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Exhibit 4.4
PSE&G TRANSITION FUNDING II LLC,
Issuer
and
THE BANK OF NEW YORK,
Trustee
---------------------
INDENTURE
Dated as of __________, 2005
---------------------
Securing BGS Transition Bonds
Issuable in Series
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ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
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SECTION 1.1.
Definitions............................................................................2
SECTION 1.2. Incorporation by Reference of the Trust Indenture
Act..................................2
SECTION 1.3. Rules of
Construction..................................................................3
ARTICLE II
THE BGS TRANSITION BONDS
SECTION 2.1.
Form...................................................................................3
SECTION 2.2. Execution, Authentication and
Delivery.................................................4
SECTION 2.3. Denominations; BGS Transition Bonds Issuable in
Series.................................4
SECTION 2.4. Temporary BGS Transition
Bonds.........................................................5
SECTION 2.5. Registration; Registration of Transfer and
Exchange....................................6
SECTION 2.6. Mutilated, Destroyed, Lost or Stolen BGS Transition
Bonds..............................7
SECTION 2.7. Persons Deemed
Owner...................................................................8
SECTION 2.8. Payment of Principal and Interest; Interest on
Overdue Principal;
Principal and Interest Rights
Preserved..............................................8
SECTION 2.9.
Cancellation..........................................................................10
SECTION 2.10. Amount; Authentication and Delivery of BGS
Transition Bonds..........................10
SECTION 2.11. Book-Entry BGS Transition
Bonds......................................................15
SECTION 2.12. Notices to Clearing
Agency...........................................................16
SECTION 2.13. Definitive BGS Transition
Bonds......................................................16
ARTICLE III
COVENANTS
SECTION 3.1. Payment of Principal and
Interest.....................................................17
SECTION 3.2. Maintenance of Office or
Agency.......................................................17
SECTION 3.3. Money for Payments To Be Held in
Trust................................................17
SECTION 3.4.
Existence.............................................................................19
SECTION 3.5. Protection of
Collateral..............................................................19
SECTION 3.6. Opinions as to
Collateral.............................................................20
SECTION 3.7. Performance of
Obligations............................................................20
SECTION 3.8. Negative
Covenants....................................................................21
SECTION 3.9. Annual Statement as to
Compliance.....................................................21
SECTION 3.10. Issuer May Consolidate, etc., Only on Certain
Terms...................................21
SECTION 3.11. Successor or
Transferee...............................................................22
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SECTION 3.12. No Other
Business.....................................................................23
SECTION 3.13. No
Borrowing..........................................................................23
SECTION 3.14. Guarantees, Loans, Advances and Other
Liabilities.....................................23
SECTION 3.15. Capital
Expenditures..................................................................23
SECTION 3.16. Restricted
Payments...................................................................23
SECTION 3.17. Notice of Events of
Default...........................................................24
SECTION 3.18.
Inspection............................................................................24
SECTION 3.19. Adjusted Overcollateralization Balance
Schedules......................................24
SECTION 3.20. Sale Agreement, Servicing Agreement and Swap
Agreement Covenants......................24
SECTION 3.21.
Taxes.................................................................................27
ARTICLE IV
SATISFACTION AND DISCHARGE; DEFEASANCE
SECTION 4.1. Satisfaction and Discharge of Indenture;
Defeasance...................................28
SECTION 4.2. Conditions to
Defeasance..............................................................29
SECTION 4.3. Application of Trust
Money............................................................30
SECTION 4.4. Repayment of Moneys Held by Paying
Agent..............................................31
ARTICLE V
REMEDIES
SECTION 5.1. Events of
Default.....................................................................31
SECTION 5.2. Acceleration of Maturity; Rescission and
Annulment....................................32
SECTION 5.3. Collection of Indebtedness and Suits for
Enforcement by Trustee.......................33
SECTION 5.4.
Remedies..............................................................................35
SECTION 5.5. Optional Preservation of the
Collateral...............................................36
SECTION 5.6. Limitation of
Proceedings.............................................................37
SECTION 5.7. Unconditional Rights of BGS Transition Bondholders
To Receive Principal and Interest..37
SECTION 5.8. Restoration of Rights and
Remedies....................................................38
SECTION 5.9. Rights and Remedies
Cumulative........................................................38
SECTION 5.10. Delay or Omission Not a
Waiver........................................................38
SECTION 5.11. Control by BGS Transition
Bondholders.................................................38
SECTION 5.12. Waiver of Past
Defaults...............................................................39
SECTION 5.13. Undertaking for
Costs.................................................................39
SECTION 5.14. Waiver of Stay or Extension
Laws......................................................40
SECTION 5.15. Action on BGS Transition
Bonds........................................................40
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ARTICLE VI
THE TRUSTEE
SECTION 6.1. Duties and Liabilities of
Trustee.....................................................40
SECTION 6.2. Rights of
Trustee.....................................................................41
SECTION 6.3. Individual Rights of
Trustee..........................................................42
SECTION 6.4. Trustee's
Disclaimer..................................................................42
SECTION 6.5. Notice of
Defaults....................................................................43
SECTION 6.6. Reports by Trustee to
Holders.........................................................43
SECTION 6.7. Compensation and
Indemnity............................................................44
SECTION 6.8. Replacement of
Trustee................................................................44
SECTION 6.9. Successor Trustee by
Merger...........................................................45
SECTION 6.10. Appointment of Co-Trustee or Separate
Trustee.........................................46
SECTION 6.11. Eligibility;
Disqualification.........................................................47
SECTION 6.12. Preferential Collection of Claims Against
Issuer......................................47
SECTION 6.13. Representations and Warranties of the
Trustee.........................................47
ARTICLE VII
BGS TRANSITION BONDHOLDERS' LISTS AND REPORTS
SECTION 7.1. Issuer To Furnish Trustee Names and Addresses of
BGS Transition Bondholders...........48
SECTION 7.2. Preservation of Information; Communications to BGS
Transition Bondholders.............48
SECTION 7.3. Reports by
Issuer.....................................................................48
SECTION 7.4. Reports by
Trustee....................................................................49
SECTION 7.5. Provision of Servicer
Reports.........................................................49
ARTICLE VIII
ACCOUNTS, DISBURSEMENTS AND RELEASES
SECTION 8.1. Collection of
Money...................................................................49
SECTION 8.2. Collection
Account....................................................................50
SECTION 8.3. Release of
Collateral.................................................................56
SECTION 8.4. Issuer Opinion of
Counsel.............................................................57
SECTION 8.5. Reports by Independent
Accountants....................................................57
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ARTICLE IX
SUPPLEMENTAL INDENTURES
SECTION 9.1. Supplemental Indentures Without Consent of BGS
Transition Bondholders.................58
SECTION 9.2. Supplemental Indentures with Consent of BGS
Transition Bondholders....................59
SECTION 9.3. BPU
Condition.........................................................................61
SECTION 9.4. Execution of Supplemental
Indentures..................................................62
SECTION 9.5. Effect of Supplemental
Indenture......................................................62
SECTION 9.6. Conformity with Trust Indenture
Act...................................................62
SECTION 9.7. Reference in BGS Transition Bonds to Supplemental
Indentures..........................62
ARTICLE X
[RESERVED]
ARTICLE XI
MISCELLANEOUS
SECTION 11.1. Compliance Certificates and Opinions,
etc............................................63
SECTION 11.2. Form of Documents Delivered to
Trustee...............................................64
SECTION 11.3. Acts of BGS Transition
Bondholders...................................................64
SECTION 11.4. Notices, etc., to Trustee, Issuer and Rating
Agencies................................65
SECTION 11.5. Notices to BGS Transition Bondholders;
Waiver........................................66
SECTION 11.6.
[Reserved]...........................................................................66
SECTION 11.7. Alternate Payment and Notice
Provisions..............................................66
SECTION 11.8. Conflict with Trust Indenture
Act....................................................67
SECTION 11.9. Effect of Headings and Table of
Contents.............................................67
SECTION 11.10. Successors and
Assigns...............................................................67
SECTION 11.11.
Severability.........................................................................67
SECTION 11.12. Benefits of
Indenture................................................................67
SECTION 11.13. Legal
Holidays.......................................................................67
SECTION 11.14. GOVERNING
LAW........................................................................67
SECTION 11.15.
Counterparts.........................................................................68
SECTION 11.16. Issuer
Obligation....................................................................68
SECTION 11.17. No
Petition..........................................................................68
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APPENDIX A MASTER DEFINITIONS
SCHEDULE I SCHEDULED OVERCOLLATERALIZATION LEVELS
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INDENTURE, dated as of __________, 2005, by and between
PSE&G TRANSITION
FUNDING II LLC, a Delaware limited liability company, as 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 BGS Transition Bonds and as
agent for itself
and any Swap Counterparty (collectively, the "Trustee").
