SERIES SUPPLEMENT
Exhibit
4.2
EXECUTION
COPY
This
SERIES SUPPLEMENT dated as of June 29, 2007 (this “Series Supplement”),
by and between RSB BONDCO LLC, a limited liability company formed under the
laws
of the State of Delaware (the “Issuer”), and DEUTSCHE BANK TRUST COMPANY
AMERICAS, a New York banking corporation (“Deutsche Bank”), in its capacity as
indenture trustee (the “Indenture Trustee”) for the benefit of the
Secured Parties under the Indenture dated as of June 29, 2007, by and between
the Issuer and Deutsche Bank, in its capacity as Indenture Trustee and in
its
separate capacity as a securities intermediary (the
“Indenture”).
PRELIMINARY
STATEMENT
Section
2.02 of the Indenture provides, among other things, that the Issuer and the
Indenture Trustee may at any time and from time to time enter into one or
more
Series Supplements for the purposes of authorizing the issuance by the Issuer
of
a Series of Rate Stabilization Bonds and establishing the terms
thereof. The Issuer has duly authorized the creation of a Series of
Rate Stabilization Bonds with an initial aggregate principal amount of
$623,200,000 to be known as RSB BondCo LLC Rate Stabilization Bonds, Series
A
(the “Series A Rate Stabilization Bonds”), and the Issuer and the
Indenture Trustee are executing and delivering this Series Supplement in
order
to provide for the creation of the Series A Rate Stabilization
Bonds.
All
terms
used in this Series Supplement that are defined in the Indenture, either
directly or by reference therein, have the meanings assigned to them therein,
except to the extent such terms are defined or modified in this Series
Supplement or the context clearly requires otherwise. In the event
that any term or provision contained herein shall conflict with or be
inconsistent with any term or provision contained in the Indenture, the terms
and provisions of this Series Supplement shall govern.
GRANTING
CLAUSE
With
respect to the Series A Rate Stabilization Bonds, the Issuer hereby Grants
to
the Indenture Trustee, as Indenture Trustee for the benefit of the Secured
Parties of the Series A Rate Stabilization Bonds, all of the Issuer’s right,
title and interest (whether now owned or hereafter acquired or arising) in
and
to the following (collectively, the “Series A Rate Stabilization Bond
Collateral”): (a) the Rate Stabilization Property created under and pursuant
to the Applicable Qualified Rate Order, and transferred by the Seller to
the
Issuer pursuant to the Sale Agreement (including, to the fullest extent
permitted by law, the right to impose, collect and receive Qualified Rate
Stabilization Charges, all revenues, collections, claims, rights, payments,
money or proceeds of or arising from the Qualified Rate Stabilization Charges
authorized in the Applicable Qualified Rate Order and any Tariffs filed pursuant
thereto and any contractual rights to collect such Qualified Rate Stabilization
Charges from Customers and Third-Party Collectors), (b) all Qualified Rate
Stabilization Charges related to such Rate Stabilization Property, (c) the
Sale
Agreement and each Xxxx of Sale executed in connection therewith and all
property and interests in property transferred under the Sale Agreement and
such
Bills of Sale with respect to
such
Rate
Stabilization Property and the Series A Rate Stabilization Bonds, (d) the
Servicing Agreement, the Administration Agreement and any subservicing, agency,
administration, collection or other agreements executed in connection therewith,
to the extent related to the foregoing Rate Stabilization Property and the
Series A Rate Stabilization Bonds, (e) the Collection Account for such Series,
all subaccounts thereof and all amounts of cash, instruments, investment
property or other assets on deposit therein or credited thereto from time
to
time and all financial assets and securities entitlements carried therein
or
credited thereto, (f) all rights to compel the Servicer to file for and obtain
adjustments to the Qualified Rate Stabilization Charges in accordance with
Section 7-531 of the Rate Stabilization Law, the Applicable Qualified Rate
Order
or any Tariff filed in connection therewith, (g) all deposits, guarantees,
