EXHIBIT 4.2
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AMENDED AND RESTATED DECLARATION AND AGREEMENT OF TRUST
by and among
California Infrastructure and Economic Development Bank,
as Originator,
Bankers Trust (Delaware),
as Delaware Trustee,
and
Bankers Trust Company of California, N.A.,
as Certificate Trustee
Dated as of __________ 1, 1997
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TABLE OF CONTENTS
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ARTICLE I
DEFINITIONS
Section 1.01. Definitions................................................. 1
Section 1.02. Compliance Certificates and Opinions........................ 11
Section 1.03. Form of Documents Delivered to Certificate Trustee.......... 12
Section 1.04. Acts of Certificateholders.................................. 13
ARTICLE II
ORGANIZATION; ACQUISITION OF NOTES;
ORIGINAL ISSUANCE OF CERTIFICATES
Section 2.01. Name; Declaration and Statement of Intent; Office;
Operations............................................... 14
Section 2.02. Trust Property.............................................. 14
Section 2.03. Tax Treatment; Construction................................. 15
Section 2.04. Purpose and Powers.......................................... 15
Section 2.05. Acquisition and Acceptance of Notes by Certificate Trustee.. 15
Section 2.06. Issuance of Certificates.................................... 15
Section 2.07. Representations and Warranties of the Originator............ 18
ARTICLE III
THE CERTIFICATES
Section 3.01. Form, Denomination and Execution of Certificates............ 19
Section 3.02. Authentication of Certificates.............................. 19
Section 3.03. Temporary Certificates...................................... 20
Section 3.04. Registration of Transfer and Exchange of Certificates....... 20
Section 3.05. Certificateholders' Lists and Reports by Certificate Trustee 21
Section 3.06. Mutilated, Destroyed, Lost or Stolen Certificates........... 22
Section 3.07. Persons Deemed Owners....................................... 22
Section 3.08. Cancellation................................................ 22
Section 3.09. Limitation of Liability for Payments........................ 23
Section 3.10. Book-Entry and Definitive Certificates...................... 23
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ARTICLE IV
DISTRIBUTIONS; STATEMENTS TO CERTIFICATEHOLDERS
Section 4.01. Certificate Accounts........................................ 25
Section 4.02. Distributions from Certificate Accounts..................... 25
Section 4.03. Statements to Certificateholders............................ 27
Section 4.04. Investment of Special Payment Moneys........................ 28
Section 4.05. Reduction in Principal...................................... 28
ARTICLE V
DEFAULT
Section 5.01. Events of Default........................................... 29
Section 5.02. Incidents of Sale of Notes.................................. 30
Section 5.03. Judicial Proceedings Instituted by Certificate Trustee;
Certificate Trustee May Bring Suit....................... 30
Section 5.04. Control by Certificateholders............................... 30
Section 5.05. Waiver of Past Defaults..................................... 31
Section 5.06. Right of Certificateholders To Receive Payments Not To
Be Impaired.............................................. 32
Section 5.07. Certificateholders May Not Bring Suit Except Under
Certain Conditions....................................... 32
Section 5.08. Remedies Cumulative......................................... 33
ARTICLE VI
THE CERTIFICATE TRUSTEE
Section 6.01. Notice of Defaults.......................................... 33
Section 6.02. Certain Rights of Certificate Trustee....................... 33
Section 6.03. Not Responsible for Recitals or Issuance of Certificates.... 35
Section 6.04. May Hold Certificates....................................... 35
Section 6.05. Money Held in Trust......................................... 35
Section 6.06. Compensation and Reimbursement; Indemnification............. 35
Section 6.07. Corporate Certificate Trustee Required; Eligibility......... 36
Section 6.08. Resignation and Removal; Appointment of Successor........... 36
Section 6.09. Acceptance of Appointment by Successor...................... 39
Section 6.10. Merger, Conversion, Consolidation or Succession to Business. 39
Section 6.11. Maintenance of Agencies..................................... 40
Section 6.12. Money for Certificate Payments To Be Held in Trust.......... 41
Section 6.13. Registration of Notes in Certificate Trustee's Name......... 41
Section 6.14. Representations and Warranties of Certificate Trustee....... 41
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Section 6.15. Withholding Taxes; Information Reporting.................... 42
ARTICLE VII
THE DELAWARE TRUSTEE
Section 7.01. Appointment................................................. 42
Section 7.02. Duties and Responsibilities................................. 42
Section 7.03. Acceptance of the Trusts.................................... 42
Section 7.04. Limitation of Liability..................................... 42
Section 7.05. Other Protections........................................... 44
Section 7.06. Compensation and Reimbursement; Indemnification............. 44
Section 7.07. Resignation................................................. 44
ARTICLE VIII
SUPPLEMENTAL TRUST AGREEMENTS
Section 8.01. Supplemental Trust Agreements Without Consent of
Certificateholders....................................... 45
Section 8.02. Supplemental Trust Agreements with Consent of
Certificateholders....................................... 45
Section 8.03. Documents Affecting Immunity or Indemnity................... 46
Section 8.04. Execution of Supplemental Trust Agreements.................. 47
Section 8.05. Effect of Supplemental Trust Agreements..................... 47
Section 8.06. Conformity with Trust Indenture Act......................... 47
Section 8.07. Reference in Certificates to Supplemental Trust Agreements.. 47
ARTICLE IX
AMENDMENTS AND SUPPLEMENTS TO NOTES, NOTE INDENTURE
AND OTHER BASIC DOCUMENTS
Section 9.01. Amendments and Supplements to Notes, Note Indenture and Other
Basic Documents.......................................... 47
ARTICLE X
TERMINATION OF TRUST
Section 10.01. Termination of the Trust................................... 48
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ARTICLE XI
MISCELLANEOUS PROVISIONS
Section 11.01. Pledge of State of California; Certificates and
Notes Not Obligation of State of California,
Originator, or Seller.................................. 49
Section 11.02. Limitation on Rights of Certificateholders................. 50
Section 11.03. No Petition................................................ 50
Section 11.04. Certificates Nonassessable and Fully Paid.................. 50
Section 11.05. Notices.................................................... 50
Section 11.06. Governing Law.............................................. 53
Section 11.07. Severability of Provisions................................. 53
Section 11.08. Conflict With Trust Indenture Act.......................... 53
Section 11.09. Effect of Headings and Table of Contents................... 53
Section 11.10. Successors and Assigns; Delegation......................... 54
Section 11.11. Benefits of Trust Agreement................................ 54
Section 11.12. Legal Holidays............................................. 54
Section 11.13. Counterparts............................................... 54
Exhibit A--Form of Certificate............................................. A-1
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AMENDED AND RESTATED DECLARATION AND AGREEMENT OF TRUST, dated as of
__________ 1, 1997 (the "Trust Agreement"), by and among Bankers Trust
(Delaware), as Delaware Trustee, and Bankers Trust Company of California, N.A.,
as Certificate Trustee, and the California Infrastructure and Economic
Development Bank, as Originator.
WHEREAS, the Delaware Trustee and the Originator entered into a Declaration
and Agreement of Trust, dated as of __________ 1, 1997 (the "Declaration and
Agreement of Trust"), creating the California Infrastructure and Economic
Development Bank Special Purpose Trust PG&E-1, a not-for-profit business trust
organized under the laws of the State of Delaware (the "Trust"); and
WHEREAS, pursuant to Section 1(b) of the Declaration and Agreement of
Trust, the Delaware Trustee filed a certificate of trust with the Secretary of
State on November 7, 1997; and
WHEREAS, pursuant to Section 1(c) of the Declaration and Agreement of
Trust, the Delaware Trustee, the Originator and the Certificate Trustee desire
to enter into this Trust Agreement in order to provide for the operation of the
Trust; and
WHEREAS, the Note Issuer (as herein defined) intends to issue notes (the
"Notes") of one or more series or classes from time to time pursuant to the Note
Indenture (as herein defined); and
WHEREAS, it is contemplated that the Trust shall purchase the Notes of each
series pursuant to the Note Purchase Agreement (as herein defined) or a
Subsequent Note Purchase Agreement (as herein defined) relating to such Notes;
and
WHEREAS, in order to finance the purchase of the Notes of one or more
series or classes from the Note Issuer, the Trust shall issue pursuant to this
Trust Agreement rate reduction certificates (the "Certificates"), each of which
shall represent a fractional undivided beneficial interest in a corresponding
series or class of Notes and the proceeds thereof, together with payments made
on any related Swap;
NOW THEREFORE, in consideration of the mutual agreements herein contained,
and of other good and valuable consideration, the receipt and adequacy of which
are hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01. Definitions. (a) For all purposes of this Trust Agreement,
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except as otherwise expressly provided or unless the context otherwise requires:
(i) the terms used herein that are defined in this Article have the
meanings assigned to them in this Article, and include the plural as well
as the singular;
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(ii) Whenever this Trust Agreement refers to a provision of the Trust
Indenture Act, the provision is incorporated by reference in and made a
part of this Trust Agreement. The following Trust Indenture Act terms have
the following corresponding terms and meanings when used in this Trust
Agreement:
"Commission" means the Securities and Exchange Commission.
"indenture securities" means the Certificates.
"indenture security holder" means a Certificateholder.
"indenture to be qualified" means this Trust Agreement.
"indenture trustee" or "institutional trustee" means the Certificate
Trustee.
"obligor" on the indenture securities means the Originator and any other
obligor on the indenture securities.
All other Trust Indenture Act terms used in this Trust Agreement that are
defined by the Trust Indenture Act, defined by Trust Indenture Act reference to
another statute or defined by Commission rule have the meaning assigned to them
by such definitions.
(iii) all references in this Trust Agreement to designated
"Articles", "Sections" and other subdivisions are to the designated
Articles, Sections and other subdivisions of this Trust Agreement;
(iv) the words "include", "including" and similar terms shall be
construed as if followed by the phrase "without limitation"; and
(v) the words "herein", "hereof" and "hereunder" and other words of
similar import refer to this Trust Agreement as a whole and not to any
particular Article, Section or other subdivision.
"Act", when used with respect to any Certificateholder, has the meaning
specified in Section 1.04.
"Authentication Agent" means the authentication agent appointed pursuant to
Section 6.11(b).
"Authorized Agent" means any Paying Agent or Registrar.
"Authorized Officer" means, with respect to any entity, any officer of such
entity who is authorized to act for such entity in matters relating to such
entity and who is identified on the list of Authorized Officers delivered by
such entity to the Certificate Trustee on the Closing Date (as such list may be
modified or supplemented from time to time thereafter).
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"Avoidable Tax" has the meaning set forth in Section 6.08(f).
"Basic Documents" means the Note Indenture, the Sale Agreement, the
Servicing Agreement, the Administration Agreement, the Note Purchase Agreement,
the DTC Agreement, the Fee and Indemnity Agreement and all other documents and
certificates delivered in connection therewith.
"Book-Entry Certificates" means, with respect to any Certificate, a
beneficial interest in such Certificate, ownership and transfers of which shall
be made through book entries by a Clearing Agency as described in Section 3.10.
"Business Trust Statute" shall mean Chapter 38 of Title 12 of the Delaware
Code, 12 Del. C., (S) 3801 et seq., as the same may be amended from time to time
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and any successor statute.
"Certificates" has the meaning set forth in the preamble to this Trust
Agreement.
"Certificate Account" means, with respect to any Series or Class of
Certificates, the account or accounts created and maintained with respect to
such Series or Class of Certificates pursuant to Section 4.01(a).
"Certificate Business Day" or "Business Day" means any day other than a
Saturday, a Sunday or a day on which banking institutions or trust companies in
New York, New York or [San Francisco] [Los Angeles] [San Diego], California are
authorized or obligated by law, regulation or executive order to remain closed.
"Certificateholder" or "Holder" means the Person in whose name a
Certificate is registered on the Register.
"Certificate Owner" means the Person who owns a Book-Entry Certificate.
"Certificate Trustee" means Bankers Trust Company, as Certificate Trustee
under this Trust Agreement, and its successors in interest, and any successor
Certificate Trustee appointed as provided herein.
"Certificate Trustee Expenses" has the meaning set forth in Section 6.06.
"Certificate Trustee Indemnified Persons" has the meaning set forth in
Section 6.06.
"Class" means, with respect to any Series of Certificates, any one of the
classes of Certificates of that Series; and, with respect to any Series of
Notes, any one of the classes of Notes of that Series.
"Clearing Agency" means an organization registered as a "clearing agency"
pursuant to Section 17A of the Exchange Act.
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"Clearing Agency Participant" means a broker, dealer, bank, other financial
institution or other Person for whom from time to time a Clearing Agency effects
book entry transfers and pledges of securities deposited with the Clearing
Agency.
"Corporate Trust Office" means the principal office of the Certificate
Trustee or the Delaware Trustee, as the case may be, at which at any particular
time its corporate trust business shall be administered which office of the
Certificate Trustee at the date of the execution of this Trust Agreement is
located at Bankers Trust Company of California, N.A., c/o Bankers Trust Company,
Four Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Structured Finance
Group and which office of the Delaware Trustee at the date of the execution of
this Trust Agreement is located at E.A. Delle Donne Corporate Center, Xxxxxxxxxx
Building, 0000 Xxxxxx Xxxx, Xxxxx 000, Xxxxxxxxxx, Xxxxxxxx 00000-0000, or at
any other time at such other address as the Certificate Trustee or the Delaware
Trustee may designate from time to time by notice given pursuant to Section
11.05.
"Declaration and Agreement of Trust" has the meaning set forth in the
preamble to this Trust Agreement.
"Definitive Certificates" has the meaning set forth in Section 3.10.
"Delaware Trustee" means Bankers Trust (Delaware), as Delaware Trustee
under this Trust Agreement, and its successors in interest, and any successor
Delaware Trustee appointed as provided herein.
"Delaware Trustee Expenses" has the meaning set forth in Section 7.06.
"Delaware Trustee Indemnified Persons" has the meaning set forth in Section
7.06.
"Distribution Date" means, with respect to any Series or Class of
Certificates, a Payment Date with respect to the Notes.
"DTC Agreement" means the agreement between the Certificate Trustee on
behalf of the Trust and The Depository Trust Company, as the initial Clearing
Agency, dated as of ___________, 1997, relating to the Certificates, as the same
may be amended and supplemented from time to time.
"Eligible Institution" means a depository institution organized under the
laws of the United States of America or any State (or any domestic branch of a
foreign bank), that (i) has either (a) a long-term unsecured debt rating of A by
Standard & Poor's and Moody's or (b) a certificate of deposit rating of A-1+ by
Standard & Poor's and P-1 by Moody's, or any other long-term, short-term or
certificate of deposit rating acceptable to the Rating Agencies and (ii) whose
deposits are insured by the FDIC. If so qualified, the Certificate Trustee or
the Note Trustee may be considered an Eligible Institution for the purposes of
this definition.
"Eligible Investments" means book-entry securities, negotiable instruments
or securities represented by instruments in bearer or registered form that
evidence:
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(i) direct obligations of, and obligations fully and
unconditionally guaranteed as to timely payment by, the United States of
America;
(ii) demand deposits, time deposits or certificates of deposit of
any depository institution or trust company incorporated under the laws of
the United States of America or any state (or any domestic branch of a
foreign bank) and subject to supervision and examination by federal or
state banking or depository institution authorities; provided, however,
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that at the time of the investment or contractual commitment to invest
therein, the commercial paper or other short-term unsecured debt
obligations (other than such obligations the rating of which is based on
the credit of the Person other than such depository institution or trust
company) thereof shall have a credit rating from each of the Rating
Agencies in the highest investment category granted thereby;
(iii) commercial paper having, at the time of the investment or
contractual commitment to invest therein, a rating from each of the Rating
Agencies in the highest investment category granted thereby;
(iv) investments in money market funds having a rating from each of
the Rating Agencies in the highest investment category granted thereby
(including funds for which the Certificate Trustee or any of its Affiliates
is investment manager or advisor);
(v) demand deposits, time deposits and certificates of deposit that
are fully insured by the FDIC;
(vi) bankers' acceptances issued by any depository institution or
trust company referred to in clause (b) above;
(vii) repurchase obligations with respect to any security that is a
direct obligation of, or fully guaranteed by, the United States of America
or any agency or instrumentality thereof the obligations of which are
backed by the full faith and credit of the United States of America, in
either case entered into with (A) a depository institution or trust company
(acting as principal) described in clause (ii) or (B) a depository
institution or trust company the deposits of which are insured by the FDIC;
and
(viii) any other investment permitted by each of the Rating Agencies.
"Event of Default" means, with respect to any Series or Class of
Certificates, (i) a Note Event of Default with respect to the corresponding
Series or Class of Notes, or (ii) a breach by the State of California of the
State Pledge described in Section 11.01(a).
"FDIC" means the Federal Deposit Insurance Corporation, and its successors.
"Fee and Indemnity Agreement" means the fee and indemnity agreement dated
as of __________ 1, 1997, among the Note Issuer, the Note Trustee, the
Originator, the Delaware Trustee and the Certificate Trustee.
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"Initial Closing Date" means __________, 1997.
"London Banking Day" means any day on which dealings in deposits in U.S.
dollars are transacted in the London interbank market.
"Note Event of Default" means, with respect to any Series or Class of
Notes, any Event of Default (as such term is defined in the Note Indenture) with
respect to such Series or Class of Notes.
"Note Indenture" means the Indenture dated as of __________, 1997, between
the Note Issuer and the Note Trustee, as amended and supplemented from time to
time, including by any Series Supplement.
"Note Issuer" means PG&E Funding LLC, a Delaware limited liability company,
and its successors in interest.
"Note Purchase Agreement" means the Note Purchase Agreement dated as of
__________, 1997, between the Note Issuer and the Certificate Trustee.
"Note Trustee" means the institution acting as Note Trustee under the Note
Indenture.
"Notes" has the meaning set forth in the preamble to this Trust Agreement.
"Officer's Certificate" means a certificate signed by any Authorized
Officer of the Originator, under the circumstances described in, and otherwise
complying with, the applicable requirements of Section 1.02, and delivered to
the Certificate Trustee.
"Opinion of Counsel" means one or more written opinions of counsel who may,
except as otherwise expressly provided in this Trust Agreement, be employees of
or counsel to the Originator and who shall be satisfactory to the Certificate
Trustee and the Delaware Trustee, if applicable, and which opinion or opinions
shall be addressed to the Certificate Trustee, as trustee, and the Delaware
Trustee, as trustee, if applicable, shall comply with any applicable
requirements of Section 1.02, and shall be in form and substance satisfactory to
the Certificate Trustee.
"Original Principal Amount" means, with respect to any Certificate, the
amount set forth as such on the face of such Certificate on the date of its
issuance.
"Originator" means the California Infrastructure and Economic Development
Bank, a public body established within the state government of the State of
California.
"Outstanding" means, as of the date of determination, all Certificates
theretofore authenticated and delivered under this Trust Agreement except:
(i) Certificates theretofore canceled by the Registrar or delivered to
the Registrar for cancellation;
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(ii) Certificates or portions thereof the payment for which money in
the necessary amount has been theretofore deposited with the Certificate
Trustee or any Paying Agent in trust for the Holders of such Certificates
(provided, however, that if such Certificates are to be redeemed, notice of
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such redemption has been duly given pursuant to this Trust Agreement or
provision therefor, satisfactory to the Certificate Trustee, has been
made); and
(iii) Certificates in exchange for or in lieu of other Certificates
that have been authenticated and delivered pursuant to this Trust Agreement
unless proof satisfactory to the Certificate Trustee is presented that any
such Certificates are held by a bona fide purchaser;
provided that in determining whether the Holders of the requisite Outstanding
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Amount of the Certificates or any Series or Class thereof have given any
request, demand, authorization, direction, notice, consent or waiver hereunder
or under any Basic Document, Certificates owned by the Note Issuer, the
Originator, the Seller, the Swap Counterparty (if applicable) or any Affiliate
of any of the foregoing Persons shall be disregarded and deemed not to be
Outstanding, except that, in determining whether the Certificate Trustee shall
be fully protected in relying upon any such request, demand, authorization,
direction, notice, consent or waiver, only Certificates that a Responsible
Officer of the Certificate Trustee actually knows to be so owned shall be so
disregarded. Certificates so owned that have been pledged in good faith may be
regarded as Outstanding if the pledgee establishes to the satisfaction of the
Certificate Trustee the pledgee's right so to act with respect to such
Certificates and that the pledgee is not the Note Issuer, any other obligor upon
the Certificates, the Originator, the Seller, the Swap Counterparty (if
applicable) or any Affiliate of any of the foregoing Persons.
"Outstanding Amount" means the aggregate principal amount of all
Certificates, or, if the context requires, all Certificates of a Series or
Class, Outstanding at the date of determination.
"Paying Agent" means the Certificate Trustee or any other Person that meets
the eligibility standards for the Certificate Trustee specified in Section
6.07(a) and is authorized by the Originator (with the prior written approval of
the Note Issuer) to make payments to and distributions from the Certificate
Account, including payment of principal of or interest on the Certificates.
"Payment" means, with respect to any Series or Class of Notes, any payment
(other than a Special Payment but including any Redemption Payment) of principal
of or interest thereon.
"Payment Date" means, with respect to any Series or Class of Notes, the
date or dates specified as Payment Dates therefor in the applicable Series
Supplement.
"Record Date" means, with respect to any Distribution Date, the Business
Day immediately preceding such Distribution Date or, if Definitive Certificates
are issued, the last day of the calendar month preceding the calendar month in
which such Distribution Date occurs.
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"Redemption Payment" means, with respect to any Series or Class of Notes,
any payment of principal of and interest on the Notes of such Series or Class
due from the Note Issuer upon the early redemption of such Series or Class of
Notes, other than any such payment due by reason of the occurrence of a Note
Event of Default with respect to such Series or Class of Notes.
"Register" has the meaning set forth in Section 3.04.
"Registrar" means, initially, the Certificate Trustee, pursuant to Section
3.04, and any successor registrar appointed pursuant to Section 6.11(b).
"Request" means a written request by the Originator setting forth the
subject matter of the request accompanied by an Officer's Certificate and an
Opinion of Counsel as provided in Section 1.02 of this Trust Agreement.
"Responsible Officer" means, when used with respect to a Trustee, any
officer within the Corporate Trust Office of the related Trustee including any
Managing Director, Vice President, Assistant Vice President, Secretary,
Assistant Secretary or Assistant Treasurer or any other officer of the related
Trustee customarily performing functions similar to those performed by any of
the above designated officers and also, with respect to a particular matter, any
other officer to whom such matter is referred because of such officer's
knowledge of and familiarity with the particular subject.
"Sale Agreement" means the Transition Property Purchase and Sale Agreement
dated as of __________, 1997, between the Seller and the Note Issuer, as amended
and supplemented from time to time.
"Scheduled Final Distribution Date" means, with respect to any Series or
Class of Certificates, the Scheduled Maturity Date of the related Series or
Class of Notes.
"Securities Act" means the Securities Act of 1933, as amended.
"Secretary of State" shall mean the Secretary of State of the State of
Delaware.
"Seller" means Pacific Gas and Electric Company, in its capacity as seller
under the Sale Agreement, including its successors in interest.