The Issuer has duly authorized the execution and delivery of
this
Indenture to provide for one or more Series of BGS Transition
Bonds, issuable
as provided in this Indenture. Each such Series of BGS
Transition Bonds will
be issued only under a separate Series Supplement to this
Indenture duly
executed and delivered by the Issuer and the Trustee. The Issuer
is entering
into this Indenture, and the Trustee is accepting the trusts
created hereby,
each for good and valuable consideration, the receipt and
sufficiency of which
are hereby acknowledged and each intending to be legally bound
hereby.
GRANTING CLAUSE
The Issuer hereby Grants to the Trustee for the benefit of (i)
the
Holders of the BGS Transition Bonds from time to time issued and
outstanding,
(ii) the Trustee and (iii) any Swap Counterparty, all of the
Issuer's right,
title and interest whether now owned or hereafter acquired, in,
to and under:
(a) all BGS Bondable Transition Property, including, without
limitation, the
BGS Bondable Transition Property transferred by the Seller to
the Issuer from
time to time pursuant to the Sale Agreement and all proceeds
thereof; (b) the
Sale Agreement; (c) all Bills of Sale delivered by the Seller
pursuant to the
Sale Agreement; (d) the Servicing Agreement; (e) the
Administration Agreement;
(f) any Interest Rate Swap Agreement; (g) the Collection Account
and all
sub-accounts thereof (including, without limitation, the General
Subaccount,
each Series Overcollateralization Subaccount, each Series
Capital Subaccount,
the Reserve Subaccount, each Series Subaccount, any Class
Subaccount and any
Defeasance Subaccount, but excluding the Capital Reserve
Subaccount) and all
cash, securities, instruments, investment property (including
without
limitation all security entitlements) or other assets deposited
in or credited
to the Collection Account or any subaccount thereof (other than
the Capital
Reserve Subaccount) from time to time or purchased with funds
therefrom; (h)
all investment property and all other property of whatever kind
owned from
time to time by the Issuer other than: (w) any cash released to
any Swap
Counterparty by the Trustee from the related Class Subaccount
pursuant to
Section 8.2(f), (x) any cash released to the Issuer by the
Trustee from any
Series Capital Subaccount pursuant to Section 8.2(g)(x) and (y)
the proceeds
from the sale of the BGS Transition Bonds used to pay (1) the
costs of
issuance of the BGS Transition Bonds and the Upfront Transaction
Costs and
Capital Reduction Costs (as those terms are defined in the
Financing Order)
and (2) the purchase price of the BGS Bondable Transition
Property paid
pursuant to 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 (j)
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, voluntary or involuntary, into cash or other liquid
property, all
cash proceeds, accounts, accounts receivable, general
intangibles, 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
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property which at any time constitute all or part of or are
included in the
proceeds of any of the foregoing (collectively, the
"Collateral").
Such Grants are made to the Trustee to have and to hold in trust
to
secure the payment of principal of, and interest on, and any
other amounts
owing in respect of, the BGS Transition Bonds and all fees,
expenses, counsel
fees and other amounts due and owing to the Trustee and, if and
to the extent
provided in any Series Supplement, any amounts due and owing to
any Swap
Counterparty (collectively, the "Secured Obligations"), equally
and ratably
without prejudice, preference, priority or distinction, except
as expressly
provided in this Indenture and to secure performance by the
Issuer of all of
the Issuer's obligations under this Indenture with respect to
the BGS
Transition Bonds, all as provided in this Indenture.
The Trustee, as trustee on behalf of the Holders of the BGS
Transition
Bonds, acknowledges such Grant, accepts the trusts hereunder in
accordance
with the provisions hereof and agrees to perform its duties
herein required.
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.1. Definitions. Capitalized terms used but not
otherwise
defined in this Indenture have the respective meanings set forth
in Appendix A
hereto unless the context otherwise requires. Non-capitalized
terms used
herein which are defined in the New Jersey UCC, as the context
requires, have
the meanings assigned to such terms in the New Jersey UCC, but
without giving
effect to any amendments to the New Jersey UCC after the date
hereof which
have a material adverse effect on the Issuer or the BGS
Transition
Bondholders.
SECTION 1.2. Incorporation by Reference of the Trust Indenture
Act.
Whenever this Indenture refers to a provision of the TIA, the
provision is
incorporated by reference in and made a part of this Indenture.
Each of the
following TIA terms used in this Indenture has the following
meaning:
"Commission" means the Securities and Exchange Commission.
"indenture securities" means the BGS Transition Bonds.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the
Trustee.
All other TIA terms used in this Indenture that are defined by
the TIA,
defined by TIA reference to another statute or defined by
Commission rule have
the meaning assigned to them by such definitions.
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SECTION 1.3. Rules of Construction.
(a) 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;
(b) "including" means including without limitation;
(c) with respect to terms defined in Appendix A hereto, words in
the
singular include the plural and words in the plural include the
singular;
(d) unless otherwise specified, references herein to Sections or
Articles
are to Sections or Articles of this Indenture; and
(e) 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.
ARTICLE II
THE BGS TRANSITION BONDS
SECTION 2.1. Form.
(a) The BGS Transition Bonds and the Trustee's certificate
of
authentication shall be in substantially the forms set forth in
Exhibit A to
the related Series Supplement, with such appropriate insertions,
omissions,
substitutions and other variations as are required or permitted
by this
Indenture or by the related Series Supplement and may have such
letters,
numbers or other marks of identification and such legends or
endorsements
placed thereon as may, consistently herewith, be determined by
the Managers of
the Issuer executing such BGS Transition Bonds, as evidenced by
their
execution of such BGS Transition Bonds. Any portion of the text
of any BGS
Transition Bond may be set forth on the reverse thereof, with an
appropriate
reference thereto on the face of the BGS Transition Bond. Each
BGS Transition
Bond shall be dated the date of its authentication.
(b) The BGS Transition Bonds shall be typewritten, printed,
lithographed
or engraved or produced by any combination of these methods
(with or without
steel engraved borders), all as determined by the Managers of
the Issuer
executing such BGS Transition Bonds, as evidenced by their
execution of such
BGS Transition Bonds.
(c) Each BGS Transition Bond shall bear upon its face the
designation so
selected for the Series and Class, if any, to which it belongs.
The terms of
all BGS Transition Bonds of the same Series shall be the same,
unless such
Series is comprised of one or more Classes, in which case the
terms of all BGS
Transition Bonds of the same Class shall be the same.
(d) Each BGS Transition Bond shall state that the Competition
Act
provides that the State of New Jersey pledges and agrees with
the holders of
the BGS Transition Bonds that "the State will not limit, alter
or impair any
bondable transition property or other rights vested in an
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electric public utility or an assignee or pledgee thereof or a
financing
entity or vested in the holders of any transition bonds pursuant
to a bondable
stranded costs rate order until such transition bonds, together
with the
interest thereon, are fully paid and discharged or until such
agreements are
fully performed on the part of the electric public utility, any
assignee or
pledgee thereof or the financing entity or in any way limit,
alter, impair or
reduce the value or amount of the bondable transition property
approved by a
bondable stranded costs rate order."
SECTION 2.2. Execution, Authentication and Delivery.
(a) The BGS Transition Bonds shall be executed on behalf of the
Issuer by
a Manager. The signature of any such Manager on the BGS
Transition Bonds may
be manual or facsimile.
(b) BGS Transition Bonds bearing the manual or facsimile
signature of
individuals who were at any time Managers 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 BGS
Transition Bonds.
(c) At any time and from time to time after the execution and
delivery of
this Indenture, the Issuer may deliver BGS Transition Bonds
executed on behalf
of the Issuer to the Trustee pursuant to an Issuer Order for
authentication;
and the Trustee shall authenticate and deliver such BGS
Transition Bond as in
this Indenture provided and not otherwise.
(d) No BGS Transition Bond shall be entitled to any benefit
under this
Indenture or be valid or obligatory for any purpose, unless
there appears on
such BGS Transition 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
BGS
Transition Bond shall be conclusive evidence, and the only
evidence, that such
BGS Transition Bond has been duly authenticated and delivered
hereunder.
SECTION 2.3. Denominations; BGS Transition Bonds Issuable in
Series.
(a) The BGS Transition Bonds of each Series shall be issuable
as
registered BGS Transition Bonds in the Authorized Denominations
specified in
the Series Supplement therefor.
(b) The BGS Transition Bonds may, at the election of and as
authorized by
a Manager and set forth in a Series Supplement, be issued in one
or more
Series (each of which may be comprised of one or more Classes),
and shall be
designated generally as the "BGS Transition Bonds" of the
Issuer, with such
further particular designations added or incorporated in such
title for the
BGS Transition Bonds of any particular Series or Class as a
Manager of the
Issuer may determine and be set forth in the Series Supplement
therefor.