surety bonds, letters of credit and other forms of credit support provided
by or
on behalf of Third-Party Collectors pursuant to such Applicable Qualified
Rate
Order or Tariff, including investment earnings thereon and all amounts on
deposit in the TPC Deposit Accounts, (h) all present and future
claims, demands, causes and choses in action in respect of any or all of
the
foregoing, whether such claims, demands, causes and choses in action constitute
Rate Stabilization Property, accounts, general intangibles, instruments,
contract rights, chattel paper or proceeds of such items or any other form
of
property, (i) all accounts, chattel paper, deposit accounts, documents, general
intangibles, goods, instruments, investment property, letters of credit,
letters-of-credit rights, money, commercial tort claims and supporting
obligations related to the foregoing, and (j) all payments on or under, and
all
proceeds in respect of, any or all of the foregoing; it being understood that
the following do not constitute Series A Rate Stabilization Bond Collateral:
(i) following retirement of all Outstanding Series of Rate Stabilization
Bonds,
cash that has been released pursuant to Section 8.04(c) of the Indenture,
(ii) amounts deposited with the Issuer on any Series Issuance Date, including
the Closing Date, for payment of costs of issuance with respect to the related
Series (together with any interest earnings thereon) and (iii) the Initial
Capital Contribution by the Member to the Issuer pursuant to Section 2.01
of the LLC Agreement, it being understood that such amounts described in
clauses (i),(ii) and (iii) above shall not be subject to
Section 3.17 of the Indenture.
The
foregoing Grant is made in trust to secure the payment of principal of and
premium, if any, interest on, and any other amounts owing in respect of,
the
Series A Rate Stabilization Bonds and all fees, expenses, counsel fees and
expenses and other amounts due and payable to the Indenture Trustee
(collectively, the “Secured Obligations”) equally and ratably without
prejudice, priority or distinction, except as expressly provided in the
Indenture, to secure compliance with the provisions of the Indenture with
respect to the Series A Rate Stabilization Bonds, all as provided in the
Indenture and to secure the performance by the Issuer of all of its obligations
under the Indenture. The Indenture and this Series Supplement
constitutes a security agreement within the meaning of the Rate Stabilization
Law and under the UCC to the extent that the provisions of the UCC are
applicable hereto. In addition, the Issuer shall cause the filing of
one or more financing statements to evidence the security interest of the
Indenture Trustee in the Series A Rate Stabilization Bond
Collateral.
The
Indenture Trustee, as indenture trustee on behalf of the Secured Parties
of the
Series A Rate Stabilization Bonds, acknowledges such Grant and accepts the
trusts under this Series Supplement and the Indenture in accordance with
the
provisions of this Series Supplement and the Indenture.
2
SECTION
1. Designation. The Series A Rate Stabilization Bonds
shall be designated generally as the Rate Stabilization Bonds, Series A and
further denominated as Tranches A-1 through A-3.
SECTION
2. Initial Principal Amount; Rate Stabilization Bond Interest Rate;
Scheduled Final Payment Date; Final Maturity Date. The Series A
Rate Stabilization Bonds of each Tranche shall have the initial principal
amount, bear interest at the rates per annum (as to each Tranche, the “Rate
Stabilization Bond Interest Rate”) and shall have the Scheduled Final
Payment Dates and the Final Maturity Dates set forth below:
|
Tranche
|
Initial
Principal
Amount
|
Rate
Stabilization
Bond
Interest
Rate
|
Scheduled
Final
Payment
Date
|
Final
Maturity
Date
|
|
Tranche
A-1
|
$284,000,000
|
5.47%
|
10/1/2012
|
10/1/2014
|
|
Tranche
A-2
|
$220,000,000
|
5.72%
|
4/1/2016
|
4/1/2018
|
|
Tranche
A-3
|
$119,200,000
|
5.82%
|
4/1/2017
|
6/28/2019
|
The
Rate
Stabilization Bond Interest Rate shall be computed on the basis of a 360-day
year of twelve (12) 30-day months.
SECTION
3. Authentication Date; Payment Dates; Expected Amortization
Schedule for Principal; Periodic Interest; No Premium; Other
Terms.
