneys.
(d) Subject to Section 8.03(b), the Trustee shall, at such time
as there are no Transition Bonds Outstanding and all sums due the Trustee
pursuant to Section 6.07 have been paid, release any remaining portion of
the Collateral that secured the Transition Bonds from the Lien of this
Indenture and release to the Issuer or any other Person entitled thereto
any funds or investments then on deposit in or credited to the Collection
Account.
SECTION 8.04 ISSUER OPINION OF COUNSEL. The Trustee shall
receive at least five days notice when requested by the Issuer to take any
action pursuant to Section 8.03, accompanied by copies of any instruments
involved, and the Trustee shall also require, as a condition to such
action, an Issuer Opinion of Counsel, in form and substance satisfactory to
the Trustee, stating the legal effect of any such action, outlining the
steps required to complete the same, and concluding that all conditions
precedent to the taking of such action have been complied with and such
action will not materially and adversely impair the security for the
Transition Bonds or the rights of the Transition Bondholders in
contravention of the provisions of this Indenture; provided, however, that
such Issuer Opinion of Counsel shall not be required to express an opinion
as to the fair value of the Collateral. Counsel rendering any such opinion
may rely, without independent investigation, on the accuracy and validity
of any certificate or other instrument delivered to the Trustee in
connection with any such action.
SECTION 8.05 REPORTS BY INDEPENDENT ACCOUNTANTS. The Issuer
shall appoint a firm of Independent certified public accountants of
recognized national reputation for purposes of preparing and delivering the
reports or certificates of such accountants required by this Indenture and
the related Series Supplements. Upon any resignation by such firm, the
Issuer shall promptly appoint a successor thereto that shall also be a firm
of Independent certified public accountants of recognized national
reputation. If the Issuer shall fail to appoint a successor to a firm of
Independent certified public accountants that has resigned within fifteen
(15) days after such resignation, the Trustee shall promptly notify the
Issuer of such failure in writing. If the Issuer shall not have appointed
a successor within ten (10) days thereafter, the Trustee shall promptly
appoint a successor firm of Independent certified public accountants of
recognized national reputation. The fees of such firm of Independent
certified public accountants and its successor shall be payable by the
Issuer.
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 or the counterparty under any Hedge Agreement or Interest
Rate Swap Agreement but with prior notice to the Rating Agencies, the
Issuer and the Trustee, when authorized by an Issuer Order, at any time and
from time to time, may enter into one or more indentures supplemental
hereto (which shall conform to the provisions of the Trust Indenture Act as
in force at the date of the execution thereof), in form satisfactory to the
Trustee, for any of the following purposes:
(i) to correct or amplify the description of the
Collateral, or better to assure, convey and confirm unto the Trustee
the Collateral, or to subject to the Lien of this Indenture
additional property;
(ii) to evidence the succession, in compliance with the
applicable provisions hereof, of another person to the Issuer, and
the assumption by any applicable successor of the covenants of the
Issuer contained herein and in the Transition Bonds;
(iii) to add to the covenants of the Issuer, for the
benefit of the Transition Bondholders, or to surrender any right or
power herein conferred upon the Issuer;
(iv) to convey, transfer, assign, mortgage or pledge any
property to the Trustee;
(v) to cure any ambiguity, to correct or supplement any
provision herein or in any Supplemental Indenture which may be
inconsistent with any other provision herein or in any Supplemental
Indenture or to make any other provisions with respect to matters or
questions arising under this Indenture or in any Supplemental
Indenture; provided, however, that (i) such action shall not, as
evidenced by an Issuer Opinion of Counsel, adversely affect in any
material respect the interests of any Transition Bondholder or any
counterparty under any Hedge Agreement or Interest Rate Swap
Agreement and (ii) the Rating Agency Condition shall have been
satisfied with respect thereto;
(vi) to evidence and provide for the acceptance of the
appointment hereunder by a successor Trustee with respect to the
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 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 Supplemental Indenture, provided
that the Rating Agency Condition has been satisfied;
(ix) to provide for any Interest Rate Swap Agreements with
respect to any Series or Class of Transition Bonds which bears a
floating rate of interest or any Series or Class with specified
credit enhancement; provided, however, that:
(A) such action shall not, as evidenced by an Opinion
of Counsel, adversely affect in any material respect the
interests of any Transition Bondholder or any counterparty under
any Hedge Agreement or any other Interest Rate Swap Agreement
and
(B) the Rating Agency Condition shall have been
satisfied with respect thereto; or
(x) to authorize the appointment of any listing agent,
transfer agent or paying agent or additional registrar for any Class
of any Series of Transition Bonds required or advisable in connection
with the listing of any Class or any Series of Transition Bonds on the
Luxembourg Stock Exchange or any other stock exchange, and otherwise
to amend this Indenture to incorporate any changes requested or
required by any governmental authority, stock exchange authority,
listing agent, transfer agent or paying agent or additional registrar
for any Class or any Series of Transition Bonds in connection with
that listing.
(b) The Trustee is hereby authorized to join in the execution of
any such Supplemental Indenture and to make any further appropriate
agreements and stipulations that may be therein contained.
SECTION 9.02 SUPPLEMENTAL INDENTURES WITH CONSENT OF TRANSITION
BONDHOLDERS. (a) The Issuer and the Trustee, when authorized by an Issuer
Order, also may, upon satisfaction of the Rating Agency Condition (in each
case, accompanied by the form of the proposed supplemental indenture) and
with the consent of the Holders of not less than a majority of the
Outstanding Amount of the Transition Bonds of each Series or Class to be
affected, by Act of such Holders delivered to the Issuer and the Trustee,
enter into an indenture or indentures supplemental hereto for the purpose
of adding any provisions to, or changing in any manner or eliminating any
of the provisions of, this Indenture or of modifying in any manner the
rights of the Holders of the 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 and each counterparty under any Hedge Agreement or Interest Rate Swap
affected thereby:
(i) change the date of payment of any instalment of
principal of or interest on any Transition Bond, or reduce the
principal amount thereof, the interest rate thereon or the redemption
price with respect thereto, change the provisions of the Interest
Rate Swap Agreement relating to the amount, calculation or timing of
payments, change the provisions of this Indenture and the related
applicable Supplemental Indenture or Series Supplement relating to
the application of collections on, or the proceeds of the sale of,
the Collateral to payment of principal of or interest on the
Transition Bonds, or change the 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 provisions of this Indenture or defaults hereunder
and their consequences provided for in this Indenture or modify or
alter the provisions of the proviso to the definition of the term
"Outstanding";
(iv) reduce the percentage of the Outstanding Amount of the
Transition Bonds required to direct the Trustee to direct the Issuer
to sell or liquidate the Collateral pursuant to Section 5.04 or to
preserve the Collateral pursuant to Section 5.05;
(v) reduce the percentage of the Outstanding Amount of a
Series or Class of Transition Bonds, the consent of the Holders of
which is required for any amendments to the Sale Agreement, the
Administration Agreement, the Servicing Agreement or any Interest
Rate Swap Agreement;
(vi) modify any of the provisions of this Indenture in such
manner so as to affect the amount of any payment of interest or
principal payable on any Transition Bond on any Payment Date or
change the Redemption Dates, Expected Amortization Schedules or Final
Maturity Date of any Series or Class of Transition Bonds, or the
method of calculation of interest on any floating rate Transition
Bond;
(vii) decrease the Overcollateralization Amount or Required
Capital Amount with respect to any Series or the Scheduled
Overcollateralization Level with respect to any Payment Date;
(viii) modify or alter the provisions of this Indenture
regarding the voting of Transition Bonds held by the Issuer, the
Seller, an Affiliate of either 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 any other Basic Documents; or
(x) permit the creation of any Lien ranking prior to or on
a parity with the Lien of this Indenture with respect to any part of
the Collateral or, except as otherwise 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.
