EXHIBIT 4.1
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PSNH FUNDING LLC 2,
as Issuer
and
THE BANK OF NEW YORK,
as Trustee
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INDENTURE
Dated as of January 30, 2002
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$50,000,000
PSNH FUNDING LLC 2 RATE REDUCTION BONDS, SERIES 2002-1
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TABLE OF CONTENTS
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ARTICLE I DEFINITIONS AND INCORPORATION BY REFERENCE...............................................2
Section 1.01. Definitions............................................................................2
Section 1.02. Incorporation by Reference of Trust Indenture Act.....................................12
Section 1.03. Rules of Construction.................................................................12
ARTICLE II THE BONDS...............................................................................12
Section 2.01. Terms of the Bonds....................................................................12
Section 2.02. Form 14
Section 2.03. Execution, Authentication and Delivery................................................14
Section 2.04. Temporary Bonds.......................................................................15
Section 2.05. Registration; Registration of Transfer and Exchange...................................15
Section 2.06. Mutilated, Destroyed, Lost or Stolen Bonds............................................16
Section 2.07. Persons Deemed Owners.................................................................17
Section 2.08. Payment of Principal and Interest; Interest on Overdue Principal; Principal and
Interest Rights Preserved ............................................................17
Section 2.09. Cancellation..........................................................................18
Section 2.10. Authentication and Delivery of Bonds..................................................18
Section 2.11. Book-Entry and Definitive Bonds.......................................................23
Section 2.12. Release of Collateral.................................................................25
ARTICLE III COVENANTS...............................................................................25
Section 3.01. Payment of Principal and Interest.....................................................25
Section 3.02. Maintenance of Office or Agency.......................................................25
Section 3.03. Money for Payments To Be Held in Trust................................................25
Section 3.04. Existence.............................................................................27
Section 3.05. Protection of Collateral..............................................................27
Section 3.06. Opinions as to Collateral.............................................................28
Section 3.07. Performance of Obligations; Servicing; NHPUC Filings..................................28
Section 3.08. Negative Covenants....................................................................30
Section 3.09. Annual Statement as to Compliance.....................................................30
Section 3.10. Issuer May Consolidate, etc., Only on Certain Terms...................................31
Section 3.11. Successor or Transferee...............................................................32
Section 3.12. No Other Business.....................................................................33
Section 3.13. No Borrowing..........................................................................33
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Section 3.14. Servicer's Obligations................................................................33
Section 3.15. No Additional Bonds...................................................................33
Section 3.16. Guarantees, Loans, Advances and Other Liabilities.....................................33
Section 3.17. Capital Expenditures..................................................................33
Section 3.18. Non-Routine Periodic Adjustment.......................................................33
Section 3.19. Restricted Payments...................................................................33
Section 3.20. Notice of Events of Default...........................................................34
Section 3.21. Further Instruments and Acts..........................................................34
Section 3.22. Change in Chief Executive Office or Jurisdiction of Organization......................34
Section 3.23. Notice to Rating Agencies of Amendment of Other Basic Documents.......................34
ARTICLE IV SATISFACTION AND DISCHARGE; DEFEASANCE..................................................34
Section 4.01. Satisfaction and Discharge of Indenture; Defeasance...................................34
Section 4.02. Conditions to Defeasance..............................................................36
Section 4.03. Application of Trust Money............................................................37
Section 4.04. Repayment of Moneys Held by Paying Agent..............................................37
ARTICLE V REMEDIES................................................................................37
Section 5.01. Events of Default.....................................................................37
Section 5.02. Acceleration of Maturity; Rescission and Annulment....................................38
Section 5.03. Collection of Indebtedness and Suits for Enforcement by Trustee.......................39
Section 5.04. Remedies; Priorities..................................................................41
Section 5.05. Optional Possession of the Collateral.................................................42
Section 5.06. Limitation of Suits...................................................................42
Section 5.07. Unconditional Rights of Bondholders To Receive Principal and Interest.................43
Section 5.08. Restoration of Rights and Remedies....................................................43
Section 5.09. Rights and Remedies Cumulative........................................................43
Section 5.10. Delay or Omission Not a Waiver........................................................43
Section 5.11. Control by Bondholders................................................................43
Section 5.12. Waiver of Past Defaults...............................................................44
Section 5.13. Undertaking for Costs.................................................................44
Section 5.14. Waiver of Stay or Extension Laws......................................................45
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Section 5.15. Action on Bonds.......................................................................45
Section 5.16. Performance and Enforcement of Certain Obligations....................................45
ARTICLE VI THE TRUSTEE.............................................................................46
Section 6.01. Duties of Trustee.....................................................................46
Section 6.02. Rights of Trustee.....................................................................47
Section 6.03. Individual Rights of Trustee..........................................................48
Section 6.04. Trustee's Disclaimer..................................................................48
Section 6.05. Notice of Defaults....................................................................48
Section 6.06. Statements to Bondholders.............................................................49
Section 6.07. Compensation and Indemnity............................................................50
Section 6.08. Corporate Trustee Required; Eligibility...............................................51
Section 6.09. Resignation and Removal; Appointment of Successor.....................................52
Section 6.10. Acceptance of Appointment by Successor................................................53
Section 6.11. Merger, Conversion, Consolidation or Succession to Business...........................54
Section 6.12. Appointment of Co-Trustee or Separate Trustee.........................................54
Section 6.13. Preferential Collection of Claims Against Issuer......................................55
Section 6.14. Registration of Eligible Investments in Trustee's Name................................55
Section 6.15. Representations and Warranties of Trustee.............................................55
Section 6.16. Covenants of the Trustee; Jurisdiction for Purposes of New Hampshire UCC..............56
ARTICLE VII BONDHOLDERS' LISTS AND REPORTS..........................................................57
Section 7.01. Issuer To Furnish Trustee Names and Addresses of Bondholders..........................57
Section 7.02. Preservation of Information; Communications to Bondholders............................57
Section 7.03. Reports by Issuer.....................................................................57
Section 7.04. Reports by Trustee....................................................................58
ARTICLE VIII ACCOUNTS, DISBURSEMENTS AND RELEASES....................................................58
Section 8.01. Collection of Money...................................................................58
Section 8.02. Collection Account....................................................................59
Section 8.03. General Provisions Regarding the Collection Account...................................62
Section 8.04. Reduction in Principal................................................................63
Section 8.05. Release of Collateral.................................................................63
Section 8.06. Opinion of Counsel....................................................................64
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Section 8.07. Reports by Independent Accountants....................................................64
ARTICLE IX SUPPLEMENTAL INDENTURES.................................................................64
Section 9.01. Supplemental Indentures Without Consent of Bondholders................................64
Section 9.02. Supplemental Indentures with Consent of Bondholders...................................65
Section 9.03. Execution of Supplemental Indentures..................................................67
Section 9.04. Effect of Supplemental Indenture......................................................67
Section 9.05. Conformity with Trust Indenture Act...................................................67
ARTICLE X REDEMPTION OF BONDS.....................................................................68
Section 10.01. Optional Redemption by Issuer.........................................................68
Section 10.02. Form of Optional Redemption Notice...................................................68
Section 10.03. Bonds Payable on Optional Redemption Date or Payment Date............................68
Section 10.04. Mandatory Redemption by Issuer.......................................................69
Section 10.05. Form of Mandatory Redemption Notice..................................................69
Section 10.06. Bonds Payable on Mandatory Redemption Date or Payment Date...........................69
ARTICLE XI MISCELLANEOUS...........................................................................70
Section 11.01. Compliance Certificates and Opinions, etc............................................70
Section 11.02. Form of Documents Delivered to Trustee...............................................71
Section 11.03. Acts of Bondholders..................................................................72
Section 11.04. Notices..............................................................................73
Section 11.05. Notices to Bondholders; Waiver.......................................................75
Section 11.06. State Pledge; Bonds Not Obligation of the State of New Hampshire, or Seller..........75
Section 11.07. Conflict with Trust Indenture Act....................................................76
Section 11.08. Effect of Headings and Table of Contents.............................................76
Section 11.09. Successors and Assigns...............................................................76
Section 11.10. Severability.........................................................................77
Section 11.11. Benefits of Indenture................................................................77
Section 11.12. Legal Holidays.......................................................................77
Section 11.13. Governing Law........................................................................77
Section 11.14. Counterparts.........................................................................77
Section 11.15. Recording of Indenture...............................................................77
Section 11.16. No Recourse to Certain Persons.......................................................77
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Section 11.17. No Recourse to Issuer................................................................77
Section 11.18. Inspection...........................................................................78
Section 11.19. Nonpetition Covenants................................................................78
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INDENTURE dated as of January 30, 2002, between PSNH FUNDING LLC 2, a
Delaware limited liability company (the "Issuer"), and THE BANK OF NEW YORK, a
New York banking corporation, in its capacity as trustee for the benefit of the
Holders of the Bonds and as agent for itself (collectively, the "Trustee").
RECITALS
The Issuer has duly authorized the execution and delivery of this
Indenture to provide for the issuance of its Bonds with an aggregate principal
amount of $50,000,000 and the Issuer and the Trustee are executing and
delivering this Indenture in order to provide for the issuance of the Bonds.
GRANTING CLAUSE
The Issuer hereby Grants to the Trustee at the Issuance Date, as
Trustee for the benefit of the Holders of the Bonds and the Trustee, all of the
Issuer's right, title and interest, whether now owned or hereafter acquired, in
and to (a) the RRB Property transferred by the Seller to the Issuer pursuant to
the Sale Agreement and all proceeds thereof, (b) the Statutory Lien, (c) the
Sale Agreement, (d) the Servicing Agreement, (e) the Administration Agreement,
(f) the Collection Account (including all subaccounts thereof) and all amounts
or investment property or other property on deposit therein or credited thereto
from time to time, (g) all other property of whatever kind owned from time to
time by the Issuer, including accounts, general intangibles, equipment and
inventory, (h) the security interest with respect to the RRB Property granted by
the Seller to the Issuer in the Sale Agreement, (i) all present and future
claims, demands, causes and choses in action in respect of any or all of the
foregoing and all payments on or under and all proceeds of every kind and nature
whatsoever in respect of any or all of the foregoing, including all proceeds of
the conversion thereof, voluntary or involuntary, into cash or other liquid
property, all cash proceeds, accounts, accounts receivable, notes, drafts,
acceptances, chattel paper, checks, deposit accounts, insurance proceeds,
condemnation awards, rights to payment of any and every kind, and other forms of
obligations and receivables, instruments and other property which at any time
constitute all or part of or are included in the proceeds of any of the
foregoing and (j) all proceeds of the foregoing (collectively, the
"Collateral"); it being understood that the following do not constitute
Collateral: (i) amounts required to be released pursuant to or contemplated in
the terms hereof, including net investment earnings on the Capital Subaccount
that are required to be released to the Issuer pursuant to Article VIII and (ii)
proceeds from the sale of the Bonds required to pay costs of issuance with
respect to the Bonds as set forth on the flow of funds memorandum delivered on
the Issuance Date (together with any interest earnings thereon), it being
understood that such amounts described in clauses (i) and (ii) above shall not
be subject to Sections 3.10(b) or 3.19.
The foregoing Grants are made to the Trustee in trust to secure the
payment of principal of, interest on, the Bonds, equally and ratably without
prejudice, priority or distinction, except as expressly provided in this
Indenture, and to secure all other Secured Obligations and compliance with the
provisions of this Indenture with respect to the Bonds and the Servicing
Agreement, all as provided in this Indenture. This Indenture constitutes a
security agreement within the meaning of the UCC or the Statute to the extent
that, under New Hampshire law, the provisions of the UCC or the Statute are
applicable hereto.
The Trustee, as trustee on behalf of the Holders of the Bonds and as
agent for itself, acknowledges such Grants, accepts the trusts hereunder in
accordance with the provisions hereof and agrees to perform its duties herein
required.
AND IT IS HEREBY COVENANTED, DECLARED AND AGREED between the parties
hereto that all Bonds are to be issued, countersigned and delivered and that all
of the Collateral is to be held and applied, subject to the further covenants,
conditions, releases, uses and trusts hereinafter set forth, and the Issuer, for
itself and any successor, does hereby covenant and agree to and with the Trustee
and its successors in said trust, for the benefit of the Holders and for the
Trustee, as follows:
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.01. Definitions. (a) Except as otherwise specified herein or
as the context may otherwise require, the following terms have the respective
meanings set forth below for all purposes of this Indenture.
"Act" has the meaning specified in Section 11.03(a).
"Administration Agreement" means the Administration Agreement dated as
of the date hereof between Public Service Company of New Hampshire, as
Administrator, and the Issuer, as the same may be amended and supplemented from
time to time.
"Administration Fee" means the fee payable to the Administrator
pursuant to the Administration Agreement.
"Administrator" means Public Service Company of New Hampshire, a New
Hampshire corporation, or any successor Administrator under the Administration
Agreement.
"Affiliate" means, with respect to any specified Person, any other
Person controlling or controlled by or under common control with such specified
Person. For the purposes of this definition, "control" when used with respect to
any specified Person means the power to direct the management and policies of
such Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"Authorized Officer" means, with respect to the Issuer, the
Administrator or the Servicer, as applicable, any officer of such Person who is
authorized to act for such Person in matters relating to such Person and who is
identified on the list of Authorized Officers or Responsible Officers delivered
by such Person to the Trustee on the Issuance Date (as such list may be modified
or supplemented by the Issuer, the Administrator or the Servicer, as applicable,
from time to time thereafter).
"Authorized Representative" means, with respect to any entity, any
person who is authorized to act for such entity in matters relating to such
entity and who is identified on the list
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of Authorized Representatives or Authorized Officers delivered by such entity to
the Trustee on the Issuance Date (as such list may be modified or supplemented
from time to time thereafter).
"Basic Documents" means, collectively, this Indenture, the Sale
Agreement, the Servicing Agreement, the Administration Agreement, the Fee and
Indemnity Agreement and the Underwriting Agreement.
"Bondholder" or "Holder" means the Person in whose name a Bond is
registered on the Register.
"Bond Interest Rate" has the meaning specified in Section 2.01(b).
"Bonds" has the meaning specified in Section 2.01(a).
"Book Entry Bonds" means, with respect to any Bond, a beneficial
interest in such Bond, ownership and transfers of which shall be made through
book entries by a Clearing Agency as described in Section 2.11.
"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
Manchester, New Hampshire are authorized or obligated by law, regulation or
executive order to remain closed.
"Capital Subaccount" has the meaning specified in Section 8.02(a).
"Class" means any one of the classes of Bonds.
"Clearing Agency" means an organization registered as a "clearing
agency" pursuant to Section 17A of the Exchange Act.
"Clearing Agency Participant" means a broker, dealer, bank, other
financial institution or other Person for whom from time to time a Clearing
Agency effects book entry transfers and pledges of securities deposited with the
Clearing Agency.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time, and Treasury Regulations promulgated thereunder.
"Collateral" has the meaning specified in the Granting Clause of this
Indenture.
"Collection Account" has the meaning specified in Section 8.02(a).
"Corporate Trust Office" means the principal office of the Trustee at
which at any particular time its corporate trust business shall be administered,
which office at the date of the execution of this Indenture is located at the
address provided in Section 11.04, or at such other address as the Trustee may
designate from time to time by notice to the Bondholders and the Issuer, or the
principal corporate trust office of any successor Trustee (the address of which
the successor Trustee will notify the Bondholders and the Issuer).
"Covenant Defeasance Option" has the meaning specified in Section
4.01(b).
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"Default" means any occurrence that is, or with notice or the lapse of
time or both would become, an Event of Default.
"Definitive Bonds" has the meaning specified in Section 2.11(a).
"Delaware UCC" means the Delaware Uniform Commercial Code.
"Eligible Deposit Account" means either (a) a segregated trust account
with an Eligible Institution or (b) a segregated trust account with the
corporate trust department of a depository institution organized under the laws
of the United States of America or any State (or any domestic branch of a
foreign bank), having corporate trust powers and acting as trustee for funds
deposited in such account, so long as any of the securities of such depository
institution shall have a credit rating from Standard & Poor's, Xxxxx'x and Fitch
(if rated by Fitch) in one of its generic rating categories which signifies
investment grade.
"Eligible Institution" means (a) the corporate trust department of the
Trustee or (b) a depository institution organized under the laws of the United
States of America or any State (or any domestic branch of a foreign bank), (i)
which has either a long-term unsecured debt rating of AAA by Standard & Poor's
and Fitch and Aaa by Xxxxx'x or a certificate of deposit rating of A-1+ by
Standard & Poor's, F1+ by Fitch and P-1 by Xxxxx'x, or any other long-term,
short-term or certificate of deposit rating acceptable to Standard & Poor's,
Xxxxx'x, and Fitch and (ii) whose deposits are insured by the FDIC. If so
qualified under clause (b) above, the Trustee may be considered an Eligible
Institution for the purposes of clause (a) of the definition of Eligible Deposit
Account.
"Eligible Investments" mean book-entry securities, negotiable
instruments or securities represented by instruments in bearer or registered
form which evidence:
(a) direct obligations of, or obligations fully and
unconditionally guaranteed as to timely payment by, the United States
of America;
(b) demand deposits, time deposits or certificates of deposit
of any depository institution or trust company (any depositary
institution or trust company being referred to in this definition as a
"financial institution") incorporated under the laws of the United
States or any State (or any domestic branch of a foreign bank) and
subject to supervision and examination by Federal or state banking or
depositary institution authorities; provided, however, that at the time
of the investment or contractual commitment to invest therein, the
commercial paper or other short-term unsecured debt obligations (other
than such obligations the rating of which is based on the credit of a
Person other than such depositary institution or trust company) thereof
shall have a credit rating from Standard & Poor's, Xxxxx'x and Fitch
(if rated by Fitch) in the highest investment category granted thereby;
(c) commercial paper or other short term obligations of any
corporation organized under the laws of the United States of America
(other than the Seller or its Affiliates) whose ratings, at the time of
the investment or contractual commitment to invest therein, from
Standard & Poor's, Xxxxx'x and Fitch (if rated by Fitch) are in the
highest investment category granted thereby;
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(d) investments in money market funds, which funds have a
rating from Standard & Poor's, Xxxxx'x and Fitch (if rated by Fitch) in
the highest investment category granted thereby (including funds for
which the Trustee or any of its Affiliates act as investment manager or
advisor);
(e) banker's acceptances issued by any depositary institution
or trust company referred to in clause (b) above;
(f) repurchase obligations with respect to any security that
is a direct obligation of, or fully guaranteed by, the United States of
America or any agency or instrumentality thereof the obligations of
which are backed by the full faith and credit of the United States of
America, in either case entered into with a depository institution or
trust company (acting as principal) described in clause (b) above;
(g) repurchase obligations with respect to any security or
whole loan entered into with
(i) a financial institution (acting as principal)
described in clause (b) above,
(ii) a broker/dealer (acting as principal) registered
as a broker or dealer under Section 15 of the Exchange Act
(any broker/dealer being referred to in this definition as a
"broker/dealer"), the unsecured short-term debt obligations of
which are rated P-1 by Xxxxx'x, A-1+ by Standard & Poor's and
F1+ by Fitch (if rated by Fitch) at the time of entering into
this repurchase obligation, or
(iii) an unrated broker/dealer, acting as principal,
that is a wholly-owned subsidiary of a non-bank or bank
holding company, the unsecured short-term debt obligations of
which are rated P-1 by Moody's, A-1+ by Standard & Poor's and
F1+ by Fitch (if rated by Fitch) at the time of purchase; or
(h) any other investment permitted by each Rating Agency;
provided, however, that, unless otherwise permitted by each Rating Agency, upon
the failure of any Eligible Institution to maintain any applicable rating set
forth in this definition or the definition of Eligible Institution, the related
investments at such institution shall be reinvested in Eligible Investments at a
successor Eligible Institution within 10 days; and provided, further, that, with
respect to Moody's only, the obligor related to clauses (b), (c), (e), (f) and
(g) above must have both a long term rating of at least Aa3 and a short term
rating of at least P-1.
"Event of Default" has the meaning specified in Section 5.01.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Expected Amortization Schedule" means, with respect to each Class of
Bonds, the schedule attached as Schedule 1 hereto.
"FDIC" means the Federal Deposit Insurance Corporation or any
successor.
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"Fee and Indemnity Agreement" means the fee and indemnity agreement
dated as of the date hereof between the Issuer and the Trustee, as amended and
supplemented from time to time.
"Final Maturity Date" means, with respect to any Class of Bonds, the
Final Maturity Date therefor, as specified in Section 2.01(b).
"Financial Asset" means a "financial asset" as defined in Section
8-102(a)(9) of the New Hampshire UCC.
"Fitch" means Fitch, Inc. or its successor.
"General Subaccount" has the meaning specified in Section 8.02(a).
"Grant" means mortgage, pledge, collaterally assign and xxxxx x xxxx
upon and a security interest pursuant to this Indenture. A Grant of the
Collateral or of any other agreement or instrument shall include all rights,
powers and options (but none of the obligations) of the Granting party
thereunder, including the immediate and continuing right to claim for, collect,
receive and give receipt for payments in respect of the Collateral and all other
moneys payable thereunder, to give and receive notices and other communications,
to make waivers or other agreements, to exercise all rights and options, to
bring Proceedings in the name of the Granting party or otherwise and generally
to do and receive anything that the Granting party is or may be entitled to do
or receive thereunder or with respect thereto.
"Indemnified Person" has the meaning specified in Section 6.07.
"Indenture" or "this Indenture" means this instrument as originally
executed and, as from time to time supplemented or amended by one or more
indentures supplemental hereto entered into pursuant to the applicable
provisions hereof, as so supplemented or amended, or both, and shall include the
forms and terms of the Bonds established hereunder.
"Independent" means, when used with respect to any specified Person,
that the Person (a) is in fact independent of the Issuer, any other obligor upon
the Bonds, the Seller, the Servicer and any Affiliate of any of the foregoing
Persons, (b) does not have any direct financial interest or any material
indirect financial interest in the Issuer, any such other obligor, the Seller,
the Servicer or any Affiliate of any of the foregoing Persons and (c) is not
connected with the Issuer, any such other obligor, the Seller, the Servicer or
any Affiliate of any of the foregoing Persons as an officer, employee, promoter,
underwriter, trustee, partner, director or person performing similar functions,
provided, however, that an individual shall be deemed to be an Independent
director of the Issuer notwithstanding the fact that he or she is or has been a
director of one or more other single purpose bankruptcy remote entities which
are Affiliates of the Issuer, the Seller, the Servicer or any Affiliate thereof.
"Independent Certificate" means a certificate or opinion to be
delivered to the Trustee under the circumstances described in, and otherwise
complying with, the applicable requirements of Section 11.01, made by an
Independent appraiser or other expert appointed by an Issuer Order and consented
to by the Trustee, and such opinion or certificate shall state that the signer
has read the definition of "Independent" in this Indenture and that the signer
is Independent within the meaning thereof.
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"Interest Reserve Subaccount" has the meaning specified in Section
8.02(a).
"Issuance Date" has the meaning specified in Section 2.01(c)(i).
"Issuer" means the party named as such in this Indenture until a
successor replaces it and, thereafter, means the successor and, for purposes of
any provision contained herein and required by the Trust Indenture Act, each
other obligor on the Bonds.
"Issuer Order" and "Issuer Request" means a written order or request
signed in the name of the Issuer by any one of its Authorized Officers and
delivered to the Trustee.
"Legal Defeasance Option" has the meaning specified in Section 4.01(b).
"Lien" means security interest, lien, charge, pledge, equity or
encumbrance of any kind.
"Mandatory Redemption Date" has the meaning specified in Section 10.04.
"Mandatory Redemption Price" has the meaning specified in Section
10.04.
"Minimum Denomination" means $1,000 or any integral multiple of $1.00
in excess thereof; provided, however, that one Bond of each Class may be of a
smaller denomination.
"Moody's" means Xxxxx'x Investors Service Inc. or its successor.
"New Hampshire UCC" means the New Hampshire Uniform Commercial Code.
"NHPUC" means the New Hampshire Public Utilities Commission and any
successor thereto.
"Officer's Certificate" means a certificate signed by any Authorized
Officer of the Issuer, under the circumstances described in, and otherwise
complying with, the applicable requirements of Section 11.01, and delivered to
the Trustee.
"Operating Expenses" means all fees, costs and expenses of, and
indemnities owed by, the Issuer, including all taxes payable by the Issuer, all
amounts owed by the Issuer to the Trustee and any other Indemnified Person, the
Servicing Fee, the Administration Fee, any fees, costs and expenses payable or
reimbursable by the Issuer to the Administrator, Seller or Servicer, and legal
and accounting fees, costs and expenses of the Issuer.
"Opinion of Counsel" means one or more written opinions of counsel who
may, except as otherwise expressly provided in this Indenture, be an employee of
or counsel to the Issuer and who shall be reasonably satisfactory to the
Trustee, and which opinion or opinions shall be addressed to the Trustee, shall
comply with any applicable requirements of Section 11.01, and shall be in form
and substance reasonably satisfactory to the Trustee.
"Optional Redemption Date" means the Payment Date specified by the
Issuer for the redemption of the Bonds pursuant to Section 10.01.
"Optional Redemption Price" has the meaning specified in Section 10.01.
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"Outstanding" means, as of the date of determination, all Bonds
theretofore authenticated and delivered under this Indenture except:
(i) Bonds theretofore cancelled by the Registrar or delivered
to the Registrar for cancellation;
(ii) Bonds or portions thereof the payment for which money in
the necessary amount has been theretofore deposited with the Trustee or
any Paying Agent in trust for the Holders of such Bonds (provided,
however, that if such Bonds are to be redeemed, notice of such
redemption has been duly given pursuant to this Indenture or provision
made therefor, reasonably satisfactory to the Trustee); and
(iii) Bonds in exchange for or in lieu of other Bonds which
have been authenticated and delivered pursuant to this Indenture unless
proof satisfactory to the Trustee is presented that any such Bonds are
held by a protected purchaser;
provided, however, that in determining whether the Holders of the requisite
Outstanding Amount of the Bonds or any Class thereof have given any request,
demand, authorization, direction, notice, consent or waiver hereunder or under
any Basic Document, Bonds owned by the Issuer, any other obligor upon the Bonds,
the Seller or any Affiliate of any of the foregoing Persons shall be disregarded
and deemed not to be Outstanding, except that, in determining whether the
Trustee shall be protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only Bonds that the Trustee
actually knows to be so owned shall be so disregarded. Bonds so owned that have
been pledged in good faith may be regarded as Outstanding if the pledgee
establishes to the satisfaction of the Trustee the pledgee's right so to act
with respect to such Bonds and that the pledgee is not the Issuer, any other
obligor upon the Bonds, the Seller or any Affiliate of any of the foregoing
Persons.
"Outstanding Amount" means the aggregate principal amount of all Bonds
or, if the context requires, all Bonds of a Class, Outstanding at the date of
determination.
"Overcollateralization Subaccount" has the meaning specified in Section
8.02(a).
"Paying Agent" means the Trustee or any other Person that meets the
eligibility standards for the Trustee specified in Section 6.08 and is
authorized by the Issuer to make payment of principal of or interest on the
Bonds on behalf of the Issuer.
"Payment Date" has the meaning specified in Section 2.01(c)(ii).
"Person" means any individual, corporation, limited liability company,
estate, partnership, joint venture, association, joint stock company, trust
(including any beneficiary thereof), unincorporated organization or government
or any agency or political subdivision thereof.
"Predecessor Bond" means, with respect to any particular Bond, every
previous Bond evidencing all or a portion of the same debt as that evidenced by
such particular Bond; and, for the purpose of this definition, any Bond
authenticated and delivered under Section 2.06 in lieu of
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a mutilated, lost, destroyed or stolen Bond shall be deemed to evidence the same
debt as the mutilated, lost, destroyed or stolen Bond.
