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PECO ENERGY TRANSITION TRUST,
Issuer
and
THE BANK OF NEW YORK,
Bond Trustee
------------------------------
SERIES SUPPLEMENT
Dated as of March 25, 1999
------------------------------
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1
SERIES SUPPLEMENT dated as of March 25, 1999 (this
"Supplement"), by and between PECO ENERGY TRANSITION TRUST, a
Delaware statutory business trust (the "Issuer"), and THE BANK OF
NEW YORK, a New York banking corporation (the "Bond Trustee"), as
Bond Trustee under the Indenture dated as of March 1, 1999,
between the Issuer and the Bond Trustee (the "Indenture").
PRELIMINARY STATEMENT
Section 9.01 of the Indenture provides, among other things, that the Issuer
and the Bond Trustee may at any time and from time to time enter into one or
more indentures supplemental to the Indenture for the purposes of authorizing
the issuance by the Issuer of a Series of Transition Bonds and specifying the
terms thereof. The Issuer has duly authorized the execution and delivery of this
Supplement and the creation of a Series of Transition Bonds with an initial
aggregate principal amount of $4,000,000,000 to be known as the Issuer's
Transition Bonds, Series 1999-A (the "Series 1999-A Transition Bonds"). All acts
and all things necessary to make the Series 1999-A Transition Bonds, when duly
executed by the Issuer and authenticated by the Bond Trustee as provided in the
Indenture and this Supplement and issued by the Issuer, the valid, binding and
legal obligations of the Issuer and to make this Supplement a valid and
enforceable supplement to the Indenture have been done, performed and fulfilled
and the execution and delivery hereof have been in all respects duly and
lawfully authorized. The Issuer and the Bond Trustee are executing and
delivering this Supplement in order to provide for the Series 1999-A Transition
Bonds.
In order to secure the payment of principal of and interest on the Series
1999-A Transition Bonds issued and to be issued under the Indenture and/or any
Series Supplement, the Issuer hereby Grants to the Bond Trustee as trustee for
the benefit of the Holders of the Transition Bonds from time to time issued and
outstanding, all of the Issuer's right, title and interest in and to (a) the
Intangible Transition Property transferred by the Seller to the Issuer from time
to time pursuant to the Sale Agreement and all proceeds thereof, (b) the Sale
Agreement except for Section 5.01 thereof solely to the extent such Section
provides for indemnification of the Issuer, (c) all Bills of Sale delivered by
the Seller pursuant to the Sale Agreement, (d) the Servicing Agreement except
for Section 5.02(b)
2
thereof solely to the extent such Section provides for indemnification of the
Issuer, (e) the Collection Account and all amounts on deposit therein from time
to time, (f) all Swap Agreements with respect to the Series 1999-A Transition
Bonds, (g) all other property of whatever kind owned from time to time by the
Issuer including all accounts, accounts receivable and chattel paper, (h) all
present and future claims, demands, causes and choses in action in respect of
any or all of the foregoing and (i) 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").
To have and to hold in trust to secure the payment of principal of and
premium, if any, and interest on, and any other amounts (including all fees,
expenses, counsel fees and other amounts due and owing to the Bond Trustee)
owing in respect of, the Transition Bonds equally and ratably without prejudice,
preference, priority or distinction, except as expressly provided in the
Indenture or any Series Supplement and to secure performance by the Issuer of
all of the Issuer's obligations under the Indenture and all Series Supplements
with respect to the Transition Bonds, all as provided in the Indenture.
The Bond Trustee, as trustee on behalf of the Holders of the Transition
Bonds, acknowledges such Grant, accepts the trusts hereunder in accordance with
the provisions hereof and agrees to perform its duties required in the Indenture
and this Supplement.
SECTION 1. Definitions. (a) Article One of the Indenture provides that the
meanings of certain defined terms used in the Indenture shall, when applied to
the Transition Bonds of a particular Series, be as defined in Article One but
with such additional provisions as are specified in the related Series
Supplement. With respect to the Series 1999-A Transition Bonds, the following
definitions shall apply:
"Adjustment Date" shall mean initially each August 12th, until February 14,
2008 and on such date and thereafter, the 14th day of each month.
3
"Authorized Initial Denominations" shall mean $1,000 and integral multiples
thereof.
"Bond Rate" has the meaning set forth in Section 3 of this Supplement.
"Calculation Date" means initially each May 14th, until January 14, 2008
and on such date and thereafter the 14th day of each month.
"Calculation Period" means the period from and including the preceding
payment date under the applicable Swap Agreement (or, in the case of the first
period, from and including March 25, 1999) to and excluding the next payment
date under such Swap Agreement.
"Class Termination Date" means, with respect to any Class of the Series
1999-A Transition Bonds, the termination date therefor, as specified in Section
3 of this Supplement.
"Expected Amortization Schedule" means Schedule A to this Supplement.
"Expected Final Payment Date" means, with respect to any Class of the
Series 1999-A Transition Bonds, the expected final payment date therefor, as
specified in Section 3 of this Supplement.
"Interest Accrual Period" means, with respect to any Payment Date, the
period from and including the preceding Payment Date (or, in the case of the
first Payment Date, from and including the Series Issuance Date) to and
excluding such Payment Date.
"Interest Determination Date" means, with respect to any payment date under
the applicable Swap Agreement, the day two London Banking Days prior to such
payment date or, in the case of the first payment date, the Series Issuance
Date.
"LIBOR" means LIBOR determined as specified in Section 3(b) of this
Supplement.
"London Banking Day" means any day on which dealings in deposits in U.S.
dollars are transacted in the London interbank market.
"Monthly Allocated Interest Balance" has the meaning set forth in Section
4(e) of this Supplement.
4
"Monthly Allocated Principal Balance" has the meaning set forth in Section
4(e) of this Supplement.