"Series," when referring to Certificates, means each series of Certificates
issued and authenticated pursuant to this Trust Agreement and a related Trust
Supplement, and, when referring to Notes, means each series of Notes issued and
authenticated pursuant to the Note Indenture and a related Series Supplement.
"Servicer" means Pacific Gas and Electric Company, in its capacity as
servicer under the Servicing Agreement, including its successors in interest,
until a successor Person shall have become the servicer pursuant to that
agreement, and thereafter "Servicer" shall mean such successor Person.
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"Servicing Agreement" means the Transition Property Servicing Agreement
dated as of __________, 1997, between the Servicer and the Note Issuer, as
amended and supplemented from time to time.
"Special Distribution Date" means, with respect to the distribution of any
Special Payment with respect to any Series or Class of Notes, the later of (i)
the date receipt of such Special Payment is confirmed by the Certificate Trustee
and (ii) the date that is the earlier of (A) if the Certificate Trustee shall
have received such Special Payment without prior notice thereof, 20 days after
such receipt is confirmed or (B) unless such Special Payment represents the
proceeds of a sale of such Notes by the Certificate Trustee (in which event the
Special Payment Date for such proceeds shall be the earliest date for which it
is practicable for the Certificate Trustee to give the 20-day notice required by
Section 4.02(b)), the date that is 20 days after the Certificate Trustee
receives notice from the Note Issuer of the anticipated payment of such Special
Payment, provided that in the event of the repurchase of the Transition Property
by the Seller, the Special Distribution Date shall mean a date not later than
five Business Days after receipt of such proceeds.
"Special Payment" means, with respect to any Series or Class of Notes, (i)
any payment of principal of or interest on (including any interest accruing upon
default), or any other amount in respect of, the Notes of such Series or Class
(including a payment under any Swap) that is not actually paid within five days
of the Payment Date applicable thereto or (ii) any proceeds from the sale of
such Notes by the Certificate Trustee pursuant to Article V hereof or the
repurchase of the Transition Property by the Seller pursuant to Article V of the
Sale Agreement.
"Special Record Date" means, with respect to any Special Distribution Date,
the close of business on the 15th day (whether or not a Business Day) preceding
such Special Distribution Date.
"State Pledge" has the meaning set forth in Section 11.01.
"Subsequent Note Purchase Agreement" means any agreement substantially
similar to the Note Purchase Agreement executed in connection with the purchase
of a Series or Class of Notes on a Subsequent Closing Date.
"Subsequent Closing Date" means any date (other than the Initial Closing
Date) specified in a Trust Supplement on which Certificates of any Series or
Class are issued.
"Swap" means an interest rate swap, cap, floor, collar or other hedging
transaction that may be entered into by the Trust, at the direction of the
Originator, for the purpose of managing interest rate risk with respect to a
specified Series or Class of Certificates that are being issued concurrently
with the execution of the Swap.
"Swap Counterparty" means the entity that is a party to a Swap with the
Trust.
"Swap Payment" means the payments made by the Trust to the Swap
Counterparty pursuant to any Swap, subject to any netting of payments provided
in the applicable Swap.
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"Swap Revenues" means the payments paid by a Swap Counterparty to the Trust
pursuant to any Swap, subject to any netting of payments provided in the
applicable Swap.
"Termination Date" means, with respect to any Series or Class of
Certificates, the Final Maturity Date of the related Series or Class of Notes.
"Trust" means the trust created by this Trust Agreement, the estate of
which consists of the Trust Property.
"Trust Agreement" means this Trust Agreement, as the same shall be amended
or supplemented from time to time.
"Trust Indenture Act", except as otherwise provided in Section 8.06, means
the Trust Indenture Act of 1939 as in force at the date as of which this
instrument was executed.
"Trust Property" means, with respect to any Series or Class of
Certificates, (i) the Series or Class of Notes corresponding to such Series or
Class of Certificates held as the property of the Trust and all monies at any
time paid thereon and all monies due and to become due thereunder, all rights of
the Certificate Trustee or the Trust, as holder of such Series or Class of
Notes, in and to the Collateral and any proceeds thereof, funds from time to
time deposited in the Certificate Account for such Series or Class of
Certificates and any proceeds from the sale by the Certificate Trustee pursuant
to Article V hereof of Notes of such Series or Class and (ii) any Swap executed
in connection with any Series or Class of Certificates together with any Swap
Revenues payable to the Trust in respect thereto.
"Trust Supplement" means a supplement to this Trust Agreement that provides
for a particular Series of Certificates.
"Trustee" means the Certificate Trustee and/or the Delaware Trustee, as the
context may require.
"Underwriters" means the underwriters who purchase Certificates of any
Series or Class from the Trust and sell such Certificates in a public offering.
(b) Except as otherwise specified herein or as the context may otherwise
require, the following terms have the respective meanings set forth in the Note
Indenture as in effect on the Closing Date for all purposes of this Trust
Agreement, and the definitions of such terms are equally applicable both to the
singular and plural forms of such terms.
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Section of
Term Note Indenture
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Administration Agreement................ 1.01(a)
Administrator........................... 1.01(a)
Advice Letters.......................... 1.01(b)
Affiliate............................... 1.01(a)
Collateral.............................. 1.01(a)
Commission.............................. 1.01(a)
Exchange Act............................ 1.01(a)
Expected Amortization Schedule.......... 1.01(a)
FDIC.................................... 1.01(a)
Final Maturity Date..................... 1.01(a)
Financing Order......................... 1.01(b)
FTA Charge.............................. 1.01(b)
Xxxxx'x................................. 1.01(a)
Person.................................. 1.01(a)
PU Code................................. 1.01(b)
Rating Agency........................... 1.01(a)
Rating Agency Condition................. 1.01(a)
Series Issuance Date.................... 1.01(a)
Series Supplement....................... 1.01(a)
Standard & Poor's....................... 1.01(a)
State................................... 1.01(a)
Transition Property..................... 1.01(b)
(c) When reference is made herein to the Certificates of any Series or
Class, such reference shall mean the Certificates of such Series if there exists
only one Series, or the Certificates of any Class within a Series, if such
Series of Certificates contains more than one Class.
Section 1.02. Compliance Certificates and Opinions. Upon any application
------------------------------------
or request by the Originator to the Certificate Trustee to take any action under
any provision of this Trust Agreement, the Originator shall furnish to the
Certificate Trustee an Officer's Certificate stating that, in the opinion of the
signers thereof, all conditions precedent, if any, provided for in this Trust
Agreement relating to the proposed action have been complied with and an Opinion
of Counsel stating that in the opinion of such counsel all such conditions
precedent, if any, have been complied with, except that in the case of any such
application or request as to which the furnishing of such documents is
specifically required by any provision of this Trust Agreement relating to such
particular application or request, no additional certificate or opinion need be
furnished. Any such application or request by the Originator to the Certificate
Trustee shall also be accompanied by evidence reasonably satisfactory to the
Certificate Trustee that the Note Issuer has given its prior written approval of
such application or request.
11
Every certificate or opinion with respect to compliance with a condition or
covenant provided for in this Trust Agreement shall include:
(a) a statement that each signatory of such certificate or opinion has
read or caused to be read such covenant or condition and the definitions
herein relating thereto;
(b) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(c) a statement that, in the opinion of each such signatory, such
signatory has made such examination or investigation as is necessary to
enable such signatory to express an informed opinion as to whether or not
such covenant or condition has been complied with; and
(d) a statement as to whether, in the opinion of each such signatory,
such condition or covenant has been complied with.
Section 1.03. Form of Documents Delivered to Certificate Trustee. In any
--------------------------------------------------
case where several matters are required to be certified by, or covered by an
opinion of, any specified Person, it is not necessary that all such matters be
certified by, or covered by the opinion of, only one such Person, or that they
be so certified or covered by only one document, but one such Person may certify
or give an opinion with respect to some matters and one or more other such
Persons as to other matters, and any such Person may certify or give an opinion
as to such matters in one or several documents.
Any certificate or opinion of an Authorized Officer of the Originator may
be based, insofar as it relates to legal matters, upon a certificate or opinion
of, or representations by, counsel, unless such officer knows, or in the
exercise of reasonable care should know, that the certificate or opinion or
representations with respect to the matters upon which his certificate or
opinion is based are erroneous. Any such certificate of an Authorized Officer
or Opinion of Counsel may be based, insofar as it relates to factual matters,
upon a certificate or opinion of, or representations by, an officer or officers
of the Servicer, the Seller, the Note Issuer or the Administrator, stating that
the information with respect to such factual matters is in the possession of the
Servicer, the Seller, the Note Issuer or the Administrator, unless such counsel
knows, or in the exercise of reasonable care should know, that the certificate
or opinion or representations with respect to such matters are erroneous.
Whenever in this Trust Agreement, in connection with any application or
certificate or report to the Certificate Trustee, it is provided that the
Originator shall deliver any document as a condition of the granting of such
application, or as evidence of the Originator's compliance with any term hereof,
it is intended that the truth and accuracy, at the time of the granting of such
application or at the effective date of such certificate or report (as the case
may be), of the facts and opinions stated in such document shall in such case be
conditions precedent to the right of the Originator to have such application
granted or to the sufficiency of such certificate or report. The foregoing
shall not, however, be construed to affect the Originator's right to rely
12
upon the truth and accuracy of any statement or opinion contained in any such
document as provided in Article VI.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Trust Agreement, they may, but need not, be consolidated
and form one instrument.
Section 1.04. Acts of Certificateholders. (a) Any request, demand,
--------------------------
authorization, direction, notice, consent, waiver or other action provided by
this Trust Agreement to be given or taken by Certificateholders may be embodied
in and evidenced by one or more instruments of substantially similar tenor
signed by such Certificateholders in person or by agents duly appointed in
writing; and except as herein otherwise expressly provided such action shall
become effective when such instrument or instruments are delivered to the
Certificate Trustee, and, where it is hereby expressly required, to the
Originator and the Note Trustee. Such instrument or instruments (and the action
embodied therein and evidenced thereby) are herein sometimes referred to as the
"Act" of the Certificateholders signing such instrument or instruments. Proof
of execution of any such instrument or of a writing appointing any such agent
shall be sufficient for any purpose of this Trust Agreement and (subject to
Article VI) conclusive in favor of the Certificate Trustee, the Originator and
the Note Trustee, if made in the manner provided in this Section.
(b) The fact and date of the execution by any Person of any such instrument
or writing may be proved in any manner that the Certificate Trustee deems
sufficient.
(c) The ownership of Certificates shall be proved by the Register.
(d) Any request, demand, authorization, direction, notice, consent, waiver
or other action by the Holder of any Certificates shall bind the Holder of every
Certificate issued upon the registration thereof or in exchange therefor or in
lieu thereof, in respect of anything done, omitted or suffered to be done by the
Certificate Trustee, the Originator or the Note Trustee in reliance thereon,
whether or not notation of such action is made upon such Certificate.
(e) The Originator may at its option by delivery of an Officer's
Certificate to the Certificate Trustee set a record date to determine the
Holders of any Series or Class of Certificates entitled to give any consent,
request, demand, authorization, direction, notice, waiver or other Act.
Notwithstanding Section 316(c) of the Trust Indenture Act, such record date
shall be the record date specified in such Officer's Certificate, which shall be
the date not more than 30 days prior to the first solicitation of
Certificateholders in connection therewith. If such a record date is fixed,
such consent, request, demand, authorization, direction, notice, waiver or other
Act may be given before or after such record date, but only the Holders of
record of Certificates of the applicable Series or Class at the close of
business on such record date shall be deemed to be Certificateholders of such
Series or Class for the purposes of determining whether Holders of the requisite
aggregate Outstanding Amount of Certificates of such Series or Class have
authorized or agreed or consented to such consent, request, demand,
authorization, direction, notice, waiver or other Act, and for that purpose the
aggregate Outstanding Amount of Certificates of such Series or Class shall be
computed as of such record date; provided that no
--------
13
such consent, request, demand, authorization, direction, notice, waiver or other
Act by the Holders of Certificates of such Series or Class on such record date
shall be deemed effective unless it shall become effective pursuant to the
provisions of this Trust Agreement not later than one year after the record
date.
(f) Except as otherwise provided in the definition of Outstanding,
Certificates of any Series or Class owned by or pledged to any Person shall have
an equal and proportional benefit under the provisions of this Trust Agreement,
without preference, priority or distinction as among all of the Certificates of
that Series or Class.
ARTICLE II
ORGANIZATION; ACQUISITION OF NOTES;
ORIGINAL ISSUANCE OF CERTIFICATES
Section 2.01. Name; Declaration and Statement of Intent; Office;
--------------------------------------------------
Operations. (a) The Trust created hereby shall be known as the "California
----------
Infrastructure and Economic Development Bank Special Purpose Trust - PG&E-1," in
which name the Delaware Trustee and the Certificate Trustee may engage in the
transactions contemplated hereby. It is the intention of the parties hereto
that the Trust constitute a not-for-profit business trust under the Business
Trust Statute and that this Trust Agreement constitute the governing instrument
of such business trust. Effective as of the date hereof, the Delaware Trustee
and the Certificate Trustee declare themselves co-trustees for the Trust.
(b) The office of the Trust shall be in care of the Delaware Trustee at its
principal Corporate Trust Office or at such other address in Delaware as the
Delaware Trustee may designate by written notice to the Originator, the
Certificate Trustee, the Note Issuer and the Certificateholders, and the Trust
shall conduct its business in such office separate and apart from that of the
Originator and its affiliates.
Section 2.02. Trust Property. (a) All bank accounts and other Trust
--------------
Property shall be established by the Certificate Trustee on behalf of the Trust
and held and maintained by the Certificate Trustee on behalf of the Trust at its
Corporate Trust Office. The Trust shall use separate stationery and other
business forms and shall maintain separate records and books of account from
those of the Originator. The Trust's assets shall not be commingled with those
of the Originator, and the Trust shall act solely in its own name through its
duly authorized agents in the conduct of its business.
(b) The Trust and the Originator each covenant and agree to hold itself out
to the public under its own name as a separate and distinct entity and will each
conduct its business so as not to mislead others as to its identity. The Trust
shall cause the preparation of its financial documents separate and apart from
those of the Originator.
(c) The Trust will not engage in any business transactions with the
Originator.
14
(d) The Certificate Trustee hereby declares that it shall hold the Trust
Property in trust upon and subject to the conditions set forth herein for the
use and benefit of the Certificate holders. The Certificate Trustee hereby
acknowledges that it has deposited the sum of $1 in the Certificate Account on
the date hereof, such sum constituting the initial Trust Property contributed by
the Originator.
Section 2.03. Tax Treatment; Construction. (a) It is the intention of
---------------------------
the parties hereto that the Trust shall be treated as a "grantor trust" for
federal income tax purposes and all transactions contemplated by this Agreement
will be reported consistent with such treatment.
(b) The provisions of this Agreement shall be construed, and the affairs of
the Trust shall be conducted, so as to achieve treatment of the Trust as a
"grantor trust" for federal income tax purposes.
Section 2.04. Purpose and Powers. The Trust is constituted solely for the
------------------
purpose of making the investment in the Notes and issuing the Certificates, and
applying the proceeds of the Notes to the payment of the Certificates, and,
except as set forth herein, neither Trustee is authorized or empowered to
acquire any other investments or engage in any other activities on behalf of the
Trust (although the Trust may enter into a Swap with respect to a Series or
Class of Certificates as authorized by any Trust Supplement) and, in particular,
neither Trustee is authorized or empowered to do anything that would cause the
Trust to fail to qualify as a "grantor trust" for federal income tax purposes.
Section 2.05. Acquisition and Acceptance of Notes by Certificate Trustee.
----------------------------------------------------------
The Certificate Trustee, upon the execution and delivery of this Trust
Agreement, hereby acknowledges its acceptance of all right, title, and interest
in and to the Notes acquired from time to time pursuant to the Note Purchase
Agreement and any Subsequent Note Purchase Agreement and hereby declares that it
will hold such right, title and interest in each Series or Class of Notes,
together with all other property constituting the Trust Property relating to
each such Series or Class of Notes, for the benefit of all present and future
holders of the corresponding Series or Class of Certificates.
Section 2.06. Issuance of Certificates. On the Initial Closing Date and
------------------------
on each Subsequent Closing Date, the Trust, subject to the provisions of any
Trust Supplement relating to the Series or Class of Certificates to be issued
and to the provisions of the Note Purchase Agreement or any Subsequent Note
Purchase Agreement, as the case may be, shall issue, and the Certificate Trustee
shall execute on behalf of the Trust and authenticate and deliver, in fully
registered form only, the Certificates of the Series or Class corresponding to
the Series or Class of Notes issued on such Initial Closing Date or Subsequent
Closing Date, as the case may be, all in accordance with the Note Purchase
Agreement or Subsequent Note Purchase Agreement, as the case may be. Each
Certificate represents a fractional undivided beneficial interest in a
corresponding Series or Class of Notes and the proceeds thereof, together with
payments made on any related Swap. Prior to the execution and authentication of
the Certificates of any Series or Class, the Certificate Trustee shall have
received the following:
15
(a) The Series or Class of Notes, duly executed by the Note Issuer and
authenticated by the Note Trustee, corresponding to the Series or Class of
Certificates to be issued;
(b) A certificate of an Authorized Officer of the Note Issuer to the effect
that all conditions required to be satisfied under Section 2.10 of the Note
Indenture for the issuance of such Series or Class of Notes and all conditions
required to be satisfied under the Note Purchase Agreement or any Subsequent
Note Purchase Agreement (as the case may be) for the purchase of the Notes by
the Trust have been satisfied, together with executed copies of all documents,
certificates, opinions, orders or approvals establishing satisfaction of such
conditions;
(c) An order of an Authorized Officer of the Originator (i) directing the
Delaware Trustee and the Certificate Trustee to execute any Trust Supplement to
be executed in connection with such Series or Class of Certificates, and the
Series or Class of Certificates to be issued hereunder or thereunder, (ii)
directing the Certificate Trustee on behalf of the Trust to execute the Note
Purchase Agreement and (iv) directing the Certificate Trustee to execute on
behalf of the Trust, authenticate, as Authentication Agent, and deliver such
Series or Class of such Certificates to the Underwriters named in said order for
the purchase price specified therein and directing the application of the
proceeds thereof;
(d) A certificate of an Authorized Officer of the Note Issuer to the effect
that no Note Event of Default, or any event or condition that, with the passage
of time or the serving of notice, would become a Note Event of Default, has
occurred or is occurring under the Note Indenture;
(e) An Opinion of Counsel, portions of which may be delivered by counsel to
the Originator and portions of which may be delivered by counsel to the Delaware
Trustee, the Certificate Trustee, the Originator or the Trust, to the effect
that:
(i) this Trust Agreement and any Trust Supplement have been duly
authorized, executed and delivered by the parties hereto;
(ii) this Trust Agreement and any Trust Supplement are valid and
binding agreements of the parties hereto, enforceable in accordance with
their respective terms except as such enforceability may be subject to
bankruptcy, insolvency, reorganization, fraudulent conveyance and other
similar laws affecting the rights of creditors generally, general
principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law) and applicable public
policy regarding rights of indemnification;
(iii) all instruments furnished to the Delaware Trustee or the
Certificate Trustee conform to the requirements of this Trust Agreement and
constitute all documents required to be delivered hereunder or any Trust
Supplement to authorize the Certificate Trustee to execute, authenticate
and deliver the Series or Class of Certificates to be issued;
(iv) the Certificates to be issued have been duly authorized and
executed and, when authenticated in accordance with the provisions of this
Trust Agreement and any
16
Trust Supplement and delivered, will be validly issued by the Trust
entitled to the benefits of this Trust Agreement and any Trust Supplement;
(v) the Trust is a duly organized and validly existing business
trust under the Business Trust Statute and is in good standing;
(vi) this Trust Agreement and any Trust Supplement to be executed
in connection with such Series or Class of Certificates have been duly
qualified under the Trust Indenture Act or no such qualification is
necessary;
(vii) the Trust constitutes a "special purpose trust" under
Section 63010 of the California Government Code and a "financing entity"
under Section 840 of the PU Code, and the Certificates constitute "rate
reduction bonds" under Section 840 of the PU Code and the Holders of the
Certificates are entitled to the rights and benefits thereunder; and
(viii) such other matters as the Certificate Trustee or the
Delaware Trustee may reasonably require.
(f) A certified copy of the Advice Letters relating to such Series or Class
of Notes and Certificates;
(g) Sufficient funds to pay the purchase price for the related Series or
Class of Notes, as well as the cost of issuance of the related Series or Class
of Certificates (to the extent not payable from Note proceeds);
(h) The Rating Agency Condition shall have been satisfied with respect to
the issuance of the Series or Class of Certificates and the execution of any
related Swap;
(i) The issuance of the Series or Class of Certificates shall not adversely
affect the status of the Trust as a grantor trust not taxable as a corporation
for federal income tax purposes; and
(j) If any Swap is to be executed in connection with the issuance of any
Series or Class of Certificates:
(i) a Trust Supplement providing the following:
(A) the form of the Swap to be executed by the Trust, together
with a direction to the Certificate Trustee from the Originator to
execute and deliver the Swap on behalf of the Trust upon the
satisfaction of any conditions set forth in such Trust Supplement;
(B) a description of the manner by which interest will be
calculated on the Series or Class of Certificates to which the Swap
relates, together with the form of such Series or Class of
Certificates;
17
(C) the form of the Certificate for such Series or Class;
(D) such other matters as the Originator may reasonably deem
appropriate, or the Certificate Trustee or Delaware Trustee may
reasonably request, and that are not inconsistent with the provisions
hereof; and
(ii) the Originator shall provide evidence satisfactory to the
Certificate Trustee that the Rating Agency Condition will be satisfied with
respect to the issuance of such Series or Class of Certificates.
Section 2.07. Representations and Warranties of the Originator. The
------------------------------------------------
Originator will represent and warrant, as of each Series Issuance Date, the
following:
(a) the Originator has full power and authority, and has taken all
action necessary, to execute and deliver this Trust Agreement and any Trust
Supplement and to fulfill its obligations under, and to consummate the
transactions contemplated by, this Trust Agreement and any Trust
Supplement;
(b) the making and performance by the Originator of this Trust
Agreement and any Trust Supplement and all documents required to be
executed and delivered by it hereunder do not and will not violate any law
or regulation of the jurisdiction of its organization or any other law or
regulation applicable to it or violate any provision of, or constitute,
with or without notice or lapse of time, a default under, or result in the
creation or imposition of any lien on any properties included in the Trust
Property pursuant to, any mortgage, indenture, contract, agreement or other
undertaking to which it is a party;
(c) this Trust Agreement and any Trust Supplement have been duly
executed and delivered by the Originator and constitute its legal, valid
and binding obligations, enforceable in accordance with their terms;
(d) all consents, licenses, approvals, authorizations, exemptions,
registrations, filings, opinions and declarations from or with any agency,
department, administrative authority, statutory corporation or judicial
entity necessary for the validity or enforceability of its obligations
under this Trust Agreement and any Trust Supplement have been obtained, and
no governmental authorizations other than any already obtained are required
in connection with the execution, delivery and performance of this Trust
Agreement and any Trust Supplement; and
(e) the representations and warranties in Section 11.01 are true and
correct.