"Proceeding" means any suit in equity, action at law or other judicial
or administrative proceeding.
"Projected Principal Balance" means, as of any Payment Date on any
Class of Bonds, the projected outstanding principal amount of such Class of
Bonds for such Payment Date set forth in the Expected Amortization Schedule.
"Quarterly Interest" has the meaning specified in Section 2.01(c)(iv).
"Quarterly Principal" means, with respect to any Payment Date on any
Class of Bonds, the excess, if any, of the Outstanding Amount of such Class of
Bonds over the outstanding principal balance of such Class of Bonds specified
for such Payment Date in the Expected Amortization Schedule.
"Rating Agency" means, collectively, Moody's, Standard & Poor's and
Fitch. If no such organization or successor is any longer in existence, "Rating
Agency" shall be a nationally recognized statistical rating organization or
other comparable Person designated by the Issuer, notice of which designation
shall be given to the Trustee and the Servicer.
"Rating Agency Condition" means, with respect to any action, that each
Rating Agency shall have been given ten days prior notice thereof and, except as
otherwise expressly set forth in the related Basic Document, that each of
Standard & Poor's and Fitch shall have notified the Servicer, the Issuer and the
Trustee in writing that such action will not result in a reduction or withdrawal
of the then current rating by such Rating Agency of any Class of the Bonds.
"Record Date" means, with respect to a Payment Date, Optional
Redemption Date or Mandatory Redemption Date, the close of business on the
Business Day immediately preceding such Payment Date, Optional Redemption Date
or Mandatory Redemption Date or, if Definitive Bonds are issued, the close of
business on the last day of the calendar month preceding the calendar month in
which such Payment Date, Optional Redemption Date or Mandatory Redemption Date
occurs.
"Register" and "Registrar" have the respective meanings specified in
Section 2.05.
"Registered Holder" means the Person in whose name a Bond is registered
on the Register on the applicable Record Date.
"Repurchase Date" has the meaning specified in the Sale Agreement.
"Required Capital Level" means, as of any Payment Date, 0.50 percent of
the initial principal amount of the Bonds.
"Required Interest Reserve Level" means, as of any Payment Date (after
giving effect to all payments of principal, if any, made or to be made on such
Payment Date), the amount equal to the aggregate amount of interest that will be
due and payable on the Bonds on and as of the
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immediately succeeding Payment Date; provided, however, that the "Required
Interest Reserve Level" with respect to the first five Payment Dates shall be as
follows:
Payment Date Required Interest Reserve Level
------------ -------------------------------
First Payment Date $329,929
Second Payment Date $371,170
Third Payment Date $412,411
Fourth Payment Date $453,652
Fifth Payment Date $494,893
"Required Overcollateralization Level" means, as of any Payment Date,
the amount required to be on deposit in the Overcollateralization Subaccount as
specified in Schedule 2 hereto.
"Reserve Subaccount" has the meaning specified in Section 8.02(a).
"Responsible Officer" means, with respect to the Trustee, any officer
assigned to the Corporate Trust Division (or any successor thereto), including
any Vice President, Assistant Vice President, Secretary, Assistant Secretary or
Trust Officer or any other officer of the Trustee customarily performing
functions similar to those performed by any of the above designated officers, in
each case having direct responsibility for the administration of this Indenture.
"RRB Property" has the meaning specified in the Sale Agreement.
"RSA" means New Hampshire Revised Statutes Annotated.
"Sale Agreement" means the Purchase and Sale Agreement dated as of the
date hereof between the Issuer and the Seller, as amended and supplemented from
time to time.
"Scheduled Maturity Date" means, with respect to any Class of Bonds,
the Scheduled Maturity Date therefor, as specified in Section 2.01(b).
"Secured Obligations" means, collectively, the payment of principal of,
and interest on, and any other amounts owning in respect of the Bonds, all fees,
expenses, counsel fees and other amounts due and owing to the Trustee pursuant
to this Indenture, all fees, expenses, counsel fees and other amounts due and
owing to the Trustee pursuant to the other Basic Documents and all amounts owed
by the Issuer to any other Person indemnified hereunder or under the Fee and
Indemnity Agreement (including indemnity payments and legal fees and expenses).
"Securities Account" means the Collection Account which shall be a
"securities account," as defined in Section 8-501 of the New Hampshire UCC.
"Securities Act" means the Securities Act of 1933, as amended.
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"Securities Intermediary" means the Trustee, acting as a "securities
intermediary," as defined in Section 8-102(a)(14) of the New Hampshire UCC.
"Security Entitlement" means a "security entitlement" as defined in
Section 8-102(a)(17) of the New Hampshire UCC.
"Seller" means Public Service Company of New Hampshire, a New Hampshire
corporation, and its permitted successors and assigns under the Sale Agreement.
"Servicer" means Public Service Company of New Hampshire, a New
Hampshire corporation, 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 the Servicing Agreement, and thereafter
"Servicer" shall mean such successor Person.
"Servicing Agreement" means the Servicing Agreement dated as of the
date hereof between the Issuer and the Servicer, as amended and supplemented
from time to time.
"Standard & Poor's" means Standard & Poor's Ratings Services, a
division of The XxXxxx-Xxxx Companies, Inc. or its successor.
"State" means any one of the 50 states of the United States of America
or the District of Columbia.
"State Pledge" has the meaning specified in Section 11.06(a).
"Statute" means RSA Chapter 369-B.
"Statutory Lien" means the Lien on the RRB Property created by RSA
369-B:7, VIII.
"Successor Servicer" has the meaning specified in Section 3.07(e).
"Trust Indenture Act" means the Trust Indenture Act of 1939 as in force
on the date hereof, unless otherwise specifically provided.
"Trustee" means The Bank of New York, a New York banking corporation or
its successor, as Trustee under this Indenture, or any successor Trustee under
this Indenture.
"UCC" means, unless the context otherwise requires, the Uniform
Commercial Code, as in effect in the relevant jurisdiction, as amended from time
to time.
"Underwriters" means the underwriters who purchase the Bonds from the
Issuer and sell the Bonds in a public offering.
"Underwriting Agreement" means the Underwriting Agreement dated as of
January 16, 2002, among the Seller, the Issuer and Xxxxxxx Xxxxx Barney Inc., as
the representative of the several underwriters named therein.
"U.S. Government Obligations" means direct obligations (or certificates
representing an ownership interest in such obligations) of the United States of
America (including any agency or
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instrumentality thereof) for the payment of which the full faith and credit of
the United States of America is pledged.
(b) Capitalized terms used herein and not otherwise defined have the
meanings assigned to them in the Servicing Agreement.
Section 1.02. Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the Trust Indenture Act, the
provision is incorporated by reference in and made a part of this Indenture. The
following Trust Indenture Act terms used in this Indenture have the following
meanings:
"Commission" means the Securities and Exchange Commission.
"indenture securities" means the Bonds.
"obligor" on the indenture securities means the Issuer and any other
obligor on the indenture securities.
All other Trust Indenture Act terms used in this Indenture that are
defined by the Trust Indenture Act, defined by Trust Indenture Act reference to
another statute or defined by Commission rule have the meanings assigned to them
by such definitions.
Section 1.03. Rules of Construction. Unless the context otherwise
requires:
(a) a term has the meaning assigned to it;
(b) an accounting term not otherwise defined has the meaning assigned
to it in accordance with generally accepted accounting principles as in effect
from time to time;
(c) "or" is not exclusive;
(d) "including" means including without limitation;
(e) words in the singular include the plural and words in the plural
include the singular;
(f) the words "herein," "hereof," "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision; and
(g) all references in this Indenture to designated "Articles,"
"Sections" and other subdivisions are to the designated Articles, Sections and
other subdivisions of this Indenture.
ARTICLE II
THE BONDS
Section 2.01. Terms of the Bonds.
(a) Authorization; Designation. The issuance of the Bonds in an
aggregate initial principal amount of $50,000,000 is hereby authorized and the
Bonds shall be designated as the
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PSNH Funding LLC 2 Rate Reduction Bonds, Series 0000-0 (xxx "Xxxxx"), and
further denominated as Class A-1.
(b) Initial Principal Amount; Bond Interest Rate; Scheduled Maturity
Date; Final Maturity Date. The Bonds of each Class shall have the initial
principal amount, bear interest at the rates per annum and shall have Scheduled
Maturity Dates and Final Maturity Dates as set forth below:
Initial Principal Bond Interest Scheduled Maturity Final
Class Amount Rate Date Maturity Date
----- ------ ---- ---- -------------
A-1 50,000,000 4.58% February 1, 2008 February 1, 2010
The Bond Interest Rate shall be computed on the basis of a 360-day year
of twelve 30-day months.
The Bonds shall be issuable in not less than Minimum Denominations.
(c) Authentication Date; Payment Dates; Expected Amortization Schedule
for Principal; Quarterly Interest.
(i) Authentication Date. The Bonds that are authenticated and
delivered by the Trustee to or upon the order of the Issuer on January
30, 2002 (the "Issuance Date") shall have as their date of
authentication January 30, 2002.
(ii) Payment Dates. The Payment Dates for the Bonds shall be
February 1, May 1, August 1 and November 1 of each year or, if any such
date is not a Business Day, the next succeeding Business Day,
commencing on August 1, 2002 and continuing until the earlier of
repayment of the Bonds in full or the Final Maturity Date for Class A-1
of the Bonds.
(iii) Expected Amortization Schedule for Principal. Unless an
Event of Default shall have occurred and be continuing and the unpaid
principal amount of all Bonds and accrued interest thereon has been
declared to be due and payable, on each Payment Date, the Trustee shall
pay to the Bondholders of record as of the related Record Date amounts
payable pursuant to Section 8.02(d) as principal, in the following
order and priority: (1) to the holders of the Class A-1 Bonds, until
the Outstanding Amount of such Class of Bonds thereof has been reduced
to zero; provided, however, that in no event shall a principal payment
pursuant to this Section 2.01(c)(iii) on any Class on a Payment Date be
greater than the amount that reduces the Outstanding Amount of such
Class of Bonds to the amount specified in the Expected Amortization
Schedule for such Payment Date. Partial payments of any scheduled
amortization payment shall be allocated within any Class of Bonds pro
rata.
(iv) Quarterly Interest. Quarterly Interest will be payable on
each Class of Bonds on each Payment Date in an amount equal to
one-quarter of the product of (i) the applicable Bond Interest Rate and
(ii) the Outstanding Amount of the related Class of
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Bonds as of the close of business on the preceding Payment Date after
giving effect to all payments of principal made to the Holders of the
related Class of 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 Issuance Date to, but
excluding, that Payment Date.
Section 2.02. Form. The Bonds shall be issued in registered form
without coupons. The Bonds and the Trustee's certificate of authentication shall
be substantially in the forms attached hereto as Exhibit A, with the following
filled in: (a) the designation of the Classes thereof, (b) the Bond number or
numbers thereof, (c) the date of authentication thereof, and (d) the original
principal amount thereof; and with such omissions, variations and insertions as
are permitted by this Indenture, 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 Bonds may be listed or
to conform to any usage in respect thereof, or as may, consistently herewith, be
prescribed by the Issuer or by the Trustee, and as evidenced by the execution
and authentication of such Bonds. Any portion of the text of any Bond may be set
forth on the reverse thereof, with an appropriate reference thereto on the face
of the Bond.
Except as provided in Section 2.11, the Definitive Bonds of each 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 Bonds of such Class may be listed, as
evidenced by an order by an Authorized Representative of the Issuer, relating to
the authentication of such Bonds by the Trustee.
The terms of the Bonds set forth in Exhibit A are part of the terms of
this Indenture.
The Bonds of each Class shall be issued in not less than Minimum
Denominations.
Section 2.03. Execution, Authentication and Delivery. The Bonds shall
be executed on behalf of the Issuer by any of its Authorized Officers. The
signature of any such Authorized Officer on the Bonds may be manual or
facsimile.
Bonds bearing the manual or facsimile signature of individuals who were
at any time Authorized Officers of the Issuer shall bind the Issuer,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Bonds or did not hold
such offices at the date of such Bonds.
At any time and from time to time after the execution and delivery of
this Indenture, the Issuer may deliver Bonds executed by the Issuer to the
Trustee pursuant to an Issuer Order for authentication; and the Trustee shall
authenticate and deliver such Bonds as in this Indenture provided and not
otherwise.
No Bond shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose, unless there appears on such Bond a
certificate of authentication substantially in the form provided for herein
executed by the Trustee by the manual signature of one of its authorized
signatories, and such certificate upon any Bond shall be conclusive evidence,
and the
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only evidence, that such Bond has been duly authenticated and delivered
hereunder. All Bonds shall be dated the date of their authentication.
Section 2.04. Temporary Bonds. Pending the preparation of Definitive
Bonds, the Issuer may execute, and upon receipt of an Issuer Order the Trustee
shall authenticate and deliver, temporary Bonds of any Class which are printed,
lithographed, typewritten, mimeographed or otherwise produced, of the tenor of
the Definitive Bonds of such Class in lieu of which they are issued and with
such variations not inconsistent with the terms of this Indenture as the
officers executing such Bonds may determine, as evidenced by their execution of
such Bonds on behalf of the Issuer.
If temporary Bonds of any Class are issued, the Issuer will cause
Definitive Bonds of such Class to be prepared without unreasonable delay. After
the preparation of Definitive Bonds of such Class, the temporary Bonds of such
Class shall be exchangeable for Definitive Bonds of such Class upon surrender of
the temporary Bonds of such Class at the office or agency of the Issuer to be
maintained as provided in Section 3.02, without charge to the Holder. Upon
surrender for cancellation of any one or more temporary Bonds, the Issuer shall
execute and the Trustee shall authenticate and deliver in exchange therefor a
like principal amount of Definitive Bonds (of the same Class as the temporary
Bonds surrendered) of Minimum Denominations of a like aggregate principal
amount. Until so exchanged, the temporary Bonds of any Class shall in all
respects be entitled to the same benefits under this Indenture as Definitive
Bonds of such Class.
Section 2.05. Registration; Registration of Transfer and Exchange. The
Issuer shall cause to be kept a register (the "Register") in which, subject to
such reasonable regulations as it may prescribe, the Issuer shall provide for
the registration of Bonds and the registration of transfers of Bonds. The
Trustee shall be "Registrar" for the purpose of registering Bonds and transfers
and exchanges of Bonds as herein provided. Upon any resignation of any
Registrar, the Issuer shall promptly appoint a successor or, if it elects not to
make such an appointment, assume the duties of Registrar.
If a Person other than the Trustee is appointed by the Issuer as
Registrar, the Issuer will give the Trustee prompt written notice of the
appointment of such Registrar and of the location, and any change in the
location, of the Register, and the Trustee shall have the right to inspect the
Register at all reasonable times and to obtain copies thereof, and the Trustee
shall have the right to rely upon a certificate executed on behalf of the
Registrar by a Responsible Officer thereof as to the names and addresses of the
Holders of the Bonds and the principal amounts and number of such Bonds.
Upon surrender for registration of transfer of any Bond at the office
or agency of the Issuer to be maintained as provided in Section 3.02, the Issuer
shall execute, and the Trustee shall authenticate and deliver, in the name of
the designated transferee or transferees, one or more new Bonds in any Minimum
Denominations, of a like Class and aggregate principal amount.
At the option of the Holder, Bonds may be exchanged for other Bonds in
any Minimum Denominations, of a like Class and aggregate principal amount, upon
surrender of the Bonds to
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be exchanged at such office or agency. Whenever any Bonds are so surrendered for
exchange, the Issuer shall execute, and the Trustee shall authenticate and
deliver the Bonds which the Bondholder making the exchange is entitled to
receive.
All Bonds issued upon any registration of transfer or exchange of Bonds
shall be the valid obligations of the Issuer, evidencing the same debt, and
entitled to the same benefits under this Indenture, as the Bonds surrendered
upon such registration of transfer or exchange.
Every Bond presented or surrendered for registration of transfer or
exchange shall be duly endorsed by, or be accompanied by (a) a written
instrument of transfer in form satisfactory to the Trustee and the Registrar
duly executed by the Holder thereof or such Holder's attorney duly authorized in
writing, with such signature guaranteed by an institution which is a member of
one of the following recognized Signature Guaranty Programs: (i) The Securities
Transfer Agent Medallion Program (STAMP); (ii) The New York Stock Exchange
Medallion Program (MSP); (iii) The Stock Exchange Medallion Program (SEMP); or
(iv) in such other guarantee program acceptable to the Trustee, and (b) such
other documents as the Trustee and the Registrar may require.
No service charge shall be made to a Holder for any registration of
transfer or exchange of Bonds, but the Issuer may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any registration of transfer or exchange of Bonds, other than
exchanges pursuant to Section 2.04 not involving any transfer.
The preceding provisions of this Section notwithstanding, the Issuer
shall not be required to make and the Registrar need not register transfers or
exchanges of Bonds selected for redemption or of any Bond for a period of 15
days preceding the due date for any payment with respect to the Bond.
Section 2.06. Mutilated, Destroyed, Lost or Stolen Bonds. If (i) any
mutilated Bond is surrendered to the Registrar, or the Registrar receives
evidence to its satisfaction of the destruction, loss or theft of any Bond, and
(ii) there is delivered to the Registrar and the 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 Issuer, the Registrar or the Trustee that
such Bond has been acquired by a protected purchaser, the Issuer shall execute
and, upon its request, the Trustee shall authenticate and deliver, in exchange
for or in lieu of any such mutilated, destroyed, lost or stolen Bond, a
replacement Bond of like Class, tenor and principal amount, bearing a number not
contemporaneously outstanding; provided, however, that if any such destroyed,
lost or stolen Bond, but not a mutilated Bond, shall have become or within seven
days shall be due and payable, or shall have been called for redemption, instead
of issuing a replacement Bond, the Issuer may pay such destroyed, lost or stolen
Bond when so due or payable or upon the Optional Redemption Date or Mandatory
Redemption Date, as applicable, without surrender thereof. If, after the
delivery of such replacement Bond or payment of a destroyed, lost or stolen Bond
pursuant to the proviso to the preceding sentence, a protected purchaser of the
original Bond in lieu of which such replacement Bond was issued presents for
payment such original Bond, the Issuer and the Trustee shall be entitled to
recover such replacement Bond (or such payment) from the Person to whom it was
delivered or any Person taking such replacement Bond from such Person to whom
such replacement Bond was delivered or any assignee of such Person,
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except a protected purchaser, and shall be entitled to recover upon the security
or indemnity provided therefor to the extent of any loss, damage, cost or
expense incurred by the Issuer or the Trustee in connection therewith.
Upon the issuance of any replacement Bond under this Section, the
Issuer may require the payment by the Holder of such Bond of a sum sufficient to
cover any tax or other governmental charge that may be imposed in relation
thereto and any other reasonable expenses (including the fees and expenses of
the Trustee and the Registrar) connected therewith. Any duplicate Bond issued
pursuant to this Section 2.06 shall constitute conclusive evidence of the same
interest in the Issuer, as if originally issued, whether or not the lost, stolen
or destroyed Bond shall be found at any time.
Every replacement Bond issued pursuant to this Section in replacement
of any mutilated, destroyed, lost or stolen Bond shall constitute an original
additional contractual obligation of the Issuer, whether or not the mutilated,
destroyed, lost or stolen Bond shall be at any time enforceable by anyone, and
shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Bonds of the same Class duly issued
hereunder.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Bonds.
Section 2.07. Persons Deemed Owners. Prior to due presentment for
registration of transfer of any Bond, the Issuer, the Trustee, the Registrar and
any Paying Agent may treat the Person in whose name any Bond is registered (as
of the day of determination) as the owner of such Bond for the purpose of
receiving payments of principal of and interest on such Bond and for all other
purposes whatsoever, whether or not such Bond be overdue, and neither the
Issuer, the Trustee, the Registrar nor any Paying Agent shall be affected by
notice to the contrary.
Section 2.08. Payment of Principal and Interest; Interest on Overdue
Principal; Principal and Interest Rights Preserved.
(a) Any installment of interest or principal payable on any Bond which
is punctually paid or duly provided for by the Issuer on the applicable Payment
Date shall be paid to the Person in whose name such Bond (or one or more
Predecessor Bonds) is registered on the Record Date for such Payment Date in the
manner set forth in Section 8.02. The funds represented by any checks returned
undelivered shall be held in accordance with Section 3.03.
(b) The principal of each Bond of each Class shall be paid, to the
extent funds are available therefor in the Collection Account, in installments
on each Payment Date specified in Section 2.01. Notwithstanding the foregoing,
the entire unpaid principal amount of the Bonds shall be due and payable, if not
previously paid, on the date on which an Event of Default shall have occurred
and be continuing, if the Trustee or the Holders of the Bonds representing not
less than a majority of the Outstanding Amount of the Bonds have declared the
Bonds to be immediately due and payable in the manner provided in Section 5.02.
In such event, all payments of principal on the Bonds shall be made pro rata.
The Trustee shall notify the Person in whose name a Bond is registered at the
close of business on the Record Date preceding the
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Payment Date on which the Issuer expects that the final installment of principal
of and interest on such Bond will be paid. Such notice shall be mailed no later
than five days prior to such final Payment Date and shall specify that such
final installment will be payable only upon presentation and surrender of such
Bond and shall specify the place where such Bond may be presented and
surrendered for payment of such installment. Notices in connection with
redemptions of Bonds shall be mailed to Bondholders as provided in Section 10.02
or Section 10.05, as applicable.
(c) If the Issuer defaults in a payment of interest on the Bonds when
due, the Issuer shall be required to pay such defaulted interest (plus interest
on such defaulted interest at the applicable Bond Interest Rate to the extent
lawful) to the Persons who are Bondholders on a subsequent special record date,
which date shall be at least five Business Days prior to the payment date. The
Issuer shall fix or cause to be fixed any such special record date and payment
date, and, at least 20 days before any such special record date, the Issuer
shall mail to each affected Bondholder a notice that states the special record
date, the payment date and the amount of defaulted interest (plus interest on
such defaulted interest) to be paid.
Section 2.09. Cancellation. All Bonds surrendered for payment,
registration of transfer, exchange or redemption shall, if surrendered to any
Person other than the Registrar, be delivered to the Registrar and shall be
promptly cancelled by the Registrar. The Issuer may at any time deliver to the
Registrar for cancellation any Bonds previously authenticated and delivered
hereunder which the Issuer may have acquired in any manner whatsoever, and all
Bonds so delivered shall be promptly cancelled by the Registrar. No Bonds shall
be authenticated in lieu of or in exchange for any Bonds cancelled as provided
in this Section, except as expressly permitted by this Indenture. All cancelled
Bonds may be held or disposed of by the Trustee in accordance with its standard
retention or disposal policy as in effect at the time.
Section 2.10. Authentication and Delivery of Bonds. On the Issuance
Date, the Bonds shall be executed by the Issuer and delivered to the Trustee for
authentication and thereupon the same shall be authenticated and delivered by
the Trustee upon Issuer Order and upon delivery by the Issuer, at the Issuer's
expense, to the Trustee, and receipt by the Trustee, or the causing to occur by
the Issuer, of the following:
(a) Issuer Action. An Issuer Order authorizing and directing the
execution, authentication and delivery of the Bonds, specifying the principal
amount of Bonds to be so executed, authenticated and delivered, and including
directing an Authorized Representative of the Issuer to execute and deliver, and
directing the Trustee to authenticate, global Bonds, each to be registered in
the name of Cede & Co., as nominee of The Depository Trust Company ("DTC"), and
to confirm its custody of the Bonds to DTC in New York, New York so that the
Bonds may be credited to or upon the order of the Underwriters named in said
Issuer Order for the purchase price specified therein and directing the
application of the proceeds thereof.
(b) Authorizations.
(i) An Opinion of Counsel that no authorization, approval or
consent of any New Hampshire, Delaware or federal governmental body or
bodies at the time having jurisdiction in the premises is required to
be obtained by the Issuer for the valid issuance, authentication and
delivery of such Bonds, except for such registrations as are required
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under the blue sky and securities laws of any State or such
authorizations, approvals or consents of governmental bodies that have
been obtained.
(ii) An Opinion of Counsel that no New Hampshire, Delaware or
federal authorization, approval or consent of any governmental body or
bodies at the time having jurisdiction in the premises is required for
the valid execution and delivery by the Issuer of each of the Basic
Documents to which the Issuer is a party, except for such
authorizations, approvals or consents of governmental bodies that have
been obtained.
(c) Authorizing Certificate. A certificate of an Authorized Officer of
the Issuer certifying that the Issuer has duly authorized the execution and
delivery of this Indenture and the execution, authentication and delivery of the
Bonds.
(d) The Collateral. The Issuer shall have caused all Collateral to have
been Granted to the Trustee and will have caused all filings pursuant to the
Statute, the New Hampshire UCC, the Delaware UCC and any other applicable law as
are necessary to cause the Trustee to have a first priority perfected security
interest in the Collateral to have been duly made.
(e) Certificates of the Issuer and the Seller.
(i) An Officer's Certificate from the Issuer, dated as of the
Issuance Date to the effect that:
(A) the Issuer is not in Default under this Indenture
and that the issuance of the Bonds applied for will not result
in any Default or in any material breach of any of the terms,
conditions or provisions of or constitute a default under any
material indenture, mortgage, deed of trust or other agreement
or instrument to which the Issuer is a party or by which it or
its property is bound or any order of any court or
administrative agency entered in any Proceeding to which the
Issuer is a party or by which it or its property may be bound
or to which it or its property may be subject;
(B) all conditions precedent provided in this
Indenture relating to the authentication and delivery of the
Bonds applied for have been complied with;
(C) all instruments furnished to the Trustee pursuant
to this Indenture conform to the requirements set forth in
this Indenture and constitute all of the documents required to
be delivered hereunder for the Trustee to authenticate and
deliver the Bonds applied for, and all conditions precedent
provided for in this Indenture relating to the authentication
and delivery of the Bonds have been complied with;
(D) the Issuer has not assigned any interest or
participation in the Collateral except for the Lien of this
Indenture and of the Statute;
(E) the Issuer has the power and right to Grant the
Collateral to the Trustee as security hereunder; and the
Issuer, subject to the terms of this Indenture, has Granted to
the Trustee all of its right, title and interest in and to
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such Collateral free and clear of any lien, mortgage, pledge,
charge, security interest, adverse claim or other encumbrance,
except the Lien of this Indenture and of the Statute;
(F) the Issuer has appointed a firm of Independent
certified public accountants as contemplated in Section 8.07;
(G) attached thereto are duly executed, true and
complete copies of the Sale Agreement and the Servicing
Agreement; and
(H) all filings with the NHPUC pursuant to the
Statute and all UCC financing statements with respect to the
Collateral that are required to be filed in order to cause the
Trustee to have a first priority perfected security interest
in the Collateral have been made.
(ii) An Officer's Certificate (as defined in the Sale
Agreement) from the Seller, dated as of the Issuance Date, to the
effect that (a) the representations and warranties set forth in Article
III of the Sale Agreement are true and correct and (b) the attached
copies of the Finance Order and Issuance Advice Letter creating the RRB
Property are true and correct.
