SERIES SUPPLEMENT
EXECUTION
COPY
Exhibit
4.2
This
SERIES SUPPLEMENT dated as of November 6, 2009 (this “Supplement”), by and
between ENTERGY TEXAS RESTORATION FUNDING, LLC, a limited liability company
created under the laws of the State of Delaware (the “Issuer”), and THE
BANK OF NEW YORK MELLON, a New York banking corporation (“BNYM”), in its
capacity as indenture trustee (the “Indenture Trustee”)
for the benefit of the Secured Parties under the Indenture dated as of November
6, 2009, by and between the Issuer and BNYM, in its capacity as Indenture
Trustee and in its separate capacity as securities intermediary (the “Indenture”).
PRELIMINARY
STATEMENT
Section 9.01 of
the Indenture provides, among other things, that the Issuer and the Indenture
Trustee may at any time enter into an indenture supplemental to the Indenture
for the purposes of authorizing the issuance by the Issuer of the Transition
Bonds and specifying the terms thereof. The Issuer has duly
authorized the creation of the Transition Bonds with an initial aggregate
principal amount of $545,900,000 to be known as Entergy Texas Restoration
Funding, LLC Transition Bonds (the “Transition Bonds”),
and the Issuer and the Indenture Trustee are executing and delivering this
Supplement in order to provide for the Transition Bonds.
All terms
used in this Supplement that are defined in the Indenture, either directly or by
reference therein, have the meanings assigned to them therein, except to the
extent such terms are defined or modified in this Supplement or the context
clearly requires otherwise. In the event that any term or provision
contained herein shall conflict with or be inconsistent with any term or
provision contained in the Indenture, the terms and provisions of this
Supplement shall govern.
GRANTING
CLAUSE
With
respect to the Transition Bonds, the Issuer hereby Grants to the Indenture
Trustee, as Indenture Trustee for the benefit of the Secured Parties of the
Transition Bonds, all of the Issuer’s right, title and interest (whether now
owned or hereafter acquired or arising) in and to (a) the Transition
Property created under and pursuant to the Financing Order, and transferred by
the Seller to the Issuer pursuant to the Sale Agreement (including, to the
fullest extent permitted by law, the right to impose, collect and receive
Transition Charges, all revenues, collections, claims, rights, payments, money
or proceeds of or arising from the Transition Charges authorized in the
Financing Order and any Tariffs filed pursuant thereto and any contractual
rights to collect such Transition Charges from Customers and REPs), (b) all
Transition Charges related to such Transition Property, (c) the Sale
Agreement and the Xxxx of Sale executed in connection therewith and all property
and interests in property transferred under the Sale Agreement and the Xxxx of
Sale with respect to such Transition Property and the Transition Bonds,
(d) the Servicing Agreement, the Administration Agreement and any
subservicing, agency, intercreditor, administration or collection agreements
executed in connection therewith, to the extent related to the foregoing
Transition Property and the Transition Bonds, (e) the Collection Account,
all subaccounts thereof and all amounts of cash, instruments, investment
property or other assets on deposit therein or credited thereto from time to
time and all financial assets and securities entitlements carried therein or
credited thereto, (f) all rights to compel the Servicer to file for and
obtain adjustments to the Transition Charges in accordance with
Section 36.402 and Section 39.307 of the Securitization Law, the
Financing Order or any Tariff filed in connection therewith, (g) all
deposits, guarantees, surety bonds, letters of credit and other forms of credit
support provided by or on behalf of REPs pursuant to the Financing Order or such
Tariff, including investment earnings thereon and all amounts on deposit in the
REP Deposit Accounts, (h) all present and future claims, demands, causes
and choses in action in respect of any or all of the foregoing, whether such
claims, demands, causes and choses in action constitute Transition Property,
accounts, general intangibles, instruments, contract rights, chattel paper or
proceeds of such items or any other form of property, (i) all accounts,
chattel paper, deposit accounts, documents, general intangibles, goods,
instruments, investment property, letters of credit, letters-of-credit rights,
money, commercial tort claims and supporting obligations related to the
foregoing, and (j) all payments on or under, and all proceeds in respect
of, any or all of the foregoing; it being understood that the
following do not constitute Transition Bond
Collateral: (i) cash that has been released pursuant to
Section 8.02(e)(x)
of the Indenture and, following retirement of all Outstanding Transition Bonds,
cash that has been released pursuant to Section 8.02(e)(xii)
of the Indenture and (ii) amounts deposited with the Issuer on the Closing
Date, for payment of costs of issuance with respect to the Transition Bonds
(together with any interest earnings thereon), it being understood that such
amounts described in clauses (i) and
(ii) above
shall not be subject to Section 3.17 of
the Indenture.