18
ARTICLE III
THE CERTIFICATES
Section 3.01. Form, Denomination and Execution of Certificates. The
------------------------------------------------
Certificates of each Series shall be issued in registered form without coupons
and shall be substantially in the form attached hereto as Exhibit A, with the
following filled in: (a) the designation of such Series and, if applicable, the
Classes thereof, which shall be the same designation as the related Series or
Class or Classes of Notes, (b) the Certificate number or numbers thereof, (c)
the date of authentication thereof, which shall be the same as the Series
Issuance Date of the related Series or Class or Classes of Notes, and (d) the
Original Principal Amount thereof, which shall equal, in the aggregate, the
principal amount of the related Series of Notes; and with such omissions,
variations and insertions as are permitted by this Trust Agreement or any Trust
Supplement, and may have such letters, numbers or other marks of identification
and such legends or endorsements printed, lithographed or engraved thereon as
may be required to comply with the rules of any securities exchange on which any
Class or Classes of the Certificates of such Series may be listed or to conform
to any usage in respect thereof, or as may, consistently herewith, be prescribed
by the Certificate Trustee or by the Originator (with the prior written approval
of the Note Issuer), and as evidenced by the execution and authentication of
such Certificates.
Except as provided in Section 3.10, the definitive Certificates of each
Series or Class shall be printed, lithographed or engraved or produced by any
combination of these methods or may be produced in any other manner permitted by
the rules of any securities exchange on which the Certificates of such Series or
Class may be listed, as evidenced by execution of such Certificates by the
Certificate Trustee on behalf of the Trust.
The Certificates of each Series or Class shall be issued in minimum
denominations of $[1,000] Original Principal Amount and integral multiples
thereof.
The Certificates shall be executed on behalf of the Trust by the
Certificate Trustee by manual or facsimile signature of a Responsible Officer of
the Certificate Trustee. Certificates bearing the manual or facsimile signature
of an individual who was, at the time when such signature was affixed,
authorized to sign on behalf of the Trust shall be validly issued by the Trust,
notwithstanding that such individual has ceased to be so authorized prior to the
authentication and delivery of such Certificates or did not hold such office at
the date of such Certificates. No Certificate shall be entitled to any benefit
under this Trust Agreement, or be valid for any purpose, unless there appears on
such Certificate a certificate of authentication substantially in the form set
forth in Exhibit A hereto, executed by the Certificate Trustee (as
Authentication Agent) by manual signature, and such certificate of
authentication upon any Certificate shall be conclusive evidence, and the only
evidence, that such Certificate has been duly authenticated and delivered
hereunder. All Certificates shall be dated the date of their authentication.
Section 3.02. Authentication of Certificates. The Certificate Trustee
------------------------------
shall duly authenticate and deliver Certificates of each Series or Class in
authorized denominations equaling
19
in the aggregate for each Series or Class of Certificates the aggregate Original
Principal Amount of the Notes of such Series or Class as provided in Section
2.06.
Section 3.03. Temporary Certificates. Pending the preparation of
----------------------
definitive Certificates of any Series or Class, the Certificate Trustee on
behalf of the Trust may execute, and the Certificate Trustee upon written order
of the Originator shall authenticate (as Authentication Agent) and deliver,
temporary Certificates of such Series or Class that are printed, lithographed,
typewritten or otherwise produced, in any denomination, containing substantially
the same terms and provisions as set forth in Exhibit A, except for such
appropriate insertions, omissions, substitutions and other variations relating
to their temporary nature as the Trust may determine, as evidenced by the
execution of such temporary Certificates by the Certificate Trustee on behalf of
the Trust.
If temporary Certificates of any Series or Class are issued, the Trust will
cause definitive Certificates of such Series or Class to be prepared without
unreasonable delay. After the preparation of definitive Certificates of such
Series or Class, the temporary Certificates shall be exchangeable for definitive
Certificates of such Series or Class upon surrender of the temporary
Certificates at the Corporate Trust Office of the Certificate Trustee, or at the
office or agency of the Certificate Trustee maintained in accordance with
Section 6.11, without charge to the Holder. Upon surrender for cancellation of
any one or more temporary Certificates, the Certificate Trustee, on behalf of
the Trust, shall execute, and the Certificate Trustee shall authenticate and
deliver in exchange therefor definitive Certificates (of the same Series or
Class as the temporary Certificates surrendered) of authorized denominations of
a like aggregate Original Principal Amount. Until so exchanged, such temporary
Certificates shall in all respects be entitled to the same benefits under this
Trust Agreement as definitive Certificates of the same Series or Class.
Section 3.04. Registration of Transfer and Exchange of Certificates. The
-----------------------------------------------------
Certificate Trustee shall cause to be kept at the office or agency to be
maintained by it in accordance with the provisions of Section 6.11 a register
(the "Register") in which, subject to such reasonable regulations as it may
prescribe, the Certificate Trustee shall provide for the registration of
Certificates and of transfers and exchanges of Certificates as herein provided.
The Certificate Trustee shall initially be the registrar (the "Registrar") for
the purpose of registering Certificates and transfers and exchanges of
Certificates as herein provided.
Subject to this Section 3.04, upon surrender for registration of transfer
of any Certificate at the Corporate Trust Office or such other office or agency
maintained by the Certificate Trustee in accordance with Section 6.11, the
Certificate Trustee, on behalf of the Trust, shall execute, and the Certificate
Trustee shall authenticate and deliver, in the name of the designated
transferee, one or more new Certificates (of the same Series or Class as the
Certificates surrendered for registration of transfer) in authorized
denominations of a like aggregate Original Principal Amount.
At the option of a Certificateholder, Certificates may be exchanged for
other Certificates (of the same Series or Class as the Certificates surrendered
for registration of exchange) of authorized denominations of a like aggregate
Original Principal Amount, upon surrender of the Certificates to be exchanged at
any such office or agency. Whenever any Certificates are so surrendered for
exchange, the Certificate Trustee, on behalf of the Trust, shall execute, and
the
20
Certificate Trustee shall authenticate and deliver the Certificates that the
Certificateholder making the exchange is entitled to receive.
Every Certificate presented or surrendered for registration of transfer or
exchange shall be duly endorsed or accompanied by a written instrument of
transfer in form satisfactory to the Certificate Trustee and the Registrar duly
executed by the Certificateholder thereof or its attorney duly authorized in
writing.
No service charge shall be made to a Certificateholder for any registration
of transfer or exchange of Certificates, but the Certificate Trustee shall
require payment of a sum sufficient to cover any tax or governmental charge that
may be imposed in connection with any transfer or exchange of Certificates.
All Certificates surrendered for registration of transfer or exchange shall
be canceled and subsequently destroyed by the Certificate Trustee in accordance
with its customary practices.
Section 3.05. Certificateholders' Lists and Reports by Certificate
----------------------------------------------------
Trustee.
(a) The Trust To Furnish Certificate Trustee with Names and Addresses of
--------------------------------------------------------------------
Certificate holders. The Registrar, on behalf of the Trust, will furnish to the
--------------------
Certificate Trustee within 15 days after each Record Date, and at such other
times as the Certificate Trustee may request in writing, within 30 days after
receipt by the Trust of any such request, a list, in such form as the
Certificate Trustee may reasonably require, of all information in the possession
or control of the Trust as to the names and addresses of the Certificateholders,
in each case as of a date not more than 15 days prior to the time such list is
furnished; provided, however, that so long as the Certificate Trustee is the
------------------
sole Registrar, no such list need be furnished; and provided further, however,
--------------------------
that no such list need be furnished for so long as a copy of the Register is
being furnished to the Certificate Trustee pursuant to Section 6.11.
(b) Preservation of Information. The Certificate Trustee shall preserve,
----------------------------
in as current a form as is reasonably practicable, the names and addresses of
Certificateholders contained in the most recent list furnished to the
Certificate Trustee as provided in Section 6.11 or Section 3.05(a), as the case
may be, and the names and addresses of Certificateholders received by the
Certificate Trustee in its capacity as Registrar, if so acting. The Certificate
Trustee may destroy any list furnished to it as provided in Section 6.11 or
Section 3.05(a), as the case may be, upon receipt of a new list so furnished.
(c) Communications Among Certificateholders. Certificateholders may
---------------------------------------
communicate pursuant to Section 312(b) of the Trust Indenture Act with other
Certificateholders with respect to their rights under this Trust Agreement or
under the Certificates.
(d) Reports by Certificate Trustee. To the extent that any of the events
-------------------------------
described in Section 313(a) of the Trust Indenture Act shall have occurred,
within 60 days after [ ] of each year, commencing with the year 1998, the
Certificate Trustee shall transmit to the Certificateholders, as provided in
Section 313(c) of the Trust Indenture Act, a brief report dated
21
as of such [ ], if required by Section 313(a) of the Trust Indenture Act.
The Certificate Trustee also shall comply with Section 313(b) of the Trust
Indenture Act.
A copy of each report at the time of its mailing to Certificateholders
shall be filed by the Certificate Trustee with the Commission and with each
stock exchange, if any, on which the Certificates are listed and of which
listing the Certificate Trustee has been informed. The Originator shall notify
the Certificate Trustee if and when the Certificates are listed on any stock
exchange.
(e) Reports by the Trust. The Trust shall furnish to the Certificate
---------------------
Trustee, not less often than annually, a certificate of the Certificate Trustee
on behalf of the Trust as to his or her knowledge of the Trust's compliance with
all conditions and covenants under this Trust Agreement and in accordance with
the Trust Indenture Act. For purposes of this Section 3.05(d) such compliance
shall be determined without regard to any period of grace or requirement of
notice provided under this Trust Agreement.
(f) Protections. The Originator, the Certificate Trustee and the Registrar
-----------
shall have the protection of Section 312(c) of the Trust Indenture Act.
Section 3.06. Mutilated, Destroyed, Lost or Stolen Certificates. If (a)
-------------------------------------------------
any mutilated Certificate is surrendered to the Registrar, or the Registrar
receives evidence to its satisfaction of the destruction, loss or theft of any
Certificate, and (b) there is delivered to the Registrar and the Certificate
Trustee such security, indemnity or bond as may be required by them to save each
of them harmless, then, in the absence of notice to the Registrar or the
Certificate Trustee that such Certificate has been acquired by a bona fide
purchaser, the Certificate Trustee, on behalf of the Trust, shall execute, and
the Certificate Trustee shall authenticate and deliver, in exchange for or in
lieu of any such mutilated, destroyed, lost or stolen Certificate, a new
Certificate (of the same Series or Class as the Certificate so mutilated,
destroyed, lost or stolen) of like Original Principal Amount. In connection
with the issuance of any new Certificate under this Section 3.06, the
Certificate Trustee shall require the payment of a sum sufficient to cover any
tax or other governmental charge that may be imposed in relation thereto and any
other expenses (including the fees and expenses of the Delaware Trustee, the
Certificate Trustee and the Registrar) connected therewith. Any duplicate
Certificate issued pursuant to this Section 3.06 shall constitute conclusive
evidence of the same interest in the Trust, as if originally issued, whether or
not the lost, stolen or destroyed Certificate shall be found at any time.
Section 3.07. Persons Deemed Owners. Prior to due presentation of a
---------------------
Certificate for registration of transfer, the Certificate Trustee, the Registrar
and any Paying Agent of the Certificate Trustee may treat the Person in whose
name any Certificate is registered as the owner of such Certificate for the
purpose of receiving distributions pursuant to Section 4.02 and for all other
purposes whatsoever, and none of the Certificate Trustee, the Registrar nor any
Paying Agent of the Certificate Trustee shall be affected by any notice to the
contrary.
Section 3.08. Cancellation. All Certificates surrendered for payment or
------------
transfer or exchange shall, if surrendered to any party hereto other than the
Registrar, be delivered to the Registrar for cancellation. No Certificates
shall be authenticated in lieu of or in exchange for any
22
Certificates canceled as provided in this Section, except as expressly permitted
by this Trust Agreement. All canceled Certificates held by the Registrar shall
be delivered to the Certificate Trustee and, in accordance with Section 3.04,
destroyed.
Section 3.09. Limitation of Liability for Payments. All payments or
------------------------------------
distributions made to Holders of Certificates under this Trust Agreement shall
be made only from the Trust Property with respect to that Series or Class of
Certificates and only to the extent that the Certificate Trustee shall have
sufficient income or proceeds from such Trust Property to make such payments in
accordance with the terms of Article IV of this Trust Agreement. Each Holder of
a Certificate of any Series or Class, by its acceptance of a Certificate of that
Series or Class, agrees that it will look solely to the income and proceeds from
the Trust Property with respect to that Series or Class to the extent available
for distribution to the Holder thereof as provided in this Trust Agreement. It
is expressly understood and agreed by the parties hereto that (a) the
Certificates are executed and delivered by Bankers Trust Company, not
individually or personally but solely as Certificate Trustee of the Trust, in
the exercise of the powers and authority conferred and vested in it, and (b)
under no circumstances shall Bankers Trust Company be personally liable for the
payment of any of the Certificates or any indebtedness or expenses of the Trust
or be liable for the breach or failure of any obligation, representation,
warranty or covenant made or undertaken by the Trust under this Trust Agreement.
Section 3.10. Book-Entry and Definitive Certificates. (a) The
--------------------------------------
Certificates of any Series or Class may be issued in the form of one or more
typewritten certificates representing the Book Entry Certificates of that Series
or Class, to be delivered to The Depository Trust Company, the initial Clearing
Agency, by, or on behalf of, the Originator. In such case, the Certificates of
such Series or Class delivered to The Depository Trust Company shall initially
be registered on the Register in the name of Cede & Co., the nominee of the
initial Clearing Agency, and no Certificate Owner will receive a definitive
Certificate representing such Certificate Owner's interest in the Certificate of
such Series or Class, except as provided in Section 3.10(c) below. Unless and
until definitive, fully registered Certificates ("Definitive Certificates") of
such Series or Class have been issued pursuant to Section 3.10(c) below:
(i) the provisions of this Section 3.10 shall be in full force and
effect with respect to the Certificates of such Series or Class;
(ii) the Originator, the Paying Agent, the Registrar and the
Certificate Trustee may deal with the Clearing Agency for all purposes
(including the making of distributions on the Certificates of such Series
or Class) as the authorized representative of the Certificate Owners of
Certificates of such Series or Class;
(iii) to the extent that the provisions of this Section 3.10
conflict with any other provisions of this Trust Agreement, the provisions
of this Section 3.10 shall control;
(iv) the rights of Certificate Owners of Certificates of such Series
or Class shall be exercised only through the Clearing Agency and shall be
limited to those established by law and agreements between such Certificate
Owners and the Clearing Agency Participants; and until Definitive
Certificates of such Series or Class are issued pursuant to
23
Section 3.10(c) below, the Clearing Agency will make book-entry transfers
among the Clearing Agency Participants and receive and transmit
distributions of principal of and interest on the Certificates of such
Series or Class to such Clearing Agency Participants; and
(v) whenever this Trust Agreement requires or permits actions to be
taken based upon instructions or directions of Certificateholders holding
Certificates of such Series or Class representing a specified percentage of
the aggregate Outstanding Amount of Certificates of such Series or Class,
the Clearing Agency shall be deemed to represent such percentage only to
the extent that it has received instructions to such effect from
Certificate Owners or Clearing Agency Participants owning or representing,
respectively, Certificates representing such percentage of the aggregate
Outstanding Amount of Certificates of such Series or Class, and has
delivered such instructions to the Certificate Trustee. The Certificate
Trustee shall have no obligation to determine whether the Clearing Agency
has in fact received any such instructions.
(b) Whenever notice or other communication to the Holders of Certificates
of any Series or Class issued in the form of Certificates representing Book-
Entry Certificates is required under this Trust Agreement, unless and until
Definitive Certificates of such Series or Class shall have been issued pursuant
to Section 3.10(c) below, the Certificate Trustee shall give all such notices
and communications specified herein to be given to Holders of Certificates of
such Series or Class to the Clearing Agency.
(c) If (i) the Clearing Agency advises the Certificate Trustee in writing
that the Clearing Agency is no longer willing or able to properly discharge its
responsibilities with respect to the Certificates, and the Certificate Trustee
or the Originator is unable to locate a qualified successor, (ii) the Originator
(with the prior written approval of the Note Issuer) at its option advises the
Certificate Trustee in writing that it elects to terminate the book-entry system
through the Clearing Agency with respect to the Certificates or (iii) after the
occurrence of a Note Event of Default with respect to any Series or Class of
Certificates, Certificate Owners representing beneficial interests aggregating
at least a majority of the Outstanding Amount of the Certificates of all Series
advise the Clearing Agency and the Certificate Trustee in writing that the
continuation of a book-entry system through the Clearing Agency is no longer in
the best interests of the Certificate Owners, then the Clearing Agency shall
notify all Certificate Owners and the Certificate Trustee of the occurrence of
any such event and of the availability of Definitive Certificates to Certificate
Owners requesting the same. Upon surrender to the Certificate Trustee of the
typewritten certificate or certificates representing the Book-Entry Certificates
by the Clearing Agency, accompanied by registration instructions, and upon
written direction by the Note Issuer, the Certificate Trustee shall execute on
behalf of the Trust and the Certificate Trustee shall authenticate the
Definitive Certificates in accordance with the instructions of the Clearing
Agency. None of the Originator, the Registrar, the Delaware Trustee or the
Certificate Trustee shall be liable for any delay in delivery of such
instructions and may conclusively rely on, and shall be fully protected in
relying on, such instructions. Upon the issuance of Definitive Certificates,
the Certificate Trustee shall recognize the Holders of the Definitive
Certificates as Certificateholders.
24
ARTICLE IV
DISTRIBUTIONS; STATEMENTS TO CERTIFICATEHOLDERS
Section 4.01. Certificate Accounts. (a) The Trust shall establish and
--------------------
maintain with the Certificate Trustee on behalf of the Holders of Certificates
of each Series or Class a Certificate Account with respect to such Series or
Class as one or more accounts, which shall be non-interest bearing except as
provided in Section 4.04, in the corporate trust department of an Eligible
Institution, in the name of the Certificate Trustee for the benefit of such
Certificateholders. The Certificate Trustee shall hold each Certificate Account
in trust for the benefit of the Holders of Certificates of the corresponding
Series or Class, and shall make or permit withdrawals therefrom only as provided
in this Trust Agreement. On each day when a Payment or Special Payment (other
than a Special Payment that represents the proceeds of any sale pursuant to
Article V hereof by the Certificate Trustee of any Note) is made to the
Certificate Trustee, as holder of Notes of any Series or Class, the Certificate
Trustee upon receipt shall immediately deposit the aggregate amount of such
Payment or Special Payment in the Certificate Account for the corresponding
Series or Class of Certificates. If a Swap has been executed with respect to
any Series or Class of Certificates, the proceeds of such Payment or Special
Payment in any Certificate Account shall be applied to satisfy any Swap Payment,
or if a payment is due to the Trust under the Swap, any Swap Revenue shall be
credited to such Certificate Account. Upon the sale of any Note by the
Certificate Trustee pursuant to Article V hereof and the realization of any
proceeds thereof, the Certificate Trustee shall deposit the aggregate amount of
such proceeds as a Special Payment in the Certificate Account for the Series or
Class of Certificates corresponding to the Series or Class of the Note so sold.
(b) The Certificate Trustee shall present to the Note Trustee for payment
each Note on its Final Maturity Date, or, in the case of any redemption or
repayment of such Note in full prior to its Final Maturity Date, on the
applicable Payment Date therefor.
Section 4.02. Distributions from Certificate Accounts. (a) On any
---------------------------------------
Distribution Date, the Certificate Trustee shall distribute out of the
Certificate Account for the corresponding Series or Class of Certificates, in
the manner described in Section 4.02(e), the entire amount of such Payment (as
reduced by any Swap Payment or increased by any Swap Revenues) deposited therein
pursuant to Section 4.01(a); provided, however, that in the event receipt of any
------------------
such Payment is not confirmed by the Certificate Trustee by 1:00 p.m. (New York
City time) on such Distribution Date, distribution thereof shall be made on the
day receipt thereof is confirmed by the Certificate Trustee by 1:00 p.m. (New
York City time) or, if receipt thereof is confirmed by the Certificate Trustee
after 1:00 p.m. (New York City time), on the following Certificate Business Day.
There shall be so distributed to each Holder of record of such Series or Class
of Certificates on the Record Date with respect to such Distribution Date (other
than as provided in Section 10.01 with respect to a final distribution) such
Certificateholder's pro rata share (based on the aggregate Outstanding Amount of
Certificates of such Series or Class held by such Certificateholder) of the
aggregate amount in the related Certificate Account. The foregoing
notwithstanding, if a Payment (or Swap Revenue) is not received by the
Certificate Trustee by
25
the day that is five days after the related Payment Date, it will be treated as
a Special Payment pursuant to Section 4.02(b).
The final distribution with respect to any Certificate, however, will be
made only upon presentation and surrender of such Certificate at the office or
agency of the Certificate Trustee specified in the notice given by the
Certificate Trustee with respect to such final payment.
(b) On each Special Distribution Date with respect to the distribution of
any Special Payment with respect to any Series or Class of Notes, the
Certificate Trustee shall distribute out of the Certificate Account for the
corresponding Series or Class of Certificates, in the manner described in
Section 4.02(e), the entire amount of such Special Payment (as reduced by any
Swap Payment or increased by any Swap Revenues) deposited therein pursuant to
Section 4.01(a) and any income and earnings received from the investment of such
Special Payment pursuant to Section 4.04; provided, however, that in the event
------------------
receipt of any such Special Payment is not confirmed by the Certificate Trustee
by 1:00 p.m. (New York City time) on such Special Distribution Date,
distribution thereof shall be made on the day receipt thereof is confirmed by
the Certificate Trustee by 1:00 p.m. (New York City time) or, if receipt thereof
is confirmed by the Certificate Trustee after 1:00 p.m. (New York City time), on
the following Certificate Business Day. There shall be so distributed to each
Holder of record of such Series or Class of Certificates on the Special Record
Date with respect to such Special Distribution Date (other than as provided in
Section 10.01 with respect to a final distribution) such Certificateholder's pro
rata share (based on the aggregate Outstanding Amount of Certificates of such
Series or Class held by such Certificateholder) of the aggregate amount of such
Special Payment (as reduced by any Swap Payment or increased by any Swap
Revenues) and any income and earnings received from the investment of such
Special Payment pursuant to Section 4.04.
(c) The Certificate Trustee shall allocate amounts distributed to Holders
of Certificates of any Series or Class on any Distribution Date or Special
Distribution Date as follows: (i) to the extent such amounts represent payments
of principal of the corresponding Series or Class of Notes (including
prepayments or redemption price), or the proceeds of the sale of any such Note
by the Certificate Trustee pursuant to Article V hereof, such amounts shall be
allocated to principal of such Certificates and (ii) and all other such amounts
shall be allocated to interest on such Certificates. The Certificate Trustee
may conclusively rely on the payment statement received by it from the Note
Trustee pursuant to Section 6.06 of the Note Indenture with any payment in
respect of any Series or Class of Notes as to whether the amount so paid in
respect of such Notes is in respect of principal of or interest on such Notes,
provided that any Swap Payment or Swap Revenues shall be attributable to
interest. If no statement is received, such payments received with respect to
any Series or Class of Notes shall first be allocable to interest to the extent
of any interest accrued and payable on such Series or Class of Notes, and then
to principal.