(b) It shall not be necessary for any Act of Transition
Bondholders under this Section 9.02 to approve the particular form of any
proposed Supplemental Indenture, but it shall be sufficient if such Act
shall approve the substance thereof.
(c) Promptly after the execution by the Issuer and the Trustee
of any Supplemental Indenture pursuant to this Section 9.02, the Trustee
shall mail to the Holders of the 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 Trustee
to mail such notice, or any defect therein, shall not, however, in any way
impair or affect the validity of any such Supplemental Indenture. If any
Transition Bonds are listed on the Luxembourg Stock Exchange and the rules
of such exchange so require, the Trustee shall arrange for publication an
Authorized Newspaper that such notice shall be available with the Issuer's
listing agent in Luxembourg appointed pursuant to Section 3.02(b).
SECTION 9.03 EXECUTION OF SUPPLEMENTAL INDENTURES. In
executing, or permitting the additional trusts created by, any Supplemental
Indenture permitted by this Article IX or the modifications thereby of the
trusts created by this Indenture, the Trustee shall be entitled to receive,
and subject to Sections 6.01 and 6.02, shall be fully protected in relying
upon, an Issuer Opinion of Counsel stating that the execution of such
Supplemental Indenture is authorized or permitted by this Indenture. The
Trustee may, but shall not be obligated to, enter into any such
Supplemental Indenture that affects the Trustee's own rights, duties,
liabilities or immunities under this Indenture or otherwise.
SECTION 9.04 EFFECT OF SUPPLEMENTAL INDENTURE. Upon the
execution of any Supplemental Indenture pursuant to the provisions hereof,
this Indenture shall be and be deemed to be modified and amended in
accordance therewith with respect to each Series or Class of Transition
Bonds affected thereby, and the respective rights, limitations of rights,
obligations, duties, liabilities and immunities under this Indenture of the
Trustee, the Issuer, the Holders of the Transition Bonds and any
counterparty under any Hedge Agreement or Interest Rate Swap Agreement
shall thereafter be determined, exercised and enforced hereunder subject in
all respects to such modifications and amendments, and all the terms and
conditions of any such Supplemental Indenture shall be and be deemed to be
part of the terms and conditions of this Indenture for any and all
purposes.
SECTION 9.05 CONFORMITY WITH TRUST INDENTURE ACT. Every
amendment of this Indenture and every Supplemental Indenture executed
pursuant to this Article IX shall conform to the requirements of the TIA as
then in effect so long as this Indenture shall then be qualified under the
TIA.
SECTION 9.06 REFERENCE IN 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 Trustee shall, bear a notation in form approved by
the Trustee as to any matter provided for in such Supplemental Indenture.
If the Issuer or the Trustee shall so determine, new Transition Bonds so
modified as to conform, in the opinion of the Trustee and the Issuer, to
any such Supplemental Indenture may be prepared and executed by the Issuer
and authenticated and delivered by the Trustee in exchange for Outstanding
Transition Bonds.
ARTICLE X
REDEMPTION OF TRANSITION BONDS
SECTION 10.01 OPTIONAL REDEMPTION BY ISSUER. If so provided in
the related Series Supplement and provided that there is no Interest Rate
Swap Agreement with respect to any Class of that Series in effect, the
Issuer may, at its option, redeem all, but not less than all, of the
Transition Bonds of a Series on any Payment Date if, after giving effect to
payments that would otherwise be made on such Payment Date, the Outstanding
Amount of any such Series of Transition Bonds has been reduced to less than
five percent (5%) of the initial principal balance of such Series. The
redemption price in any case shall be equal to the outstanding principal
amount of the Bonds to be redeemed plus accrued and unpaid interest thereon
at the Interest Rate to the Redemption Date (the "Redemption Price"). If
the Issuer elects to redeem the Transition Bonds of a Series pursuant to
this Section 10.01, it shall furnish notice of such election to (a) the
Trustee, not later than twenty-five (25) days prior to the Redemption Date
for such redemption and (b) to the Rating Agencies, not later than ten (10)
days 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 10.03 to each Holder of the Transition Bonds
of such Series pursuant to this Section 10.01.
SECTION 10.02 MANDATORY REDEMPTION BY ISSUER. The Issuer shall
redeem the Transition Bonds of a Series on the Redemption Date or Dates, if
any, in the amounts required, if any, and at the redemption price specified
in the Series Supplement for such Series, which in any case shall be not
less than the outstanding principal amount of the Bonds to be redeemed,
plus accrued interest thereon to such Redemption Date. If the Issuer is
required to redeem the Transition Bonds of a Series pursuant to this
Section 10.02, it shall furnish notice of such requirement to the Trustee
not later than twenty-five (25) days prior to the Redemption Date for such
redemption whereupon all such Transition Bonds shall be due and payable on
the Redemption Date upon the furnishing of a notice complying with Section
10.03 to each Holder of the Transition Bonds of such Series pursuant to
this Section 10.02.
SECTION 10.03 FORM OF REDEMPTION NOTICE. (a) Unless otherwise
specified in the Series Supplement relating to a Series of Transition
Bonds, notice of redemption under Sections 10.01 or 10.02 shall be given by
the Trustee by first-class mail, postage prepaid, mailed not less than five
days nor more than forty-five (45) days prior to the applicable Redemption
Date to each Holder of 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.
(b) All notices of redemption shall state:
(i) the Redemption Date;
(ii) the amount of such Transition Bonds to be redeemed;
(iii) the Redemption Price; and
(iv) 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).
(c) Notice of redemption of the Transition Bonds to be redeemed
shall be given by the Trustee in the name and at the expense of the Issuer.
For so long as any Transition Bonds are listed on the Luxembourg Stock
Exchange and the rules of such exchange so require, the Trustee shall
arrange that such notice will also be given by publication in an Authorized
Newspaper at least ten (10) days prior to the Redemption Date. Failure to
give notice of redemption, or any defect therein, to any Holder of any
Transition Bond selected for redemption shall not impair or affect the
validity of the redemption of any other Transition Bond. Notice of
optional redemption shall be irrevocable once given.
SECTION 10.04 PAYMENT OF REDEMPTION PRICE. If notice of
redemption has been duly mailed or duly waived by the Holders of all
Transition Bonds called for redemption, then 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, and the Holders of such Transition Bonds will have no
rights with respect thereto, if payment of the Redemption Price has been
duly provided for on or before the Redemption Date declared therefor.
Notwithstanding the foregoing, the Holders of the Transition Bonds shall be
entitled to payment of interest on the Redemption Price accrued at the
related Interest Rates to the extent the Issuer fails to pay the Redemption
Price on the Redemption Date. Payment of the Redemption Price shall be
made by the Trustee to or upon the order of the Holders of the 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. (a)
Upon any application or request by the Issuer to the Trustee to take any
action under any provision of this Indenture, the Issuer shall furnish to
the Trustee (i) an Issuer Officer's Certificate stating that all conditions
precedent, if any, provided for in this Indenture relating to the proposed
action have been complied with, (ii) an Issuer Opinion of Counsel stating
that in the opinion of such counsel all such conditions precedent, if any,
have been complied with and (iii) (if required by the TIA) an Independent
Certificate from a firm of certified public accountants meeting the
applicable requirements of this Section 11.01, except that, in the case of
any such application or request as to which the furnishing of such
documents is specifically required by any provision of this Indenture, no
additional certificate or opinion need be furnished.
