EXHIBIT 4.3
PP&L Transition Bond Company LLC
Issuer
and
The Bank of New York
Trustee
------------------------------
INDENTURE
Dated as of July __, 1999
------------------------------
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, Premium, if
any, and Interest; Interest on Overdue
Principal and Premium, if any; Principal,
Premium and Interest Rights Preserved . . . . 9
SECTION 2.09 Cancellation . . . . . . . . . . . . . . . . 11
SECTION 2.10 Amount; Authentication and Delivery
of Transition Bonds . . . . . . . . . . . . .11
SECTION 2.11 Book-Entry Transition Bonds . . . . . . . . 16
SECTION 2.12 Notices to Clearing Agency . . . . . . . . . 18
SECTION 2.13 Definitive Transition Bonds . . . . . . . . 18
ARTICLE III
Covenants
SECTION 3.01 Payment of Principal, Premium, if
any, and Interest . . . . . . . . . . . . . .19
SECTION 3.02 Maintenance of Office or Agency . . . . . . 19
SECTION 3.03 Money for Payments To Be Held in
Trust. . . . . . . . . . . . . . . . . . . . 19
SECTION 3.04 Existence. . . . . . . . . . . . . . . . . . 21
SECTION 3.05 Protection of Collateral . . . . . . . . . . 21
SECTION 3.06 Opinions as to Collateral. . . . . . . . . . 22
SECTION 3.07 Performance of Obligations . . . . . . . . . 23
SECTION 3.08 Negative Covenant. . . . . . . . . . . . . . 24
SECTION 3.09 Annual Statement as to Compliance. . . . . . 24
SECTION 3.10 Issuer May Consolidate, etc., Only
on Certain Terms . . . . . . . . . . . . . . 25
SECTION 3.11 Successor or Transferee . . . . . . . . . . 26
SECTION 3.12 No Other Business. . . . . . . . . . . . . . 26
SECTION 3.13 No Borrowing . . . . . . . . . . . . . . . . 27
SECTION 3.14 Guarantees, Loans, Advances and
Other Liabilities. . . . . . . . . . . . . . 27
SECTION 3.15 Capital Expenditures . . . . . . . . . . . . 27
SECTION 3.16 Restricted Payments. . . . . . . . . . . . . 27
SECTION 3.17 Notice of Events of Default. . . . . . . . . 27
SECTION 3.18 Inspection . . . . . . . . . . . . . . . . . 28
SECTION 3.19 Adjusted Overcollateralization
Balance Schedules. . . . . . . . . . . . . . 28
SECTION 3.20 Sale Agreement, Contribution
Agreement, the Administration Agreement
and Servicing Agreement Covenants. . . . . . 28
SECTION 3.21 Taxes . . . . . . . . . . . . . . . . . . . 31
ARTICLE IV
Satisfaction and Discharge; Defeasance
SECTION 4.01 Satisfaction and Discharge of
Indenture; Defeasance . . . . . . . . . . . 32
SECTION 4.02 Conditions to Defeasance . . . . . . . . . . 34
SECTION 4.03 Application of Trust Money . . . . . . . . . 36
SECTION 4.04 Repayment of Moneys Held by Paying
Agent. . . . . . . . . . . . . . . . . . . . 36
ARTICLE V
Remedies
SECTION 5.01 Events of Default . . . . . . . . . . . . . 36
SECTION 5.02 Acceleration of Maturity; Rescission
and Annulment . . . . . . . . . . . . . . . 38
SECTION 5.03 Collection of Indebtedness and Suits
for Enforcement by Trustee . . . . . . . . . 38
SECTION 5.04 Remedies; Priorities . . . . . . . . . . . . 41
SECTION 5.05 Optional Preservation of the
Collateral . . . . . . . . . . . . . . . . . 42
SECTION 5.06 Limitation of Proceedings . . . . . . . . . 43
SECTION 5.07 Unconditional Rights of Transition
Bondholders To Receive Principal, Premium,
if any, and Interest . . . . . . . . . . . . 44
SECTION 5.08 Restoration of Rights and Remedies . . . . . 44
SECTION 5.09 Rights and Remedies Cumulative . . . . . . . 44
SECTION 5.10 Delay or Omission Not a Waiver . . . . . . . 45
SECTION 5.11 Control by Transition Bondholders . . . . . 45
SECTION 5.12 Waiver of Past Defaults . . . . . . . . . . 46
SECTION 5.13 Undertaking for Costs . . . . . . . . . . . 46
SECTION 5.14 Waiver of Stay or Extension Laws . . . . . . 47
SECTION 5.15 Action on Transition Bonds . . . . . . . . . 47
ARTICLE VI
The Trustee
SECTION 6.01 Duties and Liabilities of Trustee . . . . . 47
SECTION 6.02 Rights of Trustee . . . . . . . . . . . . . 49
SECTION 6.03 Individual Rights of Trustee . . . . . . . . 50
SECTION 6.04 Trustee's Disclaimer . . . . . . . . . . . . 50
SECTION 6.05 Notice of Defaults . . . . . . . . . . . . . 50
SECTION 6.06 Reports by Trustee to Holders . . . . . . . 50
SECTION 6.07 Compensation and Indemnity . . . . . . . . . 51
SECTION 6.08 Replacement of Trustee . . . . . . . . . . . 52
SECTION 6.09 Successor Trustee by Merger . . . . . . . . 53
SECTION 6.10 Appointment of Co-Trustee or
Separate Trustee . . . . . . . . . . . . . . 54
SECTION 6.11 Eligibility; Disqualification . . . . . . . 55
SECTION 6.12 Preferential Collection of Claims
Against Issuer . . . . . . . . . . . . . . . 55
ARTICLE VII
Transition Bondholders' Lists and Reports
SECTION 7.01 Issuer To Furnish Trustee Names and
Addresses of Transition Bondholders . . . . 56
SECTION 7.02 Preservation of Information;
Communications to Transition Bondholders . . 56
SECTION 7.03 Reports by Issuer . . . . . . . . . . . . . 56
SECTION 7.04 Reports by Trustee . . . . . . . . . . . . . 57
SECTION 7.05 Provision of Servicer Reports . . . . . . . 58
ARTICLE VIII
Accounts, Disbursements and Releases
SECTION 8.01 Collection of Money . . . . . . . . . . . . 58
SECTION 8.02 Collection Account . . . . . . . . . . . . . 58
SECTION 8.03 Release of Collateral . . . . . . . . . . . 63
SECTION 8.04 Issuer Opinion of Counsel . . . . . . . . . 64
SECTION 8.05 Reports by Independent Accountants . . . . . 64
ARTICLE IX
Supplemental Indentures
SECTION 9.01 Supplemental Indentures Without
Consent of Transition Bondholders . . . . . 65
SECTION 9.02 Supplemental Indentures with Consent
of Transition Bondholders . . . . . . . . . 66
SECTION 9.03 Execution of Supplemental Indentures . . . . 69
SECTION 9.04 Effect of Supplemental Indenture . . . . . . 69
SECTION 9.05 Conformity with Trust Indenture Act . . . . 69
SECTION 9.06 Reference in Transition Bonds to
Supplemental Indentures . . . . . . . . . . 69
ARTICLE X
Redemption of Transition Bonds;
SECTION 10.01 Optional Redemption by Issuer . . . . . . . 70
SECTION 10.02 Mandatory Redemption by Issuer . . . . . . 70
SECTION 10.03 Form of Redemption Notice . . . . . . . . . 70
SECTION 10.04 Payment of Redemption Price . . . . . . . . 71
ARTICLE XI
Miscellaneous
SECTION 11.01 Compliance Certificates and
Opinions, etc . . . . . . . . . . . . . . . 73
SECTION 11.02 Form of Documents Delivered to
Trustee . . . . . . . . . . . . . . . . . . 74
SECTION 11.03 Acts of Transition Bondholders. . . . . . . 75
SECTION 11.04 Notices, etc., to Trustee, Issuer
and Rating Agencies . . . . . . . . . . . . 75
SECTION 11.05 Notices to Transition Bondholders;
Waiver. . . . . . . . . . . . . . . . . . . 76
SECTION 11.06 Alternate Payment and Notice
Provisions. . . . . . . . . . . . . . . . . 77
SECTION 11.07 Conflict with Trust Indenture Act . . . . . 77
SECTION 11.08 Effect of Headings and Table of
Contents. . . . . . . . . . . . . . . . . . 77
SECTION 11.09 Successors and Assigns. . . . . . . . . . . 77
SECTION 11.10 Separability. . . . . . . . . . . . . . . . 78
SECTION 11.11 Benefits of Indenture . . . . . . . . . . . 78
SECTION 11.12 Legal Holidays. . . . . . . . . . . . . . . 78
SECTION 11.13 Governing Law . . . . . . . . . . . . . . . 78
SECTION 11.14 Counterparts. . . . . . . . . . . . . . . . 78
SECTION 11.15 Issuer Obligation . . . . . . . . . . . . . 78
SECTION 11.16 No Petition . . . . . . . . . . . . . . . . 79
INDENTURE dated as of July __, 1999, between PP&L Transition Bond
Company LLC, a Delaware limited liability company (the "Issuer"), and The
Bank of New York, a New York banking corporation, as trustee (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 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, to and under
(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, (c) the Contribution Agreement, (d) all
Bills of Sale delivered by the Seller pursuant to the Sale Agreement, (e)
the Servicing Agreement, (f) the Collection Account and all sub-accounts
thereof and all cash, securities, instruments, investment property or other
assets credited to any such Account or subaccount from time to time or
purchased with funds therefrom, (g) all other property of whatever kind
owned from time to time by the Issuer other than any cash released to the
Issuer by the Trustee pursuant to Section 8.02, (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, 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 premium, if any, and interest on,
and any other amounts (including all fees, expenses, counsel fees and other
amounts due and owing to the Trustee) owing in respect of, the Transition
Bonds equally and ratably without prejudice, preference, priority or
distinction, except as expressly provided in this Indenture and to secure
performance by the Issuer of all of the Issuer's obligations under this
Indenture with respect to the Transition Bonds, all as provided in this
Indenture.
The 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 Agreement 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.
(i) 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;
(ii) "including" means including without limitation;
(iii) with respect to terms defined in Appendix A hereto, words
in the singular include the plural and words in the plural include the
singular;
(iv) unless otherwise specified, references herein to Sections
or Articles are to Sections or Articles of this Indenture; and
(v) 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
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SECTION 2.01 FORM. The Transition Bonds and the Trustee's
certificate of authentication shall be in substantially the forms set forth
in Exhibit A hereto, with such appropriate insertions, omissions,
substitutions and other variations as are required or permitted by this
Indenture or by the related Series Supplement and may have such letters,
numbers or other marks of identification and such legends or endorsements
placed thereon as may, consistently herewith, be determined by the 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.
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.
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.
SECTION 2.02 EXECUTION, AUTHENTICATION AND DELIVERY. 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.
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.
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.
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.
SECTION 2.03 DENOMINATIONS; TRANSITION BONDS ISSUABLE IN SERIES.
The Transition Bonds of each Series shall be issuable as registered
Transition Bonds in the Authorized Denominations specified in the Series
Supplement therefor.
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.
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. The several Series and Classes thereof may
differ as between Series and Classes, in respect of any of the following
matters:
(i) designation of the Series and, if applicable, the Classes
thereof;
(ii) the aggregate principal amount of the Transition Bonds of
the Series and, if applicable, each Class thereof;
(iii) the Bond Rate of the Series and, if applicable, each Class
thereof or the formula, if any, used to calculate the applicable Bond
Rate or Bond Rates for the Series;
(iv) the Payment Dates for the Series;
(v) the Expected Final Payment Date of the Series, and, if
applicable, each Class thereof;
(vi) the Series Final Maturity Date for the Series and, if
applicable, the Class Final Maturity Dates for each Class thereof;
(vii) the Series Issuance Date for the Series;
(viii) the place or places for payments with respect to the
Series;
(ix) the Authorized Denominations for the Series;
(x) the provisions, if any, for redemption of the Series by the
Issuer;
(xi) the Expected Amortization Schedule for the Series;
(xii) the Overcollateralization Amount with respect to the
Series;
(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
(xvi) any other terms of the Series or Class that are not
inconsistent with the provisions of this Indenture.
SECTION 2.04 TEMPORARY TRANSITION BONDS. Pending the
preparation of definitive Transition Bonds, or by agreement of the
purchasers of all Transition Bonds or, in the case of Transition Bonds held
in a book-entry only system by a Clearing Agency, 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.
If temporary Transition Bonds are issued, the Issuer will cause
definitive Transition Bonds to be prepared without unreasonable delay
except where temporary Transition Bonds are held by a Clearing Agency.
After the preparation of definitive Transition Bonds, the temporary
Transition Bonds shall be exchangeable for definitive Transition Bonds upon
surrender of the temporary Transition Bonds at the office or agency of the
Issuer to be maintained as provided in Section 3.02, without charge to the
Holder. Upon surrender for 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 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. 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 "Transition Bond Registrar" for the purpose of registering
Transition Bonds and transfers of Transition Bonds as herein provided.
Upon any resignation of any Transition Bond Registrar, the Issuer shall
promptly appoint a successor or, if it elects not to make such an
appointment, assume the duties of Transition Bond Registrar.
If a Person other than the Trustee is appointed by the Issuer as
Transition Bond Registrar, the Issuer shall give the Trustee prompt written
notice of the appointment of such Transition Bond Registrar and of the
location, and any change in the location, of the Transition Bond Register,
and the Trustee shall have the right to inspect the Transition Bond
Register at all reasonable times and to obtain copies thereof, and the
Trustee 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
principal amounts and number of such Transition Bonds.
Upon surrender for registration of transfer of any Transition Bond at
the office or agency of the Issuer to be maintained as provided in Section
3.02, 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.
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.
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.
All Transition Bonds issued upon any registration of transfer or
exchange of Transition Bonds shall be the valid obligations of the Issuer,
evidencing the same debt, and entitled to the same benefits under this
Indenture, as the Transition Bonds surrendered upon such registration of
transfer or exchange.
Every Transition Bond presented or surrendered for registration of
transfer or exchange shall be duly endorsed by, or be accompanied by a
written instrument of transfer in the form set forth in Exhibit A hereto or
such other form as is satisfactory to the Trustee duly executed by, the
Holder thereof or such Holder's attorney duly authorized in writing, with
such signature guaranteed by an Eligible Guarantor Institution in the form
set forth in such Transition Bond.
