EXHIBIT 4.3.2
SERIES SUPPLEMENT
PSE&G TRANSITION FUNDING LLC,
Issuer
and
THE BANK OF NEW YORK,
Trustee
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2001-1 SERIES SUPPLEMENT
Dated as of January 31, 2001
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2001-1 SERIES SUPPLEMENT dated as of January 31, 2001 (this
"Supplement"), by and between PSE&G TRANSITION FUNDING 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 January 31, 2001, 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 $2,525,000,000 to be
known as the Issuer's Transition Bonds, Series 2001-1 (the "Series 2001-1
Transition Bonds"). All acts and all things necessary to make the Series
2001-1 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 2001-1 Transition Bonds.
In order to secure the payment of principal of and interest on the
Series 2001-1 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 2001-1 Transition
Bonds from time to time issued and Outstanding, of all of the Issuer's
right, title and interest in, to and under the Collateral, including,
without limitation, the Bondable 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 2001-1 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.
Approved Replacement Counterparty has the meaning set forth in
Section 9(a) of this Supplement.
Authorized Denominations shall mean $1,000 and integral
multiples of $1.00 above that amount, provided, however, that one
Transition Bond of each Class may have a denomination of less than $1,000.
Calculation Period means, with respect to a Payment Date, the
period from and including the preceding Payment Date to but excluding such
Payment Date, or in the case of the first Calculation Period, from and
including the Series Issuance Date to but excluding the initial Payment
Date.
Class A-4 Transition Bonds means the Series 2001-1 Transition
Bonds, Class X- 0.
Class A-4 Gross Fixed Amount with respect to any Payment Date
means an amount equal to the product of the Class A-4 Gross Fixed Rate
times the Outstanding Amount of the Class A-4 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 Class A-4 Transition Bonds
on such preceding Payment Date, which product (i) in the case of each
Payment Date other than the initial Payment Date shall be multiplied by the
number of days (determined on the basis of a 360-day year of twelve 30-day
months) from and including the preceding payment date to, but excluding,
the current Payment Date, divided by 360, and (ii) in the case of the
initial Payment Date, shall be multiplied by the number of days (determined
on the basis of a 360-day year of twelve 30-day months) from and including
the Series Issuance Date to, but excluding, the initial Payment Date,
divided by 360, provided, that, so long as an Interest Rate Swap Agreement
is in effect, the Class A-4 Gross Fixed Amount shall be calculated in
accordance with such Interest Rate Swap Agreement.
Class A-4 Gross Fixed Rate has the meaning set forth in Section
4 of this Supplement.
Class A-4 Interest Determination Date means, with respect to a
Payment Date, the day two London Banking Days prior to such Payment Date,
or, in the case of the initial Payment Date, each of the days two London
Banking Days prior to the Series Issuance Date, March 15, 2001 and June 15,
2001.
Class A-4 Swap Agreement means the Original Class A-4 Swap
Agreement and any replacement Interest Rate Swap Agreement relating to the
Class A-4 Transition Bonds entered into pursuant to Section 9 of this
Supplement.
Class A-4 Swap Counterparty means the Swap Counterparty under
the Class A-4 Swap Agreement.
Expected Amortization Schedule means Schedule A to this Supplement.
Expected Final Payment Date means, with respect to any Class of
the Series 2001-1 Transition Bonds, the expected final Payment Date
therefor, as specified in Section 4 of this Supplement.
Final Maturity Date means, with respect to any Class of the
Series 2001-1 Transition Bonds, the final Payment Date thereof, as
specified in Section 4 of this Supplement.
Interest Rate has the meaning set forth in Section 4 of this
Supplement.
LIBOR means a rate per annum equal to the London interbank
offered rate for three-month United States dollar deposits (except with
respect to the period from the date of issuance to and including March 14,
2001 when the rate will be based on one-month United States dollar
deposits), calculated by the Trustee on the Class A-4 Interest
Determination Date according the procedure in Schedule C hereto.
London Banking Day means a day on which dealings in United
States dollars are transacted in the London interbank market.
Original Class A-4 Swap Agreement means the ISDA Master
Agreement, together with the related Schedule and Confirmation, each dated
January 25, 2001 between the Issuer and Westdeutsche Landesbank
Girozentrale, New York Branch, as the Swap Counterparty thereunder,
relating to the Class A-4 Transition Bonds.
Overcollateralization Amount has the meaning set forth in
Section 6(d) of this Supplement.
Payment Date has the meaning set forth in Section 6(a) of this
Supplement.
Qualified Replacement Counterparty means a Replacement
Counterparty that (i) has the Required Rating from each of the Required
Rating Agencies or (ii) enters into such other arrangements as will result
in the Class A-4 Transition Bonds receiving ratings from the Required
Rating Agencies not less than the ratings that would be received if such
Replacement Counterparty satisfied the Required Rating for each of the
Required Rating Agencies.
Rating Agency means any Rating Agency (as defined in the
Indenture) rating the Class A-4 Transition Bonds as of the Series Issuance
Date.
Record Date shall mean, with respect to any Payment Date, the
Business Day prior to such Payment Date or, with respect to any Definitive
Transition Bonds, the last Business Day of the month preceding such Payment
Date.
Replacement Counterparty has the meaning set forth in Section
9(a) of this Supplement.
Required Capital Amount has the meaning set forth in Section
6(e) of this Supplement.
Required Rating means "Aa3" in the case of Xxxxx'x, either "A+"
for long-term unsecured debt or "A-1+" for short-term unsecured debt in the
case of S&P and, if the Swap Counterparty is rated by Fitch, "A+" for
long-term unsecured debt and "F1" for short-term unsecured debt.
Required Rating Agencies means Xxxxx'x, S&P and, if the Swap
Counterparty is rated by Fitch, Fitch.
Series Issuance Date has the meaning set forth in Section 3(b)
of this Supplement.
Swap Agent has the meaning set forth in Section 9(a) of this
Supplement.
SECTION 3. DESIGNATION; SERIES ISSUANCE DATES.
(a) Designation. The Series 2001-1 Transition Bonds shall be
designated generally as the Issuer's Transition Bonds, Series 2001-1, and
further denominated as Class A-1, Class A-2, Class A-3, Class A-4, Class
A-5, Class A-6, Class A-7 and Class A-8.
(b) Series Issuance Date. The Series 2001-1 Transition Bonds
that are authenticated and delivered by the Trustee to or upon the order of
the Issuer on January 31, 2001 (the "Series Issuance Date") shall have as
their date of authentication January 31, 2001.
SECTION 4. INITIAL PRINCIPAL AMOUNT; INTEREST RATE; EXPECTED FINAL
PAYMENT DATE; FINAL MATURITY DATES.
The Transition Bonds of each Class of the Series 2001-1 Transition
Bonds shall have the initial principal amounts, bear interest at the
Interest Rates and have Expected Final Payment Dates and Final Maturity
Dates as set forth below:
Initial
Principal Expected Final Final
Class Amount Interest Rate Payment Date Maturity Date
----- ------ ------------- ------------ -------------
A-1 $105,249,914 5.46 % June 15, 2002 June 15, 2004
A-2 $368,980,380 5.74 % March 15, 2005 March 15, 2007
A-3 $182,621,909 5.98 % June 15, 2006 June 15, 2008
A-4 $496,606,425 LIBOR +0.30% June 15, 2009 June 15, 2011
A-5 $328,032,965 6.45 % March 15, 2011 March 15, 2013
A-6 $453,559,632 6.61 % June 15, 2013 June 15, 2015
A-7 $219,688,870 6.75 % June 15, 2014 June 15, 2016
A-8 $370,259,905 6.89 % December 15, 2015 December 15, 2017
Interest shall be paid on the Class A-4 Transition Bonds in
accordance with Section 6(c) hereof.