(b) Every certificate or opinion with respect to compliance with
a condition or covenant provided for in this Indenture shall include:
(i) statement that each signatory of such certificate or
opinion has read or has caused to be read such covenant or
condition and the definitions herein relating thereto;
(ii) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or
opinions contained in such certificate or opinion are based;
(iii) a statement that, in the opinion of each such
signatory, such signatory has made such examination or
investigation as is necessary to enable such signatory to
express an informed opinion as to whether or not such covenant
or condition has been complied with; and
(iv) a statement as to whether, in the opinion of each such
signatory, such condition or covenant has been complied with.
SECTION 11.02 FORM OF DOCUMENTS DELIVERED TO TRUSTEE. (a) In
any case where several matters are required to be certified by, or covered
by an opinion of, any specified Person, it is not necessary that all such
matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but
one such Person may certify or give an opinion with respect to some matters
and one or more other such Persons as to other matters, and any such Person
may certify or give an opinion as to such matters in one or several
documents.
(b) Any certificate or opinion of an Authorized Officer of the
Issuer may be based, insofar as it relates to legal matters, upon a
certificate or opinion of, or representations by, counsel, unless such
officer knows, or in the exercise of reasonable care should know, that the
certificate or opinion or representations with respect to the matters upon
which his certificate or opinion is based are erroneous. Any such
certificate of an Authorized Officer or Issuer Opinion of Counsel may be
based, insofar as it relates to factual matters, upon a certificate or
opinion of, or representations by, an officer or officers of the Servicer,
the Seller or the Issuer, stating that the information with respect to such
factual matters is in the possession of the Servicer, the Seller or the
Issuer, unless such Authorized Officer or counsel knows, or in the exercise
of reasonable care should know, that the certificate or opinion or
representations with respect to such matters are erroneous.
(c) Where any Person is required to make, give or execute two or
more applications, requests, consents, certificates, statements, opinions
or other instruments under this Indenture, they may, but need not, be
consolidated and form one instrument.
(d) Whenever in this Indenture, in connection with any
application or certificate or report to the Trustee, it is provided that
the Issuer shall deliver any document as a condition of the granting of
such application, or as evidence of the Issuer's compliance with any term
hereof, it is intended that the truth and accuracy, at the time of the
granting of such application or at the effective date of such certificate
or report (as the case may be), of the facts and opinions stated in such
document shall in such case be conditions precedent to the right of the
Issuer to have such application granted or to the sufficiency of such
certificate or report. The foregoing shall not, however, be construed to
affect the Trustee's right to rely upon the truth and accuracy of any
statement or opinion contained in any such document as provided in Article
VI.
SECTION 11.03 ACTS OF 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 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
Trustee and the Issuer, if made in the manner provided in this Section
11.03.
(b) The fact and date of the execution by any person of any such
instrument or writing may be proved in any manner that the Trustee deems
sufficient.
(c) The ownership of 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 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 TRUSTEE, ISSUER AND RATING
AGENCIES. (a) 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:
(i) the Trustee by any Transition Bondholder or by the Issuer,
or
(ii) the Issuer by the Trustee or by any Transition Bondholder,
shall be sufficient for every purpose hereunder if in English and in
writing, and sent by United States first-class mail, reputable overnight
courier service, facsimile transmission or electronic mail (confirmed by
telephone, United States first-class mail or reputable overnight courier
service in the case of notice by facsimile transmission or electronic mail)
or any other customary means of communication, and any such request,
demand, authorization, direction, notice, consent, waiver or Act shall be
effective when delivered or transmitted, or if mailed, five days after
deposit in the United States first-class mail with proper postage for
first-class mail prepaid, in the case of the Trustee, addressed to the
Trustee at its Corporate Trust Office, and in the case of the Issuer,
addressed to: PSE&G Transition Funding LLC, 00 Xxxx Xxxxx, X-0X, Xxxxxx,
Xxx Xxxxxx, 00000, Attention: Managers, or at any other address previously
furnished in writing to the Trustee by the Issuer. The Issuer shall
promptly transmit any notice received by it from the Transition Bondholders
to the Trustee.
(b) Notices required to be given to the Rating Agencies by the
Issuer, the Trustee or a Manager shall be in writing, delivered personally,
via facsimile transmission, by reputable overnight courier or by
first-class mail, postage prepaid, to: (i) in the case of Moody's: Xxxxx'x
Investors Service, Inc., Attention: ABS Monitoring Department, 00 Xxxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000; (ii) in the case of Standard & Poor's:
Standard & Poor's Corporation, 00 Xxxxx Xxxxxx, Xxx Xxxx, XX 00000,
Attention: Asset Backed Surveillance Department and (iii) in the case of
Fitch: Fitch, Inc., 0 Xxxxx Xxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: ABS Surveillance.
SECTION 11.05 NOTICES TO TRANSITION BONDHOLDERS; WAIVER. (a)
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
the address of such Transition Bondholder 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.
(b) Where this Indenture provides for notice in any manner, such
notice may be waived in writing by any Person entitled to receive such
notice, either before or after the event, and such waiver shall be the
equivalent of such notice. Waivers of notice by Transition Bondholders
shall be filed with the Trustee but such filing shall not be a condition
precedent to the validity of any action taken in reliance upon such a
waiver.
(c) In case it shall be impractical to deliver notice in
accordance with clause (a) of this Section 11.05 to the Holders of
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 Trustee shall be deemed to be a sufficient giving of
such notice.
(d) Where this Indenture provides for notice to the Rating
Agencies, failure to give such notice shall not affect any other rights or
obligations created hereunder, and shall not under any circumstance
constitute a Default or Event of Default.
SECTION 11.06 NOTICES TO LUXEMBOURG STOCK EXCHANGE. (a) For so
long as any Transition Bonds are listed on the Luxembourg Stock Exchange
and to the extent the rules of such exchange so require, the Issuer shall
notify the Luxembourg Stock Exchange and any agent appointed pursuant to
Section 3.02(b) if any rating assigned to such Transition Bonds is reduced
or withdrawn and shall arrange for such notice to be published in an
Authorized Newspaper.
(b) For so long as any Transition Bonds are listed on the
Luxembourg Stock Exchange and the rules of such exchange so require, the
Trustee shall make available to the Holders of such Transition Bonds and
shall deposit on file with the Issuer's listing agent in Luxembourg
appointed pursuant to Section 3.02(b), copies of the Basic Documents, all
reports provided to Transition Bondholders pursuant to this Indenture, the
prospectus related to such Transition Bonds, the reports of independent
certified public accountants obtained with respect to the Issuer pursuant
to this Indenture, the financial information regarding PSE&G in its annual
report on Form 10-K for the fiscal year ended December 31, 1999 and copies
of each annual report of PSE&G on Form 10-K for subsequent fiscal years.
The Trustee shall deposit with the Chief Registrar of the District Court of
Luxembourg prior to listing on the Luxembourg Stock Exchange a copy of the
Issuer Certificate of Formation, the Issuer LLC Agreement and any legal
notices relating to the issuance of such Transition Bonds.
SECTION 11.07 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 Trustee or any Paying Agent to such Holder, that is different from the
methods provided for in this Indenture for such payments or notices. The
Issuer will furnish to the Trustee a copy of each such agreement and the
Trustee will cause payments to be made and notices to be given in
accordance with such agreements.
SECTION 11.08 CONFLICT WITH TRUST INDENTURE ACT. (a) If any
provision hereof limits, qualifies or conflicts with another provision
hereof that is required to be included in this Indenture by any of the
provisions of the TIA, such required provision shall control.