No service charge shall be made to a Holder for any registration of
transfer or exchange of Transition Bonds, but, other than in respect of
exchanges pursuant to Section 2.04 or 9.06 not involving any transfer, the
Issuer may require payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any registration
of transfer or exchange of Transition Bonds.
The preceding provisions of this Section notwithstanding, the Issuer
shall not be required to make, and the Transition Bond Registrar need not
register, transfers or exchanges of Transition Bonds selected for
redemption or transfers or exchanges of any Transition Bond for a period of
15 days preceding the date on which final payment of principal is to be
made with respect to such Transition Bond.
SECTION 2.06 MUTILATED, DESTROYED, LOST OR STOLEN TRANSITION
BONDS. 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 bona fide 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 bona fide purchaser of the original Transition Bond in lieu of
which such replacement Transition Bond was issued presents for payment such
original Transition Bond, the Issuer and the Trustee shall be entitled to
recover such replacement Transition Bond (or such payment) from the Person
to whom it was delivered or any Person taking such replacement Transition
Bond from such Person to whom such replacement Transition Bond was
delivered or any assignee of such Person, except a bona fide purchaser, and
shall be entitled to recover upon the security or indemnity provided
therefor to the extent of any loss, damage, cost or expense incurred by the
Issuer or the Trustee in connection therewith.
Upon the issuance of any replacement Transition Bond under this
Section, the Issuer may require the payment by the Holder of such
Transition Bond of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other reasonable
expenses (including the fees and expenses of the Trustee) connected
therewith.
Every replacement Transition Bond issued pursuant to this Section in
replacement of any mutilated, destroyed, lost or stolen Transition Bond
shall constitute an original additional contractual obligation of the
Issuer, whether or not the mutilated, destroyed, lost or stolen Transition
Bond shall be at any time enforceable by anyone, and shall be entitled to
all the benefits of this Indenture equally and proportionately with any and
all other Transition Bonds duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the
replacement or payment of mutilated, destroyed, lost or stolen Transition
Bonds.
SECTION 2.07 PERSONS DEEMED OWNER. Prior to due presentment for
registration of transfer of any Transition Bond, the Issuer, the 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 premium, if any, and interest on such Transition Bond and
for all other purposes whatsoever, whether or not such Transition Bond be
overdue, and neither the Issuer, the Trustee nor any agent of the Issuer or
the Trustee shall be affected by notice to the contrary.
SECTION 2.08 PAYMENT OF PRINCIPAL, PREMIUM, IF ANY, AND
INTEREST; INTEREST ON OVERDUE PRINCIPAL AND PREMIUM, IF ANY; PRINCIPAL,
PREMIUM AND INTEREST RIGHTS PRESERVED.
(a) The Transition Bonds shall accrue interest as provided in the form
of Transition Bond attached to the Series Supplement for such Transition
Bonds, at the applicable Bond Rate specified therein, and such interest
shall be payable on each Payment Date as specified therein. Any instalment
of interest, principal or premium, if any, payable on any Transition Bond
which is punctually paid or duly provided for by the Issuer on the
applicable Payment Date shall be paid to the Person in whose name such
Transition Bond (or one or more Predecessor Transition Bonds) is registered
on the Record Date for such Payment Date, by check mailed first-class,
postage prepaid to such Person's address as it appears on the Transition
Bond Register on such Record Date or in such other manner as may be
provided in the related Series Supplement, except that with respect to
Transition Bonds registered on a Record Date in the name of the nominee of
the Clearing Agency (initially, such nominee to be Cede & Co.), payments
will be made by wire transfer in immediately available funds to the account
designated by such nominee and except for the final instalment of principal
and premium, if any, payable with respect to such Transition Bond on a
Payment Date which shall be payable as provided in clause (b) below. The
funds represented by any such checks returned undelivered shall be held in
accordance with Section 3.03.
(b) The principal of each Transition Bond of each Series (and, if
applicable, Class) shall be payable in instalments on each Payment Date
specified in the Expected Amortization Schedule included in the form of
Transition Bond attached to the Series Supplement for such Transition
Bonds, but only to the extent that moneys are available for such payment
pursuant to Section 8.02. Failure to pay in accordance with such Expected
Amortization Schedule because moneys are not so available pursuant to
Section 8.02 to make such payments shall not constitute a Default or Event
of Default under this Indenture. Notwithstanding the foregoing, the entire
unpaid principal amount of the Transition Bonds of any Series or Class
shall be due and payable, if not previously paid (i) on the Series Final
Maturity Date (or, if applicable, Class 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 at the close of business on the
Record Date preceding the Payment Date on which the Issuer expects that the
final instalment of principal of and premium, if any, and interest on such
Transition Bond will be paid. Such notice shall be mailed no later than
five days prior to such final Payment Date and shall specify that such
final instalment of principal and premium, if any, will be payable only
upon presentation and surrender of such Transition Bond and shall specify
the place where such Transition Bond may be presented and surrendered for
payment of such instalment. Notices in connection with redemptions of
Transition Bonds shall be mailed to Transition Bondholders as provided in
Section 10.03.
(c) If the Issuer defaults in a payment of interest on the Transition
Bonds of any Series, the Issuer shall pay defaulted interest (plus interest
on such defaulted interest at the applicable Bond Rate to the extent
lawful) in any lawful manner. The Issuer may pay such defaulted interest
to the Persons who are Transition Bondholders on a subsequent special
record date, which date shall be at least five Business Days prior to the
payment date. The Issuer shall fix or cause to be fixed any such special
record date and payment date, and, at least 15 days before any such special
record date, the Issuer shall mail to each affected Transition Bondholder a
notice that states the special record date, the payment date and the amount
of defaulted interest to be paid.
SECTION 2.09 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, 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. The aggregate principal amount of Transition Bonds that may be
authenticated and delivered under this Indenture shall not exceed
$__________ 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.
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:
(1) Trust Action. An Issuer Order authorizing and directing the
execution, authentication and delivery of the Transition Bonds by the
Trustee and specifying the principal amount of Transition Bonds to be
authenticated.
(2) Authorizations. An Issuer Opinion of Counsel that 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.
(3) 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.
(4) 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).
(5) Certificates of the Issuer and the Seller.
(a) An Issuer Officer's Certificate dated as of the Series
Issuance Date, stating:
(i) that no Default has occurred and is continuing under
this Indenture and that the issuance of the Transition Bonds
being issued will not result in any Default;
(ii) 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 all
right, title and interest in and to the Collateral free and
clear of any Lien arising as a result of action of the
Issuer or through the Issuer, except the Lien of this
Indenture;
(iii) that the Issuer has appointed the firm of independent
certified public accountants as contemplated in Section
8.05;
(iv) that attached thereto are duly executed, true and
complete copies of the Sale Agreement, the Contribution
Agreement and the Servicing Agreement;
(v) that all filings with the PUC pursuant to the
Competition Act and all UCC financing statements with
respect to the Collateral which are required to be filed by
the terms of the Sale Agreement, the Contribution Agreement,
the Servicing Agreement or this Indenture have been filed as
required; and
(vi) that all conditions precedent provided in the Indenture
relating to the authentication and delivery of the
Transition Bonds have been complied with.
(b) An Officer's Certificate from the Seller, dated as of the
Series Issuance Date, to the effect that, in the case of the
Intangible Transition Property to be transferred to the Issuer on
such date immediately prior to the conveyance thereof to the
Issuer pursuant to the Sale Agreement:
(i) the Seller is the sole owner of such Intangible
Transition Property; such Intangible Transition Property has
been validly transferred and sold to the Issuer free and
clear of all Liens (other than Liens created by the Issuer
pursuant to this Indenture); the Seller has the power and
authority to own, sell and assign such Intangible Transition
Property to the Issuer; and the Seller has duly authorized
such sale and assignment to the Issuer; and
(ii) the attached copy of the Qualified Rate Order creating
such Intangible Transition Property is true and correct and
is in full force and effect.
(6) 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, 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 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) the Transition Bonds being issued, when authenticated in
accordance with the provisions of the Indenture and delivered,
will constitute valid and binding obligations of the Issuer
entitled to the benefits of the Indenture and the related Series
Supplement;
(c) the Indenture (including the related Series Supplement), the
Sale Agreement and the Servicing Agreement are valid and binding
agreements of the Issuer, enforceable 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);
(d) 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);
(e) 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);
(f) the Contribution Agreement is a valid and binding agreement
of each of the parties thereto, enforceable 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 assignment of the Intangible Transition Property from
PP&L to the Seller pursuant to the Contribution Agreement and the
Assignment conveys all of PP&L's right, title and interest in the
Intangible Transition Property to the Seller and will be treated
as an absolute transfer as provided in Section 2812(e) of the
Competition Act; [(ii) such transfer has priority over any other
assignment or transfer of such Intangible Transition Property,
and (iii) such Intangible Transition Property is free and clear
of all Liens created prior to its transfer to the Seller pursuant
to the Contribution Agreement and the Assignment;]
(h) upon the delivery of a fully executed Xxxx of Sale delivered
to the Issuer pursuant to Section 2.03(i) of the Sale Agreement
in connection with the issuance of Transition Bonds being issued
and the payment of the purchase price of the related Intangible
Transition Property by the Issuer to the Seller pursuant to such
Xxxx of Sale and the Sale Agreement, then under the law of the
Commonwealth of Pennsylvania (i) the transfer of the Intangible
Transition Property by the Seller to the Issuer pursuant to such
Xxxx of Sale and the Sale Agreement conveys all of the Seller's
right, title and interest in such Intangible Transition Property
to the Issuer and will be treated as an absolute transfer of all
of the Seller's right, title, and interest in such Intangible
Transition Property, (ii) such transfer is perfected [and has
priority over any other assignment or transfer of such Intangible
Transition Property, and (iii) such Intangible Transition
Property is free and clear of all Liens created prior to its
transfer to the Issuer pursuant to such Xxxx of Sale and the Sale
Agreement;]
(i) (i) to the extent that the provisions of Section 2812 of the
Competition Act apply to the grant of a security interest by
the Issuer in the Collateral pursuant to this Indenture,
then upon the giving of value by the Trustee to the Issuer
with respect to the Collateral,
(A) this Indenture creates in favor of the Trustee a
valid and enforceable security interest in the rights
of the Issuer in the Collateral to secure the
Transition Bonds, and
(B) such security interest has attached and is
perfected and is prior to any other Lien; and
(ii) to the extent that the provisions of Section 2812 of
the Competition Act do not apply to the grant of a security
interest by the Issuer in the Collateral pursuant to this
Indenture, then upon the giving of value by the Trustee to
the Issuer with respect to the Collateral,
(A) this Indenture creates in favor of the Trustee a
security interest in the rights of the Issuer in the
Collateral, and such security interest is enforceable
against the Issuer with respect to such Collateral to
secure the Transition Bonds and any other amounts
(including all fees, expenses, counsel fees and other
amounts due and owing to the Trustee) owing in respect
of the Transition Bonds,
(B) such security interest is perfected, and
(C) such perfected security interest is of first
priority;
(j) the Indenture has been duly qualified under the Trust
Indenture Act and either the Series Supplement for the Transition
Bonds applied for has been duly qualified under the Trust
Indenture Act or no such qualification of such Series Supplement
is necessary;
(k) all instruments furnished to the Trustee conform to the
requirements of this Indenture and constitute all 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
(i) 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
(ii) the Transition Bonds are exempt from the registration
requirements under the Securities Act of 1933;
(m) the Indenture (including the related Series Supplement) has
been duly authorized, executed and delivered by the Issuer;
(n) the Sale Agreement, the Contribution 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.
(7) Accountant's Certificate or Opinion. A certificate or opinion,
addressed to the Issuer and the Trustee, complying with the
requirements of Section 11.01 hereof, of a firm of Independent
certified public accountants of recognized national reputation to the
effect that (a) such accountants are Independent within the meaning of
the Indenture, and are independent public accountants within the
meaning of the standards of The American Institute of Certified Public
Accountants, and (b) with respect to the Collateral, they have made
such calculations as they deemed necessary for the purpose and
determined that, based on the assumptions used in calculating the
initial Intangible Transition Charges with respect to the Transferred
Intangible Transition Property or, if applicable, the most recent
revised Intangible Transition Charges with respect to the Transferred
Intangible Transition Property, and taking into account amounts on
deposit in the Reserve Subaccount, as of the Series Issuance Date for
such Series (after giving effect to the issuance of such Series and
the application of the proceeds therefrom) such Intangible Transition
Charges are sufficient to (a) pay Operating Expenses when incurred,
(b) pay interest on each Series of Transition Bonds at their
respective Bond Rates when due, (c) pay principal of the Transition
Bonds of all Series in accordance with their respective Expected
Amortization Schedules and (d) fund the Scheduled
Overcollateralization Level and replenish any shortfalls in the
Capital Subaccount as of each Payment Date.
(8) Rating Agency Condition. The Trustee shall receive written notice
from each Rating Agency that the Rating Agency Condition will be
satisfied with respect to the issuance of any additional Series of
Transition Bonds being issued.
(9) 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 Intangible
Transition Property being purchased with the proceeds of such
Financing Issuance.
(10) Moneys for Refunding. If the issuance of a Series of Transition
Bonds is a Refunding Issuance, the amount of money necessary to pay
the outstanding principal balance of, and premium and interest on, the
Transition Bonds being refunded to 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:
(i) the provisions of this Section shall be in full force and
effect;
(ii) 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
premium, if any, and interest on the Transition Bonds and the
giving of instructions or directions hereunder) as the sole
holder of the Transition Bonds, and shall have no obligation to
the Transition Bond Owners;
(iii) to the extent that the provisions of this Section conflict
with any other provisions of this Indenture, the provisions of
this Section shall control;
(iv) the rights of Transition Bond Owners shall be exercised only
through the Clearing Agency and shall be limited to those
established by law and agreements between such Transition Bond
Owners and the Clearing Agency or the Clearing Agency
Participants. Pursuant to the DTC Agreement, unless and until
Definitive Transition Bonds are issued pursuant to Section 2.13,
the initial Clearing Agency will make book-entry transfers among
the Clearing Agency Participants and receive and transmit
payments of principal of and premium, if any, and interest on the
Transition Bonds to such Clearing Agency Participants; and
(v) whenever this Indenture requires or permits actions to be
taken based upon instructions or directions of Holders of
Transition Bonds evidencing a specified percentage of the
Outstanding Amount of the Transition Bonds or a Series or Class
thereof, the Clearing Agency shall be deemed to represent such
percentage only to the 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. 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. Upon the issuance of Definitive Transition Bonds, the
Trustee shall recognize the Holders of the Definitive Transition Bonds as
Transition Bondholders.