The
foregoing Grant is made in trust to secure the payment of principal of and
premium, if any, interest on, and any other amounts owing in respect of, the
Transition Bonds and all fees, expenses, indemnity amounts, counsel fees and
other amounts due and payable to the Indenture Trustee (collectively, the “Secured Obligations”)
equally and ratably without prejudice, priority or distinction, except as
expressly provided in the Indenture, to secure compliance with the provisions of
the Indenture with respect to the Transition Bonds, all as provided in the
Indenture and to secure the performance by the Issuer of all of its obligations
under the Indenture. The Indenture and this Series Supplement
constitutes a security agreement within the meaning of the Securitization Law
and under the UCC to the extent that the provisions of the UCC are applicable
hereto.
The
Indenture Trustee, as indenture trustee on behalf of the Secured Parties of the
Transition Bonds, acknowledges such Grant and accepts the trusts under this
Supplement and the Indenture in accordance with the provisions of this
Supplement and the Indenture.
SECTION 1. Designation. The
Transition Bonds shall be designated generally as the Transition Bonds and
further denominated as Tranches A-1 through A-3.
SECTION 2. Initial Principal Amount;
Transition Bond Interest Rate; Scheduled Final Payment Date; Final Maturity
Date. The Transition Bonds of each Tranche shall have the
initial principal amount, bear interest at the rates per annum and shall have
the Scheduled Final Payment Dates and the Final Maturity Dates set forth
below:
|
Tranche
|
Initial
Principal
Amount
|
Transition
Bond
Interest
Rate
|
Scheduled
Final
Payment
Date
|
Final
Maturity
Date
|
|
|
A-1
|
$
182,500,000
|
2.12%
|
2/1/2015
|
2/1/2016
|
|
|
A-2
|
$144,800,000
|
3.65%
|
8/1/2018
|
8/1/2019
|
|
|
A-3
|
$218,600,000
|
4.38%
|
8/1/2022
|
11/1/2023
|
The
Transition Bond Interest Rate shall be computed on the basis of a 360-day year
of twelve 30-day months.
SECTION 3. Authentication Date; Payment
Dates; Expected Amortization Schedule for Principal; Periodic Interest; No
Premium; Other Terms.
(a) Authentication
Date. The Transition Bonds that are authenticated and
delivered by the Indenture Trustee to or upon the order of the Issuer on
November 6, 2009 (the “Closing Date”) shall
have as their date of authentication November 6, 2009.
(b) Payment
Dates. The Payment Dates for the Transition Bonds are February
1st and
August 1st of
each year, and on the final maturity date, or, if any such date is not a
Business Day, the next succeeding Business Day, commencing on August 1, 2010 and
continuing until the earlier of repayment of the Tranche A-3 Transition Bonds in
full and the Final Maturity Date for the Tranche A-3 Transition
Bonds.
(c) Expected Amortization
Schedule for Principal. Unless an Event of Default shall have
occurred and be continuing on each Payment Date, the Indenture Trustee shall
distribute to the Holders of record as of the related Record Date amounts
payable pursuant to Section 8.02(e)
of the Indenture as principal, in the following order and
priority: (1) to the holders of the Tranche A-1 Transition Bonds,
until the Outstanding Amount of such Tranche of Transition Bonds thereof has
been reduced to zero; (2) to the holders of the Tranche A-2 Transition
Bonds, until the Outstanding Amount of such Tranche of Transition Bonds thereof
has been reduced to zero; and (3) to the holders of the Tranche A-3
Transition Bonds, until the Outstanding Amount of such Tranche of Transition
Bonds thereof has been reduced to zero; provided, however, that in no
event shall a principal payment pursuant to this Section 3(c) on
any Tranche on a Payment Date be greater than the amount necessary to reduce the
Outstanding Amount of such Tranche of Transition Bonds to the amount specified
in the Expected Amortization Schedule which is attached as Schedule A
hereto for such Tranche and Payment Date.
