EXHIBIT 4.2
EXECUTION COPY
SERIES SUPPLEMENT dated as of December 16, 1997 (this
"Supplement"), by and between SDG&E FUNDING LLC, a Delaware
limited liability company (the "Note Issuer"), and BANKERS
TRUST COMPANY OF CALIFORNIA, N.A., a national banking
association (the "Note Trustee"), as Note Trustee under the
Indenture dated as of December 16, 1997, between the Note
Issuer and the Note Trustee (the "Indenture").
PRELIMINARY STATEMENT
Section 9.01 of the Indenture provides, among other things, that
the Note Issuer and the Note 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 Note Issuer of a Series of
Notes and specifying the terms thereof. The Note Issuer has duly
authorized the creation of a Series of Notes with an initial aggregate
principal amount of $658,000,000 to be known as the Note Issuer's Notes,
Series 1997-1 (the "Series 1997-1 Notes"), and the Note Issuer and the Note
Trustee are executing and delivering this Supplement in order to provide
for the Series 1997-1 Notes.
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. In
the event that any term or provision contained herein shall conflict with
or be inconsistent with any term or provision contained in the Indenture,
the terms and provisions of this Supplement shall govern.
SECTION 1. Designation. The Series 1997-1 Notes shall be
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designated generally as the Note Issuer's Notes, Series 1997-1 and further
denominated as Classes A-1 through A-7.
SECTION 2. Initial Principal Amount; Note Interest Rate;
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Scheduled Maturity Date; Final Maturity Date. The Notes of each Class of
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the Series 1997-1 shall have the initial principal amount, bear interest at
the rates per annum and shall have
Scheduled Maturity Dates and Final Maturity Dates as set forth below:
Initial Note
Principal Interest Scheduled Final
Class Amount Rate Maturity Date Maturity Date
------ --------- --------- -------------- ------------------
A-1 $ 65,800,000 5.97 % December 26, December 26, 2000
1998
A-2 $ 82,639,254 6.04 % March 25, 2000 March 25, 2002
A-3 $ 66,230,948 6.07 % March 25, 2001 March 25, 2003
A-4 $ 65,671,451 6.15 % March 25, 2002 March 25, 2004
A-5 $ 96,537,839 6.19 % September 25, September 25, 2005
2003
A-6 $197,584,137 6.31 % September 25, September 25, 2008
2006
A-7 $ 83,536,371 6.37 % December 26, December 26, 2009
2007
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The Note Interest Rate shall be computed on the basis of a 360-day year of
twelve 30-day months.
SECTION 3. Authentication Date; Payment Dates; Expected
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Amortization Schedule for Principal; Quarterly Interest; Required
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Overcollateralization Level; No Premium. (a) Authentication Date. The
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Series 1997-1 Notes that are authenticated and delivered by the Note
Trustee to or upon the order of the Note Issuer on December 16, 1997 (the
"Series Issuance Date") shall have as their date of authentication December
16, 1997.
(b) Payment Dates. The Payment Dates for the Series 1997-1
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Notes 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 March 25, 1998 and continuing until the earlier of repayment
of the Series 1997-1 Notes in full and the Final Maturity Date for Class X-
0 of the Series 1997-1 Notes.
(c) Expected Amortization Schedule for Principal. Unless an
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Event of Default shall have occurred and be continuing and the unpaid
principal amount of all Series of Notes and accrued interest thereon has
been declared to be due and payable, on each Payment Date, the Note Trustee
shall distribute to the Noteholders of record as of the related Record Date
amounts payable pursuant to Section 8.02(d)(vii) of the Indenture as
principal, in the following order and priority: (1) to the holders of the
Class A-1 Notes, until the Outstanding Amount of such Class of Notes
thereof has been reduced to zero; (2) to the holders of the Class A-2
Notes, until the Outstanding Amount of such Class of Notes thereof has been
reduced to zero; (3) to the holders of the Class A-3 Notes, until the
Outstanding Amount of such Class of Notes thereof has been reduced to zero;
(4) to the holders of the Class A-4 Notes, until the Outstanding Amount of
such Class of Notes thereof has been reduced to zero; (5) to the holders of
the Class A-5 Notes until the Outstanding Amount of such Class of Notes
thereof has been reduced to zero; (6) to the holders of the Class A-6
Notes, until the Outstanding Amount of such Class of Notes thereof has been
reduced to zero; and (7) to the holders of the Class A-7 Notes until the
Outstanding Amount of such Class of Notes thereof has been reduced to zero;
provided, however, that in no event shall a principal payment pursuant to
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this Section 3(c) on any Class on a Payment Date be greater than the amount
that reduces the Outstanding Amount of such Class of Notes to the amount
specified in the Expected Amortization Schedule which is attached as
Schedule A hereto for such Class and Payment Date.