(f) Opinion of Counsel. An Opinion of Counsel, portions of which may be
delivered by counsel for the Issuer and portions of which may be delivered by
counsel for the Seller and the Servicer, dated the Issuance Date, in each case
subject to the customary exceptions, qualifications and assumptions contained
therein, to the collective effect that:
(i) the Indenture has been duly qualified under the Trust
Indenture Act;
(ii) the Issuer has the limited liability company power and
authority to execute and deliver this Indenture and to issue the Bonds,
and this Indenture and the Bonds have been duly authorized and the
Issuer is duly formed and is validly existing in good standing under
the laws of the jurisdiction of its organization;
(iii) the Indenture has been duly authorized, executed and
delivered by the Issuer;
(iv) all instruments furnished to the Trustee as conditions
precedent to the delivery of the Bonds conform to the requirements of
this Indenture and constitute all documents required to be delivered
hereunder to authorize the Trustee to execute and deliver Bonds;
(v) the Bonds applied for have been duly authorized and
executed and, when authenticated in accordance with the provisions of
the Indenture and delivered against payment of the purchase price
therefor, will constitute valid and binding obligations of the Issuer,
entitled to the benefits of the Indenture subject to bankruptcy,
insolvency, reorganization, moratorium, fraudulent transfer and other
laws relating to or affecting the rights of creditors generally and
general principles of equity (regardless of whether such enforceability
is considered in a proceeding in equity or at law);
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(vi) this Indenture, the Sale Agreement, the Servicing
Agreement and the Fee and Indemnity Agreement are valid and binding
agreements of the Issuer, enforceable in accordance with their
respective terms, except as such enforceability against the Issuer may
be subject to bankruptcy, insolvency, reorganization, moratorium,
fraudulent transfer and other laws relating to or affecting the rights
of creditors generally and general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or
at law);
(vii) (A) under RSA 369-B:7, II, the provisions of this
Indenture create in favor of the Trustee to secure payment of the
Secured Obligations a security interest in all right, title and
interest, whether now owned or hereafter acquired, of the Issuer in the
RRB Property; (B) the Finance Order authorizes the RRB Charge included
in the RRB Property; (C) the aforesaid security interest in the RRB
Property under this Indenture has attached to the RRB Property or (in
the case of any after acquired property) will attach as it comes into
existence; (D) a financing statement which describes the RRB Property
by reference to the Finance Order has been presented for filing in the
office of the Secretary of the State of New Hampshire, and all filing
fees required in connection therewith have been paid, in accordance
with Part 5 of Article 9 of the New Hampshire UCC; and (E) such
security interest in the RRB Property granted by the Issuer under this
Indenture is valid and enforceable against the Issuer and is perfected
or (in the case of any after acquired property) will be valid,
enforceable and perfected as such property comes into existence,
subject in each case to (x) the rights of any third parties holding
security interests in the RRB Property perfected in the manner
described in RSA 369-B:7 prior to perfection by filing of the security
interest granted under this Indenture and (y) rights arising under the
first priority lien arising under RSA 369-B:7, VIII described in
Section 2.10(f)(viii);
(viii) (A) the Statute creates a Statutory Lien on the RRB
Property securing all obligations, then existing or subsequently
arising, to the holders of the Bonds in respect of the Bonds and all
Secured Obligations, then existing or subsequently arising, to the
Trustee in its capacity as such; (B) such Statutory Lien is valid,
perfected and enforceable against the Issuer and all third parties
without any further public notice; and (C) the Statute provides that
conflicting Statutory Liens on RRB Property arising under RSA 369-B:7,
VIII rank in order of time of perfection;
(ix) (A) the provisions of this Indenture create in favor of
the Trustee a security interest in the right, title and interest,
whether now owned or hereafter acquired, of the Issuer in respect of
the Collateral; (B) such security interest will attach to the
Collateral as it comes into existence; (C) such security interest in
the Sale Agreement, the Servicing Agreement, the Administration
Agreement and all accounts, general intangibles, equipment and
inventory (as such terms are defined in the New Hampshire UCC) of the
Issuer and all other Collateral in which a security interest can be
perfected by the filing of financing statements under the New Hampshire
UCC granted by the Issuer under this Indenture is valid and enforceable
against the Issuer and is perfected (or in the case of after acquired
property will be valid, enforceable and perfected as such property
comes into existence); and (D) under the New Hampshire UCC the
perfection and priority of Collateral subject to the New Hampshire UCC
is governed by the local
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law of Delaware, except for Collateral subject to the exceptions set
forth in Sections 9-301(2)-(4) and 9-303 through 9-306 in the New
Hampshire UCC);
(x) either (A) the registration statement covering the Bonds
is effective under the Securities Act and, to the best of such
counsel's knowledge and information, no stop order suspending the
effectiveness of such registration statement has been issued under the
Securities Act and no proceedings for that purpose have been initiated
or are pending or threatened by the Commission or (B) the Bonds are
exempt from the registration requirements under the Securities Act;
(xi) the Issuer is not an "investment company" or under the
"control" of an "investment company" as such terms are defined under
the Investment Company Act of 1940, as amended;
(xii) the Sale Agreement is a valid and binding agreement of
the Seller enforceable against the Seller in accordance with its terms
except as such enforceability may be subject to bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer and other laws relating
to or affecting the rights of creditors generally and general
principles of equity (regardless of whether such enforcement is
considered in a proceeding in equity or at law);
(xiii) the Servicing Agreement is a valid and binding
agreement of the Servicer enforceable against the Servicer in
accordance with its terms except as such enforceability may be subject
to bankruptcy, insolvency, reorganization, moratorium, fraudulent
transfer and other laws relating to or affecting the rights of
creditors generally and general principles of equity (regardless of
whether such enforcement is considered in a proceeding in equity or at
law);
(xiv) upon the delivery of the fully executed Sale Agreement
to the Issuer and the payment of the purchase price of the RRB Property
by the Issuer to the Seller pursuant to the Sale Agreement, then (1)
the transfer of the RRB Property by the Seller to the Issuer pursuant
to the Sale Agreement conveys the Seller's right, title and interest in
the RRB Property to the Issuer and will be treated under the laws of
the State of New Hampshire as an absolute transfer of all of the
Seller's right, title, and interest in the RRB Property, other than for
federal and state income and franchise tax purposes and notwithstanding
any contrary treatment of such transfer for accounting purposes, (2)
such transfer of the RRB Property is perfected, (3) a financing
statement has been filed in favor of the Issuer that describes the RRB
Property by reference to the Finance Order, in accordance with RSA
369-B:6,VII and (4) assuming that the Issuer does not have notice or
knowledge of any conflicting assignment of the RRB Property, the
transfer of the RRB Property to the Issuer will have priority over any
other assignment of the RRB Property;
(xv) (1) the Finance Order has been duly issued and authorized
by the NHPUC and the Finance Order, giving effect to the Issuance
Advice Letter, is effective; (2) the Issuer constitutes a "financing
entity" under RSA 369-B:2, VI and the Bonds are "rate reduction bonds"
under RSA 369-B:2, X; (3) as of the issuance of the Bonds, the Bonds
are entitled to the protections provided in the Statute; (4) the
Finance Order is no longer
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subject to appeal by any Person in state courts of the State of New
Hampshire; and (5) the Servicer is authorized to file through the legal
final maturity date periodic RRB Charge adjustments to the extent
necessary to ensure the timely recovery of revenues sufficient to
provide for the payment of an amount equal to the sum of the periodic
Bond payment requirements for the upcoming year, which includes
indemnity obligations under the Basic Documents;
(xvi) any state action (whether legislative, by NHPUC, or
otherwise) to revoke or limit the Finance Order, the Issuance Advice
Letter, the RRB Property or the RRB Charge in a manner which would
substantially impair the rights of Bondholders would be subject to a
successful constitutional contracts clause defense; and
(xvii) such other matters as the Trustee may reasonably
require.
(g) Accountant's Letter. A letter addressed to the Issuer and the
Trustee complying with the requirements of Section 11.01(a), of a firm of
Independent certified public accountants of recognized national reputation to
the effect that (a) such accountants are Independent with respect to the Issuer
within the meaning of the Indenture, and are independent public accountants
within the meaning of the standards of The American Institute of Certified
Public Accountants, and (b) with respect to the Collateral, they have made
certain specified recalculations of calculations and information provided by the
underwriters for the purpose of determining that, based on certain specified
assumptions used in calculating estimated collections based on the initial RRB
Charge, as of the Issuance Date such estimated collections based on the initial
RRB Charge are sufficient to pay (w) assumed Operating Expenses when incurred,
plus (x) the Overcollateralization Amount set forth in the Final Prospectus (as
such term is defined in the Underwriting Agreement), plus (y) interest on the
Bonds at their respective Bond Interest Rates when due as set forth in the Final
Prospectus, plus (z) principal of the Bonds in accordance with the Expected
Amortization Schedule set forth in the Final Prospectus and found the
calculations to be mathematically correct.
(h) Ratings on the Bonds. The Trustee shall receive evidence reasonably
satisfactory to it that the Bonds shall have been rated AAA by Standard &
Poor's, Aaa by Moody's, and AAA by Fitch, or, in each case, the equivalent.
(i) Other Requirements. Such other documents, certificates, agreements,
instruments or opinions as the Trustee may reasonably require.
Section 2.11. Book-Entry and Definitive Bonds.
(a) The Bonds of any Class may be issued in the form of one or more
typewritten Bonds representing the Book-Entry Bonds of that Class, to be
delivered to The Depository Trust Company, the initial Clearing Agency, by, or
on behalf of, the Issuer. In such case, the Bonds of such 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
Bondholder will receive a Definitive Bond representing such Bondholder's
interest in the Bond of such Class, except as provided in Section 2.11(c) below.
Unless and until definitive, fully
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registered Bonds ("Definitive Bonds") of such Class have been issued pursuant to
Section 2.11(c) below:
(i) the provisions of this Section 2.11 shall be in full force
and effect with respect to the Bonds of such Class;
(ii) the Issuer, the Paying Agent, the Registrar and the
Trustee may deal with the Clearing Agency for all purposes of this
Indenture (including the making of payments on the Bonds of such Class)
as the authorized representative of the Bondholders of Bonds of such
Class;
(iii) to the extent that the provisions of this Section 2.11
conflict with any other provisions of this Indenture, the provisions of
this Section 2.11 shall control;
(iv) the rights of Bondholders of Bonds of such Class shall be
exercised only through the Clearing Agency and shall be limited to
those established by law and agreements between such Bondholders and
the Clearing Agency Participants; and until Definitive Bonds of such
Class are issued pursuant to Section 2.11(c) below, the Clearing Agency
will make book-entry transfers among the Clearing Agency Participants
and receive and transmit payments of principal of and interest on the
Bonds of such Class to such Clearing Agency Participants; and
(v) whenever this Indenture requires or permits actions to be
taken based upon instructions or directions of Bondholders holding
Bonds of such Class representing a specified percentage of the
aggregate Outstanding Amount of Bonds of such Class, the Clearing
Agency shall be deemed to represent such percentage only to the extent
that it has received instructions to such effect from Bondholders or
Clearing Agency Participants owning or representing, respectively,
Bonds representing such percentage of the aggregate Outstanding Amount
of Bonds of such Class, and has delivered such instructions to the
Trustee; the 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 Bonds of
any Class issued in the form of Bonds representing Book-Entry Bonds is required
under this Indenture, unless and until Definitive Bonds of such Class shall have
been issued pursuant to Section 2.11(c), the Trustee shall give all such notices
and communications specified herein to be given to Holders of Bonds of such
Class to the Clearing Agency.
(c) If (i) the Clearing Agency advises the Trustee in writing that the
Clearing Agency is no longer willing or able to properly discharge its
responsibilities with respect to the Bonds of a Class, and the Trustee or the
Issuer is unable to locate a qualified successor, (ii) the Issuer at its option
advises the Trustee in writing that it elects to terminate the book-entry system
through the Clearing Agency with respect to the Bonds of such Class or (iii)
after the occurrence of an Event of Default with respect to any Class of Bonds,
Bondholders representing beneficial interests aggregating at least a majority of
the Outstanding Amount of the Bonds advise the Clearing Agency and the Trustee
in writing that the continuation of a book-entry system through the Clearing
Agency is no longer in the best interests of the Bondholders, then the Clearing
Agency
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shall notify all Bondholders and the Trustee of the occurrence of any such event
and of the availability of Definitive Bonds to Bondholders requesting the same.
Upon surrender to the Trustee of the typewritten Bond or Bonds representing the
Book-Entry Bonds by the Clearing Agency, accompanied by registration
instructions, the Issuer shall execute and the Trustee shall authenticate the
Definitive Bonds in accordance with the instructions of the Clearing Agency.
None of the Issuer, the Registrar or the 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 Bonds, the Trustee shall recognize the Holders of the Definitive
Bonds as Bondholders.
Section 2.12. Release of Collateral. Subject to Section 11.01, the
Trustee shall release property from the Lien of this Indenture only as specified
in Section 8.02 or upon receipt of an Issuer Request accompanied by an Officer's
Certificate, an Opinion of Counsel and Independent Certificates in accordance
with Trust Indenture Act Sections 314(c) and 314(d)(l) or an Opinion of
Counsel in lieu of such Independent Certificates to the effect that the Trust
Indenture Act does not require any such Independent Certificates.
ARTICLE III
COVENANTS
Section 3.01. Payment of Principal and Interest. The Issuer will duly
and punctually pay the principal of and interest on the Bonds in accordance with
the terms of the Bonds and this Indenture. Amounts properly withheld under the
Code by any Person from a payment to any Bondholder of interest or principal
shall be considered as having been paid by the Issuer to such Bondholder for all
purposes of this Indenture.
Section 3.02. Maintenance of Office or Agency. The Issuer will maintain
in the Borough of Manhattan, The City of New York, an office or agency where
Bonds may be surrendered for registration of transfer or exchange. The Issuer
hereby initially appoints the Trustee to serve as its agent for the foregoing
purposes. The Issuer will give prompt written notice to the Trustee of the
location, and of any change in the location, of any such office or agency. If at
any time the Issuer shall fail to maintain any such office or agency or shall
fail to furnish the Trustee with the address thereof, such surrenders may be
made at the Corporate Trust Office, and the Issuer hereby appoints the Trustee
as its agent to receive all such surrenders.
Section 3.03. Money for Payments To Be Held in Trust. As provided in
Section 8.02(a), all payments of amounts due and payable with respect to any
Bonds that are to be made from amounts withdrawn from the Collection Account
pursuant to Section 8.02(d) shall be made on behalf of the Issuer by the Trustee
or by another Paying Agent, and no amounts so withdrawn from the Collection
Account for payments of Bonds shall be paid over to the Issuer except as
provided in this Section and Section 8.02.
The Issuer will cause each Paying Agent other than the Trustee to
execute and deliver to the Trustee an instrument in which such Paying Agent
shall agree with the Trustee (and if the Trustee acts as Paying Agent, it hereby
so agrees), subject to the provisions of this Section, that such Paying Agent
will:
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(a) hold all sums held by it for the payment of amounts due with
respect to the Bonds in trust for the benefit of the Persons entitled thereto
until such sums shall be paid to such Persons or otherwise disposed of as herein
provided and pay such sums to such Persons as herein provided;
(b) give the Trustee notice of any Default by the Issuer (or any other
obligor upon the Bonds) of which it has actual knowledge in the making of any
payment required to be made with respect to the Bonds;
(c) at any time during the continuance of any such Default, upon the
written request of the Trustee, forthwith pay to the Trustee all sums so held in
trust by such Paying Agent;
(d) immediately resign as a Paying Agent and forthwith pay to the
Trustee all sums held by it in trust for the payment of Bonds if at any time it
ceases to meet the standards required to be met by a Paying Agent at the time of
its appointment; and
(e) comply with all requirements of the Code with respect to the
withholding from any payments made by it on any Bonds of any applicable
withholding taxes imposed thereon and with respect to any applicable reporting
requirements in connection therewith.
The Issuer may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, by Issuer
Order direct any Paying Agent to pay to the Trustee all sums held in trust by
such Paying Agent, such sums to be held by the Trustee upon the same trusts as
those upon which the sums were held by such Paying Agent; and upon such payment
by any Paying Agent to the Trustee, such Paying Agent shall be released from all
further liability with respect to such money.
Subject to applicable laws with respect to escheat of funds or other
applicable abandoned property laws, any money held by the Trustee or any Paying
Agent in trust for the payment of any amount due with respect to any Bond and
remaining unclaimed for two years after such amount has become due and payable
shall be discharged from such trust and be paid to the Issuer on Issuer Request;
and, subject to Section 11.15, the Holder of such Bond shall thereafter, as an
unsecured general creditor, look only to the Issuer for payment thereof (but
only to the extent of the amounts so paid to the Issuer), and all liability of
the Trustee or such Paying Agent with respect to such trust money shall
thereupon cease; provided, however, that the Trustee or such Paying Agent,
before being required to make any such repayment, may at the expense of the
Issuer cause to be published once, in a newspaper published in the English
language, customarily published on each Business Day and of general circulation
in The City of New York, notice that such money remains unclaimed and that,
after a date specified therein, which shall not be less than 30 days from the
date of such publication, any unclaimed balance of such money then remaining
will be repaid to the Issuer. The Trustee may also adopt and employ, at the
expense of the Issuer, any other reasonable means of notification of such
repayment (including mailing notice of such repayment to Holders whose Bonds
have been called but have not been surrendered for redemption or whose right to
or interest in moneys due and payable but not claimed is determinable from the
records of the Trustee or of any Paying Agent, at the last address of record for
each such Holder).
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Section 3.04. Existence. The Issuer will keep in full effect its
existence, rights and franchises as a limited liability company under the laws
of the State of Delaware (unless, subject to the provisions of Section 3.10, it
becomes, or any successor Issuer hereunder is or becomes, organized under the
laws of any other State or of the United States of America, in which case the
Issuer will keep in full effect its existence, rights and franchises under the
laws of such other jurisdiction) and will obtain and preserve its qualification
to do business in each jurisdiction in which such qualification is or shall be
necessary to protect the validity and enforceability of this Indenture, the
Bonds, the Collateral and each other instrument or agreement included in the
Collateral.
Section 3.05. Protection of Collateral. The Issuer will from time to
time execute and deliver all such supplements and amendments hereto and all such
filings with the NHPUC pursuant to the Statute, financing statements,
continuation statements, instruments of further assurance and other instruments,
and will take such other action necessary or advisable to:
(a) maintain or preserve the Lien (and the priority thereof) of this
Indenture or carry out more effectively the purposes hereof;
(b) perfect, publish notice of or protect the validity of any Grant
made or to be made by this Indenture;
(c) enforce any of the Collateral;
(d) preserve and defend title to the Collateral and the rights of the
Trustee and the Bondholders in such Collateral against the claims of all Persons
and parties, including the challenge by any party to the validity or
enforceability of the Finance Order, any Issuance Advice Letter or the RRB
Property or any proceeding relating thereto and institute any action or
proceeding necessary to compel performance by the NHPUC or the State of New
Hampshire of any of its obligations or duties under the Statute, the Finance
Order or any Issuance Advice Letter; or
(e) pay any and all taxes levied or assessed upon all or any part of
the Collateral.
The Issuer hereby designates the Trustee its agent and attorney-in-fact
to execute any filings with the NHPUC pursuant to the Statute, financing
statement, continuation statement or other instrument required by the Trustee
pursuant to this Section, it being understood that the Trustee shall have no
such obligation. The Trustee agrees not to execute any such filings prior to a
Default unless the Issuer shall have failed to make any such filing on a timely
basis, which in the case of continuation statements with respect to financing
statements and similar instruments shall mean at least five Business Days prior
to the expiration date for such filing.
The Issuer hereby agrees to file promptly after the date hereof, and
the Trustee hereby authorizes the filing of, financing statements in lieu of
continuation statements with respect to the financing statements filed in New
Hampshire on or prior to the Issuance Date that name the Issuer as debtor in
accordance with the provisions of Article 9 of the Delaware UCC.
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Section 3.06. Opinions as to Collateral.
(a) On the Issuance Date, the Issuer shall furnish to the Trustee an
Opinion of Counsel either stating that, in the opinion of such counsel, (A) such
action has been taken (and reciting the details of such action) with respect to
the recording and filing of this Indenture and any other requisite documents,
and with respect to the execution and filing of any filings with the NHPUC
pursuant to the Statute, financing statements and continuation statements, as
are necessary to perfect the Lien of this Indenture, or (B) no such action is
necessary to make such Lien effective.
(b) Prior to the effectiveness of any amendment to the Sale Agreement,
the Issuer shall furnish to the Trustee an Opinion of Counsel either (A) stating
that, in the opinion of such counsel, all filings, including filings with the
NHPUC pursuant to the Statute and any UCC financing statements, have been
executed and filed that are necessary fully to preserve and protect the interest
of the Issuer and the Trustee in the RRB Property and the proceeds thereof, and
reciting the details of such filings or referring to prior Opinions of Counsel
in which such details are given, or (B) stating that, in the opinion of such
counsel, no such action shall be necessary to preserve and protect such
interest.
(c) The Issuer shall furnish to the Trustee not later than March 31 of
each year (commencing with March 31, 2003), an Opinion of Counsel either stating
that, in the opinion of such counsel, (A) such action has been taken (and
reciting the details of such action or referring to prior Opinions of Counsel in
which such details are given) with respect to the recording and filing of this
Indenture and any other requisite documents, and with respect to the execution
and filing of any filings with the NHPUC pursuant to the Statute, financing
statements and continuation statements, as are necessary to maintain and
continue the perfection and priority of the Lien of this Indenture until March
31 of the following year, or (B) no such action is necessary to maintain such
Lien.
Section 3.07. Performance of Obligations; Servicing; NHPUC Filings.
(a) The Issuer (i) will diligently pursue any and all actions to
enforce its rights under each instrument or agreement included in the Collateral
and (ii) will not take any action and will use its reasonable efforts not to
permit any action to be taken by others that would release any Person from any
of such Person's covenants or obligations under any such instrument or agreement
or that would result in the amendment, hypothecation, subordination, termination
or discharge of, or impair the validity or effectiveness of, any such instrument
or agreement, except, in each case, as expressly permitted in this Indenture,
the Sale Agreement, the Servicing Agreement or such other instrument or
agreement.
(b) The Issuer may contract with other Persons to assist it in
performing its duties under this Indenture, and any performance of such duties
by a Person identified to the Trustee in an Officer's Certificate of the Issuer
shall be deemed to be action taken by the Issuer. Initially, the Issuer has
contracted with the Administrator and the Servicer to assist the Issuer in
performing its duties under this Indenture.
(c) The Issuer will punctually perform and observe all of its
obligations and agreements contained in this Indenture, the Basic Documents and
in the instruments and agreements included
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in the Collateral, including filing or causing to be filed all filings with the
NHPUC pursuant to the Statute, UCC financing statements and continuation
statements required to be filed by it by the terms of this Indenture, the Sale
Agreement and the Servicing Agreement in accordance with and within the time
periods provided for herein and therein. Except as otherwise expressly permitted
therein, the Issuer shall not waive, amend, modify, supplement or terminate any
Basic Document or any provision thereof without the written consent of the
Trustee (which consent shall not be withheld if (i) the Trustee shall have
received an Officer's Certificate stating that such waiver, amendment,
modification, supplement or termination shall not adversely affect in any
material respect the interests of the Bondholders and (ii) the Rating Agency
Condition shall have been satisfied with respect thereto) or the Holders of at
least a majority of the Outstanding Amount of Bonds.
(d) If the Issuer shall have knowledge of the occurrence of a Servicer
Default under the Servicing Agreement, the Issuer shall promptly give written
notice thereof to the Trustee and the Rating Agencies, and shall specify in such
notice the action, if any, the Issuer is taking with respect to such default. If
a Servicer Default shall arise from the failure of the Servicer to perform any
of its duties or obligations under the Servicing Agreement with respect to the
RRB Property, including the RRB Charge, the Issuer shall take all reasonable
steps available to it to remedy such failure.
(e) As promptly as possible after the giving of notice to the Servicer,
the Trustee and the Rating Agencies of termination of the Servicer's rights and
powers pursuant to Section 7.01 of the Servicing Agreement, the Issuer, subject
to the approval of the NHPUC pursuant to the Finance Order, shall appoint a
successor Servicer (the "Successor Servicer") with the Trustee's prior written
consent thereto (which consent shall not be unreasonably withheld), and such
Successor Servicer shall accept its appointment by a written assumption in a
form acceptable to the Issuer and the Trustee. A Person shall qualify as a
Successor Servicer only if such Person satisfies the requirements of the
Servicing Agreement. If within 30 days after the delivery of the notice referred
to above, the Issuer shall not have obtained such a new Servicer, the Trustee
may petition the NHPUC or a court of competent jurisdiction to appoint a
Successor Servicer. In connection with any such appointment, the Issuer may make
such arrangements for the compensation of such successor as it and such
successor shall agree, subject to the limitations set forth below and in the
Servicing Agreement, and in accordance and in compliance with Section 7.02 of
the Servicing Agreement, the Issuer shall enter into an agreement with such
successor for the servicing of the RRB Property (such agreement to be in form
and substance reasonably satisfactory to the Trustee).
(f) Upon any termination of the Servicer's rights and powers pursuant
to the Servicing Agreement, the Trustee shall promptly notify the Issuer, the
Bondholders and the Rating Agencies. As soon as a Successor Servicer is
appointed, the Issuer shall notify the Trustee, the Bondholders and the Rating
Agencies of such appointment, specifying in such notice the name and address of
such Successor Servicer.
(g) Without derogating from the absolute nature of the assignment
granted to the Trustee under this Indenture or the rights of the Trustee
hereunder, the Issuer agrees that it will not, without the prior written consent
of the Trustee (which consent shall not be withheld if (i) the Trustee shall
have received an Officer's Certificate stating that such amendment,
modification,
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waiver, supplement, termination or surrender shall not adversely affect in any
material respect the interests of the Bondholders and (ii) the Rating Agency
Condition shall have been satisfied with respect thereto) or the Holders of at
least a majority in Outstanding Amount of the Bonds, amend, modify, waive,
supplement, terminate or surrender, or agree to any amendment, modification,
waiver, supplement, termination or surrender of, the terms of any Collateral or
the Basic Documents, or waive timely performance or observance of any material
term by the Seller or the Servicer under the Sale Agreement or the Servicing
Agreement, respectively. If any such amendment, modification, supplement or
waiver shall be so consented to by the Trustee or such Holders, the Issuer
agrees to execute and deliver, in its own name and at its own expense, such
agreements, instruments, consents and other documents as shall be necessary or
appropriate in the circumstances. The Issuer agrees that no such amendment,
modification, supplement or waiver shall adversely affect the rights of the
Holders of the Bonds Outstanding at the time of any such amendment,
modification, supplement or waiver, except as otherwise agreed to by the Holders
in accordance with the Basic Documents.
(h) The Issuer shall file with the Commission such periodic reports, if
any, as are required from time to time under Section 13 or 15(d) of the Exchange
Act.
(i) The Issuer shall make all filings required under the Statute
relating to the transfer of the ownership or security interest in the RRB
Property other than those required to be made by the Seller pursuant to the
Basic Documents.
Section 3.08. Negative Covenants. So long as any Bonds are Outstanding,
the Issuer shall not:
(a) except as expressly permitted by this Indenture, sell, transfer,
exchange or otherwise dispose of any of the properties or assets of the Issuer,
including those included in the Collateral, unless directed to do so by the
Trustee in accordance with Article V;
(b) claim any credit on, or make any deduction from the principal or
interest payable in respect of, the Bonds (other than amounts properly withheld
from such payments under the Code) or assert any claim against any present or
former Bondholder by reason of the payment of the taxes levied or assessed upon
any part of the Collateral;
(c) terminate its existence or dissolve or liquidate in whole or in
part; or
(d) (A) permit the validity or effectiveness of this Indenture to be
impaired, or permit the Lien of this Indenture to be amended, subordinated,
terminated or discharged, or permit any Person to be released from any covenants
or obligations with respect to the Bonds under this Indenture except as may be
expressly permitted hereby, (B) permit any lien, charge, excise, claim, security
interest, mortgage or other encumbrance (other than the Lien of this Indenture
and the Statutory Lien) to be created by the Issuer on or extend to or otherwise
arise upon or burden the Collateral or any part thereof or any interest therein
or the proceeds thereof or (C) subject to the Statutory Lien, permit the Lien of
this Indenture not to constitute a valid first priority security interest in the
Collateral.