(d) Periodic
Interest. Periodic Interest will be payable on each Tranche of
the Transition Bonds on each Payment Date in an amount equal to one-half of the
product of (i) the applicable Transition Bond Interest Rate and
(ii) the Outstanding Amount of the related Tranche of Transition Bonds as
of the close of business on the preceding Payment Date after giving effect to
all payments of principal made to the Holders of the related Tranche of
Transition Bonds on such preceding Payment Date; provided, however, that with
respect to the Initial Payment Date, or, if no payment has yet been made,
interest on the outstanding principal balance will accrue from and including the
Closing Date to, but excluding, the following Payment Date, and provided in the
case of the Final Maturity Date of the A-3 Transition Bonds, one quarter of the
product of (i) the applicable Transition Bond Interest Rate and (ii) the
Outstanding Amount of the Tranche A-3 Transition Bonds as of the close of
business on the preceding Payment Date after giving effect to all payments of
principal made to the Holders of the related Tranche A-3 Transition Bonds on
such preceding Payment Date.
(e) Book-Entry Transition
Bonds. The Transition Bonds shall be Book-Entry Transition
Bonds and the applicable provisions of Section 2.11 of
the Indenture shall apply to such Transition Bonds.
(f) Waterfall
Cap. The amount payable with respect to the Transition Bonds
pursuant to Section 8.02(e)(i)
of the Indenture shall not exceed $1,000,000 annually.
SECTION 4. Minimum
Denominations. The Transition Bonds shall be issuable in the
Minimum Denomination and integral multiples thereof.
SECTION 5. Certain Defined
Terms. Article I of the
Indenture provides that the meanings of certain defined terms used in the
Indenture shall, when applied to the Transition Bonds, be as defined in Appendix A to
the Indenture. Additionally, Article II of
the Indenture provides that certain terms will have the meanings specified in
this Supplement. With respect to the Transition Bonds, the following
definitions shall apply:
“Initial Payment Date”
shall mean the first Payment Date for a Tranche of the Transition Bonds
specified in the Expected Amortization Schedule which is attached as Schedule A
hereto.
“Minimum Denomination”
shall mean $100,000.
“Payment Date” has the
meaning set forth in Section 3(b) of
this Supplement.
“Periodic Interest”
has the meaning set forth in Section 3(d) of
this Supplement.
“Transition Bond Interest
Rate” has the meaning set forth in Section 2 of
this Supplement.
SECTION 6. Delivery and Payment for the
Transition Bonds; Form of the Transition Bonds. The Indenture
Trustee shall deliver the Transition Bonds to the Issuer when authenticated in
accordance with Section 2.03 of
the Indenture. The Transition Bonds of each Tranche shall be in the
form of Exhibits A-1
through A-3 hereto.
SECTION 7. Ratification of
Agreement. As supplemented by this Supplement, the Indenture
is in all respects ratified and confirmed and the Indenture, as so supplemented
by this Supplement, shall be read, taken, and construed as one and the same
instrument. This Supplement amends, modifies and supplemented the
Indenture only in so far as it relates to the Transition Bonds.
SECTION 8. Counterparts. This
Supplement may be executed in any number of counterparts, each of which so
executed shall be deemed to be an original, but all of such counterparts shall
together constitute but one and the same instrument.
SECTION 9. GOVERNING
LAW. THIS SUPPLEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS (OTHER THAN SECTION 5-1401 OF THE NEW YORK
GENERAL OBLIGATIONS LAW AND SECTIONS 9-301 THROUGH
9-306 OF THE NY UCC), AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS; PROVIDED
THAT THE CREATION, ATTACHMENT AND PERFECTION OF ANY LIENS CREATED UNDER THE
INDENTURE IN TRANSITION PROPERTY, AND ALL RIGHTS AND REMEDIES OF THE INDENTURE
TRUSTEE AND THE HOLDERS WITH RESPECT TO SUCH TRANSITION PROPERTY, SHALL BE
GOVERNED BY THE LAWS OF THE STATE OF TEXAS.
SECTION 10. Issuer
Obligation. No recourse may be taken directly or indirectly,
by the Holders with respect to the obligations of the Issuer on the Transition
Bonds, under the Indenture or under this Supplement or any certificate or other
writing delivered in connection herewith or therewith, against (i) the
Indenture Trustee or the Managers in their respective individual capacities,
(ii) any owner of a beneficial interest in the Issuer (including ETI) or
(iii) any shareholder, partner, owner, beneficiary, agent, officer,
director, employee or agent of the Indenture Trustee, the Managers or any owner
of a beneficial interest in the Issuer (including ETI) in its individual
capacity, or of any successor or assign of any of them in their respective
individual or corporate capacities, except as any such Person may have expressly
agreed (it being understood that none of the Indenture Trustee, the Managers and
ETI have any such obligations in their respective individual or corporate
capacities).