"Overcollateralization Amount" has the meaning set forth in Section 4(e) of
this Supplement.
"Payment Date" has the meaning set forth in Section 4(a) of this
Supplement.
"Record Date" shall mean, with respect to any Payment Date, the close of
business on the day prior to such Payment Date.
"Series Issuance Date" has the meaning set forth in Section 2(b) of this
Supplement.
"Series Termination Date" has the meaning set forth in Section 3 of this
Supplement.
"Servicing Fee Rate" shall mean 0.25% per annum so long as ITC Charges are
included in electric bills otherwise sent to Customers or, if ITC Charges are
not included in such bills, 1.50% per annum.
(b) All terms used in this Supplement that are defined in the Indenture,
either directly or by reference therein, have the meanings assigned to them
therein, except to the extent such terms are defined or modified in this
Supplement or the context clearly requires otherwise.
SECTION 2. Designation; Series Issuance Dates. (a) Designation. The Series
1999-A Transition Bonds shall be designated generally as the Issuer's Transition
Bonds, Series 1999-A and further denominated as Classes A-1 through A-7.
(b) Series Issuance Date. The Series 1999-A Transition Bonds that are
authenticated and delivered by the Bond Trustee to or upon the order of the
Issuer on March 25, 1999 (the "Series Issuance Date") shall have as their date
of authentication March 25, 1999. Each other Series 1999-A Transition Bond shall
be dated the date of its authentication.
SECTION 3. Initial Principal Amount; Bond Rate; Expected Final Payment
Date; Series Termination Date; Class Termination Dates; Determination of LIBOR;
Calculation of Interest Due. (a) The Transition Bonds of each Class of the
Series 1999-A Transition Bonds shall have the initial principal amounts, bear
interest at the rates per annum and
5
shall have Expected Final Payment Dates and Class Termination Dates as set forth
below:
Initial
Principal Bond Expected Final Class
Class Amount Rate Payment Date Termination Date
----- ------ ---- ------------ ----------------
A-1 244,470,272 5.48% Xxxxx 0, 0000 Xxxxx 1, 2003
A-2 275,371,325 5.63% Xxxxx 0, 0000 Xxxxx 1, 2005
A-3 667,000,000 LIBOR + 0.125% Xxxxx 0, 0000 Xxxxx 1, 2006
A-4 458,518,647 5.80% Xxxxx 0, 0000 Xxxxx 1, 2007
A-5 464,600,000 LIBOR + 0.200% September 1, 2007 March 1, 2009
A-6 993,386,331 6.05% Xxxxx 0, 0000 Xxxxx 1, 2009
A-7 896,653,425 6.13% September 1, 2008 March 1, 2009
The Bond Rate for Classes X-0, X-0, X-0, X-0 and A-7 shall be computed on
the basis of a 360-day year of twelve 30-day months. The Bond Rate for Classes
A-3 and A-5 shall be computed on the basis of the actual number of days from the
preceding Payment Date, to but excluding the next Payment Date, divided by 360,
for so long as the related Swap Agreement is in effect and any payments due
thereunder from the applicable Counterparty are being received by the Issuer and
otherwise on the basis of a 360-day year of twelve 30-day months at a Bond Rate
for Classes A-3 and A-5 of 6.577% and 6.9425%, respectively. In the event that a
Swap Agreement terminates, the Bond Rate for the affected Class shall
permanently convert to the applicable foregoing rate.
(b) Determination of LIBOR. So long as the Swap Agreement related to
Classes A-3 or A-5, as applicable, is in effect and any payments due thereunder
from the applicable Counterparty are being received by the Issuer, the
applicable Counterparty will determine LIBOR for the Calculation Period
corresponding to each Interest Accrual Period and provide such calculation to
the Servicer for use in calculating the Bond Rate for Classes A-3 and A-5 as
applicable in accordance with the following provisions:
(i) On the Interest Determination Date immediately preceding the first
day of each Calculation Period, each Counterparty will determine LIBOR
based on the offered rate for deposits in U.S. dollars for the six-month
period commencing on the first day of such Calculation Period that appears
on the page
6
USD-LIBOR-BBA, of the Dow Xxxxx Telerate Service as of 11:00 a.m., London
time, on such Interest Determination Date (such display page being the
"Telerate Page"). Notwithstanding the foregoing, if no offered rate
appears, LIBOR for such Calculation Period will be determined as described
in clause (ii) below.
(ii) With respect to an Interest Determination Date on which no
offered rate appears on the Telerate Page, each Counterparty will request
the principal London office of each of four major banks in the London
interbank market, selected by such Counterparty, to provide such
Counterparty with its offered quotation for six-month deposits in U.S.
dollars for the applicable Calculation Period, commencing on the second
London Banking Day immediately following such Interest Determination Date,
to prime banks in the London interbank market at approximately 11:00 a.m.,
London time, on such Interest Determination Date and in a principal amount
that is representative for a single transaction in U.S. dollars in such
market at such time. If at least two such quotations are provided, LIBOR
for the relevant Calculation Period will be the arithmetic mean of such
quotations. If fewer than two quotations are provided, LIBOR for such
Calculation Period will be the arithmetic mean of the rates quoted at
approximately 11:00 a.m. in the City of New York, on such Interest
Determination Date by three major banks in the City of New York selected by
such Counterparty for loans in U.S. dollars to leading European banks, for
the Calculation Period commencing on the second London Banking Day
immediately following such Interest Determination Date and in a principal
amount that is representative for a single transaction in U.S. dollars in
such market at such time.