(d) The Certificate Trustee shall cause notice of each Special Payment with
respect to any Series or Class of Notes to be mailed to each Holder of
Certificates of the corresponding Series or Class at its address as it appears
in the Register. In the event of redemption of the Notes of any Series or
Class, such notice shall be mailed not less than five days nor more than 25 days
prior to the Special Distribution Date on which any such Redemption Payment is
26
scheduled to be distributed. In the case of any other Special Payment, such
notice shall be mailed not less than 20 days prior to the Special Distribution
Date on which any Special Payment is scheduled to be distributed in respect of
Certificates of such Series or Class stating such anticipated Special
Distribution Date. Any such notice mailed by the Certificate Trustee shall set
forth:
(i) the Special Distribution Date or the Distribution Date, as
applicable, and the Special Record Date or Record Date therefor, as
applicable (except as otherwise provided in Section 10.01);
(ii) the amount of the Special Distribution for each $1,000 Original
Principal Amount of Certificates of the applicable Series or Class and the
amount thereof constituting principal and interest;
(iii) the reason for the Special Distribution; and
(iv) the total amount to be received on such date for each $1,000
Original Principal Amount of Certificates of the applicable Series or Class
but only, in the case of a Special Payment, if the related Special
Distribution Date is also a Distribution Date.
(e) Distributions to Holders of Certificates shall be by check sent by
first-class mail to the address of such Holder appearing on the Register at the
relevant Record Date or Special Record Date or, upon written application of a
Holder of Certificates of any Series or Class in the Original Principal Amount
of $1,000,000 or more to the Certificate Trustee made at any time not later than
such Record Date or Special Record Date or continuing in effect from a prior
request, by wire transfer in immediately available funds to the account of such
Holder at such bank located in [New York, New York] having wire transfer
capability as may be designated by such Holder; provided, however, that the
------------------
final distribution in respect of any Certificate shall be made only as provided
in Section 10.01. The foregoing notwithstanding, any distributions made to Cede
& Co., as the nominee of the initial Clearing Agency, shall be made by wire
transfer of immediately available funds.
Section 4.03. Statements to Certificateholders. (a) On each Distribution
--------------------------------
Date, Special Distribution Date or any other date specified herein for
distribution of any payments with respect to any Series or Class of
Certificates, or as soon as practicable following such Distribution Date, if the
Certificate Trustee and the Note Trustee are different entities, the Certificate
Trustee will include with each distribution to Holders of Certificates of such
Series or Class a statement with respect to such distribution to be made on such
Distribution Date, Special Distribution Date or other date, as the case may be,
setting forth the following information:
(i) the amount of such distribution to Holders of Certificates
allocable to (a) principal and (b) interest, in each case per $1,000
Original Principal Amount of each Series or Class of Certificates;
(ii) the amount of any Swap Payment or Swap Revenues with respect to
any Series or Class of Certificates;
27
(iii) the aggregate outstanding principal balance of the
Certificates, after giving effect to payments allocated to principal
reported under (i) above; and
(iv) the difference, if any, between the amount specified in (iii)
above and the principal amount scheduled to be outstanding on such date
according to the Expected Amortization Schedule.
On each date on which the Certificate Trustee distributes any such report to the
Holders of the Certificates of any Series or Class, the Certificate Trustee
shall also distribute such report to each Rating Agency to the Certificate
Trustee in writing.
(b) Within a reasonable period of time after the end of each calendar year
but not later than the latest date permitted by law, the Certificate Trustee
shall furnish to each Person who at any time during such calendar year was a
Holder of record of any Series or Class of Certificates a statement containing
the sum of the amounts determined pursuant to clause (a)(i) above with respect
to such Series or Class of Certificates for such calendar year, or, in the event
such Person was a Holder of record of such Series or Class of Certificates
during a portion of such calendar year, for the applicable portion of such year,
and such other items as are readily available to the Certificate Trustee and
that a Certificateholder shall reasonably request as necessary for the purpose
of such Certificateholder's preparation of its Federal income tax returns.
Section 4.04. Investment of Special Payment Moneys. Any money received by
------------------------------------
the Certificate Trustee pursuant to Section 4.01(a) representing a Special
Payment (or Swap Revenue) that is not to be promptly distributed, to the extent
practicable, shall be invested in Eligible Investments by the Certificate
Trustee pending distribution of such Special Payment pursuant to Section 4.02.
Any investment made pursuant to this Section 4.04 shall be in such Eligible
Investments maturing in not more than 60 days or such lesser time as is
required for the distribution of any such funds on a Special Payment Date
pending the distribution of such funds to Certificateholders as described
herein. The Certificate Trustee shall hold any such Eligible Investments until
maturity. The Certificate Trustee shall have no liability with respect to any
investment made pursuant to this Section 4.04 (including any losses on such
investments), other than by reason of the willful misconduct or negligence of
the Certificate Trustee. All income and earnings from such investments shall be
distributed on such Special Distribution Date as part of such Special Payment
and shall be treated as payments of interest on the Certificates.
Section 4.05. Reduction in Principal. Any reduction in the principal
----------------------
amount of any Certificate effected by any distribution in respect of principal
thereof shall be binding upon all Holders of such Certificate and of any
Certificate issued upon the registration or transfer thereof or in lieu thereof,
whether or not noted thereon.
28
ARTICLE V
DEFAULT
Section 5.01. Events of Default. (a) If any Note Event of Default shall
-----------------
occur and be continuing with respect to any Series or Class of Certificates,
then, and in each and every case, the Certificate Trustee may, and, upon the
written direction of Holders representing not less than a majority of the
Outstanding Amount of the Certificates of all Series then Outstanding, shall
vote all the Notes of all Series in favor of declaring the unpaid principal
amount of all the Notes of all Series then outstanding and accrued interest
thereon to be due and payable in accordance with the provisions thereof. In
addition, if a Note Event of Default shall have occurred and be continuing with
respect to any Series or Class of Certificates, the Certificate Trustee may,
and, upon the written direction of Holders representing not less than a majority
of the Outstanding Amount of the Certificates of all Series then Outstanding,
shall vote all the Notes of all Series in favor of directing the Note Trustee
acting in accordance with the written direction of the Certificateholders as to
the time, method and place of conducting any proceeding for any remedy available
to the Note Trustee or of exercising any trust or power conferred on the Note
Trustee under the Note Indenture.
(b) In addition, after a Note Event of Default shall have occurred and be
continuing with respect to the Certificates of any Series or Class, subject to
Section 5.01(c), the Certificate Trustee may, and upon the written direction of
Holders of Certificates representing not less than a majority of the Outstanding
Amount of Certificates of such Series or Class, by such officer or agent as it
may appoint, shall sell, convey, transfer and deliver any Note or Notes, without
recourse to or warranty by the Certificate Trustee or any Certificateholder, to
any Person, all upon such terms and conditions as the Certificateholders may
reasonably deem advisable and at such prices as the Certificateholders may
reasonably deem advisable, for cash. If the Certificate Trustee so decides or
is required to sell or otherwise dispose of the Notes pursuant to this Section,
the Certificate Trustee may, but is not obligated to, take such of the actions
described above as it may reasonably deem most effectual to complete the sale or
other disposition of the Notes, so as to provide for the payment in full of all
amounts due on the Certificates of all Series.
(c) The foregoing provisions of Section 5.01(b) notwithstanding, the
Certificate Trustee shall not sell any Notes following the occurrence of any
Event of Default, other than a Note Event of Default described in Section
5.01(i), (ii) or (iii) of the Note Indenture, with respect to any Series or
Class of Certificates unless (i) the Certificate Trustee determines that the
amounts receivable from the Collateral with respect to each Series or Class of
Notes are not sufficient to pay in full the principal of and accrued interest on
the Notes of each such Series or Class and to pay an allocable share of all sums
due to the Certificate Trustee and any other administrative expenses specified
in this Trust Agreement and the Certificate Trustee obtains the written consent
of Holders of Certificates of each such Series or Class representing 66 2/3
percent of the aggregate Outstanding Amount of the Certificates of each such
Series or Class, or (ii) the Certificate Trustee obtains the written consent of
Holders of Certificates representing 100 percent of the aggregate Outstanding
Amount of the Certificates of each such Series or Class.
29
Section 5.02. Incidents of Sale of Notes. Upon any sale of the Notes made
--------------------------
either under the power of sale given under this Trust Agreement or otherwise for
the enforcement of this Trust Agreement, the following shall be applicable:
(a) Certificateholders and Certificate Trustee May Purchase
-------------------------------------------------------
Notes. Any Certificateholder, the Certificate Trustee in its individual or
-----
any other capacity or any other Person (other than the Seller) may bid for
and purchase any of the Notes, and upon compliance with the terms of sale,
may hold, retain, possess and dispose of such Notes in their own absolute
right without further accountability.
(b) Receipt of Certificate Trustee Shall Discharge Purchaser.
--------------------------------------------------------
The receipt of the Certificate Trustee, on behalf of the Trust, shall be a
sufficient discharge to any purchaser for its purchase money, and, after
paying such purchase money and receiving such receipt, such purchaser or
its personal representative or assigns shall not be obliged to see to the
application of such purchase money, or be in any way answerable for any
loss, misapplication or nonapplication thereof.
(c) Application of Moneys Received upon Sale. Any moneys
----------------------------------------
collected by the Trust upon any sale made either under the power of sale
given by this Trust Agreement or otherwise for the enforcement of this
Trust Agreement, shall be applied as provided in Section 4.02.
Section 5.03. Judicial Proceedings Instituted by Certificate Trustee;
-------------------------------------------------------
Certificate Trustee May Bring Suit. (a) If there shall be a failure to make
----------------------------------
payment of the principal of or interest on any Note, then the Certificate
Trustee, in its own name, and as trustee of an express trust, as holder of such
Note, if directed in writing by the Holders of a majority of the Outstanding
Amount of the Certificates of all Series but subject to the provisions of
Section 6.02 hereof, shall be, to the extent permitted by and in accordance with
the terms of the Notes, entitled and empowered to institute any suits, actions
or proceedings at law, in equity or otherwise, including the power to make a
demand on the Note Trustee to take action under the Note Indenture to enforce
the Notes, for the collection of the sums so due and unpaid on such Note and may
prosecute any such claim or proceeding to judgment or final decree with respect
to the whole amount of any such sums so due and unpaid.
(b) If there shall be a breach of the State Pledge (as described in Section
11.01(a)) by the State of California, then the Certificate Trustee, in its own
name and as trustee of an express trust, as holder of the Notes, if directed in
writing by the Holders of a majority of the Outstanding Amount of the
Certificates of all Series but subject to the provisions of Section 6.02 hereof,
shall be, to the extent permitted by state and federal law, entitled and
empowered to institute any suits, actions or proceedings at law, in equity or
otherwise, to enforce the State Pledge and to collect any monetary damages as a
result of a breach thereof, and may prosecute any such suit, action or
proceeding to judgment or final decree.
Section 5.04. Control by Certificateholders. Subject to Section 2.03, the
-----------------------------
Holders of a majority of the Outstanding Amount of the Certificates of all
Series (or, if less than all Series or Classes are affected, the affected Series
or Class or Classes) shall have the right to direct the
30
time, method and place of conducting any proceeding for any remedy available to
the Certificate Trustee, or exercising any trust or power conferred on the
Certificate Trustee under this Trust Agreement, including any right of the
Certificate Trustee as holder of the Notes of the corresponding Series or Class
or Classes, in each case unless a different percentage is specified herein;
provided that:
--------
(a) such direction shall not be in conflict with any rule of law
or with this Trust Agreement and would not involve the Certificate Trustee
in personal liability or expense;
(b) the Certificate Trustee shall not determine that the action
so directed would be unjustly prejudicial to the Holders of Certificates of
such Series or Class or Classes not taking part in such direction;
(c) the Certificate Trustee may take any other action deemed
proper by the Certificate Trustee that is not inconsistent with such
direction; and
(d) if a Note Event of Default with respect to such Series or
Class of Notes shall have occurred and be continuing, such direction shall
not obligate the Certificate Trustee to vote more than a corresponding
majority of the related Notes held by the Trust in favor of declaring the
unpaid principal amount of the Notes of all Series and accrued interest
thereon to be due and payable or directing any action by the Note Trustee
with respect to such Note Event of Default.
Section 5.05. Waiver of Past Defaults. Prior to the declaration of the
-----------------------
acceleration of the maturity of the Notes of all Series as provided in Section
5.01, the Holders of Certificates of not less than a majority of the Outstanding
Amount of the Certificates of all Series may waive any past default or Note
Event of Default and its consequences except a default (a) in payment of
principal of or interest on any of the Notes, (b) in respect of a covenant or
provision hereof that cannot be modified or amended without the consent of the
Holder of each Certificate of all Series or Classes affected or (c) in the
deposit or distribution of any Payment or Special Payment under Section 4.01
with respect to any Series or Class of Certificates or in the distribution of
any payment under Section 4.02 on any Series or Class of Certificates. Upon any
such direction, the Certificate Trustee shall vote such percentage of the Notes
of the corresponding Series or Class held by the Certificate Trustee as
corresponds to the percentage of the aggregate Outstanding Amount of the
Certificates of such Series or Class held by Holders who directed the
Certificate Trustee to waive such default or Note Event of Default hereunder.
Upon any waiver that is effective under the terms of such Series or Class
of Notes to waive such default or Note Event of Default, such default or Note
Event of Default shall cease to exist with respect to this Trust Agreement, and,
in the case of a default, any Note Event of Default arising therefrom shall be
deemed to have been cured for every purpose of this Trust Agreement and any
written direction given by the Certificate Trustee on behalf of such
Certificateholders to the Note Trustee or in respect of any Notes shall be
annulled with respect thereto; but no such waiver shall extend to any subsequent
or other default or Note Event of Default or impair any right consequent
thereon.
31
Section 5.06. Right of Certificateholders To Receive Payments Not To Be
---------------------------------------------------------
Impaired. Anything in this Trust Agreement to the contrary notwithstanding,
--------
including Section 5.07 hereof, the right of any Certificateholder to receive
distributions of payments required pursuant to Section 4.02 hereof on the
Certificates when due, or to institute suit for the enforcement of any such
payment on or after the applicable Distribution Date, Special Distribution Date
or other date specified herein for the making of such payment, shall not be
impaired or affected without the consent of such Certificateholder.
Section 5.07. Certificateholders May Not Bring Suit Except Under Certain
----------------------------------------------------------
Conditions. A Certificateholder shall not have the right to institute any suit,
----------
action or proceeding at law or in equity or otherwise with respect to this Trust
Agreement, for the appointment of a receiver or for the enforcement of any other
remedy under this Trust Agreement, unless:
(a) such Certificateholder has previously given written notice
to the Certificate Trustee of a continuing Note Event of Default with
respect to the Series or Class of Certificates held by such Holder;
(b) the Holders of not less than 25 percent of the Outstanding
Amount of the Certificates of all Series have made written request to the
Certificate Trustee to institute such action, suit or proceeding in respect
of such Note Event of Default in its own name as Certificate Trustee
hereunder;
(c) such Certificateholder or Certificateholders have offered to
the Certificate Trustee indemnity satisfactory to it against the costs,
expenses (including legal fees and expenses) and liabilities to be incurred
in complying with such request;
(d) the Certificate Trustee for 60 days after its receipt of
such notice, request and offer of indemnity has failed to institute such
action, suit or proceedings; and
(e) no direction inconsistent with such written request has been
given to the Certificate Trustee during such 60-day period by the Holders
of a majority of the Outstanding Amount of the Certificates of all Series;
it being understood and intended that no one or more Holders of Certificates
shall have any right in any manner whatever by virtue of, or by availing of, any
provision of this Trust Agreement to affect, disturb or prejudice the rights of
any other Holders of Certificates or to obtain or to seek to obtain priority or
preference over any other Certificateholders or to enforce any right under this
Trust Agreement, except in the manner herein provided. The provisions of this
Section 5.07 shall be deemed to modify, to the fullest extent permitted by law,
the rights of the Certificateholders under Section 3816 of the Business Trust
Statute.
In the event the Certificate Trustee shall receive conflicting or
inconsistent requests and indemnity from two or more groups of Holders of
Certificates, each representing less than a majority of the Outstanding Amount
of the Certificates of all Series, the Certificate Trustee in its sole
discretion may determine what action, if any, shall be taken, notwithstanding
any other provisions of this Trust Agreement.
32
Section 5.08. Remedies Cumulative. Every remedy given hereunder to the
-------------------
Certificate Trustee or to any of the Certificateholders shall not be exclusive
of any other remedy or remedies, and every such remedy shall be cumulative and
in addition to every other remedy given hereunder or now or hereafter given by
statute, law, equity or otherwise.
ARTICLE VI
THE CERTIFICATE TRUSTEE
Section 6.01. Notice of Defaults. As promptly as practicable after, and
------------------
in any event within 30 days after, receipt by a Responsible Officer of the
Certificate Trustee of notice or actual knowledge of the occurrence of any
default (as such term is defined below) hereunder with respect to any Series or
Class of Certificates, the Certificate Trustee shall transmit by mail to the
Originator, the Note Trustee and the Holders of Certificates of all Series in
accordance with Section 313(c) of the Trust Indenture Act, notice of such
default, unless such default shall have been cured or waived; provided, however,
------------------
that, except in the case of a default in the payment of the principal of or
interest on any Note of the corresponding Series or Class, the Certificate
Trustee shall be fully protected in withholding such notice if and so long as a
trust committee of Responsible Officers of the Certificate Trustee in good faith
determines that the withholding of such notice is in the interests of the
Holders of the Certificates. For the purpose of this Section, the term
"default" means, with respect to any Series or Class of Certificates, any event
that is, or after notice or lapse of time or both would become, a Note Event of
Default with respect to such Series or Class of Certificates.
Section 6.02. Certain Rights of Certificate Trustee. Subject to the
-------------------------------------
provisions of Section 315 of the Trust Indenture Act:
(a) the Certificate Trustee may conclusively rely and shall be
fully protected in acting or refraining from acting in reliance upon any
resolution, certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, bond, debenture or other paper or
document believed by it to be genuine and to have been signed or presented
by the proper party or parties;
(b) any request or direction of the Originator mentioned herein
shall be sufficiently evidenced by a Request, accompanied by evidence
reasonably satisfactory to the Certificate Trustee that the Note Issuer has
given its prior written approval of such request or direction;
(c) whenever in the administration of this Trust Agreement the
Certificate Trustee shall deem it desirable that a matter be proved or
established prior to taking, suffering or omitting any action hereunder,
the Certificate Trustee (unless other evidence be herein specifically
prescribed) may, in the absence of bad faith on its part, conclusively rely
upon an Officers' Certificate of the Originator;
33
(d) the Certificate Trustee may consult with counsel and the
advice of such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or
omitted by it hereunder in good faith and in reliance thereon;
(e) the Certificate Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Trust Agreement
at the request or direction of any of the Certificateholders pursuant to
this Trust Agreement, unless such Certificateholders shall have offered to
the Certificate Trustee reasonable security or indemnity satisfactory to it
against the cost, expenses (including legal fees and expenses) and
liabilities that might be incurred by it in compliance with such request or
direction;
(f) the Certificate Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture or other paper or document;
(g) the Certificate Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or by or
through agents, attorneys, custodians or nominees and the Certificate
Trustee shall not be responsible, for any misconduct or negligence on the
part of, or for the supervision of, any agent, attorney, custodian or
nominee appointed with due care by it hereunder;
(h) the Certificate Trustee shall not be liable with respect to
any action taken or omitted to be taken by it in good faith in accordance
with the direction of the Holders of Certificates relating to the time,
method and place of conducting any proceeding for any remedy available to
the Certificate Trustee, or exercising any trust or power conferred upon
the Certificate Trustee, under this Trust Agreement;
(i) the Certificate Trustee shall not be required to expend or
risk its own funds in the performance of any of its duties hereunder, or in
the exercise of any of its rights or powers, if it shall have reasonable
grounds for believing that repayment of such funds or indemnity
satisfactory to it against such risk is not reasonably assured to it;
(j) the Certificate Trustee shall not be personally liable for
any action taken or suffered or omitted to be taken by it in good faith and
reasonably believed by it to be authorized or within the discretion or
rights or powers conferred upon it by this Trust Agreement; provided,
---------
however, that the Certificate Trustee's conduct does not constitute willful
-------
misconduct, [gross] negligence or bad faith;
(k) in the event that the Certificate Trustee is also acting as
Paying Agent, Authenticating Agent or Registrar hereunder, the rights and
protections afforded to the Certificate Trustee pursuant to this Article VI
shall also be afforded to such Paying Agent, Authenticating Agent or
Registrar;
34
(l) the Certificate Trustee shall not be charged with knowledge
of an Event of Default unless a Responsible Officer obtains actual
knowledge of such event or the Certificate Trustee receives written notice
of such event from the Originator, the Note Trustee, the Servicer or a
majority of the Holders of Certificates of the Series or Class or Classes
so affected; and
(m) without limiting its rights under bankruptcy law, when the
Certificate Trustee incurs expenses or renders services in connection with
the insolvency or bankruptcy of any party hereto or with the Basic
Documents to which it is a party, such expenses (including the fees and
expenses of its counsel) and the compensation for such services are
intended to constitute expenses of administration under any bankruptcy or
insolvency law.
Section 6.03. Not Responsible for Recitals or Issuance of Certificates.
--------------------------------------------------------
The recitals contained herein and in the Certificates, except the certificates
of authentication, shall not be taken as the statements of the Certificate
Trustee, and the Certificate Trustee assumes no responsibility for their
correctness. Subject to Section 6.14, the Certificate Trustee makes no
representations as to the validity or sufficiency of this Trust Agreement, the
Notes, any Basic Document or the Certificates.
Section 6.04. May Hold Certificates. The Certificate Trustee, any Paying
---------------------
Agent, any Registrar or any of their Affiliates or any other agent, in their
respective individual or any other capacity, may become the owner or pledgee of
Certificates and subject to Sections 310(b) and 311 of the Trust Indenture Act
may otherwise deal with the Originator, the Note Issuer or the Note Trustee with
the same rights it would have if it were not Certificate Trustee, Paying Agent,
Registrar or such other agent.
Section 6.05. Money Held in Trust. Money held by the Certificate Trustee
-------------------
or the Paying Agent in trust hereunder need not be segregated from other funds
except to the extent required herein or by law and neither the Certificate
Trustee nor the Paying Agent shall have any liability for interest upon any such
moneys except as provided for herein.
Section 6.06. Compensation and Reimbursement; Indemnification. Pursuant
-----------------------------------------------
to the Fee and Indemnity Agreement, the Note Issuer has agreed to pay, or cause
to be paid, to the Certificate Trustee from time to time reasonable compensation
for its services and to reimburse it for its reasonable expenses.
In addition, the Certificate Trustee shall be entitled to reimbursement,
but solely from amounts payable under the Fee and Indemnity Agreement, for any
tax incurred without negligence, bad faith or willful misconduct, on its part,
arising out of or in connection with the acceptance or administration of this
Trust (other than any tax attributable to the Certificate Trustee's compensation
for serving as such), including any costs and expenses incurred in contesting
the imposition of any such tax.