(c) Each Series of BGS Transition Bonds shall be created by a
Series
Supplement authorized by a Manager and establishing the terms
and provisions
of such Series and, if
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applicable, any Classes thereof. The several Series and any
Classes thereof
may differ as between Series and Classes, in respect of any of
the following
matters:
(i) designation of the Series and each Class thereof;
(ii) the aggregate initial principal amount of the BGS
Transition
Bonds of the Series and each Class thereof;
(iii) the Interest Rate of the Series and each Class thereof or
the
formula, if any, used to calculate the applicable Interest Rate
or
Interest Rates for the Series and each Class thereof;
(iv) the Payment Dates of the Series and each Class thereof;
(v) the Expected Final Payment Date of the Series and each
Class
thereof;
(vi) the Final Maturity Date of the Series and each Class
thereof;
(vii) the place or places for payments with respect to the
Series
and each Class thereof;
(viii) the Authorized Denominations for the Series and each
Class
thereof;
(ix) [reserved];
(x) the Expected Sinking Fund Amortization Schedule for the
Series
and each Class thereof;
(xi) the Overcollateralization Amount with respect to the
Series;
(xii) the Required Capital Amount with respect to the
Series;
(xiii) the Calculation Dates and Adjustment Dates for the
Series;
(xiv) the credit enhancement, if any, applicable to the Series
and
each Class thereof; and
(xv) any other terms of the Series or each Class that are
not
inconsistent with the provisions of this Indenture.
SECTION 2.4. Temporary BGS Transition Bonds.
(a) Pending the preparation of definitive BGS Transition Bonds
pursuant
to Section 2.13 or, in the case of BGS Transition Bonds held in
a book-entry
only system by a Clearing Agency, a Manager on behalf of the
Issuer may
execute, and upon receipt of an Issuer Order the Trustee shall
authenticate
and deliver, temporary BGS Transition Bonds which are printed,
lithographed,
typewritten, mimeographed or otherwise produced, of the tenor of
the
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definitive BGS Transition Bonds in lieu of which they are issued
and with such
variations not inconsistent with the terms of this Indenture as
the Manager
executing such BGS Transition Bonds may determine, as evidenced
by their
execution of such BGS Transition Bonds.
(b) If temporary BGS Transition Bonds are issued, the Issuer
will cause
definitive BGS Transition Bonds to be prepared without
unreasonable delay
except where temporary BGS Transition Bonds are held by a
Clearing Agency.
After the preparation of definitive BGS Transition Bonds, the
temporary BGS
Transition Bonds shall be exchangeable for definitive BGS
Transition Bonds
upon surrender of the temporary BGS Transition Bonds at the
office or agency
of the Issuer to be maintained as provided in Section 3.2,
without charge to
any Holder. Upon surrender for cancellation of any one or more
temporary BGS
Transition Bonds, a Manager on behalf of the Issuer shall
execute and the
Trustee shall authenticate and deliver in exchange therefor a
like Series (and
if applicable, Class) and aggregate initial principal amount of
definitive BGS
Transition Bonds in Authorized Denominations. Until so
exchanged, the
temporary BGS Transition Bonds shall in all respects be entitled
to the same
benefits under this Indenture as definitive BGS Transition
Bonds.
SECTION 2.5. Registration; Registration of Transfer and
Exchange.
(a) The Issuer shall cause to be kept a register (the "BGS
Transition
Bond Register") in which, subject to such reasonable regulations
as it may
prescribe, the Issuer shall provide for the registration of BGS
Transition
Bonds and the registration of transfers of BGS Transition Bonds.
The Trustee
shall be the registrar (the Trustee or any successor thereof in
such capacity,
the "BGS Transition Bond Registrar") for the purpose of
registering BGS
Transition Bonds and transfers of BGS Transition Bonds as herein
provided.
Upon any resignation of any BGS Transition Bond Registrar, the
Issuer shall
promptly appoint a successor or, if it elects not to make such
an appointment,
assume the duties of BGS Transition Bond Registrar.
(b) If a Person other than the Trustee is appointed by the
Issuer as BGS
Transition Bond Registrar, the Issuer shall give the Trustee and
any transfer,
paying or listing agent of the Issuer appointed pursuant to
Section 3.2(b)
prompt written notice of the appointment of such BGS Transition
Bond Registrar
and of the location, and any change in the location, of the BGS
Transition
Bond Register; the Trustee and any such agent shall have the
right to inspect
the BGS Transition Bond Register at all reasonable times and to
obtain copies
thereof; and the Trustee and any such agent shall have the right
to rely upon
a certificate executed on behalf of the BGS Transition Bond
Registrar by a
duly authorized officer thereof as to the names and addresses of
the Holders
of the BGS Transition Bonds and the original and Outstanding
principal amounts
and number of such BGS Transition Bonds (separately stated by
Series and, if
applicable, Class).
(c) Upon surrender for registration of transfer of any BGS
Transition
Bond at the office or agency of the Issuer to be maintained as
provided in
Section 3.2, a Manager on behalf of the Issuer shall execute,
and the Trustee
shall authenticate and the BGS Transition Bondholder shall
obtain from the
Trustee, in the name of the designated transferee or
transferees, one or more
new BGS Transition Bonds in any Authorized Denominations, of a
like Series
(and, if applicable, Class) and aggregate initial principal
amount.
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(d) At the option of the Holder, BGS Transition Bonds may be
exchanged
for other BGS Transition Bonds of a like Series (and, if
applicable, Class)
and aggregate initial principal amount in Authorized
Denominations, upon
surrender of the BGS Transition Bonds to be exchanged at such
office or agency
as provided in Section 3.2. Whenever any BGS Transition Bonds
are so
surrendered for exchange, a Manager on behalf of the Issuer
shall execute, and
the Trustee shall authenticate and the BGS Transition Bondholder
shall obtain
from the Trustee, the BGS Transition Bonds which the BGS
Transition Bondholder
making the exchange is entitled to receive.
(e) All BGS Transition Bonds issued upon any registration of
transfer or
exchange of BGS Transition Bonds shall be the valid obligations
of the Issuer,
evidencing the same debt, and entitled to the same benefits
under this
Indenture, as the BGS Transition Bonds surrendered upon such
registration of
transfer or exchange.
(f) Every BGS Transition Bond presented or surrendered for
registration
of transfer or exchange shall be duly endorsed by, or be
accompanied by a
written instrument of transfer in form satisfactory to the
Trustee duly
executed by the Holder thereof or such Holder's attorney duly
authorized in
writing, with such signature guaranteed by an Eligible Guarantor
Institution
in the form set forth in such BGS Transition Bond.
(g) No service charge shall be made to a Holder for any
registration of
transfer or exchange of BGS Transition Bonds, but, other than in
respect of
exchanges pursuant to Sections 2.4 or 2.6 not involving any
transfer, the
Issuer may require payment by such Holder 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 BGS Transition Bonds,
including the
fees and expenses of the Trustee.
(h) The preceding provisions of this Section 2.5
notwithstanding, the
Issuer shall not be required to make, and the BGS Transition
Bond Registrar
need not register, transfers or exchanges of BGS Transition
Bonds selected for
transfers or exchanges of any BGS Transition Bond for a period
of fifteen (15)
days preceding the date on which final payment of principal is
to be made with
respect to such BGS Transition Bond.
SECTION 2.6. Mutilated, Destroyed, Lost or Stolen BGS Transition
Bonds.
(a) If (i) any mutilated BGS Transition Bond is surrendered to
the
Trustee, or the Trustee receives evidence to its satisfaction of
the
destruction, loss or theft of any BGS Transition Bond, and (ii)
there is
delivered to the Trustee such security or indemnity as may be
required by it
to hold the Issuer and the Trustee harmless, then, in the
absence of notice to
the Issuer, the BGS Transition Bond Registrar or the Trustee
that such BGS
Transition Bond has been acquired by a protected purchaser, a
Manager on
behalf of the Issuer shall execute, and upon a Manager's request
the Trustee
shall authenticate and deliver, in exchange for or in lieu of
any such
mutilated, destroyed, lost or stolen BGS Transition Bond, a
replacement BGS
Transition Bond of like Series (and, if applicable, Class),
tenor and initial
principal amount in Authorized Denominations, bearing a number
not
contemporaneously outstanding; provided,
7
<PAGE>
however, that if any such destroyed, lost or stolen BGS
Transition Bond, but
not a mutilated BGS Transition Bond, shall have become or within
seven days
shall be due and payable, instead of issuing a replacement BGS
Transition
Bond, the Issuer may pay such destroyed, lost or stolen BGS
Transition Bond
when so due or payable without surrender thereof. If, after the
delivery of
such replacement BGS Transition Bond or payment of a destroyed,
lost or stolen
BGS Transition Bond pursuant to the proviso to the preceding
sentence, a
protected purchaser of the original BGS Transition Bond in lieu
of which such
replacement BGS Transition Bond was issued presents for payment
such original
BGS Transition Bond, the Issuer and the Trustee shall be
entitled to recover
such replacement BGS Transition Bond (or such payment) from the
Person to whom
it was delivered or any Person taking such replacement BGS
Transition Bond
from such Person to whom such replacement BGS Transition Bond
was delivered or
any assignee of such Person, 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.