(c) Calculation of Interest Due. So long as the Swap Agreement related to
Classes A-3 or A-5, as applicable, is in effect and any payments due thereunder
from the applicable Counterparty are being received by the Issuer, on or prior
to each Payment Date, the Servicer, using LIBOR as determined by the applicable
Counterparty, will calculate the amount of interest payable on Classes A-3 and
A-5, as applicable, for the relevant Interest Accrual Period. Interest payments
on such Classes will be made in an amount equal to the product of (i) the actual
number of days in the related Interest Accrual Period divided by 360, (ii) the
applicable Bond Rate and (iii) the principal balance of the relevant Class as of
the close of business on the preceding Payment Date (or, in the case of the
first Payment Date, as
7
of the Series Issuance Date). There will be no minimum or maximum Bond Rate.
SECTION 4. Payment Dates; Expected Amortization Schedule for Principal;
Interest; Overcollateralization Amount; Monthly Allocated Balances. (a) Payment
Dates. The Payment Dates for each Class of the Series 1999-A Transition Bonds
are March 1 and September 1 of each year or, if any such date is not a Business
Day, the next succeeding Business Day, commencing on September 1, 1999 and
continuing until the earlier of repayment of such Class in full and the
applicable Class Termination Date.
(b) Expected Amortization Schedule for Principal. Unless an Event of
Default shall have occurred and be continuing and the unpaid principal amount of
all Series of Transition Bonds has been declared to be due and payable together
with accrued and unpaid interest thereon, on each Payment Date, the Bond Trustee
shall distribute to the Series 1999-A Transition Bondholders of record as of the
related Record Date amounts payable in respect of the Series 1999-A Transition
Bonds pursuant to Section 8.02(e) of the Indenture as principal, in accordance
with the Expected Amortization Schedule. To the extent that more than one Class
of the Series 1999-A Transition Bonds is to receive payments of principal in
accordance with the Expected Amortization Schedule on any Payment Date, such
amounts will be allocated pro rata between such Classes based on the principal
scheduled to be paid to such Classes in accordance with the Expected
Amortization Schedule on such Payment Date; provided, however, that if one or
more Classes did not receive principal on the prior Payment Date and as a result
their Class Principal Balance was not reduced to the balance indicated in the
Expected Amortization Schedule on such Payment Date, then such Classes will be
(i) allocated funds from the Series 1999-A Subaccount to make up such shortfalls
prior to any Classes receiving funds in respect of principal scheduled to be
paid on the current Payment Date and (ii) allocated funds from the Series 1999-A
Subaccount in respect of prior shortfalls on a pro rata basis based on the
amount of such shortfalls; provided, however, that other than in the event of a
redemption in no event shall a principal payment pursuant to this Section 4(b)
on any Class on a Payment Date be greater than the amount that reduces the
Outstanding Amount of such Class of Series 1999-A Transition Bonds to the amount
specified in the Expected Amortization Schedule which is attached as Schedule A
hereto for such Class and Payment Date.
8
(c) Interest. Interest will be payable on each Class of the Series 1999-A
Transition Bonds on each Payment Date in an amount equal to one-half of the
product of (i) the applicable Bond Rate and (ii) the Outstanding Amount of the
related Class of Transition Bonds as of the close of business on the preceding
Payment Date after giving effect to all payments of principal made to the
holders of the related Class of Series 1999-A Transition Bonds on such preceding
Payment Date; and provided, further, that with respect to the initial Payment
Date or, if no payment has yet been made, interest on the outstanding principal
balance will accrue from and including the Series Issuance Date to, but
excluding, the following Payment Date.
(d) Overcollateralization Amount. The Overcollateralization Amount for the
Series 1999-A Transition Bonds shall be $80,000,000.
(e) Monthly Allocated Balances. The Monthly Allocated Interest Balance and
Monthly Allocated Principal Balance for any Monthly Allocation Date and the
Series 1999-A Transition Bonds shall be as set forth in Schedule B hereto.
Not later than each Schedule Revision Date, the Issuer shall deliver to the
Bond Trustee replacement Schedules A and B hereto, adjusted to reflect the event
giving rise to such Schedule Revision Date and setting forth the Expected
Amortization Schedule for each Payment Date and the Monthly Allocated Interest
Balance and Monthly Allocated Principal Balance for each Monthly Allocation
Date; provided, however, that no such replacement schedules shall be required if
the event giving rise to such Schedule Revision Date is a redemption of the
Series 1999-A Transition Bonds in whole.
SECTION 5. Authorized Initial Denominations. The Series 1999-A Transition
Bonds shall be issuable in the Authorized Initial Denominations.
SECTION 6. Redemption. (a) Mandatory Redemption. The Series 1999-A
Transition Bonds shall not be subject to mandatory redemption except as provided
in Section 10.02 of the Indenture in the event that the Issuer receives
Liquidated Damages.
(b) Optional Redemption. The Issuer may, at its sole option, redeem the
Series 1999-A Class A-3 and A-5 Transition Bonds in whole or from time to time
in part on any Payment Date on or after March 1, 2001, at a Redemption Price
equal to the principal amount thereof plus interest at
9
the applicable Bond Rate accrued to the Redemption Date pursuant to Section
10.01 of the Indenture. The Series 1999-A Transition Bonds of all other Classes
shall not be subject to optional redemption by the Issuer except that the Series
1999-A Transition Bonds may be redeemed in whole at a Redemption Price equal to
the principal amount thereof plus interest at the applicable Bond Rate accrued
to the Redemption Date on any Payment Date on which the Outstanding Amount
thereof (after giving effect to payments that would otherwise be made on such
Payment Date) has been reduced to less than 5% of the initial principal balance
thereof.
SECTION 7. Credit Enhancement. No credit enhancement (other than the
Overcollateralization Amount) is provided for the Series 1999-A Transition
Bonds.