Section 3.09. Annual Statement as to Compliance. The Issuer will
deliver to the Trustee and the Rating Agencies not later than March 31 of each
year (commencing with March 31,
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2003), an Officer's Certificate stating, as to the Authorized Officer signing
such Officer's Certificate, that
(a) a review of the activities of the Issuer during the preceding
twelve months ended December 31 (or, in the case of the Officer's Certificate to
be delivered on or before March 31, 2003, the period of time from the date of
this Indenture until December 31, 2002), and of performance under this Indenture
has been made under such Authorized Officer's supervision; and
(b) to such Authorized Officer's knowledge, based on such review, the
Issuer has complied with all conditions and covenants under this Indenture
throughout such twelve month period, or, if there has been a default in so
complying with any such condition or covenant, specifying each such default
known to such Authorized Officer and the nature and status thereof.
Section 3.10. Issuer May Consolidate, etc., Only on Certain Terms.
(a) The Issuer shall not consolidate or merge with or into any other
Person, unless
(i) the Person (if other than the Issuer) formed by or
surviving such consolidation or merger shall be a Person organized and
existing under the laws of the United States of America or any State
and shall expressly assume, by an indenture supplemental hereto,
executed and delivered to the Trustee, in form and substance reasonably
satisfactory to the Trustee, the due and punctual payment of the
principal of and interest on all Bonds and the performance or
observance of every agreement and covenant of this Indenture on the
part of the Issuer to be performed or observed, all as provided herein;
(ii) immediately after giving effect to such transaction, no
Default or Event of Default shall have occurred and be continuing;
(iii) the Rating Agency Condition shall have been satisfied
with respect to such transaction;
(iv) the Issuer shall have received an Opinion of Counsel (and
shall have delivered copies thereof to the Trustee) to the effect that
such transaction will not have any material adverse tax consequence to
the Issuer or any Bondholder;
(v) any action as is necessary to maintain the Lien created by
this Indenture shall have been taken; and
(vi) the Issuer shall have delivered to the Trustee an
Officer's Certificate and an Opinion of Counsel each stating that such
consolidation or merger and such supplemental indenture comply with
this Section 3.10 and that all conditions precedent herein provided for
relating to such transaction have been complied with (including any
filing required by the Exchange Act).
(b) Except as specifically provided herein, the Issuer shall not convey
or transfer any of its properties or assets, including those included in the
Collateral, to any Person, unless
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(i) the Person that acquires by conveyance or transfer the
properties and assets of the Issuer the conveyance or transfer of which
is hereby restricted shall (A) be a United States citizen or a Person
organized and existing under the laws of the United States of America
or any State, (B) expressly assumes, by an indenture supplemental
hereto, executed and delivered to the Trustee, in form and substance
reasonably satisfactory to the Trustee, the due and punctual payment of
the principal of and interest on all Bonds and the performance or
observance of every agreement and covenant of this Indenture on the
part of the Issuer to be performed or observed, all as provided herein,
(C) expressly agrees by means of such supplemental indenture that all
right, title and interest so conveyed or transferred shall be subject
and subordinate to the rights of Holders of the Bonds, (D) unless
otherwise provided in the supplemental indenture referred to in clause
(B) above, expressly agrees to indemnify, defend and hold harmless the
Trustee against and from any loss, liability or expense arising under
or related to this Indenture and the Bonds and (E) expressly agrees by
means of such supplemental indenture that such Person (or if a group of
Persons, then one specified Person) shall make all filings with the
Commission (and any other appropriate Person) required by the Exchange
Act in connection with the Bonds;
(ii) immediately after giving effect to such transaction, no
Default or Event of Default shall have occurred and be continuing;
(iii) the Rating Agency Condition shall have been satisfied
with respect to such transaction;
(iv) the Issuer shall have received an Opinion of Counsel (and
shall have delivered copies thereof to the Trustee) to the effect that
such transaction will not have any material adverse tax consequence to
the Issuer or any Bondholder;
(v) any action as is necessary to maintain the Lien created by
this Indenture shall have been taken; and
(vi) the Issuer shall have delivered to the Trustee an
Officer's Certificate and an Opinion of Counsel each stating that such
conveyance or transfer and such supplemental indenture comply with this
Section 3.10 and that all conditions precedent herein provided for
relating to such transaction have been complied with (including any
filing required by the Exchange Act).
Section 3.11. Successor or Transferee.
(a) Upon any consolidation or merger of the Issuer in accordance with
Section 3.10(a), the Person formed by or surviving such consolidation or merger
(if other than the Issuer) shall succeed to, and be substituted for, and may
exercise every right and power of, the Issuer under this Indenture with the same
effect as if such Person had been named as the Issuer herein.
(b) Except as set forth in Section 6.06, upon a conveyance or transfer
of all the assets and properties of the Issuer pursuant to Section 3.10(b), PSNH
Funding LLC 2 will be released from every covenant and agreement of this
Indenture to be observed or performed on the part of the
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Issuer with respect to the Bonds immediately upon the delivery of written notice
by PSNH Funding LLC 2 to the Trustee stating that PSNH Funding LLC 2 is to be so
released.
Section 3.12. No Other Business. The Issuer shall not engage in any
business other than financing, purchasing, owning and managing the RRB Property
in the manner contemplated by this Indenture and the Basic Documents and
activities incidental thereto.
Section 3.13. No Borrowing. The Issuer shall not issue, incur, assume,
guarantee or otherwise become liable, directly or indirectly, for any
indebtedness except for the Bonds.
Section 3.14. Servicer's Obligations. The Issuer shall enforce the
Servicer's compliance with all of the Servicer's material obligations under the
Servicing Agreement.
Section 3.15. No Additional Bonds. The Issuer shall not issue any
additional Bonds hereunder, except pursuant to Section 2.05 or Section 2.06.
Section 3.16. Guarantees, Loans, Advances and Other Liabilities. Except
as otherwise contemplated by the Sale Agreement, the Servicing Agreement or this
Indenture, the Issuer shall not make any loan or advance or credit to, or
guarantee (directly or indirectly or by an instrument having the effect of
assuring another's payment or performance on any obligation or capability of so
doing or otherwise), endorse or otherwise become contingently liable, directly
or indirectly, in connection with the obligations, stocks or dividends of, or
own, purchase, repurchase or acquire (or agree contingently to do so) any stock,
obligations, assets or securities of, or any other interest in, or make any
capital contribution to, any other Person.
Section 3.17. Capital Expenditures. Other than expenditures in an
aggregate amount not to exceed $25,000 in any calendar year, the Issuer shall
not make any expenditure (by long-term or operating lease or otherwise) for
capital assets (either realty or personalty).
Section 3.18. Non-Routine Periodic Adjustment. The Issuer agrees that
it shall not consent to a Non-Routine Periodic Adjustment pursuant to Section
4.01(c) of the Servicing Agreement unless the Rating Agency Condition shall have
been satisfied.
Section 3.19. Restricted Payments. The Issuer shall not, directly or
indirectly, while the Bonds are Outstanding (i) pay any dividend or make any
distribution (by reduction of capital or otherwise), whether in cash, property,
securities or a combination thereof, to any owner of a beneficial interest in
the Issuer or otherwise with respect to any ownership or equity interest or
security in or of the Issuer, (ii) redeem, purchase, retire or otherwise acquire
for value any such ownership or equity interest or security or (iii) set aside
or otherwise segregate any amounts for any such purpose; provided, however,
that, if no Event of Default shall have occurred and be continuing, the Issuer
may make, or cause to be made, any such distributions to any owner of a
beneficial interest in the Issuer or otherwise with respect to any ownership or
equity interest or security in or of the Issuer using funds distributed to the
Issuer pursuant to Section 8.02 to the extent that such distributions would not
cause the amount of the Capital Subaccount to decline below the Required Capital
Level. The Issuer will not, directly or indirectly, make payments to or
distributions from the Collection Account except in accordance with this
Indenture and the Basic Documents.
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Section 3.20. Notice of Events of Default. The Issuer agrees to give
the Trustee, and the Rating Agencies prompt written notice of each Event of
Default hereunder and each default on the part of the Seller or the Servicer of
its obligations under the Sale Agreement or the Servicing Agreement,
respectively.
Without limiting the foregoing, the Issuer shall deliver to a
Responsible Officer of the Trustee and to the Rating Agencies, within five
Business Days after an Authorized Officer of the Issuer has knowledge of the
occurrence thereof, written notice in the form of an Officer's Certificate of
any event which with the giving of notice and the lapse of time would become an
Event of Default under Section 5.01(d), its status and what action the Issuer is
taking or proposes to take with respect thereto.
Section 3.21. Further Instruments and Acts. Upon request of the
Trustee, the Issuer will execute and deliver such further instruments and do
such further acts as may be reasonably necessary or proper to carry out more
effectively the purpose of this Indenture. The Issuer will take all actions, and
make all filings, necessary to obtain and maintain a first priority perfected
security interest in the Collateral in favor of the Trustee.
Section 3.22. Change in Chief Executive Office or Jurisdiction of
Organization. The Issuer shall not change its chief executive office or the
jurisdiction of its formation without previously having delivered to the Trustee
an Opinion of Counsel to the effect that all actions have been taken, and all
filings have been made, as are necessary to continue and maintain the first
priority perfected security interest of the Trustee in the Collateral.
Section 3.23. Notice to Rating Agencies of Amendment of Other Basic
Documents. Promptly after the execution of any amendment to any of the Basic
Documents (other than this Indenture), the Issuer shall mail to the Rating
Agencies a notice setting forth in general terms the substance of such
amendment. Any failure of the Issuer to mail such notice, or any defect therein,
shall not, however, in any way impair or affect the validity of any such
amendment. If any such amendment requires satisfaction of the Rating Agency
Condition, the notice requirements contained in this Section 3.23 are in
addition to the notice requirements that may otherwise apply. Notice to the
Rating Agencies of the execution by the Issuer and the Trustee of any
supplemental indenture pursuant to Section 9.01 or Section 9.02 shall be given
by the Trustee in accordance with such Section.
ARTICLE IV
SATISFACTION AND DISCHARGE; DEFEASANCE
Section 4.01. Satisfaction and Discharge of Indenture; Defeasance.
(a) This Indenture shall cease to be of further effect with respect to
the Bonds and the Trustee, on reasonable demand of and at the expense of the
Issuer, shall execute proper instruments acknowledging satisfaction and
discharge of this Indenture with respect to the Bonds, when
(i) either all Bonds theretofore authenticated and delivered
(other than (i) Bonds that have been mutilated, destroyed, lost or
stolen and that have been replaced
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or paid as provided in Section 2.06 and (ii) Bonds for whose payment
money has theretofore been deposited in trust or segregated and held in
trust by the Issuer and thereafter repaid to the Issuer or discharged
from such trust, as provided in Section 3.03) have been delivered to
the Trustee for cancellation; or the Scheduled Maturity Date or
Redemption Date has occurred with respect to all Bonds not theretofore
delivered to the Trustee for cancellation, and the Issuer has
irrevocably deposited or caused to be irrevocably deposited with the
Trustee cash, in trust for such purpose, in an amount sufficient to pay
and discharge the entire indebtedness on such Bonds not theretofore
delivered to the Trustee for cancellation on the Scheduled Maturity
Date therefor;
(ii) the Issuer has paid or caused to be paid all other sums
payable hereunder by the Issuer; and
(iii) the Issuer has delivered to the Trustee an Officer's
Certificate, an Opinion of Counsel and (if required by the Trust
Indenture Act or the Trustee) an Independent Certificate from a firm of
certified public accountants, each meeting the applicable requirements
of Section 11.01(a) and each stating that all conditions precedent
herein provided for relating to the satisfaction and discharge of this
Indenture with respect to the Bonds have been complied with.
(b) Subject to Sections 4.01(c) and 4.02, the Issuer at any time may
terminate (i) all its obligations under this Indenture with respect to the Bonds
("Legal Defeasance Option") or (ii) its obligations under Sections 3.04, 3.05,
3.06, 3.07, 3.08, 3.09, 3.10, 3.12, 3.13, 3.14, 3.15, 3.16, 3.17 and 3.18 and
the operation of Section 5.01(d) ("Covenant Defeasance Option") with respect to
the Bonds. The Issuer may exercise the Legal Defeasance Option notwithstanding
its prior exercise of the Covenant Defeasance Option.
If the Issuer exercises the Legal Defeasance Option, the maturity of
the Bonds may not be accelerated because of an Event of Default. If the Issuer
exercises the Covenant Defeasance Option, the maturity of the Bonds may not be
accelerated because of an Event of Default specified in Section 5.01(d).
Upon satisfaction of the conditions set forth herein to the exercise of
the Legal Defeasance Option or the Covenant Defeasance Option, the Trustee, on
reasonable demand of and at the expense of the Issuer, shall execute proper
instruments acknowledging satisfaction and discharge of the obligations that are
terminated pursuant to such exercise.
(c) Notwithstanding Sections 4.01(a) and 4.01(b), (i) rights of
registration of transfer and exchange, (ii) substitution of mutilated,
destroyed, lost or stolen Bonds, (iii) rights of Bondholders to receive payments
of principal and interest, (iv) Sections 4.03, 4.04 and 11.19, (v) the rights,
obligations and immunities of the Trustee hereunder (including the rights of the
Trustee under Section 6.07 and the obligations of the Trustee under Section
4.03) and (vi) the rights of Bondholders as beneficiaries hereof with respect to
the property deposited with the Trustee payable to all or any of them, shall
survive until the Bonds, as to which this Indenture or certain obligations
hereunder have been satisfied and discharged pursuant to Section 4.01(a) or
4.01(b), have been paid in full. Thereafter, the obligations in Sections 4.04,
Section 6.07 and 11.19 shall survive.
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Section 4.02. Conditions to Defeasance. The Issuer may exercise the
Legal Defeasance Option or the Covenant Defeasance Option of Bonds only if:
(a) the Issuer irrevocably deposits or causes to be deposited in trust
with the Trustee cash or U.S. Government Obligations for the payment of
principal of and interest on each such Bond to the Scheduled Maturity Date,
Optional Redemption Date or Mandatory Redemption Date therefor, as applicable;
(b) the Issuer delivers to the Trustee a certificate from a nationally
recognized firm of Independent accountants expressing its opinion that the
payments of principal and interest when due and without reinvestment on the
deposited U.S. Government Obligations plus any deposited cash without investment
will provide cash at such times and in such amounts (but, in the case of the
Legal Defeasance Option only, not more than such amounts) as will be sufficient
to pay in respect of the Bonds (i) subject to clause (ii), principal in
accordance with the Expected Amortization Schedule therefor, (ii) if to be
redeemed, the Optional Redemption Price or Mandatory Redemption Price, as
applicable, therefor on the related Optional Redemption Date or Mandatory
Redemption Date, as applicable and (iii) interest when due;
(c) in the case of the Legal Defeasance Option, 91 days pass after the
deposit is made and during the 91-day period no Default specified in Section
5.01(e) or (f) occurs which is continuing at the end of the period;
(d) no Default has occurred and is continuing on the day of such
deposit and after giving effect thereto;
(e) in the case of an exercise of the Legal Defeasance Option, the
Issuer shall have delivered to the Trustee an Opinion of Counsel stating that
(i) the Issuer has received from, or there has been published by, the Internal
Revenue Service a ruling, or (ii) since the date of execution of this Indenture,
there has been a change in the applicable federal income tax law, in either case
to the effect that, and based thereon such opinion shall confirm that, the
Holders of the Bonds will not recognize income, gain or loss for federal income
tax purposes as a result of such legal defeasance and will be subject to federal
income tax on the same amounts, in the same manner and at the same times as
would have been the case if such legal defeasance had not occurred;
(f) in the case of an exercise of the Covenant Defeasance Option, the
Issuer shall have delivered to the Trustee an Opinion of Counsel to the effect
that the Holders of the Bonds will not recognize income, gain or loss for
federal income tax purposes as a result of such covenant defeasance and will be
subject to federal income tax on the same amounts, in the same manner and at the
same times as would have been the case if such covenant defeasance had not
occurred; and
(g) the Issuer delivers to the Trustee an Officer's Certificate and an
Opinion of Counsel, each stating that all conditions precedent to the
satisfaction and discharge of the Bonds to the extent contemplated by this
Article IV have been complied with.
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Before or after a deposit pursuant to this Section 4.02, the Issuer may
make arrangements satisfactory to the Trustee for the redemption of such Bonds
at a future date in accordance with Article X.
Section 4.03. Application of Trust Money. All moneys or U.S. Government
Obligations deposited with the Trustee pursuant to Section 4.01 or 4.02 shall be
held in trust and applied by it, in accordance with the provisions of the Bonds
and this Indenture, to the payment, either directly or through any Paying Agent,
as the Trustee may determine, to the Holders of the particular Bonds for the
payment or redemption of which such moneys have been deposited with the Trustee,
of all sums due and to become due thereon for principal and interest, but such
moneys need not be segregated from other funds except to the extent required
herein or in the Servicing Agreement or required by law.
Section 4.04. Repayment of Moneys Held by Paying Agent. In connection
with the satisfaction and discharge of this Indenture or the Covenant Defeasance
Option or Legal Defeasance Option with respect to the Bonds, all moneys then
held by any Paying Agent other than the Trustee under the provisions of this
Indenture with respect to such Bonds shall, upon demand of the Issuer, be paid
to the Trustee to be held and applied according to Section 3.03 and thereupon
such Paying Agent shall be released from all further liability with respect to
such moneys.
ARTICLE V
REMEDIES
Section 5.01. Events of Default. "Event of Default", wherever used
herein, means any one of the following events (whatever the reason for such
Event of Default and whether it shall be voluntary or involuntary or be effected
by operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body):
(a) default in the payment of any interest on any Bond when the same
becomes due and payable, and such default shall continue for a period of five
days; or
(b) default in the payment of the then unpaid principal of any Bond on
the Final Maturity Date; or
(c) default in the payment of the Optional Redemption Price for the
Bonds on the Optional Redemption Date therefor, or a default in the payment of
the Mandatory Redemption Price for the Bonds on the Mandatory Redemption Date;
or
(d) (i) default in the observance or performance in any material
respect of any covenant or agreement of the Issuer made in this Indenture (other
than a covenant or agreement, a default in the observance or performance of
which is elsewhere in this Section specifically dealt with), or (ii) any
representation or warranty of the Issuer made in this Indenture or in any
certificate or other writing delivered pursuant hereto or in connection herewith
proving to have been incorrect in any material respect as of the time when the
same shall have been made and, in any case under clause (i) or clause (ii), such
default shall continue or not be cured, or the circumstance or
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condition in respect of which such misrepresentation or warranty was incorrect
shall not have been eliminated or otherwise cured, for a period of 30 days after
there shall have been given, by registered or certified mail, to the Issuer by
the Trustee or to the Issuer and the Trustee by the Holders of at least 25
percent of the Outstanding Amount of the Bonds, a written notice specifying such
default or incorrect representation or warranty and requiring it to be remedied
and stating that such notice is a "Notice of Default" hereunder; or
(e) the filing of a decree or order for relief by a court having
jurisdiction in the premises in respect of the Issuer or any substantial part of
the Collateral in an involuntary case under any applicable federal or state
bankruptcy, insolvency or other similar law now or hereafter in effect, or
appointing a receiver, liquidator, assignee, custodian, trustee, sequestrator or
similar official of the Issuer or for any substantial part of the Collateral, or
ordering the winding-up or liquidation of the Issuer's affairs, and such decree
or order shall remain unstayed and in effect for a period of 60 consecutive
days; or
(f) the commencement by the Issuer of a voluntary case under any
applicable federal or state bankruptcy, insolvency or other similar law now or
hereafter in effect, or the consent by the Issuer to the entry of an order for
relief in an involuntary case under any such law, or the consent by the Issuer
to the appointment or taking possession by a receiver, liquidator, assignee,
custodian, trustee, sequestrator or similar official of the Issuer or for any
substantial part of the Collateral, or the making by the Issuer of any general
assignment for the benefit of creditors, or the failure by the Issuer generally
to pay its debts as such debts become due, or the taking of action by the Issuer
in furtherance of any of the foregoing; or
(g) a breach of the State Pledge by the State of New Hampshire.
Section 5.02. Acceleration of Maturity; Rescission and Annulment. If an
Event of Default, other than an Event of Default pursuant to Section 5.01(g),
should occur and be continuing, then and in every such case, the Trustee may
and, upon the written direction of the Holders of Bonds representing not less
than a majority of the Outstanding Amount of the Bonds, shall declare all the
Bonds to be immediately due and payable, by a notice in writing to the Issuer
and upon any such declaration the unpaid principal amount of the Bonds, together
with accrued and unpaid interest thereon through the date of acceleration, shall
become immediately due and payable.
At any time after such declaration of acceleration of maturity has been
made and before a judgment or decree for payment of the money due has been
obtained by the Trustee as hereinafter in this Article V provided, the Holders
of Bonds representing a majority of the Outstanding Amount of the Bonds, by
written notice to the Issuer and the Trustee, may rescind and annul such
declaration and its consequences if:
(a) the Issuer has paid or deposited with the Trustee a sum sufficient
to pay:
(1) all payments of principal of and interest on all Bonds and
all other amounts that would then be due hereunder or upon
such Bonds if the Event of Default giving rise to such
acceleration had not occurred; and
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(2) all sums paid or advanced by the Trustee hereunder and the
reasonable compensation, expenses, disbursements and
advances of the Trustee and its agents and counsel and all
amounts due under the Fee and Indemnity Agreement; and
(b) all Events of Default, other than the nonpayment of the principal
of the Bonds that has become due solely by such acceleration, have been cured or
waived as provided in Section 5.12.
No such rescission shall affect any subsequent Default or impair any
right consequent thereto.
Section 5.03. Collection of Indebtedness and Suits for Enforcement by
Trustee.
(a) The Issuer covenants that if (i) default is made in the payment of
any interest on any Bond when the same becomes due and payable, and such default
continues for a period of five days, (ii) default is made in the payment of the
then unpaid principal of any Bond on the Final Maturity Date for such Bond or
(iii) default is made in the payment of the Optional Redemption Price or
Mandatory Redemption Price, as applicable, for any Bond on the Optional
Redemption Date or Mandatory Redemption Date, as applicable, therefor, the
Issuer will, upon demand of the Trustee, pay to it, for the benefit of the
Holders of the Bonds, the whole amount then due and payable on such Bonds for
principal and interest, with interest upon the overdue principal and, to the
extent payment at such rate of interest shall be legally enforceable, upon
overdue installments of interest, at the respective rate borne by the Bonds of
the applicable Class and in addition thereto such further amount as shall be
sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Trustee and
its agents and counsel and an amount sufficient to cover all amounts required to
be paid by the Issuer under the Fee and Indemnity Agreement.
(b) Subject to Section 11.16, in case the Issuer shall fail forthwith
to pay such amounts upon such demand, the Trustee, in its own name and as
trustee of an express trust, may institute a Proceeding for the collection of
the sums so due and unpaid, and may prosecute such Proceeding to judgment or
final decree, and may enforce the same against the Issuer or other obligor upon
such Bonds and collect in the manner provided by law out of the property of the
Issuer or other obligor upon such Bonds, wherever situated, the moneys adjudged
or decreed to be payable.
(c) If an Event of Default occurs and is continuing, the Trustee may,
as more particularly provided in Section 5.04, in its discretion, proceed to
protect and enforce its rights and the rights of the Bondholders, by such
appropriate Proceedings as the Trustee shall deem most effective to protect and
enforce any such rights, whether for the specific enforcement of any covenant or
agreement in this Indenture or in aid of the exercise of any power granted
herein, or to enforce any other proper remedy or legal or equitable right vested
in the Trustee by this Indenture or by law.
(d) In case there shall be pending, relative to the Issuer or any other
obligor upon the Bonds or any Person having or claiming an ownership interest in
the Collateral, Proceedings under Title 11 of the United States Code or any
other applicable federal or state bankruptcy,
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insolvency or other similar law, or in case a receiver, assignee or trustee in
bankruptcy or reorganization, liquidator, sequestrator or similar official shall
have been appointed for or taken possession of the Issuer or its property or
such other obligor or Person, or in case of any other comparable judicial
Proceedings relative to the Issuer or other obligor upon the Bonds, or to the
creditors or property of the Issuer or such other obligor, the Trustee,
irrespective of whether the principal of any Bonds shall then be due and payable
as therein expressed or by declaration or otherwise and irrespective of whether
the Trustee shall have made any demand pursuant to the provisions of this
Section, shall be entitled and empowered, by intervention in such Proceedings or
otherwise:
(i) to file and prove a claim or claims for the whole amount
of principal and interest owing and unpaid in respect of the Bonds and
to file such other papers or documents as may be necessary or advisable
in order to have the claims of (A) the Trustee (including any claim for
reasonable compensation to the Trustee and each predecessor Trustee,
and their respective agents, attorneys and counsel, and for
reimbursement of all expenses and liabilities incurred, and all
advances made, by the Trustee and each predecessor Trustee, except as a
result of negligence or willful misconduct), (B) the Bondholders and
(C) each Person for whom a claim may be made under the Fee and
Indemnity Agreement, allowed in such Proceedings;
(ii) unless prohibited by applicable law and regulations, to
vote on behalf of the Holders of Bonds in any election of a trustee, a
standby trustee or Person performing similar functions in any such
Proceedings; and
(iii) to collect and receive any moneys or other property
payable or deliverable on any such claims and to distribute all amounts
received with respect to the claims of the Bondholders and of the
Trustee on their behalf;
and any trustee, receiver, liquidator, custodian or other similar official in
any such Proceeding is hereby authorized by each of such Bondholders to make
payments to the Trustee, and, in the event that the Trustee shall consent to the
making of payments directly to such Bondholders, to pay to the Trustee (or such
other beneficiary of the Fee and Indemnity Agreement) such amounts as shall be
sufficient to cover reasonable compensation and other amounts owing hereunder to
the Trustee or such Person, each predecessor Trustee and their respective
agents, attorneys and counsel, and all other reasonable expenses and liabilities
incurred, and all advances made, by the Trustee and each predecessor Trustee
except as a result of negligence or willful misconduct.
(e) Nothing herein contained shall be deemed to authorize the Trustee
to authorize or consent to or vote for or accept or adopt on behalf of any
Bondholder any plan of reorganization, arrangement, adjustment or composition
affecting the Bonds or the rights of any Holder thereof or to authorize the
Trustee to vote in respect of the claim of any Bondholder in any such proceeding
except, as aforesaid, to vote for the election of a trustee in bankruptcy or
similar Person.
(f) All rights of action and of asserting claims under this Indenture,
or under any of the Bonds, may be enforced by the Trustee without the possession
of any of the Bonds or the production thereof in any trial or other Proceedings
relative thereto, and any such action or
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proceedings instituted by the Trustee shall be brought in its own name as
trustee of an express trust, and any recovery of judgment, subject to the
payment of the expenses, disbursements and compensation of the Trustee, each
predecessor Trustee and their respective agents and attorneys, shall be for the
ratable benefit of the Holders of the Bonds.
(g) In any Proceedings brought by the Trustee (and also any Proceedings
involving the interpretation of any provision of this Indenture to which the
Trustee shall be a party), the Trustee shall be held to represent all the
Holders of the Bonds, and it shall not be necessary to make any Bondholder a
party to any such Proceedings.
Section 5.04. Remedies; Priorities.