The Originator, but solely from amounts payable under the Fee and Indemnity
Agreement, shall indemnify, defend and hold harmless the Certificate Trustee and
any of the affiliates,
35
officers, directors, employees and agents of the Certificate Trustee (the
"Certificate Trustee Indemnified Persons") from and against any and all losses,
claims, taxes, damages, expenses and liabilities (including liabilities under
state or federal securities laws) of any kind and nature whatsoever
(collectively, "Certificate Trustee Expenses"), to the extent that such
Certificate Trustee Expenses arise out of or are imposed upon or asserted
against such Certificate Trustee Indemnified Persons with respect to the
creation, operation or termination of the Trust, the execution, delivery or
performance of this Trust Agreement or the transactions contemplated hereby;
provided, however, that the Originator shall not be required to indemnify any
------------------
Certificate Trustee Indemnified Person for any Certificate Trustee Expenses that
result from the willful misconduct or gross negligence of such Certificate
Trustee Indemnified Person. The obligations of the Originator to indemnify the
Certificate Trustee Indemnified Persons in the Trust Agreement shall survive the
termination of this Trust Agreement and the resignation or removal of the
Certificate Trustee Indemnified Persons.
Notwithstanding anything to the contrary in this Agreement, the Certificate
Trustee shall have no recourse against the Originator or the Trust Property for
payment of any amounts required to be paid to the Certificate Trustee under this
Section 6.06.
Section 6.07. Corporate Certificate Trustee Required; Eligibility. (a)
---------------------------------------------------
This Trust Agree shall at all times have a certificate trustee that shall be
eligible to act as a trustee under Section 310(a) of the Trust Indenture Act,
shall have a combined capital and surplus of at least $50,000,000 and shall have
a long-term debt rating of [Baa3] or better by Xxxxx'x. If such entity publishes
reports of conditions at least annually, pursuant to law or to the requirements
of federal, state, territorial or District of Columbia supervising or examining
authority, then for the purposes of this Section 6.07, the combined capital and
surplus of such entity shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. The Certificate
Trustee shall meet the requirements of Section 26(a)(1) of the Invest Company
Act of 1940, as amended, shall not be an affiliate (as that term is defined in
Rule 405 under the Securities Act) of the Trust or of any Person involved in the
organization or operation of the Trust, shall not provide credit or credit
enhancement to the Trust and shall be subject to Section 310(b) of the Trust
Indenture Act.
(b) In determining whether the Certificate Trustee has a conflicting
interest with respect to any Series or Class of Certificates under Section
310(b) of the Trust Indenture Act and this Section, each other Series or Class
of Certificates will be treated as having been issued under an indenture other
than this Trust Agreement.
(c) If at any time the Certificate Trustee shall cease to be eligible in
accordance with the provisions of this Section 6.07, the Certificate Trustee
shall resign immediately in the manner and with the effect specified in Section
6.08.
Section 6.08. Resignation and Removal; Appointment of Successor. (a) No
-------------------------------------------------
resignation or removal of the Certificate Trustee and no appointment of a
successor Certificate Trustee pursuant to this Article shall become effective
(i) until the acceptance of appointment by the successor Certificate Trustee
under Section 6.09 and (ii) other than in the case of paragraph (b) below,
unless a successor Certificate Trustee has been appointed and has accepted such
36
appointment and the Delaware Trustee, the Note Issuer and the Originator has
received written confirmation from each of the Rating Agencies that no lowering
or withdrawal of the then current Ratings of any Series or Class of Certificates
will result from such appointment.
(b) The Certificate Trustee may resign at any time in the case of a
conflicting interest as determined in accordance with Section 6.07(b), with
respect to one or more Series or Classes of Certificates, by giving written
notice thereof to the Originator, the Authorized Agents, the Note Issuer and the
Note Trustee. If an instrument of acceptance by a successor Certificate Trustee
with respect to such Series or Class or Classes of Certificates shall not have
been delivered to the Originator and the Certificate Trustee within 30 days
after the giving of such notice of resignation the resigning Certificate
Trustee may petition any court of competent jurisdiction for the appointment of
a successor Certificate Trustee with respect to such Series or Class or Series
or Classes of Certificates.
(c) The Certificate Trustee may be removed at any time in the case of a
conflicting interest as determined in accordance with Section 6.07(b), with
respect to any Series or Class of Certificates, by Act of Certificateholders
holding Certificates of such Series or Class representing not less than 51
percent of the Outstanding Amount of the Certificates of that Series or Class
delivered to the Certificate Trustee and to the Originator, the Note Issuer and
the Note Trustee.
(d) Upon 30 days' written notice, the Certificate Trustee (i) may resign
with respect to the Certificates as a whole by giving such written notice to the
Originator, the Delaware Trustee, the Authorized Agents, the Note Issuer and the
Note Trustee or (ii) may be removed with respect to the Certificates as a whole
by Act of Certificateholders holding Certificates representing not less than a
majority of the Outstanding Amount of Certificates of all the Series delivered
to the Delaware Trustee, the Originator, the Note Issuer and the Note Trustee.
If an instrument of acceptance by a successor Certificate Trustee with respect
to the Certificates as a whole shall not have been delivered to the Originator,
the Delaware Trustee, the Note Issuer and the Note Trustee within 90 days after
the giving of such notice of resignation or Act by the Certificateholders as a
whole for removal of the Certificate Trustee, the Delaware Trustee or the
Originator may petition any court of competent jurisdiction for the appointment
of a successor Certificate Trustee with respect to the Certificates as a whole.
(e) If at any time:
(i) the Certificate Trustee shall fail to comply with Section 310 of
the Trust Indenture Act after written request therefor by the Originator or
by any Holder of Certificates of any Series or Class affected thereby who
has been a bona fide Holder of Certificates of such Series or Class for at
least six months; or
(ii) the Certificate Trustee shall cease to be eligible under Section
6.07 and shall fail to resign after written request therefor by the
Originator or by any Certificate holder; or
(iii) the Certificate Trustee shall become incapable of acting or
shall be adjudged a bankrupt or insolvent or a receiver of the Certificate
Trustee or of its property
37
shall be appointed or any public officer shall take charge or control of
the Certificate Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation;
then, in any case, (x) the Originator may remove the Certificate Trustee with
respect to any Series or Class of Certificates affected thereby or (y) any
Holder of Certificates of any Series or Class affected thereby who has been a
bona fide Holder of Certificates of such Series or Class for at least six months
may, on behalf of himself and all others similarly situated, petition any court
of competent jurisdiction for the removal of the Certificate Trustee with
respect to such Series or Class of Certificates and the appointment of a
successor Certificate Trustee with respect to such Series or Class.
(f) If a Responsible Officer of the Certificate Trustee shall have received
written notice of an Avoidable Tax (as hereinafter defined) that has been or is
likely to be asserted, the Certificate Trustee shall promptly notify the
Originator and the Note Issuer thereof and shall, within 30 days of such
notification, resign hereunder unless within such 30-day period the Certificate
Trustee shall have received notice that either the Originator or the Note Issuer
has agreed to pay such tax. In such event, the Originator (with the prior
written approval of the Note Issuer) shall promptly appoint a successor
Certificate Trustee in a jurisdiction where there are no Avoidable Taxes. As
used herein, an "Avoidable Tax" means a state or local tax: (i) upon (w) the
Trust, (x) the Trust Property, (y) the Certificateholders or (z) the Certificate
Trustee for which the Certificate Trustee is entitled to seek reimbursement from
the Trust Property, and (ii) that would be avoided if the Certificate Trustee
were located in another state, or jurisdiction within a state, within the United
States. A tax shall not be an Avoidable Tax if either the Originator or the
Note Issuer shall agree to pay, and shall pay, such tax.
(g) With respect to any Series or Class of Certificates, if the Certificate
Trustee shall resign, be removed or become incapable of acting, or if a vacancy
shall occur in the office of the Certificate Trustee for any cause, the
Originator (with the prior written approval of the Note Issuer) shall promptly
appoint a successor Certificate Trustee. If, within one year after such
resignation, removal or incapability, or the occurrence of such vacancy with
respect to any Series or Class of Certificates, a successor Certificate Trustee
shall be appointed by Act of the Certificateholders holding Certificates of such
Series or Class representing not less than a majority of the Outstanding Amount
of the Certificates of such Series or Class delivered to the Originator, the
Note Trustee and the retiring Certificate Trustee, the successor Certificate
Trustee so appointed shall, forthwith upon its acceptance of such appointment,
become the successor Certificate Trustee with respect to such Series or Class
and supersede the successor Certificate Trustee appointed as provided above. If
no successor Certificate Trustee shall have been so appointed as provided above
and accepted appointment in the manner hereinafter provided, any Holder of
Certificates of any affected Series or Class who has been a bona fide Holder of
Certificates of such Series or Class for at least six months may, on behalf of
himself and all others similarly situated, petition any court of competent
jurisdiction for the appointment of a successor Certificate Trustee with respect
to the affected Series or Class of Certificates.
(h) The successor Certificate Trustee shall give notice of the resignation
and removal of the Certificate Trustee and appointment of the successor
Certificate Trustee, in each case with
38
respect to any Series or Class of Certificates, by mailing written notice of
such event by first-class mail, postage prepaid, to the Holders of the affected
Series or Class as their names and addresses appear in the Register and to each
Rating Agency. Each notice shall include the name of such successor Certificate
Trustee and the address of the corporate trust office of such successor
Certificate Trustee.
(i) The Originator shall notify the Rating Agencies of any resignation and
removal of the Certificate Trustee and appointment of a successor Certificate
Trustee under this Section 6.08.
Section 6.09. Acceptance of Appointment by Successor. Every successor
--------------------------------------
Certificate Trustee appointed hereunder shall execute, acknowledge and deliver
to the Originator and to the retiring Certificate Trustee an instrument
accepting such appointment, and thereupon the resignation or removal of the
retiring Certificate Trustee shall become effective and such successor
Certificate Trustee, without any further act, deed or conveyance, shall become
vested with all the rights, powers, trusts and duties of the retiring
Certificate Trustee with respect to any Series or Class of Certificates as to
which the retiring Certificate Trustee is retiring; but, on request of the
Originator or the successor Certificate Trustee, such retiring Certificate
Trustee shall execute and deliver an instrument transferring to such successor
Certificate Trustee all the rights, powers and trusts of the retiring
Certificate Trustee with respect to such Series or Class of Certificates and
shall duly assign, transfer and deliver to such successor Certificate Trustee
all property and money held by such retiring Certificate Trustee hereunder with
respect to such Series or Class of Certificates. Upon request of any such
successor Certificate Trustee, the Originator, the retiring Certificate Trustee
and such successor Certificate Trustee shall execute and deliver any and all
instruments containing such provisions as shall be necessary or desirable to
transfer and confirm to, and for more fully and certainly vesting in, such
successor Certificate Trustee all such rights, powers and trusts. No
Certificate Trustee hereunder shall be liable for the acts or omissions of any
successor Certificate Trustee.
No successor Certificate Trustee shall accept its appointment unless at the
time of such acceptance such successor Certificate Trustee shall be qualified
and eligible under this Article and any and all amounts due and payable to the
predecessor trustee have been paid.
Section 6.10. Merger, Conversion, Consolidation or Succession to Business.
-----------------------------------------------------------
Any corporation into which the Certificate Trustee may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which the Certificate Trustee
shall be a party, or any corporation succeeding to all or substantially all of
the corporate trust business of the Certificate Trustee, shall be the successor
of the Certificate Trustee hereunder, provided such corporation shall be
otherwise qualified and eligible under this Article, without the execution or
filing of any paper or any further act on the part of any of the parties hereto.
In case any Certificates shall have been authenticated, but not delivered, by
the Certificate Trustee then in office, any successor by merger, conversion or
consolidation to such authenticating Certificate Trustee may adopt such
authentication and deliver the Certificates so authenticated with the same
effect as if such successor Certificate Trustee had itself authenticated such
Certificates.
39
Section 6.11. Maintenance of Agencies. (a) There shall at all times be
-----------------------
maintained in the Borough of Manhattan, The City of New York, an office or
agency where Certificates may be presented or surrendered for registration of
transfer or for exchange, and for payment thereof and where notices and demands
to or upon the Certificate Trustee on behalf of the Trust in respect of the
Certificates or of this Trust Agreement may be served. At no time shall there
be any other such office or agency outside the United States. Such office or
agency shall be initially at ____________________. Written notice of any change
of location thereof shall be given by the Certificate Trustee on behalf of the
Trust to the Originator, the Note Trustee, the Note Issuer, the
Certificateholders and the Rating Agencies. In the event that no such office or
agency shall be maintained or no such notice of location or of change of
location shall be given, presentations and demands may be made and notices may
be served at the Corporate Trust Office of the Certificate Trustee.
(b) There shall at all times be a Registrar, an Authentication Agent and a
Paying Agent hereunder. Each such Authorized Agent shall be a bank or trust
company, shall be a corporation organized and doing business under the laws of
the United States or any state, with a combined capital and surplus of at least
$50,000,000, shall have a long-term debt rating of A or better by Xxxxx'x and
Standard & Poor's and shall be authorized under such laws to exercise corporate
trust powers, subject to supervision by federal or state authorities. The
Certificate Trustee shall initially be the Paying Agent, Authentication Agent,
and, as provided in Section 3.04, Registrar hereunder. Each Registrar, if other
than the Certificate Trustee, shall furnish to the Certificate Trustee, at
stated intervals of not more than six months, and at such other times as the
Certificate Trustee may request in writing, a copy of the Register.
(c) Any corporation into which any Authorized Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, consolidated or conversion to which any Authorized Agent
shall be a party, or any corporation succeeding to the corporate trust business
of any Authorized Agent, shall be the successor of such Authorized Agent
hereunder, if such successor corporation is otherwise eligible under this
Section, without the execution or filing of any paper or any further act on the
part of the parties hereto or such Authorized Agent or such successor
corporation.
(d) Any Authorized Agent may at any time resign by giving written notice of
resignation to the Certificate Trustee, the Originator and the Note Trustee.
The Originator (with the prior written approval of the Note Issuer) may, and at
the request of the Certificate Trustee shall, at any time terminate the agency
of any Authorized Agent by giving written notice of termination to such
Authorized Agent, the Note Trustee and to the Certificate Trustee. Upon the
resignation or termination of an Authorized Agent or in case at any time any
such Authorized Agent shall cease to be eligible under this Section (when, in
either case, no other Authorized Agent performing the functions of such
Authorized Agent shall have been appointed by the Certificate Trustee), the
Originator (with the prior written approval of the Note Issuer) shall promptly
appoint one or more qualified successor Authorized Agents, reasonably
satisfactory to the Certificate Trustee, to perform the functions of the
Authorized Agent that has resigned or whose agency has been terminated or who
shall have ceased to be eligible under this Section. The Originator shall give
written notice of any such appointment made by it to the Certificate Trustee
40
and the Note Trustee; and in each case the Certificate Trustee shall mail notice
of such appointment to all Certificateholders as their names and addresses
appear on the Register.
(e) Pursuant to the Fee and Indemnity Agreement, the Note Issuer has agreed
to pay, or cause to be paid, from time to time to each Authorized Agent
reasonable compensation for its services and to reimburse it for its reasonable
expenses, and no Authorized Agent shall have any recourse against the Originator
or the Trust Property for payment of such amounts.
Section 6.12. Money for Certificate Payments To Be Held in Trust. All
--------------------------------------------------
moneys deposited with any Paying Agent for the purpose of any payment on
Certificates shall be deposited and held in trust for the benefit of the
Certificateholders entitled to such payment, subject to the provisions of this
Section. Moneys so deposited and held in trust shall constitute a separate
trust fund for the benefit of the Certificateholders with respect to which such
money was deposited.
The Certificate Trustee may at any time, for the purpose of obtaining the
satisfaction and discharge of this Trust Agreement or for any other purpose,
direct any Paying Agent to pay to the Certificate Trustee all sums held in trust
by such Paying Agent, such sums to be held by the Certificate Trustee upon the
same trusts as those upon which such sums were held by such Paying Agent; and,
upon such payment by any Paying Agent to the Certificate Trustee, such Paying
Agent shall be released from all further liability with respect to such money.
Section 6.13. Registration of Notes in Certificate Trustee's Name. The
---------------------------------------------------
Certificate Trustee agrees that all Notes and Eligible Investments, if any,
shall be issued in the name of the Certificate Trustee or its nominee, on behalf
of the Trust, and held by the Certificate Trustee, or, if not so held, the
Certificate Trustee or its nominee, on behalf of the Trust, shall be reflected
as the owner of such Notes or Eligible Investments, as the case may be, in the
register of the issuer of such Notes or Eligible Investments. In no event shall
the Certificate Trustee invest in, or hold, Notes or Eligible Investments in a
manner that would cause the Certificate Trustee not to have the ownership
interest in such Notes or Eligible Investments under the applicable provisions
of the Uniform Commercial Code in effect where the Certificate Trustee holds
such Notes or Eligible Investments or other applicable law then in effect.
Section 6.14. Representations and Warranties of Certificate Trustee. The
-----------------------------------------------------
Certificate Trustee hereby represents and warrants that:
(a) the Certificate Trustee is a corporation duly organized, validly
existing, and in good standing under the laws of the State of New York;
(b) the Certificate Trustee has full power, authority and legal
right to execute, deliver and perform this Trust Agreement and the Basic
Documents to which the Certificate Trustee is a party and has taken all
necessary action to authorize the execution, delivery, and performance by
it of this Trust Agreement and such Basic Documents; and
41
(c) when delivered by the Certificate Trustee, the Certificates of
any Series or Class will have been duly executed by the Certificate Trustee
on behalf of the Trust and duly authenticated by the Certificate Trustee.
Section 6.15. Withholding Taxes; Information Reporting. The Certificate
----------------------------------------
Trustee, as trustee of a grantor trust, shall exclude and withhold from each
distribution of principal and interest and other amounts due hereunder or under
the Certificates any and all withholding taxes applicable thereto as required by
law. The Certificate Trustee agrees that it will act as such withholding agent
and, in connection therewith, whenever any present or future taxes or similar
charges are required to be withheld with respect to any amounts payable in
respect of the Certificates, to withhold such amounts and timely pay the same to
the appropriate authority in the name of and on behalf of the
Certificateholders, that it will file any necessary withholding tax returns or
statements when due, and that, as promptly as possible after the payment
thereof, it will deliver to each Certificateholder appropriate documentation
showing the payment thereof, together with such additional documentary evidence
as such Certificateholders may reasonably request from time to time. The
Certificate Trustee agrees to file any other information reports as it may be
required to file with respect to taxes. For purposes of reporting on Internal
Revenue Service Form 1041 (and any statement attached thereto) or any successor
form thereto, the Certificate Trustee will separately set forth information
reported with respect to each Series or Class of Certificates.
ARTICLE VII
THE DELAWARE TRUSTEE
Section 7.01. Appointment. For valuable consideration received, it is
-----------
mutually covenanted and agreed in accordance with the terms of Section 2.01 of
this Trust Agreement that the Delaware Trustee has been and by this document is,
appointed to serve as the trustee of the Trust in the State of Delaware pursuant
to Section 3807 of the Business Trust Statute.
Section 7.02. Duties and Responsibilities. It is understood and agreed
---------------------------
that the duties and responsibilities of the Delaware Trustee shall be limited to
(a) accepting legal process served on the Trust in the State of Delaware and (b)
the execution and delivery of all certificates required to be filed with the
Secretary of State in order to form and maintain the existence of the Trust
under the Business Trust Statute.
Section 7.03. Acceptance of the Trusts. By the execution hereof, the
------------------------
Delaware Trustee accepts the trusts created hereinabove and in Section 2.01.
Except as otherwise expressly required by Section 7.02, the Delaware Trustee
shall not have any duty or liability with respect to the administration of the
Trust, the investment of the Trust's property or the payment of dividends or
other distributions of income or principal to the Certificateholders.
Section 7.04. Limitation of Liability. The Delaware Trustee shall not be
-----------------------
liable for the acts or omissions of the Certificate Trustee, nor shall the
Delaware Trustee be liable for supervising or monitoring the performance of the
duties and obligations of the Certificate Trustee
42
or the Trust under this Trust Agreement or any related document. The Delaware
Trustee shall not be personally liable under any circumstances, except for its
own willful misconduct or gross negligence. In particular, but not by way of
limitation:
(a) the Delaware Trustee shall not be personally liable for any error
of judgment made in good faith by a Responsible Officer of the Delaware
Trustee;
(b) no provision of this Trust Agreement shall require the Delaware
Trustee to expend or risk its personal funds or otherwise incur any
financial liability in the performance of its rights or powers hereunder,
if the Delaware Trustee shall have reasonable grounds for believing that
repayment of such funds or indemnity satisfactory to it against such risk
or liability is not reasonably assured or provided to it;
(c) it is expressly understood and agreed by the parties hereto that
(i) this Trust Agreement is executed and delivered by Bankers Trust
(Delaware), not individually or personally but solely as Delaware Trustee
of the Trust, in the exercise of the powers and authority conferred and
vested in it, (ii) the representations, undertakings and agreements herein
made on the part of the Trust are made and intended not as personal
representations undertakings and agreements by Bankers Trust (Delaware),
but are made and intended for the purpose of binding only the Trust, (iii)
nothing herein contained shall be construed as creating any liability on
Bankers Trust (Delaware), individually or personally, to perform any
covenant either expressed or implied contained herein, all such liability,
if any, being expressly waived by the parties who are signatories to this
Trust Agreement and by any Person claiming by, through or under such
parties and (iv) under no circumstances shall Bankers Trust (Delaware), be
personally liable for the payment of any indebtedness or expenses of the
Trust or be liable for the breach or failure of any obligation,
representation, warranty or covenant made or undertaken by the Trust under
this Trust Agreement;
(d) the Delaware Trustee shall not be personally responsible for or in
respect of the validity or sufficiency of this Trust Agreement or for the
due execution hereof by the Originator or the Certificate Trustee;
(e) the Delaware Trustee shall incur no liability to anyone in acting
upon any signature, instrument, notice, resolution, request, consent,
order, certificate, report, opinion, bond or other document or paper
believed by it to be genuine and believed by it to be signed by the proper
party or parties. The Delaware Trustee may accept a certified copy of a
resolution of the board of directors or other governing body of any
corporate party as conclusive evidence that such resolution has been duly
adopted by such body and that the same is in full force and effect;
(f) in the exercise or administration of the trusts hereunder, the
Delaware Trustee (i) may act directly or through agents, attorneys,
custodians or nominees pursuant to agreements entered into with any of
them, and the Delaware Trustee shall not be liable for the default or
misconduct or supervision of such agents, attorneys, custodians or nominees
if such agents, attorneys, custodians or nominees shall have been selected
by
43
the Delaware Trustee in good faith and (ii) may consult with counsel,
accountants and other skilled persons to be selected in good faith and
employed by it, and it shall not be liable for anything done, suffered or
omitted in good faith by it in accordance with the advice or opinion of any
such counsel, accountants or other skilled persons; and
(g) except as expressly provided in this Section 7.04, in accepting
and performing the trusts hereby created the Delaware Trustee acts solely
as trustee for the Trust and not in its individual capacity, and all
persons having any claim against the Delaware Trustee by reason of the
transactions contemplated by this Trust Agreement shall look only to the
Trust's property for payment or satisfaction thereof.