SECTION 5. SERIES 2001-1 TRANSITION BONDS, CLASS A-4
(a) Upon the issuance of the Class A-4 Transition Bonds, the
Trustee will establish and maintain a Class Subaccount (the "Class A-4
Subaccount"), which the Trustee will hold in trust for the benefit of the
Holders of the Class A-4 Transition Bonds and the Class A-4 Swap
Counterparty. On the Business Day preceding each Payment Date, but subject
to any proration among Series and Classes in the case of a shortfall of
funds available to pay interest on the Transition Bonds pursuant to Section
8.02 of the Indenture, the Trustee shall allocate to the Class A-4
Subaccount an amount equal to the Class A-4 Gross Fixed Amount with respect
to such Payment Date. On or before the Payment Date, any net amount payable
by the Issuer to the Class A-4 Swap Counterparty under the Class A-4 Swap
Agreement shall be paid from the Class A-4 Subaccount, and any net amount
payable to the Issuer by the Class A-4 Swap Counterparty under the Class
A-4 Swap Agreement shall be deposited into the Class A-4 Subaccount. On
that Payment Date, amounts in the Class A-4 Subaccount after such netting
and payment shall be paid as interest to the Holders of the Class A-4
Transition Bonds.
(b) (i) For each Payment Date the Class A-4 Fixed Gross Amount
with respect to such Payment Date shall be allocated to the Class A-4
Subaccount on a pro rata basis with amounts allocated with respect to
Interest payable on each of the other Classes of the Series 2001-1
Transition Bonds pursuant to Section 8.02(g)(iii) of the Indenture.
(ii) If, on any Payment Date for any Calculation Period
during which the Class A-4 Swap Agreement is in effect, there are
insufficient funds in the Class A-4 Subaccount to pay the interest due to
the Holders of the Class A-4 Transition Bonds because of a failure of the
Class A-4 Swap Counterparty to pay any net amount payable by the Class A-4
Swap Counterparty under the Class A-4 Swap Agreement, the Class A-4
Transition Bondholders shall have no recourse to amounts in any other
Subaccount to recover such shortfall other than from amounts subsequently
paid by the Class A-4 Swap Counterparty.
(iii) If for any Payment Date there are insufficient
funds in the Class X- 0 Subaccount to pay the interest due to the Holders
of the Class A-4 Transition Bonds and to pay any net amount payable to the
Class A-4 Swap Counterparty by the Issuer under the Class A-4 Swap
Agreement because of a shortfall of funds available for the Trustee to
allocate to the Class A-4 Subaccount the full amount of the Class A-4 Fixed
Gross Amount with respect to such Payment Date, amounts in the Class A-4
Subaccount shall be distributed to the Holders of the Class A-4 Transition
Bonds and the Class A-4 Swap Counterparty on a pro rata basis based on the
respective amounts payable to the Swap Counterparty and the interest
payable to Holders of the Class A-4 Transition Bonds with respect to such
Payment Date. Any overdue and unpaid amounts due to the Swap Counterparty
shall be paid from the Class A-4 Subaccount pari passu and pro rata with
any overdue and unpaid interest due to the Holders of the Class A-4
Transition Bonds.
(iv) The Class A-4 Swap Counterparty shall be secured by
the Grant made to the Trustee under the Granting Clause of the Indenture
with respect to and to the extent of amounts on deposit in the Class A-4
Subaccount pari passu with the Holders of the Class A-4 Transition Bonds
based on the respective amounts payable to the Swap Counterparty and the
amounts payable to the Holders of the Class A-4 Transition Bonds, in
accordance with this Series Supplement, the Indenture and the Interest Rate
Swap Agreement.
(c) The Trustee shall calculate LIBOR in accordance with
Schedule C hereto on each Class A-4 Interest Determination Date and the
Trustee shall notify the Servicer, the Issuer and the Swap Counterparty of
such calculation. For so long as the Class A-4 Transition Bonds are listed
on the Luxembourg Stock Exchange, the Trustee shall also notify the
Luxembourg Stock Exchange and any agents in Luxembourg appointed pursuant
to Section 3.02(b) of the Indenture of the rate of interest and the amount
of the interest payment on the Class A-4 Transition Bonds for each Payment
Date.
SECTION 6. 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 2001-1 Transition Bonds are March 15, June 15, September 15 and
December 15 of each year or, if any such date is not a Business Day, the
next succeeding Business Day, commencing on September 15, 2001 and
continuing until the earlier of repayment of such Class in full and the
applicable Final Maturity Date.
(b) Expected Amortization Schedule for Principal. Except in the
case of an optional redemption pursuant to Section 10.01 of the Indenture,
unless an Event of Default has occurred 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 2001-1 Transition
Bondholders of record as of the related Record Date amounts payable in
respect of the Series 2001-1 Transition Bonds pursuant to Section 8.02(g)
of the Indenture as principal, in accordance with the Expected Amortization
Schedule. Notwithstanding the foregoing, if one or more Classes did not
receive principal on any prior Payment Date in accordance with the Expected
Amortization Schedule, such shortfalls of principal shall be paid prior to
the payment of principal scheduled to be paid on the current Payment Date
and shall be paid in the order in which such amounts were scheduled to be
paid previously pursuant to the Expected Amortization Schedule; provided,
however, that in no event shall a principal payment pursuant to this
Section 6(b) on any Class on a Payment Date be greater than the amount that
reduces the Outstanding Amount of such Class of Series 2001-1 Transition
Bonds to the amount specified in the Expected Amortization Schedule for
such Class and Payment Date.
(c) Interest. On each Payment Date after the initial Payment
Date, interest will be payable on the Series 2001-1 Transition Bonds in an
amount equal to: (1) with respect to the Series 2001-1 Transition Bonds,
Class X-0, Xxxxx X-0, Class A-3, Class A-4 (to the extent interest is being
paid at the Class A-4 Gross Fixed Rate), Class A-5, Class A-6, Class A-7
and Class A-8, the number of days (determined on the basis of a 360-day
year of twelve 30-day months and assuming that the 15th day is also a
Business Day) from and including the preceding Payment Date to, but
excluding, the current Payment Date, divided by 360, and (2) with respect
to the Class A-4 Transition Bonds (to the extent interest is being paid at
the floating rate), the actual number of days since the preceding Payment
Date to, but excluding, the current Payment Date, divided by 360, times the
product of:
(i) the applicable Interest Rate times
(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 2001-1 Transition Bonds on
such preceding Payment Date.