SECTION 11. Application of Transition
Bond Proceeds; Costs of Issuance Account. The proceeds of the
Transition Bond Proceeds shall be applied to pay the costs of issuing the
Transition Bonds and to purchase the Transition Property, as directed in an
Officer’s Certificate. The Indenture Trustee shall, pursuant to an
Issuer Order, deposit the amounts directed to be applied to the payment of the
costs of issuance into a segregated trust account (the “Costs of Issuance
Account”). Amounts in the Costs of Issuance Account shall be applied
from time to time as directed by an Officer’s Certificate, to pay costs of
issuing the Transition Bonds, and, upon payment of all such costs, for deposit
into the General Subaccount and applied as a credit against Transition Charges
as required by the Financing Order. Pending such application, amounts
in the Costs of Issuance Account may be invested in the same manner and subject
to the same restrictions as amounts in the General Subaccount, provided that any
amount earned, or gains or losses, shall be credited to the Costs of Issuance
Account.
IN
WITNESS WHEREOF, the Issuer and the Indenture Trustee have caused this
Supplement to be duly executed by their respective officers thereunto duly
authorized as of the first day of the month and year first above
written.
|
|
|
|
By: /s/ Xxxxxx X. XxXxxx
Name: Xxxxxx X.
XxXxxx
Title: Vice President and
Treasurer
|
|
|
THE
BANK OF NEW YORK MELLON, as Indenture Trustee
|
|
|
By: /s/ Xxxxx Xxxxxxx
Name: Xxxxx
Xxxxxxx
Title: Senior
Associate
|
SCHEDULE
A
EXPECTED
AMORTIZATION SCHEDULE*
OUTSTANDING
PRINCIPAL BALANCE OF EACH TRANCHE
|
Semi-Annual Payment Date
|
Tranche
A-1 Balance
|
Tranche
A-2 Balance
|
Tranche
A-3 Balance
|
|
Closing
Date
|
$182,500,000
|
$144,800,000
|
$218,600,000
|
|
8/1/2010
|
169,766,346
|
144,800,000
|
218,600,000
|
|
2/1/2011
|
148,680,805
|
144,800,000
|
218,600,000
|
|
8/1/2011
|
132,004,549
|
144,800,000
|
218,600,000
|
|
2/1/2012
|
110,334,448
|
144,800,000
|
218,600,000
|
|
8/1/2012
|
93,436,006
|
144,800,000
|
218,600,000
|
|
2/1/2013
|
71,468,800
|
144,800,000
|
218,600,000
|
|
8/1/2013
|
54,046,659
|
144,800,000
|
218,600,000
|
|
2/1/2014
|
31,527,654
|
144,800,000
|
218,600,000
|
|
8/1/2014
|
13,816,410
|
144,800,000
|
218,600,000
|
|
2/1/2015
|
–
|
135,847,004
|
218,600,000
|
|
8/1/2015
|
–
|
117,462,135
|
218,600,000
|
|
2/1/2016
|
–
|
94,004,300
|
218,600,000
|
|
8/1/2016
|
–
|
74,898,861
|
218,600,000
|
|
2/1/2017
|
–
|
50,711,257
|
218,600,000
|
|
8/1/2017
|
–
|
30,768,708
|
218,600,000
|
|
2/1/2018
|
–
|
5,791,594
|
218,600,000
|
|
8/1/2018
|
–
|
–
|
203,613,397
|
|
2/1/2019
|
–
|
–
|
177,772,194
|
|
8/1/2019
|
–
|
–
|
155,968,524
|
|
2/1/2020
|
–
|
–
|
129,104,710
|
|
8/1/2020
|
–
|
–
|
106,214,411
|
|
2/1/2021
|
–
|
–
|
78,262,965
|
|
8/1/2021
|
–
|
–
|
54,257,249
|
|
2/1/2022
|
–
|
–
|
25,193,355
|
|
8/1/2022
|
–
|
–
|
–
|
__________________
*Dollar
amounts in the schedule are rounded to the nearest dollar.