(d) Quarterly Interest. Quarterly Interest will be payable on
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each Class of the Series 1997-1 Notes on each Payment Date in an amount
equal to one-fourth of the product of (i) the applicable Note Interest Rate
and (ii) the Outstanding Amount of the related Class of Notes 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
1997-1 Notes on such preceding Payment Date; provided, however, that with
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respect to the initial Payment Date or, if no payment has yet been made,
interest on the outstanding principal balance will accrue from and
including the Series Issuance Date to, but excluding, the following Payment
Date.
(e) Required Overcollateralization Level. The Required
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Overcollateralization Level for any Payment Date shall be as set forth in
Schedule B hereto.
(f) No Premium. No premium will be payable in connection with
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the early redemption of the Series 1997-1 Notes.
SECTION 4. Minimum Denominations. The Series 1997-1 Notes shall
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be issuable in the Minimum Denomination and integral multiples of $1 in
excess thereof.
SECTION 5. Certain Defined Terms. Article One of the Indenture
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provides that the meanings of certain defined terms used in the Indenture
shall, when applied to the Notes of a particular Series, be as defined in
Article One but with such additional provisions as are specified in the
related Supplement. Additionally, Article Two of the Indenture provides
that with
respect to a particular Series of Notes, certain terms will have the
meanings specified in the related Supplement. With respect to the Series
1997-1 Notes, the following definitions shall apply:
"Minimum Denomination" shall mean $1,000.
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"Note Interest Rate" has the meaning set forth in Section 2 of
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this Supplement.
"Payment Date" has the meaning set forth in Section 3(b) of this
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Supplement.
"Quarterly Interest" has the meaning set forth in Section 3(d) of
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this Supplement.
"Series Issuance Date" has the meaning set forth in Section 3(a)
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of this Supplement.
SECTION 6. Delivery and Payment for the Series 1997-1 Notes;
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Form of the Series 1997-1 Notes. The Note Trustee shall deliver the Series
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1997-1 Notes to the Note Issuer when authenticated in accordance with
Section 2.03 of the Indenture. The Series 1997-1 Notes of each Class shall
be in the form of Exhibits A-1 through A-7 hereto.
SECTION 7. Ratification of Agreement. As supplemented by this
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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 8. Counterparts. This Supplement may be executed in any
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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 9. Governing Law. This Supplement shall be construed in
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accordance with the laws of the State of California, 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 10. Trust Obligation. No recourse may be taken,
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directly or indirectly, with respect to the obligations of the Note Issuer
or the Note Trustee on the Notes or under this Supplement or any
certificate or other writing delivered in connection herewith or therewith,
against (i) the Note Trustee in its individual capacity, (ii) any owner of
a beneficial interest in the Note Issuer or (iii) any partner, owner,
beneficiary, agent, officer, director, employee or agent of the Note
Trustee in its individual capacity, any holder of a beneficial interest
in the Note Issuer or the Note Trustee or of any successor or assign of the
Note Trustee in its individual capacity, except as any such Person may have
expressly agreed (it being understood that the Note Trustee has no such
obligations in its individual capacity).
IN WITNESS WHEREOF, the Note Issuer and the Note 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.