(b) Every replacement BGS Transition Bond issued pursuant to
this Section
2.6 in replacement of any mutilated, destroyed, lost or stolen
BGS Transition
Bond shall constitute an original additional contractual
obligation of the
Issuer, whether or not the mutilated, destroyed, lost or stolen
BGS Transition
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 BGS Transition Bonds duly issued hereunder.
(c) The provisions of this Section 2.6 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
BGS Transition
Bonds.
SECTION 2.7. Persons Deemed Owner. Prior to due presentment
for
registration of transfer of any BGS Transition Bond, the Issuer,
the Trustee
and any agent of the Issuer or the Trustee may treat the Person
in whose name
any BGS Transition Bond is registered (as of the day of
determination) as the
owner of such BGS Transition Bond for the purpose of receiving
payments of
principal of and interest on such BGS Transition Bond and for
all other
purposes whatsoever, whether or not such BGS Transition Bond be
overdue, and
neither the Issuer, the Trustee nor any agent of the Issuer or
the Trustee
shall be affected by notice to the contrary.
SECTION 2.8. Payment of Principal and Interest; Interest on
Overdue
Principal; Principal and Interest Rights Preserved.
(a) The BGS Transition Bonds shall accrue interest as provided
in the
form of BGS Transition Bond attached to the Series Supplement
for such BGS
Transition Bonds, at the applicable Interest Rate specified
therein, and such
interest shall be payable on each Payment Date as specified
therein. Any
installment of interest or principal payable on any BGS
Transition 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 BGS
Transition
Bond (or one or more Predecessor BGS Transition Bonds) is
registered on the
Record Date for such Payment Date, in the manner specified in
the related
Series Supplement, and if not specified therein, either
8
<PAGE>
(i) by check mailed first-class, postage prepaid to such
Person's address as
it appears on the BGS Transition Bond Register on such Record
Date or (ii)
with respect to BGS Transition Bonds registered on a Record Date
in the name
of the nominee of the Clearing Agency (initially, such nominee
to be Cede &
Co.), payments will be made by wire transfer in immediately
available funds to
the account designated by such nominee, except for the final
installment of
principal payable with respect to such BGS Transition Bond on a
Payment Date,
which shall be payable as provided in clause (b) below. The
funds represented
by any such checks or other amounts returned undelivered shall
be held in
accordance with Section 3.3.
(b) The principal of each BGS Transition Bond of each Series
(and, if
applicable, Class) shall be payable in installments on each
Payment Date
specified in the Expected Sinking Fund Amortization Schedule
included in the
form of BGS Transition Bond attached to the Series Supplement
for such BGS
Transition Bonds, but only to the extent that moneys are
available for such
payment pursuant to Section 8.2; provided that installments of
principal not
paid when scheduled to be paid shall be paid upon receipt of
moneys available
for such purpose, in the sequential order set forth in the
applicable Expected
Sinking Fund Amortization Schedule. Failure to pay in accordance
with such
Expected Sinking Fund Amortization Schedule because moneys are
not so
available pursuant to Section 8.2 to make such payments shall
not constitute a
Default or Event of Default under this Indenture.
Notwithstanding the
foregoing, the entire Outstanding principal amount of the BGS
Transition Bonds
of any Series or Class shall be due and payable, if not
previously paid,
either: (i) on the Final Maturity Date therefor, (ii) on the
date on which the
BGS Transition Bonds of all Series have been declared
immediately due and
payable in accordance with Section 5.2, if any, therefor. The
Trustee shall
notify the Person in whose name a BGS Transition Bond is
registered, and any
other Person required under the relevant Series Supplement, at
the close of
business on the second Record Date preceding the Payment Date on
which the
Issuer expects that the final installment of principal of and
interest on such
BGS Transition Bond will be paid. Such notice shall be mailed no
later than
five (5) days prior to such final Payment Date and shall specify
that such
final installment of principal will be payable only upon
presentation and
surrender of such BGS Transition Bond and shall specify the
place where such
BGS Transition Bond may be presented and surrendered for payment
of such
installment. The Trustee shall also arrange for such notice to
be published in
an Authorized Newspaper, not later than the fifth day of the
month of the
expected payment of such final installment.
(c) If the Issuer defaults in a payment of interest on the BGS
Transition
Bonds of any Series, or in a default of any amount payable to
any Swap
Counterparty, the Issuer shall pay defaulted interest, plus
interest on such
defaulted interest at the applicable Interest Rate in any lawful
manner
(subject to the availability of such amounts in the related
Class Subaccount,
in the case of interest owed with respect to any BGS Transition
Bonds which
have a floating rate of interest). The Issuer may pay such
defaulted interest
to the Persons who are BGS Transition Bondholders and to any
Swap
Counterparty, as applicable, at the rate specified in the
related Series
Supplement or Interest Rate Swap Agreement, respectively, 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 fifteen (15) days
before any such
special record date, the Issuer shall mail to each affected
BGS
9
<PAGE>
Transition Bondholder a notice that states the special record
date, the
payment date and the amount of defaulted interest to be
paid.
SECTION 2.9. Cancellation. All BGS Transition Bonds surrendered
for
payment, registration of transfer or exchange shall, if
surrendered to any
Person other than the Trustee, be delivered to the Trustee and
shall be
promptly canceled by the Trustee. The Issuer may at any time
deliver to the
Trustee for cancellation any BGS Transition Bonds previously
authenticated and
delivered hereunder which the Issuer may have acquired in any
manner
whatsoever, and all BGS Transition Bonds so delivered shall be
promptly
canceled by the Trustee. No BGS Transition Bonds shall be
authenticated in
lieu of or in exchange for any BGS Transition Bonds canceled as
provided in
this Section 2.9, except as expressly permitted by this
Indenture. All
canceled BGS Transition 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 unless the Issuer shall direct by an Issuer Order that they
be destroyed
or returned to it; provided that such Issuer Order is timely and
the BGS
Transition Bonds have not been previously disposed of by the
Trustee.
SECTION 2.10. Amount; Authentication and Delivery of BGS
Transition
Bonds.
(a) The aggregate principal amount of BGS Transition Bonds that
may be
authenticated and delivered under this Indenture shall not
exceed
$102,700,000.
(b) BGS Transition Bonds of a new Series may from time to time
be
executed by a Manager on behalf of the Issuer and delivered to
the Trustee for
authentication and thereupon the same shall be authenticated and
delivered by
the Trustee upon Issuer Request and upon delivery by the Issuer,
at the
Issuer's expense, to the Trustee of the following:
(i) Trust Action. An Issuer Order authorizing and directing
the
authentication and delivery of the BGS Transition Bonds by the
Trustee
and specifying the principal amount of BGS Transition Bonds to
be
authenticated.
(ii) Authorizing Certificate. A certified resolution of the
Managers
authorizing the execution and delivery of the Series Supplement
for the
BGS Transition Bonds applied for and the execution,
authentication and
delivery of such BGS Transition Bonds.
(iii) Series Supplement. A Series Supplement for the Series of
BGS
Transition Bonds being issued, which shall set forth the
provisions and
form of the BGS Transition Bonds of such Series (and, if
applicable, each
Class thereof).
(iv) Certificates of the Issuer and the Seller.
(A) An Issuer Officer's Certificate dated as of the Series
Issuance Date, stating:
10
<PAGE>
(1) that no Default has occurred and is continuing under
this Indenture and that the issuance of the BGS Transition
Bonds being issued will not result in any Default;
(2) that the Issuer has not assigned any interest or
participation in the Collateral except for the Grant
contained
in this Indenture; that the Issuer has the power and
authority
to Grant the Collateral to the Trustee as security
hereunder;
and that the Issuer, subject to the terms of this Indenture,
has Granted to the Trustee a perfected security interest in
all
right, title and interest in, to and under the Collateral
free
and clear of any Lien, except the Lien of this Indenture;
(3) that the Issuer has appointed the firm of independent
certified public accountants as contemplated in Section 8.5;
(4) that attached thereto are duly executed, true and
complete copies of the Sale Agreement and the Servicing
Agreement;
(5) that all financing statements with respect to the
Collateral which are required to be filed under the New
Jersey
UCC or the uniform commercial code of any other jurisdiction
by
the terms of the Sale Agreement, the Servicing Agreement or
this Indenture will be filed as required; and
(6) that all conditions precedent provided in this
Indenture relating to the authentication and delivery of the
BGS Transition Bonds have been complied with.