SECTION 8. Swap Agreements. The Issuer has entered into Swap Agreements
with Xxxxxxx Sachs Mitsui Marine Derivative Products, L.P. and Citibank, N.A.,
New York for the benefit of Classes A-3 and A-5 respectively. In the event that
the Issuer is permitted to terminate either such Swap Agreement pursuant to the
terms thereof, the Class A-3 or Class A-5 Transition Bondholders, as applicable,
may vote to do so in accordance with the provisions of Section 3.22(b) of the
Indenture.
SECTION 9. Delivery and Payment for the Series 1999-A Transition Bonds;
Form of the Series 1999-A Transition Bonds. The Bond Trustee shall deliver the
Series 1999-A Transition Bonds to the Issuer when authenticated in accordance
with Section 2.02 of the Indenture. The Series 1999-A Transition Bonds of each
Class shall be in the form of Exhibits A-1 through A-7 hereto.
SECTION 10. Confirmation of Indenture. As supplemented by this Supplement,
the Indenture is in all respects ratified and confirmed and the Indenture, as so
supplemented by this Supplement, shall be read, taken, and construed as one and
the same instrument.
SECTION 11. Counterparts. This Supplement may be executed in any number of
counterparts, each of which so executed shall be deemed to be an original, but
all of such counterparts shall together constitute but one and the same
instrument.
SECTION 12. Governing Law. This Supplement shall be construed in accordance
with the laws of the Commonwealth of Pennsylvania, without reference to its
conflict of law provisions, and the obligations, rights and remedies of the
10
parties hereunder shall be determined in accordance with such laws.
SECTION 13. Issuer Obligation. No recourse may be taken, directly or
indirectly, with respect to the obligations of the Issuer or the Bond Trustee on
the Transition Bonds or under this Supplement or any certificate or other
writing delivered in connection herewith or therewith, against (i) any owner of
a beneficial interest in the Issuer or (ii) any partner, owner, beneficiary,
agent, officer, director or employee of the Bond Trustee, any holder of a
beneficial interest in the Issuer or the Bond Trustee or of any successor or
assign of the Bond Trustee, except as any such Person may have expressly agreed
(it being understood that none of the Bond Trustee's obligations are in its
individual capacity).
11
IN WITNESS WHEREOF, the Issuer and the Bond Trustee have caused this
Supplement to be duly executed by their respective officers thereunto duly
authorized as of the first day of the month and year first above written.
PECO ENERGY TRANSITION TRUST,
by First Union Trust Company,
National Association, not in
its individual capacity but
solely as Issuer Trustee,
Delaware Trustee and
Independent Trustee
by /s/ Xxxxxx X. Xxxxxx, Xx.
---------------------------
Name: Xxxxxx X. Xxxxxx, Xx.
Title: Vice President
THE BANK OF NEW YORK, not in
its individual capacity but
solely as Bond Trustee on
behalf of the Transition
Bondholders,
by /s/ Xxxxxx X. Laser
----------------------------
Name: Xxxxxx X. Laser
Title: Assistant Vice President
SCHEDULE A
Expected Amortization Schedule
Outstanding Principal Balance
---------------------- ----------- ----------- ----------- ----------- ----------- -----------
Payment Date Class A-1 Class A-2 Class A-3 Class A-4 Class A-5 Class A-6
---------------------- ----------- ----------- ----------- ----------- ----------- -----------
Series Issuance Date.. 244,470,272 275,371,325 667,000,000 458,518,647 464,600,000 993,386,331
September 1, 1999..... 201,970,272 275,371,325 667,000,000 458,518,647 464,600,000 993,386,331
March 1, 2000......... 138,085,186 275,371,325 667,000,000 458,518,647 464,600,000 993,386,331
September 1, 2000..... 81,970,272 275,371,325 667,000,000 458,518,647 464,600,000 993,386,331
March 1, 2001......... 0 275,371,325 667,000,000 458,518,647 464,600,000 993,386,331
September 1, 2001..... 0 228,041,597 608,800,000 458,518,647 464,600,000 993,386,331
March 1, 2002......... 0 149,875,299 549,400,000 458,518,647 464,600,000 993,386,331
September 1, 2002..... 0 78,069,747 481,400,000 458,518,647 464,600,000 993,386,331
March 1, 2003......... 0 0 330,200,000 458,518,647 464,600,000 993,386,331
September 1, 2003..... 0 0 161,200,000 387,037,737 464,600,000 993,386,331
March 1, 2004......... 0 0 0 286,885,259 464,600,000 993,386,331
September 1, 2004..... 0 0 0 187,125,557 307,900,000 993,386,331
March 1, 2005......... 0 0 0 0 221,400,000 993,386,331
September 1, 2005..... 0 0 0 0 153,000,000 793,067,814
March 1, 2006......... 0 0 0 0 86,100,000 560,156,375
September 1, 2006..... 0 0 0 0 18,500,000 318,221,391
March 1, 2007......... 0 0 0 0 3,500,000 0
September 1, 2007..... 0 0 0 0 0 0
March 1, 2008......... 0 0 0 0 0 0
September 1, 2008..... 0 0 0 0 0 0
---------------------- ----------- -------------
Payment Date Class A-7 Series 1999-A
---------------------- ----------- -------------
Series Issuance Date.. 896,653,425 4,000,000,000
September 1, 1999..... 896,653,425 3,957,500,000
March 1, 2000......... 896,653,425 3,893,614,914
September 1, 2000..... 896,653,425 3,837,500,000
March 1, 2001......... 896,653,425 3,755,529,728
September 1, 2001..... 896,653,425 3,650,000,000
March 1, 2002......... 896,653,425 3,512,433,702
September 1, 2002..... 896,653,425 3,372,628,150
March 1, 2003......... 896,653,425 3,143,358,403
September 1, 2003..... 896,653,425 2,902,877,493
March 1, 2004......... 896,653,425 2,641,525,015
September 1, 2004..... 896,653,425 2,385,065,313
March 1, 2005......... 896,653,425 2,111,439,756
September 1, 2005..... 896,653,425 1,842,721,239
March 1, 2006......... 896,653,425 1,542,909,800
September 1, 2006..... 896,653,425 1,233,374,816
March 1, 2007......... 896,653,425 900,153,425