Section 7.05. Other Protections. The Delaware Trustee shall be entitled
-----------------
to all of the other benefits and protections provided to the Certificate Trustee
in this Trust Agreement.
Section 7.06. Compensation and Reimbursement; Indemnification. Pursuant
-----------------------------------------------
to the Fee and Indemnity Agreement, the Note Issuer has agreed to pay, or cause
to be paid, to the Delaware Trustee from time to time compensation for its
services and to reimburse it for its reasonable expenses.
The Originator, but solely from amounts payable under the Fee and Indemnity
Agreement, shall indemnify, defend and hold harmless the Delaware Trustee and
any of the affiliates, officers, directors, employees and agents of the Delaware
Trustee (the "Delaware Trustee Indemnified Persons") from and against any and
all losses, claims, taxes, damages, expenses and liabilities (including
liabilities under state or federal securities laws) of any kind and nature
whatsoever (collectively, "Delaware Trustee Expenses"), to the extent that such
Delaware Trustee Expenses arise out of or are imposed upon or asserted against
such Delaware Trustee Indemnified Persons with respect to the creation,
operation or termination of the Trust, the execution, delivery or performance of
this Trust Agreement or the transactions contemplated hereby; provided, however,
------------------
that the Originator shall not be required to indemnify any Delaware Trustee
Indemnified Person for any Delaware Trustee Expenses that result from the
willful misconduct or gross negligence of such Delaware Trustee Indemnified
Person. The obligations of the Originator to indemnify the Delaware Trustee
Indemnified Persons in the Trust Agreement shall survive the termination of this
Trust Agreement and the resignation or removal of the Delaware Trustee
Indemnified Persons.
Notwithstanding anything to the contrary in this Agreement, the Delaware
Trustee shall have no recourse against the Originator or the Trust Property for
payment of any amounts required to be paid to the Delaware Trustee under this
Section 7.06.
Section 7.07. Resignation. The Delaware Trustee may resign upon 30 days'
-----------
prior written notice to the Certificate Trustee, the Originator and the Note
Issuer; provided, however, that a successor Delaware Trustee satisfactory to the
------------------
Certificate Trustee shall have been appointed and agreed to serve. If a
successor Delaware Trustee shall not have been appointed within such 30-day
period, the Delaware Trustee may apply to the Court of Chancery of the State of
Delaware for the appointment of a successor Delaware Trustee. Any successor
Delaware Trustee must satisfy the requirement of Section 3807(a) of the Business
Trust Statute.
44
ARTICLE VIII
SUPPLEMENTAL TRUST AGREEMENTS
Section 8.01. Supplemental Trust Agreements Without Consent of
------------------------------------------------
Certificateholders. Without the consent of Certificateholders, the Originator
------------------
(with the prior written approval of the Note Issuer) may, and the Certificate
Trustee and the Delaware Trustee (subject to Section 8.03) shall, at any time
and from time to time enter into one or more agreements supplemental hereto, in
form satisfactory to the Certificate Trustee and the Delaware Trustee, for any
of the following purposes:
(a) to add to the covenants of the Originator for the benefit of the
Certificate holders, or to surrender any right or power herein conferred
upon the Originator;
(b) to correct or supplement any provision herein or in any
supplemental agreement that may be defective or inconsistent with any
other provision herein or in any supplemental agreement or to make any
other provisions with respect to matters or questions arising under this
Trust Agreement; provided that any such action shall not adversely affect
--------
in any material respect the interests of the Certificateholders;
(c) to cure any ambiguity or correct any mistake;
(d) to qualify, if necessary, this Trust Agreement (including any
supplemental agreement) under the Trust Indenture Act, or under any similar
federal statute hereafter enacted, and to add to this Trust Agreement such
other provisions as may be expressly permitted by the Trust Indenture Act,
excluding, however, the provisions referred to in Section 316(a)(2) of the
Trust Indenture Act as in effect at the date as of which this instrument
was executed or any corresponding provision in any similar federal statute
hereafter enacted; or
(e) to provide for the issuance of the Certificates of any Class or
Series, or to provide for the execution and delivery of any Swap in
connection with such an issuance.
Section 8.02. Supplemental Trust Agreements with Consent of
---------------------------------------------
Certificateholders. With the consent of the Certificateholders holding
------------------
Certificates representing not less than a majority of the aggregate Outstanding
Amount of Certificates of each Series or Class affected thereby, by Act of said
Certificateholders delivered to the Originator, the Note Trustee, the Delaware
Trustee and the Certificate Trustee, the Originator (with the prior written
approval of the Note Issuer) may, and the Certificate Trustee and the Delaware
Trustee (subject to Section 8.03) shall, enter into an agreement or agreements
supplemental hereto for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of this Trust Agreement or of
modifying in any manner the rights and obligations of the Holders of
Certificates of each such Series or Class under this Trust Agreement; provided,
---------
however, that no such supplemental
--------
45
agreement shall, without the consent of the Certificateholder of each
Outstanding Certificate affected thereby:
(a) reduce in any manner the amount of, or delay the timing of, any
receipt by the Certificate Trustee of payments on the Notes or
distributions that are required to be made herein on any Certificate, or
change any date of payment on any Certificate, or change the place of
payment where, or the coin or currency in which, any Certificate is
payable, or impair the right to institute suit for the enforcement of any
such payment or distribution on or after the Distribution Date, Special
Distribution Date or other date specified herein applicable thereto;
(b) permit the disposition of any Note in the Trust Property except as
permitted by this Trust Agreement, or otherwise deprive any Holder of
Certificates of any Series or Class of the benefit of the ownership of the
Notes of the corresponding Series or Class in the Trust;
(c) reduce the percentage of the aggregate Outstanding Amount of the
Certificates of any Series or Class that is required for any such
supplemental agreement, or reduce such percentage required for any waiver
(of compliance with certain provisions of this Trust Agreement or certain
defaults hereunder and their consequences) provided for in this Trust
Agreement;
(d) modify any of the provisions of this Section, except to increase
any percentage set forth herein or to provide that certain other provisions
of this Trust Agreement cannot be modified or waived without the consent of
the Holder of each Certificate affected thereby; or
(e) adversely affect the status of the Trust as a grantor trust for
federal income tax purposes.
It shall not be necessary for any Act of Certificateholders under this
Section to approve the particular form of any proposed supplemental agreement,
but it shall be sufficient if such Act shall approve the substance thereof. The
Certificate Trustee shall give each Rating Agency five days prior written notice
of any such proposed supplemental agreement. Promptly after the execution by
the Originator, the Delaware Trustee and the Certificate Trustee of any
supplemental agreement pursuant to this Section, the Certificate Trustee shall
mail to the Holders of the Certificates to which such agreement relates a notice
setting forth in general terms the substance of such agreement. Any failure of
the Certificate Trustee to mail such notice, or any defect therein, shall not,
however, in any way impair or affect the validity of any such agreement.
Section 8.03. Documents Affecting Immunity or Indemnity. If in the
-----------------------------------------
opinion of the Certificate Trustee or the Delaware Trustee any document required
to be executed by it pursuant to the terms of Section 8.01 or 8.02 affects any
interest, right, duty, immunity or indemnity in favor of such entity under this
Trust Agreement, the Certificate Trustee or the Delaware Trustee may in its
discretion decline to execute such document.
46
Section 8.04. Execution of Supplemental Trust Agreements. In executing,
------------------------------------------
or accepting the additional trusts created by, any supplemental agreement
permitted by this Article or the modifications thereby of the trusts created by
this Trust Agreement, the Certificate Trustee and the Delaware Trustee shall be
entitled to receive, and shall be fully protected in relying upon, an Opinion of
Counsel stating that the execution of such supplemental agreement is authorized
or permitted by this Trust Agreement.
Section 8.05. Effect of Supplemental Trust Agreements. Upon the execution
---------------------------------------
of any supplemental agreement under this Article, this Trust Agreement shall be
modified in accordance therewith, and such supplemental agreement shall form a
part of this Trust Agreement for all purposes; and every Holder of any
Certificate theretofore or thereafter authenticated and delivered hereunder
shall be bound thereby.
Section 8.06. Conformity with Trust Indenture Act. Every supplemental
-----------------------------------
agreement executed pursuant to this Article shall conform to the requirements of
the Trust Indenture Act as then in effect.
Section 8.07. Reference in Certificates to Supplemental Trust Agreements.
----------------------------------------------------------
Certificates authenticated and delivered after the execution of any supplemental
agreement pursuant to this Article may bear a notation in form approved by the
Certificate Trustee as to any matter provided for in such supplemental
agreement; and, in such case, suitable notation may be made upon Outstanding
Certificates after proper presentation and demand.
ARTICLE IX
AMENDMENTS AND SUPPLEMENTS TO NOTES, NOTE INDENTURE
AND OTHER BASIC DOCUMENTS
Section 9.01. Amendments and Supplements to Notes, Note Indenture and
-------------------------------------------------------
Other Basic Documents. In the event that the Certificate Trustee, as holder of
---------------------
the Notes of any Series or Class in trust for the benefit of the Holders of
Certificates of the corresponding Series or Class, receives a request for a
consent to any amendment, modification, waiver or supplement under such Notes,
the Note Indenture or any other Basic Document to which the Certificate Trustee
is a party, the Certificate Trustee shall forthwith send a notice of such
proposed amendment, modification, waiver or supplement, to each Holder of
Certificates of such Series or Class registered on the Register as of such date.
The Certificate Trustee shall request from such Certificateholders directions as
to (a) whether or not the Certificate Trustee should take or refrain from taking
any action that a holder of such Note has the option to direct, (b) whether or
not to give or execute any waivers, consents, amendments, modifications or
supplements as a holder of such Note and (c) how to vote such Note if a vote has
been called for with respect thereto; provided however, in the case of any
-------- -------
change to the terms of, or modification to, the Notes, the Certificateholders
may not direct any such action to be taken or direct whether or not to give or
execute any such waiver, consent, amendment, modification or supplement that is
not pursuant to the original terms of the Notes, unless the Certificate Trustee
obtains an opinion at the expense of the Trust of independent tax counsel to the
effect that after any such action, waiver, consent,
47
amendment, modification or supplement the Trust will continue to be treated as a
"grantor trust" for federal income tax purposes. Provided such a request for
Certificateholder direction shall have been made, in directing any action or
casting any vote or giving any consent as the holder of the Notes, the
Certificate Trustee shall vote or consent with respect to such Notes in the same
proportion as the Certificates of the corresponding Series or Class were
actually voted by Acts of the Holders thereof delivered to the Certificate
Trustee prior to two Certificate Business Days before the Certificate Trustee
takes such action or casts such vote or gives such consent.
ARTICLE X
TERMINATION OF TRUST
Section 10.01. Termination of the Trust. The respective obligations and
------------------------
responsibilities of the Originator, the Certificate Trustee, the Delaware
Trustee and the Trust created hereby shall terminate with respect to any Series
or Class of Certificates upon the distribution to all Holders of Certificates of
such Series or Class and the Certificate Trustee of all amounts required to be
distributed to them pursuant to this Trust Agreement and the disposition of all
property held as part of the Trust Property with respect to such Series or
Class. Upon the termination of all Series of Certificates and the election of
the Originator, the Trust shall dissolve. The Originator shall pay or provide
for the payment of all remaining liabilities of the Trust, the Certificate
Trustee and the Delaware Trustee, but solely from amounts payable under the Fee
and Indemnity Agreement, and thereupon the Delaware Trustee shall file, from
amounts payable under the Fee and Indemnity Agreement, a certificate of
cancellation under the Business Trust Statute and the Trust shall terminate.
Notice of any termination, specifying the Distribution Date or Special
Distribution Date, as the case may be, upon which the Holders of Certificates of
any Series or Class may surrender their Certificates to the Certificate Trustee
for payment of the final distribution and cancellation, shall be mailed promptly
by the Certificate Trustee to Holders of Certificates of such Series or Class
not earlier than the 60th day and not later than the 20th day next preceding
such final distribution specifying (a) the Distribution Date or Special
Distribution Date, as the case may be, upon which the proposed final payment of
the Certificates of such Series or Class will be made upon presentation and
surrender of such Certificates at the office or agency of the Certificate
Trustee therein specified, (b) the amount of any such proposed final payment and
(c) that the Record Date otherwise applicable to such Distribution Date or the
Special Record Date otherwise applicable to such Special Distribution Date, as
the case may be, is not applicable, payments being made only upon presentation
and surrender of the Certificates of such Series or Class at the office or
agency of the Certificate Trustee therein specified. The Certificate Trustee
shall give such notice to the Registrar at the time such notice is given to
Holders of Certificates of such Series or Class. Upon presentation and
surrender of such Certificates, the Certificate Trustee shall cause to be
distributed to the Holders thereof amounts distributable thereon on such
Distribution Date or Special Distribution Date, as the case may be, pursuant to
Section 4.02.
In the event that all of the Holders of Certificates of such Series or
Class shall not surrender their Certificates for cancellation within six months
after the date specified in the above
48
mentioned written notice, the Certificate Trustee shall give a second written
notice to the remaining Holders of such Certificates to surrender their
Certificates for cancellation and receive the final distribution with respect
thereto. In the event that any money held by the Certificate Trustee for the
payment of distributions on the Certificates of any Series or Class shall remain
unclaimed for two years (or such lesser time as the Certificate Trustee shall be
satisfied, after 60 days' notice from the Originator (with the prior written
approval of the Note Issuer), is one month prior to the escheat period provided
under applicable law) after the final distribution date with respect thereto,
the Certificate Trustee shall pay such money to the Note Trustee for deposit
into the collection account relating to the related Notes or, if such collection
account no longer exists, to the Note Issuer and the Certificate Trustee or Note
Issuer shall give written notice thereof to the Note Trustee, the Note Issuer
and the Originator.
ARTICLE XI
MISCELLANEOUS PROVISIONS
Section 11.01. Pledge of State of California; Certificates and Notes Not
---------------------------------------------------------
Obligation of State of California, Originator, or Seller. (a) The Originator
--------------------------------------------------------
hereby finds and determines, and hereby represents and warrants, that the Trust
constitutes a "special purpose trust" under Section 63010 of the California
Government Code and a "financing entity" under Section 840 of the PU Code, and
that the Certificates constitute "rate reduction bonds" under Section 840 of the
PU Code and that the Holders of the Certificates are entitled to the rights and
benefits thereunder. Pursuant to Section 841(c) of the PU Code, the Originator,
on behalf of the State of California, does hereby pledge and agree with the Note
Issuer, the Trust and the Holders of the Certificates that the State of
California shall neither limit nor alter the FTA Charges, the Transition
Property, or the Financing Order or Advice Letters relating thereto, and all
rights thereunder, until the Certificates, together with the interest thereon,
are fully met and discharged, provided nothing contained in this Section shall
preclude such limitation or alteration if and when adequate provision shall be
made by law for the protection of the Note Issuer, the Trustee and the Holders
(the "State Pledge"). The Originator hereby further agrees to treat the Notes
as debt of the Note Issuer secured by, among other things, the Transition
Property and the equity of the Note Issuer for all purposes.
(b) Each Certificate represents a fractional undivided beneficial interest
in a corresponding Series or Class of Notes and the proceeds thereof, together
with payments made on any related Swap. The Certificates do not represent an
interest in or obligation of the State of California, the Originator, any other
governmental agency or instrumentality or the Seller or any of its affiliates.
None of the Certificates, the Notes or the underlying Transition Property will
be guaranteed or insured by the State of California, the Originator, the Trust
or any other governmental agency or instrumentality or by the Seller or its
affiliates.
Neither the full faith and credit nor the taxing power of the State of
California, the Originator or any other governmental agency or instrumentality
is pledged to the payment of the principal, purchase price of, or interest on,
the Certificates or the Notes, or to the payments in respect of the Transition
Property, nor is the State of California, the Originator or any other
49
governmental agency or instrumentality in any manner obligated to make any
appropriation for the payment thereof.
Section 11.02. Limitation on Rights of Certificateholders. The death or
------------------------------------------
incapacity of any Certificateholder shall not operate to terminate this Trust
Agreement or the Trust, nor entitle such Certificateholder's legal
representatives or heirs to claim an accounting or to take any action or
commence any proceeding in any court for a partition or winding up of the Trust,
nor otherwise affect the rights, obligations, and liabilities of the parties
hereto or any of them.
Section 11.03. No Petition. Each of the Certificate Trustee and the
-----------
Delaware Trustee, by entering into this Trust Agreement, hereby covenants and
agrees that it will not at any time institute against the Note Issuer or the
Trust, or join in any institution against the Note Issuer or the Trust of, any
bankruptcy proceedings under any United States federal or state bankruptcy or
similar law in connection with any obligations relating to the Certificates, the
Notes, this Trust Agreement or any of the other Basic Documents.
Section 11.04. Certificates Nonassessable and Fully Paid.
-----------------------------------------
Certificateholders shall not be personally liable for obligations of the Trust,
the interests in the Trust represented by the Certificates shall be
nonassessable for any losses or expenses of the Trust or for any reason
whatsoever, and Certificates upon authentication thereof by the Certificate
Trustee pursuant to Section 3.02 are and shall be deemed fully paid and non-
assessable. No Certificateholder shall have any right (except as expressly
provided herein) to vote or in any manner otherwise control the operation and
management of the Trust Property, the Trust established hereunder, or the
obligations of the parties hereto, nor shall anything set forth herein, or
contained in the terms of the Certificates, be construed so as to constitute the
Certificateholders from time to time as partners or members of an association.
Section 11.05. Notices. (a) Unless otherwise specifically provided
-------
herein, all notices, directions, consents and waivers required under the terms
and provisions of this Agreement shall be in English and in writing, and any
such notice, direction, consent or waiver may be given by United States mail,
courier service, telegram, telex, telemessage, telecopy, telefax, cable or
facsimile (confirmed by telephone or in writing in the case of notice by
telegram, telex, tele message, telecopy, telefax, cable or facsimile) or any
other customary means of communication, and any such notice, direction, consent
or waiver shall be effective when delivered, or if mailed, three days after
deposit in the United States mail with proper postage for ordinary mail prepaid;
provided, however, that such notices, directions, consents and waivers to the
------------------
Delaware Trustee
50
and/or the Certificate Trustee shall be given by United States first-class mail,
facsimile or overnight mail,
if to the Originator, to:
California Infrastructure and Economic Development Bank
c/o California Trade and Commerce Agency
000 X Xxxxxx, Xxxxx 0000
Xxxxxxxxxx, Xxxxxxxxxx 00000
Attention: Executive Director
Facsimile: 000-000-0000
Telephone: 000-000-0000
if to the Delaware Trustee, to:
Bankers Trust (Delaware)
E.A. Delle Donne Corporate Center
Xxxxxxxxxx Building
0000 Xxxxxx Xxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxxx 00000-0000
Attention: President
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
(with a copy to the Certificate Trustee)
if to the Certificate Trustee, to:
Bankers Trust Company of California, N.A.
c/o Bankers Trust Company
Corporate Trust and Agency Services
Four Xxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Structured Finance Group
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
if to the Note Issuer, to:
PG&E Funding LLC
Attention:
--------------------
Facsimile:
--------------------
Telephone:
--------------------
51
if to the Note Trustee, to:
Bankers Trust Company of California, N.A.
c/o Bankers Trust Company
Corporate Trust and Agency Services
Four Xxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Structured Finance Group
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
if to the Rating Agencies, to:
Standard & Poor's Ratings Services
00 Xxxxxxxx (00xx Xxxxx)
New York, New York 10004
Attention: Asset-Backed Surveillance Department
Facsimile:
--------------------
Telephone:
--------------------
Xxxxx'x Investors Service, Inc.
00 Xxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: ABS Monitoring Department
Facsimile: 000-000-0000
Telephone: 000-000-0000,
Fitch Investors Service, L.P.
Xxx Xxxxx Xxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn:
--------------------------
Facsimile:
--------------------
Telephone: , and
--------------------
Duff & Xxxxxx Credit Rating Co.
00 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn:
--------------------------
Facsimile:
--------------------
Telephone:
--------------------
(b) The Originator, the Delaware Trustee, the Certificate Trustee, the Note
Issuer or the Note Trustee, by notice to the others, may designate additional or
different addresses for subsequent notices or communications.
52
(c) Any notice or communication to Certificateholders shall be mailed by
first-class mail to the addresses for each Certificateholder shown on the
Register kept by the Registrar. Failure so to mail a notice or communication or
any defect in such notice or communication shall not affect its sufficiency with
respect to other Certificateholders.
(d) If a notice or communication is mailed in the manner provided above
within the time prescribed, it is conclusively presumed to have been duly given,
whether or not the addressee receives it.
(e) If the Originator mails a notice or communication to the
Certificateholders, it shall mail a copy to the Certificate Trustee, to each
Paying Agent and to the Note Issuer at the same time.
(f) Notwithstanding the foregoing, all communications or notices to the
Certificate Trustee shall be deemed to be given only when received by a
Responsible Officer of the Certificate Trustee.
Section 11.06. Governing Law. THIS TRUST AGREEMENT SHALL BE GOVERNED BY
-------------
AND CONSTRUED IN ACCORDANCE WITH THE DOMESTIC LAW OF THE STATE OF DELAWARE, AND
THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE
DETERMINED IN ACCORDANCE WITH SUCH LAW; PROVIDED, HOWEVER, THAT MATTERS
-------- -------
REGARDING THE AUTHORITY OF THE ORIGINATOR AND THE VALIDITY OF ACTIONS TAKEN BY
THE ORIGINATOR HEREUNDER AND OTHER MATTERS REFERENCED IN SECTION 11.01 ABOVE
SHALL BE GOVERNED BY THE DOMESTIC LAW OF THE STATE OF CALIFORNIA.
Section 11.07. Severability of Provisions. If any one or more of the
--------------------------
covenants, agreements, provisions or terms of this Trust Agreement shall be for
any reason whatsoever held invalid, then such covenants, agreements, provisions
or terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Trust Agreement and shall in no way affect the
validity or enforceability of the other provisions of this Trust Agreement or
the Trust, or of the Certificates or the rights of the Certificateholders
thereof.
Section 11.08. Conflict With Trust Indenture Act. If any provision hereof
---------------------------------
limits, qualifies or conflicts with another provision hereof that is required to
be included in this Trust Agreement by any of the provisions of the Trust
Indenture Act, such required provision shall control.
The provisions of Sections 310 through 317 of the Trust Indenture Act that
impose duties on any Person (including the provisions automatically deemed
included herein unless expressly excluded by this Trust Agreement) are a part of
and govern this Trust Agreement, whether or not physically contained herein.
Section 11.09. Effect of Headings and Table of Contents. The Article and
----------------------------------------
Section headings herein and in the Table of Contents are for convenience only
and shall not affect the construction hereof.
53
Section 11.10. Successors and Assigns; Delegation. (a) All covenants,
----------------------------------
agreements, representations and warranties in this Trust Agreement by the
Certificate Trustee, the Delaware Trustee and the Originator shall bind and, to
the extent permitted hereby, shall inure to the benefit of and be enforceable by
their respective successors and assigns, whether so expressed or not.
(b) No party to this Agreement shall assign or delegate this Agreement or
all or any part of its rights or obligations hereunder to any Person without the
prior written consent of the other parties.