(B) An Officer's Certificate from the Seller, dated as of
the
Series Issuance Date, to the effect that, in the case of the
BGS
Bondable Transition Property to be transferred to the Issuer on
such
date, immediately prior to the conveyance thereof to the
Issuer
pursuant to the Sale Agreement:
(1) the Seller was the sole owner of such BGS Bondable
Transition Property and such ownership interest was
perfected;
such BGS Bondable Transition Property will be validly
transferred and sold to the Issuer free and clear of all
Liens
(other than Liens created by the Issuer pursuant to this
Indenture) and such transfer will be perfected; the Seller
has
the power and authority to own, sell and assign such BGS
Bondable Transition Property to the Issuer; the Seller has
duly
authorized such sale and assignment to the Issuer; and the
Seller has its chief executive office in the State of New
Jersey; and
(2) the attached copy of the Financing Order creating such
BGS Bondable Transition Property is true and correct and is
in
full force and effect; and
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<PAGE>
(v) Issuer Opinion of Counsel. An Issuer 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/or the
Servicer,
dated as of the Series Issuance Date, subject to customary
qualifications, in the form set forth in the Underwriting
Agreement to the
collective effect that:
(A) the Issuer has the power and authority to execute and
deliver the Series Supplement and this Indenture and to issue
the
BGS Transition Bonds being issued, each of the Series Supplement
and
this Indenture and such BGS Transition Bonds have been duly
authorized, executed and delivered, and the Issuer is duly
organized, is validly existing as a limited liability company
and in
good standing under the laws of the jurisdiction of its
organization
and is in good standing in any jurisdiction where it is required
to
be qualified;
(B) no authorization, approval or consent of any
governmental
body is required for the valid issuance, authentication or
delivery
of such BGS Transition Bonds, except for any such
authorization,
approval or consent as has already been obtained and such
registrations as are required under the Blue Sky and securities
laws
of any State;
(C) the BGS Transition Bonds being issued, when executed and
authenticated in accordance with the provisions of this
Indenture
and delivered, will constitute valid and binding obligations of
the
Issuer entitled to the benefits of this Indenture and the
related
Series Supplement;
(D) the Financing Order is final and non-appealable;
(E) this Indenture (including the related Series
Supplement),
the Sale Agreement and the Servicing Agreement are valid and
binding
agreements of the Issuer, enforceable against the Issuer in
accordance with their respective terms except as such
enforceability
may be subject to bankruptcy, insolvency, reorganization and
other
similar laws 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);
(F) 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 and other similar laws 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);
(G) 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 and
12
<PAGE>
other similar laws 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);
(H) upon giving value by the Issuer to the Seller with
respect
to the BGS Bondable Transition Property;
(1) the provisions of the Sale Agreement together with the
Bill of Sale are effective to create, in favor of the Issuer,
a
valid security interest (as such term is defined in Section
1-201 of the New Jersey UCC) in the Seller's rights in the
BGS
Bondable Transition Property described in the Bill of Sale
(the
"Transferred BGS Bondable Transition Property"), which
security
interest if characterized as a transfer for security will
secure the amount paid by the Issuer for such Transferred
BGS
Bondable Transition Property; it being noted that the term
"security interest" includes both a sale and a transfer for
security of an account and no opinion is expressed as to the
proper characterization of the transfer of the Transferred
BGS
Bondable Transition Property by the Seller to the Issuer;
(2) the security interest in favor of the Issuer in the
Transferred BGS Bondable Transition Property has been
perfected; and
(3) no other security interest of any other creditor of
the Seller is equal or prior to the security interest of the
Issuer in the Transferred BGS Bondable Transition Property;
(I) upon the giving of value by the Trustee to the Issuer
with
respect to the Collateral,
(1) this Indenture creates in favor of the Trustee, to
secure payment of the BGS Transition Bonds, a valid security
interest in the rights of the Issuer in, to and under that
portion of the Collateral subject to Article 9 of the New
Jersey UCC, including the BGS Bondable Transition Property
(the
"Article 9 Collateral"),
(2) upon filing of the related financing statements in
accordance with the New Jersey UCC and Delaware UCC, such
security interest will be perfected, and
(3) based solely on a review of the UCC Search Reports, no
other security interest of any other creditor of the Issuer
is
equal or prior to the security interest of the Trustee for
the
benefit of the BGS Transition Bondholders in the Article 9
Collateral;
(J) this Indenture has been duly qualified under the Trust
Indenture Act and either the Series Supplement for the BGS
Transition Bonds applied for
13
<PAGE>
has been duly qualified under the Trust Indenture Act or no
such
qualification of such Series Supplement is necessary;
(K) either
(1) the registration statement covering the BGS Transition
Bonds is effective under the Securities Act of 1933 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 of 1933 nor have
proceedings therefor been instituted or threatened by the
Commission or
(2) the BGS Transition Bonds are exempt from the
registration requirements under the Securities Act of 1933;
(L) this Indenture (including the related Series Supplement)
has been duly authorized, executed and delivered by the Issuer
and
constitutes the legal, valid and binding obligation of the
Issuer,
enforceable against the Issuer in accordance with its terms;
(M) the Sale Agreement and the Servicing Agreement have been
duly authorized, executed and delivered by each of the
parties
thereto; and
(N) the Issuer is not now and, following the issuance of the
BGS Transition Bonds will not be, required to be registered
under
the Investment Company Act of 1940, as amended.
(vi) Accountant's Certificate or Opinion. A letter addressed to
the
Issuer and the Trustee complying with the requirements of
Section 11.1,
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
this
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
Issuer for
the purpose of determining that, based on certain specified
assumptions
used in calculating the BGS Transition Bond Charge with respect
to the
related Transferred BGS Bondable Transition Property, as of the
Series
Issuance Date for such Series, the BGS Transition Bond Charge
will be
sufficient to pay (1) assumed Operating Expenses when incurred,
plus (2)
any amounts due under any
14
<PAGE>
Interest Rate Swap Agreement when due, plus (3) the
Overcollateralization
Amount for such Series set forth in the Final Prospectus (as
such term is
defined in the Series Supplement), plus (4) interest on the
BGS
Transition Bonds at their respective Interest Rates when due as
set forth
in the Final Prospectus, plus (5) principal of the BGS
Transition Bonds
in accordance with the Expected Sinking Fund Amortization
Schedule set
forth in the Final Prospectus, and found such calculations to
be
mathematically correct.
(vii) Required Capital Amount. Evidence satisfactory to the
Trustee
that the Required Capital Amount for such Series has been
credited to the
Capital Subaccount for such Series, provided that in the case of
the
initial Series of BGS Transition Bonds, $100,000 of the Required
Capital
Amount for such Series shall have been deposited to the credit
of the
Capital Reserve Subaccount.
(viii) Rating Agency Approval. Written notice from each
Rating
Agency that such action will not result in a reduction or
withdrawal of
the then current rating by such Rating Agency of any Outstanding
Series
or Class of BGS Transition Bonds.
(ix) Bill of Sale. If the issuance of an additional Series of
BGS
Transition Bonds is a Financing Issuance, the Bill of Sale
delivered to
the Issuer under the Sale Agreement with respect to the BGS
Bondable
Transition Property being purchased with the proceeds of such
Financing
Issuance.
SECTION 2.11. Book-Entry BGS Transition Bonds. Unless otherwise
specified
in the related Series Supplement, each Series of BGS Transition
Bonds, upon
original issuance, will be issued in the form of a typewritten
BGS Transition
Bond or BGS Transition Bonds representing the Book-Entry BGS
Transition Bonds,
to be delivered to The Depository Trust Company, the initial
Clearing Agency,
by, or on behalf of, the Issuer. Such BGS Transition Bond shall
initially be
registered on the BGS Transition Bond Register in the name of
Cede & Co., the
nominee of the initial Clearing Agency, and no BGS Transition
Bond Owner will
receive a definitive BGS Transition Bond representing such BGS
Transition Bond
Owner's interest in such BGS Transition Bond, except as provided
in Section
2.13. Unless and until definitive, fully registered BGS
Transition Bonds (the
"Definitive Transition Bonds") have been issued to BGS
Transition Bondholders
pursuant to Section 2.13:
(a) the provisions of this Section 2.11 shall be in full force
and
effect;
(b) the BGS Transition Bond Registrar and the Trustee shall
be
entitled to deal with the Clearing Agency for all purposes of
this
Indenture (including the payment of principal of and interest on
the BGS
Transition Bonds and the giving of instructions or directions
hereunder)
as the sole Holder of the BGS Transition Bonds, and shall have
no
obligation to the BGS Transition Bond Owners;
(c) to the extent that the provisions of this Section 2.11
conflict
with any other provisions of this Indenture, the provisions of
this
Section shall control;
15
<PAGE>
(d) the rights of BGS Transition Bond Owners shall be exercised
only
through the Clearing Agency and shall be limited to those
established by
law and agreements between such BGS Transition Bond Owners and
the
Clearing Agency or the Clearing Agency Participants. Pursuant to
the DTC
Agreement, unless and until Definitive BGS Transition Bonds are
issued
pursuant to Section 2.13, the initial Clearing Agency will
make
book-entry transfers among the Clearing Agency Participants and
receive
and transmit payments of principal of and interest on the BGS
Transition
Bonds to such Clearing Agency Participants; and
(e) whenever this Indenture requires or permits actions to be
taken
based upon instructions or directions of Holders of BGS
Transition Bonds
evidencing a specified percentage of the Outstanding Amount of
the BGS
Transition Bonds or a Series or Class thereof, the Clearing
Agency shall
be deemed to represent such percentage only to the extent that
it has
received instructions to such effect from BGS Transition Bond
Owners or
Clearing Agency Participants owning or representing,
respectively, such
required percentage of the beneficial interest in the BGS
Transition
Bonds or such Series or Class and has delivered such
instructions to the
Trustee.