SDG&E FUNDING LLC, as Note Issuer,
by /s/ Xxxxxxx X. XxXxxxxxx
___________________________
Name: Xxxxxxx X. XxXxxxxxx
Title: President and Chief Executive
Officer
BANKERS TRUST COMPANY OF CALIFORNIA, N.A.,
not in its individual capacity but solely as
Note Trustee,
by /s/ Xxxxx X. Xxxxxxx
____________________________
Name: Xxxxx X. Xxxxxxx
Title: Vice President
SCHEDULE A
EXPECTED AMORTIZATION SCHEDULE
OUTSTANDING PRINCIPAL BALANCE
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Payment Date Class A-1 Class A-2 Class A-3 Class A-4 Class A-5 Class A-6 Class A-7
------------ --------- --------- --------- ---------- --------- --------- ----------
Series Issuance
Date............ $65,800,000.00 $82,639,254.00 $66,230,948.00 $65,671,451.00 $96,537,839.00 $197,584,137.00 $83,536,371.00
Mar. 1998....... 62,632,171.52 82,639,254.00 66,230,948.00 65,671,451.00 96,537,839.00 197,584,137.00 83,536,371.00
June 1998....... 43,932,681.18 82,639,254.00 66,230,948.00 65,671,451.00 96,537,839.00 197,584,137.00 83,536,371.00
Sept. 1998...... 23,489,759.73 82,639,254.00 66,230,948.00 65,671,451.00 96,537,839.00 197,584,137.00 83,536,371.00
Dec. 1998....... 0.00 82,639,254.00 66,230,948.00 65,671,451.00 96,537,839.00 197,584,137.00 83,536,371.00
Mar. 1999....... 0.00 63,000,733.42 66,230,948.00 65,671,451.00 96,537,839.00 197,584,137.00 83,536,371.00
June 1999....... 0.00 49,025,773.57 66,230,948.00 65,671,451.00 96,537,839.00 197,584,137.00 83,536,371.00
Sept. 1999...... 0.00 34,076,269.98 66,230,948.00 65,671,451.00 96,537,839.00 197,584,137.00 83,536,371.00
Dec. 1999....... 0.00 16,839,254.00 66,230,948.00 65,671,451.00 96,537,839.00 197,584,137.00 83,536,371.00
Mar. 2000....... 0.00 0.00 66,230,948.00 65,671,451.00 96,537,839.00 197,584,137.00 83,536,371.00
June 2000....... 0.00 0.00 51,351,375.00 65,671,451.00 96,537,839.00 197,584,137.00 83,536,371.00
Sept. 2000...... 0.00 0.00 35,452,056.18 65,671,451.00 96,537,839.00 197,584,137.00 83,536,371.00
Dec. 2000....... 0.00 0.00 17,270,202.00 65,671,451.00 96,537,839.00 197,584,137.00 83,536,371.00
Mar. 2001....... 0.00 0.00 0.00 65,671,451.00 96,537,839.00 197,584,137.00 83,536,371.00
June 2001....... 0.00 0.00 0.00 50,877,702.51 96,537,839.00 197,584,137.00 83,536,371.00
Sept. 2001...... 0.00 0.00 0.00 35,102,832.31 96,537,839.00 197,584,137.00 83,536,371.00
Dec. 2001....... 0.00 0.00 0.00 17,141,653.00 96,537,839.00 197,584,137.00 83,536,371.00
Mar. 2002....... 0.00 0.00 0.00 0.00 96,537,839.00 197,584,137.00 83,536,371.00
June 2002....... 0.00 0.00 0.00 0.00 81,688,200.22 197,584,137.00 83,536,371.00
Sept. 2002...... 0.00 0.00 0.00 0.00 65,850,943.56 197,584,137.00 83,536,371.00
Dec. 2002....... 0.00 0.00 0.00 0.00 47,879,492.00 197,584,137.00 83,536,371.00
Mar. 2003....... 0.00 0.00 0.00 0.00 30,746,198.35 197,584,137.00 83,536,371.00
June 2003....... 0.00 0.00 0.00 0.00 15,862,492.33 197,584,137.00 83,536,371.00
Sept. 2003...... 0.00 0.00 0.00 0.00 0.00 197,584,137.00 83,536,371.00
Dec. 2003....... 0.00 0.00 0.00 0.00 0.00 179,663,629.00 83,536,371.00
Mar. 2004....... 0.00 0.00 0.00 0.00 0.00 162,559,535.91 83,536,371.00
June 2004....... 0.00 0.00 0.00 0.00 0.00 147,610,059.78 83,536,371.00
Sept. 2004...... 0.00 0.00 0.00 0.00 0.00 131,717,804.89 83,536,371.00
Dec. 2004....... 0.00 0.00 0.00 0.00 0.00 113,863,629.00 83,536,371.00
Mar. 2005....... 0.00 0.00 0.00 0.00 0.00 96,804,670.77 83,536,371.00