With respect to the initial Payment Date, interest will be
payable in an amount equal to:
(1) with respect to the Series 2001-1 Transition Bonds, Class
X-0, Xxxxx X-0, Class A-3, Class A-5, Class A-6, Class A-7 and Class
A-8, the number of days (determined on the basis of a 360-day year of
twelve 30-day months) from and including the Series Issuance Date to,
but excluding, the initial Payment Date, divided by 360, times the
product of:
(a) the applicable Interest Rate for such Class times
(b) the original principal amount of such Class of
Transition Bonds as of the Series Issuance Date;
(2) with respect to the Class A-4 Transition Bonds,
(a) 5.94750% times
(b) $496,606,425, times
(c) the actual number of days from and including the
Series Issuance Date up to and including March 14, 2001, divided by
360,
plus (d) LIBOR (calculated two London Banking Days before
March 15, 2001) plus 0.30% times
(e) $496,606,425, times
(f) the actual number of days from and including March
15, 2001 up to and including June 14, 2001, divided by 360,
plus
(g) LIBOR (calculated two London Banking Days before June
15, 2001) plus 0.30% times
(h) $496,606,425, times
(i) the actual number of days from and including June 15,
2001 up to and including September 16, 2001, divided by 360.
Notwithstanding the foregoing, upon the termination of the
Class A-4 Swap Agreement for any reason and for so long as there is no
replacement Class A-4 Swap Agreement in effect, the Class A-4 Transition
Bonds shall bear interest at the fixed rate of 6.2875 percent per annum
(the "Class A-4 Gross Fixed Rate"), effective from and including the
Payment Date preceding such termination (or, if the Class A-4 Swap
Agreement is terminated before the initial Payment Date, from the Series
Issuance Date). The Class A-4 Gross Fixed Rate shall be computed on the
basis of a 360-day year of twelve 30-day months or, for the initial Payment
Date, the number of days (determined on the basis of a 360-day year of
twelve 30-day months) from and including the Series Issuance Date to but
excluding the initial Payment Date. At such time as the Issuer enters into
a replacement Class A-4 Swap Agreement pursuant to Section 9 of this
Supplement, the Class A-4 Transition Bonds shall revert to the interest
rate of LIBOR plus 0.30 percent, which rate shall accrue from and including
the next Payment Date following the date such replacement Class A-4 Swap
Agreement becomes effective and which shall be computed on the basis of the
actual number of days elapsed and a 360-day year.
(d) Overcollateralization Amount. The Overcollateralization
Amount for the Series 2001-1 Transition Bonds shall be as set forth in
Schedule B hereto.
(e) Required Capital Amount; Series 2001-1 Capital Subaccount.
(i) The Required Capital Amount for the Series 2001-1 Transition Bonds
shall be $12,625,000.
(ii) Solely for tracing deposits to and withdrawals from the Series
2001-1 Capital Subaccount, the Series 2001-1 Capital Subaccount shall
comprise two sub-subaccounts, designated "Capital Subaccount - A" and
"Capital Subaccount - B". The original deposit to the Series 2001-1 Capital
Subaccount in the amount of $12,625,000 shall be deposited to Capital
Subaccount - A. No additional deposits shall be made to Capital Subaccount
- A. Any additional deposits to the Series 2001-1 Capital Subaccount shall
be made to Capital Subaccount - B. Any withdrawals from the Series 2001-1
Capital Subaccount shall be made from Capital Subaccount - B until no funds
remain in Capital Subaccount - B and thereafter shall be made from Capital
Subaccount - A.
(f) No Premium. No premium will be payable in connection with
the early redemption of the Series 2001-1 Transition Bonds.
SECTION 7. AUTHORIZED DENOMINATIONS. The Series 2001-1 Transition
Bonds shall be issuable in the Authorized Denominations.
SECTION 8. REDEMPTION.
(a) Mandatory Redemption. The Series 2001-1 Transition Bonds
shall not be subject to mandatory redemption.
(b) Optional Redemption. The Issuer may redeem the Transition
Bonds of Series 2001-1, at its option, on any Payment Date in accordance
with Section 10.01 of the Indenture if (1) 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 and (2) no Interest Rate Swap Agreement is
in effect.
SECTION 9. INTEREST RATE SWAP AGREEMENT.
(a) Upon a termination event or event of default under the
Class A-4 Swap Agreement, the Issuer shall appoint a recognized swap dealer
which is a member of the International Swaps and Derivatives Association,
Inc. with capital and surplus of at least $50 million (the "Swap Agent") to
independently solicit, for a period not exceeding 30 days, a replacement
Class A-4 Swap Counterparty (a "Replacement Counterparty"), who shall not
be the Swap Agent or an Affiliate thereof. During such 30 day period, the
Swap Agent shall be required to identify a Qualified Replacement
Counterparty, or if a Qualified Replacement Counterparty cannot be found,
the Swap Agent shall be required to identify the highest rated Replacement
Counterparty available that is approved by the Holders of at least 66 2/3%
of the Outstanding Amount of the Class A-4 Transition Bonds (an "Approved
Replacement Counterparty"). In any case, if there is more than one
available Qualified Replacement Counterparty or Approved Replacement
Counterparty, as applicable, with the same credit rating, the Swap Agent
shall select that prospective Qualified Replacement Counterparty or
Approved Replacement Counterparty, as applicable, offering the terms with
the lowest overall cost to the Issuer. The costs and expenses of a Swap
Agent appointed pursuant to this Section 9(a) shall be an Operating Expense
to be paid by the Issuer pursuant to Section 8.02(g)(vi), to the extent not
paid by the Swap Counterparty .
(b) If the Swap Agent is successful in identifying a Qualified
Replacement Counterparty or Approved Replacement Counterparty, upon the
termination of the Class A-4 Swap Agreement, the Issuer shall execute a
replacement Class A-4 Swap Agreement with such Replacement Counterparty
having substantially the same terms as the Class A-4 Swap Agreement being
replaced, effective as of the Payment Date immediately following such
execution. Any initial upfront payments made by such Replacement
Counterparty in connection with its entering into such replacement Class
A-4 Swap Agreement shall be paid to the terminated Class A-4 Swap
Counterparty, and any termination payment or other similar amount paid to
the Issuer by the terminated Class A-4 Swap Counterparty in accordance with
the terms of the Swap Agreement shall first be used to make any payment
required to be made to a Replacement Counterparty under an Interest Rate
Swap Agreement and then to the extent not so used shall be deposited into
the Class A-4 Subaccount and paid to the Holders of the Class A-4
Transition Bonds on the next Payment Date, pro rata based on the principal
amount held by each Holder.
(c) If a Qualified Replacement Counterparty or an Approved
Replacement Counterparty has not been obtained, the Swap Agent shall be
required to renew such search every three months thereafter until a
Qualified Replacement Counterparty or Approved Replacement Counterparty has
been identified and approved and a replacement Class A-4 Swap Agreement has
been entered into in the manner set forth in clauses (a) and (b) above.
(d) If a termination event or a event of default occurs and is
continuing under the Class A-4 Swap Agreement, the Trustee may, and at the
direction of the Holders of at least 66 2/3% of the Outstanding Amount of
the Class A-4 Transition Bonds shall, exercise all rights, remedies,
powers, privileges and claims of the Issuer against the Class A-4 Swap
Counterparty and any right of the Issuer to take this action shall be
suspended.
(e) The Class A-4 Swap Agreement may be amended with the
consent of the Trustee and the Class A-4 Swap Counterparty, upon prior
notice to the Rating Agencies; provided that such amendment may not
adversely affect in any material respect the interests of the Holders of
Class A-4 Transition Bonds unless the Holders of at least 66 2/3% of the
Outstanding Amount of the Class A-4 Transition Bonds direct the Trustee to
consent to such amendment. Moreover, such amendment may not adversely
affect in any material respect the interests of the Holders of any other
Series or Class of Transition Bonds or any counterparty to any other Hedge
Agreement or Interest Rate Swap Agreement without the consent of the
Holders of 66 2/3% of the Outstanding Amount of all of such other Series or
Classes, and each counterparty to any other Hedge Agreement or Interest
Rate Swap Agreement, materially and adversely affected thereby.