ARTICLE III
COVENANTS
-------------
SECTION 3.01 PAYMENT OF PRINCIPAL, PREMIUM, IF ANY, AND
INTEREST. The Issuer will duly and punctually pay the principal of and
premium, if any, and interest on the Transition Bonds in accordance with
the terms of the Transition Bonds and this Indenture; provided that except
on the Series Final Maturity Date, the Class Final Maturity Date or the
Redemption Date for a Series or Class of Transition Bonds or upon the
acceleration of the Transition Bonds following the occurrence of an Event
of Default, the Issuer shall only be obligated to pay the principal of such
Transition Bonds on each Payment Date therefor to the extent moneys are
available for such payment pursuant to Section 8.02. Amounts properly
withheld under the Code by any Person from a payment to any Transition
Bondholder of interest or principal or premium, if any, shall be considered
as having been paid by the Issuer to such Transition Bondholder for all
purposes of this Indenture.
SECTION 3.02 MAINTENANCE OF OFFICE OR AGENCY. The Issuer will
maintain in the Borough of Manhattan, the City of New York, an office or
agency where Transition Bonds may be surrendered for registration of
transfer or exchange, and where notices and demands to or upon the Issuer
in respect of the Transition Bonds and this Indenture may be served. The
Issuer hereby initially appoints the Trustee to serve as its agent for the
foregoing purposes. The Issuer will give prompt written notice to the
Trustee of the location, and of any change in the location, of any such
office or agency. If at any time the Issuer shall fail to maintain any
such office or agency or shall fail to furnish the Trustee with the address
thereof, such surrenders, notices and demands may be made or served at the
Corporate Trust Office, and the Issuer hereby appoints the Trustee as its
agent to receive all such surrenders, notices and demands.
SECTION 3.03 MONEY FOR PAYMENTS TO BE HELD IN TRUST. As
provided in Section 8.02(a), all payments of principal of, or premium and
interest on, the Transition Bonds that are to be made from amounts
withdrawn from the Collection Account pursuant to Section 8.02(d) or (e) 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 and in Section 8.02.
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, that such
Paying Agent will:
(i) hold all sums held by it for the payment of principal of, or
premium or interest on, the Transition Bonds in trust for the
benefit of the Persons entitled thereto until such sums shall be
paid to such Persons or otherwise disposed of as herein provided
and pay such sums to such Persons as herein provided;
(ii) give the 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.
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.
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, premium on, if any, or interest on any Transition
Bond and remaining unclaimed for two years after such amount has become due
and payable shall be discharged from such trust and be paid to the Issuer;
and the Holder of such Transition Bond shall thereafter, as an unsecured
general creditor, look only to the Issuer for payment thereof (but only to
the extent of the amounts so 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, notice that such money remains
unclaimed and that, after a date specified therein, which shall not be less
than 30 days from the date of such publication, any unclaimed balance of
such money then remaining will be repaid to the Issuer. The 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. The Issuer shall from
time to time execute and deliver all such supplements and amendments hereto
and all such filings (including filings with the PUC pursuant to the
Competition Act), 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 lien and security interest (and the
priority thereof) of this Indenture or carry out more effectively
the purposes hereof;
(ii) perfect, publish notice of or protect the validity of any
Grant made or to be made by this Indenture;
(iii) enforce any of the Collateral;
(iv) preserve and defend title to the Collateral and the rights
of the Trustee and the Transition Bondholders in the Collateral
against the claims of all Persons and parties; or
(v) pay any and all taxes levied or assessed up on all or any
part of the Collateral.
The Issuer hereby designates the Trustee its agent and attorney-in-fact to
execute any filing with the PUC, financing statement, continuation
statement or other instrument required by the Trustee pursuant to this
Section.
SECTION 3.06 OPINIONS AS TO COLLATERAL. (a) On or before [March
31] in each calendar year, while any Series is outstanding, 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 recording, filing, re-recording and re-filing of this
Indenture, any indentures supplemental hereto and any other requisite
documents and, with respect to the execution and filing of any filings
pursuant to the Competition Act or the UCC, 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 lien and security
interest, and the first priority thereof. Such Issuer Opinion of Counsel
shall also describe the recording, filing, re-recording and re-filing of
this Indenture, any indentures supplemental hereto and any other requisite
documents, and the execution and filing of any filings pursuant to the
Competition Act or the UCC, financing statements and continuation
statements that will, in the opinion of such counsel, be required to
maintain the lien and security interest of this Indenture until [ ] in
the following calendar year.
(b) Prior to the effectiveness of any amendment to the Sale Agreement,
the Contribution Agreement or the Servicing Agreement, the Issuer shall
furnish to the Trustee an Issuer Opinion of Counsel either (A) stating
that, in the opinion of such counsel, all filings, including filings
pursuant to the Competition Act or the 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 Intangible Transition Property and the
proceeds thereof, and reciting the details of such filings or referring to
prior Opinions of Counsel in which such details are given, or (B) stating
that, in the opinion of such counsel, no such action shall be necessary to
preserve and protect such interest.
SECTION 3.07 PERFORMANCE OF OBLIGATIONS. (a) The Issuer (i)
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 Contribution Agreement or the
Servicing Agreement or such other instrument or agreement.
(b) The Issuer may contract with other Persons to assist it in
performing its duties under this Indenture, and any performance of such
duties by a Person identified to the 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, the Contribution Agreement and in all other instruments and
agreements included in the Collateral.
NEGATIVE COVENANTS. The Issuer shall not:
(i) except as expressly permitted by this Indenture, the Sale
Agreement or the Servicing Agreement, sell, transfer, exchange or
otherwise dispose of any of the Collateral, unless directed to do so
by the Trustee in accordance with Article V;
(ii) claim any credit on, or make any deduction from the
principal or premium, if any, or interest payable in respect of, the
Transition Bonds (other than amounts properly withheld from such
payments under the Code) or assert any claim against any present or
former Transition Bondholder by reason of the payment of taxes levied
or assessed upon the Issuer or any part of the Collateral; or
(iii) (A) permit the validity or effectiveness of this
Indenture to be impaired, or permit the lien of this Indenture to be
amended, hypothecated, subordinated, terminated or discharged, or
permit any Person to be released from any covenants or obligations
with respect to the Transition Bonds under this Indenture except as
may be expressly permitted hereby, (B) permit any Lien (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 or
any interest therein or the proceeds thereof or (C) permit the Lien of
this Indenture not to constitute a continuing valid first priority
security interest in the Collateral.
SECTION 3.08 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 1999), an Issuer Officer's
Certificate stating, as to the Manager signing such Issuer Officer's
Certificate, that
(i) a review of the activities of the Issuer during such year (or
relevant portion thereof) and of performance under this Indenture
has been made under such Manager's supervision; and
(ii) 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 3.09 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 and
dissolve, unless:
(i) the Person (if other than the Issuer) formed by or surviving
such consolidation or merger or to whom substantially all of such
assets are sold shall be a Person organized and existing under
the laws of the United States of America or any State and shall
expressly assume by an indenture supplemental hereto, executed
and delivered to the Trustee, in form satisfactory to the
Trustee, the due and punctual payment of the principal of and
premium, if any, and interest on all Transition Bonds and the
performance or observance of every agreement and covenant of this
Indenture on the part of the Issuer to be performed or observed,
all as provided herein and in the applicable Series Supplement or
Series Supplements;
(ii) the Person (if other than the Issuer) formed by or surviving
such consolidation or merger or to whom substantially all of such
assets are sold shall expressly assume all obligations and
succeed to all rights of the Issuer under the Sale Agreement, the
Contribution Agreement, the Administration Agreement and the
Servicing Agreement pursuant to an assignment and assumption
agreement executed and delivered to the Trustee, in form
satisfactory to the Trustee;
(iii) immediately after giving effect to such consolidation or
merger or sale, no Default or Event of Default shall have
occurred and be continuing;
(iv) the Rating Agency Condition shall have been satisfied with
respect to such consolidation or merger or sale;
(v) 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 or merger or sale (a) will not
have any material adverse tax consequence to the Issuer or any
Transition Bondholder, (b) complies with this Indenture and all
of the conditions precedent herein relating to such transaction
and (c) will result in the Trustee maintaining a continuing valid
first priority security interest in the Collateral;
(vi) neither the Intangible Transition Property nor the Qualified
Rate Order nor the Issuer's rights under the Competition Act or
the Qualified Rate Order shall be impaired thereby; and
(vii) any action as is necessary to maintain the Lien created by
this Indenture shall have been taken.
SECTION 3.10 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, PP&L Transition Bond Company 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 and the Servicing Agreement to be
observed or performed on the part of the Issuer.
SECTION 3.11 NO OTHER BUSINESS. The Issuer shall not engage in
any business other than purchasing and owning Intangible Transition
Property, issuing Transition Bonds from time to time, pledging its interest
in the Collateral to the Trustee under this Indenture in order to secure
the Transition Bonds and performing activities that are necessary, suitable
or convenient to accomplish these purposes or are incidental thereto.
SECTION 3.12 NO BORROWING. The Issuer shall not issue, incur,
assume, guarantee or otherwise become liable, directly or indirectly, for
any indebtedness and except for the Transition Bonds and except as
contemplated by the Basic Documents.
SECTION 3.13 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.
SECTION 3.14 CAPITAL EXPENDITURES. The Issuer shall not make
any expenditure (by long-term or operating lease or otherwise) for capital
assets (either realty or personalty) other than Intangible Transition
Property purchased from the Seller pursuant to, and in accordance with, the
Sale Agreement.
SECTION 3.15 RESTRICTED PAYMENTS. The Issuer shall not,
directly or indirectly, (i) pay any dividend or make any distribution (by
reduction of capital or otherwise), whether in cash, property, securities
or a combination thereof, to any owner of a beneficial interest in the
Issuer or otherwise with respect to any ownership or equity interest in, or
ownership security of, the Issuer, (ii) redeem, purchase, retire or
otherwise acquire for value any such ownership or equity interest or
security or (iii) set aside or otherwise segregate any amounts for any such
purpose; provided, however, that if no Event of Default shall have occurred
and be continuing, the Issuer may make, or cause 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 distributed to the Issuer pursuant to Section
8.02(d) 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 3.16 NOTICE OF EVENTS OF DEFAULT. The Issuer agrees to
deliver to the Trustee and the Rating Agencies 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 3.17 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 3.18 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.
SECTION 3.19 SALE AGREEMENT, CONTRIBUTION AGREEMENT, THE
ADMINISTRATION AGREEMENT AND SERVICING AGREEMENT COVENANTS. (a) The Issuer
agrees to take all such lawful actions to enforce its rights under the Sale
Agreement, the Contribution Agreement, the Administration Agreement and the
Servicing Agreement and to compel or secure the performance and observance
by the Seller, PP&L and the Servicer, of each of their obligations to the
Issuer under or in connection with the Sale Agreement, the Contribution
Agreement, the Administration Agreement and the Servicing Agreement,
respectively, in accordance with the terms thereof. So long as no Event of
Default occurs and is continuing, but subject to Section 3.20(f), the
Issuer may exercise any and all rights, remedies, powers and privileges
lawfully available to the Issuer under or in connection with the Sale
Agreement, the Contribution Agreement, the Administration Agreement and the
Servicing 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 the Holders of a majority of
the Outstanding Amount of the Transition Bonds of all Series shall,
exercise all right, remedies, powers, privileges and claims of the Issuer
against the Seller, PP&L or the Servicer under or in connection with the
Sale Agreement, the Contribution Agreement, the Administration Agreement
and the Servicing Agreement, respectively, including the right or power to
take any action to compel or secure performance or observance by the
Seller, PP&L or the Servicer 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 Contribution Agreement,
the Administration Agreement and the Servicing Agreement, and any right of
the Issuer to take such action shall be suspended.
(c) With the consent of the Trustee, the Sale Agreement, the
Contribution 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, provided that such amendment shall not, as evidenced by an
Issuer Opinion of Counsel, adversely affect the interest of any Transition
Bondholder in any material respect without the consent of the Holders of a
majority of the Outstanding Amount of the Transition Bonds of each Series
materially and adversely affected thereby and without having satisfied the
Rating Agency Condition.
(d) If the Issuer, the Seller, PP&L or the Servicer proposes to amend,
modify, waive, supplement, terminate or surrender, or agree to any
amendment, modification, supplement, termination, waiver or surrender of,
the terms of the Sale Agreement, the Contribution Agreement or the
Servicing Agreement, or waive timely performance or observance by the
Servicer, PP&L or the Seller under the Sale Agreement, the Contribution
Agreement or the Servicing Agreement, respectively, in each case in such a
way as would materially and adversely affect the interests of Transition
Bondholders, the Issuer shall first notify the Rating Agencies of the
proposed amendment and, upon satisfaction of the Rating Agency Condition,
shall notify the Trustee and the Trustee shall notify the Transition
Bondholders of the proposed amendment and that the Rating Agency Condition
has been satisfied with respect thereto. The Trustee shall consent to such
proposed amendment, modification, supplement or waiver only with the
consent of the Holders of a majority of the Outstanding Amount of the
Transition Bonds of each Series materially and adversely affected thereby.
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.
(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, supplement, termination, waiver or
surrender of, the Intangible Transition 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, PP&L or the
Servicer under the Sale Agreement, the Contribution Agreement or the
Servicing 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, PP&L or the
Servicer, as applicable, of each of their obligations to the Issuer under
or in connection with the Sale Agreement, the Contribution Agreement or the
Servicing Agreement in accordance with the terms thereof, and to exercise
any and all rights, remedies, powers and privileges lawfully available to
the Issuer under or in connection with the Sale Agreement, the Contribution
Agreement or the Servicing Agreement to the extent and in the manner
directed by the Trustee, including the transmission of notices of default
on the part of the Seller, PP&L or the Servicer thereunder and the
institution of legal or administrative actions or proceedings to compel or
secure performance by the Seller, PP&L or the Servicer of each of their
obligations under the Sale Agreement, the Contribution Agreement and the
Servicing Agreement.