Section 11.11. Benefits of Trust Agreement. Nothing in this Trust
---------------------------
Agreement or in the Certificates, express or implied, shall give to any Person,
other than the parties hereto and their successors hereunder, the
Certificateholders and, to the extent provided herein, the Note Issuer, any
benefit or any legal or equitable right, remedy or claim under this Trust
Agreement.
Section 11.12. Legal Holidays. In any case where any date for any
--------------
distribution in respect of any Certificate shall not be a Certificate Business
Day, then (notwithstanding any other provision of this Trust Agreement) payment
need not be made on such date, but may be made on the next succeeding
Certificate Business Day with the same force and effect as if made on such first
date, and no interest shall accrue during the intervening period.
Section 11.13. Counterparts. For the purpose of facilitating the
------------
execution of this Trust Agreement and for other purposes, this Trust Agreement
may be executed simultaneously in any number of counterparts, each of which
counterparts shall be deemed to be an original, and all of which counterparts
shall constitute but one and the same instrument.
[SIGNATURE PAGE FOLLOWS]
54
IN WITNESS WHEREOF, the Originator, the Delaware Trustee and the Certificate
Trustee have caused this Trust Agreement to be duly executed by duly authorized
officers, all as of the day and year first above written.
CALIFORNIA INFRASTRUCTURE AND
ECONOMIC DEVELOPMENT BANK,
as Originator
By:
--------------------------------
Name:
Title:
BANKERS TRUST (DELAWARE),
as Delaware Trustee
By:
--------------------------------
Name:
Title:
BANKERS TRUST COMPANY OF CALIFORNIA, N.A.,
as Certificate Trustee
By:
--------------------------------
Name:
Title:
S-1
EXHIBIT A
FORM OF FIXED RATE CERTIFICATE
REGISTERED REGISTERED
NO. . $.
CALIFORNIA INFRASTRUCTURE AND ECONOMIC DEVELOPMENT BANK
SPECIAL PURPOSE TRUST PG&E-1
CLASS .
RATE REDUCTION CERTIFICATE
SCHEDULED
FINAL
INTEREST DISTRIBUTION TERMINATION
RATE DATE DATE CUSIP
---------- ------------ ----------- -----
REGISTERED OWNER: Cede & Co.
PRINCIPAL AMOUNT:
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUST OR
ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER
NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF
FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
This Certificate evidences a fractional undivided beneficial interest in an
underlying note of a corresponding class or series issued by PG&E Funding LLC
and the proceeds thereof, held by a trust, as more fully described herein.
The Certificates do not represent an interest in or obligation of the State
of California, the California Infrastructure and Economic Development Bank (the
"Originator"), a public body established within the state government of the
State of California, any other governmental agency or instrumentality or the
Seller or any of its affiliates. None of the Certificates, the Underlying
A-1
Note or the underlying Transition Property (as defined in the Trust Agreement)
will be guaranteed or insured by the State of California, the Originator, the
Trust or any other governmental agency or instrumentality or by the Seller or
its affiliates.
Neither the full faith and credit nor the taxing power of the State of
California, the Originator or any other governmental agency or instrumentality
is pledged to the payment of the principal of, premium, if any, purchase price
of, or interest on, this Certificate or the Underlying Note, or to the payments
in respect of the Transition Property, nor is the State of California, the
Originator or any other governmental agency or instrumentality in any manner
obligated to make any appropriation for the payment thereof.
THIS CERTIFIES THAT CEDE & CO., as nominee for The Depository Trust
Company, for value received, is the registered owner of a Principal Amount
(stated above) of nonassessable, fully-paid, fractional undivided beneficial
interest in certain property held by the California Infrastructure and Economic
Development Bank Special Purpose Trust PG&E-1 (the "Trust"). The Trust is
created pursuant to, and this Certificate is issued under and is subject to the
terms, provisions, and conditions of, an Amended and Restated Declaration and
Agreement of Trust, as supplemented by a First Supplemental Agreement of Trust,
each dated as of __________ 1, 1997 (collectively, the "Trust Agreement"), by
and among Bankers Trust (Delaware), as Delaware Trustee (the "Delaware
Trustee"), Bankers Trust Company of California, N.A., as Certificate Trustee
(the "Certificate Trustee") and the Originator, a summary of certain of the
pertinent provisions of which is set forth below. This Certificate is one of the
duly authorized class of Certificates designated as "California Infrastructure
and Economic Development Bank Special Purpose Trust PG&E-1 Class . Rate Rate
Reduction Certificates" (herein called the "Class . Certificates"). The Class .
Certificates are one of a series of classes of Certificates issued under the
Trust Agreement (such Class . Certificates, together with other Certificates
heretofore or hereafter issued under the Trust Agreement being herein called the
"Certificates"). The holder of this Certificate, by virtue of its acceptance
hereof, assents and agrees to be bound by the terms of the Trust Agreement. This
Class . Certificate represents a fractional undivided beneficial interest in the
note of a related class (the "Underlying Note") issued by PG&E Funding LLC, as
Note Issuer, together with the proceeds of the Underlying Note. The Underlying
Note is one of a series of notes secured by a security interest in the property
right created under the PU Code, pursuant to a Financing Order (Decision 97-09-
.) issued by the CPUC on September 3, 1997, and Advice Letters issued pursuant
thereto, representing the irrevocable right of Pacific Gas and Electric Company
(the "Seller") or its assignee to receive certain nonbypassable charges, as
adjusted from time to time, on residential and small commercial customers within
the Seller's historic service territory, together with certain related
collateral, all as more fully described in the Note Indenture.
To the extent not otherwise defined herein, the capitalized terms used
herein have the meanings assigned to them in the Trust Agreement.
As provided in the Trust Agreement, additional Certificates may be issued
thereunder from time to time pursuant to trust supplements in one or more series
or classes, in various principal amounts equal to the corresponding series or
class of underlying notes, may bear interest at different rates and may
otherwise vary as provided in the Trust Agreement. The aggregate
A-2
principal amount of Certificates equals the aggregate amount of the
corresponding series or class of underlying notes, and all Certificates issued
and to be issued under the Trust Agreement are and will be equally secured by
the pledge and covenants made therein, except as otherwise expressly provided or
permitted in the Trust Agreement.
Subject to and in accordance with the terms of the Trust Agreement, there
will be distributed on each March 25, June 25, September 25 and December 26 or
each year or, if any such day is not a Business Day, the next succeeding
Business Day (each, a "Distribution Date"), commencing on ., 1998 and ending no
later than the Termination Date (stated above) to the person in whose name this
Certificate is registered at the close of business on the last Business Day
immediately preceding the related Distribution Date or, if Definitive
Certificates are issued, the last day of the immediately preceding calendar
month (each, a "Record Date"), such Holder's pro rata interest in the payments
made on the Underlying Note due on such Payment Date, the receipt of which has
been confirmed by the Certificate Trustee. Subject to and in accordance with the
terms of the Trust Agreement, in the event that a Special Payment on the
Underlying Note is received by the Certificate Trustee, from funds then
available to the Certificate Trustee, there will be distributed on the
applicable Special Payment Date, to the Person in whose name this Certificate is
registered on the Record Date preceding the Special Payment Date, as applicable,
such Holder's pro rata share of such amount. The Special Payment Date will be
determined as provided in the Trust Agreement. The Certificate Trustee will mail
notice of each Special Payment and the related Special Payment Date to the
Certificateholder of this Certificate as provided in the Trust Agreement.
Distributions on this Certificate will be made as provided in the Trust
Agreement by the Certificate Trustee by wire transfer or check mailed to the
Certificateholder of record in the Certificate Register without the presentation
or surrender of this Certificate or the making of any notation hereon, except
that with respect to Certificates registered on the Record Date in the name of
the nominee of the Clearing Agency (initially, such nominee to be Cede & Co.),
payments will be made by wire transfer in immediately available funds to the
account designated by such nominee. Except as otherwise provided in the Trust
Agreement and notwithstanding the above, the final distribution on this
Certificate will be made after due notice by the Certificate Trustee of the
pendency of such distribution and only upon presentation and surrender of this
Certificate at the office of the Paying Agent or the office or agency maintained
for that purpose by the Certificate Trustee in The City of New York.
Subject to and in accordance with the terms of the Trust Agreement, the
Originator has represented and warranted under the Trust Agreement that the
Trust constitutes a "special purpose trust" under Section 63010 of the
California Government Code and a "financing entity" under Section 840 of the PU
Code, and that the Certificates constitute "rate reduction bonds" under Section
840 of the PU Code and that the Holders of the Certificates are entitled to the
rights and benefits thereunder. Pursuant to Section 841(c) of the PU Code, the
Originator, on behalf of the State of California, has additionally pledged and
agreed with the Note Issuer, Trust and the Certificateholders that the State of
California will neither limit nor alter the FTA Charges, the Transition
Property, or the Financing Order or Advice Letters relating thereto, and all
rights thereunder, until the Certificates, together with the interest thereon,
are fully met and discharged, provided that nothing in the pledge and agreement
will preclude such limitation or alteration if
A-3
and when adequate provision is made by law for the protection of the Note
Issuer, the Trust and the Holders.
Reference is hereby made to the further provisions of this Certificate set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon shall have been executed by
an authorized officer of the Certificate Trustee, by manual signature, this
Certificate shall not entitle the holder hereof to any benefit under the Trust
Agreement or any other Basic Document or be valid for any purpose.
THIS TRUST CERTIFICATE SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF DELAWARE, 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; PROVIDED, HOWEVER, THAT MATTERS
-------- -------
REGARDING THE AUTHORITY OF THE ORIGINATOR AND THE VALIDITY OF ACTIONS TAKEN BY
THE ORIGINATOR SHALL BE GOVERNED BY THE DOMESTIC LAW OF THE STATE OF CALIFORNIA.
A-4
IN WITNESS WHEREOF, the Certificate Trustee has on behalf of the Trust
caused this Certificate to be duly executed.
By: BANKERS TRUST COMPANY OF
CALIFORNIA, N.A., not in its
individual capacity but solely as
Certificate Trustee
By:
-----------------------------------
Name:
Title:
A-5
CERTIFICATE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
Dated: __________, 199_
This is one of the Certificates referred to in the within-mentioned Trust
Agreement.
BANKERS TRUST COMPANY OF
CALIFORNIA, N.A., not in its individual
capacity but solely as Certificate Trustee
By:
----------------------------------------
Authorized Officer
A-6
[FORM OF REVERSE OF CERTIFICATE]
The Certificates are limited in right of payment, all as more specifically
set forth on the face hereof and in the Trust Agreement. All payments or
distributions made to Certificateholders under the Trust Agreement shall be made
only from the Trust Property and only to the extent that the Certificate Trustee
shall have sufficient income or proceeds from the Trust Property to make such
payments in accordance with the terms of the Trust Agreement. Each Holder of
this Certificate, by its acceptance hereof, agrees that it will look solely to
the income and proceeds from the Trust Property to the extent available for
distribution to such Certificateholder as provided in the Trust Agreement. This
Certificate does not purport to summarize the Trust Agreement and reference is
made to the Trust Agreement for information with respect to the interests,
rights, benefits, obligations, proceeds, and duties evidenced hereby. A copy of
the Trust Agreement may be examined during normal business hours at the
principal office of the Certificate Trustee, and at such other places, if any,
designated by the Certificate Trustee, by any Holder upon request.
The Trust Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights of the Certificateholders
under the Trust Agreement at any time by the Originator (with the prior written
approval of the Note Issuer) and the Certificate Trustee with the consent of the
Certificateholders holding Certificates evidencing fractional undivided
beneficial interests aggregating not less than a majority in interest in each
affected Series or Class of Certificates issued by the Trust. Any such consent
by the Certificateholder of this Certificate shall be conclusive and binding on
such Certificateholder and upon all future Certificateholders of this
Certificate and of any Certificate issued upon the transfer hereof or in
exchange hereof or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Trust Agreement also permits the amendment
thereof, in certain limited circumstances, without the consent of the
Certificateholders of any of the Certificates.
As provided in the Trust Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registerable in the
Register upon surrender of this Certificate for registration of transfer at the
offices or agencies maintained by the Certificate Trustee in its capacity as
Registrar, or by any successor Registrar, in the Borough of Manhattan, the City
of New York, duly endorsed or accompanied by a written instrument of transfer in
form satisfactory to the Certificate Trustee and the Registrar duly executed by
the Certificateholder hereof or such Certificateholder's attorney duly
authorized in writing, and thereupon one or more new Certificates of authorized
denominations evidencing the same aggregate fractional undivided beneficial
interest in the Underlying Note will be issued to the designated transferee or
transferees.
The Certificates are issuable only as registered Certificates without
coupons in minimum denominations of [$1,000] Original Principal Amount and
integral multiples thereof. As provided in the Trust Agreement and subject to
certain limitations therein set forth, Certificates are exchangeable for new
Certificates of authorized denominations evidencing the same aggregate
fractional undivided beneficial interest in the Underlying Note, as requested by
the Certificateholder surrendering the same.
A-7
The Holder of this Certificate, by purchase of this Certificate, will be
deemed to represent that such purchase will not result in a non-exempt
prohibited transaction under the Internal Revenue Code of 1986, as amended, or
the Employee Retirement Income Security Act of 1974, as amended, and, in each
case, the rules and regulations thereunder.
No service charge will be made for any such registration of transfer or
exchange, but the Certificate Trustee shall require payment of a sum sufficient
to cover any tax or governmental charge payable in connection therewith.
The Certificate Trustee, the Registrar, and any agent of the Certificate
Trustee or the Registrar may treat the person in whose name this Certificate is
registered as the owner hereof for all purposes, and neither the Certificate
Trustee, the Registrar, nor any such agent shall be affected by any notice to
the contrary.
The obligations and responsibilities created by the Trust Agreement and the
Trust created thereby shall terminate with respect to the Certificates upon the
distribution to the Certificateholders of all amounts required to be distributed
to them pursuant to the Trust Agreement and the disposition of all property held
as part of the Trust Property, except certain indemnity obligations of the
Originator to the Certificate Trustee and the Delaware Trustee.
A-8
EXHIBIT B
FORM OF CERTIFICATE OF AMENDMENT
STATE OF DELAWARE
CERTIFICATE OF AMENDMENT TO
CERTIFICATE OF TRUST
Pursuant to Title 12, Section 3810(b) of the Delaware General Corporation Law,
the undersigned corporation executed the following Certificate of Amendment:
1. Name of Business Trust: California Infrastructure and Economic
----------------------------------------------------
Development Bank Special Purpose Trust PG&E-1
---------------------------------------------------------------------------
2. The Certificate of Amendment to the Certificate of Trust is hereby amended
as follows:
___________________________________________________________________________
___________________________________________________________________________
__________________________________________________________________________.
[set forth amendment(s)]
3. This Certificate of Amendments shall be effective on______________________.
IN WITNESS WHEREOF, the undersigned have executed this Certificate on the
_________________ day of __________________, 19___.
-----------------------------------
Trustee
-----------------------------------
Execution
B-1
================================================================================
FIRST SUPPLEMENTAL AGREEMENT OF TRUST
by and among
California Infrastructure and Economic Development Bank,
as Originator,
Bankers Trust (Delaware),
as Delaware Trustee,
and
Bankers Trust Company of California , N.A.
as Certificate Trustee
Dated as of __________ 1, 1997
(Supplemental to the Amended and Restated Declaration and
Agreement of Trust dated as of __________ 1, 1997)
================================================================================
TABLE OF CONTENTS
Page
ARTICLE XII
INITIAL ISSUANCE OF CERTIFICATES
SECTION 12.01. Definitions................................................ 2
SECTION 12.02. Authorization of Certificates, Classes A through [ ]...... 2
SECTION 12.03. Determination of Interest Rate on Floating Rate
Certificates............................................... 3
SECTION 12.04. Agent Bank................................................. 5
SECTION 12.05. Provisions Relating to Class [ ] Swap Agreement........... 6
SECTION 12.06. Terms of Floating Rate Certificates Subject to Trust
Agreement.................................................. 6
SECTION 12.07. Execution in Counterparts.................................. 7
EXHIBIT A - Form of Floating Rate Certificates............................. A-1
EXHIBIT B - Form of Swap Agreement......................................... B-1
i
First Supplemental Agreement of Trust
(Supplemental to the Amended and Restated Declaration and
Agreement of Trust dated as of __________ 1, 1997)
Authorizing the Issuance of
$[ ] Aggregate Principal Amount of
Rate Reduction Certificates, Classes [A] through [ ]
------------------------
This First Supplemental Agreement of Trust, dated as of __________ 1, 1997
(the "First Supplemental Trust Agreement"), by and among Bankers Trust
(Delaware), as Delaware Trustee, Bankers Trust Company of California, N.A., as
Certificate Trustee, and the California Infrastructure and Economic Development
Bank, as Originator;
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, the Delaware Trustee and the Originator entered into a Declaration
and Agreement of Trust, dated as of __________ 1, 1997 (the "Declaration and
Agreement of Trust"), creating the California Infrastructure and Economic
Development Bank Special Purpose Trust PG&E-1, a not-for-profit business trust
organized under the laws of the State of Delaware (the "Trust"); and
WHEREAS, pursuant to Section 1(c) of the Declaration and Agreement of
Trust, the Delaware Trustee, the Originator and the Certificate Trustee entered
into an Amended and Restated Declaration and Agreement of Trust, dated as of
__________ 1, 1997 (the "Trust Agreement") in order to provide for the operation
of the Trust and the issuance of rate reduction certificates (the
"Certificates"); and
WHEREAS, pursuant to Section 8.01 of the Trust Agreement, the Originator
may, and the Certificate Trustee and the Delaware Trustee shall, at any time and
from time to time enter into one or more agreements supplemental to the Trust
Agreement to provide for the issuance of the Certificates of any Class or
Series, or to provide for the execution and delivery of any Swap in connection
with such an issuance; and
WHEREAS, in order to finance the purchase of the Notes, consisting of
Classes [A] through [ ] from the Note Issuer, the Trust shall issue, pursuant
to this First Supplemental Trust Agreement, Rate Reduction Certificates
consisting of Classes [A] through [ ]; and
WHEREAS, the Originator desires to establish the terms and conditions for
the issuance of such Certificates; and
WHEREAS, interest payable with respect to the Class [ ] Certificates will
be calculated at a variable rate, as described herein, and the Trust will
execute and deliver an interest rate exchange agreement in connection with the
delivery of such Certificates, all as authorized herein;
NOW THEREFORE, in consideration of the mutual agreements contained herein
and of other good and valuable consideration, the receipt and adequacy of which
are hereby acknowledged, the parties hereto agree as follows:
ARTICLE XII
INITIAL ISSUANCE OF CERTIFICATES
SECTION 12.01. Definitions. The terms defined in this Section shall, for
-----------
all purposes of this First Supplemental Trust Agreement and of any certificate,
opinion or other document herein mentioned, have the meanings herein specified,
to be equally applicable to both the singular and plural forms of any of the
terms herein defined. Terms defined in Section 1.01 of the Trust Agreement not
otherwise defined herein shall have the meanings specified therein.
"Agent Bank" means Bankers Trust Company or any successor person meeting
the requirements of Section 12.04 hereof.
"Class [ ] Swap" means the Swap Agreement, substantially in the form of
Exhibit B hereto, by and between the Class [ ] Swap Counterparty and the Trust,
to be executed in connection with the issuance of the Class [ ] Certificates,
together with any supplements or amendments thereto, or any replacement Swap
Agreement entered into in the event of a Downgrade Event.
"Class [ ] Swap Counterparty" means CDC Financial Products Inc., or any
successor to such party or any replacement counterparty under the Class [ ]
Swap.
"Downgrade Event" shall have the meaning assigned under the Class [ ]
Swap.
"First Supplement" means this First Supplemental Agreement of Trust dated
as of __________ 1, 1997.
"Floating Rate Certificate" shall have the meaning assigned in Section
12.02 hereof.
"Interest Accrual Period" shall have the meaning assigned in Section 12.03
hereof.
"Interest Determination Date" shall have the meaning assigned in Section
12.03 hereof.
"Interest Rate" shall have the meaning assigned in Section 12.03 hereof.
"London Banking Day" means any day on which dealings in deposits in U.S.
dollars are transacted in the London interbank market.
SECTION 12.02. Authorization of Certificates, Classes A through [ ]. The
-----------------------------------------------------
issuance by the Trust of the Certificates consisting of the Class [ ]
Certificates[,] [and] Class [ ] Certificates [identify each Class] is hereby
authorized, each such Class to be in an aggregate
2
amount equal to the corresponding Class of Notes as set forth in the Note
Purchase Agreement. Each such Class of Certificates other than the Class [ ]
Certificates shall be denominated as "California Infrastructure and Economic
Development Bank Special Purpose Trust PG&E-1 Class [ ] Fixed Rate Rate
Reduction Certificates" (the "Fixed Rate Certificates") and shall be
substantially in the form as provided in Section 3.01 and Exhibit A to the Trust
Agreement. The Class [ ] Certificates shall be denominated as "California
Infrastructure and Economic Development Bank Special Purpose Trust PG&E-1 Class
[ ] Floating Rate Rate Reduction Certificates" (the "Floating Rate
Certificates") and shall be substantially in the form of Exhibit A to this First
Supplement.
For each Class of Certificates authorized to be issued hereby, there is
hereby created, pursuant to Section 4.01 of the Trust Agreement, an individual
account denominated as "Class [ ] Certificate Account" (each, a "Certificate
Account"). Deposits into and distributions from each Certificate Account shall
be made as provided in Article IV of the Trust Agreement.
Set forth below for each class of Certificates are the Scheduled Final
Distribution Date and the Termination Date as well as the Interest Rate payable
with respect to each such Class of Certificates:
Scheduled Final Interest
Class Distribution Date Termination Date Rate
----- ----------------- ---------------- ----------
_________, 200_ _________, 200_ ___.___%
_________, 200_ _________, 200_ ___.___%
_________, 200_ _________, 200_ ___.___%
_________, 200_ _________, 200_ ___.___%
_________, 200_ _________, 200_ ___(1)___
-------------------
(1) Interest Rate determined in accordance with Section 12.03 hereof.
SECTION 12.03. Determination of Interest Rate on Floating Rate
-----------------------------------------------
Certificates. (A) The initial Interest Rate on the Floating Rate Certificates
------------
for the initial Interest Accrual Period ending [__________, _____] will be [
]%. Following such initial Interest Accrual Period the Interest Rates
applicable from time to time to the Floating Rate Certificates shall be
determined by Agent Bank in accordance with the following provisions:
(i) Calculation of LIBOR. On the second London Banking Day
immediately preceding the first day of each Interest Accrual Period (as
defined below) and on the Closing Date with respect to the first Interest
Accrual Period (each such day, an "Interest Determination Date"), the Agent
Bank shall determine "LIBOR" based on the offered rate for deposits in U.S.
dollars for a period of three months commencing on the first day of such
Interest Accrual Period that currently appears on display page 3750 of the
Dow Xxxxx Telerate Service for the purpose of displaying the London
interbank offered rate of major banks for U.S. Dollars as of 11:00 a.m.,
London time, on such Interest Determination Date (such display page being
the "Telerate Page"). Notwithstanding the foregoing, if no offered rate
appears, LIBOR for
3
such Interest Accrual Period shall be determined as if the parties had
specified the rate described in clause (ii) below. The Interest Rate
applicable to the Class [ ] Certificates for the Interest Accrual Period
relating to an Interest Determination Date shall be the sum of LIBOR as
determined by the Agent Bank on the most recent Interest Determination Date
plus [ ]%.