(f) With respect to any action proposed by the Issuer to amend,
modify, waive, supplement or surrender the terms of or rights under the
Class A-4 Swap Agreement, or waive timely performance or observance by the
Class A-4 Swap Counterparty under the Class X- 0 Swap Agreement, in a way
which would materially and adversely affect the interests of the Holders of
the Class A-4 Transition Bonds, the Issuer shall provide prior notice to
the Rating Agencies. The Issuer will consent to such proposed action only
with the consent of (i) the Holders of at least 66 2/3% of the Outstanding
Amount of the Class A-4 Transition Bonds and (ii) the Holders of at least
66 2/3% of the Outstanding Amount of all of such other Series or Classes,
and each counterparty to any other Hedge Agreement or Interest Rate Swap
Agreement, materially and adversely affected thereby. Notwithstanding the
foregoing, nothing shall prevent the Issuer from seeking or retaining a
Swap Agent to seek a Replacement Counterparty.
(g) Notwithstanding the foregoing clause (f), upon a swap
counterparty Downgrade Event or payment default by the Class A-4 Swap
Counterparty under the Class A-4 Swap Agreement, the Issuer shall not (i)
continue with a downgraded Class A-4 Counterparty notwithstanding the
failure timely to identify a Qualified Replacement Counterparty or Approved
Replacement Counterparty, as provided in the Class A-4 Swap Agreement, or
(ii) waive a payment default by the Class A-4 Swap Counterparty within the
time periods prescribed in the Class A-4 Swap Agreement, except as directed
by the Holders of at least 66 2/3% of the Outstanding Amount of the Class
A-4 Transition Bonds.
SECTION 10. CREDIT ENHANCEMENT. No credit enhancement (other than the
Overcollateralization Amount, the Required Capital Amount and any
adjustments to the Transition Bond Charge approved by the BPU as
contemplated in the Servicing Agreement) is provided for the Series 2001-1
Transition Bonds.
SECTION 11. TRUSTEE POLICIES. If at any time withdrawals from Capital
Subaccount - A of the Series 2001-1 Capital Subaccount exceed in the
aggregate $7,625,000, the Issuer shall, upon the written request of the
Trustee, within thirty days after the date of such request, deliver to the
Trustee and keep in force until this Indenture ceases to be of any further
effect, one or more policies of insurance, surety bonds and/or letters of
credit in the aggregate face amount of $5,000,000, which policies, surety
bonds and/or letters of credit are sufficient to provide coverage for, and
to ensure to the Trustee the payment of, all amounts due and owing to the
Trustee under this Indenture (collectively, the "Trustee Policies"),
subject to reasonable commercial availability and provided that the
premiums or fees for the Trustee Policies shall not exceed $50,000 during
any calendar year. The terms and conditions of the Trustee Policies shall
be in form and substance reasonably acceptable to the Trustee and shall be
issued by one or more carriers or issuers reasonably acceptable to the
Trustee.
SECTION 12. DELIVERY AND PAYMENT FOR THE SERIES 2001-1 TRANSITION
BONDS; FORM OF THE SERIES 2001-1 TRANSITION BONDS. The Trustee shall
deliver the Series 2001-1 Transition Bonds to the Issuer when authenticated
in accordance with Section 2.02 of the Indenture. The Series 2001-1
Transition Bonds of Class A-1, Class A-2, Class A-3, Class A-5, Class A-6,
Class A-7 and Class A-8 shall be in the form of Exhibit A hereto and the
Series 2001- 1 Transition Bonds of Class A-4 shall be in the form of
Exhibit B hereto.
SECTION 13. ADMINISTRATION FEE. The Administrator shall be paid by
the Issuer a fee of $31,250 on each Payment Date with respect to the Series
2001-1 Transition Bonds.
SECTION 14. LISTING AGENT, PAYING AGENT, TRANSFER AGENT. For so long
as any Series 2001-1 Transition Bonds are listed on the Luxembourg Stock
Exchange and the rules and regulations of such exchange so require, the
Issuer shall retain a listing agent, a transfer agent and a paying agent in
Luxembourg appointed pursuant to Section 3.02(b) of the Indenture.
SECTION 15. 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 16. 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 17. GOVERNING LAW. This Supplement shall be construed in
accordance with the laws of the State of New Jersey, without reference to
its conflict of law provisions, and the obligations, rights and remedies of
the parties hereunder shall be determined in accordance with such laws.
IN WITNESS WHEREOF, the Issuer and the Trustee have caused this
Supplement to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first above written.
PSE&G TRANSITION FUNDING LLC,
as Issuer
By: /s/ Xxxxxx X. Xxxxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Manager
THE BANK OF NEW YORK, not in its
individual capacity but solely as
Trustee on behalf of the
Transition Bondholders,
By: /s/ Xxxxxxxxx Xxxxx
-------------------------------------
Name: Xxxxxxxxx Xxxxx
Title: Assistant Vice President
SCHEDULE A
Expected Amortization Schedule
Scheduled Amortization Requirement
All amounts are in United States Dollars
Class A-1 Class A-2 Class A-3 Class A-4 Class A-5 Class A-6 Class A-7 Class A-8
Payment Date Balance Balance Balance Balance Balance Balance Balance Balance
----------- ---------- --------- ----------- ------------ ----------- ---------- ---------- ------------
Closing 105,249,914 368,980,380 182,621,909 496,606,425 328,032,965 453,559,632 219,688,870 370,259,905
09/15/01 79,221,814 368,980,380 182,621,909 496,606,425 328,032,965 453,559,632 219,688,870 370,259,905
12/15/01 51,861,270 368,980,380 182,621,909 496,606,425 328,032,965 453,559,632 219,688,870 370,259,905
03/15/02 26,582,543 368,980,380 182,621,909 496,606,425 328,032,965 453,559,632 219,688,870 370,259,905
06/15/02 - 368,980,380 182,621,909 496,606,425 328,032,965 453,559,632 219,688,870 370,259,905
09/15/02 - 335,606,551 182,621,909 496,606,425 328,032,965 453,559,632 219,688,870 370,259,905
12/15/02 - 300,386,596 182,621,909 496,606,425 328,032,965 453,559,632 219,688,870 370,259,905
03/15/03 - 270,106,256 182,621,909 496,606,425 328,032,965 453,559,632 219,688,870 370,259,905
06/15/03 - 242,250,492 182,621,909 496,606,425 328,032,965 453,559,632 219,688,870 370,259,905
09/15/03 - 207,771,601 182,621,909 496,606,425 328,032,965 453,559,632 219,688,870 370,259,905
12/15/03 - 171,451,240 182,621,909 496,606,425 328,032,965 453,559,632 219,688,870 370,259,905