(g) If the Issuer shall have knowledge of the occurrence of a Servicer
Default under the Servicing Agreement, the Issuer shall promptly give
written notice thereof to the Trustee and the Rating Agencies, and shall
specify in such notice the action, if any, the Issuer is taking with
respect to such default. If a Servicer Default shall arise from the
failure of the Servicer to perform any of its duties or obligations under
the Servicing Agreement with respect to the Intangible Transition Property
or the Intangible Transition Charges, the Issuer shall take all reasonable
steps available to it to remedy such failure. The Issuer shall not take
any action to terminate the Servicer's rights and powers under the
Servicing Agreement following a Servicer Default without the prior written
consent of the Trustee and of the Holders of a majority of the Outstanding
Amount of the Transition Bonds of all Series.
(h) As promptly as possible after the giving of notice of termination
to the Servicer and the Rating Agencies of the Servicer's rights and powers
pursuant to Section 6.01 of the Servicing Agreement, the 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,
shall 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. If within 30 days after the
delivery of the notice referred to above, a Successor Servicer shall not
have been appointed and accepted its appointment as such, the 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 petition the PUC or a court of competent jurisdiction to appoint a
Successor Servicer. In connection with any such appointment, the Issuer
may make such arrangements for the compensation of such Successor Servicer
as it and such Successor Servicer shall agree, subject to the limitations
set forth below and in the Servicing Agreement, and in accordance with
Section 6.04 of the Servicing Agreement, the Issuer shall enter into an
agreement with such Successor Servicer for the servicing of the Intangible
Transition Property (such agreement to be in form and substance
satisfactory to the Trustee).
(i) 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.
SECTION 3.20 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
(A) either
(1) all Transition Bonds of such Series theretofore
authenticated and delivered (other than (i) Transition
Bonds that have been destroyed, lost or stolen and that
have been replaced or paid as provided in Section 2.06
and (ii) Transition Bonds for whose payment money has
theretofore been deposited in trust or segregated and
held in trust by the Issuer and thereafter repaid to
the Issuer or discharged from such trust, as provided
in Section 3.03) have been delivered to the Trustee for
cancellation; or
(2) the Expected Final Payment Date or Redemption Date
has occurred with respect to all Transition Bonds of
such Series not theretofore delivered to the 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;
(B) the Issuer has paid or caused to be paid all other sums
payable hereunder by the Issuer with respect to such Series; and
(C) the Issuer has delivered to the 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, 3.07, 3.08, 3.09, 3.10, 3.12,
3.13, 3.14, 3.15, 3.16, 3.17, 3.18, 3.19 and 3.20 and the operation of
Section 5.01(iv) ("Covenant Defeasance Option") with respect to any Series
of Transition Bonds. The Issuer may exercise the Legal Defeasance Option
with respect to any Series of Transition Bonds notwithstanding its prior
exercise of the Covenant Defeasance Option with respect to such Series.
If the Issuer exercises the Legal Defeasance Option with respect to
any Series, the maturity of the Transition Bonds of such Series may not be
(a) accelerated because of an Event of Default or (b) except as provided in
Section 4.02, redeemed. If the Issuer exercises the Covenant Defeasance
Option with respect to any Series, the maturity of the Transition Bonds of
such Series may not be accelerated because of an Event of Default specified
in Section 5.01(iv).
Upon satisfaction of the conditions set forth herein to the exercise
of the Legal Defeasance Option or the Covenant Defeasance Option with
respect to any Series of Transition Bonds, the Trustee, on demand of and at
the expense of the Issuer, shall execute proper instruments acknowledging
satisfaction and discharge of the obligations that are terminated pursuant
to such exercise.
(c) Notwithstanding Sections 4.01(a) and 4.01(b) above, (i) rights of
registration of transfer and exchange, (ii) rights of substitution of
mutilated, destroyed, lost or stolen Transition Bonds, (iii) rights of
Transition Bondholders to receive payments of principal, premium, if any,
and interest, but only from the amounts deposited with the 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 be satisfied and
discharged pursuant to Section 4.01(a) or 4.01(b) and have been paid in
full. Thereafter, the obligations in Sections 6.07 and 4.04 with respect
to such Series shall survive.
SECTION 4.02 CONDITIONS TO DEFEASANCE. The Issuer may exercise
the Legal Defeasance Option or the Covenant Defeasance Option with respect
to any Series of Transition Bonds only if:
(a) the Issuer irrevocably deposits or causes to be deposited in
trust with the Trustee cash or U.S. Government Obligations for
the payment of principal of and premium, if any, 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;
(b) 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 (i) subject to clause (ii), principal in
accordance with the Expected Amortization Schedule therefor, (ii)
if such Series is to be redeemed, the Redemption Price therefor
on the Redemption Date therefor and (iii) interest when due;
(c) in the case of the Legal Defeasance Option, 95 days pass
after the deposit is made and during the 95-day period no Default
specified in Section 5.01(v) or (vi) occurs which is continuing
at the end of the period;
(d) no Default has occurred and is continuing on the day of such
deposit and after giving effect thereto;
(e) in the case of the Legal Defeasance Option, the Issuer
delivers to the Trustee an Issuer Opinion of Counsel stating that
(i) the Issuer has received from, or there has been published by,
the Internal Revenue Service a ruling, or (ii) since the date of
execution of this Indenture, there has been a change in the
applicable federal income tax law, in either case to the effect
that, and based thereon such opinion shall confirm that, the
Holders of the Transition Bonds of such Series will not recognize
income, gain or loss for federal income tax purposes as a result
of the exercise of such Legal Defeasance Option and will be
subject to federal income tax on the same amounts, in the same
manner and at the same times as would have been the case if such
Legal Defeasance had not occurred;
(f) in the case of the Covenant Defeasance Option, the Issuer
delivers to the 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
(g) 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.
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 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 Section 4.01
or 4.02 hereof with respect to any Series of Transition Bonds shall be held
in trust in the Defeasance Subaccount for such Series and applied by it, in
accordance with the provisions of the Transition Bonds and this Indenture,
to the payment, either directly or through any Paying Agent, as the 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, premium,
if any, 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):
(i) 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;
(ii) default in the payment of the then unpaid principal of any
Transition Bond of any Series on the Series Final Maturity Date for
such Series or, if applicable, any Class on the Class Final Maturity
Date for such Class;
(iii) default in the payment of the Redemption Price for any
Transition Bond on the Redemption Date therefor;
(iv) default in the observance or performance of any covenant or
agreement of the Issuer made in this Indenture (other than a covenant
or agreement, a default in the observance or performance of which is
specifically dealt with in clause (i), (ii) or (iii) above), 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 30 days after (A) 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
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 (B) the date
the Issuer has knowledge of the default;
(v) the filing of a decree or order for relief by a court having
jurisdiction in the premises in respect of the Issuer or any
substantial part of the Collateral in an involuntary case under any
applicable federal or state bankruptcy, insolvency or other similar
law now or hereafter in effect, or appointing a receiver, liquidator,
assignee, custodian, trustee, sequestrator or similar official of the
Issuer or for any substantial part of the Collateral, or ordering the
winding-up or liquidation of the Issuer's affairs, and such decree or
order shall remain unstayed and in effect for a period of 90
consecutive days;
(vi) the commencement by the Issuer of a voluntary case under
any applicable federal or state bankruptcy, insolvency or other
similar law now or hereafter in effect, or the consent by the Issuer
to the entry of an order for relief in an involuntary case under any
such law, or the consent by the Issuer to the appointment or taking
possession by a receiver, liquidator, assignee, custodian, trustee,
sequestrator or similar official of the Issuer or for any substantial
part of the Collateral, or the making by the Issuer of any general
assignment for the benefit of creditors, or the failure by the Issuer
generally to pay its debts as such debts become due, or the taking of
action by the Issuer in furtherance of any of the foregoing; or
(vii) any act or failure to act by the Commonwealth of
Pennsylvania or any of its agencies (including the PUC), officers or
employees that violates or is not in accordance with the pledge and
agreement of the Commonwealth in Section 2812(c)(2) of the Competition
Act.
SECTION 5.02 ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT.
If an Event of Default (other than an Event of Default under clause (vii)
of Section 5.01) 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.
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 provided, the
Holders of Transition Bonds representing a majority of the Outstanding
Amount of the Transition Bonds of all Series, by written notice to the
Issuer and the Trustee, may rescind and annul such declaration and its
consequences if:
(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 premium, if any, and
interest on all Transition Bonds of all Series and all other
amounts that would then be due hereunder or upon such Transition
Bonds if the Event of Default giving rise to such acceleration
had not occurred; and
(B) all sums paid or advanced by the 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.
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 Series Final Maturity Date or Class
Final Maturity Date, as applicable, therefor (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, premium, if any, and interest, with interest upon the overdue
principal and premium, if any, and, to the extent payment at such rate of
interest shall be legally enforceable, upon overdue instalments of
interest, at the respective Bond Rate of such Series or the applicable
Class of such Series.
(b) In case the Issuer shall fail forthwith to pay the amounts
specified in clause (a) above upon such demand, the 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 Intangible
Transition Property securing the Transition Bonds or applying to the PUC
for sequestration of revenues arising with respect to such Intangible
Transition Property.
(d) In case there shall be pending, relative to the Issuer or
any other obligor upon the Transition Bonds or any Person having or
claiming an ownership interest in the Collateral, Proceedings under Title
11 of the United States Code or any other applicable federal or state
bankruptcy, insolvency or other similar law, or in case a receiver,
assignee or trustee in bankruptcy or reorganization, liquidator,
sequestrator or similar official shall have been appointed for or taken
possession of the Issuer or its property or such other obligor or Person,
or in case of any other comparable judicial Proceedings relative to the
Issuer or other obligor upon the Transition Bonds, or to the creditors or
property of the Issuer or such other obligor, the 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, shall be entitled and empowered, by intervention in such
Proceedings or otherwise:
(i) to file and prove a claim or claims for the whole amount of
principal, premium, if any, and interest owing and unpaid in respect
of the Transition Bonds and to file such other papers or documents as
may be necessary or advisable in order to have 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; PRIORITIES. (a) If an Event of Default
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 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, PP&L or the Servicer under or in
connection with the Sale Agreement, the Contribution Agreement, the
Administration Agreement or the Servicing Agreement 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(i), (ii) or (iii), with respect
to any Series unless (A) the Holders of 100% of the Outstanding Amount of
the Transition Bonds of all Series consent thereto, (B) the proceeds of
such sale or liquidation distributable to the Transition Bondholders of all
Series are sufficient to discharge in full all amounts then due and unpaid
upon such Transition Bonds for principal, premium, if any, and interest or
(C) the 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 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 clause (vii) of Section 5.01
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 Commonwealth
in Section 2812(c)(2) 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.
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(iii), to maintain possession
of the Collateral and not sell or liquidate the same. It is the desire of
the parties hereto and the Transition Bondholders that there be at all
times sufficient funds for the payment of principal of and premium, if any,
and interest on the Transition Bonds, and the 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. No Holder of any
Transition Bond of any Series shall have any right to institute any
Proceeding, judicial or otherwise, or to avail itself of the remedies
provided in Section 2812(d)(3)(v) of the 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 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 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 60-day period by the Holders of a
majority of the Outstanding Amount of the Transition Bonds of all
Series;
it being understood and intended that no one or more Holders of Transition
Bonds shall have any right in any manner whatever by virtue of, or by
availing of, any provision of this Indenture to affect, disturb or
prejudice the rights of any other Holders of Transition Bonds or to obtain
or to seek to obtain priority or preference over any other Holders or to
enforce any right under this Indenture, except in the manner herein
provided.
In the event the 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, PREMIUM, IF ANY, AND INTEREST. Notwithstanding any
other provisions in this Indenture, the Holder of any Transition Bond shall
have the right, which is absolute and unconditional, 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 Series
Final Maturity Date or Class Final Maturity Date therefor or (iii) in the
case of redemption, receive payment of the unpaid principal, if any, of and
premium, if any, and interest, if any, on such Transition Bond on or after
the Redemption Date therefor and (b) to institute suit for the enforcement
of any such payment, and such right shall not be impaired without the
consent of such Holder.
SECTION 5.08 RESTORATION OF RIGHTS AND REMEDIES. If the 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
(i) such direction shall not be in conflict with any rule of law
or with this Indenture;
(ii) subject to the express terms of Section 5.04, any direction
to the Trustee to sell or liquidate the Collateral shall be by the
Holders of Transition Bonds representing not less than 100% of the
Outstanding Amount of the Transition Bonds of all Series;
(iii) if the conditions set forth in Section 5.05 have been
satisfied and the Trustee elects to retain the Collateral pursuant to
such Section and no sell or liquidate the same, then any direction to
the Trustee by Holders of Transition Bonds representing less than 100%
of the Outstanding Amount of the Transition Bonds of all Series to
sell or liquidate the Collateral shall be of no force and effect; and
(iv) the 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. Prior to the declaration
of the acceleration of the maturity of the Transition Bonds of all Series
as provided in Section 5.02, the Holders of not less than a majority of the
Outstanding Amount of the Transition Bonds of all Series may waive any past
Default or Event of Default and its consequences except a Default (i) in
payment of principal of or premium, if any, or interest on any of the
Transition Bonds or (ii) in respect of a covenant or provision hereof which
cannot be modified or amended without the consent of the Holder of each
Transition Bond of all Series or Classes affected. In the case of any such
waiver, the Issuer, the Trustee and the Holders of the Transition Bonds
shall be restored to their former positions and rights hereunder,
respectively; but no such waiver shall extend to any subsequent or other
Default or impair any right consequent thereto.
Upon any such waiver, such Default shall cease to exist and be deemed
to have been cured and not to have occurred, and any Event of Default
arising therefrom shall be deemed to have been cured and not to have
occurred, for every purpose of this Indenture; but no such waiver shall
extend to any subsequent or other Default or Event of Default or impair any
right consequent thereto.
SECTION 5.13 UNDERTAKING FOR COSTS. All parties to this
Indenture agree, and each Holder of any Transition Bond by such Holder's
acceptance thereof shall be deemed to have 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 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 10% of the Outstanding Amount of the
Transition Bonds of a Series or (c) any suit instituted by any Transition
Bondholder for the enforcement of the payment of (i) interest on any
Transition Bond on or after the due dates expressed in such Transition Bond
and in this Indenture, (ii) the unpaid principal, if any, of any Transition
Bond on or after the Series Final Maturity Date or Class Final Maturity
Date, if applicable, therefor or (iii) in the case of redemption, the
unpaid principal of and premium, if any, and interest on any Transition
Bond on or after the Redemption Date therefor.