SECTION 2.12. Notices to Clearing Agency. Whenever a notice or
other
communication to the BGS Transition Bondholders is required
under this
Indenture, unless and until Definitive BGS Transition Bonds
shall have been
issued to BGS Transition Bond Owners pursuant to Section 2.13,
the Trustee
shall give all such notices and communications specified herein
to be given to
BGS Transition Bondholders to the Clearing Agency, and shall
have no
obligation to the BGS Transition Bond Owners.
SECTION 2.13. Definitive BGS Transition Bonds.
(a) If (i) the Issuer advises the Trustee in writing that the
Clearing
Agency is no longer willing or able to properly discharge its
responsibilities
as depository with respect to any Series or Class of BGS
Transition Bonds and
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
any Series or
Class of BGS Transition Bonds or (iii) after the occurrence of
an Event of
Default, BGS Transition Bond Owners representing beneficial
interests
aggregating at least a majority of the Outstanding Amount of the
BGS
Transition Bonds of all Series advise the Trustee through the
Clearing Agency
in writing that the continuation of a book-entry system through
the Clearing
Agency is no longer in the best interests of the BGS Transition
Bond Owners,
then the Clearing Agency shall notify all affected BGS
Transition Bond Owners
and the Trustee of the occurrence of any such event and of the
availability of
Definitive BGS Transition Bonds to affected BGS Transition Bond
Owners
requesting the same. Upon surrender to the Trustee of the
typewritten BGS
Transition Bond or BGS Transition Bonds representing the
Book-Entry BGS
Transition Bonds by the Clearing Agency, accompanied by
registration
instructions, a Manager on behalf of the Issuer shall execute
and the Trustee
shall authenticate the Definitive BGS Transition Bonds in
accordance with the
instructions of the Clearing Agency. None of the Issuer, the BGS
Transition
Bond Registrar or the Trustee shall be liable for any delay in
delivery of
such instructions and may
16
<PAGE>
conclusively rely on, and shall be protected in relying on, such
instructions.
Upon the issuance of Definitive BGS Transition Bonds, the
Trustee shall
recognize the Holders of the Definitive BGS Transition Bonds as
BGS Transition
Bondholders.
(b) Definitive BGS Transition Bonds will be transferable and
exchangeable
at the offices of the BGS Transition Bond Registrar. With
respect to any
transfer of such listed BGS Transition Bonds, the new Definitive
BGS
Transition Bonds registered in the names specified by the
transferee and the
original transferor shall be available at the offices of such
transfer agent.
ARTICLE III
COVENANTS
SECTION 3.1. Payment of Principal and Interest. The Issuer will
duly and
punctually pay the principal of and interest on the BGS
Transition Bonds in
accordance with the terms of the BGS Transition Bonds and this
Indenture;
provided that except on the Final Maturity Date for a Series or
Class of BGS
Transition Bonds or upon the acceleration of the BGS Transition
Bonds pursuant
to Section 5.2, the Issuer shall only be obligated to pay the
principal of
such BGS Transition Bonds on each Payment Date therefor to the
extent moneys
are available for such payment pursuant to Section 8.2. Amounts
properly
withheld under the Code by any Person from a payment to any BGS
Transition
Bondholder of interest or principal shall be considered as
having been paid by
the Issuer to such BGS Transition Bondholder for all purposes of
this
Indenture.
SECTION 3.2. Maintenance of Office or Agency.
(a) The Issuer will maintain in the Borough of Manhattan, the
City of New
York, an office or agency where BGS Transition Bonds may be
surrendered for
registration of transfer or exchange, and where notices and
demands to or upon
the Issuer in respect of the BGS Transition Bonds and this
Indenture may be
served. 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 and any agent appointed pursuant to clause (b) below of
the location
and identity, and of any change in the location or identity, 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 and each
such agent with
the address thereof, such surrenders, notices and demands may be
made or
served at the Corporate Trust Office, and the Issuer hereby
appoints the
Trustee as its agent to receive all such surrenders, notices and
demands.
(b) [reserved]
SECTION 3.3. Money for Payments To Be Held in Trust.
(a) As provided in Section 8.2(a), all payments of principal of
and
interest on the BGS Transition Bonds that are to be made from
amounts
withdrawn from the Collection Account pursuant to Section
8.2(g), or Section
4.3 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
17
<PAGE>
for payments of BGS Transition Bonds shall be paid over to the
Issuer except
as provided in this Section 3.3 and in Section 8.2.
(b) The Issuer shall 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
3.3, that such
Paying Agent will:
(i) hold all sums held by it for the payment of principal of
or
interest on the BGS Transition 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;
(ii) give the Trustee and the BPU notice of any Default by
the
Issuer (or any other obligor upon the BGS Transition Bonds) of
which the
Paying Agent has actual knowledge in the making of any payment
required
to be made with respect to the BGS Transition Bonds;
(iii) 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;
(iv) immediately resign as a Paying Agent and forthwith pay to
the
Trustee all sums held by the Paying Agent in trust for the
payment of BGS
Transition Bonds if at any time the Paying Agent ceases to meet
the
standards required to be met by a Paying Agent at the time of
its
appointment; and
(v) comply with all requirements of the Code with respect to
the
withholding from any payments made by it on any BGS Transition
Bonds of
any applicable withholding taxes imposed thereon and with
respect to any
applicable reporting requirements in connection therewith.
(c) 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.
(d) Subject to applicable laws with respect to escheat of funds,
any
money held by the Trustee or any Paying Agent in trust for the
payment of any
amount of principal of or interest on any BGS Transition 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; and the
Holder of such
BGS Transition 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
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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, and in an Authorized Newspaper, notice that
such money
remains unclaimed and that, after a date specified therein,
which shall not be
less than thirty (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 BGS Transition 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).
SECTION 3.4. Existence. Subject to Section 3.10, the Issuer
shall keep in
full effect its existence, rights and franchises as a statutory
limited
liability company under the laws of the State of Delaware
(unless 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
BGS Transition Bonds, the Collateral and each other instrument
or agreement
included therein.
SECTION 3.5. Protection of Collateral.
(a) The Issuer shall from time to time execute and deliver all
such
supplements and amendments hereto and all such filings,
financing statements,
continuation statements, instruments of further assurance and
other
instruments, and shall take such other action necessary or
advisable to:
(i) maintain and preserve the Grant, Lien and security interest
(and
the priority thereof) of this Indenture or carry out more
effectively the
purposes hereof;
(ii) perfect, publish notice of or protect the validity of any
Grant
made or to be made by this Indenture;
(iii) enforce any of the Collateral, including any Interest
Rate
Swap Agreement;
(iv) preserve and defend title to the Collateral and the rights
of
the Trustee and the BGS Transition Bondholders in the Collateral
against
the claims of all Persons and parties; or
(v) pay any and all taxes levied or assessed upon all or any
part of
the Collateral.
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(b) The Issuer hereby designates the Trustee its agent and
attorney-in-fact to execute any filing with the BPU, financing
statement,
continuation statement or other instrument required by the
Trustee pursuant to
this Section 3.5.
SECTION 3.6. Opinions as to Collateral.
(a) On or before March 31 in each calendar year, while any
Series is
outstanding, commencing March 31, 2006, the Issuer shall furnish
to the
Trustee an Issuer Opinion of Counsel either stating that, in the
opinion of
such counsel, such action has been taken with respect to the
execution and
filing of any filings pursuant to the New Jersey UCC and
Delaware UCC of
financing statements and continuation statements as is necessary
to maintain
the Lien and security interest, and the first priority thereof,
created by
this Indenture and reciting the details of such action or
stating that in the
opinion of such counsel no such action is necessary to maintain
such Grant,
Lien and security interest, and the first priority thereof. Such
Issuer
Opinion of Counsel shall also describe the execution and filing
of any filings
pursuant to the New Jersey UCC and Delaware UCC of financing
statements and
continuation statements that will, in the opinion of such
counsel, be required
to maintain the Grant, Lien and security interest of this
Indenture until
March 31 in the following calendar year.