September 1, 2007..... 575,000,000 575,000,000
March 1, 2008......... 280,541,519 280,541,519
September 1, 2008..... 0 0
SCHEDULE B
Monthly Allocated Balances
Monthly Allocated Monthly Allocated
Monthly Allocation Date Interest Balance Principal Balance
----------------------- ----------------- -----------------
April 1, 1999......................... 0 0
May 1, 1999........................... 6,009,682 2,389,350
June 1, 1999.......................... 23,990,211 9,538,110
July 1, 1999.......................... 47,877,958 19,035,482
August 1, 1999........................ 75,613,569 30,062,701
September 1, 1999..................... 106,895,807 42,500,000
October 1, 1999....................... 27,751,438 14,510,961
November 1, 1999...................... 49,853,432 26,067,882
December 1, 1999...................... 68,071,815 35,594,100
January 1, 2000....................... 84,809,971 44,346,321
February 1, 2000...................... 102,815,715 53,761,352
March 1, 2000......................... 122,176,816 63,885,086
April 1, 2000......................... 20,205,539 9,415,148
May 1, 2000........................... 39,848,461 18,568,135
June 1, 2000.......................... 58,512,822 27,265,142
July 1, 2000.......................... 77,204,707 35,974,975
August 1, 2000........................ 97,622,954 45,489,239
September 1, 2000..................... 120,426,364 56,114,914
October 1, 2000....................... 20,998,609 14,477,911
November 1, 2000...................... 41,727,971 28,770,185
December 1, 2000...................... 60,338,386 41,601,507
January 1, 2001....................... 77,853,830 53,677,881
February 1, 2001...................... 97,257,955 67,056,442
March 1, 2001......................... 118,888,816 81,970,272
April 1, 2001......................... 19,569,765 17,705,263
May 1, 2001........................... 38,612,205 34,933,441
June 1, 2001.......................... 56,693,782 51,292,303
July 1, 2001.......................... 74,771,743 67,647,893
August 1, 2001........................ 94,524,850 85,519,030
September 1, 2001..................... 116,642,830 105,529,728
October 1, 2001....................... 20,379,437 24,723,174
November 1, 2001...................... 40,718,626 49,397,522
December 1, 2001...................... 58,984,935 71,557,170
January 1, 2002....................... 76,173,040 92,408,802
February 1, 2002...................... 94,390,685 114,509,413
March 1, 2002......................... 113,396,591 137,566,298
April 1, 2002......................... 18,414,682 23,566,531
May 1, 2002........................... 36,252,431 46,394,721
June 1, 2002.......................... 53,169,187 68,044,253
July 1, 2002.......................... 70,065,088 89,667,096
August 1, 2002........................ 88,532,014 113,300,487
September 1, 2002..................... 109,242,841 139,805,552
October 1, 2002....................... 17,000,627 37,126,419
November 1, 2002...................... 35,796,839 78,174,083
December 1, 2002...................... 53,175,431 116,125,912
January 1, 2003....................... 69,647,773 152,098,647
February 1, 2003...................... 87,017,263 190,030,598
March 1, 2003......................... 104,985,335 229,269,747
April 1, 2003......................... 16,495,634 40,554,787
May 1, 2003........................... 32,468,019 79,823,158
June 1, 2003.......................... 47,613,606 117,058,831
Monthly Allocated Monthly Allocated
Monthly Allocation Date Interest Balance Principal Balance
----------------------- ----------------- -----------------
July 1, 2003.......................... 62,737,890 154,242,132
August 1, 2003........................ 79,269,816 194,886,142
September 1, 2003..................... 97,815,459 240,480,910
October 1, 2003....................... 17,175,919 49,775,147
November 1, 2003...................... 33,496,993 97,072,984
December 1, 2003...................... 47,868,216 138,720,231
January 1, 2004....................... 61,316,125 177,691,749
February 1, 2004...................... 75,491,001 218,769,991
March 1, 2004......................... 90,184,948 261,352,478
April 1, 2004......................... 13,824,099 43,246,494
May 1, 2004........................... 27,210,422 85,123,474
June 1, 2004.......................... 39,904,175 124,833,857
July 1, 2004.......................... 52,580,673 164,490,264
August 1, 2004........................ 66,436,744 207,836,778
September 1, 2004..................... 81,979,464 256,459,702
October 1, 2004....................... 14,140,528 52,537,248
November 1, 2004...................... 27,470,877 102,064,384
December 1, 2004...................... 39,177,262 145,557,897
January 1, 2005....................... 50,123,659 186,227,778
February 1, 2005...................... 61,667,486 229,117,328
March 1, 2005......................... 73,646,984 273,625,557
April 1, 2005......................... 10,996,939 45,311,022
May 1, 2005........................... 21,646,318 89,189,981
June 1, 2005.......................... 31,744,783 130,798,991
July 1, 2005.......................... 41,829,380 172,350,864
August 1, 2005........................ 52,852,514 217,769,816
September 1, 2005..................... 65,217,711 268,718,517
October 1, 2005....................... 10,572,276 55,820,365
November 1, 2005...................... 20,741,140 109,510,766
December 1, 2005...................... 29,752,969 157,092,157
January 1, 2006....................... 38,203,795 201,711,521
February 1, 2006...................... 47,229,360 249,365,436
March 1, 2006......................... 56,783,741 299,811,439
April 1, 2006......................... 7,993,400 52,181,586
May 1, 2006........................... 15,739,126 102,746,328