(b) The provisions of TIA Sections 310 through 317 that impose
duties on any person (including the provisions automatically deemed
included herein unless expressly excluded by this Indenture) are a part of
and govern this Indenture, whether or not physically contained herein.
SECTION 11.09 EFFECT OF HEADINGS AND TABLE OF CONTENTS. The
Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.
SECTION 11.10 SUCCESSORS AND ASSIGNS. (a) All covenants and
agreements in this Indenture and the Transition Bonds by the Issuer shall
bind its successors and permitted assigns, whether so expressed or not.
(b) All agreements of the Trustee in this Indenture shall bind
its successors.
(c) The Trustee shall provide prior notice to the Rating
Agencies of any assignment of the obligations under this Agreement.
SECTION 11.11 SEVERABILITY. 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 11.12 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 11.13 LEGAL HOLIDAYS. In any case where the date on
which any payment is due shall not be a Business Day, then (notwithstanding
any other provision of the 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 11.14 GOVERNING LAW. THIS INDENTURE SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW JERSEY,
WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS,
RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS.
SECTION 11.15 COUNTERPARTS. This Indenture may be executed in
any number of counterparts, each of which so executed shall be deemed to be
an original, but all such counterparts shall together constitute but one
and the same instrument.
SECTION 11.16 ISSUER OBLIGATION. No recourse may be taken,
directly or indirectly, with respect to the obligations of the Issuer or
the Trustee on the Transition Bonds or under this Indenture or any
certificate or other writing delivered in connection herewith or therewith,
against (i) the Member or any Manager, employee or agent of the Issuer or
(ii) any stockholder, officer, director, employee or agent of the Trustee
(it being understood that none of the Trustee's obligations are in its
individual capacity).
SECTION 11.17 NO PETITION. The Trustee, by entering into this
Indenture, and each Transition Bondholder, by accepting a Transition Bond,
hereby covenants and agrees (or shall be deemed to have covenanted and
agreed) that it shall not at any time institute against the Issuer, or join
in the institution against the Issuer of, or acquiesce, petition or
otherwise invoke or cause the Issuer to invoke the process of any court or
government authority for the purpose of commencing or sustaining a case
against the Issuer under any federal or State bankruptcy, insolvency or
similar law or appointing a receiver, liquidator, assignee, trustee,
custodian, sequestrator or other similar official of the Issuer or any
substantial part of the property of the Issuer or ordering the winding up
or liquidation of the affairs of the Issuer.
IN WITNESS WHEREOF, the Issuer and the Trustee have caused this
Indenture to be duly executed and delivered by a Manager and an officer,
respectively, thereof, each thereunto duly authorized, all as of the day
and year first above written.
PSE&G TRANSITION FUNDING LLC,
as Issuer
By: /s/ Xxxxxx X. Xxxxxxx
--------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Manager
THE BANK OF NEW YORK,
as Trustee
By: /s/ Xxxxxxxxx Xxxxx
-----------------------
Name: Xxxxxxxxx Xxxxx
Title: Trust Officer
APPENDIX A
MASTER DEFINITIONS
The definitions contained in this Appendix A are applicable to the singular
as well as the plural forms of such terms.
Act has the meaning specified in Section 11.03 of the Indenture.
Adjustment Date means (a) January 1 of each year through January 1,
2015, (b) as long as the Transition Bonds are outstanding, October 1,
January 1, April 1 and July 1 of each year, beginning April 1, 2015,
and (c) any other date which is thirty days after a Calculation Date.
Adjustment Request means an application filed by the Servicer with the
BPU for a Transition Bond Charge Adjustment pursuant to Section 4(b)
of the Issuer Annex.
Administration Agreement means the Administration Agreement dated as
of January 31, 2001, between PSE&G, as administrator, and the Issuer,
as the same may be amended or supplemented from time to time.
Administrator means PSE&G, as administrator under the Administration
Agreement, and each successor to PSE&G, in the same capacity, pursuant
to Section 14 of the Administration Agreement.
Advice Letter means, with respect to any Series of Transition Bonds,
the Issuance Advice Letter, in the form attached as Appendix B to the
Financing Order, filed with the BPU at the time of the issuance of
such Series.
Affiliate means, with respect to any specified Person, any other
Person controlling or controlled by or under common control with such
specified Person. For the purposes of this definition, control when
used with respect to any specified Person means the power to direct
the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or
otherwise; and the terms controlling and controlled have meanings
correlative to the foregoing.
Annual Accountant's Report has the meaning assigned to that term
in Section 3.07 of the Servicing Agreement.
Annual Reconciliation Date means the last Business Day of October of
each year, commencing with October 2001 and continuing through October
2014 (or such earlier month as the Servicer shall have specified to
the Issuer and the Trustee by not less than 30 days prior written
notice).
Authorized Denominations means, with respect to any Series or Class of
Transition Bonds, $1,000 and integral multiples of $1.00 above that
amount, provided, however, that one bond of each Class may have
denomination of less than $1,000, or such other denominations as may
be specified in the Series Supplement therefor.
Authorized Newspaper means the Luxemburger Wort or any other newspaper
published in Luxembourg on a daily basis.
Authorized Officer means, with respect to the Issuer, (A) any Manager
and, (B) any person designated as an "Officer" under the Issuer LLC
Agreement and authorized thereby to act on behalf of the Issuer.
Basic Documents means the Formation Documents, the Sale Agreement, any
Bills of Sale, the Servicing Agreement, the Administration Agreement,
the Indenture, the Underwriting Agreement, the Hedge Agreement, the
Interest Rate Swap Agreement and the Securities Account Control
Agreement, as each may be amended or supplemented from time to time.
Billing Month means a calendar month during which the Transition Bond
Charge is billed to Customers.
Xxxx of Sale means any xxxx of sale issued by the Seller to the Issuer
pursuant to the Sale Agreement evidencing the sale of Bondable
Transition Property by the Seller to the Issuer.
Bondable Stranded Costs means those bondable stranded costs,
within the meaning specified in the Competition Act, approved for
recovery in the Financing Order.
Bondable Transition Property has the meaning assigned to that
term in the Competition Act and the Financing Order.
Bondable Transition Property Documentation means all documents
relating to the Transferred Bondable Transition Property,
including copies of the Petition and the Financing Order and all
documents filed with the BPU in connection with any Transition
Bond Charge Adjustment.
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
of the Indenture.
BPU means the State of New Jersey Board of Public Utilities or
its successor.
BPU Regulations means any regulations, orders, guidelines or
directives promulgated, issued or adopted by the BPU.
Business Day means any day other than a Saturday or Sunday or a
day on which banking institutions in the City of Newark, New
Jersey, or in the City of New York, New York or, with respect to
any Transition Bonds listed on the Luxembourg Stock Exchange, in
Luxembourg, are required or authorized by law or executive order
to remain closed.
Calculation Date means (a) December 1 of each year until December 1,
2014, (b) September 1, December 1, March 1 and June 1 of each year
beginning March 1, 2015 and for so long as the Transition Bonds are
outstanding, and (c) any other day on which the Servicer files an
Adjustment Request.
Capital Reserve Subaccount has the meaning specified in Section
8.02(a) of the Indenture.
Capital Subaccount has the meaning specified in Section 8.02(a) of the
Indenture.
Class means, with respect to any Series, any one of the classes
of Transition Bonds of that Series, as specified in the Series
Supplement for that Series.
Class Final Maturity Date means the Final Maturity Date of a Class, as
specified in the Series Supplement for the related Series.
Class Subaccount has the meaning specified in Section 8.02(a) of the
Indenture.