(b) Prior to the effectiveness of any amendment to the Sale
Agreement or
the Servicing Agreement, the Issuer shall furnish to the Trustee
an Issuer
Opinion of Counsel either (i) stating that, in the opinion of
such counsel,
all filings, including filings pursuant to the New Jersey UCC
and Delaware
UCC, have been executed and filed that are necessary fully to
preserve and
protect the interest of the Issuer and the Trustee in the
Transferred BGS
Bondable Transition 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 (ii) stating that, in the opinion of
such counsel,
no such action shall be necessary to preserve and protect such
interest.
SECTION 3.7. Performance of Obligations.
(a) The Issuer (i) shall diligently pursue any and all actions
to enforce
its rights under each instrument or agreement included in the
Collateral and
(ii) shall not take any action and will use its best 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
provided in this
Indenture, the Sale Agreement, the Servicing Agreement, any
Interest Rate Swap
Agreement or any other Basic Document.
(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 Issuer Officer's
Certificate of the
Issuer shall be deemed to be action taken by the Issuer.
Initially, the Issuer
has contracted with the Administrator to assist the Issuer in
performing its
duties under this Indenture.
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<PAGE>
(c) The Issuer shall punctually perform and observe all of
its
obligations and agreements contained in the Sale Agreement, the
Servicing
Agreement, any Interest Rate Swap Agreement and in all other
instruments and
agreements included in the Collateral.
SECTION 3.8. Negative Covenants. The Issuer shall not:
(a) except as expressly permitted by this Indenture, the
Sale
Agreement, the Servicing Agreement, any Interest Rate Swap
Agreement or
any other Basic Document, sell, transfer, exchange or otherwise
dispose
of any of 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 BGS Transition Bonds (other
than
amounts properly withheld from such payments under the Code or
pursuant
to any Interest Rate Swap Agreement) or assert any claim against
any
present or former BGS Transition Bondholder by reason of the
payment of
taxes levied or assessed upon the Issuer or any part of the
Collateral;
or
(c) (i) permit the validity or effectiveness of this Indenture
to be
impaired, or permit the Lien of this Indenture to be
amended,
hypothecated, subordinated, terminated or discharged, or permit
any
Person to be released from any covenants or obligations with
respect to
the BGS Transition Bonds under this Indenture except as may be
expressly
permitted hereby, (ii) permit any Lien (other than the Lien
created by
this Indenture) to be created on or extend to or otherwise arise
upon or
burden the Collateral or any part thereof, any interest therein
or the
proceeds thereof or (iii) permit the Lien of this Indenture not
to
constitute a continuing valid first priority security interest
in the
Collateral.
SECTION 3.9. Annual Statement as to Compliance.
(a) The Issuer will deliver to the Trustee and the BPU, within
120 days
after the end of each fiscal year of the Issuer (commencing with
the fiscal
year 2005), an Issuer Officer's Certificate stating, as to the
Manager signing
such Issuer Officer's Certificate, that a review of the
activities of the
Issuer during such year (or relevant portion thereof) and of
performance under
this Indenture has been made under such Manager's supervision;
and
(b) to the best of such Manager's knowledge, based on such
review, the
Issuer has complied with all conditions and covenants under this
Indenture
throughout such calendar year (or relevant portion thereof), or,
if there has
been a default in complying with any such condition or covenant,
describing
each such default and the nature and status thereof.
SECTION 3.10. Issuer May Consolidate, etc., Only on Certain
Terms. The
Issuer shall not consolidate or merge with or into any other
Person or sell
substantially all of its assets to any other Person or dissolve,
unless:
(a) the Person (if other than the Issuer) formed by or
surviving
such consolidation or merger or to whom substantially all of
such assets
are sold shall be a
21
<PAGE>
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
satisfactory to the Trustee, the due and punctual payment of
the
principal of and interest on all BGS Transition 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
and in the applicable Series Supplement or Series
Supplements;
(b) the Person (if other than the Issuer) formed by or
surviving
such consolidation or merger or to whom substantially all of
such assets
are sold shall expressly assume all obligations and succeed to
all rights
of the Issuer under the Sale Agreement, the Administration
Agreement, the
Servicing Agreement and any Interest Rate Swap Agreement
pursuant to an
assignment and assumption agreement executed and delivered to
the
Trustee, in form satisfactory to the Trustee;
(c) immediately after giving effect to such consolidation,
merger or
sale, no Default or Event of Default shall have occurred and
be
continuing;
(d) the Rating Agency Condition shall have been satisfied with
the
respect to such consolidation or merger or sale;
(e) the Issuer shall have received an Issuer Opinion of Counsel
(and
shall have delivered copies thereof to the Trustee) to the
effect that
such consolidation, merger or sale (i) will not have any
material adverse
tax consequence to the Issuer or any BGS Transition Bondholder,
(ii)
complies with this Indenture and all of the conditions precedent
herein
relating to such transaction and (iii) will result in the
Trustee
maintaining a continuing valid first priority perfected security
interest
in the Collateral;
(f) neither the BGS Bondable Transition Property nor the
Financing
Order nor the rights of the Seller, the Servicer or the Issuer
under the
Competition Act or the Financing Order shall be impaired
thereby; and
(g) any action as is necessary to maintain the Lien created by
this
Indenture shall have been taken.
SECTION 3.11. Successor or Transferee.
(a) Upon any consolidation or merger of the Issuer in accordance
with
Section 3.10, 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) Upon any sale by the Issuer of substantially all of its
assets in a
sale which complies with Section 3.10, PSE&G Transition
Funding II LLC will be
released from every covenant and agreement of this Indenture to
be observed or
performed on the part of the Issuer with respect to the BGS
Transition Bonds
and from every covenant and agreement of the Sale
22
<PAGE>
Agreement, the Administration Agreement, the Servicing Agreement
and any
Interest Rate Swap Agreement to be observed or performed on the
part of the
Issuer.
SECTION 3.12. No Other Business. The Issuer shall not engage in
any
business other than purchasing and owning BGS Bondable
Transition Property,
issuing BGS Transition Bonds from time to time, pledging its
interest in the
Collateral to the Trustee under this Indenture in order to
secure the BGS
Transition Bonds, entering into the Basic Documents relating to
the BGS
Transition Bonds and performing its obligations thereunder and
performing
activities that are necessary, suitable or convenient to
accomplish these
purposes or are incidental thereto and other than as
contemplated by the Basic
Documents.
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 BGS Transition Bonds and except as
contemplated by
the Basic Documents.
SECTION 3.14. Guarantees, Loans, Advances and Other Liabilities.
Except
as contemplated by the Basic Documents, 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, other than any Eligible Investments.
SECTION 3.15. Capital Expenditures. The Issuer shall not make
any
expenditure (by long-term or operating lease or otherwise) for
capital assets
(either realty or personalty) other than BGS Bondable Transition
Property
purchased from the Seller pursuant to, and in accordance with,
the Sale
Agreement.
SECTION 3.16. Restricted Payments. The Issuer shall not,
directly or
indirectly, 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 in, or ownership security
of, the Issuer,
redeem, purchase, retire or otherwise acquire for value any such
ownership or
equity interest or security or 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 or would otherwise result from
such payment,
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
either distributed to the Issuer pursuant to Section 8.2(g) or
which are not
otherwise subject to the Lien of this Indenture, to the extent
that such
distributions would not cause the book value of the remaining
equity in the
Issuer to decline below [0.5]% of the original principal amount
of all Series
of BGS Transition Bonds which remain outstanding. 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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<PAGE>
SECTION 3.17. Notice of Events of Default. The Issuer agrees to
deliver
to the Trustee, the BPU, and the Rating Agencies written notice
in the form of
an Issuer Officer's Certificate of any Default or Event of
Default hereunder
or under any of the Basic Documents, its status and what action
the Issuer is
taking or proposes to take with respect thereto within five
Business Days
after the occurrence thereof.
SECTION 3.18. Inspection. The Issuer agrees that, on reasonable
prior
notice, it will permit any representative of the Trustee and
any
representative of the BPU, 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 annually by Independent certified public accountants,
and to discuss
the Issuer's affairs, finances and accounts with the Issuer's
officers,
employees and Independent certified public accountants, all at
such reasonable
times and as often as may be reasonably requested. The Trustee
and the BPU
shall and shall cause their respective 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 and the BPU may
reasonably determine
that such disclosure is consistent with its obligations
hereunder.
SECTION 3.19. Adjusted Overcollateralization Balance Schedules.