SECTION 5.14 WAIVER OF STAY OR EXTENSION LAWS. The Issuer
covenants (to the extent that it may lawfully do so) that it will not at
any time insist upon, or plead or in any manner whatsoever, claim or take
the benefit or advantage of, any stay or extension law wherever enacted,
now or at any time hereafter in force, that may affect the covenants or the
performance of this Indenture; and the Issuer (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any
such law, and covenants that it will not hinder, delay or impede the
execution of any power herein granted to the 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
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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 paragraph does not limit the effect of paragraph (b) of
this Section;
(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 paragraphs (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 or the Sale Agreement or the Servicing
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 and to the provisions of the TIA.
(i) Under no circumstances shall the Trustee be liable for any
indebtedness of the Issuer, the Servicer, the Seller or PP&L 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, but shall remain liable as if it had
performed such trusts or powers itself.
(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 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
the 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 a Manager or any Manager of the Issuer
under any Basic Document or otherwise 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 Holder
of Transition Bonds of all Series notice of the Default within 90 days
after it occurs. Except in the case of a Default in payment of principal
of or premium, if any, or interest on any Transition Bond, the 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 of Transition Bonds, on or prior
to each Payment Date therefor, the Trustee will deliver a statement
prepared by the Trustee to each Holder of Transition Bonds which will
include (to the extent applicable) the following information (and any other
information so specified in the Series Supplement for such Series) as to
the Transition Bonds of such Series with respect to such Payment Date or
the period since the previous Payment Date, as applicable:
(i) the amount paid to Holders of such Transition Bonds in
respect of principal;
(ii) the amount paid to Holders of such Transition Bonds in
respect of interest;
(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 as of such Payment
Date;
(iv) the amount on deposit in the Overcollateralization
Subaccount and the Scheduled Overcollateralization Level as of such
Payment Date;
(v) the amount on deposit in the Capital Subaccount as of such
Payment Date; and
(vi) the amount, if any, on deposit in the Reserve Subaccount as
of such Payment Date.
(c) The Trustee's responsibility for disbursing the information
described in subsection (b) above to Holders of Transition Bonds is limited
to the availability, timeliness and accuracy of the information provided by
the Servicer pursuant to Section 3.04 and Annex 1 of the Servicing
Agreement.
SECTION 6.07 COMPENSATION AND INDEMNITY. The Issuer shall pay
to the 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. 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, by PP&L pursuant to the
Contribution Agreement or by the Servicer pursuant to the Servicing
Agreement.
When the Trustee incurs expenses after the occurrence of a Default
specified in Section 5.01(v) or (vi) with respect to the Issuer, the
expenses are intended to constitute expenses of administration under Title
11 of the United States Code or any other applicable federal or state
bankruptcy, insolvency or similar law.
SECTION 6.08 REPLACEMENT OF TRUSTEE. The Trustee may resign at
any time upon 30 days notice by so notifying the Issuer. The Issuer
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.
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.
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 may appoint a successor Trustee.
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
will 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.
If a successor Trustee does not take office within 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.
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.
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. 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.
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, 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 hereof.
(b) Every separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following provisions
and conditions:
(i) all rights, powers, duties and obligations conferred or
imposed upon the 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). 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 "Baa3" or better by Moody's. 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.
ARTICLE VII
TRANSITION BONDHOLDERS' LISTS AND REPORTS
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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 30 days after
receipt by the Issuer of any such request, a list of similar form and
content as of a date not more than 10 days prior to the time such list is
furnished; provided, however, that so long as the Trustee is the Transition
Bond Registrar, no such list shall be required to be furnished.
SECTION 7.02 PRESERVATION OF INFORMATION; COMMUNICATIONS TO
TRANSITION BONDHOLDERS. (a) The 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, within 15 days after the Issuer
is required to file the same with the Commission, copies of the
annual reports and of the information, documents and other
reports (or copies of such portions of any of the foregoing as
the Commission may from time to time by rules and regulations
prescribe) which the Issuer may be required to file with the
Commission pursuant to Section 13 or 15(d) of the Exchange Act;
(ii) file with the Trustee and the Commission in accordance
with rules and regulations prescribed from time to time by the
Commission such additional information, documents and reports
with respect to compliance by the Issuer with the conditions and
covenants of this Indenture as may be required from time to time
by such rules and regulations; and
(iii) supply to the Trustee (and the Trustee shall transmit
by mail to all Transition Bondholders described in TIA Section
313(c)) such summaries of any information, documents and reports
required to be filed by the Issuer pursuant to clauses (i) and
(ii) of this Section 7.03(a) as may be required by rules and
regulations prescribed from time to time by the Commission.
(b) Unless the Issuer otherwise determines, the fiscal year of
the Issuer shall end on December 31 of each year.
SECTION 7.04 REPORTS BY TRUSTEE. If required by TIA Section
313(a), within 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 12 months after the initial
issuance of each Series.
A copy of each report at the time of its mailing to Transition
Bondholders shall be filed by the 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.
ARTICLE VIII
ACCOUNTS, DISBURSEMENTS AND RELEASES
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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) 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
(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 (the "Overcollateralization Subaccount"),
a capital subaccount (the "Capital Subaccount"), a reserve subaccount (the
"Reserve Subaccount"), and a series subaccount for each Series of
Transition Bonds issued on such date (each a "Series Subaccount"). 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 as a subaccount 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 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) and
(e). The Collection Account shall at all times be maintained in an
Eligible Deposit 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 except to the extent set
forth in Section 6.01(f). 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.
(b) So long as no Default or Event of Default has occurred and
is continuing, all or a portion of the funds in the Collection Account
shall be invested in Eligible Investments and reinvested by the Trustee
upon Issuer Order; provided, however, that (i) such Eligible Investments
shall not mature later than the Business Day prior to the next Payment Date
(except as otherwise provided in any Series Supplement with respect to
funds in the Series Subaccount for any Series of Transition Bonds), (ii)
such Eligible Investments shall not be sold, liquidated or otherwise
disposed of at a loss prior to the maturity thereof, and (iii) no funds in
the Defeasance Subaccount for any Series of Transition Bonds shall be
invested in Eligible Investments or otherwise, except that U.S. Government
Obligations deposited by the Issuer with the Trustee pursuant to Sections
4.01 or 4.02 shall remain as such. All income or other gain from
investments of moneys deposited in the Collection Account shall be
deposited by the 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. Eastern 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.
(c) Any ITC Collections remitted by the Servicer to the Trustee,
any Indemnity Amounts remitted to the Trustee by PP&L or the Servicer or
otherwise received by the Trustee or the Issuer, and any other proceeds of
Collateral received by the Servicer, the Issuer or the Trustee shall be
deposited in the General Subaccount.
(d) On the Business Day preceding each Payment Date, the Trustee
shall by 12:00 noon (New York City time) apply all amounts on deposit in
the General Subaccount of the Collection Account and any investment
earnings on the subaccounts in the Collections Account in the following
priority:
(i) all amounts owed to the Trustee (including legal fees and
expenses and Indemnity Amounts) shall be paid to the Trustee;
(ii) all amounts owed to the Independent Managers (including
legal fees and expenses and Indemnity Amounts) shall be paid to the
Independent Managers;
(iii) the Servicing Fee and all unpaid Servicing Fees from prior
Payment Dates shall be paid to the Servicer;
(iv) the administration fee payable under the Administration
Agreement between the Issuer and the Administrator shall be paid to
the Administrator;
(v) so long as no Event of Default has occurred and is
continuing or would be caused by such payment, all Operating Expenses
other than (i), (ii), (iii) and (iv) above shall be paid to the
Persons entitled thereto, provided that the amount paid on any Payment
Date pursuant to this clause (v) may not exceed $ in the
aggregate for all Series;
(vi) an amount equal to Interest payable on each Series of
Transition Bonds for the Payment Date shall be allocated on a Pro Rata
Basis to the corresponding Series Subaccount or will be paid to the
counterparty on any interest rate swap agreement between the Issuer
and such counterparty, specified in the related Series Supplement, if
such swap agreement remains in effect for such Payment Date;
(vii) an amount equal to any Principal of any Series or Class of
Transition Bonds payable as a result of acceleration pursuant to
Section 5.02, any Principal of any Series or Class of Transition Bonds
payable on a Series Final Maturity Date or Class Final Maturity Date
for that Series or Class and any Principal of and premium, if any, on
a Series or Class of Transition Bonds payable on a Redemption Date
shall be allocated on a Pro Rata basis to the corresponding Series
Subaccount;
(viii) an amount equal to Principal scheduled to be paid on each
Series of Transition Bonds on the next Payment Date, excluding any
amounts provided for pursuant to clause (vii) above, shall be
allocated on a Pro Rata basis to the corresponding Series Subaccount;
(ix) all remaining unpaid Operating Expenses and Indemnity
Amounts shall be paid to the Persons entitled thereto;
(x) any amount necessary to replenish any withdrawals from the
Capital Subaccount shall be allocated to the Capital Subaccount;
(xi) an amount shall be allocated to the Overcollateralization
Subaccount sufficient to cause the amount in the Overcollateralization
Subaccount to equal the Scheduled Overcollateralization Level;
(xii) an amount equal to investment earnings on amounts in the
Capital Subaccount shall be released to the Issuer;
(xiii) the balance, if any, shall be allocated to the Reserve
Subaccount; and
(xiv) following repayment of the outstanding Series of
Transition Bonds, the balance, if any, shall be released to the Issuer
free from the Lien of the Indenture.
"Pro Rata" means with respect to any Series or Class of Transition
Bonds a ratio, (i) in the case of clause (d)(vi) above, the numerator of
which is the aggregate amount of Interest payable with respect to such
Series or Class on such Payment Date and the denominator of which is the
sum of the aggregate amounts of Interest payable with respect to all
Outstanding Series or Classes on such Payment Date; and (ii) in the case of
clauses (d)(vii) and (d)(viii) above, the numerator of which is the
aggregate amount of Principal scheduled to be paid or payable pursuant to
each such clause with respect to such Series or Class on such Payment Date
and the denominator of which is the sum of the aggregate amounts of
Principal scheduled to be paid or payable pursuant to each such clause with
respect to all Outstanding Series or Classes on such Payment Date, unless
and to the extent, with respect to either clause (i) or (ii) above, in the
case of a Series comprised of two or more Classes, the Series Supplement
for such Series provides otherwise.
If, on any Payment Date, funds on deposit in the General Subaccount
are insufficient to make the payments or transfers contemplated by clauses
(i) through (ix) above, the Trustee shall 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 transfers:
(i) from the Reserve Subaccount,
(ii) from the Overcollateralization Subaccount, and
(iii) from the Capital Subaccount.
(e) On each Payment Date for any Series, the amounts on deposit
in the Series Subaccount for that Series shall be applied or transferred as
follows (in the priority indicated): (i) to pay Interest due and payable on
the Transition Bonds of such Series on such Payment Date to the Holders of
Transition Bonds of such Series, (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 and (iii) the balance, if any, to the
General Subaccount for allocation on the next Payment Date.
All payments to the Transition Bondholders of a Series pursuant to (A)
clause (i) of the preceding paragraph shall be made pro rata based on the
respective aggregate amounts of Interest due and payable with respect to
Outstanding Transition Bonds of such Series held by such Holders, and (B)
clause (ii) of the preceding paragraph shall be made pro rata based on the
respective aggregate amounts of Principal scheduled to be paid or payable
with respect to Outstanding Transition Bonds of such Series held by such
Holders, unless and to the extent, with respect to either clause (i) or
(ii) above, in the case of a Series comprised of two or more Classes, the
Series Supplement for such Series provides otherwise. All payments to
Transition Bondholders of a Class pursuant to clause (i) or (ii) of the
preceding paragraph shall be made pro rata based on the respective
principal amounts of Transition Bonds of such Class held by such Holders.
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
hereof shall be deemed released from the Indenture when so withdrawn and
applied in accordance with the provisions of Article VIII, without further
notice to, or release or consent by, the Trustee.
(f) 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.
(g) 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.
(h) 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 8.06 REPORTS BY INDEPENDENT ACCOUNTANTS. The Issuer
shall appoint a firm of Independent certified public accountants of
recognized national reputation for purposes of preparing and delivering the
reports or certificates of such accountants required by this Indenture and
the related Series Supplements. Upon any resignation by such firm, the
Issuer shall promptly appoint a successor thereto that shall also be a firm
of Independent certified public accountants of recognized national
reputation. If the Issuer shall fail to appoint a successor to a firm of
Independent certified public accountants that has resigned within 15 days
after such resignation, the Trustee shall promptly notify the Issuer of
such failure in writing. If the Issuer shall not have appointed a
successor within 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 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 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; or
(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.
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.
(b) The Issuer and the Trustee, when authorized by an Issuer
Order, may, also without the consent of any of the Holders of the
Transition Bonds, enter into an indenture or indentures supplemental hereto
for the purpose of adding any provisions to, or changing in any manner or
eliminating any of the provisions of, this Indenture or of modifying in any
manner the rights of the Holders of the Transition Bonds under this
Indenture; provided, however, that (i) such action shall not, as evidenced
by an Issuer Opinion of Counsel, adversely affect in any material respect
the interests of any Transition Bondholder and (ii) the Rating Agency
Condition shall have been satisfied with respect thereto.
SECTION 9.02 SUPPLEMENTAL INDENTURES WITH CONSENT OF TRANSITION
BONDHOLDERS. The Issuer and the Trustee, when authorized by an Issuer
Order, also may, with prior notice to the Rating Agencies and with the
consent of the Holders of not less than a majority of the Outstanding
Amount of the Transition Bonds of each Series or Class to be affected, by
Act of such Holders delivered to the Issuer and the Trustee, enter into an
indenture or indentures supplemental hereto for the purpose of adding any
provisions to, or changing in any manner or eliminating any of the
provisions of, this Indenture or of modifying in any manner the rights of
the Holders of the Transition Bonds under this Indenture; provided,
however, that no such Supplemental Indenture shall, without the consent of
the Holder of each Outstanding Transition Bond of each Series or Class
affected thereby:
(i) change the date of payment of any instalment of principal of
or premium, if any, or interest on any Transition Bond, or reduce the
principal amount thereof, the interest rate thereon or the redemption
price or the premium, if any, with respect thereto, change the
provisions of this Indenture and the related applicable 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 premium, if any, 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) modify any provision of this Section 9.02 except to increase
any percentage specified herein or to provide that those provisions of
this Indenture or the Basic Documents referenced in this Section
cannot be modified or waived without the consent of the Holder of each
Outstanding Transition Bond affected thereby;
(vi) modify any of the provisions of this Indenture in such
manner so as to affect the amount of any payment of interest,
principal or premium, if any, payable on any Transition Bond on any
Payment Date or change the Redemption Dates, Expected Amortization
Schedules or Series Final Maturity Dates or Class Final Maturity Dates
of any Transition Bonds;
(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.