Clearing Agency means an organization registered as a "clearing
agency" pursuant to Section 17A of the Exchange Act.
Clearing Agency Participant means a broker, dealer, bank, other
financial institution or other Person for whom from time to time a
Clearing Agency effects book-entry transfers and pledges of securities
deposited with the Clearing Agency.
Code means the Internal Revenue Code of 1986, as amended from time to
time, and Treasury Regulations promulgated thereunder.
Collateral has the meaning specified in the Granting Clause of the
Indenture.
Collection Account has the meaning specified in Section 8.02(a) of the
Indenture.
Collection Period means the period from and including the first
day of a calendar month to but excluding the first day of the
next calendar month.
Collections Curve means a forecast prepared by the Servicer of the
percentages of amounts billed in a Billing Month that are expected to
be received during each of the following seven months.
Collections Curve Payment means, with respect to a Billing Month, the
sum of the amounts paid to the Trustee over a seven-month period
following that Billing Month based on the Collections Curve for that
Billing Month.
Commission means the U.S. Securities and Exchange Commission, and any
successor thereof.
Competition Act means the Electric Discount and Energy
Competition Act, New Jersey Statutes Annotated, title 48, chapter
3, article 7.
Corporate Trust Office means the principal office of the 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 000 Xxxxxxx Xxxxxx, Xxxxx 12 East, New York, New York
10286, Attention: CDO Unit, or at such other address as the Trustee
may designate from time to time by notice to the Transition
Bondholders and the Issuer, or the principal corporate trust office of
any successor Trustee (the address of which the successor Trustee will
notify the Transition Bondholders and the Issuer in writing).
Covenant Defeasance Option has the meaning specified in Section
4.01(b) of the Indenture.
Curve Payment Shortfall means: (a) with respect to each Annual
Reconciliation Date, the excess of actual TBC Collections in respect
of each of the 12 Billing Months beginning 19 Billing Months (or from
the first Series Issuance Date, if less than 19 months have elapsed)
before the Billing Month in which such Reconcilation Date occurs, over
the actual Collection Curve Payments made to the Trustee in respect of
those Billing Months; and (b) with respect to each Monthly
Reconciliation Date, the excess of actual TBC Collections in respect
of the Billing Month that is 8 months prior to the Billing Month in
which such Reconciliation Date occurs, over the actual Collection
Curve Payments made to the Trustee in respect of that prior Billing
Month.
Customer means each person who is a retail consumer of
electricity and who accesses PSE&G's transmission and
distribution system, regardless of whether such consumer elects
to purchase electricity from a Third Party.
Daily Remittance Date means, if the Servicer has not satisfied
the conditions of Section 5.11(b) of the Servicing Agreement,
each Business Day commencing on the second Business Day following
the date on which the Servicer begins remittance procedures under
Section 3.03(a)(ii)(y) of the Servicing 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) of
the Indenture.
Definitive Transition Bonds has the meaning specified in Section 2.11
of the Indenture.
DTC Agreement means the agreement between the Issuer, the Trustee and
The Depository Trust Company, as the initial Clearing Agency, dated on
or about January 31, 2001, relating to the Transition Bonds, as the
same may be amended or supplemented from time to time.
Eligible Guarantor Institution means a firm or other entity identified
in Rule 17Ad-15 under the Exchange Act as "an eligible guarantor
institution," including (as such terms are defined therein):
(a) a bank;
(b) a broker, dealer, municipal securities broker or dealer or
government securities broker or dealer;
(c) a credit union;
(d) a national securities exchange, registered securities
association or clearing agency; or
(e) a savings association that is a participant in a securities
transfer association.
Eligible Institution means:
(a) the corporate trust department of the Trustee, so long as
any of the securities of the Trustee have a credit rating
from each Rating Agency in one of its generic rating
categories which signifies investment grade, or
(b) a depositary institution organized under the laws of the
United States of America or any State (or any domestic
branch of a foreign bank), which
(i) has either
(A) with respect to any Eligible Investment having a
maturity of greater than one month, a long-term
unsecured debt rating of "AAA" by Standard &
Poor's and Fitch and "Aaa" by Moody's, or
(B) with respect to any Eligible Investment having a
maturity one month or less, a certificate of
deposit rating of "A-1+" by Standard & Poor's and
"P-1" by Moody's, or any other long-term,
short-term or certificate of deposit rating
acceptable to the Rating Agencies, and
(ii) whose deposits are insured by the FDIC.
Eligible Investments mean book-entry securities, negotiable
instruments or securities represented by instruments in bearer or
registered form which evidence:
(a) direct obligations of, and obligations fully and
unconditionally guaranteed as to timely payment by, the
United States of America;
(b) demand deposits, time deposits or certificates of deposit of
any depository institution or trust company (any depositary
institution or trust company being referred to in this
definition as a "financial institution") incorporated under
the laws of the United States of America or any State
thereof (or any domestic branch of a foreign bank) and
subject to supervision and examination by Federal or State
banking or depositary institution authorities; provided,
however, that at the time of the investment or contractual
commitment to invest therein, the commercial paper or other
short-term unsecured debt obligations (other than such
obligations the rating of which is based on the credit of a
Person other than such depositary institution or trust
company) thereof shall have a credit rating from each of the
Rating Agencies in the highest investment category granted
thereby;
(c) commercial paper or other short term obligations of any
corporation organized under the laws of the United States of
America (other than PSE&G) whose ratings, at the time of the
investment or contractual commitment to invest therein, from
each of the Rating Agencies are in the highest investment
category granted thereby;
(d) demand deposits, time deposits and certificates of deposit
which are fully insured by the Federal Deposit Insurance
Corporation;
(e) investments in money market funds having a rating from each
of the Rating Agencies in the highest investment category
granted thereby (including funds for which the Trustee or
any of its Affiliates act as investment manager or advisor);
(f) bankers' acceptances issued by any depositary institution or
trust company referred to in clause (b) above;
(g) repurchase obligations with respect to any security that is
a direct obligation of, or fully guaranteed by, the United
States of America or any agency or instrumentality thereof
the obligations of which are backed by the full faith and
credit of the United States of America, in either case
entered into with a depositary institution or trust company
(acting as principal) described in clause (b) above;
(h) repurchase obligations with respect to any security or whole
loan entered into with
(i) a financial institution (acting as principal) described
in clause (b) above,
(ii) a broker/dealer (acting as principal) registered as a
broker or dealer under Section 15 of the Exchange Act
(any broker/dealer being referred to in this definition
as a "broker/dealer"), the unsecured short-term debt
obligations of which are rated P-1 by Moody's and A-1+
by Standard & Poor's at the time of entering into this
repurchase obligation, or
(iii) an unrated broker/dealer, acting as principal,
that is a wholly-owned subsidiary of a non-bank or
bank holding company the unsecured short-term debt
obligations of which are rated P-1 by Moody's and
A-1+ by Standard & Poor's at the time of purchase;
or
(i) any other investment permitted by each Rating Agency;
provided, however, that, with respect to Moody's only, the obligor
related to clauses (b), (c), (d), (f), (g) and (h) above must have
both a long term rating of at least A1 and a short term rating of at
least P1, and provided further, that, unless otherwise permitted by
each Rating Agency, upon the failure of any Eligible Institution to
maintain any applicable rating set forth in this definition or the
definition of Eligible Institution, the related investments at such
institution shall be reinvested in Eligible Investments at a successor
Eligible Institution within 10 days, and provided, further, that, any
Eligible Investment must not:
(a) be sold, liquidated or otherwise disposed of at a loss,
prior to the maturity thereof, or
(b) mature later than (i) the date on which the proceeds of such
Eligible Investment will be required to be on deposit in the
Collection Account in order for the Trustee to make all
required and scheduled payments and deposits into
Subaccounts under the Indenture, if such Eligible Investment
is held by an Affiliate of the Trustee, or (ii) the Business
Day prior to the date on which the proceeds of such Eligible
Investment will be required to be on deposit in the
Collection Account in order for the Trustee to make all
required and scheduled payments and deposits into
Subaccounts under the Indenture, if such Eligible Investment
is not held by an Affiliate of the Trustee.