03/15/04 - 139,589,132 182,621,909 496,606,425 328,032,965 453,559,632 219,688,870 370,259,905
06/15/04 - 109,531,025 182,621,909 496,606,425 328,032,965 453,559,632 219,688,870 370,259,905
09/15/04 - 72,751,836 182,621,909 496,606,425 328,032,965 453,559,632 219,688,870 370,259,905
12/15/04 - 34,090,613 182,621,909 496,606,425 328,032,965 453,559,632 219,688,870 370,259,905
03/15/05 - - 182,621,909 496,606,425 328,032,965 453,559,632 219,688,870 370,259,905
06/15/05 - - 150,436,329 496,606,425 328,032,965 453,559,632 219,688,870 370,259,905
09/15/05 - - 111,488,525 496,606,425 328,032,965 453,559,632 219,688,870 370,259,905
12/15/05 - - 70,599,211 496,606,425 328,032,965 453,559,632 219,688,870 370,259,905
03/15/06 - - 34,308,521 496,606,425 328,032,965 453,559,632 219,688,870 370,259,905
06/15/06 - - - 496,606,425 328,032,965 453,559,632 219,688,870 370,259,905
09/15/06 - - - 455,520,961 328,032,965 453,559,632 219,688,870 370,259,905
12/15/06 - - - 412,432,186 328,032,965 453,559,632 219,688,870 370,259,905
03/15/07 - - - 374,173,676 328,032,965 453,559,632 219,688,870 370,259,905
06/15/07 - - - 338,300,783 328,032,965 453,559,632 219,688,870 370,259,905
09/15/07 - - - 295,669,116 328,032,965 453,559,632 219,688,870 370,259,905
12/15/07 - - - 251,038,529 328,032,965 453,559,632 219,688,870 370,259,905
03/15/08 - - - 211,037,450 328,032,965 453,559,632 219,688,870 370,259,905
06/15/08 - - - 173,199,357 328,032,965 453,559,632 219,688,870 370,259,905
09/15/08 - - - 128,609,280 328,032,965 453,559,632 219,688,870 370,259,905
12/15/08 - - - 82,002,162 328,032,965 453,559,632 219,688,870 370,259,905
03/15/09 - - - 39,946,202 328,032,965 453,559,632 219,688,870 370,259,905
06/15/09 - - - - 328,032,965 453,559,632 219,688,870 370,259,905
09/15/09 - - - - 281,341,624 453,559,632 219,688,870 370,259,905
12/15/09 - - - - 232,595,203 453,559,632 219,688,870 370,259,905
03/15/10 - - - - 188,360,940 453,559,632 219,688,870 370,259,905
06/15/10 - - - - 146,249,254 453,559,632 219,688,870 370,259,905
09/15/10 - - - - 97,394,711 453,559,632 219,688,870 370,259,905
12/15/10 - - - - 46,468,072 453,559,632 219,688,870 370,259,905
03/15/11 - - - - - 453,559,632 219,688,870 370,259,905
06/15/11 - - - - - 409,203,619 219,688,870 370,259,905
09/15/11 - - - - - 358,110,899 219,688,870 370,259,905
12/15/11 - - - - - 304,908,604 219,688,870 370,259,905
03/15/12 - - - - - 256,101,919 219,688,870 370,259,905
06/15/12 - - - - - 209,395,101 219,688,870 370,259,905
09/15/12 - - - - - 155,989,558 219,688,870 370,259,905
12/15/12 - - - - - 100,456,246 219,688,870 370,259,905
03/15/13 - - - - - 49,213,164 219,688,870 370,259,905
06/15/13 - - - - - - 219,688,870 370,259,905
09/15/13 - - - - - - 163,810,935 370,259,905
12/15/13 - - - - - - 105,763,937 370,259,905
03/15/14 - - - - - - 51,898,931 370,259,905
06/15/14 - - - - - - - 370,259,905
09/15/14 - - - - - - - 311,715,680
12/15/14 - - - - - - - 250,956,594
03/15/15 - - - - - - - 192,665,880
06/15/15 - - - - - - - 134,008,933
09/15/15 - - - - - - - 68,204,674
12/15/15 - - - - - - - -
SCHEDULE B
Schedule of Overcollateralization Requirement
Overcollateralization Overcollateralization
Account Account
Date Balance Date Balance
09/15/01 496,489 12/15/08 6,667,135
12/15/01 709,270 03/15/09 6,879,916
03/15/02 922,051 06/15/09 7,092,697
06/15/02 1,134,831 09/15/09 7,305,478
09/15/02 1,347,612 12/15/09 7,518,258
12/15/02 1,560,393 03/15/10 7,731,039
03/15/03 1,773,174 06/15/10 7,943,820
06/15/03 1,985,955 09/15/10 8,156,601
09/15/03 2,198,736 12/15/10 8,369,382
12/15/03 2,411,517 03/15/11 8,582,163
03/15/04 2,624,298 06/15/11 8,794,944
06/15/04 2,837,079 09/15/11 9,007,725
09/15/04 3,049,860 12/15/11 9,220,506
12/15/04 3,262,640 03/15/12 9,433,287
03/15/05 3,475,421 06/15/12 9,646,067
06/15/05 3,688,202 09/15/12 9,858,848
09/15/05 3,900,983 12/15/12 10,071,629
12/15/05 4,113,764 03/15/13 10,284,410
03/15/06 4,326,545 06/15/13 10,497,191
06/15/06 4,539,326 09/15/13 10,709,972
09/15/06 4,752,107 12/15/13 10,922,753
12/15/06 4,964,888 03/15/14 11,135,534
03/15/07 5,177,669 06/15/14 11,348,315
06/15/07 5,390,449 09/15/14 11,561,096
09/15/07 5,603,230 12/15/14 11,773,876
12/15/07 5,816,011 03/15/15 11,986,657
03/15/08 6,028,792 06/15/15 12,199,438
06/15/08 6,241,573 09/15/15 12,412,219
09/15/08 6,454,354 12/15/15 12,625,000
SCHEDULE C
Calculation of LIBOR
(a) On the Class A-4 Interest Determination Date immediately
preceding the first day of each applicable Calculation Period, the Trustee
will determine LIBOR based on the offered rate for deposits in United
States dollars for the applicable period, commencing on the first day of
that Calculation Period that appears on page 3750 of the Telerate Services
as of 11:00 a.m., London time, on such Class A-4 Interest Determination
Date (the "Telerate Page"). If no offered rate appears on the Telerate
Page, LIBOR for such Calculation Period will be determined as described in
clause (b) below.
(b) With respect to an Class A-4 Interest Determination Date on which
no offered rate appears on the Telerate Page, the Trustee will request each
of four major banks in the London interbank market, selected by the
Trustee, to provide the Trustee with its offered quotation for deposits in
United States dollars for the applicable Calculation Period, commencing on
the second London Banking Day immediately following that Class A-4 Interest
Determination Date, to prime banks in the London interbank market at
approximately 11:00 a.m., London time, on such Class A-4 Interest
Determination Date and in a principal amount that is representative for a
single transaction in United States dollars in that market at that time for
the applicable period. If at least two such quotations are provided, LIBOR
for such Calculation Period will be the arithmetic mean of those
quotations. If fewer than two quotations are provided, LIBOR for that
Calculation Period will be the arithmetic mean of the rates quoted at
approximately 11:00 a.m. in the City of New York, on that Class A-4
Interest Determination Date by major banks in the City of New York selected
by the Trustee for loans in United States dollars to leading European
banks, for the Calculation Period commencing on the second London Banking
Day immediately following that Class A-4 Interest Determination Date and in
a principal amount that is representative for a single transaction in
United States dollars in that market at that time.