(a) If an Event of Default, other than an Event of Default pursuant to
Section 5.01(g) (the remedy for which is set forth in Section 5.04(b)), shall
have occurred and be continuing, the Trustee may do one or more of the following
(subject to Section 5.05):
(i) institute Proceedings in its own name and as trustee of an
express trust for the collection of all amounts then payable on the
Bonds or under this Indenture with respect thereto, whether by
declaration or otherwise, enforce any judgment obtained, and collect
from the Issuer and any other obligor upon such Bonds moneys adjudged
due;
(ii) institute Proceedings from time to time for the complete
or partial foreclosure of this Indenture with respect to the
Collateral;
(iii) exercise any remedies of a secured party under the UCC,
the Statute or other applicable law and take any other appropriate
action to protect and enforce the rights and remedies of the Trustee
and the Holders of the Bonds; and
(iv) sell the Collateral or any portion thereof or rights or
interest therein, at one or more public or private sales called and
conducted in any manner permitted by law;
provided, however, that the Trustee may not sell or otherwise liquidate any
portion of the Collateral following an Event of Default, other than an Event of
Default described in Section 5.01(a), (b) or (c), unless (A) the Holders of 100
percent of the Outstanding Amount of the Bonds consent thereto, (B) the proceeds
of such sale or liquidation distributable to the Bondholders are sufficient to
discharge in full all amounts then due and unpaid upon such Bonds for principal
and interest after taking into account payment of all amounts due prior thereto
pursuant to the priorities set forth in Section 8.02(d) or (C) the Trustee
determines that the Collateral will not continue to provide sufficient funds for
all payments on the Bonds as they would have become due if the Bonds had not
been declared due and payable, and the Trustee obtains the consent of Holders of
66-2/3 percent of the Outstanding Amount of the Bonds. In determining such
sufficiency or insufficiency with respect to clause (B) and (C), the Trustee
may, but need not, obtain and conclusively rely upon an opinion of an
Independent investment banking or accounting firm of national reputation as to
the feasibility of such proposed action and as to the sufficiency of the
Collateral for such purpose.
(b) If an Event of Default pursuant to Section 5.01(g) shall have
occurred and be continuing, then the Trustee, in its own name and as trustee of
an express trust, shall be, to the
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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.
(c) If the Trustee collects any money pursuant to this Article V, it
shall pay out such money in accordance with the priorities set forth in Section
8.02(d).
Section 5.05. Optional Possession of the Collateral. If the Bonds have
been declared to be due and payable under Section 5.02 following an Event of
Default and such declaration and its consequences have not been rescinded and
annulled, the Trustee may, but need not, elect to maintain possession of the
Collateral. It is the desire of the parties hereto and the Bondholders that
there be at all times sufficient funds for the payment of principal of and
interest on the Bonds, and the Trustee shall take such desire into account when
determining whether or not to maintain possession of the Collateral. In
determining whether to maintain possession of the Collateral, the Trustee may,
but need not, obtain and conclusively rely upon an opinion of an Independent
investment banking or accounting firm of national reputation as to the
feasibility of such proposed action and as to the sufficiency of the Collateral
for such purpose.
Section 5.06. Limitation of Suits. No Holder of any Bond shall have any
right to institute any Proceeding, judicial or otherwise, with respect to this
Indenture, or for the appointment of a receiver or trustee, or for any other
remedy hereunder, and each Holder agrees, by its acceptance of any Bond, to the
fullest extent permitted by law, not to avail itself of any remedies in the
Statute or to utilize or enforce the Statutory Lien, unless:
(a) such Holder previously has given written notice to the Trustee of a
continuing Event of Default;
(b) the Holders of not less than 25 percent of the Outstanding Amount
of the Bonds have made written request to the Trustee to institute such
Proceeding in respect of such Event of Default in its own name as Trustee
hereunder;
(c) such Holder or Holders have offered to the Trustee indemnity
satisfactory to it against the costs, expenses and liabilities to be incurred in
complying with such request;
(d) the Trustee for 60 days after its receipt of such notice, request
and offer of indemnity has failed to institute such Proceedings; and
(e) no direction inconsistent with such written request has been given
to the Trustee during such 60-day period by the Holders of a majority of the
Outstanding Amount of the Bonds;
it being understood and intended that no one or more Holders of Bonds shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other
Holders of Bonds or to obtain or to seek to obtain priority or preference over
any other Holders or to enforce any right under this Indenture, except in the
manner herein provided.
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In the event the Trustee shall receive conflicting or inconsistent
requests and indemnity from two or more groups of Holders of Bonds, each
representing less than a majority of the Outstanding Amount of the Bonds, the
Trustee in its sole discretion may determine what action, if any, shall be
taken, notwithstanding any other provisions of this Indenture.
Section 5.07. Unconditional Rights of Bondholders To Receive Principal
and Interest. Notwithstanding any other provisions in this Indenture, the Holder
of any Bond shall have the right, which is absolute and unconditional, (a) to
receive payment of (i) the interest, if any, on such Bond on or after the due
dates thereof expressed in such Bond or in this Indenture, (ii) the unpaid
principal, if any, of such Bonds on or after the Final Maturity Date therefor or
(iii) in the case of redemption, receive payment of the unpaid principal of and
interest, if any, on such Bond on or after the Optional Redemption Date or
Mandatory Redemption Date, as applicable, therefor and (b) to institute suit for
the enforcement of any such payment, and such right shall not be impaired
without the consent of such Holder.
Section 5.08. Restoration of Rights and Remedies. If the Trustee or any
Bondholder has instituted any Proceeding to enforce any right or remedy under
this Indenture and such Proceeding has been discontinued or abandoned for any
reason or has been determined adversely to the Trustee or to such Bondholder ,
then and in every such case the Issuer, the Trustee and the Bondholders shall,
subject to any determination in such Proceeding, be restored severally and
respectively to their former positions hereunder, and thereafter all rights and
remedies of the Trustee and the Bondholders shall continue as though no such
Proceeding had been instituted.
Section 5.09. Rights and Remedies Cumulative. No right or remedy herein
conferred upon or reserved to the Trustee or to the Bondholders is intended to
be exclusive of any other right or remedy, and every right and remedy shall, to
the extent permitted by law, be cumulative and in addition to every other right
and remedy given hereunder or now or hereafter existing at law or in equity or
otherwise. The assertion or employment of any right or remedy hereunder, or
otherwise, shall not prevent the concurrent assertion or employment of any other
appropriate right or remedy.
Section 5.10. Delay or Omission Not a Waiver. No delay or omission of
the Trustee or any Bondholder to exercise any right or remedy accruing upon any
Default or Event of Default shall impair any such right or remedy or constitute
a waiver of any such Default or Event of Default or an acquiescence therein.
Every right and remedy given by this Article V or by law to the Trustee or to
the Bondholders may be exercised from time to time, and as often as may be
deemed expedient, by the Trustee or by the Bondholders, as the case may be.
Section 5.11. Control by Bondholders. The Holders of a majority of the
Outstanding Amount of the Bonds (or, if less than all Classes are affected, the
affected Class or Classes) shall have the right to direct the time, method and
place of conducting any Proceeding for any remedy available to the Trustee with
respect to the Bonds of such Class or Classes or exercising any trust or power
conferred on the Trustee with respect to such Class or Classes; provided,
however, that
(a) such direction shall not be in conflict with any rule of law or
with this Indenture;
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(b) subject to the express terms of Section 5.04, any direction to the
Trustee to sell or liquidate the Collateral shall be by the Holders of Bonds
representing not less than 100 percent of the Outstanding Amount of the Bonds;
(c) if the conditions set forth in Section 5.05 have been satisfied and
the Trustee elects to retain the Collateral pursuant to such Section, then any
direction to the Trustee by Holders of Bonds representing less than 100 percent
of the Outstanding Amount of the Bonds to sell or liquidate the Collateral shall
be of no force and effect; and
(d) the Trustee may take any other action deemed proper by the Trustee
that is not inconsistent with such direction;
provided, however, that, subject to Section 6.01, the Trustee need not take any
action that it determines might involve it in liability or might materially
adversely affect the rights of any Bondholders not consenting to such action.
Section 5.12. Waiver of Past Defaults. Prior to the declaration of the
acceleration of the maturity of the Bonds as provided in Section 5.02, the
Holders of Bonds of not less than a majority of the Outstanding Amount of the
Bonds may waive any past Default or Event of Default and its consequences except
a Default (a) in payment of principal of or interest on any of the Bonds or (b)
in respect of a covenant or provision hereof which cannot be modified or amended
without the consent of the Holder of each Bond or of all Classes affected, which
Defaults may be waived only by the Holders of each Bond, or each affected Class,
as the case may be. In the case of any such waiver, the Issuer, the Trustee and
the Holders of the Bonds shall be restored to their former positions and rights
hereunder, respectively; but no such waiver shall extend to any subsequent or
other Default or impair any right consequent thereto.
Upon any such waiver, such Default shall cease to exist and be deemed
to have been cured and not to have occurred, and any Event of Default arising
therefrom shall be deemed to have been cured and not to have occurred, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other Default or Event of Default or impair any right consequent thereto.
Section 5.13. Undertaking for Costs. All parties to this Indenture
agree, and each Holder of any Bond by such Holder's acceptance thereof shall be
deemed to have agreed, that any court may in its discretion require, in any suit
for the enforcement of any right or remedy under this Indenture, or in any suit
against the Trustee for any action taken, suffered or omitted by it as Trustee,
the filing by any party litigant in such suit of an undertaking to pay the costs
of such suit, and that such court may in its discretion assess reasonable costs,
including reasonable attorneys' fees, against any party litigant in such suit,
having due regard to the merits and good faith of the claims or defenses made by
such party litigant; but the provisions of this Section shall not apply to (a)
any suit instituted by the Trustee, (b) any suit instituted by any Bondholder,
or group of Bondholders, in each case holding in the aggregate more than 10
percent of the Outstanding Amount of the Bonds or (c) any suit instituted by any
Bondholder for the enforcement of the payment of (i) interest on any Bond on or
after the due dates expressed in such Bond and in this Indenture, (ii) the
unpaid principal, if any, of any Bond on or after the Final Maturity Date
therefor or (iii) in the case of redemption, the unpaid principal of and
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interest on any Bond on or after the Optional Redemption Date or Mandatory
Redemption Date, as applicable, therefor.
Section 5.14. Waiver of Stay or Extension Laws. The Issuer covenants
(to the extent that it may lawfully do so) that it will not at any time insist
upon, or plead or in any manner whatsoever, claim or take the benefit or
advantage of, any stay or extension law wherever enacted, now or at any time
hereafter in force, that may affect the covenants or the performance of this
Indenture; and the Issuer (to the extent that it may lawfully do so) hereby
expressly waives all benefit or advantage of any such law, and covenants that it
will not hinder, delay or impede the execution of any power herein granted to
the Trustee, but will suffer and permit the execution of every such power as
though no such law had been enacted.
Section 5.15. Action on Bonds. The Trustee's right to seek and recover
judgment on the Bonds or under this Indenture shall not be affected by the
seeking, obtaining or application of any other relief under or with respect to
this Indenture. Neither the Lien of this Indenture nor any rights or remedies of
the Trustee or the Bondholders shall be impaired by the recovery of any judgment
by the Trustee against the Issuer or by the levy of any execution under such
judgment upon any portion of the Collateral or upon any of the assets of the
Issuer.
Section 5.16. Performance and Enforcement of Certain Obligations.
(a) Promptly following a request from the Trustee to do so and at the
Issuer's expense, the Issuer agrees to take all such lawful action as the
Trustee may reasonably request to compel or secure the performance and
observance by the Seller and the Servicer, as applicable, of each of their
obligations to the Issuer under or in connection with the Sale Agreement and the
Servicing Agreement, respectively, in accordance with the terms thereof, and to
exercise any and all rights, remedies, powers and privileges lawfully available
to the Issuer under or in connection with the Sale Agreement and the Servicing
Agreement, respectively, to the extent and in the manner directed by the
Trustee, including the transmission of notices of default on the part of the
Seller or the Servicer thereunder and the institution of legal or administrative
actions or proceedings to compel or secure performance by the Seller or the
Servicer of each of their obligations under the Sale Agreement and the Servicing
Agreement, respectively.
(b) If an Event of Default has occurred, the Trustee may, and, at the
direction (which direction shall be in writing or by telephone (confirmed in
writing promptly thereafter)) of the Holders of 66-2/3 percent of the
Outstanding Amount of the Bonds , shall, subject to Article VI, exercise all
rights, remedies, powers, privileges and claims of the Issuer against the Seller
or the Servicer under or in connection with the Sale Agreement and the Servicing
Agreement, respectively, including the right or power to take any action to
compel or secure performance or observance by the Seller or the Servicer of each
of their obligations to the Issuer thereunder and to give any consent, request,
notice, direction, approval, extension or waiver under the Sale Agreement or the
Servicing Agreement, respectively, and any right of the Issuer to take such
action shall be suspended.
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ARTICLE VI
THE TRUSTEE
Section 6.01. Duties of Trustee.
(a) If an Event of Default has occurred and is continuing, the Trustee
shall exercise the rights and powers vested in it by this Indenture and use the
same degree of care and skill in their exercise as a prudent person would
exercise or use under the circumstances in the conduct of such person's own
affairs.
(b) Except during the continuance of an Event of Default:
(i) the Trustee undertakes to perform such duties and only
such duties as are specifically set forth in this Indenture and no
implied covenants or obligations shall be read into this Indenture
against the Trustee; and
(ii) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements of
this Indenture; however, the Trustee shall examine the certificates and
opinions to determine whether or not they conform to the requirements
of this Indenture.
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own willful
misconduct, except that:
(i) this paragraph does not limit the effect of paragraph (b)
of this Section;
(ii) the Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer unless it is proved that
the Trustee was negligent in ascertaining the pertinent facts; and
(iii) the Trustee shall not be liable with respect to any
action it takes or omits to take in good faith in accordance with a
direction received by it pursuant to Section 5.11.
(d) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b) and (c) of this Section.
(e) The Trustee shall not be liable for interest on any money received
by it except as the Trustee may agree in writing with the Issuer.
(f) Money held in trust by the Trustee need not be segregated from
other funds except to the extent required by law or the terms of this Indenture,
the Sale Agreement or the Servicing Agreement.
(g) No provision of this Indenture shall require the Trustee to expend
or risk its own funds or otherwise incur financial liability in the performance
of any of its duties hereunder or in
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the exercise of any of its rights or powers, if it shall have reasonable grounds
to believe that repayment of such funds or indemnity satisfactory to it against
such risk or liability is not reasonably assured to it.
(h) Every provision of this Indenture relating to the conduct or
affecting the liability of or affording protection to the Trustee shall be
subject to the provisions of this Section and to the provisions of the Trust
Indenture Act.
(i) In the event that the Trustee is also acting as Paying Agent or
Registrar hereunder, this Article VI shall also be afforded to such Paying Agent
or Registrar.
(j) Under no circumstances shall the Trustee be liable for any
indebtedness of the Issuer, the Servicer or the Seller evidenced by or arising
under the Bonds or any Basic Document.
Section 6.02. Rights of Trustee. Subject to the provisions of Trust
Indenture Act Section 315:
(a) the Trustee may conclusively rely and shall be fully protected in
acting or refraining from acting in reliance upon any resolution, Bond,
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 and the
Trustee need not investigate any matter or fact stated in such document;
(b) any request or direction of the Issuer mentioned herein shall be
sufficiently evidenced by a Request;
(c) whenever in the administration of this Indenture the Trustee shall
deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the 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 Issuer;
(d) the 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 Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction of
any of the Bondholders pursuant to this Indenture, unless such Bondholders shall
have offered to the Trustee reasonable security or indemnity satisfactory to it
against the cost, expenses (including reasonable legal fees and expenses) and
liabilities that might be incurred by it in compliance with such request or
direction;
(f) the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, Bond, statement, instrument, opinion,
report, notice, request, direction, consent, order, bond, debenture or other
paper or document;
(g) the 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 Trustee shall not be responsible for any
misconduct or negligence on the part of, or for the
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supervision of, any agent, attorney, custodian or nominee appointed with due
care by it hereunder;
(h) the 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 Bonds relating to the time, method and place of conducting any
proceeding for any remedy available to the Trustee, or exercising any trust or
power conferred upon the Trustee, under this Indenture;
(i) the 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 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 Indenture; provided, however, that the Trustee's conduct does not
constitute willful misconduct, negligence or bad faith;
(k) in the event that the Trustee is also acting as Paying Agent,
authenticating agent or Registrar hereunder, the rights and protections afforded
to the Trustee pursuant to this Article VI shall also be afforded to such Paying
Agent, authenticating agent or Registrar;
(l) the Trustee shall not be charged with knowledge of an Event of
Default unless a Responsible Officer obtains actual knowledge of such event or
the Trustee receives written notice of such event from the Issuer, the Servicer
or a majority of the Holders of Bonds of the Class or Classes so affected; and
(m) without limiting its rights under bankruptcy law, when the 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. Individual Rights of Trustee. The Trustee in its
individual or any other capacity may become the owner or pledgee of Bonds and
may otherwise deal with the Issuer or its affiliates with the same rights it
would have if it were not Trustee. Any Paying Agent, Registrar, co-registrar or
co-paying agent may do the same with like rights. However, the Trustee must
comply with Sections 6.08 and 6.13.
Section 6.04. Trustee's Disclaimer. The Trustee shall not be
responsible for and makes no representation as to the validity or adequacy of
this Indenture or the Bonds, it shall not be accountable for the Issuer's use of
the proceeds from the Bonds, and it shall not be responsible for any statement
of the Issuer in the Indenture or in any document issued in connection with the
sale of the Bonds or in the Bonds other than the Trustee's certificate of
authentication.
Section 6.05. Notice of Defaults. If a Default occurs and is continuing
and if it is actually known to a Responsible Officer of the Trustee, the Trustee
shall mail to each Holder of
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Bonds and to the Rating Agencies notice of the Default within 30 days after it
has such actual knowledge.
Section 6.06. Statements to Bondholders.
(a) So long as the Trustee is the Registrar and Paying Agent, it shall
deliver to each Bondholder such information in its possession as may be required
to enable such Holder to prepare its federal and state income tax returns.
(b) On or prior to each Payment Date therefor, the Trustee will deliver
to each Holder of Bonds on such Payment Date a statement as provided and
prepared by the Servicer which will include (to the extent applicable) the
following information as to the Bonds with respect to such Payment Date or the
period since the previous Payment Date, as applicable:
(i) the amount of the payment to Bondholders allocable to
principal (such amount to be expressed as an aggregate dollar amount
and as a dollar amount per $1,000 of original principal amount);
(ii) the amount of the payment to Bondholders allocable to
interest (such amount to be expressed as an aggregate dollar amount and
as a dollar amount per $1,000 of original principal amount);
(iii) the Outstanding Amount of the Bonds, after giving effect
to payments allocated to principal reported under (i) above;
(iv) the difference, if any, between the Outstanding Amount of
the Bonds and the Projected Principal Balance as of such Payment Date,
after giving effect to payments to be made on such Payment Date;
(v) the balance of amounts on deposit in the Reserve
Subaccount after giving effect to payments or allocations made or to be
made on such Payment Date;
(vi) the balance of amounts on deposit in the
Overcollateralization Subaccount after giving effect to payments or
allocations made or to be made on such Payment Date;
(vii) the balance of amounts on deposit in the Capital
Subaccount after giving effect to payments or allocations made or to be
made on such Payment Date; and
(viii) the balance of amounts on deposit in the Interest
Reserve Subaccount after giving effect to payments or allocations made
or to be made on such Payment Date.
On each date on which the Trustee distributes any such report to the Holders of
the Bonds of any Class, the Trustee shall also distribute such report to each
Rating Agency.
(c) The Issuer shall send a copy of each Certificate of Compliance
delivered to it pursuant to Section 3.03 of the Servicing Agreement and each
Annual Accountant's Report delivered to it pursuant to Section 3.04 of the
Servicing Agreement to the Trustee, the Bondholders and the Rating Agencies.
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(d) Within a reasonable period of time after the end of each calendar
year but not later than the latest date permitted by law, the Trustee shall
furnish to each Person who at any time during such calendar year was a Holder of
any Class of Bonds and received a payment thereon, a statement containing the
sum of the amounts determined pursuant to clause (b)(i) or (ii) above with
respect to such Class of Bonds for such calendar year, or, in the event such
Person was a Holder of such Class of Bonds during a portion of such calendar
year, for the applicable portion of such year, and such other items as are
readily available to the Trustee and that a Bondholder shall reasonably request
as necessary for the purpose of such Bondholder 's preparation of its federal
income tax returns.
Section 6.07. Compensation and Indemnity. The Issuer shall pay to the
Trustee from time to time reasonable compensation for its services. The
Trustee's compensation shall not be limited by any law on compensation of a
trustee of an express trust. The Issuer shall reimburse the Trustee for all
reasonable out-of-pocket expenses, disbursements and advances incurred or made
by it, including costs of collection, in addition to the compensation for its
services. Such expenses shall include the reasonable compensation and expenses,
disbursements and advances of the Trustee's agents, counsel, accountants and
experts. The Issuer shall indemnify, defend and hold harmless the Trustee and
any of its affiliates, officials, officers, directors, employees, consultants,
counsel and agents (the "Indemnified Persons") from and against any and all
losses, claims, actions, suits, taxes, damages, expenses (including, without
limitation, legal fees and expenses) and liabilities (including liabilities
under state or federal securities laws) of any kind and nature whatsoever
(collectively, "Expenses"), to the extent that such Expenses arise out of or are
imposed upon or asserted against such Indemnified Persons with respect to the
creation, administration, operation, enforcement or termination of this trust
and the performance by the Trustee of its duties hereunder, the failure of the
Issuer or any other Person (other than the Person being indemnified) to perform
its obligations hereunder or under any of the Basic Documents, or otherwise in
connection with the Basic Documents or the transactions contemplated thereby,
provided, however, that the Issuer is not required to indemnify any Indemnified
Person for any Expenses that result from the willful misconduct or gross
negligence of such Indemnified Person and, provided, further, that any Expenses
payable to any Indemnified Person hereunder shall be paid to the Trustee for
deposit into and distribution from the Collection Account in accordance with
Article VIII. The willful misconduct or negligence of any Trustee shall not
affect the rights of any predecessor or successor Trustee hereunder. The Issuer
shall not be required to indemnify an Indemnified Person for any amount paid or
payable by such Indemnified Person pursuant to this Section 6.07 in the
settlement of any action, proceeding or investigation without the written
consent of the Issuer, which consent shall not be unreasonably withheld.
Promptly after receipt by an Indemnified Person of notice of its involvement in
any action, proceeding or investigation, such Indemnified Person shall, if a
claim for indemnification in respect thereof is to be made against the Issuer
under this Section 6.07, notify the Issuer in writing of such involvement.
Failure by an Indemnified Person to so notify the Issuer shall relieve the
Issuer from the obligation to indemnify and hold harmless such Indemnified
Person under this Section 6.07, only to the extent that the Issuer suffers
actual prejudice as a result of such failure. With respect to any action,
proceeding or investigation brought by a third party for which indemnification
may be sought under this Section 6.07, the Issuer shall be entitled to assume
the defense of any such action, proceeding or investigation. Upon assumption by
the Issuer of the defense of any such action, proceeding or investigation, the
Indemnified Person shall have the right to participate in such action or
proceeding and to retain
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its own counsel. The Issuer shall be entitled to appoint counsel of the Issuer's
choice at the Issuer's expense to represent the Indemnified Person in any
action, proceeding or investigation for which a claim of indemnification is made
against the Issuer under this Section 6.07 (in which case the Issuer shall not
thereafter be responsible for the fees and expenses of any separate counsel
retained by the Indemnified Person except as set forth below); provided,
however, that such counsel shall be reasonably satisfactory to the Indemnified
Person. Notwithstanding the Issuer's election to appoint counsel to represent
the Indemnified Person in an action, proceeding or investigation, the
Indemnified Person shall have the right to employ separate counsel (including
local counsel), and the Issuer shall bear the reasonable fees, costs and
expenses of such separate counsel if (i) the use of counsel chosen by the Issuer
to represent the Indemnified Person would present such counsel with a conflict
of interest, (ii) the actual or potential defendants in, or targets of, any such
action include both the Indemnified Person and the Issuer and the Indemnified
Person shall have reasonably concluded that there may be legal defenses
available to it that are different from or additional to those available to the
Issuer, (iii) the Issuer shall not have employed counsel reasonably satisfactory
to the Indemnified Person to represent the Indemnified Person within a
reasonable time after notice of the institution of such action or (iv) the
Issuer shall authorize the Indemnified Person to employ separate counsel at the
expense of the Issuer. Notwithstanding the foregoing, the Issuer shall not be
obligated to pay for the fees, costs and expenses of more than one separate
counsel for the Indemnified Persons (in addition to local counsel). The Issuer
will not, without the prior written consent of the Indemnified Person, settle or
compromise or consent to the entry of any judgment with respect to any pending
or threatened claim, action, suit or proceeding in respect of which
indemnification may be sought under this Section 6.07 (whether or not the
Indemnified Person is an actual or potential party to such claim or action)
unless such settlement, compromise or consent includes an unconditional release
of the Indemnified Person from all liability arising out of such claim, action,
suit or proceeding. Indemnification under this Section 6.07 shall include
reasonable fees and out-of-pocket expenses of investigation and litigation
(including reasonable attorneys' fees and expenses), except as otherwise
provided in this Agreement.
The Issuer's payment obligations to the Trustee pursuant to this
Section shall survive the discharge of this Indenture or the earlier resignation
or removal of the Trustee. When the Trustee incurs expenses after the occurrence
of a Default specified in Section 5.01(e) or (f) with respect to the Issuer, the
expenses are intended to constitute expenses of administration under Title 11 of
the United States Code or any other applicable federal or state bankruptcy,
insolvency or similar law.
Section 6.08. Corporate Trustee Required; Eligibility.
(a) The Trustee shall at all times be eligible to act as a trustee
under Trust Indenture Act Section 310(a) and Section 26(a)(i) of the Investment
Company Act of 1940, shall have a combined capital and surplus of at least
$50,000,000 and shall have a long-term debt rating of at least A by Moody's and
Standard & Poor's. If such entity publishes reports of conditions at least
annually, pursuant to law or to the requirements of federal, State or
territorial supervising or examining authority, then for the purposes of this
Section 6.08, 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 Trustee shall comply with Trust Indenture Act
Section 310(b), including the optional provision permitted by the second
sentence of Trust Indenture Act Section 310(b)(9);
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provided, however, that there shall be excluded from the operation of Trust
Indenture Act Section 310(b)(1) any indenture or indentures under which other
securities of the Issuer are outstanding if the requirements for such exclusion
set forth in Trust Indenture Act Section 310(b)(1) are met.
(b) In determining whether the Trustee has a conflicting interest under
Trust Indenture Act Section 310(b) and this Section, each other Class of Bonds
will be treated as having been issued under an indenture other than this
Indenture.
(c) If at any time the Trustee shall cease to be eligible in accordance
with the provisions of this Section 6.08, the Trustee shall resign immediately
in the manner and with the effect specified in Section 6.09.
Section 6.09. Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective (i) until the
acceptance of appointment by the successor Trustee under Section 6.10 and (ii)
other than in the case of paragraph (b) below, unless a successor Trustee has
been appointed and has accepted such appointment and the Rating Agency Condition
shall have been satisfied.
(b) The Trustee may resign at any time in the case of a conflicting
interest as determined in accordance with Section 6.08(b) by giving written
notice thereof to the Issuer, the Registrar, the Paying Agent and any
authenticating agent. If an instrument of acceptance by a successor Trustee
shall not have been delivered to the Issuer within 30 days after the giving of
such notice of resignation, the resigning Trustee may petition any court of
competent jurisdiction for the appointment of a successor Trustee.