Eligible Securities Account means either:
(a) a segregated trust account with an Eligible Institution or
(b) a segregated trust account with the corporate trust
department of a depositary institution organized under the
laws of the United States of America or any State (or any
domestic branch of a foreign bank), having corporate trust
powers and acting as trustee for funds deposited in such
account, so long as any of the securities of such depositary
institution shall have a credit rating from each Rating
Agency in one of its generic rating categories which
signifies investment grade.
Event of Default has the meaning specified in Section 5.01 of the
Indenture.
Excess Curve Payment means, (a) with respect to each Annual
Reconciliation Date, the excess of the Collections Curve Payments made
to the Trustee in respect of each of the 12 Billing Months beginning
19 Billing Months (or from the first Series Issuance Date, if less
than 19 months have elapsed) before the Billing Month in which the
Reconciliation Date occurs, over the actual TBC Collections in respect
of those Billing Months; and (b) with respect to each Monthly
Reconciliation Date, the excess of the Collections Curve Payments made
to the Trustee in respect of the Billing Month that is 8 months prior
to the Billing Month in which such Reconciliation Date occurs, over
the actual TBC Collections in respect of that prior Billing Month.
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,
chief information officer, president, executive vice president, any
vice president, the secretary or the treasurer of such corporation;
and with respect to any limited liability company, any manager
thereof.
Expected Amortization Schedule means, with respect to each Series or,
if applicable, each Class 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 each Series or, if
applicable, each Class of Transition Bonds, the Payment Date related
to the date when all interest and principal is scheduled to be paid
with respect to that Series or Class in accordance with the Expected
Amortization Schedule, as specified in the Series Supplement therefor.
FDIC means the Federal Deposit Insurance Corporation or its successor.
Final Maturity Date means, for each Series or, if applicable, each
Class of Transition Bonds, the Payment Date related to the date by
which all principal of and interest on such Series or Class of
Transition Bonds is required to be paid, as specified in the Series
Supplement therefor.
Financing Issuance means an issuance of a new Series of Transition
Bonds under the Indenture to provide funds to finance the purchase by
the Issuer of Bondable Transition Property.
Financing Order means the bondable stranded cost rate order issued by
the BPU on September 17, 1999 pursuant to the Competition Act.
Fitch means Fitch, Inc., or its successor.
Formation Documents means, collectively, the Issuer LLC Agreement, the
Issuer Certificate of Formation and any other document pursuant to
which the Issuer is formed or governed, as each may be amended or
supplemented from time to time.
General Subaccount has the meaning specified in Section 8.02(a) of the
Indenture.
Grant means mortgage, pledge, bargain, sell, warrant, alienate,
remise, release, convey, assign, transfer, create, and xxxxx x xxxx
upon and a security interest in and right of set-off against, deposit,
set over and confirm. 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.
Hedge Counterparty means PSE&G as hedge counterparty under the Hedge
Agreement.
Hedge Agreement means the ISDA Master Agreement and the related
Schedule and Confirmations, each dated January 5, 2001 between PSE&G
and the Issuer, as same may be amended or supplemented from time to
time.
Holder or Transition Bondholder means the Person in whose name a
Transition Bond of any Series or Class is registered in the Transition
Bond Register.
Indemnification Event means an event which triggers PSE&G's obligation
to indemnify the Issuer and the Trustee, for itself and on behalf of
the Transition Bondholders, and each of their respective managers,
officers, directors and agents, pursuant to Section 5.01 of the Sale
Agreement.
Indemnity Amount means the amount of any indemnification obligation
payable under the Basic Documents.
Indenture means the Indenture dated as of January 31, 2001, between
the Issuer and the Trustee, as the same may be amended and
supplemented from time to time by one or more Supplemental Indentures,
and shall include each Series Supplement and the forms and terms of
the Transition Bonds established thereunder.
Independent means, when used with respect to any specified Person,
that the Person
(a) is in fact independent of the Issuer, any other obligor upon
the Transition Bonds, PSE&G 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, PSE&G or any Affiliate of any of the foregoing
Persons, and
(c) is not connected with the Issuer, any such other obligor,
PSE&G or any Affiliate of any of the foregoing Persons as an
officer, employee, promoter, underwriter, trustee, partner,
director or person performing similar functions.
Independent Certificate means a certificate or opinion to be delivered
to the Trustee under the circumstances described in, and otherwise
complying with, the applicable requirements of Section 11.01 of the
Indenture, made by an Independent appraiser or other expert appointed
by an Issuer Order and approved by the Trustee in the exercise of
reasonable care, and such opinion or certificate shall state that the
signer has read the definition of "Independent" in this Appendix A and
that the signer is Independent within the meaning thereof.
Independent Manager has the meaning set forth in the Issuer LLC
Agreement.
Initial Purchase Price has the meaning set forth in Section 2.01 of
the Sale Agreement.
Initial Transfer Date means the Series Issuance Date for the first
Series of Transition Bonds.
Initial Transferred Bondable Transition Property means the Bondable
Transition Property sold by the Seller to the Issuer as of the Initial
Transfer Date pursuant to the Sale Agreement and the Xxxx of Sale
delivered on or prior to the Initial Transfer Date as identified in
such Xxxx of Sale.
Insolvency Event means, with respect to a specified Person,
(a) the filing of a decree or order for relief by a court having
jurisdiction in the premises in respect of such Person or
any substantial part of its property in an involuntary case
under any applicable Federal or State bankruptcy, insolvency
or other similar law now or hereafter in effect, or
appointing a receiver, liquidator, assignee, custodian,
trustee, sequestrator or similar official for such Person or
for any substantial part of its property, or ordering the
winding-up or liquidation of such Person's affairs, and such
decree or order shall remain unstayed and in effect for a
period of 90 consecutive days or
(b) the commencement by such Person of a voluntary case under
any applicable Federal or State bankruptcy, insolvency or
other similar law now or hereafter in effect, or the consent
by such Person to the entry of an order for relief in an
involuntary case under any such law, or the consent by such
Person to the appointment of or taking possession by a
receiver, liquidator, assignee, custodian, trustee,
sequestrator or similar official for such Person or for any
substantial part of its property, or the making by such
Person of any general assignment for the benefit of
creditors, or the failure by such Person generally to pay
its debts as such debts become due, or the taking of action
by such Person in furtherance of any of the foregoing.
Interest means, for any Payment Date for any Series or Class of
Transition Bonds, the sum, without duplication, of:
(a) an amount equal to the amount of interest accrued at
the applicable Interest Rate from the prior Payment
Date with respect to that Series or Class;
(b) any unpaid interest, to the extent permitted by law,
plus any interest accrued on this unpaid interest at
the applicable Interest Rate, to the extent permitted
by applicable law;
(c) if the Transition Bonds have been declared due and
payable, all accrued and unpaid interest thereon; and
(d) with respect to a Series or Class to be redeemed prior
to the next Payment Date, the amount of interest that
will be payable as interest on such Series or Class
upon such redemption.