(c) If LIBOR cannot be determined in accordance with clauses (a) or
(b) above, then LIBOR will be determined to be the same as the rate which
applied during the previous Calculation Period or, in the case of any
failure to determine LIBOR on either of the two Class A-4 Interest
Determination Dates preceding the first Payment Date, the rate which was
calculated by the Trustee on the first Class A-4 Interest Determination
Date.
Exhibit A to Series Supplement
Form of Bond
REGISTERED $
No. R-1 CUSIP NO.
SEE REVERSE FOR CERTAIN DEFINITIONS
THE PRINCIPAL OF THIS CLASS A-[ ] TRANSITION BOND WILL BE PAID IN
INSTALMENTS AS SET FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL
AMOUNT OF THIS CLASS A-[ ] TRANSITION BOND AT ANY TIME MAY BE LESS THAN THE
AMOUNT SHOWN ON THE FACE HEREOF. THE HOLDER OF THIS CLASS A-[ ] TRANSITION
BOND HEREBY COVENANTS AND AGREES THAT PRIOR TO THE DATE WHICH IS ONE (1)
YEAR AND ONE (1) DAY AFTER THE PAYMENT IN FULL OF THE CLASS A-[ ]
TRANSITION BONDS, IT WILL NOT INSTITUTE AGAINST, OR JOIN ANY OTHER PERSON
IN INSTITUTING AGAINST, THE ISSUER ANY BANKRUPTCY, REORGANIZATION,
ARRANGEMENT, INSOLVENCY OR LIQUIDATION PROCEEDINGS OR OTHER SIMILAR
PROCEEDING UNDER THE LAWS OF THE UNITED STATES OR ANY STATE OF THE UNITED
STATES. TRANSFERS OF THIS GLOBAL TRANSITION BOND SHALL BE LIMITED TO
TRANSFERS IN THE CLEARING AGENCY OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL TRANSITION
BOND SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS
SET FORTH IN THE INDENTURE.
PSE&G TRANSITION FUNDING LLC
TRANSITION BONDS, SERIES 2001-1, CLASS A-[ ].
Interest Original Principal Expected Final
Rate Amount Payment Date Maturity Date
PSE&G Transition Funding LLC, a limited liability company formed 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 installments on the Payment Dates (as defined below) and
in the amounts determined as specified on the reverse hereof or, if less,
the amounts determined pursuant to Section 8.02(g) of the Indenture, in
each year, commencing on September 15, 2001 and ending on or before the
Final Maturity Date, to pay the entire unpaid principal hereof on the Final
Maturity Date and to pay interest, at the Interest Rate shown above at a
fixed rate, on each March 15, June 15, September 15 and December 15, and if
any such day is not a Business Day, the next succeeding Business Day,
commencing on September 15, 2001 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-[ ] Transition
Bond outstanding from time to time. Interest will be computed (i) for the
first Payment Date, on the basis of the number of days (determined on the
basis of a 360-day year of twelve 30-day months) from and including the
Series Issuance Date, to but excluding the initial Payment Date, divided by
360, multiplied by [ ]%, multiplied by the Original Principal Amount of the
Class A-[ ] Transition Bonds, and (ii) for each succeeding Payment Date,
the number of days (determined on the basis of a 360-day year of twelve
30-day months) from and including the preceding Payment Date to, but
excluding, the current Payment Date, divided by 360, multiplied by [ ]%,
multiplied by the Outstanding Amount of the Class A-[ ] 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 Class A-[ ]
Transition Bonds on such preceding Payment Date. Such principal of and
interest on this Class A-[ ] Transition Bond shall be paid in the manner
specified on the reverse hereof.
The principal of and interest on this Class A-[ ] 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 A-[ ] Transition
Bond shall be applied first to interest due and payable on this Class A-[ ]
Transition Bond as provided above and then to the unpaid principal of this
Class A-[ ] Transition Bond, all in the manner set forth in Section 8.02(g)
of the Indenture.
Reference is made to the further provisions of this Class A-[ ]
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 A-[ ] Transition
Bond.
Unless the certificate of authentication hereon has been executed by
the Trustee whose name appears below by manual signature, this Class A-[ ]
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 Manager of the Issuer.
Dated: [ ], 2001
PSE&G TRANSITION FUNDING LLC
By:
------------------------
Name:
Title: Manager
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
Dated: [ ], 2001
This is one of the Class A-[ ] Transition Bonds of the Series 2001-1
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 Class A-[ ] 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. The Series 2001-1
Transition Bonds consist of eight Classes, including the Class A-[ ]
Transition Bonds (herein called the "Class A-[ ] Transition Bonds"). The
Class A-[ ] Transition Bonds have been issued under an indenture dated as
of January 31, 2001, and a series supplement thereto dated as of January
31, 2001 (such series supplement, as supplemented or amended, the "Series
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 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 A-[ ]
Transition Bond that are defined in the Indenture, as supplemented or
amended, shall have the meanings assigned to them in the Indenture.
The Class A-[ ] Transition Bonds, the other Classes of Series 2001-1
Transition Bonds and any other Series of Transition Bonds issued by the
Issuer are and will be equally and ratably secured by the Collateral
pledged as security therefor as provided in the Indenture.
The principal of this Class A-[ ] 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 of
the Class A-[ ] Transition Bonds 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 Series Supplement as Schedule A, unless
payable earlier either because
(i) an Event of Default has occurred and is 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, or
(ii) the Issuer, at its option, has called for the redemption
of the Series 2001-1 Transition Bonds in whole pursuant to Section
8(b) of the Series Supplement and Section 10.01 of the Indenture.
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(g) of the Indenture. The entire unpaid principal amount of this Class
A-[ ] Transition Bond shall be due and payable on the earlier of the Final
Maturity Date hereof and the Redemption Date, if any. 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 A-[ ] Transition Bonds shall be made pro rata to the Class A-[ ]
Transition Bondholders entitled thereto based on the respective principal
amounts of the Class A-[ ] Transition Bonds held by them.
Payments of interest on this Class A-[ ] Transition Bond due and
payable on each Payment Date, together with the installment of principal
payable on this Class A-[ ] 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 A-[ ] Transition Bond (or
one or more predecessors 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 Series Supplement, except that with
respect to Class A-[ ] 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 installment of principal payable with
respect to this Class A-[ ] 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 A-[ ] Transition Bond be submitted for notation of payment.
Any reduction in the principal amount of this Class A-[ ] Transition Bond
(or any one or more predecessors to such Transition Bond) effected by any
payments made on any Payment Date shall be binding upon all future Holders
of this Class A-[ ] Transition Bond and of any Class A-[ ] 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 A-[ ] 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 installment 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 A-[ ] Transition Bond and shall
specify the place where this Class A-[ ] Transition Bond may be presented
and surrendered for payment of such installment.
The Issuer shall pay interest on overdue installments of interest on
this Class A-[ ] Transition Bond at the Interest Rate for Class A-[ ] to
the extent lawful.
As provided in the Indenture, the Class A-[ ] Transition Bonds may be
redeemed, in whole, but not in part, in certain circumstances as provided
in Section 8(b) of the Series Supplement and Section 10.01 of the
Indenture.
This Class A-[ ] Transition Bond is a Transition Bond as such term is
defined in the Competition Act. Principal and interest due and payable on
this Transition Bond are payable from and secured primarily by bondable
transition property authorized by a bondable stranded cost rate order
issued by the State of New Jersey Board of Public Utilities pursuant to the
Competition Act. Bondable transition property includes the irrevocable
right to impose and collect certain non-bypassable charges (defined in the
Competition Act as "transition bond charges") to be included in electric
utility bills of all electric service retail customers of Public Service
Electric and Gas Company, a New Jersey electric utility.