June 1, 2006.......................... 23,081,956 150,680,939
July 1, 2006.......................... 30,408,503 198,509,246
August 1, 2006........................ 38,418,715 250,800,585
September 1, 2006..................... 47,415,904 309,534,984
October 1, 2006....................... 7,187,939 63,446,989
November 1, 2006...................... 14,026,982 123,814,324
December 1, 2006...................... 20,063,459 177,097,512
January 1, 2007....................... 25,718,561 227,014,350
February 1, 2007...................... 31,647,444 279,347,819
March 1, 2007......................... 37,750,806 333,221,391
April 1, 2007......................... 4,668,918 54,996,347
May 1, 2007........................... 9,181,118 108,146,666
June 1, 2007.......................... 13,453,005 158,466,276
July 1, 2007.......................... 17,707,549 208,581,610
August 1, 2007........................ 22,361,570 263,402,471
Monthly Allocated Monthly Allocated
Monthly Allocation Date Interest Balance Principal Balance
----------------------- ----------------- -----------------
September 1, 2007..................... 27,603,921 325,153,425
October 1, 2007....................... 3,759,860 62,819,931
November 1, 2007...................... 6,976,457 116,562,983
December 1, 2007...................... 9,692,137 161,936,697
January 1, 2008....................... 12,204,195 203,908,297
February 1, 2008...................... 14,855,815 248,211,691
March 1, 2008......................... 17,623,750 294,458,481
April 1, 2008......................... 1,454,140 47,443,388
May 1, 2008........................... 2,860,012 93,311,958
June 1, 2008.......................... 4,190,789 136,730,466
July 1, 2008.......................... 5,515,533 179,952,125
August 1, 2008........................ 6,964,860 227,238,503
September 1, 2008..................... 8,598,598 280,541,519
1
Exhibit A to Series Supplement
REGISTERED $[ ]
No. ______
SEE REVERSE FOR CERTAIN DEFINITIONS
CUSIP NO.
THE PRINCIPAL OF THIS CLASS [ ] TRANSITION BOND WILL BE PAID
IN INSTALMENTS AS SET FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL
AMOUNT OF THIS CLASS [ ] TRANSITION BOND AT ANY TIME MAY BE LESS THAN THE AMOUNT
SHOWN ON THE FACE HEREOF.
PECO ENERGY TRANSITION TRUST
TRANSITION BONDS, SERIES [ ], Class [ ].
Bond Original Principal Expected Final
Rate Amount Payment Date
[ ]% $[ ] [ ], [ ]
PECO Energy Transition Trust, a statutory business trust organized and
existing under the laws of the State of Delaware (herein referred to as the
"Issuer"), for value received, hereby promises to pay to the Registered Holder
hereof, or registered assigns, the Original Principal Amount shown above in
[monthly][quarterly][semi-annual] instalments on the Payment Dates and in the
amounts specified on the reverse hereof or, if less, the amounts determined
pursuant to Section 8.02(e) of the Indenture, in each year, commencing on the
date determined as provided on the reverse hereof and ending on or before the
Class [ ] Termination Date, to pay the entire unpaid principal hereof on the
Class [ ] Termination Date and to pay interest, at [the Bond Rate shown above][a
floating rate calculated as follows [insert formula]], on each [ ] and [ ] or if
any such day is not a Business Day, the next succeeding Business Day, commencing
on [ ], 1999 and continuing until the earlier of the payment of the principal
hereof and the Class [ ] Termination Date (each a "Payment Date"), on the
principal amount of this Class [ ] Transition Bond outstanding from time to
time. Interest on this Class [ ] Transition Bond will accrue for each Payment
Date from the
2
most recent Payment Date on which interest has been paid to but excluding such
Payment Date or, if no interest has yet been paid, from [ ], 1999. Interest will
be computed on the basis of [a 360-day year of twelve 30-day months] [the actual
number of days from the preceeding Payment Date, to but excluding the next
Payment Date, divided by 360]. Such principal of and interest on this Class [ ]
Transition Bond shall be paid in the manner specified on the reverse hereof.
The principal of and interest on this Class [ ] Transition Bond are payable
in such coin or currency of the United States of America as at the time of
payment is legal tender for payment of public and private debts. All payments
made by the Issuer with respect to this Class [ ] Transition Bond shall be
applied first to interest due and payable on this Class [ ] Transition Bond as
provided above and then to the unpaid principal of and premium, if any, on this
Class [ ] Transition Bond, all in the manner set forth in Section 8.02(e) of the
Indenture.
Reference is made to the further provisions of this Class [ ] Transition
Bond set forth on the reverse hereof, which shall have the same effect as though
fully set forth on the face of this Class [ ] Transition Bond.
Unless the certificate of authentication hereon has been executed by the
Bond Trustee whose name appears below by manual signature, this Class [ ]
Transition Bond shall not be entitled to any benefit under the Indenture
referred to on the reverse hereof, or be valid or obligatory for any purpose.
3
IN WITNESS WHEREOF, the Issuer has caused this instrument to be signed,
manually or in facsimile, by an Authorized Officer of the Issuer Trustee.
Date:
PECO ENERGY TRANSITION TRUST,
by First Union Trust Company,
National Association, not in
its individual capacity but
solely as Issuer Trustee,
by
---------------------------
Name:
Title:
4
BOND TRUSTEE'S CERTIFICATE OF AUTHENTICATION
Dated: _______________, 199[ ]
This is one of the Class [ ] Transition Bonds of the Series [ ] Transition
Bonds, designated above and referred to in the within-mentioned Indenture.