(c) The Trustee may be removed at any time in the case of a conflicting
interest as determined in accordance with Section 6.08(b) by Act of Bondholders
holding Bonds representing not less than a majority of the Outstanding Amount of
the Bonds delivered to the Trustee and to the Issuer.
(d) Upon 30 days' written notice, the Trustee (i) may resign with
respect to the Bonds as a whole by giving such written notice to the Issuer, the
Registrar, the Paying Agent and any authenticating agent or (ii) may be removed
with respect to the Bonds as a whole by Act of Bondholders holding Bonds
representing not less than a majority of the Outstanding Amount of Bonds
delivered to the Issuer. If an instrument of acceptance by a successor Trustee
with respect to the Bonds as a whole shall not have been delivered to the Issuer
within 90 days after the giving of such notice of resignation or Act by the
Bondholders as a whole for removal of the Trustee, the Issuer may petition any
court of competent jurisdiction for the appointment of a successor Trustee with
respect to the Bonds as a whole.
(e) If at any time:
(i) the Trustee shall fail to comply with Trust Indenture
Act Section 310 after written request therefor by the Issuer or by any
Holder of Bonds who has been a bona fide Holder of Bonds for at least
six months; or
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(ii) the Trustee shall cease to be eligible under Section 6.08
and shall fail to resign after written request therefor by the Issuer
or by any Bondholder; or
(iii) the Trustee shall become incapable of acting or shall be
adjudged a bankrupt or insolvent or a receiver of the Trustee or of its
property shall be appointed or any public officer shall take charge or
control of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation; or
(iv) the Trustee shall fail to perform its obligations
hereunder in any material respect and shall not have cured such failure
within 30 days after written notice thereof from the Issuer or any
Bondholder;
then, in any case, (x) the Issuer may remove the Trustee or (y) any Holder of
Bonds who has been a bona fide Holder of Bonds 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 Trustee and the appointment of a
successor Trustee.
(f) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of the Trustee for any reason,
the Issuer shall promptly appoint a successor Trustee. If, within one year after
such resignation, removal or incapability, or the occurrence of such vacancy, a
successor Trustee shall be appointed by Act of the Bondholders representing not
less than a majority of the Outstanding Amount of the Bonds delivered to the
Issuer and the retiring Trustee, the successor Trustee so appointed shall,
forthwith upon its acceptance of such appointment, become the successor Trustee
and supersede the successor Trustee appointed as provided above. If no successor
Trustee shall have been so appointed as provided above and accepted appointment
in the manner hereinafter provided, any Holder of Bonds who has been a bona fide
Holder of Bonds 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 Trustee.
(g) The successor Trustee shall give notice of the resignation and
removal of the Trustee and appointment of the successor Trustee by mailing
written notice of such event by first-class mail, postage prepaid, to the
Holders as their names and addresses appear in the Register and to each Rating
Agency and the Issuer. Each notice shall include the name of such successor
Trustee and the address of the corporate trust office of such successor Trustee.
(h) The Issuer shall notify the Rating Agencies of any resignation and
removal of the Trustee and appointment of a successor Trustee under this Section
6.09.
Section 6.10. Acceptance of Appointment by Successor. Every successor
Trustee appointed hereunder shall execute, acknowledge and deliver to the Issuer
and to the retiring Trustee an instrument accepting such appointment, and
thereupon the resignation or removal of the retiring Trustee shall become
effective and such successor Trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers, trusts and duties
of the retiring Trustee; but, on request of the Issuer or the successor Trustee,
such retiring Trustee shall execute and deliver an instrument transferring to
such successor Trustee all the rights, powers and trusts of the retiring Trustee
and shall duly assign, transfer and deliver to such successor
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Trustee all property and money held by such retiring Trustee hereunder. Upon
request of any such successor Trustee, the Issuer, the retiring Trustee and such
successor 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 Trustee all such
rights, powers and trusts. No Trustee hereunder shall be liable for the acts or
omissions of any successor Trustee.
No successor Trustee shall accept its appointment unless at the time of
such acceptance such successor 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 6.11. Merger, Conversion, Consolidation or Succession to
Business. Any corporation into which the 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 Trustee shall be a party, or any
corporation succeeding to all or substantially all of the corporate trust
business of the Trustee, shall be the successor of the 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 Bonds shall have been
authenticated, but not delivered, by the Trustee then in office, any successor
by merger, conversion or consolidation to such authenticating Trustee may adopt
such authentication and deliver the Bonds so authenticated with the same effect
as if such successor Trustee had itself authenticated such Bonds.
Section 6.12. Appointment of Co-Trustee or Separate Trustee.
(a) Notwithstanding any other provisions of this Indenture, at any
time, for the purpose of meeting any legal requirement of any jurisdiction in
which any part of the Collateral may at the time be located, the Trustee shall
have the power and may execute and deliver all instruments to appoint one or
more Persons to act as a co-trustee or co-trustees, or separate trustee or
separate trustees, of all or any part of the Collateral, and to vest in such
Person or Persons, in such capacity and for the benefit of the Bondholders, such
title to the Collateral, or any part hereof, and, subject to the other
provisions of this Section, such powers, duties, obligations, rights and trusts
as the Trustee may consider necessary or desirable. The Trustee shall give
prompt written notice to the Bondholders of the appointment of any co-trustee or
separate trustee.
(b) Every separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following provisions and
conditions:
(i) all rights, powers, duties and obligations conferred or
imposed upon the Trustee shall be conferred or imposed upon and
exercised or performed by the Trustee and such separate trustee or
co-trustee jointly (it being understood that such separate trustee or
co-trustee is not authorized to act separately without the Trustee
joining in such act), except to the extent that under any law of any
jurisdiction in which any particular act or acts are to be performed
the Trustee shall be incompetent or unqualified to perform such act or
acts, in which event such rights, powers, duties and obligations
(including the holding of title to the Collateral or any portion
thereof in any such jurisdiction) shall be
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exercised and performed singly by such separate trustee or co-trustee,
but solely at the direction of the Trustee;
(ii) no trustee hereunder shall be personally liable by reason
of any act or omission of any other trustee hereunder; and
(iii) the Trustee may at any time accept the resignation of or
remove any separate trustee or co-trustee.
(c) Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the then separate trustees and co-trustees,
as effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this Indenture and the conditions
of this Article VI. Each separate trustee and co-trustee, upon its acceptance of
the trusts conferred, shall be vested with the estates or property specified in
its instrument of appointment, either jointly with the Trustee or separately, as
may be provided therein, subject to all the provisions of this Indenture,
specifically including every provision of this Indenture relating to the conduct
of, affecting the liability of, or affording protection to, the Trustee. Every
such instrument shall be filed with the Trustee.
(d) Any separate trustee or co-trustee may at any time constitute the
Trustee, its agent or attorney-in-fact with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Indenture on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Trustee, to the extent permitted by law, without the appointment of a new or
successor trustee.
Section 6.13. Preferential Collection of Claims Against Issuer. The
Trustee shall comply with Trust Indenture Act Section 311(a), excluding any
creditor relationship listed in Trust Indenture Act Section 311(b). A Trustee
who has resigned or been removed shall be subject to Trust Indenture Act Section
311(a) to the extent provided therein.
Section 6.14. Registration of Eligible Investments in Trustee's Name.
The Trustee agrees that all Eligible Investments, if any, shall be issued in the
name of the Trustee or its nominee, on behalf of the Issuer, and held by the
Trustee, or, if not so held, the Trustee or its nominee, on behalf of the
Issuer, shall be reflected as the owner of such Eligible Investments, as the
case may be, in the register of the issuer of such Eligible Investments. In no
event shall the Trustee invest in, or hold, Eligible Investments in a manner
that would cause the Trustee not to have the ownership interest or first
priority security interest in such Eligible Investments under the applicable
provisions of the Uniform Commercial Code in effect in the location where the
Trustee holds such Eligible Investments or other applicable law then in effect.
Section 6.15. Representations and Warranties of Trustee. The Trustee
hereby represents and warrants that:
(a) the Trustee is a banking corporation validly existing in good
standing under the laws of New York; and
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(b) the Trustee has full power (including trust powers), authority and
legal right to execute, deliver and perform this Indenture and the Basic
Documents to which the Trustee is a party and has taken all necessary action to
authorize the execution, delivery, and performance by it of this Indenture and
such Basic Documents.
(c) when delivered by the Trustee, the Bonds will have been duly
authenticated by the Trustee.
Section 6.16. Covenants of the Trustee; Jurisdiction for Purposes of
New Hampshire UCC.
(a) The Trustee hereby covenants and agrees as follows:
(i) the Trustee will establish the Collection Account as a
Securities Account;
(ii) the financial institution that is the Trustee, acting as
Securities Intermediary, will identify the Collection Account in its
records as a Securities Account of the Trustee and will identify the
Trustee in such records as the Person having the Security Entitlement
against the Securities Intermediary with respect to the Securities
Account and all Security Entitlements carried in the Securities
Account;
(iii) the financial institution that is the Trustee, acting as
Securities Intermediary, will maintain accurate and complete records of
the Financial Assets in the Securities Account such that the Collateral
is objectively determinable;
(iv) the financial institution that is the Trustee, acting as
Securities Intermediary, will in the ordinary course of its business,
maintain securities accounts for its customers and will act in that
capacity in holding the Securities Account under this Indenture;
(v) the financial institution that is the Trustee, acting as
Securities Intermediary, will treat all property in the Collection
Account that is not treated as funds in a "deposit account" (as defined
in the New Hampshire UCC) as a Financial Asset and will duly hold such
property in the Securities Account; and
(vi) the financial institution that is the Trustee, acting as
Securities Intermediary, will not agree to comply with entitlement
orders of any Person other than the Trustee with respect to the
Securities Account or any Security Entitlements carried in the
Securities Account and agrees to comply with entitlement orders of the
Trustee without the consent of any other Person.
(b) The Issuer, the Trustee and the financial institution that is the
Trustee, acting as Securities Intermediary, agree that New Hampshire is the
Securities Intermediary's jurisdiction for purposes of the New Hampshire UCC.
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ARTICLE VII
BONDHOLDERS' LISTS AND REPORTS
Section 7.01. Issuer To Furnish Trustee Names and Addresses of
Bondholders. The Registrar on behalf of the Issuer will furnish or cause to be
furnished to the Trustee within 15 days after each Record Date, and at such
other times as the Trustee may request in writing, within 30 days after receipt
by the Issuer of any such request, a list, in such form as the Trustee may
reasonably require, of all information in the possession or control of the
Issuer as to the names and addresses of the Bondholders, in each case as of a
date not more than 10 days prior to the time such list is furnished; provided,
however, that so long as the Trustee is the Registrar, no such list shall be
required to be furnished.
Upon the written request of any Bondholder or Bondholders of record
holding Bonds evidencing not less than ten percent of the aggregate Outstanding
Amount of Bonds, the Trustee shall afford such Bondholder or Bondholders access
during business hours to the current list of Bondholders for purposes of
communicating with other Bondholders with respect to their rights under this
Indenture.
Section 7.02. Preservation of Information; Communications to
Bondholders.
(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of the Holders of Bonds contained in the
most recent list furnished to the Trustee as provided in Section 7.01 and the
names and addresses of Holders of Bonds received by the Trustee in its capacity
as Registrar, if so acting. The Trustee may destroy any list furnished to it as
provided in such Section 7.01 upon receipt of a new list so furnished.
(b) Bondholders may communicate pursuant to Trust Indenture
Act Section 312(b) with other Bondholders with respect to their rights under
this Indenture or under the Bonds.
(c) The Issuer, the Trustee and the Registrar shall have the protection
of Trust Indenture Act Section 312(c).
Section 7.03. Reports by Issuer.
(a) The Issuer shall:
(i) so long as the Issuer is required to file such documents
with the Commission, file with the Trustee, within 15 days after the
Issuer is required to file the same with the Commission, copies of the
annual reports and of the information, documents and other reports (or
copies of such portions of any of the foregoing as the Commission may
from time to time by rules and regulations prescribe) which the Issuer
may be required to file with the Commission pursuant to Section 13 or
15(d) of the Exchange Act;
(ii) file with the Trustee and the Commission in accordance
with rules and regulations prescribed from time to time by the
Commission such additional information, documents and reports with
respect to compliance by the Issuer with the conditions and
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covenants of this Indenture as may be required from time to time by
such rules and regulations;
(iii) supply to the Trustee (and the Trustee shall transmit by
mail to all Bondholders described in Trust Indenture Act Section
313(c)) such summaries of any information, documents and reports
required to be filed by the Issuer pursuant to clauses (i) and (ii) of
this Section 7.03(a) as may be required by rules and regulations
prescribed from time to time by the Commission; and
(iv) pursuant to Trust Indenture Act Section 314(a)(4), the
Issuer shall furnish to the Trustee, not less often than annually and
prior to January 31 of each year, commencing January 31, 2003, a
certificate as to the Issuer's compliance with all conditions and
covenants under this Indenture. For purposes of this Section 7.03(a),
such compliance shall be determined without regard to any period of
grace or requirement of notice provided under this Indenture. In
addition, the Trustee shall forward such certificate to the
Bondholders.
(b) Unless the Issuer otherwise determines, the fiscal year of the
Issuer shall end on December 31 of each year.
Section 7.04. Reports by Trustee. If required by Trust Indenture Act
Section 313(a), within 60 days after December 31 of each year, commencing
December 31, 2002, the Trustee shall mail to each Holder of Bonds as required by
Trust Indenture Act Section 313(c) a brief report dated as of such date that
complies with Trust Indenture Act Section 313(a). The Trustee also shall comply
with Trust Indenture Act Section 313(b).
A copy of each report at the time of its mailing to Bondholders shall
be filed by the Trustee with the Commission and each stock exchange, if any, on
which the Bonds are listed. The Issuer shall notify the Trustee if and when the
Bonds are listed on any stock exchange.
ARTICLE VIII
ACCOUNTS, DISBURSEMENTS AND RELEASES
Section 8.01. Collection of Money. Except as otherwise expressly
provided herein, the Trustee may demand payment or delivery of, and shall
receive and collect, directly and without intervention or assistance of any
fiscal agent or other intermediary, all money and other property payable to or
receivable by the Trustee pursuant to this Indenture, and the Fee and Indemnity
Agreement. The Trustee shall apply all such money received by it as provided in
this Indenture. Except as otherwise expressly provided in this Indenture, if any
default occurs in the making of any payment or performance under any agreement
or instrument that is part of the Collateral, the Trustee may take such action
as may be appropriate to enforce such payment or performance, subject to Article
VI, including the institution and prosecution of appropriate Proceedings. Any
such action shall be without prejudice to any right to claim a Default or Event
of Default under this Indenture and any right to proceed thereafter as provided
in Article V.
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Section 8.02. Collection Account.
(a) Prior to the Issuance Date, the Issuer shall open, at the Trustee's
Corporate Trust Office, or at another Eligible Institution, one or more
segregated trust accounts in the Trustee's name for the deposit of amounts
remitted to the Trustee for deposit therein on the Issuance Date, RRB Charge
Payments and other amounts remitted under the Servicing Agreement (collectively,
the "Collection Account"). The Trustee shall hold the Collection Account for the
benefit of Bondholders, the Trustee and the other Persons indemnified hereunder
or under the Fee and Indemnity Agreement. The Collection Account will consist of
five subaccounts (which need not be separate bank accounts): a general
subaccount (the "General Subaccount"), a reserve subaccount (the "Reserve
Subaccount"), an overcollateralization subaccount (the "Overcollateralization
Subaccount"), a capital subaccount (the "Capital Subaccount") and an interest
reserve subaccount (the "Interest Reserve Subaccount"). All amounts in the
Collection Account not allocated to any other subaccount shall be allocated to
the General Subaccount. Prior to the initial Payment Date, all amounts in the
Collection Account (other than funds deposited into the Capital Subaccount and
the Interest Reserve Subaccount, together with interest earnings thereon) shall
be allocated to the General Subaccount. All references to the Collection Account
shall be deemed to include reference to all subaccounts contained therein.
Withdrawals from and deposits to each of the foregoing subaccounts of the
Collection Account shall be made as set forth in this Section 8.02. The
Collection Account shall at all times be maintained in an Eligible Deposit
Account and only the Trustee shall have access to the Collection Account for the
purpose of making deposits in and withdrawals from the Collection Account in
accordance with this Indenture. Funds in the Collection Account shall not be
commingled with any other moneys. Except as provided in Section 8.03, all moneys
deposited from time to time in the Collection Account, all deposits therein
pursuant to this Indenture, and all investments made in Eligible Investments
with such moneys, including all income or other gain from such investments,
shall be held by the Trustee in the Collection Account as part of the Collateral
as herein provided.
(b) The Trustee shall have sole dominion and exclusive control over all
moneys in the Collection Account and shall apply such amounts therein as
provided in this Section 8.02.
(c) All RRB Charge Payments and other remittances under the Servicing
Agreement shall be deposited in the General Subaccount as provided in Section
4.03 of the Servicing Agreement. All deposits to and withdrawals from the
Collection Account and all allocations to the subaccounts of the Collection
Account shall be made by the Trustee in accordance with the written instructions
provided by the Servicer in the Quarterly Servicer Certificate or as otherwise
provided herein.
(d) On any Business Day upon which the Trustee receives a written
request from the Administrator stating that any Operating Expense payable by the
Issuer (but only as described in clauses (i) through (iv) below) will become due
and payable prior to the next succeeding Payment Date, and setting forth the
amount and nature of such Operating Expenses, as well as any supporting
documentation that the Trustee may reasonably request, the Trustee, upon receipt
of such information, will make payment of such Operating Expenses on or before
the date such payment is due from amounts on deposit in the General Subaccount,
the Reserve Subaccount, the
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Overcollateralization Subaccount and the Capital Subaccount, in that order and
only to the extent required to make such payment.
On each Payment Date or, for any amount payable under clauses (i)
through (iv) below, on any Business Day, the Trustee shall apply all amounts on
deposit in the Collection Account, including all net earnings thereon (other
than on amounts in the Capital Subaccount), to pay the following amounts, in
accordance with the Quarterly Servicer Certificate, in the following priority
(provided that, in accordance with Section 8.02(e), amounts on deposit in the
Interest Reserve Subaccount shall be applied only to make the payments
contemplated by clause (v) below):
(i) all amounts owed by the Issuer to the Trustee or to any
other Person indemnified hereunder or under the Fee and Indemnity
Agreement (including indemnity payments and legal fees and expenses)
shall be paid, as incurred, first to the Trustee (subject to Section
6.07) and second to such other Person; provided, however, that the
amount paid by the Trustee on behalf of the Issuer pursuant to this
clause (i) to (A) the Trustee shall not in the aggregate (from the
Issuance Date) exceed $10 million and (B) the other Persons indemnified
hereunder or under the Fee and Indemnity Agreement shall not in the
aggregate (from the Issuance Date) exceed $5 million, unless, in each
case, each Rating Agency shall have been given ten days prior notice
thereof and Standard & Poor's shall have notified the Servicer, the
Issuer and the Trustee in writing that such action will not result in a
reduction or withdrawal of the then current rating by such Rating
Agency of any Class of Bonds;
(ii) the Servicing Fee for such Payment Date and all unpaid
Servicing Fees from prior Payment Dates shall be paid to the Servicer;
(iii) the Administration Fee and all unpaid Administration
Fees from prior Payment Dates shall be paid to the Administrator;
(iv) so long as no Default or Event of Default shall have
occurred and be continuing or would result from such payment, all other
Operating Expenses shall be paid to the Persons entitled thereto (other
than the Persons referred to in clause (i) above); provided, however,
that the amount of such other Operating Expenses paid by the Trustee
from, but not including, the previous Payment Date to, and including,
the current Payment Date shall not in the aggregate exceed $100,000;
(v) (A) any overdue Quarterly Interest (together with, to the
extent lawful, interest on such overdue Quarterly Interest at the
applicable Bond Interest Rate) and (B) Quarterly Interest for such
Payment Date shall be paid to the Bondholders;
(vi) (A) principal due and payable on the Bonds (x) as a
result of an Event of Default or (y) on the Final Maturity Date of the
Bonds, shall be paid to the Bondholders and (B) Quarterly Principal for
such Payment Date shall be paid to the Bondholders;
(vii) unpaid Operating Expenses shall be paid to the Persons
entitled thereto;
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(viii) the amount, if any, by which the Required Interest
Reserve Level, with respect to all Outstanding Bonds, exceeds the
amount in the Interest Reserve Subaccount as of such Payment Date shall
be allocated to the Interest Reserve Subaccount;
(ix) the amount, if any, by which the Required Capital Level,
with respect to all Outstanding Bonds, exceeds the amount in the
Capital Subaccount (disregarding any interest earnings held in the
Capital Subaccount which have not been remitted to the Issuer) as of
such Payment Date shall be allocated to the Capital Subaccount;
(x) the amount, if any, by which the Required
Overcollateralization Level, with respect to all Outstanding Bonds,
exceeds the amount in the Overcollateralization Subaccount as of such
Payment Date shall be allocated to the Overcollateralization
Subaccount; and
(xi) the balance, if any, shall be allocated to the Reserve
Subaccount for distribution on subsequent Payment Dates.
After principal of and interest on all Bonds, and all of the other
foregoing amounts, have been paid in full, the balance, if any, shall be paid to
the Issuer, free from the Lien of this Indenture.
In the case of any deficiency in the amount required under clause (v)
above, amounts available to make payments under clause (v) above will be
allocated among each Class of Bonds pro rata based upon the respective amounts
of interest owed on the Bonds of each Class, and allocated and paid to holders
within each Class pro rata based upon the respective principal amount of Bonds
held. In the case of any deficiency in the amount required under clause (vi)
above, amounts available to make payments under clause (vi) above will be
allocated among each Class of Bonds pro rata based upon the respective principal
amount of Bonds due (in the case of clause (vi)(A)(x) above) or scheduled to be
paid (in the case of clauses (vi)(A)(y) and (vi)(B) above, based on the
priorities set forth in Section 2.01(c)(iii) and according to the expected
amortization schedule for such Class), and allocated and paid to the holders
within each Class pro rata based upon the principal amount of Bonds held.
The final payment with respect to any Bond, however, will be made only
upon presentation and surrender of such Bond at the office or agency of the
Trustee specified in the notice given by the Trustee with respect to such final
payment.
(e) If on any Payment Date, or for any amounts payable under clauses
(i) through (iv) above, on any Business Day, funds on deposit in the General
Subaccount are insufficient to make the payments contemplated by clauses (i)
through (vi) of Section 8.02(d), the Trustee shall (i) first, draw from amounts
on deposit in the Reserve Subaccount, (ii) second, draw from amounts on deposit
in the Overcollateralization Subaccount, (iii) third, draw from amounts on
deposit in the Capital Subaccount and (iv) fourth, draw from amounts on deposit
in the Interest Reserve Subaccount, in each case, up to the amount of such
shortfall in order to make the payments contemplated by clauses (i) through (vi)
of Section 8.02(d); provided, however, that the Trustee shall draw from amounts
on deposit in the Interest Reserve Subaccount pursuant to clause (iv) of this
Section 8.02(e) only to make the payments contemplated by clause (v) of Section
8.02(d). In
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addition, if on any Payment Date funds on deposit in the General Subaccount are
insufficient to make the allocations contemplated by clauses (viii), (ix) and
(x) of Section 8.02(d), the Trustee shall draw from amounts on deposit in the
Reserve Subaccount to make such allocations.
(f) Payments to Holders of Bonds 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, upon written application of a Holder of Bonds of any Class in
the original principal amount of $1,000,000 or more to the Trustee made at any
time not later than such 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 payment in respect of any Bond shall be made only as provided in Section
8.02(d). The foregoing notwithstanding, any payments made to Cede & Co., as the
nominee of the initial Clearing Agency, shall be made by wire transfer of
immediately available funds.
(g) On any Optional Redemption Date or Mandatory Redemption Date, the
Trustee shall pay to the Bondholders the Optional Redemption Price or Mandatory
Redemption Price, as the case may be, which the Trustee has received.
(h) On the last day of each month, if the amount in the Capital
Subaccount exceeds the Required Capital Level, the Trustee shall pay to the
Issuer, upon receipt of an Issuer Request, free from the Lien of this Indenture,
all amounts in the Capital Subaccount in excess of the Required Capital Level.
(i) On any Payment Date, if, after giving effect to payments or
allocations made or to be made on such Payment Date, the amount in the Interest
Reserve Subaccount exceeds the Required Interest Reserve Level, the amount of
such excess shall be allocated to the Reserve Subaccount for distribution on
subsequent Payment Dates.
(j) The Issuer and the Trustee agree that New Hampshire is the
Trustee's jurisdiction for purposes of the New Hampshire UCC.
Section 8.03. General Provisions Regarding the Collection Account.
(a) So long as no Default or Event of Default shall have occurred and
be continuing, all or a portion of the funds in the Collection Account shall be
invested in Eligible Investments and reinvested by the Trustee upon Issuer
Order; provided, however, that (i) such Eligible Investments shall not mature
later than the Business Day prior to the next Payment Date and (ii) such
Eligible Investments shall not be sold, liquidated or otherwise disposed of at a
loss prior to the maturity thereof. All income or other gain from investments of
moneys deposited in the Collection Account shall be deposited by the Trustee in
the Collection Account, and any loss resulting from such investments shall be
charged to the Collection Account; provided, however, that all income or other
gain from investments of moneys deposited in the Capital Subaccount shall be
retained in the Capital Subaccount and any loss resulting from such investments
shall be charged to the Capital Subaccount. The Issuer will not direct the
Trustee to make any investment of any funds or to sell any investment held in
the Collection Account unless the security interest Granted and perfected in
such account will continue to be perfected in such
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investment or the proceeds of such sale, in either case without any further
action by any Person, and, in connection with any direction to the Trustee to
make any such investment or sale, if requested by the Trustee, the Issuer shall
deliver to the Trustee an Opinion of Counsel, reasonably acceptable to the
Trustee, to such effect. In no event shall the Trustee be liable for the
selection of Eligible Investments or for investment losses incurred thereon. The
Trustee shall have no liability in respect of losses incurred as a result of the
liquidation of any Eligible Investment prior to its stated maturity or the
failure of the Issuer to provide timely written investment direction. The
Trustee shall have no obligation to invest or reinvest any amounts held
hereunder in the absence of written investment direction pursuant to an Issuer
Order. If the rating of the Eligible Institution, which may be the Trustee's
Corporate Trust Office, falls below the rating requirements set forth in clause
(b)(i) of the definition of Eligible Institution, the Trustee shall notify the
Issuer and the Bond Issue shall, within one month after notice of such rating
change, cause the Collection Account to be transferred to an institution meeting
the requirements set forth in clause (b)(i) of the definition of "Eligible
Institution."
(b) Subject to Section 6.01(c), the Trustee shall not in any way be
held liable by reason of any insufficiency in the Collection Account resulting
from any loss on any Eligible Investment included therein except for losses
attributable to the Trustee's failure to make payments on such Eligible
Investments issued by the Trustee, in its commercial capacity as principal
obligor and not as trustee, in accordance with their terms.
(c) If (i) the Issuer shall have failed to give written investment
directions for any funds on deposit in the Collection Account to the Trustee by
11:00 a.m. Eastern Time (or such other time as may be agreed by the Issuer and
Trustee) on any Business Day; or (ii) a Default or Event of Default shall have
occurred and be continuing with respect to the Bonds but the Bonds shall not
have been declared due and payable pursuant to Section 5.02; then the Trustee
shall, to the fullest extent practicable, invest and reinvest funds in the
Collection Account in one or more investments described under paragraph (d) of
the definition of Eligible Investments.