(ii) Alternate Interest Rate Calculation. With respect to an Interest
Determination Date on which no offered rate appears on the Telerate Page,
the Agent Bank shall request the principal London office of each of four
major banks in the London interbank market, selected by the Agent Bank, to
provide the Agent Bank with its offered quotation for deposits in U.S.
Dollars for a period of three months, commencing on the second London
Banking Day immediately following such Interest Determination Date, to
prime banks in the London interbank market at approximately 11:00 a.m.,
London time, on such Interest Determination Date and in a principal amount
not less than $1 million that is representative for a single transaction in
U.S. dollars in such market at such time. If at least two such quotations
are provided, LIBOR for the relevant Interest Accrual Period shall be the
arithmetic mean of such quotations. If fewer than two quotations are
provided, LIBOR for such Interest Accrual Period shall be the arithmetic
mean of the rates quoted at approximately 11:00 a.m. in The City of New
York, on such Interest Determination Date by three major banks in The City
of New York selected by the Agent Bank for loans in U.S. Dollars to leading
European banks, for the period of three months, commencing on the second
London Banking Day immediately following such Interest Determination Date
and in a principal amount not less than $1 million that is representative
for a single transaction in U.S. dollars in such market at such time;
provided, however, that if any of the banks so selected by the Agent Bank
are not quoting as mentioned in this sentence, the Interest Rate in effect
for such Interest Accrual Period shall be the Interest Rate in effect on
such Interest Determination Date.
(iii) No Maximum or Minimum Interest Rate. There shall be no maximum
or minimum Interest Rate.
Notwithstanding the foregoing, in the event that the Class [ ] Swap Agreement
has been terminated, the Interest Rate with respect to the Floating Rate
Certificates shall be [ ]% per annum (calculated on the basis of a 360-day year
consisting of twelve 30-day months), effective as of the first day of the
Interest Accrual Period in which the termination of the Class [ ] Swap
Agreement occurs or, in the case of a termination resulting from a failure of a
Class [ ] Swap Counterparty to make a payment due under the Class [ ] Swap,
effective as of the first day of the Interest Accrual Period preceding such
termination. In such event, the obligations of the Agent Bank shall cease and
terminate.
(B) Calculation of Quarterly Interest. The Agent Bank shall, as soon as
practicable after 11:00 a.m. (London time) on each Interest Determination Date,
determine the Interest Rate applicable to, and calculate the amount of interest
payable on, each of the Floating Rate Certificates for the relevant Interest
Accrual Period. Interest payments shall be made in an amount equal to the
product of (a) (1) the actual number of days in the related Interest Accrual
Period (as defined herein) divided by 360, multiplied by (2) the applicable
Certificate
4
Interest Rate and (b) the outstanding principal amount of the Certificates as of
the close of Business Day on the preceding Distribution Date after giving effect
to all payments of principal made to the Class [ ] Certificateholders on such
preceding Distribution Date (or, in the case of the first Distribution Date, as
of the Closing Date) (such amount, the "Quarterly Interest" with respect to such
Class). The "Interest Accrual Period" with respect to any Distribution Date
shall be the period from and including the preceding Distribution Date (or, in
the case of the first Distribution Date, from and including the Closing Date) to
and excluding such Distribution Date.
(C) Notice of Interest Rate and Interest Payments. The Agent Bank shall
notify the Originator, the Certificate Trustee and any Paying Agents of the
Interest Rate and the Quarterly Interest due on the Floating Rate Certificates
for each Interest Accrual Period and the relevant Distribution Date as soon as
possible after their determination but in no event later than the first Business
Day of any Interest Accrual Period.
(D) Determination or Calculation by Certificate Trustee. If the Agent Bank
fails to determine an Interest Rate or calculate Quarterly Interest in
accordance with paragraph (B) above at any time or for any reason, the
Certificate Trustee as soon as reasonably practical shall determine the Interest
Rate and calculate the Quarterly Interest in accordance with paragraph (B)
above, and each such determination or calculation shall be deemed to have been
made by the Agent Bank. The determination by the Agent Bank or the Certificate
Trustee (as the case may be) of the Interest Rate and calculation thereby of any
Quarterly Interest shall, in the absence of manifest error, be final and binding
on all parties.
(E) Distributions. Distributions of principal and interest with respect to
the Floating Rate Certificates shall be made as provided in Article IV of the
Trust Agreement.
SECTION 12.04. Agent Bank. The Originator agrees that, so long as any of
----------
the Floating Rate Certificates remain outstanding, there shall at all times be
an Agent Bank which shall calculate the Interest Rate on the Floating Rate
Certificates in accordance with Section 12.03 hereof. The initial Agent Bank
shall be Bankers Trust Company. The Originator, upon written notice to the
Agent Bank and the Certificate Trustee, may terminate the appointment of the
Agent Bank for any reason. Notice of any such termination shall be given by the
Certificate Trustee to Certificateholders within ten days of receipt of notice
of such termination. If (a) any person is unable or unwilling to continue to
act as the Agent Bank, (b) the appointment of the Agent Bank is terminated or
(c) the Agent Bank fails duly to determine the Interest Rate and/or the
Quarterly Interest for any Interest Accrual Period, then the Originator shall
appoint a successor Agent Bank to act as such in its place and give notice of
such appointment to the Certificate Trustee; provided, however, that neither the
resignation nor the removal of the Agent Bank shall take effect until a
successor Agent Bank has been appointed. Notice of any appointment of a
successor Agent Bank shall be given by the Certificate Trustee to the
Certificateholders within ten days of such appointment.
Any successor Agent Bank shall be a banking institution organized under the
laws of any state or of the United States with capital and surplus of at least
$50 million and an active dealer in LIBOR-based securities.
5
SECTION 12.05. Provisions Relating to Class [ ] Swap Agreement. The
------------------------------------------------
Certificate Trustee, on behalf of the Trust, is hereby authorized and directed
to execute and deliver the Class [ ] Swap, substantially in the form of Exhibit
B hereto, upon receipt of the following:
(a) an order of an Authorized Officer of the Originator directing the
Certificate Trustee to execute the Class [ ] Swap;
(b) an Opinion of Counsel to the effect that the Class [ ] Swap is a valid
and binding agreement of the Class [ ] Swap Counterparty, enforceable in
accordance with its respective terms (except as such enforceability may be
subject to bankruptcy, insolvency, reorganization and other similar laws
affecting the rights of creditors generally), general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law) and applicable public policy regarding rights of
indemnification; and
(c) evidence satisfactory to the Certificate Trustee that the Rating Agency
Condition has been satisfied with respect to the issuance of the Floating Rate
Certificates.
All Swap Revenues received or Swap Payments required to be made under the
Class [ ] Swap shall be deposited in or paid from the Class [ ] Certificate
Account established for the Floating Rate Certificates pursuant to Section 12.02
hereof and Section 4.01 of the Trust Agreement and shall secure payment of and
be allocated to the Floating Rate Certificates.
If a Downgrade Event shall occur, the Certificate Trustee shall execute and
deliver any documentation necessary or appropriate to assign the Class [ ] Swap
to (or enter into a replacement Swap with) a new Swap Counterparty.
If an event of default or a termination event shall occur and be continuing
under the Class [ ] Swap, then the Certificate Trustee may, and upon the
occurrence of an Event of Default (as defined in the Class [ ] Swap) or a
termination event caused by a Downgrade Event, or if directed by the holders of
a majority of the Outstanding Principal Amount of the Floating Rate Certificates
(but subject to the provisions of Section 6.02 of the Trust Agreement) shall,
terminate the Class [ ] Swap, in which event the interest rate with respect to
the Floating Rate Certificates shall revert to a fixed rate as provided in
Section 12.03 hereof.
Any termination or other payment received subsequent to the date of an
event of default or termination event under the Class [ ] Swap shall be
distributed to each Class [ ] Certificateholder on the Distribution Date so
received or on a Special Distribution Date (if not received on a Distribution
Date) shall be distributed to each Holder on a pro rata basis (based upon the
aggregate Outstanding Amount of the Floating Rate Certificates held by such
Holder).
SECTION 12.06. Terms of Floating Rate Certificates Subject to Trust
----------------------------------------------------
Agreement. Except as expressly provided in this First Supplemental Trust
---------
Agreement, every term and condition contained in the Trust Agreement shall apply
to this First Supplemental Trust Agreement and to the Floating Rate Certificates
with the same force and effect as if the same
6
were herein set forth in full, with such omissions, variations and modifications
thereof as may be appropriate to make the same conform to this First
Supplemental Trust Agreement.
This First Supplemental Trust Agreement and all the terms and provisions
contained herein shall form part of the Trust Agreement and shall have the same
force and effect as if set forth in the Trust Agreement. The Trust Agreement is
hereby ratified and confirmed and shall continue in full force and effect in
accordance with the terms and provisions thereof, as supplemented and amended
hereby.
SECTION 12.07. Execution in Counterparts. This First Supplemental Trust
-------------------------
Agreement may be executed in several counterparts, each of which shall be deemed
an original and all of which shall constitute but one and the same instrument.
7
IN WITNESS WHEREOF, the Originator, the Delaware Trustee and the
Certificate Trustee have caused this First Supplemental Trust Agreement to be
duly executed by duly authorized officers, all as of the day and year first
above written.
CALIFORNIA INFRASTRUCTURE AND
ECONOMIC DEVELOPMENT BANK,
as Originator
By:
--------------------------------
Name:
Title:
BANKER TRUST (DELAWARE),
as Delaware Trustee
By:
--------------------------------
Name:
Title:
BANKERS TRUST COMPANY OF
CALIFORNIA, N. A.,
as Certificate Trustee
By:
--------------------------------
Name:
Title:
S-1
EXHIBIT A
FORM OF FLOATING RATE CERTIFICATE
REGISTERED REGISTERED
NO. . $ .
CALIFORNIA INFRASTRUCTURE AND ECONOMIC DEVELOPMENT BANK
SPECIAL PURPOSE TRUST PG&E-1
CLASS . FLOATING RATE
RATE REDUCTION CERTIFICATE
SCHEDULED FINAL
DISTRIBUTION DATE TERMINATION DATE CUSIP
----------------- ---------------- -----
REGISTERED OWNER: Cede & Co.
PRINCIPAL AMOUNT:
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUST OR
ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER
NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF
FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
This Certificate evidences a fractional undivided beneficial interest in an
underlying note of a corresponding class or series issued by PG&E Funding LLC, a
related swap agreement, together with the proceeds of such note and payments
under a related swap agreement, held by a trust, as more fully described herein.
The Certificates do not represent an interest in or obligation of the State
of California, the California Infrastructure and Economic Development Bank (the
"Originator"), a public body established within the state government of the
State of California, any other governmental agency or instrumentality or the
Seller or any of its affiliates. None of the Certificates, the Underlying Note
or the underlying Transition Property (as defined in the Trust Agreement) will
be guaranteed or insured by the State of California, the Originator, the Trust
or any other governmental agency or instrumentality or by the Seller or its
affiliates.
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Neither the full faith and credit nor the taxing power of the State of
California, the Originator or any other governmental agency or instrumentality
is pledged to the payment of the principal of, premium, if any, purchase price
of, or interest on, this Certificate or the Underlying Note, or to the payments
in respect of the Transition Property, nor is the State of California, the
Originator or any other governmental agency or instrumentality in any manner
obligated to make any appropriation for the payment thereof.
THIS CERTIFIES THAT CEDE & CO., as nominee for The Depository Trust
Company, for value received, is the registered owner of a Principal Amount
(stated above) of nonassessable, fully-paid, fractional undivided beneficial
interest in certain property held by the California Infrastructure and Economic
Development Bank Special Purpose Trust PG&E-1 (the "Trust"). The Trust is
created pursuant to, and this Certificate is issued under and is subject to the
terms, provisions, and conditions of, an Amended and Restated Declaration and
Agreement of Trust, as supplemented by a First Supplemental Agreement of Trust,
each dated as of __________ 1, 1997 (collectively, the "Trust Agreement"), by
and among Bankers Trust (Delaware), as Delaware Trustee (the "Delaware
Trustee"), Bankers Trust Company of California, N.A., as Certificate Trustee
(the "Certificate Trustee") and the Originator, a summary of certain of the
pertinent provisions of which is set forth below. This Certificate is one of
the duly authorized class of Certificates designated as "California
Infrastructure and Economic Development Bank Special Purpose Trust PG&E-1 Class
. Floating Rate Rate Reduction Certificates" (herein called the "Class .
Certificates"). The Class . Certificates are one of a series of classes of
Certificates issued under the Trust Agreement (such Class . Certificates,
together with other Certificates heretofore or hereafter issued under the Trust
Agreement being herein called the "Certificates"). The holder of this
Certificate, by virtue of its acceptance hereof, assents and agrees to be bound
by the terms of the Trust Agreement. This Class . Certificate represents a
fractional undivided beneficial interest in the note of a related class (the
"Underlying Note") issued by PG&E Funding LLC, as Note Issuer, and the proceeds
thereof, together with payments made under a Swap Agreement dated as of ., 1997
between the Trust and CDC Financial Products, Inc., as swap counterparty
(together with any replacement swap agreement executed pursuant to the terms of
the Trust Agreement, the "Swap"). The Underlying Note is one of a series of
notes secured by a security interest in the property right created under the PU
Code, pursuant to a Financing Order (Decision 97-09-.) issued by the CPUC on
September 3, 1997, and Advice Letters issued pursuant thereto, representing the
irrevocable right of Pacific Gas and Electric Company (the "Seller") or its
assignee to receive certain nonbypassable charges, as adjusted from time to
time, on residential and small commercial customers within the Seller's historic
service territory, together with certain related collateral, all as more fully
described in the Note Indenture.
To the extent not otherwise defined herein, the capitalized terms used
herein have the meanings assigned to them in the Trust Agreement.
As provided in the Trust Agreement, additional Certificates may be issued
thereunder from time to time pursuant to trust supplements in one or more series
or classes, in various principal amounts equal to the corresponding series or
class of underlying notes, may bear interest at different rates and may
otherwise vary as provided in the Trust Agreement. The aggregate principal
amount of Certificates equals the aggregate amount of the corresponding series
or class of underlying notes, and all Certificates issued and to be issued under
the Trust Agreement are
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and will be equally secured by the pledge and covenants made therein, except as
otherwise expressly provided or permitted in the Trust Agreement.
The Interest Rate applicable to the Class ___ Certificates for the Interest
Accrual Period relating to an Interest Determination Date will be the sum of
LIBOR as determined by the Bankers Trust Company (together with any successor
Agent Bank under the Trust Agreement, the "Agent Bank") on the most recent
Interest Determination Date plus .%. Except as set forth below, interest on the
Certificates will be calculated on the basis of the actual number of days in an
Interest Accrual Period and a 360-day year. There will be no maximum or minimum
Certificate Interest Rate. Notwithstanding the foregoing, in the event that the
Swap is terminated, the Interest Rate with respect to the Class ___ Certificates
will be .% per annum (calculated on the basis of a 360-day year consisting of
twelve 30-day months), effective, except as otherwise set forth in the Trust
Agreement, as of the first day of the Interest Accrual Period immediately
preceding the termination of the Swap.
Subject to and in accordance with the terms of the Trust Agreement, there
will be distributed on each March 25, June 25, September 25 and December 26 or
each year or, if any such day is not a Business Day, the next succeeding
Business Day (each, a "Distribution Date"), commencing on ., 1998 and ending no
later than the Termination Date (stated above) to the person in whose name this
Certificate is registered at the close of business on the last Business Day
immediately preceding the related Distribution Date or, if Definitive
Certificates are issued, the last day of the immediately preceding calendar
month (each, a "Record Date"), such Holder's pro rata interest in the payments
made on the Underlying Note and the Swap due on such Payment Date, the receipt
of which has been confirmed by the Certificate Trustee. Subject to and in
accordance with the terms of the Trust Agreement, in the event that a Special
Payment on the Underlying Note is received by the Certificate Trustee, from
funds then available to the Certificate Trustee, there will be distributed on
the applicable Special Payment Date, to the Person in whose name this
Certificate is registered on the Record Date preceding the Special Payment Date,
as applicable, such Holder's pro rata share of such amount. The Special Payment
Date will be determined as provided in the Trust Agreement. The Certificate
Trustee will mail notice of each Special Payment and the related Special Payment
Date to the Certificateholder of this Certificate as provided in the Trust
Agreement.
Distributions on this Certificate will be made as provided in the Trust
Agreement by the Certificate Trustee by wire transfer or check mailed to the
Certificateholder of record in the Certificate Register without the presentation
or surrender of this Certificate or the making of any notation hereon, except
that with respect to Certificates registered on the Record Date in the name of
the nominee of the Clearing Agency (initially, such nominee to be Cede & Co.),
payments will be made by wire transfer in immediately available funds to the
account designated by such nominee. Except as otherwise provided in the Trust
Agreement and notwithstanding the above, the final distribution on this
Certificate will be made after due notice by the Certificate Trustee of the
pendency of such distribution and only upon presentation and surrender of this
Certificate at the office of the Paying Agent or the office or agency maintained
for that purpose by the Certificate Trustee in The City of New York.
Subject to and in accordance with the terms of the Trust Agreement, the
Originator has represented and warranted under the Trust Agreement that the
Trust constitutes a "special purpose
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trust" under Section 63010 of the California Government Code and a "financing
entity" under Section 840 of the PU Code, and that the Certificates constitute
"rate reduction bonds" under Section 840 of the PU Code and that the Holders of
the Certificates are entitled to the rights and benefits thereunder. Pursuant
to Section 841(c) of the PU Code, the Originator, on behalf of the State of
California, has additionally pledged and agreed with the Note Issuer, Trust and
the Certificateholders that the State of California will neither limit nor alter
the FTA Charges, the Transition Property, or the Financing Order or Advice
Letters relating thereto, and all rights thereunder, until the Certificates,
together with the interest thereon, are fully met and discharged, provided that
nothing in the pledge and agreement will preclude such limitation or alteration
if and when adequate provision is made by law for the protection of the Note
Issuer, the Trust and the Holders.
Reference is hereby made to the further provisions of this Certificate set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon shall have been executed by
an authorized officer of the Certificate Trustee, by manual signature, this
Certificate shall not entitle the holder hereof to any benefit under the Trust
Agreement or any other Basic Document or be valid for any purpose.
THIS TRUST CERTIFICATE SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF DELAWARE, 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; PROVIDED, HOWEVER, THAT MATTERS
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REGARDING THE AUTHORITY OF THE ORIGINATOR AND THE VALIDITY OF ACTIONS TAKEN BY
THE ORIGINATOR SHALL BE GOVERNED BY THE DOMESTIC LAW OF THE STATE OF CALIFORNIA.
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IN WITNESS WHEREOF, the Certificate Trustee has on behalf of the Trust
caused this Certificate to be duly executed.
By: BANKERS TRUST COMPANY OF
CALIFORNIA, N.A., not in its
individual capacity but solely
as Certificate Trustee
By:
--------------------------------
Name:
Title:
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CERTIFICATE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
Dated: __________, 199_
This is one of the Certificates referred to in the within-mentioned Trust
Agreement.
BANKERS TRUST COMPANY OF
CALIFORNIA, N.A., not in its
individual capacity but
solely as Certificate Trustee
By:
---------------------------------
Authorized Officer
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[FORM OF REVERSE OF CERTIFICATE]
The Certificates are limited in right of payment, all as more specifically
set forth on the face hereof and in the Trust Agreement. All payments or
distributions made to Certificateholders under the Trust Agreement shall be made
only from the Trust Property and only to the extent that the Certificate Trustee
shall have sufficient income or proceeds from the Trust Property to make such
payments in accordance with the terms of the Trust Agreement. Each Holder of
this Certificate, by its acceptance hereof, agrees that it will look solely to
the income and proceeds from the Trust Property to the extent available for
distribution to such Certificateholder as provided in the Trust Agreement. This
Certificate does not purport to summarize the Trust Agreement and reference is
made to the Trust Agreement for information with respect to the interests,
rights, benefits, obligations, proceeds, and duties evidenced hereby. A copy of
the Trust Agreement may be examined during normal business hours at the
principal office of the Certificate Trustee, and at such other places, if any,
designated by the Certificate Trustee, by any Holder upon request.
The Trust Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights of the Certificateholders
under the Trust Agreement at any time by the Originator (with the prior written
approval of the Note Issuer) and the Certificate Trustee with the consent of the
Certificateholders holding Certificates evidencing fractional undivided
beneficial interests aggregating not less than a majority in interest in each
affected Series or Class of Certificates issued by the Trust. Any such consent
by the Certificateholder of this Certificate shall be conclusive and binding on
such Certificateholder and upon all future Certificateholders of this
Certificate and of any Certificate issued upon the transfer hereof or in
exchange hereof or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Trust Agreement also permits the amendment
thereof, in certain limited circumstances, without the consent of the
Certificateholders of any of the Certificates.
As provided in the Trust Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registerable in the
Register upon surrender of this Certificate for registration of transfer at the
offices or agencies maintained by the Certificate Trustee in its capacity as
Registrar, or by any successor Registrar, in the Borough of Manhattan, the City
of New York, duly endorsed or accompanied by a written instrument of transfer in
form satisfactory to the Certificate Trustee and the Registrar duly executed by
the Certificateholder hereof or such Certificateholder's attorney duly
authorized in writing, and thereupon one or more new Certificates of authorized
denominations evidencing the same aggregate fractional undivided beneficial
interest in the Underlying Note and Swap will be issued to the designated
transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in minimum denominations of [$1,000] Original Principal Amount and
integral multiples thereof. As provided in the Trust Agreement and subject to
certain limitations therein set forth, Certificates are exchangeable for new
Certificates of authorized denominations evidencing the same aggregate
fractional undivided beneficial interest in the Underlying Note and Swap, as
requested by the Certificateholder surrendering the same.
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The Holder of this Certificate, by purchase of this Certificate, will be
deemed to represent that such purchase will not result in a non-exempt
prohibited transaction under the Internal Revenue Code of 1986, as amended, or
the Employee Retirement Income Security Act of 1974, as amended, and, in each
case, the rules and regulations thereunder.
No service charge will be made for any such registration of transfer or
exchange, but the Certificate Trustee shall require payment of a sum sufficient
to cover any tax or governmental charge payable in connection therewith.
The Certificate Trustee, the Registrar, and any agent of the Certificate
Trustee or the Registrar may treat the person in whose name this Certificate is
registered as the owner hereof for all purposes, and neither the Certificate
Trustee, the Registrar, nor any such agent shall be affected by any notice to
the contrary.
The obligations and responsibilities created by the Trust Agreement and the
Trust created thereby shall terminate with respect to the Certificates upon the
distribution to the Certificateholders of all amounts required to be distributed
to them pursuant to the Trust Agreement and the disposition of all property held
as part of the Trust Property, except certain indemnity obligations of the
Originator to the Certificate Trustee and the Delaware Trustee.
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EXHIBIT B
FORM OF SWAP AGREEMENT
[TO COME]
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