THE BANK OF NEW YORK, not in its
individual capacity but solely as
Bond Trustee on behalf of the
Transition Bondholders,
by
--------------------------
Authorized Signatory
5
[REVERSE OF TRANSITION BOND]
This Series [ ], Class [ ] Transition Bond is one of a duly authorized
issue of Transition Bonds of the Issuer, designated as its Transition Bonds
(herein called the "Transition Bonds"), issued and to be issued in one or more
Series, which Series are issuable in one or more Classes, and this Series [ ]
Transition Bond, in which this Class [ ] Transition Bond represents an interest,
consists of [ ] Classes, including the Class [ ] Transition Bonds (herein called
the "Class [ ] Transition Bonds"), all issued and to be issued under an
indenture dated as of March 1, 1999, and a series supplement thereto dated as of
[ ], [1999] (such series supplement, as supplemented or amended, the
"Supplement" and, collectively with such indenture, as supplemented or amended,
the "Indenture"), each between the Issuer and The Bank of New York, as Bond
Trustee (the "Bond Trustee", which term includes any successor bond trustee
under the Indenture), to which Indenture and all indentures supplemental thereto
reference is hereby made for a statement of the Collateral property pledged, the
nature and extent of the security, the respective rights, obligations and
immunities thereunder of the Issuer, the Bond Trustee and the Holders of the
Transition Bonds and the terms and conditions under which additional Transition
Bonds may be issued. All terms used in this Class [ ] Transition Bond that are
defined in the Indenture, as supplemented or amended, shall have the meanings
assigned to them in the Indenture.
The Class [ ] Transition Bonds, the other Classes of Series [ ] Transition
Bonds and any other Series of Transition Bonds issued by the Issuer are and will
be equally and ratably secured by the Collateral pledged as security therefor as
provided in the Indenture.
The principal of this Class [ ] Transition Bond shall be payable on each
Payment Date only to the extent that amounts in the Collection Account are
available therefor, and only until the outstanding principal balance thereof on
such Payment Date (after giving effect to all payments of principal, if any,
made on such Payment Date) has been reduced to the principal balance specified
in the Expected Amortization Schedule which is attached to the Supplement as
Schedule A, unless payable earlier either because (i) an Event of Default shall
have occurred and be continuing and the Bond Trustee or the Holders of
Transition
6
Bonds representing not less than a majority of the Outstanding Amount of the
Transition Bonds of all Series have declared the Transition Bonds to be
immediately due and payable in accordance with Section 5.02 of the Indenture,
(ii) [the Issuer, at its option, shall have called for the redemption of the
Series [ ] Transition Bonds in whole or from time to time in part pursuant to
Section 10.01 of the Indenture [or][,] (iii)] the Issuer shall have called for
the redemption of the Series [ ] Transition Bonds pursuant to Section 10.02 of
the Indenture if the Seller is required to pay Liquidated Damages pursuant to
Section 5.01(d) of the Sale Agreement [or [(iii)][(iv)] the Issuer shall have
called for the redemption of the Series [ ] Transition Bond in whole or from
time to time in part] pursuant to Section [6(a) or] 6(b) of the Supplement].
However, actual principal payments may be made in lesser than expected amounts
and at later than expected times as determined pursuant to Section 8.02(e) of
the Indenture. The entire unpaid principal amount of this Class [ ] Transition
Bond shall be due and payable on the earlier of the Class [ ]Termination Date
hereof and the Redemption Date, if any, herefor. Notwithstanding the foregoing,
the entire unpaid principal amount of the Transition Bonds shall be due and
payable, if not then previously paid, on the date on which an Event of Default
shall have occurred and be continuing and the Bond Trustee or the Holders of the
Transition Bonds representing not less than a majority of the Outstanding Amount
of the Transition Bonds have declared the Transition Bonds to be immediately due
and payable in the manner provided in Section 5.02 of the Indenture. All
principal payments on the Class [ ] Transition Bonds shall be made pro rata to
the Class [ ] Transition Bondholders entitled thereto based on the respective
principal amounts of the Class [ ] Transition Bonds held by them.
Payments of interest on this Class [ ] Transition Bond due and payable on
each Payment Date, together with the instalment of principal or premium, if any,
due on this Class [ ] Transition Bond on such Payment Date shall be made by
check mailed first-class, postage prepaid, to the Person whose name appears as
the Registered Holder of this Class [ ] Transition Bond (or one or more
Predecessor Transition Bonds) in the Transition Bond Register as of the close of
business on the Record Date or in such other manner as may be provided in the
Supplement, except that with respect to Class [ ] Transition Bonds registered on
the Record Date in the name of a Clearing Agency, payments will be made by wire
transfer in immediately available funds to
7
the account designated by such Clearing Agency and except for the final
instalment of principal and premium, if any, payable with respect to this Class
[ ] Transition Bond on a Payment Date which shall be payable as provided below.
Such checks shall be mailed to the Person entitled thereto at the address of
such Person as it appears in the Transition Bond Register as of the applicable
Record Date without requiring that this Class [ ] Transition Bond be submitted
for notation of payment. Any reduction in the principal amount of this Class [ ]
Transition Bond (or any one or more Predecessor Transition Bonds) effected by
any payments made on any Payment Date shall be binding upon all future Holders
of this Class [ ] Transition Bond and of any Class [ ] Transition Bond issued
upon the registration of transfer hereof or in exchange hereof or in lieu
hereof, whether or not noted hereon. If funds are expected to be available, as
provided in the Indenture, for payment in full of the then remaining unpaid
principal amount of this Class [ ] Transition Bond on a Payment Date, then the
Bond Trustee, in the name of and on behalf of the Issuer, will notify the Person
who was the Registered Holder hereof as of the second preceding Record Date to
such Payment Date by notice mailed no later than five days prior to such final
Payment Date and shall specify that such final instalment will be payable to the
Registered Holder hereof as of the Record Date immediately preceding such final
Payment Date and only upon presentation and surrender of this Class [ ]
Transition Bond and shall specify the place where this Class [ ] Transition Bond
may be presented and surrendered for payment of such instalment.