The Competition Act provides that:
"The State of New Jersey does hereby pledge and agree with the
holders of any transition bonds issued under the authority of this act,
with the pledgee, owner or assignee of bondable transition property, with
any financing entity which has issued transition bonds with respect to
which a bondable stranded costs rate order has been issued and with any
person who may enter into agreements with an electric public utility or an
assignee or pledgee thereof or a financing entity pursuant to this act,
that the State will not limit, alter or impair any bondable transition
property or other rights vested in an electric public utility or an
assignee or pledgee thereof or a financing entity or vested in the holders
of any transition bonds pursuant to a bondable stranded costs rate order
until such transition bonds, together with the interest and acquisition or
redemption premium, if any, thereon, are fully paid and discharged or until
such agreements are fully performed on the part of the electric public
utility, any assignee or pledgee thereof or the financing entity or in any
way limit, alter, impair or reduce the value or amount of the bondable
transition property approved by a bondable stranded costs rate order . .
.."
As provided in the Indenture and subject to certain limitations set
forth therein, the transfer of this Class A-[ ] Transition Bond may be
registered in the Transition Bond Register upon surrender of this Class A-[
] 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 A-[ ] 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 A-[ ] 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 A-[ ] Transition Bond, the Issuer, the Trustee and any agent of the
Issuer or the Trustee may treat the Person in whose name this Class A-[ ]
Transition Bond is registered (as of the day of determination) as the owner
hereof for the purpose of receiving payments of principal of and interest
on this Class A-[ ] Transition Bond and for all other purposes whatsoever,
whether or not this Class A-[ ] Transition Bond may 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 and upon satisfaction of the Rating Agency Condition. 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 A-[ ]
Transition Bond (or any one of more predecessors of such transition bonds)
shall be conclusive and binding upon such Holder and upon all future
Holders of this Class A-[ ] Transition Bond and of any Class A-[ ]
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 A-[ ] 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 Class A-[ ] 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 A-[ ] Transition Bonds are issuable only in registered form
in Authorized Denominations as provided in the Indenture and the Series
Supplement, subject to certain limitations therein set forth.
This Class A-[ ] Transition Bond and the Indenture shall be construed
in accordance with the laws of the State of New Jersey, without reference
to its conflict of law provisions, and the obligations, rights and remedies
of the parties hereunder and thereunder shall be determined in accordance
with such laws.
No reference herein to the Indenture and no provision of this Class
A-[ ] 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 A-[ ] Transition Bond at the times
and rate and in the 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 A-[ ] Transition Bond and all rights thereunder, and
hereby irrevocably constitutes and appoints
(name and address of appointee)
attorney, to transfer said Class A-[ ] 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
A-[ ] Transition Bond in every particular, without alteration,
enlargement or any change whatsoever.
Exhibit B to Series Supplement
Form of Bond
REGISTERED $
No. R-1 CUSIP NO.
SEE REVERSE FOR CERTAIN DEFINITIONS
THE PRINCIPAL OF THIS CLASS A-4 BOND WILL BE PAID IN INSTALMENTS AS
SET FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS
CLASS A-4 BOND AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE
HEREOF. THE HOLDER OF THIS CLASS A-4 BOND HEREBY COVENANTS AND AGREES THAT
PRIOR TO THE DATE WHICH IS ONE (1) YEAR AND ONE (1) DAY AFTER THE PAYMENT
IN FULL OF THE CLASS A-4 BONDS, IT WILL NOT INSTITUTE AGAINST, OR JOIN ANY
OTHER PERSON IN INSTITUTING AGAINST, THE ISSUER ANY BANKRUPTCY,
REORGANIZATION, ARRANGEMENT, INSOLVENCY OR LIQUIDATION PROCEEDINGS OR OTHER
SIMILAR PROCEEDING UNDER THE LAWS OF THE UNITED STATES OR ANY STATE OF THE
UNITED STATES. TRANSFERS OF THIS GLOBAL TRANSITION BOND SHALL BE LIMITED TO
TRANSFERS IN THE CLEARING AGENCY OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL TRANSITION
BOND SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS
SET FORTH IN THE INDENTURE.
PSE&G TRANSITION FUNDING LLC
TRANSITION BONDS, SERIES 2001-1, CLASS A-4.
Interest Original Principal Expected Final
Rate Amount Payment Date Maturity Date
LIBOR + 0.30% $496,606,425 June 15, 2009 June 15, 2011
PSE&G Transition Funding LLC, a limited liability company formed 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 determined as specified on the reverse hereof or, if less,
the amounts determined pursuant to Section 8.02(g) of the Indenture, in
each year, commencing on September 15, 2001 and ending on or before the
Final Maturity Date, to pay the entire unpaid principal hereof on the Final
Maturity Date and to pay interest, at the Interest Rate which is a floating
rate of LIBOR plus 0.30% per annum, on each March 15, June 15, September 15
and December 15, and if any such day is not a Business Day, the next
succeeding Business Day, commencing on September 15, 2001 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-4 Transition Bond outstanding on such Payment Date, after giving
effect to any payments of principal made on such Payment Date. For the
initial Payment Date, interest will be computed as the sum of (i) 5.94750%
multiplied by the actual number of days from and including the Series
Issuance Date to but excluding March 15, 2001 divided by 360, multiplied by
$496,606,425, (ii) LIBOR plus 0.30% multiplied by the actual number of days
from and including March 15, 2001 to but excluding June 15, 2001, divided
by 360, multiplied by $496,606,425, and (iii) LIBOR plus 0.30% multiplied
by the actual number of days from and including June 15, 2001, to but
excluding September 16, 2001, divided by 360, multiplied by $496,606,425.
For each succeeding Payment Date, interest will be computed as the actual
number of days since the preceding Payment Date to, but excluding, the
current Payment Date, divided by 360, multiplied by LIBOR plus 0.30%,
multiplied by the Outstanding Amount of the Class A-4 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 Class A-4
Transition Bonds on such preceding Payment Date.
Notwithstanding the foregoing, upon the termination of the Class A-4
Swap Agreement for any reason and for so long as there is no replacement
Class A-4 Swap Agreement in effect, the Interest Rate for the Class A-4
Transition Bonds shall be the fixed rate of 6.2875 percent per annum (the
"Class A-4 Gross Fixed Rate"), effective from and including the Payment
Date preceding such termination. The Class A-4 Gross Fixed Rate shall be
computed on the basis of a 360-day year of twelve 30-day months or, for the
initial Payment Date, the number of days (calculated on the basis of a
360-day year of twelve 30-day months) from and including the Series
Issuance Date to but excluding the initial Payment Date. At such time as
the Issuer enters into a replacement Class A-4 Swap Agreement pursuant to
Section 9 of the Series Supplement, the Class A-4 Transition Bonds shall
revert to the Interest Rate of LIBOR plus 0.30%, effective as of the next
Payment Date following the date of such replacement Class A-4 Swap
Agreement and computed on the basis of the actual number of days elapsed
and a 360-day year. Principal of and interest on this Class A-4 Transition
Bond shall be paid in the manner specified on the reverse hereof.