Interest Rate means, with respect to each Series or Class of
Transition Bonds, 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.
Interest Rate Swap Agreement means any ISDA Master Agreement, together
with the related Schedule and Confirmation, between the Issuer and a
Swap Counterparty, as same may be amended or supplemented from time to
time, with respect to any Series or Class of Transition Bonds.
Issuer means PSE&G Transition Funding LLC, a Delaware limited
liability company, or its successor under the Indenture or the party
named as such in the Indenture until a successor replaces it and,
thereafter, means the successor.
Issuer Annex means Annex 1 of the Servicing Agreement.
Issuer Certificate of Formation means the Amended and Restated
Certificate of Formation of the Issuer, dated January 25, 2001, which
was filed with the Delaware Secretary of State's Office on January 26,
2001, as the same may be amended or supplemented from time to time.
Issuer LLC Agreement means the Amended and Restated Limited Liability
Company Agreement between the Issuer and PSE&G, as sole Member, dated
as of January 31, 2001, as the same may be amended or supplemented
from time to time.
Issuer Officer's Certificate means a certificate signed by any
Authorized Officer of the Issuer, under the circumstances described
in, and otherwise complying with, the applicable requirements of
Section 11.01 of the Indenture, and delivered to the Trustee. Unless
otherwise specified, any reference in the Indenture to an Officer's
Certificate shall be to an Officer's Certificate of any Authorized
Officer of the Issuer.
Issuer Opinion of Counsel means one or more written opinions of
counsel who may, except as otherwise expressly provided in the
Indenture, be employees of or counsel to the Issuer or the Seller and
who shall be reasonably satisfactory to the Trustee, and which opinion
or opinions shall be addressed to the Trustee, and shall be in a form
reasonably satisfactory to the Trustee.
Issuer Order or Issuer Request means a written order or request,
respectively, signed in the name of the Issuer by any one of its
Authorized Officers and delivered to the Trustee.
Legal Defeasance Option has the meaning specified in Section 4.01(b)
of the Indenture.
Lien means a security interest, lien, charge, pledge, equity or
encumbrance of any kind.
Losses means collectively, any and all liabilities, obligations,
losses, damages, payments, costs or expenses of any kind whatsoever.
Manager has the meaning set forth in the Issuer LLC Agreement.
Market Transition Charge means the market transition charge that PSE&G
may impose on Customers pursuant to the Competition Act and the
Restructuring Order.
Member means PSE&G, as the sole member of the Issuer, in its capacity
as such member under the Issuer LLC Agreement.
Monthly Reconciliation Date means the last Business Day of each month
commencing with November 2014 (or such earlier month as the Servicer
shall have specified to the Issuer and the Trustee by not less than 30
days prior written notice).
Monthly Remittance Date means the 13th day of each calendar month (or
if such day is not a Business Day, the preceding Business Day)
beginning in March 2001.
Monthly Servicing Fee means the fee payable to the Servicer on a
monthly basis for services rendered, in accordance with Section 5.07
of the Servicing Agreement.
Moody's means Xxxxx'x Investors Service, Inc., or its successor.
MTC-Tax means the tax which PSE&G is entitled to impose under the
Restructuring Order.
New Jersey UCC means the Uniform Commercial Code, as in effect in the
State of New Jersey, as amended from time to time.
Officers' Certificate means a certificate signed by
(a) the chairman of the board, the president, the vice chairman
of the board, any executive vice president or any vice
president; and
(b) the treasurer, any assistant treasurer, the secretary or any
assistant secretary of PSE&G.
Operating Expenses means, with respect to the Issuer, all fees, costs,
expenses and indemnity payments owed by the Issuer, including, without
limitation, all amounts owed by the Issuer to the Trustee, the Monthly
Servicing Fee, the fees and expenses payable by the Issuer to the
Administrator under the Administration Agreement, the fees and
expenses payable by the Issuer to the Independent Managers and Special
Members of the Issuer, fees of the Rating Agencies, legal fees and
expenses of the Servicer pursuant to Section 3.10 of the Servicing
Agreement, legal and accounting fees, costs and expenses of the
Issuer, and legal, accounting or other fees, costs and expenses of the
Seller (including, without limitation, any costs and expenses incurred
by the Seller pursuant to Section 4.08 of the Sale Agreement) under or
in connection with the Basic Documents or the Financing Order.
Opinion of Counsel means one or more written opinions of counsel who
may be an employee of or counsel to PSE&G, the Issuer or any other
Person (as the context may require), which counsel shall be reasonably
acceptable to the Trustee, the Issuer or the Rating Agencies, as
applicable, and which shall be in form reasonably satisfactory to the
Trustee, if applicable.
Outstanding with respect to Transition Bonds means, as of the date of
determination, all Transition Bonds theretofore authenticated and
delivered under the Indenture except:
(a) Transition Bonds theretofore canceled by the Transition Bond
Registrar or delivered to the Transition Bond Registrar for
cancellation;
(b) Transition Bonds or portions thereof the payment for which
money in the necessary amount has been theretofore deposited
with the 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 the Indenture or
provision therefor, satisfactory to the Trustee, made; and
(c) Transition Bonds in exchange for or in lieu of other
Transition Bonds which have been authenticated and delivered
pursuant to the Indenture unless proof satisfactory to the
Trustee is presented that any such Transition Bonds are held
by a protected 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, PSE&G or any Affiliate of any of the foregoing
Persons shall be disregarded and deemed not to be Outstanding, except
that, in determining whether the Trustee shall be protected in relying
upon any such request, demand, authorization, direction, notice,
consent or waiver, only Transition Bonds that the 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 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, PSE&G or any Affiliate of any of the foregoing Persons.
Outstanding Amount means the aggregate principal amount of all
Outstanding Transition Bonds or, if the context requires, all
Outstanding 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 Scheduled
Overcollateralization Level for such Payment Date.
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) of the Indenture.
Paying Agent means the Trustee or any other Person, including any
Person appointed pursuant to Section 3.02(b) of the Indenture, that
meets the eligibility standards for the Trustee specified in Section
6.11 of the Indenture and is authorized by the Issuer to make the
payments of principal of or premium, if any, or interest on the
Transition Bonds on behalf of the Issuer.
Payment Date means, with respect to each Series or Class of Transition
Bonds, each date or dates respectively 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, limited liability company,
unincorporated organization or government or any agency or political
subdivision thereof.
Petition means the petition filed by PSE&G with the BPU, dated June 8,
1999.
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 of the
Indenture 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.
Principal means, with respect to any Payment Date and each Series or
Class of Transition Bonds:
(a) the amount of principal scheduled to be paid on such Payment
Date in accordance with the Expected Amortization Schedule;
(b) the amount of principal due on the Final Maturity Date of
any Series or Class on such Payment Date;
(c) the amount of principal due as a result of the occurrence
and continuance of an Event of Default and acceleration of
the Transition Bonds;
(d) the amount of principal and premium, if any, due as a result
of a redemption of Transition Bonds on such Payment Date;
and
(e) any overdue payments of principal.
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 as of such date.
PSE&G means Public Service Electric and Gas Company, a New Jersey
corporation, or its successor.
Rating Agency means, as of any date, 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 Trustee, the Member and the
Servicer.
Rating Agency Condition means, with respect to any action, the
notification by the Trustee to each Rating Agency of such action and
the notification from each of Fitch and S&P to the Trustee and the
Issuer that such action will not result in a reduction or withdrawal
of the then current rating by such Rating Agency of any Outstanding
Series or Class of Transition Bonds.
Reconciliation Date means an Annual Reconciliation Date or a Monthly
Reconciliation Date, as appropriate.