It shall not be necessary for any Act of Transition Bondholders under
this Section to approve the particular form of any proposed Supplemental
Indenture, but it shall be sufficient if such Act shall approve the
substance thereof.
Promptly after the execution by the Issuer and the Trustee of any
Supplemental Indenture pursuant to this Section, 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.
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 and the Holders of the Transition Bonds shall
thereafter be determined, exercised and enforced hereunder subject in all
respects to such modifications and amendments, and all the terms and
conditions of any such Supplemental Indenture shall be and be deemed to be
part of the terms and conditions of this Indenture for any and all
purposes.
SECTION 9.05 CONFORMITY WITH TRUST INDENTURE ACT. Every
amendment of this Indenture and every Supplemental Indenture executed
pursuant to this Article IX shall conform to the requirements of the TIA as
then in effect so long as this Indenture shall then be qualified under the
TIA.
SECTION 9.06 REFERENCE IN TRANSITION BONDS TO SUPPLEMENTAL
INDENTURES. Transition Bonds authenticated and delivered after the
execution of any Supplemental Indenture pursuant to this Article IX may,
and if required by the 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, 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 of the initial principal
balance of suc 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 Bond 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 the Trustee not later than 25 days prior to the Redemption Date
for such redemption and shall deposit with the Trustee the Redemption Price
of the Transition Bonds to be redeemed plus interest accrued thereon to
such Redemption Date on or prior to such Redemption Date whereupon all such
Transition Bonds shall be due and payable on such Redemption Date upon the
furnishing of a notice complying with Section 10.03 hereof 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 25 days prior to the Redemption Date for such redemption and
shall deposit with the Trustee the redemption price of the Transition Bonds
to be redeemed 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 hereof to each Holder of the Transition Bonds of such Series
pursuant to this Section 10.02.
SECTION 10.03 FORM OF REDEMPTION NOTICE. Unless otherwise
specified in the Series Supplement relating to a Series of Transition
Bonds, notice of redemption under Section 10.01 or 10.02 hereof shall be
given by the Trustee by first-class mail, postage prepaid, mailed not less
than five days nor more than 45 days prior to the applicable Redemption
Date to each Holder of Transition Bonds to be redeemed, as of the close of
business on the Record Date preceding the applicable Redemption Date at
such Holder's address appearing in the Transition Bond Register.
All notices of redemption shall state:
(1) the Redemption Date;
(2) the amount of such Transition Bonds to be redeemed;
(3) the Redemption Price; and
(4) the place where such Transition Bonds are to be surrendered
for payment of the Redemption Price and accrued interest (which
shall be the office or agency of the Issuer to be maintained as
provided in Section 3.02 hereof).
Notice of redemption of the Transition Bonds to be redeemed shall be
given by the Trustee in the name and at the expense of the Issuer. Failure
to give notice of redemption, or any defect therein, to any Holder of any
Transition Bond selected for redemption shall not impair or affect the
validity of the redemption of any other Transition Bond. [Any notice of
optional redemption may be conditioned upon the deposit of sufficient
moneys to pay the Redemption Price and accrued interest with the Trustee
before the date fixed for redemption and such notice shall be of no effect
unless such moneys are so deposited.]
SECTION 10.04 PAYMENT OF REDEMPTION PRICE. If (a) unconditional
notice of redemption has been duly mailed or duly waived by the Holders of
all Transition Bonds called for redemption or (b) conditional notice of
redemption has been so mailed or waived and the redemption moneys have been
duly deposited with the Trustee, then in either case the Transition Bonds
called for redemption shall be payable on the applicable Redemption Date at
the applicable Redemption Price plus accrued interest thereon. No further
interest will accrue on the principal amount of any Transition Bonds called
for redemption after the Redemption Date for such redemption if payment of
the Redemption Price thereof plus accrued interest thereon has been duly
provided for, and the Holder of such Transition Bonds will have no rights
with respect thereto, except to receive payment of the Redemption Price
thereof and unpaid interest accrued to the Redemption Date. Payment of the
Redemption Price together with accrued interest shall be made by the
Trustee to or upon the order of the Holders of the Transition Bonds called
for redemption upon surrender of such Transition Bonds, and the Transition
Bonds so redeemed shall cease to be of further effect and the Lien
hereunder shall be released with respect to such Transition Bonds.
ARTICLE XI
MISCELLANEOUS
-----------------
SECTION 11.01 COMPLIANCE CERTIFICATES AND OPINIONS, ETC. Upon
any application or request by the Issuer to the 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, except that, in the case of any
such application or request as to which the furnishing of such documents is
specifically required by any provision of this Indenture, no additional
certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(a) statement that each signatory of such certificate or opinion
has read or has caused to be read such covenant or condition and the
definitions herein relating thereto;
(b) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(c) a statement that, in the opinion of each such signatory,
such signatory has made such examination or investigation as is necessary
to enable such signatory to express an informed opinion as to whether or
not such covenant or condition has been complied with; and
(d) a statement as to whether, in the opinion of each such
signatory, such condition or covenant has been complied with.
SECTION 11.02 FORM OF DOCUMENTS DELIVERED TO TRUSTEE. In any
case where several matters are required to be certified by, or covered by
an opinion of, any specified Person, it is not necessary that all such
matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but
one such Person may certify or give an opinion with respect to some matters
and one or more other such Persons as to other matters, and any such Person
may certify or give an opinion as to such matters in one or several
documents.
Any certificate or opinion of an Authorized Officer of the Issuer may
be based, insofar as it relates to legal matters, upon a certificate or
opinion of, or representations by, counsel, unless such officer knows, or
in the exercise of reasonable care should know, that the certificate or
opinion or representations with respect to the matters upon which his
certificate or opinion is based are erroneous. Any such certificate of an
Authorized Officer or 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.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or
other instruments under this Indenture, they may, but need not, be
consolidated and form one instrument.
Whenever in this Indenture, in connection with any application or
certificate or report to the 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.
(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. Any request, demand, authorization, direction, notice, consent,
waiver or Act of Transition Bondholders or other documents provided or
permitted by this Indenture to be made upon, given or furnished to or filed
with:
(a) the Trustee by any Transition Bondholder or by the Issuer
shall be sufficient for every purpose hereunder if made, given, furnished
or filed in writing, delivered personally, via facsimile transmission, by
reputable overnight courier or by first-class mail, postage prepaid, to the
Trustee at its Corporate Trust Office, or
(b) the Issuer by the Trustee or by any Transition Bondholder
shall be sufficient for every purpose hereunder if in writing, delivered
personally, via facsimile transmission, by reputable overnight courier or
by first-class mail, postage prepaid, to the Issuer addressed to: ______,
Xxx Xxxxx Xxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxxxxx 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.
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 IBCA,
Inc., 0 Xxxxx Xxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000.
SECTION 11.05 NOTICES TO TRANSITION BONDHOLDERS; WAIVER. Where
this Indenture provides for notice to Transition Bondholders of any event,
such notice shall be sufficiently given (unless otherwise herein expressly
provided) if in writing and delivered by first-class mail, postage prepaid,
to each Transition Bondholder affected by such event, at 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.
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.
In case it shall be impractical to deliver notice in accordance with
the first paragraph of this Section 11.05 to the Holders of Transition
Bonds when such notice is required to be given pursuant to any provision of
this Indenture, then any manner of giving such notice as shall be
satisfactory to the Trustee shall be deemed to be a sufficient giving of
such notice.
Where this Indenture provides for notice to the Rating Agencies,
failure to give such notice shall not affect any other rights or
obligations created hereunder, and shall not under any circumstance
constitute a Default or Event of Default.
SECTION 11.06 ALTERNATE PAYMENT AND NOTICE PROVISIONS.
Notwithstanding any provision of this Indenture or any of the Transition
Bonds to the contrary, the Issuer may enter into any agreement with any
Holder of a Transition Bond providing for a method of payment, or notice by
the 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 11.07 CONFLICT WITH TRUST INDENTURE ACT. If any
provision hereof limits, qualifies or conflicts with another provision
hereof that is required to be included in this Indenture by any of the
provisions of the TIA, such required provision shall control.
The provisions of TIA Sections 310 through 317 that impose duties on
any person (including the provisions automatically deemed included herein
unless expressly excluded by this Indenture) are a part of and govern this
Indenture, whether or not physically contained herein.
SECTION 11.08 EFFECT OF HEADINGS AND TABLE OF CONTENTS. The
Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.
SECTION 11.09 SUCCESSORS AND ASSIGNS. All covenants and
agreements in this Indenture and the Transition Bonds by the Issuer shall
bind its successors and permitted assigns, whether so expressed or not.
All agreements of the Trustee in this Indenture shall bind its
successors.
SECTION 11.10 SEPARABILITY. In case any provision in this
Indenture or in the Transition Bonds shall be invalid, illegal or
unenforceable, the validity, legality, and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
SECTION 11.11 BENEFITS OF INDENTURE. Nothing in this Indenture
or in the Transition Bonds, express or implied, shall give to any Person,
other than the parties hereto and their successors hereunder, and the
Transition Bondholders, and any other party secured hereunder, and any
other Person with an ownership interest in any part of the Collateral, any
benefit or any legal or equitable right, remedy or claim under this
Indenture.
SECTION 11.12 LEGAL HOLIDAYS. In any case where the date on
which any payment is due shall not be a Business Day, then (notwithstanding
any other provision of the Transition Bonds or this Indenture) payment need
not be made on such date, but may be made on the next succeeding Business
Day with the same force and effect as if made on the date on which
nominally due, and no interest shall accrue for the period from and after
any such nominal date.
SECTION 11.13 GOVERNING LAW. THIS INDENTURE SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE COMMONWEALTH OF
PENNSYLVANIA, 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 11.14 COUNTERPARTS. This Indenture may be executed in
any number of counterparts, each of which so executed shall be deemed to be
an original, but all such counterparts shall together constitute but one
and the same instrument.
SECTION 11.15 ISSUER OBLIGATION. No recourse may be taken,
directly or indirectly, with respect to the obligations of the Issuer or
the 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 all of the Trustee's obligations are in its
individual capacity).
SECTION 11.16 NO PETITION. The Trustee, by entering into this
Indenture, and each Transition Bondholder, by accepting a Transition Bond,
hereby covenant and agree that they will not at any time institute against
the Issuer, or join in the institution against the Issuer of, any
bankruptcy, reorganization, arrangement, insolvency or liquidation
Proceeding, or other Proceeding under any United States federal or state
bankruptcy or similar law in connection with any obligations relating to
the Transition Bonds, this Indenture or any of the Basic Documents.
IN WITNESS WHEREOF, the Issuer and the Trustee have caused this
Indenture to be duly executed by their respective Manager and officer,
respectively, thereunto duly authorized, all as of the day and year first
above written.
PP&L TRANSITION BOND
COMPANY LLC,
By:__________________________
Name:
Title: Manager
THE BANK OF NEW YORK,
not in its individual capacity,
but solely as Trustee,
By:__________________________
Name:
Title: Trust Officer
EXHIBIT A
PP&L TRANSITION BOND COMPANY LLC
Issuer
and
THE BANK OF NEW YORK
Trustee
------------------------------
1999-1 SERIES SUPPLEMENT
Dated as of July , 1999
------------------------------
1999-1 SERIES SUPPLEMENT dated as of July , 1999 (this "Supplement"),
by and between PP&L TRANSITION BOND COMPANY LLC, a Delaware limited
liability company (the "Issuer"), and THE BANK OF NEW YORK, a New York
banking corporation (the "Trustee"), as Trustee under the Indenture dated
as of July , 1999, between the Issuer and the Trustee (the "Indenture").
PRELIMINARY STATEMENT
Section 9.01 of the Indenture provides, among other things, that the
Issuer and the Trustee may at any time and from time to time enter into
one or more indentures supplemental to the Indenture for the purposes of
authorizing the issuance by the Issuer of a Series of Transition Bonds and
specifying the terms thereof. The Issuer has duly authorized the execution
and delivery of this Supplement and the creation of a Series of Transition
Bonds with an initial aggregate principal amount of $[ ] to be known as
the Issuer's Transition Bonds, Series 1999-1 (the "Series 1999-1
Transition Bonds"). All acts and all things necessary to make the Series
1999-1 Transition Bonds, when duly executed by the Issuer and
authenticated by the 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 Trustee are executing and
delivering this Supplement in order to provide for the Series 1999-1
Transition Bonds.
In order to secure the payment of principal of and interest on the
Series 1999-1 Transition Bonds issued and to be issued under the Indenture
and/or any Series Supplement, the Issuer hereby confirms the Grant to the
Trustee for the benefit of the Holders of the Series 1999-1 Transition
Bonds from time to time issued and outstanding, all of the Issuer's right,
title and interest in, to and under the Collateral, including without
limitation, the Intangible Transition Property transferred by the Seller
to the Issuer as of the Initial Transfer Date pursuant to the Sale
Agreement and all proceeds thereof.
The Trustee, on behalf of the Holders of the Series 1999-1 Transition
Bonds, acknowledges the confirmation of 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.
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. OTHER DEFINITIONAL PROVISIONS.
Authorized Denominations shall mean $1,000 and integral multiples
thereof.
Bond Rate has the meaning set forth in Section 4 of this Supplement.
Class Final Maturity Date means, with respect to any Class of the
Series 1999-1 Transition Bonds, the final maturity date thereof, as
specified in Section 4 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 1999-1 Transition Bonds, the expected final payment date therefor,
as specified in Section 4 of this Supplement.
Interest Accrual Period means, with respect to any Payment Date, the
period from and including the preceding Payment Date (or, in the case of
the first Payment Date, from and including the Series Issuance Date) to
and excluding such Payment Date.
Overcollateralization Amount has the meaning set forth in Section
5(e) of this Supplement.
Payment Date has the meaning set forth in Section 5(a) of this
Supplement.
Record Date shall mean, with respect to any Payment Date, the close
of business on the Business Day prior to such Payment Date.
Required Capital Amount has the meaning set forth in Section 5(e) of
this Series Supplement.
Series Issuance Date has the meaning set forth in Section 3(b) of
this Supplement.