(a) Authentication
Date. The Series A Rate Stabilization Bonds that are
authenticated and delivered by the Indenture Trustee to or upon the order
of the
Issuer on June 29, 2007 (the “Series Issuance Date”) shall have as their
date of authentication June 29, 2007.
(b) Payment
Dates. The Payment Dates for the Series A Rate Stabilization
Bonds are April 1 and October 1 of each year or, if any such date is not
a
Business Day, the following Business Day, commencing on April 1, 2008 and
continuing until the earlier of repayment of the Series A, Tranche A-3 Rate
Stabilization Bonds in full and the Final Maturity Date for the Series A,
Tranche A-3 Rate Stabilization Bonds.
(c) Expected
Amortization Schedule for Principal. Unless an Event of Default
shall have occurred and be continuing on each Payment Date, the Indenture
Trustee shall distribute to the Holders of record as of the related Record
Date
amounts payable pursuant to Section 8.02(e) of the Indenture as
principal, in the following order and priority: (1) to the holders of the
Tranche A-1 Rate Stabilization Bonds, until the Outstanding Amount of such
Tranche of Rate Stabilization Bonds thereof has been reduced to zero; (2)
to the
holders of the Tranche A-2 Rate Stabilization Bonds, until the Outstanding
Amount of such Tranche of Rate Stabilization Bonds thereof has been reduced
to
zero; and (3) to the holders of the Tranche A-3 Rate Stabilization Bonds,
until
the Outstanding Amount of such Tranche of Rate Stabilization Bonds thereof
has
been reduced to zero; provided, however, that in no event shall a
principal payment pursuant to this Section 3(c) on any Tranche on a
Payment Date be greater than the amount necessary to reduce the Outstanding
Amount of such Tranche of Rate Stabilization
3
Bonds
to
the amount specified in the Expected Amortization Schedule which is attached
as
Schedule A hereto for such Tranche and Payment Date.
(d) Periodic
Interest. Periodic Interest will be payable on each Tranche of
the Series A Rate Stabilization Bonds on each Payment Date in an amount equal
to
one-half of the product of (i) the applicable Rate Stabilization Bond Interest
Rate and (ii) the Outstanding Amount of the related Tranche of Series A Rate
Stabilization Bonds as of the close of business on the preceding Payment
Date
(or, with respect to the Initial Payment Date, the Outstanding Amount of
the
related Tranche of Series A Rate Stabilization Bonds on the Series Issuance
Date) after giving effect to all payments of principal made to the Holders
of
the related Tranche of Series A Rate Stabilization Bonds on such preceding
Payment Date.
(e) Book-Entry
Rate Stabilization Bonds. The Series A Rate Stabilization Bonds
shall be Book-Entry Rate Stabilization Bonds and the applicable provisions
of
Section 2.11 of the Indenture shall apply to such Rate Stabilization
Bonds.
(f) Waterfall
Caps.
(i) The
amount payable with respect to the Series A Rate Stabilization Bonds pursuant
to
Section 8.02(e)(i) of the Indenture shall not exceed $850,000
annually.
(ii) The
amount payable with respect to the Series A Rate Stabilization Bonds pursuant
to
Section 8.02(e)(ii) of the Indenture shall not exceed on an annual basis
(A) for so long as BGE is the Servicer, 0.05% of the aggregate initial principal
amount of Series A Rate Stabilization Bonds, provided that BGE may seek
approval from the PSC to recover from Customers, in accordance with the
Financing Credit Order, any incremental costs it incurs to service the Rate
Stabilization Property to the extent such incremental costs exceed 0.05%
of the
aggregate initial principal amount of Series A Rate Stabilization Bonds,
and
furtherprovided that such excess amount shall neither be
considered an Operating Expense nor be paid out of the Collection Account
or
included in the calculation of True-Up Adjustments, or (B) if BGE is not
the
Servicer, 1.25% of the aggregate initial principal amount of Series A Rate
Stabilization Bonds, provided, however, that BGE may seek approval
from the PSC for a higher fee to be payable under Section 8.02(e)(ii) of
the Indenture if it can reasonably demonstrate to the PSC that the services
cannot be obtained under then-current market conditions for a fee of 1.25%
of
the aggregate initial principal amount of Series A Rate Stabilization
Bonds.