Record Date has the meaning set forth in each Supplemental Indenture.
Redemption Date means, with respect to each Series or Class of
Transition Bonds, the date for the redemption of the Transition Bonds
of such Series or Class pursuant to Sections 10.01 or 10.02 of the
Indenture or the Series Supplement for such Series or Class, which in
each case shall be a Payment Date.
Redemption Price has the meaning set forth in Section 10.01 of the
Indenture.
Refunding Issuance means an issuance of a new Series of Transition
Bonds under the Indenture to pay the cost of refunding, through
redemption or payment on the Expected Final Payment Date for a Series
or Class of Transition Bonds, all or part of the Transition Bonds of
such Series or Class to the extent permitted by the terms thereof.
Registered Holder means, as of any date, the Person in whose name a
Transition Bond is registered in the Transition Bond Register on such
date.
Released Parties has the meaning specified in Section 5.02(f) of the
Servicing Agreement.
Remittance Date means a Daily Remittance Date or a Monthly Remittance
Date, as applicable.
Required Capital Amount means with respect to any Series, the amount
required to be deposited in the Capital Subaccount on the Series
Issuance Date of such Series, as specified in the related Series
Supplement.
Reserve Subaccount has the meaning specified in Section 8.02(a) of the
Indenture.
Responsible Officer means, with respect to the Trustee, any officer
within the Corporate Trust Office of the Trustee, including any vice
president, assistant vice president, secretary, assistant secretary,
or any other officer of the Trustee customarily performing functions
similar to those performed by any of the 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.
Restructuring Order means the order of the BPU issued on August 24,
1999 pursuant to Section 13 of the Competition Act.
Retiring Trustee means a Trustee that resigns or vacates the office of
Trustee for any reason.
Sale Agreement means the Bondable Transition Property Sale Agreement
dated January 31, 2001 between the Seller and the Issuer, as the same
may be amended or supplemented from time to time.
Scheduled Overcollateralization Level means, with respect to each
Series and any Payment Date, the amount with respect to such Series
set forth as such in Schedule 1 of the Indenture, as such Schedule has
been adjusted in accordance with Section 3.19 of the Indenture to
reflect redemptions or defeasances of Transition Bonds and issuances
of additional Series of Transition Bonds.
Securities Account Control Agreement means the securities account
control agreement by and between PSE&G Transition Funding LLC, as
debtor, the Trustee as the Secured Party and The Bank of New York, in
its capacity as securities intermediary thereunder.
Seller means PSE&G, in its capacity as seller of the Bondable
Transition Property to the Issuer pursuant to the Sale Agreement.
Series means any series of Transition Bonds issued by the Issuer and
authenticated by the Trustee pursuant to the Indenture, as specified
in the Series Supplement therefor.
Series Capital Subaccount has the meaning specified in Section 8.02(a)
of the Indenture.
Series Final Maturity Date means the Final Maturity Date for a Series.
Series Issuance Date means, with respect to any Series, the date on
which the Transition Bonds of such Series are to be originally issued
in accordance with Section 2.10 of the Indenture and the Series
Supplement for such Series.
Series Overcollateralization Subaccount has the meaning specified in
Section 8.02(a) of the Indenture.
Series Subaccount has the meaning specified in Section 8.02(a) of the
Indenture.
Series Supplement means an indenture supplemental to the Indenture
that authorizes a particular Series of Transition Bonds, as the same
may be amended or supplemented from time to time.
Servicer means PSE&G, as the servicer of the Bondable Transition
Property, and each successor to PSE&G (in the same capacity) pursuant
to Section 5.03 or 6.04 of the Servicing Agreement.
Servicer Default means an event specified in Section 6.01 of the
Servicing Agreement.
Servicing Agreement means the Servicing Agreement dated as of January
31, 2001, between the Issuer and the Servicer, as the same may be
amended and supplemented from time to time.
Special Member has the meaning set forth in the Issuer LLC Agreement.
Standard & Poor's, or S&P, means Standard & Poor's Ratings Group, a
division of The XxXxxx-Xxxx Companies, or its successor.
State means any one of the 50 states of the United States of America
or the District of Columbia.
Subaccount means any of the subaccounts of the Collection Account
specified in Section 8.02 of the Indenture.
Subsequent Sale means the sale of additional Bondable Transition
Property by the Seller to the Issuer after the Initial Transfer Date,
subject to the satisfaction of the conditions specified in the Sale
Agreement and the Indenture.
Subsequent Transfer Date means the date that a sale of Subsequent
Transferred Bondable Transition Property will be effective, as
specified in a written notice provided by the Seller to the Issuer
pursuant to the Sale Agreement.
Subsequent Transferred Bondable Transition Property means Bondable
Transition Property sold by the Seller to the Issuer as of a
Subsequent Transfer Date pursuant to the Sale Agreement and the Xxxx
of Sale delivered on or prior to the Subsequent Transfer Date as
identified in such Xxxx of Sale.
Successor Servicer means a successor Servicer appointed by the Trustee
pursuant to Section 6.04 of the Servicing Agreement which succeeds to
all the rights and duties of the Servicer under the Servicing
Agreement.
Supplemental Indenture means a supplemental indenture entered into by
the Issuer and the Trustee pursuant to Article IX of the Indenture.
Swap Counterparty means, with respect to any Interest Rate Swap
Agreement, the swap counterparty under that Interest Rate Swap
Agreement.
TBC Collections means amounts received by the Servicer in respect of
the Transition Bond Charge.
Termination Notice has the meaning specified in Section 6.01 of the
Servicing Agreement.
Third Party means any third party, including any electric generation
supplier, providing billing or metering services, licensed by the BPU
pursuant to relevant provisions of the Competition Act, the BPU
Regulations and the Financing Order.
Transfer Date means the Initial Transfer Date or any Subsequent
Transfer Date, as applicable.
Transferred Bondable Transition Property means Bondable Transition
Property which has been sold, assigned and transferred to the Issuer
pursuant to the Sale Agreement.
Transition Bond means any of the transition bonds (as defined in the
Competition Act) issued by the Issuer pursuant to the Indenture.
Transition Bond Balance means, as of any date, the aggregate
Outstanding Amount of all Series of Transition Bonds on such date.
Transition Bond Charge means the Transition Bond Charge authorized by
the BPU to be imposed on all Customers by PSE&G or its successor to
recover Bondable Stranded Costs pursuant to the Competition Act and
the Financing Order.
Transition Bond Charge Adjustment means each adjustment to the
Transition Bond Charge related to the Transferred Bondable Transition
Property made in accordance with Section 4.01 of the Servicing
Agreement and the Issuer Annex.
Transition Bond Charge Adjustment Process means the process by which
the Transition Bond Charge is adjusted pursuant to the Servicing
Agreement, the Competition Act, the Petition and the Financing Order.
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 has the meaning specified in Section 2.05(a)
of the Indenture.
Transition Bond Registrar has the meaning specified in Section 2.05(a)
of the Indenture.
Trust Indenture Act or TIA means the Trust Indenture Act of 1939, as
in force on the date hereof, unless otherwise specifically provided.
Trustee means The Bank of New York, a New York banking corporation, or
its successor, as trustee under the Indenture and in the capacity
specified in the first paragraph of the Indenture, or any successor
Trustee under the Indenture.
Underwriting Agreement means the Underwriting Agreement dated as of
January 25, 2001, among the Seller, the Issuer and Xxxxxx Brothers,
Inc., on behalf of itself and as the representative of the several
underwriters named therein.
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.
SCHEDULE I
SCHEDULED OVERCOLLATERALIZATION LEVELS
