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,
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<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
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(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
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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
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<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
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<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;
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<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
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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
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<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
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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
Swap Agreement witho