June 2005....... 0.00 0.00 0.00 0.00 0.00 81,792,085.99 83,536,371.00
Sept. 2005...... 0.00 0.00 0.00 0.00 0.00 65,865,306.62 83,536,371.00
Dec. 2005....... 0.00 0.00 0.00 0.00 0.00 48,063,629.00 83,536,371.00
Mar. 2006....... 0.00 0.00 0.00 0.00 0.00 31,031,326.78 83,536,371.00
June 2006....... 0.00 0.00 0.00 0.00 0.00 15,955,287.79 83,536,371.00
Sept. 2006...... 0.00 0.00 0.00 0.00 0.00 0.00 83,536,371.00
Dec. 2006....... 0.00 0.00 0.00 0.00 0.00 0.00 65,800,000.00
Mar. 2007....... 0.00 0.00 0.00 0.00 0.00 0.00 48,653,497.67
June 2007....... 0.00 0.00 0.00 0.00 0.00 0.00 33,202,584.82
Sept. 2007...... 0.00 0.00 0.00 0.00 0.00 0.00 16,886,533.28
Dec. 2007....... 0.00 0.00 0.00 0.00 0.00 0.00 0.00
OUTSTANDING
PRINCIPAL
BALANCE
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Payment Date Series 1997-1
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Series Issuance
Date............ $658,000,000.00
Mar. 1998....... 654,832,171.52
June 1998....... 636,132.681.18
Sept. 1998...... 615,689,759.73
Dec. 1998....... 592,200,000.00
Mar. 1999....... 572,561,479.42
June 1999....... 558,586,519.57
Sept. 1999...... 543,637,015.98
Dec. 1999....... 526,400,000.00
Mar. 2000....... 509,560,746.00
June 2000....... 494,681,173.00
Sept. 2000...... 478,781,854.18
Dec. 2000....... 460,000,000.00
Mar. 2001....... 443,329,798.00
June 2001....... 428,536,049.51
Sept. 2001...... 412,761,179.31
Dec. 2001....... 394,800,000.00
Mar. 2002....... 377,658,347.00
June 2002....... 362,808,708.22
Sept. 2002...... 346,971,451.56
Dec. 2002....... 329,000,000.00
Mar. 2003....... 311,866,706.35
June 2003....... 296,983,000.33
Sept. 2003...... 281,120,508.00
Dec. 2003....... 263,200,000.00
Mar. 2004....... 246,095,906.91
June 2004....... 231,146,430.78
Sept. 2004...... 215,254,175.89
Dec. 2004....... 197,400,000.00
Mar. 2005....... 180,341,041.77
June 2005....... 165,328,456.99
Sept. 2005...... 149,401,677.62
Dec. 2005....... 131,600,000.00
Mar. 2006....... 114,567,697.78
June 2006....... 99,491,658.79
Sept. 2006...... 83,536,371.00
Dec. 2006....... 65,800,000.00
Mar. 2007....... 48,653,497.67
June 2007....... 33,202,584.82
Sept. 2007...... 16,886,533.28
Dec. 2007....... 0.00
SCHEDULE B
REQUIRED OVERCOLLATERALIZATION LEVEL SCHEDULE
Required Required
Payment Date Overcollateralization Payment Date Xxxxxxxxxxxxxxxxxxxxx
Xxxxx Xxxxx
Xxx. 0000 $ 82,250 Mar. 2003 $ 1,727,250
June 1998 $ 164,500 June 2003 $ 1,809,500
Sept.1998 $ 246,750 Sept.2003 $ 1,891,750
Dec. 1998 $ 329,000 Dec. 2003 $ 1,974,000
Mar. 1999 $ 411,250 Mar. 2004 $ 2,056,250
June 1999 $ 493,500 June 2004 $ 2,138,500
Sept.1999 $ 575,750 Sept.2004 $ 2,220,750
Dec. 1999 $ 658,000 Dec. 2004 $ 2,303,000
Mar. 2000 $ 740,250 Mar. 2005 $ 2,385,250
June 2000 $ 822,500 June 2005 $ 2,467,500
Sept.2000 $ 904,750 Sept.2005 $ 2,549,750
Dec. 2000 $ 987,000 Dec. 2005 $ 2,632,000
Mar. 2001 $1,069,250 Mar. 2006 $ 2,714,250
June 2001 $1,151,500 June 2006 $ 2,796,500
Sept.2001 $1,233,750 Sept.2006 $ 2,878,750
Dec. 2001 $1,316,000 Dec. 2006 $ 2,961,000
Mar. 2002 $1,398,250 Mar. 2007 $ 3,043,250
June 2002 $1,480,500 June 2007 $ 3,125,500
Sept.2002 $1,562,750 Sept.2007 $ 3,207,750
Dec. 2002 $1,645,000 Dec. 2007 $ 3,290,000
EXHIBIT A
Form of Note
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REGISTERED $_________________
No. ______
SEE REVERSE FOR CERTAIN DEFINITIONS
CUSIP NO.