Section 8.04. Reduction in Principal. Any reduction in the principal
amount of any Bond effected by any payment in respect of principal thereof shall
be binding upon all Holders of such Bond and of any Bond issued upon the
registration or transfer thereof or in lieu thereof, whether or not noted
thereon.
Section 8.05. Release of Collateral.
(a) The Trustee may, and when required by the provisions of this
Indenture shall, execute instruments to release property from the Lien of this
Indenture, or convey the Trustee's interest in the same, in a manner and under
circumstances that are not inconsistent with the provisions of this Indenture.
No party relying upon an instrument executed by the Trustee as provided in this
Article VIII shall be bound to ascertain the Trustee's authority, inquire into
the satisfaction of any conditions precedent or see to the application of any
moneys.
(b) The Trustee shall, at such time as there are no Bonds Outstanding,
release any remaining portion of the Collateral that secured the Bonds from the
Lien of this Indenture and release to the Issuer or any other Person entitled
thereto any funds then on deposit in the Collection Account. The Trustee shall
release property from the Lien of this Indenture pursuant
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to this Section 8.05(b) only upon receipt of an Issuer Request accompanied by an
Officer's Certificate, an Opinion of Counsel and (if required by the Trust
Indenture Act) Independent Certificates in accordance with Trust Indenture Act
Sections 314(c) and 314(d)(1) meeting the applicable requirements of
Section 11.01.
Section 8.06. Opinion of Counsel. The Trustee shall receive at least
seven days' notice when requested by the Issuer to take any action pursuant to
Section 8.05(a), accompanied by copies of any instruments involved, and the
Trustee shall also require, as a condition to such action, an Opinion of
Counsel, in form and substance reasonably satisfactory to the Trustee, stating
the legal effect of any such action, outlining the steps required to complete
the same, and concluding that all conditions precedent to the taking of such
action have been complied with and such action will not materially and adversely
impair the security for the Bonds or the rights of the Bondholders in
contravention of the provisions of this Indenture; provided, however, that such
Opinion of Counsel shall not be required to express an opinion as to the fair
value of the Collateral. Counsel rendering any such opinion may rely, without
independent investigation, on the accuracy and validity of any certificate or
other instrument delivered to the Trustee in connection with any such action.
Section 8.07. Reports by Independent Accountants. As of the Issuance
Date, the Issuer shall appoint a firm of Independent certified public
accountants of recognized national reputation for purposes of preparing and
delivering the reports or certificates of such accountants required by this
Indenture. In the event such firm requires the Trustee to agree to the
procedures performed by such firm, the Issuer shall direct the Trustee in
writing to so agree; it being understood and agreed that the Trustee will
deliver such letter of agreement in conclusive reliance upon the direction of
the Issuer, and the Trustee makes no independent inquiry or investigation to,
and shall have no obligation or liability in respect of, the sufficiency,
validity or correctness of such procedures. Upon any resignation by such firm
the Issuer shall provide written notice thereof to the Trustee and shall
promptly appoint a successor thereto that shall also be a firm of Independent
certified public accountants of recognized national reputation. If the Issuer
shall fail to appoint a successor to a firm of Independent certified public
accountants that has resigned within 30 days after such resignation, the Trustee
shall promptly notify the Issuer of such failure in writing. If the Issuer shall
not have appointed a successor within 10 days thereafter the Trustee shall
promptly appoint a successor firm of Independent certified public accountants of
recognized national reputation; provided, however, that the Trustee shall have
no liability with respect to such appointment if the Trustee acted with due care
with respect thereto. The fees of such Independent certified public accountants
and its successor shall be payable by the Issuer.
ARTICLE IX
SUPPLEMENTAL INDENTURES
Section 9.01. Supplemental Indentures Without Consent of Bondholders.
Without the consent of the Bondholders but with prior notice to the Rating
Agencies, the Issuer and the Trustee, when authorized by an Issuer Order, at any
time and from time to time, may enter into one or more indentures supplemental
hereto (which shall conform to the provisions of the Trust
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Indenture Act as in force at the date of the execution thereof), in form
reasonably satisfactory to the Trustee, for any of the following purposes:
(a) to add to the covenants of the Issuer for the benefit of the
Bondholders, or to surrender any right or power herein conferred upon the
Issuer;
(b) to correct or supplement any provision herein or in any
supplemental indenture that may be defective or inconsistent with any other
provision herein or in any supplemental indenture or to make any other
provisions with respect to matters or questions arising under this Indenture;
provided, however, that any such action shall not adversely affect in any
material respect the interests of the Bondholders;
(c) to cure any ambiguity or correct any mistake;
(d) to qualify, if necessary, this Indenture (including any
supplemental indenture) under the Trust Indenture Act, or under any similar
federal statute hereafter enacted, and to add to this Indenture such other
provisions as may be expressly permitted by the Trust Indenture Act, excluding,
however, the provisions referred to in Trust Indenture Act Section 316(a)(2) as
in effect at the date as of which this instrument was executed or any
corresponding provision in any similar federal statute hereafter enacted;
(e) to provide for any interest rate swap transactions with respect to
any floating rate series or class of bonds or any series or class with specified
credit enhancement; but:
(i) such action shall not, as evidenced by an opinion of
counsel, adversely affect in any material respect the interests of any
Bondholder or other swap counterparty; and
(ii) the Rating Agency Condition shall have been satisfied; or
(f) to authorize the appointment of any listing agent, transfer agent
or Paying Agent or Registrar for any class of bonds required or advisable in
connection with the listing of any class of bonds on the Luxembourg Stock
Exchange or any other stock exchange, and otherwise to amend the indenture to
incorporate any changes requested or required by any governmental authority,
stock exchange authority, listing agent, transfer agent or Paying Agent or
Registrar for any class of bonds in connection with that listing.
Promptly after the execution by the Issuer and the Trustee of any
supplemental indenture pursuant to this Section, the Trustee shall mail to the
Rating Agencies a notice setting forth in general terms the substance of such
supplemental indenture. Any failure of the Trustee to mail such notice, or any
defect therein, shall not, however, in any way impair or affect the validity of
any such supplemental indenture. If any such supplemental indenture requires
satisfaction of the Rating Agency Condition, the notice requirements contained
in this Section 9.01 are in addition to the notice requirements that may
otherwise apply.
Section 9.02. Supplemental Indentures with Consent of Bondholders. The
Issuer and the Trustee, when authorized by an Issuer Order, also may, with prior
notice to the Rating Agencies, and with the consent of the Holders of not less
than a majority of the Outstanding
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Amount of the Bonds of each Class to be affected, by Act of such Holders
delivered to the Issuer and the Trustee, enter into an indenture or indentures
supplemental hereto for the purpose of adding any provisions to, or changing in
any manner or eliminating any of the provisions of, this Indenture or of
modifying in any manner the rights of the Holders of the Bonds under this
Indenture; provided, however, that no such supplemental indenture shall, without
the consent of the Holder of each Outstanding Bond of each Class affected
thereby:
(a) change the date of payment of any installment of principal of or
interest on any Bond, or reduce the principal amount thereof or the interest
rate thereon, change the provisions of this Indenture relating to the
application of collections on, or the proceeds of the sale of, the Collateral to
payment of principal of or interest on the Bonds, or change any place of payment
where, or the coin or currency in which, any Bond or the interest thereon is
payable, or impair the right to institute suit for the enforcement of the
provisions of this Indenture requiring the application of funds available
therefor, as provided in Article V, to the payment of any such amount due on the
Bonds on or after the respective due dates thereof (or, in the case of optional
or mandatory redemption, on or after the Optional Redemption Date or Mandatory
Redemption Date, as applicable);
(b) reduce the percentage of the Outstanding Amount of the Bonds or of
a Class thereof, the consent of the Holders of which is required for any such
supplemental indenture, or the consent of the Holders of which is required for
any waiver of compliance with certain provisions of this Indenture or certain
defaults hereunder and their consequences provided for in this Indenture;
(c) modify or alter the provisions of the proviso to the definition of
the term "Outstanding";
(d) reduce the percentage of the Outstanding Amount of the Bonds
required to direct the Trustee to direct the Issuer to sell or liquidate the
Collateral pursuant to Section 5.04;
(e) modify any provision of this Section except to increase any
percentage specified herein or to provide that certain additional provisions of
this Indenture or the Basic Documents cannot be modified or waived without the
consent of the Holder of each Outstanding Bond affected thereby;
(f) modify any of the provisions of this Indenture in such manner as to
affect the calculation of the amount of any payment of interest or principal due
on any Bond on any Payment Date (including the calculation of any of the
individual components of such calculation) or to affect the rights of the
Holders of Bonds to the benefit of any provisions for the mandatory redemption
of the Bonds contained herein; or
(g) permit the creation of any lien ranking prior to or on a parity
with the Lien of this Indenture with respect to any part of the Collateral or,
except as otherwise permitted or contemplated herein, terminate the Lien of this
Indenture on any property at any time subject hereto or deprive the Holder of
any Bond of the security provided by the Lien of this Indenture.
The Trustee may in its discretion determine whether or not any Bonds of
a Class would be affected by any supplemental indenture and any such
determination shall be conclusive upon
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the Holders of all Bonds of such Class, whether theretofore or thereafter
authenticated and delivered hereunder. The Trustee shall not be liable for any
such determination made in good faith.
It shall not be necessary for any Act of Bondholders under this Section
to approve the particular form of any proposed supplemental indenture, but it
shall be sufficient if such Act shall approve the substance thereof.
The Trustee shall give each Rating Agency five Business Days prior
written notice of any such proposed supplemental indenture. Promptly after the
execution by the Issuer and the Trustee of any supplemental indenture pursuant
to this Section, the Trustee shall mail to the Rating Agencies and the Holders
of the Bonds to which such amendment or supplemental indenture relates a notice
setting forth in general terms the substance of such supplemental indenture. Any
failure of the Trustee to mail such notice, or any defect therein, shall not,
however, in any way impair or affect the validity of any such supplemental
indenture. If any such supplemental indenture requires satisfaction of the
Rating Agency Condition, the notice requirements contained in this Section 9.02
are in addition to the notice requirements that may otherwise apply.
Section 9.03. Execution of Supplemental Indentures. In executing any
supplemental indenture permitted by this Article IX or the modifications thereby
of the trusts created by this Indenture, the Trustee shall be entitled to
receive, and subject to Sections 6.01 and 6.02, shall be fully protected in
relying upon, an Opinion of Counsel stating that the execution of such
supplemental indenture is authorized or permitted by this Indenture. The Trustee
may, but shall not be obligated to, enter into any such supplemental indenture
that affects the Trustee's own rights, duties, liabilities or immunities under
this Indenture or otherwise.
Section 9.04. Effect of Supplemental Indenture. Upon the execution of
any supplemental indenture pursuant to the provisions hereof, this Indenture
shall be and be deemed to be modified and amended in accordance therewith with
respect to each Class of Bonds affected thereby, and the respective rights,
limitations of rights, obligations, duties, liabilities and immunities under
this Indenture of the Trustee, the Issuer and the Holders of the Bonds shall
thereafter be determined, exercised and enforced hereunder subject in all
respects to such modifications and amendments, and all the terms and conditions
of any such supplemental indenture shall be and be deemed to be part of the
terms and conditions of this Indenture for any and all purposes. If required by
the Trustee, Bonds may bear a notation in form approved by the Trustee as to any
matter provided for in such supplemental indenture. If the Issuer or the Trustee
shall so determine, new Bonds so modified as to conform, in the opinion of the
Trustee and the Issuer, to any such supplemental indenture may be prepared and
executed by the Issuer and authenticated and delivered by the Trustee in
exchange for Outstanding Bonds.
Section 9.05. Conformity with Trust Indenture Act. Every amendment of
this Indenture and every supplemental indenture executed pursuant to this
Article IX shall conform to the requirements of the Trust Indenture Act as then
in effect so long as this Indenture shall then be qualified under the Trust
Indenture Act.
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ARTICLE X
REDEMPTION OF BONDS
Section 10.01. Optional Redemption by Issuer. The Issuer may, at its
option, redeem all, but not less than all, of the Bonds on any Payment Date if,
after giving effect to payments that would otherwise be made on such Payment
Date, the Outstanding Amount has been reduced to less than five percent of the
initial principal balance thereof at a price equal to the outstanding principal
amount of the Bonds to be redeemed plus accrued and unpaid interest thereon at
the Bond Interest Rate to the Optional Redemption Date (such price being called
the "Optional Redemption Price"). If the Issuer shall elect to redeem the Bonds
pursuant to this Section 10.01, it shall furnish written notice (which notice
shall state all items listed in Section 10.02) of such election to the Trustee
and the Rating Agencies not later than 25 days prior to the Optional Redemption
Date and shall deposit with the Trustee not later than one Business Day prior to
the Optional Redemption Date the Optional Redemption Price of the Bonds to be
redeemed whereupon all such Bonds shall be due and payable on the Optional
Redemption Date upon the furnishing of a notice complying with Section 10.02 to
each Holder of the Bonds pursuant to this Section 10.01.
Section 10.02. Form of Optional Redemption Notice. Notice of redemption
under Section 10.01 shall be given by the Trustee by first-class mail, postage
prepaid, mailed not less than five days nor more than 25 days prior to the
Optional Redemption Date to each Holder of Bonds to be redeemed, as of the close
of business on the Record Date preceding the Optional Redemption Date at such
Holder's address appearing in the Register.
All notices of redemption shall state:
(i) the Optional Redemption Date;
(ii) the Optional Redemption Price; and
(iii) the place where such Bonds are to be surrendered for
payment of the Optional Redemption Price (which shall be the office or
agency of the Issuer to be maintained as provided in Section 3.02).
Notice of redemption of the Bonds to be redeemed shall be given by the
Trustee in the name and at the expense of the Issuer. Failure to give notice of
redemption, or any defect therein, to any Holder of any Bonds elected for
redemption shall not impair or affect the validity of the redemption of any
other Bond.
Section 10.03. Bonds Payable on Optional Redemption Date or Payment
Date. Notice of redemption having been given as provided in Section 10.02, the
Bonds to be redeemed shall on the Optional Redemption Date become due and
payable at the Optional Redemption Price and (unless the Issuer shall default in
the payment of the Optional Redemption Price) no interest shall accrue on the
Optional Redemption Price for any period after the date to which accrued
interest is calculated for purposes of calculating the Optional Redemption
Price.
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Section 10.04. Mandatory Redemption by Issuer. If the Seller is
required to repurchase the RRB Property pursuant to Section 5.01(b) of the Sale
Agreement, or elects to repurchase the RRB Property pursuant to Section 5.01(e)
of the Sale Agreement, the Issuer shall be required to redeem all outstanding
Bonds on or before the fifth Business Day following the Repurchase Date (such
date of mandatory redemption, the "Mandatory Redemption Date") for a purchase
price equal to the then outstanding principal amount of the Bonds plus accrued
and unpaid interest thereon at the Bond Interest Rate to the Mandatory
Redemption Date (such price being called the "Mandatory Redemption Price"). If
the Issuer is required to redeem the Bonds pursuant to this Section 10.04, it
shall furnish written notice (which notice shall state all items listed in
Section 10.05) of such redemption to the Trustee and the Rating Agencies not
later than one Business Day before such Repurchase Date and shall deposit with
the Trustee, not later than 12:00 noon Eastern Time on the Repurchase Date, the
Mandatory Redemption Price of the Bonds to be redeemed whereupon all such Bonds
shall be due and payable on the Mandatory Redemption Date upon the furnishing of
a notice complying with Section 10.05 to each Holder of the Bonds pursuant to
this Section 10.04.
Section 10.05. Form of Mandatory Redemption Notice. Notice of
redemption under Section 10.04 shall be given by the Trustee by first-class
mail, postage prepaid, mailed not less than five days prior to the Mandatory
Redemption Date to each Holder of Bonds to be redeemed, as of the close of
business on the Record Date preceding the Mandatory Redemption Date at such
Holder's address appearing in the Register.
All notices of redemption shall state:
(i) the Mandatory Redemption Date;
(ii) the Mandatory Redemption Price; and
(iii) the place where such Bonds are to be surrendered for
payment of the Mandatory Redemption Price (which shall be the office or
agency of the Issuer to be maintained as provided in Section 3.02).
Notice of redemption of the Bonds to be redeemed shall be given by the
Trustee in the name and at the expense of the Issuer. Failure to give notice of
redemption, or any defect therein, to any Holder of any Bonds elected for
redemption shall not impair or affect the validity of the redemption of any
other Bond.
Section 10.06. Bonds Payable on Mandatory Redemption Date or Payment
Date. Notice of redemption having been given as provided in Section 10.05, the
Bonds to be redeemed shall on the Mandatory Redemption Date become due and
payable at the Mandatory Redemption Price and (unless the Issuer shall default
in the payment of the Mandatory Redemption Price) no interest shall accrue on
the Mandatory Redemption Price for any period after the date to which accrued
interest is calculated for purposes of calculating the Mandatory Redemption
Price.
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ARTICLE XI
MISCELLANEOUS
Section 11.01. Compliance Certificates and Opinions, etc.
(a) Upon any application or request by the Issuer to the Trustee to
take any action under any provision of this Indenture, the Issuer shall furnish
to the Trustee (i) an Officer's Certificate stating that all conditions
precedent, if any, provided for in this Indenture relating to the proposed
action have been complied with, (ii) an Opinion of Counsel stating that in the
opinion of such counsel all such conditions precedent, if any, have been
complied with and (iii) (if required by the Trust Indenture Act) an Independent
Certificate from a firm of certified public accountants meeting the applicable
requirements of this Section, except that, in the case of any such application
or request as to which the furnishing of such documents is specifically required
by any provision of this Indenture, no additional certificate or opinion need be
furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(i) a statement that each signatory of such certificate or
opinion has read or has caused to be read such covenant or condition
and the definitions herein relating thereto;
(ii) 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;
(iii) 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
(iv) a statement as to whether, in the opinion of each such
signatory, such condition or covenant has been complied with.
(b) (i) Prior to the deposit of any Collateral or other property or
securities with the Trustee that is to be made the basis for the release of any
property or securities subject to the Lien of this Indenture, the Issuer shall,
in addition to any obligation imposed in Section 11.01(a) or elsewhere in this
Indenture, furnish to the Trustee an Officer's Certificate certifying or stating
the opinion of each person signing such certificate as to the fair value (within
90 days of such deposit) to the Issuer of the Collateral or other property or
securities to be so deposited.
(ii) Whenever the Issuer is required to furnish to the Trustee
an Officer's Certificate certifying or stating the opinion of any
signer thereof as to the matters described in clause (i) above, the
Issuer shall also deliver to the Trustee an Independent Certificate as
to the same matters, if the fair value to the Issuer of the securities
to be so deposited and of all other such securities made the basis of
any such withdrawal or release since the commencement of the
then-current fiscal year of the Issuer, as set forth
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in the certificates delivered pursuant to clause (i) above and this
clause (ii), is ten percent or more of the Outstanding Amount of the
Bonds, but such a certificate need not be furnished with respect to any
securities so deposited, if the fair value thereof to the Issuer as set
forth in the related Officer's Certificate is less than $25,000 or less
than one percent of the Outstanding Amount of the Bonds.
(iii) Whenever any property or securities are to be released
from the Lien of this Indenture other than pursuant to Section 8.02,
the Issuer shall also furnish to the Trustee an Officer's Certificate
certifying or stating the opinion of each person signing such
certificate as to the fair value (within 90 days of such release) of
the property or securities proposed to be released and stating that in
the opinion of such person the proposed release will not impair the
security under this Indenture in contravention of the provisions
hereof.
(iv) Whenever the Issuer is required to furnish to the Trustee
an Officer's Certificate certifying or stating the opinion of any
signer thereof as to the matters described in clause (iii) above, the
Issuer shall also furnish to the Trustee an Independent Certificate as
to the same matters if the fair value of the property or securities and
of all other property, or securities released from the Lien of this
Indenture (other than pursuant to Section 8.02) since the commencement
of the then-current calendar year, as set forth in the certificates
required by clause (iii) above and this clause (iv), equals 10 percent
or more of the Outstanding Amount of the Bonds, but such certificate
need not be furnished in the case of any release of property or
securities if the fair value thereof as set forth in the related
Officer's Certificate is less than $25,000 or less than one percent of
the then Outstanding Amount of the Bonds.
(v) Notwithstanding Section 2.12 or any other provision of
this Section, the Issuer may (A) collect, liquidate, sell or otherwise
dispose of the RRB Property and the RRB Charge as and to the extent
permitted or required by the Basic Documents (B) cause the Trustee to
make cash payments out of the Collection Account as and to the extent
permitted or required by the Basic Documents and (C) exercise its Legal
Defeasance Option or its Covenant Defeasance Option, as applicable
pursuant to Article IV.
Section 11.02. Form of Documents Delivered to Trustee.
(a) 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.
(b) Any certificate or opinion of an Authorized Officer of the Issuer
may be based, insofar as it relates to legal matters, upon a certificate or
opinion of, or representations by, counsel, unless such officer knows, or in the
exercise of reasonable care should know, that the certificate or opinion or
representations with respect to the matters upon which his or her certificate or
opinion is based are erroneous. Any such certificate of an Authorized Officer or
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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 Issuer or the Administrator, stating that the
information with respect to such factual matters is in the possession of the
Servicer, the Seller, the 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.
(c) Whenever in this Indenture, in connection with any application or
certificate or report to the Trustee, it is provided that the Issuer shall
deliver any document as a condition of the granting of such application, or as
evidence of the Issuer's compliance with any term hereof, it is intended that
the truth and accuracy, at the time of the granting of such application or at
the effective date of such certificate or report (as the case may be), of the
facts and opinions stated in such document shall in such case be conditions
precedent to the right of the Issuer to have such application granted or to the
sufficiency of such certificate or report. The foregoing shall not, however, be
construed to affect the Trustee's right to rely upon the truth and accuracy of
any statement or opinion contained in any such document as provided in Article
VI.
(d) Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
Section 11.03. Acts of Bondholders.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given or taken by
Bondholders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Bondholders in person or by agents
duly appointed in writing; and except as herein otherwise expressly provided
such action shall become effective when such instrument or instruments are
delivered to the Trustee, and, where it is hereby expressly required, to the
Issuer. Such instrument or instruments (and the action embodied therein and
evidenced thereby) are herein sometimes referred to as the "Act" of the
Bondholders signing such instrument or instruments. Proof of execution of any
such instrument or of a writing appointing any such agent shall be sufficient
for any purpose of this Indenture and (subject to Section 6.01) conclusive in
favor of the Trustee and the Issuer, if made in the manner provided in this
Section.
(b) The fact and date of the execution by any person of any such
instrument or writing may be proved in any manner that the Trustee deems
sufficient.
(c) The ownership of Bonds shall be proved by the Register.
(d) Any request, demand, authorization, direction, notice, consent,
waiver or other action by the Holder of any Bonds shall bind the Holder of every
Bond issued upon the registration thereof or in exchange therefor or in lieu
thereof, in respect of anything done, omitted or suffered to be done by the
Trustee or the Issuer in reliance thereon, whether or not notation of such
action is made upon such Bond.
(e) The Issuer may at its option by delivery of an Officer's
Certificate to the Trustee set a record date to determine the Holders of any
Class of Bonds entitled to give any consent, request,
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demand, authorization, direction, notice, waiver or other Act. Notwithstanding
Trust Indenture Act Section 316(c), 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 Bondholders 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 Bonds of the applicable Class at the close of
business on such record date shall be deemed to be Bondholders of such Class for
the purposes of determining whether Holders of the requisite aggregate
Outstanding Amount of Bonds of such 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 Bonds of
such Class shall be computed as of such record date; provided, however, that no
such consent, request, demand, authorization, direction, notice, waiver or other
Act by the Holders of Bonds of such Class on such record date shall be deemed
effective unless it shall become effective pursuant to the provisions of this
Indenture not later than one year after the record date.
(f) Except as otherwise provided in the definition of Outstanding,
Bonds of any Class owned by or pledged to any Person shall have an equal and
proportional benefit under the provisions of this Indenture, without preference,
priority or distinction as among all of the Bonds of that Class.
Section 11.04. Notices.
(a) Unless otherwise specifically provided herein, all requests,
notices, directions, consents and waivers required under the terms and
provisions of this Indenture shall be in English and in writing, and any such
notice, direction, consent or waiver may be given by United first class States
mail, reputable overnight courier service, facsimile transmission or electronic
mail (confirmed by telephone, United States first class mail or reputable
overnight courier service in the case of notice by facsimile transmission or
electronic mail) or any other customary means of communication, and any such
requests, 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,
if to the Issuer, to:
PSNH Funding LLC 0
x/x Xxxxxx Xxxxxxx Xxxxxxx xx Xxx Xxxxxxxxx
if prior to April 1, 2002:
0000 Xxx Xxxxxx
Xxxxxxxxxx, Xxx Xxxxxxxxx 00000
if on or after April 1, 2002:
000 Xxxxx Xxxxxxxxxx Xxxxxx
Xxxxxxxxxx, Xxx Xxxxxxxxx 00000
- 73 -
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
E-Mail: xxxxxxx@xx.xxx (email)
with a copy to:
Public Service Company of New Hampshire
c/o Northeast Utilities Service Company
if by U.S. Mail:
X.X. Xxx 000
Xxxxxxxx, XX 00000-0000
if by courier:
000 Xxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Assistant Treasurer - Finance
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
E-Mail: xxxxxxx@xx.xxx
if to the Trustee, to:
The Bank of New York
0 Xxxx Xxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: ABS Unit
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
if to the Rating Agencies, to:
Standard & Poor's Ratings Services
00 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Asset Backed Surveillance Department
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
Xxxxx'x Investors Service
00 Xxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: ABS Monitoring Department
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
and
- 74 -
Fitch, Inc.
Xxx Xxxxx Xxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: ABS Surveillance
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
Email: xxxx@xxxxxxxxxxxx.xxx
Section 11.05. Notices to Bondholders; Waiver. Where this Indenture
provides for notice to Bondholders of any event, such notice shall be
sufficiently given (unless otherwise herein expressly provided) if in writing
and mailed, first-class, postage prepaid to each Bondholder affected by such
event, at such Bondholder 's address as it appears on the Register, not later
than the latest date, and not earlier than the earliest date, prescribed for the
giving of such notice. In any case where notice to Bondholders is given by mail,
neither the failure to mail such notice nor any defect in any notice so mailed
to any particular Bondholder shall affect the sufficiency of such notice with
respect to other Bondholders, and any notice that is mailed in the manner herein
provided shall conclusively be presumed to have been duly given.
Where this Indenture provides for notice in any manner, such notice may
be waived in writing by any Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Bondholders shall be filed with the Trustee but
such filing shall not be a condition precedent to the validity of any action
taken in reliance upon such a waiver.
In case, by reason of the suspension of regular mail service as a
result of a strike, work stoppage or similar activity, it shall be impractical
to mail notice of any event of Bondholders when such notice is required to be
given pursuant to any provision of this Indenture, then any manner of giving
such notice as shall be satisfactory to the Trustee shall be deemed to be a
sufficient giving of such notice.
Where this Indenture provides for notice to the Rating Agencies,
failure to give such notice shall not affect any other rights or obligations
created hereunder, and shall not under any circumstance constitute a Default or
Event of Default.
Section 11.06. State Pledge; Bonds Not Obligation of the State of New
Hampshire, or Seller.
(a) The Issuer hereby finds and determines, and hereby represents and
warrants, that it constitutes a "financing entity" under RSA 369-B:2, and that
the Bonds constitute "rate reduction bonds" under RSA 369-B:2 and that the
Holders of the Bonds are entitled to the rights and benefits thereunder.