[Not
later than the date on which a new Series of BGS Transition
Bonds is issued or
any outstanding Series of BGS Transition Bonds is defeased, the
Issuer shall
deliver to the Trustee and to the BPU a replacement Schedule 1
hereto,
adjusted to reflect such issuance or defeasance and setting
forth the
Scheduled Overcollateralization Level for each Payment Date with
respect to
each Series.]
SECTION 3.20. Sale Agreement, Servicing Agreement and Swap
Agreement
Covenants. The Issuer agrees to take all such lawful actions to
enforce its
rights under the Sale Agreement, the Servicing Agreement and any
Interest Rate
Swap Agreement and to compel or secure the performance and
observance by the
Seller, the Servicer and any Swap Counterparty, of each of their
obligations
to the Issuer under or in connection with the Sale Agreement,
the Servicing
Agreement and any Interest Rate Swap Agreement, respectively, in
accordance
with the terms thereof. So long as no Event of Default occurs
and is
continuing, but subject to Section 3.20(f), the Issuer may
exercise any and
all rights, remedies, powers and privileges lawfully available
to the Issuer
under or in connection with the Sale Agreement, the Servicing
Agreement and
any Interest Rate Swap Agreement.
(i) If an Event of Default occurs and is continuing, the
Trustee
may, and, at the direction (which direction shall be in writing
or by
telephone (confirmed in writing promptly thereafter)) of with
respect to
the Sale Agreement or the Servicing Agreement, the Holders of a
majority
of the Outstanding Amount of the BGS Transition Bonds of all
Series or
with respect to any Interest Rate Swap Agreement, the Holders of
that
percentage of the Outstanding Amount of the BGS Transition Bonds
of the
related Class specified in the related Series Supplement, shall,
exercise
all right, remedies, powers, privileges and claims of the Issuer
against
the Seller, the Servicer or any Swap Counterparty under or in
connection
with the Sale Agreement, the Servicing Agreement and any
Interest Rate
Swap Agreement, respectively, including the right or power to
take
24
<PAGE>
any action to compel or secure performance or observance by the
Seller,
the Servicer or any Swap Counterparty 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, the
Servicing
Agreement and any Interest Rate Swap Agreement, and any right of
the
Issuer to take such action shall be suspended.
(b) With the consent of the Trustee, the Sale Agreement and the
Servicing
Agreement may be amended in accordance with the terms thereof,
so long as the
Rating Agency Condition is satisfied in connection therewith, at
any time and
from time to time, without the consent of the BGS Transition
Bondholders, or
the counterparty under or Interest Rate Swap Agreement. However,
such
amendment may not adversely affect in any material respect the
interest of any
BGS Transition Bondholder or any counterparty under any Interest
Rate Swap
Agreement without the consent of the Holders of a majority of
the Outstanding
Amount of the BGS Transition Bonds of each Series or Class, and
each such
counterparty, materially and adversely affected thereby.
Further, with the
consent of the Trustee and the related counterparty under any
Interest Rate
Swap Agreement, any Interest Rate Swap Agreement may be amended,
at any time
and from time to time, so long as the Rating Agency Condition is
satisfied in
connection therewith. However, such amendment may not adversely
affect in any
material respect the interest of any BGS Transition Bondholder
or counterparty
under any Interest Rate Swap Agreement without the consent of
sixty-six and
two-thirds percent (66 2/3%) of the Holders of the Outstanding
Amount of the
BGS Transition Bonds of each Series or Class and each such other
counterparty
materially and adversely affected thereby.
(c) If the Issuer, the Seller or the Servicer proposes to amend,
modify,
waive, supplement, terminate or surrender, or agree to any
amendment,
modification, waiver, supplement, termination, or surrender of,
the terms of
the Sale Agreement, the Servicing Agreement or any Interest Rate
Swap
Agreement, or waive timely performance or observance thereunder
by the Seller,
the Servicer or any Swap Counterparty, respectively, in each
case in such a
way as would materially and adversely affect the interests of
any Class of any
Series of BGS Transition Bondholders or the counterparty under
any Interest
Rate Swap Agreement, the Issuer shall first notify the Rating
Agencies of the
proposed amendment, modification, termination or surrender. Upon
receiving
notification regarding whether the Rating Agency Condition has
been satisfied,
the Issuer shall notify the Trustee, and the Trustee shall
notify the BGS
Transition Bondholders and each counterparty under any Interest
Rate Swap
Agreement, of the proposal and whether the Rating Agency
Condition has been
satisfied with respect thereto. With respect to any such
proposed action
related to the Sale Agreement and the Servicing Agreement, the
Trustee shall
consent to such proposed action only (i) with the consent of the
Holders of a
majority of the Outstanding Amount of the BGS Transition Bonds
of each Class
of each Series, and each counterparty under any Interest Rate
Swap Agreement,
materially and adversely affected thereby and (ii) upon
satisfaction of the
Rating Agency Condition. With respect to any such proposed
action related to
any Interest Rate Swap Agreement, the Trustee shall consent to
such proposed
action only (y) with the consent of the Holders representing
sixty-six and
two-thirds percent (66 2/3%) of the Outstanding Amount of the
BGS Transition
Bonds of the related Class, and each counterparty under any
Interest Rate Swap
Agreement, materially and adversely affected thereby and (z)
upon satisfaction
of the Rating Agency Condition. If any such
25
<PAGE>
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.
(d) If the Issuer or the Servicer proposes to amend, modify,
waive,
supplement, terminate or surrender in any material respect, or
to agree to any
material amendment, modification, waiver, supplement,
termination or surrender
of, the BGS Transition Bond Charge Adjustment Process, the
Issuer shall notify
the Trustee and the Trustee shall notify BGS Transition
Bondholders of such
proposal and the Trustee shall consent thereto only with the
consent of the
Holders a majority of the Outstanding Amount of the BGS
Transition Bonds of
each Series materially and adversely affected thereby and only
if the Rating
Agency Condition has been satisfied with respect thereto.
(e) Promptly following a default by either the Seller, the
Servicer or
any Swap Counterparty under the Sale Agreement, the Servicing
Agreement or any
Interest Rate Swap Agreement, respectively, and at the Issuer's
expense, the
Issuer agrees to take all such lawful actions as the Trustee may
request to
compel or secure the performance and observance by the Seller,
the Servicer or
any Swap Counterparty, as applicable, of each of their
obligations to the
Issuer under or in connection with the Sale Agreement, the
Servicing Agreement
or any Interest Rate Swap Agreement 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, the
Servicing Agreement or any Interest Rate Swap 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, the Servicer or
any Swap
Counterparty thereunder and the institution of legal or
administrative actions
or proceedings to compel or secure performance by the Seller,
the Servicer or
any Swap Counterparty of each of their respective obligations
under the Sale
Agreement, the Servicing Agreement and any Interest Rate Swap
Agreement.
(f) If the Issuer shall have knowledge of the occurrence of a
Servicer
Default under the Servicing Agreement or an event of default,
termination
event or downgrade event under any Interest Rate Swap 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 or event.
(g) 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 BGS Bondable Transition Property or the BGS
Transition Bond
Charge, the Issuer shall take all reasonable steps available to
it to remedy
such failure. The Issuer shall not take any action to terminate
the Servicer's
rights and powers under the Servicing Agreement following a
Servicer Default
without the prior written consent of the Trustee and of the
Holders of a
majority of the Outstanding Amount of the BGS Transition Bonds
of all Series.
(h) As promptly as possible after the giving of notice of
termination to
the Servicer and the Rating Agencies of the Servicer's rights
and powers
pursuant to Section 6.1 of the
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Servicing Agreement, the Trustee, with the consent of the
Holders of BGS
Transition Bonds evidencing not less than a majority of the
Outstanding Amount
of the BGS Transition Bonds of all Series, may appoint a
successor Servicer
(the "Successor Servicer"), 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 Section 6.4 of the Servicing
Agreement. In
connection with any such appointment, the Issuer may make such
arrangements
for the compensation of such Successor Servicer as it and such
Successor
Servicer shall agree, subject to the limitations set forth below
and in the
Servicing Agreement, and in accordance with Section 6.4 of the
Servicing
Agreement, the Issuer shall enter into an agreement with such
Successor
Servicer for the servicing of the BGS Bondable Transition
Property (such
agreement to be in form and substance satisfactory to the
Trustee).
(i) Upon termination of the Servicer's rights and powers
pursuant to the
Servicing Agreement, the Trustee shall promptly notify the
Issuer, the BGS
Transition Bondholders and the Rating Agencies of such
termination. As soon as
a Successor Servicer is appointed, the Issuer shall notify the
Trustee, the
BGS Transition Bondholders and the Rating Agencies of such
appointment,
specifying in such notice the name and address of such Successor
Servicer.
(j) The Issuer shall not take any action to terminate or assign
the Swap
Counterparty's rights and powers under any Interest Rate Swap
Agreement or
replace any Swap Counterparty following an event of default,
termination event
or downgrade event under any Interest Rate
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