The Issuer shall pay interest on overdue instalments of interest on this
Class [ ] Transition Bond at the Class [ ] Bond Rate to the extent lawful.
As provided in the Indenture, [the Class [ ] Transition Bonds may be
redeemed, in whole or from time to time in part, at the option of the Issuer on
any Redemption Date at the Redemption Price. In addition, as provided in the
Indenture,] if the Seller is required to pay Liquidated Damages pursuant to
Section 5.01(d) of the Sale Agreement, the Issuer will be required to redeem all
outstanding Series of Transition Bonds, including the Class [ ] Transition
Bonds, on the Liquidated Damages Redemption Date. [The Issuer will also be
required to redeem the Class [ ] Transition Bonds in certain circumstances as
provided in Sections 6(a) and 6(b) of the Supplement.]
8
As provided in the Indenture and subject to certain limitations set forth
therein, the transfer of this Class [ ] Transition Bond may be registered in the
Transition Bond Register upon surrender of this Class [ ] Transition Bond for
registration of transfer at the office or agency designated by the Issuer
pursuant to the Indenture, duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Bond Trustee duly executed by
the Holder hereof or his attorney duly authorized in writing, with such
signature guaranteed by an Eligible Guarantor Institution, and thereupon one or
more new Class [ ] Transition Bonds of any Authorized Initial Denominations and
in the same aggregate initial principal amount will be issued to the designated
transferee or transferees. No service charge will be charged for any
registration of transfer or exchange of this Class [ ] Transition Bond, but the
transferor may be required to pay a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any registration of
transfer or exchange.
Each Class [ ] Transition Bondholder, by acceptance of a Class [ ]
Transition Bond, covenants and agrees that no recourse may be taken, directly or
indirectly, with respect to the obligations of the Issuer or the Bond Trustee on
the Class [ ] Transition Bonds or under the Indenture or any certificate or
other writing delivered in connection herewith or therewith, against (i) any
owner of a beneficial interest in the Issuer or (ii) any partner, owner,
beneficiary, agent, officer, director or employee of the Bond Trustee, any
holder of a beneficial interest in the Issuer or the Bond Trustee or of any
successor or assign of the Bond Trustee, except as any such Person may have
expressly agreed (it being understood that all of the Bond Trustee's obligations
are in its individual capacity).
Prior to the due presentment for registration of transfer of this Class [ ]
Transition Bond, the Issuer, the Bond Trustee and any agent of the Issuer or the
Bond Trustee may treat the Person in whose name this Class [ ] Transition Bond
is registered (as of the day of determination) as the owner hereof for the
purpose of receiving payments of principal of and premium, if any, and interest
on this Class [ ] Transition Bond and for all other purposes whatsoever, whether
or not this Class [ ] Transition Bond be overdue, and neither the Issuer, the
Bond
9
Trustee nor any such agent shall be affected by notice to the contrary.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Issuer and the rights of the Holders of the Transition Bonds under the Indenture
at any time by the Issuer with the consent of the Holders of Transition Bonds
representing a majority of the Outstanding Amount of all Transition Bonds at the
time Outstanding of each Series or Class to be affected. The Indenture also
contains provisions permitting the Holders of Transition Bonds representing
specified percentages of the Outstanding Amount of the Transition Bonds of all
Series, on behalf of the Holders of all the Transition Bonds, to waive
compliance by the Issuer with certain provisions of the Indenture and certain
past defaults under the Indenture and their consequences. Any such consent or
waiver by the Holder of this Class [ ] Transition Bond (or any one of more
Predecessor Transition Bonds) shall be conclusive and binding upon such Holder
and upon all future Holders of this Class [ ] Transition Bond and of any Class [
] Transition Bond issued upon the registration of transfer hereof or in exchange
hereof or in lieu hereof whether or not notation of such consent or waiver is
made upon this Class [ ] Transition Bond. The Indenture also permits the Bond
Trustee to amend or waive certain terms and conditions set forth in the
Indenture without the consent of Holders of the Transition Bonds issued
thereunder.
The term "Issuer" as used in this Class [ ] Transition Bond includes any
successor to the Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain circumstances, to
merge or consolidate, subject to the rights of the Bond Trustee and the Holders
of Transition Bonds under the Indenture.
The Class [ ] Transition Bonds are issuable only in registered form in
Authorized Initial Denominations as provided in the Indenture and the
Supplement, subject to certain limitations therein set forth.
This Class [ ] Transition Bond, the Indenture and the Supplement shall be
construed in accordance with the laws of the Commonwealth of Pennsylvania,
without reference to its conflict of law provisions, and the obligations,
10
rights and remedies of the parties hereunder and thereunder shall be determined
in accordance with such laws.
No reference herein to the Indenture and no provision of this Class [ ]
Transition Bond or of the Indenture shall alter or impair the obligation of the
Issuer, which is absolute and unconditional, to pay the principal of and
interest on this Class [ ] Transition Bond at the times, place, and rate, and in
the coin or currency herein prescribed.
11
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number
of assignee
_______________________
FOR VALUE RECEIVED, the undersigned hereby sells,
assigns and transfers unto ___________________________________________________
______________________________________________________________________________
(name and address of assignee)
the within Class [ ] Transition Bond and all rights
thereunder, and hereby irrevocably constitutes and appoints
_____________________________________________________________________________,
attorney, to transfer said Class [ ] Transition Bond on the books kept for
registration thereof, with full power of substitution in the premises.
Dated: *
----------------- --------------------------------------
Signature Guaranteed:
----------------------- --------------------------------------
----------
* NOTE: The signature to this assignment must correspond with the name of the
registered owner as it appears on the face of the within Class [ ]
Transition Bond in every particular, without alteration, enlargement or any
change whatsoever.