THE PRINCIPAL OF THIS CLASS A-__ NOTE WILL BE PAID IN INSTALLMENTS AS
SET FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS CLASS
A-__ NOTE AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
SDG&E FUNDING LLC
NOTES, SERIES 1997-1, Class A-__.
Interest Original Principal Final Maturity
Rate Amount Date
---- ------ ----
_____% $______________ _____________
SDG&E Funding LLC, a limited liability company organized and existing
under the laws of the State of Delaware (herein referred to as the "Note
Issuer"), for value received, hereby promises to pay to California
Infrastructure and Economic Development Bank Special Purpose Trust SDG&E-1, or
registered assigns, the Original Principal Amount shown above in quarterly
installments on the Payment Dates and in the amounts specified on the reverse
hereof or, if less, the amounts determined pursuant to Section 8.02 of the
Indenture, in each year, commencing on the date determined as provided on the
reverse hereof and ending on or before the Final Maturity Date and to pay
interest, at the Interest Rate shown above, on each March 25, June 25, September
25 and December 26 or if any such day is not a Business Day, the next succeeding
Business Day, commencing on March 25, 1998 and continuing until the earlier of
the payment of the principal hereof and the Final Maturity Date (each a "Payment
Date"), on the principal amount of this Class A-__ Note. Interest on this Class
A-__ Note 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 December 16, 1997. Interest will be computed
on the basis of a 360-day year of twelve 30-day months. Such
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principal of and interest on this Class A-__ Note shall be paid in the manner
specified on the reverse hereof.
The principal of and interest on this Class A-__ Note 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 Note Issuer with respect to this Class A-__ Note shall be applied first to
interest due and payable on this Class A-__ Note as provided above and then to
the unpaid principal of and premium, if any, on this Class A-__ Note, all in the
manner set forth in Section 8.02 of the Indenture.
Reference is made to the further provisions of this Class A-__ Note
set forth on the reverse hereof, which shall have the same effect as though
fully set forth on the face of this Class A-__ Note.
Unless the certificate of authentication hereon has been executed by
the Note Trustee whose name appears below by manual signature, this Class A-__
Note shall not be entitled to any benefit under the Indenture referred to on the
reverse hereof, or be valid or obligatory for any purpose.
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IN WITNESS WHEREOF, the Note Issuer has caused this instrument to be
signed, manually or in facsimile, by its Authorized Officer.
Date: December 16, 1997
SDG&E FUNDING LLC,
by
_____________________________
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NOTE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
Dated: December 16, 1997
This is one of the Class A-__ Notes of the Series 1997-1 Notes,
designated above and referred to in the within-mentioned Indenture.
BANKERS TRUST COMPANY OF
CALIFORNIA, N.A.,
not in its individual capacity but solely as Note
Trustee,
by
__________________________
Authorized Signatory
5
[REVERSE OF NOTE]
This Series 1997-1, Class A-__ Note is one of a duly authorized issue
of Notes of the Note Issuer, designated as its Notes (herein called the
"Notes"), issued and to be issued in one or more Series, which Series are
issuable in one or more Classes, and this Series 1997-1 Note, in which this
Class A-__ Note represents an interest, consists of 7 Classes, including this
Class A-__ Note (herein called the "Class A-__ Notes"), all issued and to be
issued under an Indenture dated as of December 16, 1997, and a Series Supplement
thereto (such Indenture and Series Supplement, each as supplemented or amended,
are herein referred to collectively as the "Indenture"), each between the Note
Issuer and Bankers Trust Company of California, N.A., as Note Trustee (the "Note
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 respective rights and obligations thereunder of the Note
Issuer, the Note Trustee and the Holders of the Notes. All terms used in this
Class A-__ Note that are defined in the Indenture, as supplemented or amended,
shall have the meanings assigned to them in the Indenture.