Pursuant to RSA 369-B:6, II, the State of New Hampshire pledges, contracts and
agrees with the Issuer and the Holders of the Bonds (the "State Pledge") as
follows:
The state does hereby pledge, contract, and agree with the owners of
RRB property and holders of and trustees for rate reduction bonds that
neither the state, nor any of its agencies, including the commission,
shall limit, alter, amend,
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reduce, or impair the RRB charge, RRB property, finance orders, and all
rights thereunder or ownership thereof or security interest therein
until the rate reduction bonds, including all principal, interest,
premium, costs and arrearages thereon, are fully met and discharged,
provided nothing contained in this paragraph shall preclude the
limitation, alteration, amendment, reduction, or impairment if and when
adequate provision shall be made by law for the protection of such
owners, holders and trustees. The state does hereby acknowledge that
such owners, holders and trustees may and will rely on this pledge,
contract, and agreement and that any such limitation, alteration,
amendment, reduction, or impairment without such adequate provision
will irreparably harm such owners, holders and trustees. The state
treasurer and the financing entity are each authorized to include this
pledge, contract, agreement, and acknowledgment of the state in the
documentation relating to the rate reduction bonds.
(b) The Bonds do not represent an interest in or obligation of the
State of New Hampshire, or any other governmental agency or instrumentality, or
the Seller or any of its affiliates, except that the Bonds are obligations of
PSNH Funding LLC 2, which is an affiliate of PSNH. None of the Bonds or the
underlying RRB Property will be guaranteed or insured by the State of New
Hampshire, 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
New Hampshire or any political subdivision thereof or any other governmental
agency or instrumentality is pledged to the payment of the principal of, or
interest on, the Bonds, or to the payments in respect of or in repurchase of the
RRB Property, nor is the State of New Hampshire or any political subdivision
thereof or any other governmental agency or instrumentality in any manner
obligated to make any appropriation for the payment thereof.
Section 11.07. Conflict with Trust Indenture Act. If any provision
hereof limits, qualifies or conflicts with another provision hereof that is
required to be included in this Indenture by any of the provisions of the Trust
Indenture Act, such required provision shall control.
The provisions of Trust Indenture Act Sections 310 through 317
that impose duties on any person (including the provisions automatically deemed
included herein unless expressly excluded by this Indenture) are a part of and
govern this Indenture, whether or not physically contained herein.
Section 11.08. Effect of Headings and Table of Contents. The Article
and Section headings herein and the Table of Contents are for convenience only
and shall not affect the construction hereof.
Section 11.09. Successors and Assigns. All covenants and agreements in
this Indenture and the Bonds by the Issuer shall bind its successors and
assigns, whether so expressed or not.
All agreements of the Trustee in this Indenture shall bind its
successors.
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Section 11.10. Severability. In case any provision in this Indenture or
in the Bonds shall be invalid, illegal or unenforceable, the validity, legality,
and enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.
Section 11.11. Benefits of Indenture. Nothing in this Indenture or in
the Bonds, express or implied, shall give to any Person, other than the parties
hereto and their successors hereunder, and the Bondholders, and any other party
secured hereunder, and any other Person with an ownership interest in any part
of the Collateral, any benefit or any legal or equitable right, remedy or claim
under this Indenture.
Section 11.12. Legal Holidays. In any case where the date on which any
payment is due shall not be a Business Day, then (notwithstanding any other
provision of the Bonds or this Indenture) payment need not be made on such date,
but may be made on the next succeeding Business Day with the same force and
effect as if made on the date on which nominally due, and no interest shall
accrue for the period from and after any such nominal date.
Section 11.13. Governing Law. THIS INDENTURE SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW HAMPSHIRE, WITHOUT
REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND
REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH
LAWS.
Section 11.14. Counterparts. This Indenture may be executed in any
number of counterparts, each of which so executed shall be deemed to be an
original, but all such counterparts shall together constitute but one and the
same instrument.
Section 11.15. Recording of Indenture. If this Indenture is subject to
recording in any appropriate public recording offices, such recording is to be
effected by the Issuer and at its expense accompanied by an Opinion of Counsel
(which may be counsel to the Trustee or any other counsel reasonably acceptable
to the Trustee) to the effect that such recording is necessary either for the
protection of the Bondholders or any other Person secured hereunder or for the
enforcement of any right or remedy granted to the Trustee under this Indenture.
Section 11.16. No Recourse to Certain Persons. No recourse may be
taken, directly or indirectly, with respect to the obligations of the Issuer or
the Trustee on the Bonds or under this Indenture or any certificate or other
writing delivered in connection herewith or therewith, against (i) the Trustee
in its individual capacity, (ii) any owner of a membership interest in the
Issuer or (iii) any partner, owner, beneficiary, agent, officer, director or
employee of the Trustee in its individual capacity, any holder of a membership
interest in the Issuer or the Trustee or of any successor or assign of the
Trustee in its individual capacity, except as any such Person may have expressly
agreed (it being understood that the Trustee has no such obligations in its
individual capacity).
Section 11.17. No Recourse to Issuer. Notwithstanding any provision of
this Indenture or any supplemental Indenture to the contrary, Bondholders shall
have no recourse against the Issuer, but shall look only to the Collateral, with
respect to any amounts due to the Bondholders hereunder.
- 77 -
Section 11.18. Inspection. The Issuer agrees that, on reasonable prior
notice, it will permit any representative of the Trustee, during the Issuer's
normal business hours, to examine all the books of account, records, reports,
and other papers of the Issuer, to make copies and extracts therefrom, to cause
such books to be audited by Independent certified public accountants, and to
discuss the Issuer's affairs, finances and accounts with the Trustee's officers,
employees, and Independent certified public accountants, all at such reasonable
times and as often as may be reasonably requested. The Trustee shall and shall
cause its representatives to hold in confidence all such information except to
the extent disclosure may be required by law (and all reasonable applications
for confidential treatment are unavailing) and except to the extent that the
Trustee may reasonably determine that such disclosure is consistent with its
obligations hereunder. Notwithstanding anything herein to the contrary, the
foregoing shall not be construed to prohibit (i) disclosure of any and all
information that is or becomes publicly known, or information obtained by the
Trustee from sources other than the Issuer, provided such parties are rightfully
in possession of such information and do not have an obligation of
confidentiality, (ii) disclosure of any and all information (A) if required to
do so by any applicable statute, law, rule or regulation, (B) pursuant to any
subpoena, civil investigative demand or similar demand or request of any court
or regulatory authority exercising its proper jurisdiction, (C) in any
preliminary or final offering circular, registration statement or contract or
other document pertaining to the transactions contemplated by this Indenture or
the Basic Documents approved in advance by the Issuer or (D) to any affiliate,
independent or internal auditor, agent, employee or attorney of the Trustee
having a need to know the same, provided that such parties agree to be bound by
the confidentiality provisions contained in this Section 11.18, or (iii) any
other disclosure authorized by the Issuer.
Section 11.19. Nonpetition Covenants. Notwithstanding any prior
termination of this Indenture, but subject to the NHPUC's right to order the
sequestration and payment of revenues arising with respect to the RRB Property
notwithstanding any bankruptcy, reorganization or other insolvency proceedings
with respect to the debtor, pledgor or transferor of the RRB Property pursuant
to RSA 369-B:7, VI and RSA 369-B:7, VIII, the Trustee shall not, prior to the
date which is one year and one day after the termination of this Indenture with
respect to the Issuer, petition or otherwise invoke or cause the Issuer to
invoke the process of any court or governmental authority for the purpose of
commencing or sustaining a case against the Issuer under any federal or state
bankruptcy, insolvency or similar law or appointing a receiver, liquidator,
assignee, trustee, custodian, sequestrator or other similar official of the
Issuer or any substantial part of the property of the Issuer, or ordering the
winding up or liquidation of the affairs of the Issuer.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the Issuer and the Trustee have caused this
Indenture to be duly executed by their respective officers, thereunto duly
authorized, all as of the day and year first above written.
PSNH FUNDING LLC 2
By: /s/ Xxxxx X. Xxxxx
Name: Xxxxx X. Xxxxx
Title: President
THE BANK OF NEW YORK,
as Trustee
By: /s/ Xxxxxx Xxxxxxx
Name: Xxxxxx Xxxxxxx
Title: Assistant Treasurer
- S-1 -
SCHEDULE 1
EXPECTED AMORTIZATION SCHEDULE
PAYMENT OUTSTANDING PRINCIPAL
DATE BALANCE
---- -------
Closing Date 50,000,000
8/1/2002 48,167,365
11/1/2002 46,660,745
2/1/2003 45,081,055
5/1/2003 43,222,109
8/1/2003 41,374,844
11/1/2003 39,212,967
2/1/2004 37,236,774
5/1/2004 35,084,506
8/1/2004 33,090,920
11/1/2004 30,833,175
2/1/2005 28,766,948
5/1/2005 26,455,318
8/1/2005 24,327,636
11/1/2005 21,947,169
2/1/2006 19,715,789
5/1/2006 17,304,850
8/1/2006 15,046,446
11/1/2006 12,524,367
2/1/2007 10,145,714
5/1/2007 7,601,610
8/1/2007 5,200,896
11/1/2007 2,532,344
2/1/2008 -
- 1-1 -
SCHEDULE 2
REQUIRED OVERCOLLATERALIZATION LEVEL SCHEDULE
Payment Required
Date Overcollateralization Level
---- ---------------------------
8/1/2002 20,833
11/1/2002 31,250
2/1/2003 41,667
5/1/2003 52,083
8/1/2003 62,500
11/1/2003 72,917
2/1/2004 83,333
5/1/2004 93,750
8/1/2004 104,167
11/1/2004 114,583
2/1/2005 125,000
5/1/2005 135,417
8/1/2005 145,833
11/1/2005 156,250
2/1/2006 166,667
5/1/2006 177,083
8/1/2006 187,500
11/1/2006 197,917
2/1/2007 208,333
5/1/2007 218,750
8/1/2007 229,167
11/1/2007 239,583
2/1/2008 250,000
- 2-1 -
EXHIBIT A
FORM OF BOND
REGISTERED
NO. [ ] $ [ ]
SEE REVERSE FOR CERTAIN DEFINITIONS
THE PRINCIPAL OF THIS CLASS A-1 BOND WILL BE PAID IN INSTALLMENTS AS
SET FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS CLASS
A-1 BOND AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
PSNH FUNDING LLC 2
CLASS A-1
RATE REDUCTION BOND, SERIES 2002-1
BOND INTEREST RATE SCHEDULED MATURITY DATE FINAL MATURITY DATE CUSIP
------------------ ----------------------- ------------------- -----
4.58% February 1, 2008 February 1, 2010 69363X AA 1
REGISTERED OWNER: Cede & Co.
PRINCIPAL AMOUNT:
UNLESS THIS BOND IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO PSNH FUNDING LLC 2 OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY BOND 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 AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
This Bond does not represent an interest in or obligation of the State
of New Hampshire, any governmental agency or instrumentality or Public Service
Company of New Hampshire, a New Hampshire corporation ("PSNH"). None of the Bond
or the underlying RRB Property (as defined in the Indenture) will be guaranteed
or insured by
- A-1 -
the State of New Hampshire, any other governmental agency or instrumentality or
by PSNH.
Neither the full faith and credit nor the taxing power of the State of
New Hampshire or any political subdivision thereof or any governmental agency or
instrumentality is pledged to the payment of the principal of, or interest on,
this Bond, or to the payments in respect of or in repurchase of the RRB
Property, nor is the State of New Hampshire or any political subdivision thereof
or any governmental agency or instrumentality in any manner obligated to make
any appropriation for the payment thereof.
To the extent not otherwise defined herein, the capitalized terms used
herein have the meanings assigned to them in the Indenture.
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 and fully-paid Bond. PSNH Funding LLC 2, a
limited liability company formed and existing under the laws of the State of
Delaware (herein referred to as the "Issuer"), for value received, hereby
promises to pay to the person whose name appears as the Registered Holder of
this Class A-1 Bond, which shall initially be Cede & Co., the original principal
amount shown above in quarterly installments on the Payment Dates and in the
amounts specified on the reverse hereof or, if less, the amounts determined
pursuant to Section 8.02 of the Indenture, in each year, commencing on the date
determined as provided on the reverse hereof and ending on or before the Final
Maturity Date and to pay interest, at the Bond Interest Rate shown above, on
each February 1, May 1, August 1 and November 1 or if any such day is not a
Business Day, the next succeeding Business Day, commencing on August 1, 2002 and
continuing until the earlier of the payment of the principal hereof or the Final
Maturity Date (each a "Payment Date"), on the principal amount of this Class A-1
Bond. Interest on this Class A-1 Bond will accrue for each Payment Date from the
most recent Payment Date on which interest has been paid to but excluding such
Payment Date or, if no interest has yet been paid, from January 30, 2002.
Interest will be computed on the basis of a 360-day year of twelve 30-day
months. Such principal of and interest on this Class A-1 Bond shall be paid in
the manner specified on the reverse hereof.
The principal of and interest on this Class A-1 Bond are payable in
such coin or currency of the United States of America as at the time of payment
is legal tender for payment of public and private debts. All payments made by
the Issuer with respect to this Class A-1 Bond shall be applied first to
interest due and payable on this Class A-1 Bond as provided above and then to
the unpaid principal of this Class A-1 Bond, all in the manner set forth in
Section 8.02 of the Indenture.
Subject to and in accordance with the terms of the Indenture, the
Issuer has represented and warranted under the Indenture, that the Issuer
constitutes a "financing entity" under RSA 369-B:2, and that the Bonds
constitute "rate reduction bonds" under RSA 369-B:2 and that the Holders of the
Bonds are entitled to the rights and benefits
- A-2 -
thereunder. Pursuant to RSA 369-B:6, II, the State of New Hampshire has pledged
and agreed with the Issuer and the Holders of the Bonds (the "State Pledge") as
follows:
The state does hereby pledge, contract, and agree with the owners of
RRB property and holders of and trustees for rate reduction bonds that
neither the state, nor any of its agencies, including the commission,
shall limit, alter, amend, reduce, or impair the RRB charge, RRB
property, finance orders, and all rights thereunder or ownership
thereof or security interest therein until the rate reduction bonds,
including all principal, interest, premium, costs and arrearages
thereon, are fully met and discharged, provided nothing contained in
this paragraph shall preclude the limitation, alteration, amendment,
reduction, or impairment if and when adequate provision shall be made
by law for the protection of such owners, holders and trustees. The
state does hereby acknowledge that such owners, holders and trustees
may and will rely on this pledge, contract, and agreement and that any
such limitation, alteration, amendment, reduction, or impairment
without such adequate provision will irreparably harm such owners,
holders and trustees. The state treasurer and the financing entity are
each authorized to include this pledge, contract, agreement, and
acknowledgment of the state in the documentation relating to the rate
reduction bonds.
Further, the Issuer has pledged and agreed with the Holders of the
Bonds that it will not act in a manner inconsistent with the State Pledge and
will not take any action that would impair any rights of the Holders of the
Bonds or the RRB Property.
Reference is made to the further provisions of this Class A-1 Bond set
forth on the reverse hereof, which shall have the same effect as though fully
set forth on the face of this Class A-1 Bond.
The Holder of this Class A-1 Bond by the acceptance hereof agrees to be
bound by the terms of the Indenture.
Unless the certificate of authentication hereon has been executed by
the Trustee whose name appears below by manual signature, this Class A-1 Bond
shall not be entitled to any benefit under the Indenture, or any other Basic
Document, or be valid or obligatory for any purpose.
It is expressly agreed and understood by the parties hereto that (a)
this Bond is executed, authenticated and delivered by The Bank of New York, not
individually or personally but solely as Trustee, on behalf of the Issuer in the
exercise of the powers and authority conferred and vested in it, (b) the
representations, undertakings and agreements herein made by the Trustee on
behalf of the Issuer are made and intended not as personal representations,
undertakings and agreements of the Trustee, but are made and intended for the
purpose of binding only the Issuer, (c) nothing herein contained shall be
construed as creating any liability on The Bank of New York, individually or
personally, to perform any covenant either expressed or implied herein, except
in its capacity as Trustee, all such
- A-3 -
liability being expressly waived by all Persons, and (d) under no circumstances
shall The Bank of New York be personally liable for the payment of any
indebtedness or expenses of the Issuer, or be personally liable for the breach
or failure of any obligation, representation, warranty or covenant made or
undertaken by the Issuer under the Indenture.
IN WITNESS WHEREOF, the Issuer has caused this instrument to be signed,
manually or in facsimile, by its Authorized Officer.
Date: [ ], ______
PSNH FUNDING LLC 2
By:________________________
Name:
Title:
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TRUSTEE'S CERTIFICATE OF AUTHENTICATION
Dated: [ ], ______
This is one of the Bonds referred to in the within-mentioned Indenture.
THE BANK OF NEW YORK,
as Trustee
By:________________________
Name:
Title:
- A-5 -
[REVERSE OF BOND]
This Class A-1 Bond is one of a duly authorized issue of Bonds of the
Issuer, designated as its PSNH Funding LLC 2 Rate Reduction Bonds, Series 2002-1
(herein called the "Bonds"), issuable in one or more Classes, and further
designated as a Class A-1 Bond (collectively with all other Class A-1 Bonds of
this issue, the "Class A-1 Bonds"), all issued under a Indenture dated as of
January 30, 2002 (together with all amendments and supplements thereto, the
"Indenture"), between the Issuer and The Bank of New York, as Trustee (the
"Trustee," which term includes any successor trustee under the Indenture), to
which Indenture and all indentures supplemental thereto reference is hereby made
for a statement of the respective rights and obligations thereunder of the
Issuer, the Trustee and the Holders of the Bonds. All terms used in this Class
A-1 Bond that are defined in the Indenture shall have the meanings assigned to
them in the Indenture. This Class A-1 Bond does not purport to summarize the
Indenture and reference is made to the Indenture for information with respect to
the interests, rights, benefits, obligations, proceeds, and duties evidenced
hereby. A copy of the Indenture may be examined during normal business hours at
the principal office of the Trustee, and at such other places, if any,
designated by the Trustee, by any Holder upon request.
The Class A-1 Bonds and the other Classes of Bonds issued by the Issuer
are and will be equally and ratably secured by the collateral pledged as
security therefor, as provided in the Indenture.
The principal of this Class A-1 Bond shall be payable on each Payment
Date only to the extent that amounts in the Collection Account are available
therefor, and only until the outstanding principal balance thereof on such
Payment Date (after giving effect to all payments of principal, if any, made on
such Payment Date) has been reduced to the principal balance specified in the
Expected Amortization Schedule which is attached to the Indenture as Schedule 1,
unless payable earlier either because (x) an Event of Default, other than an
Event of Default pursuant to Section 5.01(g) of the Indenture, shall have
occurred and be continuing, and the Trustee has declared the Bonds to be
immediately due and payable in accordance with Section 5.02 of the Indenture,
(y) the Issuer, at its option, shall have called for the redemption of the Bonds
pursuant to Section 10.01 of the Indenture or (z) the Issuer shall have called
for the redemption of the Bonds pursuant to Section 10.04 of the Indenture if
the Seller is required to repurchase the RRB Property pursuant to Section
5.01(b) of the Sale Agreement. However, actual principal payments may be made in
lesser than expected amounts and at later than expected times as determined
pursuant to Section 8.02 of the Indenture. The entire unpaid principal amount of
this Class A-1 Bond shall be due and payable on the earlier of the Final
Maturity Date hereof, the Optional Redemption Date, if any, and the Mandatory
Redemption Date, if any, herefor. Notwithstanding the foregoing, the entire
unpaid principal amount of the Bonds shall be due and payable, if not then
previously paid, on the date on which an Event of Default shall have occurred
and be continuing and the Trustee has declared the Bonds to be immediately due
and payable in the manner provided in Section 5.02 of the Indenture. All
principal payments on the Class A-1 Bonds shall be made pro rata to the Class
A-1 Bondholders entitled thereto based on the respective principal amounts of
the Class A-1 Bonds held by them.
- A-6 -
Payments of interest on this Class A-1 Bond due and payable on each
Payment Date, together with the installment of principal shall be made by check
mailed first-class, postage prepaid, to the Person whose name appears as the
Registered Holder of this Class A-1 Bond (or one or more Predecessor Bonds) on
the Register as of the close of business on the Record Date, or, upon written
application of the Registered Holder if this Class A-1 Bond is in the original
principal amount of $1,000,000 or more to the Trustee made at any time not later
than the Record Date or continuing in effect from a prior request, by wire
transfer in immediately available funds to the account of the Registered Holder
at such bank located in New York, New York having wire transfer capability as
may be designated by the Registered Holder, except that with respect to Bonds
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, and except for the final installment of principal payable with respect
to this Class A-1 Bond on a Payment Date which shall be payable as provided
below. Such checks shall be mailed to the Person entitled thereto at the address
of such Person as it appears on the Register as of the applicable Record Date
without requiring that this Class A-1 Bond be submitted for notation of payment.
Any reduction in the principal amount of this Class A-1 Bond (or any one or more
Predecessor Bonds) effected by any payments made on any Payment Date shall be
binding upon all future Holders of this Class A-1 Bond and of any Bond issued
upon the registration of transfer hereof or in exchange hereof or in lieu
hereof, whether or not noted hereon. If funds are expected to be available, as
provided in the Indenture, for payment in full of the then remaining unpaid
principal amount of this Class A-1 Bond on a Payment Date, then the Trustee, in
the name of and on behalf of the Issuer, will notify the Person who was the
Registered Holder hereof as of the Record Date preceding such Payment Date by
notice mailed no later than five days prior to such final Payment Date and shall
specify that such final installment will be payable only upon presentation and
surrender of this Class A-1 Bond at the office of the Paying Agent or the office
or agency maintained for that purpose by the Trustee in the City of New York.
The Issuer shall pay interest on overdue installments of interest at
the Bond Interest Rate to the extent lawful.
As provided in the Indenture, the Class A-1 Bonds may be redeemed, in
whole but not in part, at the option of the Issuer on any Payment Date at the
Optional Redemption Price if, after giving effect to payments that would
otherwise be made on such Payment Date, the Outstanding Amount of the Bonds has
been reduced to less than five percent of the initial principal balance thereof.
In addition, as provided in the Indenture, if the Seller is required to
repurchase the RRB Property pursuant to Section 5.01(b) of the Sale Agreement,
the Issuer will be required to redeem all outstanding Bonds, including the Class
A-1 Bonds, on or before the fifth Business Day following the Repurchase Date (as
defined in the Sale Agreement).
As provided in the Indenture and subject to certain limitations set
forth therein, the transfer of this Class A-1 Bond may be registered on the
Register upon surrender of this Class A-1 Bond for registration of transfer at
the office or agency designated by the Issuer pursuant to the Indenture, duly
endorsed by, or accompanied by (a) a written
- A-7 -
instrument of transfer in form satisfactory to the Trustee and the Registrar
duly executed by the Holder hereof or such Holder's attorney duly authorized in
writing, with such signature guaranteed by an institution which is a member of
one of the following recognized Signature Guaranty Programs: (i) The Securities
Transfer Agent Medallion Program (STAMP); (ii) The New York Stock Exchange
Medallion Program (MSP); (iii) The Stock Exchange Medallion Program (SEMP); or
(iv) in such other guarantee program acceptable to the Trustee, and (b) such
other documents as the Trustee may require, and thereupon one or more new Class
A-1 Bonds of Minimum Denominations and in the same aggregate principal amount
will be issued to the designated transferee or transferees. No service charge
will be charged for any registration of transfer or exchange of this Class A-1
Bond, but the transferor may be required to pay a sum sufficient to cover any
tax or other governmental charge that may be imposed in connection with any such
registration of transfer or exchange, other than exchanges pursuant to Section
2.04 of the Indenture not involving any transfer.
Each Bondholder , by acceptance of a Bond, covenants and agrees that no
recourse may be taken, directly or indirectly, with respect to the obligations
of the Issuer or the Trustee on the Bonds or under the Indenture or any
certificate or other writing delivered in connection therewith, against (i) the
Trustee in its individual capacity, (ii) any owner of a membership interest in
the Issuer or (iii) any partner, owner, beneficiary, agent, officer, director or
employee of the Trustee in its individual capacity, any holder of a membership
interest in the Issuer or the Trustee or of any successor or assign of the
Trustee in its individual capacity, except as any such Person may have expressly
agreed (it being understood that the Trustee has no such obligations in its
individual capacity).
Prior to the due presentment for registration of transfer of this Class
A-1 Bond, the Issuer, the Trustee, the Registrar, the Paying Agent and any other
agent of the Issuer, the Trustee or the Registrar may treat the Person in whose
name this Class A-1 Bond is registered (as of the day of determination) as the
owner hereof for the purpose of receiving payments of principal of and interest
on this Class A-1 Bond and for all other purposes whatsoever, whether or not
this Class A-1 Bond be overdue, and neither the Issuer, the Trustee, the
Registrar, the Paying Agent nor any such other agent shall be affected by notice
to the contrary.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Issuer and the rights of the Holders of the Bonds under the Indenture at any
time by the Issuer with the consent of the Holders of Bonds representing a
majority of the Outstanding Amount of all Bonds at the time Outstanding of each
Class to be affected. The Indenture also contains provisions permitting the
Holders of Bonds representing specified percentages of the Outstanding Amount of
the Bonds, on behalf of the Holders of all the Bonds, to waive compliance by the
Issuer with certain provisions of the Indenture and certain past defaults under
the Indenture and their consequences. Any such consent or waiver by the Holder
of this Class A-1 Bond (or any one of more Predecessor Bonds) shall be
conclusive and binding upon such Holder and upon all future Holders of this
Class A-1 Bond and of any Bond issued upon the registration of transfer hereof
or in exchange hereof or in lieu hereof whether or not notation of such consent
or waiver is made upon
- A-8 -
this Class A-1 Bond. The Indenture also permits the Trustee to amend or waive
certain terms and conditions set forth in the Indenture without the consent of
Holders of the Bonds issued thereunder.
The term "Issuer" as used in this Class A-1 Bond includes any successor
to the Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain circumstances,
to merge or consolidate, subject to the rights of the Trustee and the Holders of
Bonds under the Indenture.
The Class A-1 Bonds are issuable only in registered form without
coupons in Minimum Denominations of $1,000 original principal amount and
integral multiples thereof as provided in the Indenture, subject to certain
limitations therein set forth.
The Holder, by purchase of this Class A-1 Bond, 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.
The Holder, by purchase of this Class A-1 Bond, will be deemed to agree
to treat this Bond as debt of the Issuer secured by, among other things, the RRB
Property and other related collateral, for all purposes.
THIS CLASS A-1 BOND AND THE INDENTURE SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW HAMPSHIRE, WITHOUT
REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND
REMEDIES OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS.
No reference herein to the Indenture and no provision of this Class A-1
Bond or of the Indenture shall alter or impair the obligation of the Issuer,
which is absolute and unconditional, to pay the principal of and interest on
this Class A-1 Bond at the times, place, and rate, and in the coin or currency
herein prescribed.
The Holder of this Class A-1 Bond by the acceptance hereof agrees that,
notwithstanding any provision of the Indenture to the contrary, the Holder shall
have no recourse against the Issuer, but shall look only to the Collateral, with
respect to any amounts due to the Holder under this Class A-1 Bond.
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ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of
assignee: _________________
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto
________________________________________________________________________________
________________________________________________________________________________
(name and address of assignee)
the within Class A-1 Bond and all rights thereunder, and hereby irrevocably
constitutes and appoints __________________, attorney, to transfer said Class
A-1 Bond on the books kept for registration thereof, with full power of
substitution in the premises.
Dated: ___________________________ ___________________________________
Signature Guaranteed:
___________________________________ ___________________________________
___________________________________
* NOTE: The signature to this assignment must correspond with the name of
the registered owner as it appears on the face of the within Class A-1
Bond in every particular, without alteration, enlargement or any change
whatsoever
- A-10 -