Series Final Maturity Date has the meaning set forth in Section 4 of
this Supplement.
SECTION 3. DESIGNATION; SERIES ISSUANCE DATES.
(a) Designation. The Series 1999-1 Transition Bonds shall be
designated generally as the Issuer's Transition Bonds, Series 1999-1 and
further denominated as Classes through .
(b) Series Issuance Date. The Series 1999-1 Transition Bonds that are
authenticated and delivered by the Trustee to or upon the order of the
Issuer on July , 1999 (the "Series Issuance Date") shall have as their
date of authentication July , 1999. Each other Series 1999-1Transition
Bond shall be dated the date of its authentication.
SECTION 4. INITIAL PRINCIPAL AMOUNT; BOND RATE; EXPECTED FINAL
PAYMENT DATE; CLASS FINAL MATURITY DATES.
(a) The Transition Bonds of each Class of the Series 1999-1
Transition Bonds shall have the initial principal amounts, bear interest
at the rates per annum and have Expected Final Payment Dates and Class
Final Maturity Dates as set forth below:
Initial
Principal Bond Expected Final Class
Class Amount Rate Payment Date Final Maturity Date
----- ---------- ----- ------------------ -------------------
The Bond Rate for Classes ___, ___, ____, ___ and ___ shall be
computed on the basis of a 360-day year of twelve 30-day months.
SECTION 5. PAYMENT DATES; EXPECTED AMORTIZATION SCHEDULE FOR
PRINCIPAL; INTEREST; OVERCOLLATERALIZATION AMOUNT; REQUIRED CAPITAL
AMOUNT.
(a) Payment Dates. The Payment Dates for each Class of the Series
1999-1 Transition Bonds are March 25, June 25, September 25 and December 26
of each year or, if any such date is not a Business Day, the next
succeeding Business Day, commencing on December 26, 1999 and continuing
until the earlier of repayment of such Class in full and the applicable
Class Final Maturity Date.
(b) Expected Amortization Schedule for Principal. Unless an Event of
Default has incurred and is 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
Trustee shall distribute to the Series 1999-1 Transition Bondholders of
record as of the related Record Date amounts payable in respect of the
Series 1999-1 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 1999-1 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 the aggregate
Outstanding Amount of such Class or Classes 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 1999-1 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 1999-1 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 5(b) on any Class on a
Payment Date be greater than the amount that reduces the Outstanding Amount
of such Class of Series 1999-1 Transition Bonds to the amount specified in
the Expected Amortization Schedule for such Class and Payment Date.
(c) Interest. Interest will be payable on each Class of the Series
1999-1 Transition Bonds on each Payment Date in an amount equal to one-
quarter of the product of
(i) the applicable Bond Rate and
(ii) the Outstanding Amount of the related Class of Transition Bonds
as of the close of business on the preceding Payment Date after giving
effect to all payments of principal made to the holders of the related
Class of Series 1999-1 Transition Bonds on such preceding Payment
Date;
provided that, with respect to the initial Payment Date or if no payment
has yet been made, interest on the outstanding principal balance shall
accrue from and including the Series Issuance Date to, but excluding, the
following Payment Date.
(d) Overcollateralization Amount. The Overcollateralization Amount for
the Series 1999-1 Transition Bonds shall be $ .
(e) Required Capital Amount. The Required Reserve Amount for the
Series 1999-1 Transition Bonds shall be $___________.
(f) Issuer to Deliver Revised Schedule A. Not later than the date of
any partial redemption of the Series 1999-1 Transition Bonds, the Issuer
shall deliver to the Trustee a replacement Schedule A hereto, adjusted to
reflect such partial redemption and setting forth the revised Expected
Amortization Schedule for each Payment Date.
SECTION 6. AUTHORIZED DENOMINATIONS. The Series 1999-1 Transition
Bonds shall be issuable in the Authorized Denominations.
SECTION 7. REDEMPTION.
(a) Mandatory Redemption. The Series 1999-1 Transition Bonds shall not
be subject to mandatory redemption.
(b) Optional Redemption. [The Series 1999-1 Transition Bonds of all
Classes shall not be subject to optional redemption by the Issuer.] [The
Issuer may, at its option, redeem all, but not less than all, of the
Transition Bonds of Series 1999-1 on any Payment Date in accordance with
Section 10.01 of the Indenture if, after giving effect to payments that
would otherwise be made on such Payment Date, the Outstanding Amount of
such Series has been reduced to less than five percent of the initial
principal balance of such Series.]
[SECTION 8. CREDIT ENHANCEMENT. No credit enhancement (other than the
Overcollateralization Amount and the Required Capital Amount) is provided
for the Series 1999-1Transition Bonds.]
SECTION 9. DELIVERY AND PAYMENT FOR THE SERIES 1999-1 TRANSITION
BONDS; FORM OF THE SERIES 1999-1 TRANSITION BONDS. The Trustee shall
deliver the Series 1999-1 Transition Bonds to the Issuer when authenticated
in accordance with Section 2.02 of the Indenture. The Series 1999-1
Transition Bonds of each Class shall be in the form of Exhibits __ through __
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 parties hereunder shall be determined in accordance
with such laws.
IN WITNESS WHEREOF, the Issuer and the 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.
PP&L TRANSITION BOND COMPANY LLC,
as Issuer
By:___________________________
Name:
Title:
THE BANK OF NEW YORK,
not in its individual capacity but
solely as Trustee on behalf
on behalf of the Transition Bondholders,
By:___________________________
Name:
Title:
SCHEDULE A
Expected Amortization Schedule
Outstanding Principal Balance
------------ -------- -------- -------- -------- -------- --------
Payment Date Class __ Class __ Class __ Class __ Class __ Class __
------------ -------- -------- -------- -------- -------- --------
Series Issuance Date..
October __, 1999
January __, 2000
April __, 2000
July __, 2000
October __, 2000
January __, 2001
April __, 2001
July __, 2001
October __, 2001
January __, 2002
April __, 2002
July __, 2002
October __, 2002
January __, 2003
April __, 2003
July __, 2003
October __, 2003
January __, 2004
April __, 2004
July __, 2004
October __, 2004
January __, 2005
April __, 2005
July __, 2005
October __, 2005
January __, 2006
April __, 2006
July __, 2006
October __, 2006
January __, 2007
April __, 2007
July __, 2007
October __, 2007
January __, 2008
April __, 2008
July __, 2008
October __, 2008
January __, 2009
April __, 2009
July __, 2009
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.
PP&L TRANSITION BOND COMPANY LLC
TRANSITION BONDS, SERIES 1999-1, Class _____.
Bond Original Principal Expected Final Class Final
Rate Amount Payment Date Maturity Date
_____% $_________________ ______________ ______________
PP&L Transition Bond Company LLC, a limited liability company
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 quarterly instalments on the Payment Dates (as
defined below) 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 Final Maturity Date, to pay the
entire unpaid principal hereof on the Class Final Maturity Date and to pay
interest, at the Bond Rate shown above at a [floating] [fixed] rate
calculated as follows [insert rate or formula], on each January __, April
__, July __ and October __, 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
Final Maturity Date (each a "Payment Date"), on the principal amount of
this Series 1999-1, Class __ Transition Bond outstanding from time to time.
Interest on this Series 1999-1, Class __ Transition Bond will accrue for
each Payment Date from the 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 July , 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
preceding Payment Date, to but excluding the next Payment Date, divided by
360 . Such principal of and interest on this Series 1999-1, Class __
Transition Bond shall be paid in the manner specified on the reverse
hereof.
The principal of and interest on this Series 1999-1, 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 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.
IN WITNESS WHEREOF, the Issuer has caused this instrument to be
signed, manually or in facsimile, by an Authorized Officer of the Member.
Date:
PP&L TRANSITION BOND
COMPANY LLC,
By:________________________
Name:
Title:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
Dated: July __, 1999
This is one of the Class _____ Transition Bonds of the Series 1999-1
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 Trustee on behalf of the
Transition Bondholders,
By:_______________________
Name:
Title:
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 Series 1999-1,
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 July __, 1999, and a series supplement thereto dated as of July __, 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 Trustee
(the "Trustee", which term includes any successor 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 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 or the Series
1999-1 Supplement.
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
Trustee or the Holders of Transition 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,]
(iii)[the Issuer shall redeem the Series 1999-1 Transition Bonds
pursuant to Section 10.02 of the Indenture] or
(iv) [the Issuer shall have called for the redemption of the Series
1999-1 Transition Bond in whole or from time to time in part pursuant
to Section 7(a) or 7(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 Series
1999-1, Class __ Transition Bond shall be due and payable on the earlier of
the Class Final Maturity 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 Trustee or the Holders of the Transition Bonds of all
Series 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 Series 1999-1, 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 of such Transition Bond) 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 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 to such Transition Bond) 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 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 Series 1999-1, 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 Bond Rate for Class __ 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. The Issuer will
also be required to redeem the Series 1999-1, Class __ Transition Bonds in
certain circumstances as provided in Sections 7(a) and 7(b) of the
Supplement.]
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
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 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.
Prior to the due presentment for registration of transfer of this
Class __ Transition Bond, the Issuer, the Trustee and any agent of the
Issuer or the 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 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 of such 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 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 Series 1999-1, 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 Trustee and the
Holders of Transition Bonds under the Indenture.
The Class __ Transition Bonds are issuable only in registered form in
Authorized 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, 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.
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
(name and address of appointee)
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.
EXHIBIT B
APPENDIX A
MASTER DEFINITIONS
[To be used in connection with the Servicing Agreement,
the Administration Agreement and the Indenture]
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 (i) January 1 of each year through January 1,
2008 and (ii) the first day of each month or calendar quarter
thereafter in respect of which the Servicer requests the PUC to
approve an Intangible Transition Charge Adjustment.
Administration Agreement means the Administration Agreement dated as
of July __, 1999, between PP&L, as Administrator, and the Issuer.
Administrator means PP&L as administrator under the Administration
Agreement.
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.
Assignment means the Assignment executed and delivered by PP&L in
favor of CEP Securities Co. LLC pursuant to, and in the form set forth
in Exhibit A of, the Contribution Agreement.
Authorized Denominations means, with respect to any Series or Class of
Transition Bonds, $1,000 and integral multiples thereof, or such other
denominations as may be specified in the Series Supplement therefor.
[Authorized Officer means, with respect to the Issuer, any Manager or
the Member of the Issuer and, with respect to the Member of the
Issuer, any officer who is authorized to act for the Member in matters
relating to the Issuer and who is identified on the list of Authorized
Officers delivered by the Member to the Trustee as of the date hereof
(as such list may be modified or supplemented from time to time
thereafter).]
Basic Documents means the Issuer LLC Agreement, the Issuer Certificate
of Formation, the Contribution Agreement, the Assignment, the Sale
Agreement, the Servicing Agreement, the Administration Agreement, the
Indenture and any Bills of Sale.
Billing Month means a particular calendar month during which
Intangible Transition Charges are billed to Customers.
Xxxx of Sale means any xxxx of sale issued by CEP Securities to the
Issuer pursuant to the Sale Agreement evidencing the sale of
Intangible Transition Property by CEP Securities to the Issuer.
Bond Rate means, with respect to each Series or, if applicable, each
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.
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.
Business Day means any day other than a Saturday or Sunday or a
day on which banking institutions in the City of Allentown,
Pennsylvania, or in the City of New York, New York are required
or authorized by law or executive order to remain closed.
Calculation Date means, with respect to any Adjustment Date, (i)
________ of each year through [2008] and (ii) thereafter, the
fifteenth day of the month preceding such Adjustment Date.
Capital Subaccount has the meaning specified in Section 8.02(a) of the
Indenture.
CEP Securities means CEP Securities Co. LLC, a Delaware limited
liability company, or its successor.
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 in relation to the Notes issued means the
Final Maturity Date of a Class, as specified in the Series Supplement
for the related Series.
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 separate forecast prepared by the Servicer
for each Customer Class 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 Curves for that
Billing Month.
Commission means the U.S. Securities and Exchange Commission, and any
successor thereof.
Competition Act means the Pennsylvania Electricity Generation
Customer Choice and Competition Act, Chapter 28 of Title 66 of
the Pennsylvania Consolidated Statutes, 66 Pa. C.S., Sections
2801, et seq.
Competitive Transition Charges means the competitive transition
charges that PP&L may impose on Customers pursuant to the Competition
Act and the Qualified Rate Order.
Contract Rights has the meaning specified in Section 2.01 of the
Contribution Agreement.
Contributed Property has the meaning specified in Section 2.01 of the
Contribution Agreement.
Contribution Agreement means the Contribution Agreement, dated as
of May 13, 1999, among PP&L, Group, Reserves and CEP Securities,
as amended by the Amendment thereto dated July __, 1999, as the
same may be further amended and supplemented from time to time.
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 ___________________, New York, NY _____, Attention:
_______ 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).
Covenant Defeasance Option has the meaning specified in Section 4.01
of the Indenture.
Curve Payment Shortfall means, with respect to each Billing Month and
the Reconciliation Date for such Billing Month, the excess of actual
ITC Collections the Servicer has received for that Billing Month over
the Collections Curve Payments previously made to the Trustee for that
Billing Month.
Customer Class means each of the customer classes specified in the
Qualified Rate Order.
Customers means each person that
(a) was a retail customer of electric service of PP&L located
within PP&L's service territory on January 1, 1997 or that became a
retail customer of electric service of PP&L located within PP&L's
service territory after January 1, 1997,
(b) is still located within PP&L's service territory, and
(c) is receiving distribution service from PP&L.
Daily Remittance Date means, if the Servicer has not satisfied
the conditions of Section 5.10(b) of the Servicing Agreement,
each Business Day of each calendar month.
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 as
of the Closing Date, relating to the Transition Bonds, substantially
in the form of Exhibit C of the Indenture, as the same may be amended
and supplemented from time to time.
Eligible Deposit Account means either:
(a) a segregated account with an Eligible Institution or
(b) a segregated trust account with the corporate trust department
of a depository institution organized under the laws of the United
States of America or any State (or any domestic branch of a foreign
bank), having corporate trust powers and acting as trustee for
funds deposited in such account, so long as any of the securities
of such depository institution shall have a credit rating from each
Rating Agency in one of its generic rating categories which
signifies investment grade.