The Class A-__ Notes, the other Classes of Series 1997-1 Notes and any
other Series of Notes issued by the Note Issuer are and will be equally and
ratably secured by the collateral pledged as security therefor as provided in
the Indenture.
The principal of this Class A-__ Note 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 related Series
Supplement as Schedule A, unless payable earlier either because (x) an Event of
Default shall have occurred and be continuing and the Note Trustee or the
Holders of Notes representing not less than a majority of the Outstanding Amount
of the Notes of all Series have declared the Notes of all Series to be
immediately due and payable in accordance with Section 5.02 of the Indenture,
(y) the Note Issuer, at its option, shall have called for the redemption of the
Series 1997-1 Notes pursuant to Section 10.01 of the Indenture or (z) the Note
Issuer shall have called for the redemption of the Series 1997-1 Notes pursuant
to Section 10.04 of the Indenture if the Seller is required to repurchase the
Transition Property pursuant to Section 5.01(b) of the Sale Agreement. However,
actual
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principal payments may be made in lesser than expected amounts and at later than
expected times as determined pursuant to Section 8.02 of the Indenture. The
entire unpaid principal amount of this Class A-__ Note shall be due and payable
on the earlier of the Final Maturity Date hereof, the Optional Redemption Date,
if any, and the Mandatory Redemption Date, if any, herefor. Notwithstanding the
foregoing, the entire unpaid principal amount of the Notes 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 Note Trustee or the Holders of the
Notes representing not less than a majority of the Outstanding Amount of the
Notes of all Series have declared the Notes of all Series to be immediately due
and payable in the manner provided in Section 5.02 of the Indenture. All
principal payments on the Class A-__ Notes shall be made pro rata to the Class
A-__ Noteholders entitled thereto based on the respective principal amounts of
the Class A-__ Notes held by them.
Payments of interest on this Class A-__ Note due and payable on each
Payment Date, together with the installment of principal or premium, if any,
shall be made by check mailed first-class, postage prepaid, to the Person whose
name appears as the Registered Holder of this Class A-__ Note (or one or more
Predecessor Notes) on the Note Register as of the close of business on the
Record Date or in such other manner as may be provided in the related Series
Supplement, except that with respect to Notes registered on the Record Date in
the name of the Certificate Trustee, payments will be made by wire transfer in
immediately available funds to the account designated by the Certificate Trustee
and except for the final installment of principal and premium, if any, payable
with respect to this Class A-__ Note 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 on the Note Register as of the
applicable Record Date without requiring that this Class A-__ Note be submitted
for notation of payment. Any reduction in the principal amount of this Class A-
__ Note (or any one or more Predecessor Notes) effected by any payments made on
any Payment Date shall be binding upon all future Holders of this Class A-__
Note and of any Note 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 A-__ Note on a Payment
Date, then the Note Trustee, in the name of and on behalf of the Note Issuer,
will notify the Person who was the Registered Holder hereof as of the Record
Date preceding such Payment Date by notice mailed no later than five days prior
to such final Payment Date and shall specify that such final installment will be
payable only upon presentation and surrender of this Class A-__ Note
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and shall specify the place where this Class A-__ Note may be presented and
surrendered for payment of such installment.
The Note Issuer shall pay interest on overdue installments of interest
at the Note Interest Rate to the extent lawful.
As provided in the Indenture, the Class A-__ Notes may be redeemed, in
whole but not in part, at the option of the Note Issuer on any Payment Date at
the Optional Redemption Price if, after giving effect to payments that would
otherwise be made on such Payment Date, the Outstanding Amount of the Class A-__
Notes has been reduced to less than five percent of the initial principal
balance thereof. In addition, as provided in the Indenture, if the Seller is
required to repurchase the Transition Property pursuant to Section 5.01(b) of
the Sale Agreement, the Note Issuer will be required to redeem all outstanding
Series of Notes, including the Class A-__ Notes, on or before the fifth Business
Day following the Repurchase Date (as defined in the Sale Agreement).