(iii) The
amount payable for the Series A Rate Stabilization Bonds pursuant to Section
8.02(e)(iii) of the Indenture, shall not exceed $100,000 in the aggregate
annually, provided that BGE may seek approval from the PSC to recover
from Customers, in accordance with the Financing Credit Order, any incremental
costs it incurs to provide administrative support services to the Issuer
to the
extent such incremental costs exceed $100,000, and furtherprovided
that such excess amount shall neither be considered an Operating Expense
nor be
paid out of the Collection Account or included in the calculation of True-Up
Adjustments.
4
(iv) The
amount payable with respect to the ordinary periodic Operating Expenses not
described above pursuant to Section 8.02(e)(iv) shall not exceed $250,000
in the aggregate annually.
SECTION
4. Minimum Denominations. The Series A Rate
Stabilization Bonds shall be issuable in the Minimum Denomination and in
integral multiples of $1,000 thereof.
SECTION
5. Certain Defined Terms. Article I of the
Indenture provides that the meanings of certain defined terms used in the
Indenture shall, when applied to the Rate Stabilization Bonds of a particular
Series, be as defined in Appendix A to the
Indenture. Additionally, Article II of the Indenture provides
that with respect to a particular Series of Rate Stabilization Bonds, certain
terms will have the meanings specified in the related Series
Supplement. With respect to the Series A Rate Stabilization Bonds,
the following definitions shall apply:
“Initial
Payment Date” shall mean the first Payment Date for a Tranche
of Series A Rate Stabilization Bonds specified in the Expected
Amortization Schedule which is attached as Schedule A
hereto.
“Minimum
Denomination” shall mean $100,000, or integral multiples of $1,000 in excess
thereof, except for one Rate Stabilization Bond of each Tranche which may
be of
a smaller denomination.
“Rate
Stabilization Bond Interest Rate” has the meaning set forth in Section
2 of this Series Supplement.
“Payment
Date” has the meaning set forth in Section 3(b) of this Series
Supplement.
“Periodic
Interest” has the meaning set forth in Section 3(d) of this Series
Supplement.
“Series
Issuance Date” has the meaning set forth in Section 3(a) of this
Series Supplement.
SECTION
6. Delivery and Payment for the Series A Rate Stabilization Bonds;
Form of the Series A Rate Stabilization Bonds. The
Indenture Trustee shall deliver the Series A Rate Stabilization Bonds to
the
Issuer when authenticated in accordance with Section 2.03 of the
Indenture. The Series A Rate Stabilization Bonds of each
Tranche shall be in the form of Exhibits A-1 through A-3 hereto.
SECTION
7. Ratification of Agreement. As supplemented by
this Series Supplement, the Indenture is in all respects ratified and confirmed
and the Indenture, as so supplemented by this Series Supplement, shall be
read,
taken, and construed as one and the same instrument. This Series
Supplement amends, modifies and supplements the Indenture only in so far
as it
relates to the Series A Rate Stabilization Bonds.
5
SECTION
8. Counterparts. This Series Supplement may be
executed in any number of counterparts, each of which when so executed shall
be
deemed to be an original, but all of such counterparts shall together constitute
but one and the same instrument.
SECTION
9.
GOVERNING LAW. THIS SERIES SUPPLEMENT SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT
REFERENCE TO ITS CONFLICT OF LAW PROVISIONS (OTHER THAN SECTION 5-1401 OF
THE
NEW YORK GENERAL OBLIGATIONS LAW), AND THE OBLIGATIONS, RIGHTS AND REMEDIES
OF
THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS; PROVIDED
THAT THE CREATION, ATTACHMENT AND PERFECTION OF ANY LIENS CREATED UNDER THE
INDENTURE IN RATE STABILIZATION PROPERTY, AND ALL RIGHTS AND REMEDIES OF
THE
INDENTURE TRUSTEE AND THE HOLDERS WITH RESPECT TO SUCH RATE STABILIZATION
PROPERTY, SHALL BE GOVERNED BY THE LAWS OF THE STATE OF MARYLAND.