Eligible Guarantor Institution means a firm or other entity identified
in Rule 17Ad-15 under the Exchange Act as "an eligible guarantor
institution," including (as such terms are defined therein):
(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 or
(b) a depository institution organized under the laws of the United
States of America or any State (or any domestic branch of a foreign
bank), which
(i) has either
(A) a long-term unsecured debt rating of "AAA" by Standard &
Poor's and "Al" by Moody's or
(B) 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 guaranteed as
to timely payment by, the United States of America;
(b) demand deposits, time deposits or certificates of deposit
of any depositors institution or trust company 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
depository 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
depository 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 PP&L) 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) 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);
(e) bankers' acceptances issued by any depository institution
or trust company referred to in clause (b) above;
(f) 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 depository institution or trust company (acting as
principal) described in clause (b) above;
(g) repurchase obligations with respect to any security or
whole loan entered into with
(i) a depository institution or trust company (acting as
principal) described in clause (b) above (except that the
rating referred to in the proviso in this clause (b) shall
be A-1 or higher in the case of Standard & Poor's) (any
depository institution or trust company being referred to
in this definition as a "financial institution"),
(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 at least 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 at least A-1 by Standard &
Poor's at the time of purchase; or
(h) any other investment permitted by each of the Rating
Agencies;
provided, however, that:
(i) any book-entry security, instrument or security having a
maturity of one month or less that would be an Eligible
Investment but for its failure (or the failure of the
obligor thereon) to have the rating specified above shall be
an Eligible Investment if such book-entry security,
instrument or security (or the obligor thereon) has a
long-term unsecured debt rating of at least "A2" by Moody's
(or the equivalent thereof by the other Rating Agencies) or
a short-term rating of at least "P-1" by Moody's (or the
equivalent thereof by the other Rating Agencies) and
(ii) any book-entry security, instrument or security having
a maturity of greater than one month that would be an
Eligible Investment but for its failure (or the failure of
the obligor thereon) to have the rating specified above
shall be an Eligible Investment if such book-entry security,
instrument or security (or the obligor thereon) has a
long-term unsecured debt rating of at least "A1" by Moody's
(or the equivalent thereof by the other Rating Agencies) and
a short-term rating of at least "P-1" by Moody's (or the
equivalent thereof by the other Rating Agencies).
Event of Default has the meaning specified in Section 5.01 of the
Indenture.
Excess Curve Payment means, with respect to each Billing Month and the
Reconciliation Date for such Billing Month, the excess of the
Collections Curve Payments previously made to the Trustee for that
Billing Month over actual ITC Collections the Servicer has received
for that 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 date when all interest
and principal is scheduled to be paid for 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 any successor.
Final Maturity Date means, for each Series or, if applicable, each
Class of Transition Bonds, the date by which all principal and
interest on the 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 Intangible Transition Property.
Fitch means Fitch IBCA, 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
the same may be amended and 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 pursuant to this Indenture. A Grant of the
Collateral or of any other agreement or instrument shall include all
rights, powers and options (but none of the obligations) of the
Granting party thereunder, including the immediate and continuing
right to claim for, collect, receive and give receipt for principal,
interest and other payments in respect of the Collateral and all other
moneys payable thereunder, to give and receive notices and other
communications, to make waivers or other agreements, to exercise all
rights and options, to bring Proceedings in the name of the Granting
party or otherwise and generally to do and receive anything that the
Granting party is or may be entitled to do or receive thereunder or
with respect thereto.
Group means CEP Group, Inc., a Pennsylvania corporation, or its
successor.
Holder or Transition Bondholder means the Person in whose name a
Transition Bond of any Series or Class is registered on the Transition
Bond Register.
Indemnification Event means an event which triggers PP&L's obligation
to indemnify CEP Securities, 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 Contribution Agreement.
Indemnity Amounts means any indemnification obligations payable by
PP&L pursuant to Section 5.01 of the Contribution Agreement or the
Servicer pursuant to Section 5.01 of the Servicing Agreement, as
applicable.
Indenture means the Indenture dated as of July __, 1999, between
the Issuer and the Trustee, as the same may be amended and
supplemented from time to time by one or more indentures
supplemental hereto, and shall include 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, PP&L, Group, Reserves, CEP Securities 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,
PP&L, Group, Reserves, CEP Securities or any Affiliate of any of
the foregoing Persons and
(c) is not connected with the Issuer, any such other obligor, PP&L,
Group, Reserves, CEP Securities 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.
Initial Intangible Transition Property means the Intangible
Transaction Property sold by the Seller to the Issuer as of the
Initial Transfer Date pursuant to the Sale Agreement.
Initial Transfer Date means the Series Issuance Date for the first
Series of Transition Bonds.
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.
Intangible Transition Charge Adjustment means each adjustment to
Intangible Transition Charges related to the Transferred
Intangible Transition Property made in accordance with Section
4.01 of the Servicing Agreement and the Issuer Annex [or in
connection with the conveyance to the Issuer of Intangible
Transition Property or the redemption or refunding by the Issuer
of Transition Bonds].
Intangible Transition Charge Adjustment Process means the process by
which Intangible Transition Charges are adjusted pursuant to the
Servicing Agreement and the Competition Act.
Intangible Transition Charges means the intangible transition
charges authorized by the PUC to be imposed on all Customers by
PP&L or its successor to recover Qualified Transition Expenses
pursuant to the Competition Act and the Qualified Rate Order.
Intangible Transition Property means the irrevocable right of
PP&L or its successor or assignee to collect Intangible
Transition Charges from Customers to recover through the issuance
of Transition Bonds the Qualified Transition Expenses described
in the Qualified Rate Order, including all right, title and
interest of PP&L or its successor or assignee in such order and
in all revenues, collections, claims, payments, money or proceeds
of or arising from Intangible Transition Charges pursuant to such
order, and all proceeds of any of the foregoing.
Intangible Transition Property Documentation means all documents
relating to the Intangible Transition Property, including copies
of the Qualified Rate Order and all documents filed with the PUC
in connection with any Intangible Transition Charges Adjustment,
as described in Section 3.08 of the Servicing Agreement.
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 rates 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;
(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 the Series on that Redemption
Date.
Issuer means PP&L Transition Bond Company LLC, a Delaware limited
liability company, or its successor 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 Certificate of Formation of
the Issuer which was filed with the Delaware Secretary of State's
Office on March 25, 1999.
Issuer LLC Agreement means the Amended and Restated Limited
Liability Company Agreement between the Issuer and PP&L, as sole
Member, dated as of July __, 1999.
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 and who shall be
reasonably satisfactory to the Trustee, and which opinion or opinions
shall be addressed to the Trustee, as Trustee, and shall comply with
any applicable requirements of Section 11.01 of the Indenture, and
shall be in a form reasonably satisfactory to the Trustee.
Issuer Order and Issuer Request means a written order or request
signed in the name of the Issuer by any one of its Authorized Officers
and delivered to the Trustee.
ITC Collections means amounts collected in respect of Intangible
Transition Charges.
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 means any manager of the Issuer.
Member means PP&L, as the sole member of the Issuer.
Monthly Remittance Date means, if the Servicer has satisfied the
conditions of Section 5.10(b) of the Servicing Agreement, the
twentieth day of each calendar month (or if such twentieth day is not
a Business Day, the next Business day).
Moody's means Xxxxx'x Investors Service Inc., or its successor.
Officers' Certificate means a certificate signed, in the case of
PP&L, by
(a) the chairman of the board, the president, the vice
chairman of the board, the executive vice president or any
vice president; and
(b) a treasurer, assistant treasurer, secretary or assistant
secretary
and, in the case of CEP Securities, by two of the Managers of CEP
Securities.
Operating Expenses means, with respect to the Issuer, all fees, costs,
expenses and indemnity payments owed by the Issuer, including all
amounts owed by the Issuer to the Trustee, the Quarterly Servicing
Fee, the quarterly fee payable by the Issuer to the Administrator
under the Administration Agreement, the fees and expenses payable by
the Issuer to the independent managers of the Issuer, legal fees and
expenses of the Servicer pursuant to Section 3.09 of the Servicing
Agreement, and legal and accounting fees, costs and expenses of the
Issuer.
Opinion of Counsel means one or more written opinions of counsel
who may be an employee of or counsel to CEP Securities or PP&L,
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 bona fide purchaser;
provided that in determining whether the Holders of the requisite
Outstanding Amount of the Transition Bonds or any Series or Class
thereof have given any request, demand, authorization, direction,
notice, consent or waiver hereunder or under any Basic Document,
Transition Bonds owned by the Issuer, any other obligor upon the
Transition Bonds, PP&L, Group, Reserves, CEP Securities 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, PP&L, Group, Reserves, CEP
Securities 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, without regard to
investment earnings.
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 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, if applicable,
each Class of Transition Bonds, each date or dates specified as
Payment Dates for such Series or Class in the Series Supplement
therefor.
Person means any individual, corporation, estate, partnership, joint
venture, association, joint stock company, trust (including any
beneficiary thereof), business trust, limited liability company,
unincorporated organization or government or any agency or political
subdivision thereof.
PP&L means PP&L, Inc., a Pennsylvania corporation, or its successor.
Predecessor Transition Bond means, with respect to any particular
Transition Bond, every previous Transition Bond evidencing all or a
portion of the same debt as that evidenced by such particular
Transition Bond; and, for the purpose of this definition, any
Transition Bond authenticated and delivered under Section 2.06 in lieu
of a mutilated, lost, destroyed or stolen Transition Bond shall be
deemed to evidence the same debt as the mutilated, lost, destroyed or
stolen Transition Bond.
Post-Retail Access means any period after the time that a Customer was
permitted to choose its electricity generation supplier.
Pre-Retail Access means any period prior to the time that a Customer
was permitted to choose its electricity generation supplier.
Principal means, with respect to any Payment Date and each Series or,
if applicable, each 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 and such date.
PUC means the Pennsylvania Public Utility Commission or any
successor.
PUC Regulations means any regulations, orders or directives
promulgated, issued or adopted by the PUC.
Qualified Rate Order means the Final Order issued by the PUC on
August 27, 1998 pursuant to the Competition Act, as such order
has been supplemented by the Supplemental Order issued by the PUC
on May 21, 1999, and as such order may hereafter be further
supplemented by an order of the PUC issued pursuant to paragraph
19 of the August 27, 1998 order.
Qualified Transition Expenses has the meaning assigned to that
term in the Competition Act and the Qualified Rate Order.
Quarterly Servicing Fee means the fee payable to the Servicer on [the
Business Day preceding] each Payment Date for services rendered, in
accordance with Section 5.07 of the Servicing Agreement.
Rating Agency means any rating agency rating the Transition Bonds of
any Class or Series at the time of issuance thereof at the request of
the Issuer. If no such organization or successor is any longer in
existence, "Rating Agency" shall be a nationally recognized
statistical rating organization or other comparable Person designated
by the Issuer, notice of which designation shall be given to the
Trustee under the Indenture, the Member of the Issuer and the
Servicer.
Rating Agency Condition means, with respect to any action, the
notification in writing by each Rating Agency 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, with respect to any Billing Month, the
twentieth day (or if such twentieth day is not a Business Day, the
next Business day) in the eighth month after such Billing Month.
Record Date means, with respect to any Payment Date for a Series or
Class, the date set forth as such in the Series Supplement therefor.
Redemption Date means, with respect to each Series or, if applicable,
each 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 issuance of a new Series of Transition Bonds
hereunder to pay the cost of refunding, through redemption or payment
on the Expected Final Payment Date for a Series or Class of Transition
Bonds, all or part of the Transition Bonds of such Series or Class to
the extent permitted by the terms thereof.
Registered Holder means, as of any date, the Person in whose name a
Transition Bond is registered on the Transition Bond Register on such
date.
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 a capital contribution in an amount
equal to the amount specified in the related Series Supplement,
representing a capital contribution from PP&L.
Reserve Subaccount has the meaning specified in Section 8.02(a) of the
Indenture.
Reserves means CEP Reserves, Inc., a Delaware corporation, or its
successor.
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.
Retiring Trustee means a Trustee that resigns or vacates the office of
Trustee for any reason.
Sale Agreement means the Intangible Transition Property Sale
Agreement dated July __, 1999, between the Seller and the Issuer.
Sale Date means each date on which the Seller sells, transfers,
assigns and conveys the Intangible Transition Property to the
Issuer.
Scheduled Overcollateralization Level means, with respect to any
Payment Date, the amount 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.
Seller means CEP Securities Co. LLC, a Delaware limited liability
company, or its successor, in its capacity as seller of the Intangible
Transition Property to the Issuer pursuant to the Sale Agreement.
Series means any series of Transition Bonds issued and authenticated
by the Issuer pursuant to the Indenture, as specified in the Series
Supplement therefor.
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 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.
Servicer means PP&L, as the servicer of the Intangible Transition
Property, and each successor to PP&L (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
July __, 1999, between the Issuer and the Servicer, as the same
may be amended and supplemented from time to time.
Standard & Poor's, or S&P, means Standard & Poor's Rating 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.
Subsequent Intangible Transition Property means Intangible Transition
Property sold by the Seller to the Issuer as of a Subsequent Transfer
Date pursuant to the Sale Agreement.
Subsequent Sale means the sale of additional Intangible 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 Subsequent Sale will be
effective, specified in a written notice provided by the Seller to the
Issuer pursuant to the Sale Agreement.
Successor Servicer means a successor Servicer appointed by the Trustee
pursuant to Section 6.01 of the Servicing Agreement which will succeed
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.]
Supplemental Order means the Order of the PUC dated May 21, 1999,
supplementing the Qualified Rate Order.
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 PUC pursuant to relevant provisions of the
Competition Act and any PUC order.
Transfer Date means the Initial Transfer Date or any Subsequent
Transfer Date, as applicable.
Transferred Intangible Transition Property means Intangible 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 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 means a register, kept by the Transition Bond
Registrar on behalf of the Issuer in which, subject to such reasonable
regulations as it may prescribe, the Transition Bond Registrar shall
provide for the registration of Transition Bonds and the registration
of transfers of Transition Bonds.
Transition Bond Registrar means the Trustee, in its capacity as keeper
of the Transition Bond Register, or any successor to the Trustee in
such capacity.
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 or any successor Trustee under the Indenture.
UCC means, unless the context otherwise requires, the Uniform
Commercial Code, as in effect in the relevant jurisdiction, as amended
from time to time
U.S. Government Obligations means direct obligations (or certificates
representing an ownership interest in such obligations) of the United
States of America (including any agency or instrumentality thereof)
for the payment of which the full faith and credit of the United
States of America is pledged and which are not callable at the
issuer's option.