As provided in the Indenture and subject to certain limitations set
forth therein, the transfer of this Class A-__ Note may be registered on the
Note Register upon surrender of this Class A-__ Note for registration of
transfer at the office or agency designated by the Note Issuer pursuant to the
Indenture, duly endorsed by, or accompanied by (a) a written instrument of
transfer in form satisfactory to the Note Trustee duly executed by the Holder
hereof or his attorney duly authorized in writing, with such signature
guaranteed by an institution which is a member of one of the following
recognized Signature Guaranty Programs: (i) The Securities Transfer Agent
Medallion Program (STAMP); (ii) The New York Stock Exchange Medallion Program
(MSP); (iii) The Stock Exchange Medallion Program (SEMP); or (iv) in such other
guarantee program acceptable to the Note Trustee, and (b) such other documents
as the Note Trustee may require, and thereupon one or more new Class A-__ Notes
of Minimum Denominations and in the same aggregate 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 A-__ Note,
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 such
registration of transfer or exchange, other than exchanges pursuant to Section
2.04 or 9.06 of the Indenture not involving any transfer.
Each Noteholder, by acceptance of a Note, covenants and agrees that no
recourse may be taken, directly or indirectly, with respect to the obligations
of the Note Issuer or the Note Trustee on the Notes or under the
8
Indenture or any certificate or other writing delivered in connection therewith,
against (i) the Note Trustee in its individual capacity, (ii) any owner of a
beneficial interest in the Note Issuer or (iii) any partner, owner, beneficiary,
agent, officer, director or employee of the Note Trustee in its individual
capacity, any holder of a beneficial interest in the Note Issuer or the Note
Trustee or of any successor or assign of the Note Trustee in its individual
capacity, except as any such Person may have expressly agreed (it being
understood that the Note Trustee has no such obligations in its individual
capacity).
Prior to the due presentment for registration of transfer of this
Class A-__ Note, the Note Issuer, the Note Trustee and any agent of the Note
Issuer or the Note Trustee may treat the Person in whose name this Class A-__
Note 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 A-__ Note and for all other purposes whatsoever, whether or not
this Class A-__ Note be overdue, and neither the Note Issuer, the Note 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
Note Issuer and the rights of the Holders of the Notes under the Indenture at
any time by the Note Issuer with the consent of the Holders of Notes
representing a majority of the Outstanding Amount of all Notes at the time
Outstanding of each Series or Class to be affected. The Indenture also contains
provisions permitting the Holders of Notes representing specified percentages of
the Outstanding Amount of the Notes of all Series, on behalf of the Holders of
all the Notes, to waive compliance by the Note 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 A-__ Note
(or any one of more Predecessor Notes) shall be conclusive and binding upon such
Holder and upon all future Holders of this Class A-__ Note and of any Note
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
A-__ Note. The Indenture also permits the Note Trustee to amend or waive
certain terms and conditions set forth in the Indenture without the consent of
Holders of the Notes issued thereunder.
The term "Note Issuer" as used in this Class A-__ Note includes any
successor to the Note Issuer under the Indenture.
The Note Issuer is permitted by the Indenture, under certain
circumstances, to merge or consolidate,
9
subject to the rights of the Note Trustee and the Holders of Notes under the
Indenture.
The Class A-__ Notes are issuable only in registered form in
denominations as provided in the Indenture and the related Series Supplement,
subject to certain limitations therein set forth.
This Class A-__ Note, the Indenture and the related Series Supplement
shall be construed in accordance with the laws of the State of California,
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 A-
__ Note or of the Indenture shall alter or impair the obligation of the Note
Issuer, which is absolute and unconditional, to pay the principal of and
interest on this Class A-__ Note at the times, place, and rate, and in the coin
or currency herein prescribed.
The Holder of this Class A-__ Note by the acceptance hereof agrees
that, notwithstanding any provision of the Indenture or the related Series
Supplement to the contrary, the Holder shall have no recourse against the Note
Issuer, but shall look only to the Collateral, with respect to any amounts due
to the Holder under this Class A-__ Note.
10
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 A-__ Note and all rights thereunder, and hereby irrevocably
constitutes and appoints _____________________, attorney, to transfer said Class
A-__ Note on the books kept for registration thereof, with full power of
substitution in the premises.
Dated:______________________ ______________________________*
Signature Guaranteed:
____________________________ ______________________________
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* NOTE: The signature to this assignment must correspond with the name of
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the registered owner as it appears on the face of the within Class A-1 Note in
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every particular, without alteration, enlargement or any change whatsoever.
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