SECTION
10. Issuer Obligation. No recourse may be taken
directly or indirectly, by the Holders with respect to the obligations of
the
Issuer on the Rate Stabilization Bonds, under the Indenture or under this
Series
Supplement or any certificate or other writing delivered in connection herewith
or therewith, against (i) the Indenture Trustee or the Managers in their
respective individual capacities, (ii) any owner of a limited liability company
interest in the Issuer (including BGE) or (iii) any shareholder, partner,
owner,
beneficiary, agent, officer, director, employee or agent of the Indenture
Trustee, the Managers or any owner of a limited liability company interest
in
the Issuer (including BGE) in its individual capacity, or of any successor
or
assign of any of them in their respective individual or corporate capacities,
except as any such Person may have expressly agreed (it being understood
that
none of the Indenture Trustee, the Managers and BGE have any such obligations
in
their respective individual or corporate capacities).
6
IN
WITNESS WHEREOF, the Issuer and the Indenture Trustee have caused this Series
Supplement to be duly executed by their respective officers thereunto duly
authorized as of the first day of the month and year first above
written.
|
RSB
BONDCO LLC, as Issuer
|
||
|
By:
|
/s/ Xxxxxxx X. Xxxxxxxxxx | |
|
Name: Xxxxxxx
X. Xxxxxxxxxx
Title: Secretary
|
||
Issuer
Signature Page to Series Supplement
|
DEUTSCHE
BANK TRUST COMPANY AMERICAS,
not
in its individual capacity but solely in its capacity as Indenture
Trustee
|
||
|
By:
|
/s/ Xxxxxx Xxxxxx | |
|
Name: Xxxxxx
Xxxxxx
Title: Vice
President
|
||
|
By:
|
/s/ Xxxxx Xxxx | |
|
|
Name:
Xxxxx Xxxx
Title:
Vice President
|
|
Trustee
Signature Page to Series Supplement
SCHEDULE
A
EXPECTED
AMORTIZATION SCHEDULE
OUTSTANDING
PRINCIPAL BALANCE PER TRANCHE
|
Payment
Date
|
Tranche
X-0
|
Xxxxxxx
X-0
|
Xxxxxxx
X-0
|
|
Series
Issuance Date
|
$284,000,000
|
$220,000,000
|
$119,200,000
|
|
4/1/2008
|
$250,741,286
|
$220,000,000
|
$119,200,000
|
|
10/1/2008
|
$225,198,598
|
$220,000,000
|
$119,200,000
|
|
4/1/2009
|
$198,590,708
|
$220,000,000
|
$119,200,000
|
|
10/1/2009
|
$171,674,318
|
$220,000,000
|
$119,200,000
|
|
4/1/2010
|
$143,549,922
|
$220,000,000
|
$119,200,000
|
|
10/1/2010
|
$115,131,815
|
$220,000,000
|
$119,200,000
|
|
4/1/2011
|
$85,457,334
|
$220,000,000
|
$119,200,000
|
|
10/1/2011
|
$55,423,848
|
$220,000,000
|
$119,200,000
|
|
4/1/2012
|
$24,142,900
|
$220,000,000
|
$119,200,000
|
|
10/1/2012
|
$0
|
$212,419,156
|
$119,200,000
|
|
4/1/2013
|
$0
|
$179,418,862
|
$119,200,000
|
|
10/1/2013
|
$0
|
$145,855,662
|
$119,200,000
|
|
4/1/2014
|
$0
|
$110,970,180
|
$119,200,000
|
|
10/1/2014
|
$0
|
$75,433,398
|
$119,200,000
|
|
4/1/2015
|
$0
|
$38,549,788
|
$119,200,000
|
|
10/1/2015
|
$0
|
$925,060
|
$119,200,000
|
|
4/1/2016
|
$0
|
$0
|
$81,127,235
|
|
10/1/2016
|
$0
|
$0
|
$41,269,298
|
|
4/1/2017
|
$0
|
$0
|
$0
|
SCHEDULE
A