Upon the termination of the Class A-4 Swap Agreement and payment by
the Class A-4 Swap Counterparty of any termination payment or other similar
amount to the Issuer in accordance with the terms of the Class A-4 Swap
Agreement, such amount shall be deposited directly into the Class A-4 Class
Subaccount and first used to make any payment required to be made to a
Replacement Counterparty and then to the extent not so used, shall be paid
to the Holders of the Class A-4 Transition Bonds on the next Payment Date,
pro rata based on the principal amount held by each Holder.
The principal of and interest on this Class A-4 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 A-4 Transition
Bond shall be applied first to interest due and payable on this Class A-4
Transition Bond as provided above and then to the unpaid principal of this
Class A-4 Transition Bond, all in the manner set forth in Section 8.02(g)
of the Indenture.
Reference is made to the further provisions of this Class A-4
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 A-4 Transition
Bond.
Unless the certificate of authentication hereon has been executed by
the Trustee whose name appears below by manual signature, this Class A-4
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 Manager of the Issuer.
Dated: [ ], 2001
PSE&G TRANSITION FUNDING LLC
By:
-----------------------
Name:
Title: Manager
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
Dated: [ ], 2001
This is one of the Class A-4 Transition Bonds of the Series 2001-1
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 2001-1 Class A-4 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. The Series 2001-1 Transition Bonds consist of eight Classes,
including the Series 2001-1 Transition Bonds, Class A-4 (herein called the
"Class A-4 Transition Bonds"). The Class A-4 Transition Bonds have been
issued under an indenture dated as of January 31, 2001, and a series
supplement thereto dated as of January 31, 2001 (such series supplement, as
supplemented or amended, the "Series 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 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 A-4 Transition Bond that are defined in the Indenture,
as supplemented or amended, shall have the meanings assigned to them in the
Indenture.
The Class A-4 Transition Bonds, the other Classes of Series 2001-1
Transition Bonds and any other Series of Transition Bonds issued by the
Issuer are and will be equally and ratably secured by the Collateral
pledged as security therefor as provided in the Indenture.
The principal of this Class A-4 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 of
the Class A-1 Transition Bonds 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 Series Supplement as Schedule A, unless
payable earlier either because
(i) an Event of Default has occurred and is 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, or
(ii) the Issuer, at its option, has called for the redemption
of the Series 2001-1 Transition Bonds in whole pursuant to Section
8(b) of the Series Supplement and Section 10.01 of the Indenture.
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(g) of the Indenture. The entire unpaid principal amount of this Class
A-4 Transition Bond shall be due and payable on the earlier of the Final
Maturity Date hereof and the Redemption Date, if any. 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. If the Transition Bonds
are accelerated and the Bondable Transition Property is liquidated in
accordance with the Indenture, the proceeds of such liquidation which are
allocated to the Class A-4 Subaccount and deposited in the Class A-4
Subaccount will be allocated between and paid to the Holders of the Class
A-4 Transition Bonds and the Swap Counterparty, pro rata, based on the
aggregate amount of principal and interest due and payable on the Class A-4
Transition Bonds and the aggregate amount payable to the Swap Counterparty
in accordance with the Interest Rate Swap Agreement. All principal payments
on the Class A-4 Transition Bonds shall be made pro rata to the Class A-4
Transition Bondholders entitled thereto based on the respective principal
amounts of the Class A-4 Transition Bonds held by them.
Payments of interest on this Class A-4 Transition Bond due and
payable on each Payment Date, together with the instalment of principal
payable on this Class A-4 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 A-4 Transition Bond (or one
or more predecessors 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 Series Supplement, except that with
respect to Class A-4 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 payable with
respect to this Class A-4 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 A-4 Transition Bond be submitted for notation of payment.
Any reduction in the principal amount of this Class A-4 Transition Bond (or
any one or more predecessors to such Transition Bond) effected by any
payments made on any Payment Date shall be binding upon all future Holders
of this Class A-4 Transition Bond and of any Class A-4 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 A-4 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 A-4 Transition Bond and shall
specify the place where this Class A-4 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 A-4 Transition Bond at the Interest Rate for Class A-4 to the
extent lawful, subject to the availability of such amounts in the Class A-4
Subaccount.
As provided in the Indenture, the Class A-4 Transition Bonds may be
redeemed, in whole, but not in part, in certain circumstances as provided
in Section 8(b) of the Series Supplement and Section 10.01 of the
Indenture.
This Class A-4 Transition Bond is a Transition Bond as such term is
defined in the Competition Act. Principal and interest due and payable on
this Transition Bond are payable from and secured primarily by bondable
transition property authorized by a bondable stranded cost rate order
issued by the State of New Jersey Board of Public Utilities pursuant to the
Competition Act. Bondable transition property includes the irrevocable
right to impose and collect certain non-bypassable charges (defined in the
Competition Act as "transition bond charges") to be included in electric
utility bills of all electric service retail customers of Public Service
Electric and Gas Company, a New Jersey electric utility.
The Competition Act provides that:
"The State of New Jersey does hereby pledge and agree with the
holders of any transition bonds issued under the authority of this act,
with the pledgee, owner or assignee of bondable transition property, with
any financing entity which has issued transition bonds with respect to
which a bondable stranded costs rate order has been issued and with any
person who may enter into agreements with an electric public utility or an
assignee or pledgee thereof or a financing entity pursuant to this act,
that the State will not limit, alter or impair any bondable transition
property or other rights vested in an electric public utility or an
assignee or pledgee thereof or a financing entity or vested in the holders
of any transition bonds pursuant to a bondable stranded costs rate order
until such transition bonds, together with the interest and acquisition or
redemption premium, if any, thereon, are fully paid and discharged or until
such agreements are fully performed on the part of the electric public
utility, any assignee or pledgee thereof or the financing entity or in any
way limit, alter, impair or reduce the value or amount of the bondable
transition property approved by a bondable stranded costs rate order . . .
."
As provided in the Indenture and subject to certain limitations set
forth therein, the transfer of this Class A-4 Transition Bond may be
registered in the Transition Bond Register upon surrender of this Class A-4
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 A-4 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 A-4 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 A-4 Transition Bond, the Issuer, the Trustee and any agent of the
Issuer or the Trustee may treat the Person in whose name this Class A-4
Transition Bond is registered (as of the day of determination) as the owner
hereof for the purpose of receiving payments of principal of and interest
on this Class A-4 Transition Bond and for all other purposes whatsoever,
whether or not this Class A-4 Transition Bond may 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 and upon satisfaction of the Rating Agency Condition. 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 A-4
Transition Bond (or any one of more predecessors of such transition bonds)
shall be conclusive and binding upon such Holder and upon all future
Holders of this Class A-4 Transition Bond and of any Class A-4 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 A-4 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 Class A-4 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 A-4 Transition Bonds are issuable only in registered form
in Authorized Denominations as provided in the Indenture and the Series
Supplement, subject to certain limitations therein set forth.
This Class A-4 Transition Bond and the Indenture shall be construed
in accordance with the laws of the State of New Jersey, without reference
to its conflict of law provisions, and the obligations, rights and remedies
of the parties hereunder and thereunder shall be determined in accordance
with such laws.
No reference herein to the Indenture and no provision of this Class
A-4 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 A-4 Transition Bond at the times
and rate and in the 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 A-4 Transition Bond and all rights thereunder, and hereby
irrevocably constitutes and appoints
(name and address of appointee)
attorney, to transfer said Class A-4 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
A-4 Transition Bond in every particular, without alteration,
enlargement or any change whatsoever.
