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Exhibit 10.1
BGS BONDABLE TRANSITION PROPERTY SALE AGREEMENT
between
PSE&G TRANSITION FUNDING II LLC
Issuer
and
PUBLIC SERVICE ELECTRIC AND GAS COMPANY
Seller
Dated as of _____________, 2005
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TABLE OF CONTENTS
Page
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ARTICLE I
DEFINITIONS
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Section 1.1.
Definitions...................................................................................
3
Section 1.2. Other Definitional
Provisions.................................................................
3
ARTICLE II
CONVEYANCE OF TRANSFERRED BGS BONDABLE TRANSITION PROPERTY
Section 2.1. Conveyance of Initial Transferred BGS Bondable
Transition Property............................ 4
Section 2.2. Conditions to Conveyance of BGS Bondable Transition
Property.................................. 5
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLER
Section 3.1. Organization and Good
Standing................................................................
7
Section 3.2. Due
Qualification.............................................................................
7
Section 3.3. Power and
Authority...........................................................................
7
Section 3.4. Binding
Obligation............................................................................
7
Section 3.5. No
Violation..................................................................................
7
Section 3.6. No
Proceedings................................................................................
7
Section 3.7.
Approvals.....................................................................................
8
Section 3.8. The Transferred BGS Bondable Transition
Property.............................................. 8
Section 3.9.
Solvency......................................................................................
11
ARTICLE IV
COVENANTS OF THE SELLER
Section 4.1. Seller's
Existence............................................................................
11
Section 4.2. No Liens or
Conveyances.......................................................................
11
Section 4.3. Use of
Proceeds...............................................................................
11
Section 4.4. Delivery of
Collections.......................................................................
11
Section 4.5. Notice of
Liens...............................................................................
12
Section 4.6. Compliance with
Law...........................................................................
12
Section 4.7. Covenants Related to Transferred BGS Bondable
Transition Property............................. 12
Section 4.8. Protection of
Title...........................................................................
13
Section 4.9.
Taxes.........................................................................................
14
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ARTICLE V
ADDITIONAL UNDERTAKINGS OF THE SELLER
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Section 5.1. Liability of the Seller;
Indemnities..........................................................
14
Section 5.2. Merger or Consolidation of, or Assumption of the
Obligations of, the Seller................... 15
Section 5.3. Limitation on Liability of the Seller and
Others.............................................. 16
ARTICLE VI
MISCELLANEOUS PROVISIONS
Section 6.1.
Amendment.....................................................................................
17
Section 6.2.
Notices.......................................................................................
18
Section 6.3. Assignment by
Seller..........................................................................
19
Section 6.4. Assignment to
Trustee.........................................................................
19
Section 6.5. Limitations on Rights of
Others...............................................................
19
Section 6.6.
Severability..................................................................................
19
Section 6.7. Separate
Counterparts.........................................................................
19
Section 6.8.
Headings......................................................................................
19
Section 6.9. Governing
Law.................................................................................
19
Section 6.10. Nonpetition
Covenant.........................................................................
19
EXHIBIT A - Bill of
Sale....................................................................................
A-1
EXHIBIT B - Opinion of
Counsel..............................................................................
B-1
EXHIBIT C - Opinion of
Counsel..............................................................................
C-1
APPENDIX A - Master Definitions
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BGS BONDABLE TRANSITION PROPERTY SALE AGREEMENT, dated as of
___________,
2005, by and between PSE&G TRANSITION FUNDING II LLC, a
Delaware limited
liability company, as issuer (the "Issuer"), and PUBLIC SERVICE
ELECTRIC AND
GAS COMPANY, a New Jersey corporation, as seller hereunder (in
such capacity,
the "Seller").
W I T N E S S E T H:
WHEREAS the Issuer desires to purchase from time to time BGS
Bondable
Transition Property created pursuant to the Competition Act and
the Financing
Order;
WHEREAS the Seller is willing to sell BGS Bondable Transition
Property to
the Issuer;
WHEREAS the Issuer, in order to finance the purchase of the
Transferred
BGS Bondable Transition Property, will from time to time issue
BGS Transition
Bonds under the Indenture; and
WHEREAS the Issuer, to secure its obligations under the BGS
Transition
Bonds and the Indenture, will pledge its right, title and
interest in, to and
under the Transferred BGS Bondable Transition Property to the
Trustee for the
benefit of the BGS Transition Bondholders.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants
herein contained and other good and valuable consideration, the
receipt and
sufficiency of which are hereby acknowledged, and intending to
be legally
bound hereby, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1. Definitions. Capitalized terms used herein and not
otherwise
defined herein have the meanings assigned to them in Appendix A
hereto.
Section 1.2. Other Definitional Provisions.
(a) "Agreement" means this BGS Bondable Transition Property
Sale
Agreement, as the same may be amended, supplemented or otherwise
modified from
time to time.
(b) Non-capitalized terms used herein which are defined in
the
Competition Act, as the context requires, have the meanings
assigned to such
terms in the Competition Act, but without giving effect to
amendments to the
Competition Act after the date hereof which have a material
adverse effect on
the Issuer or the BGS Transition Bondholders.
(c) All terms defined in this Agreement have the defined
meanings when
used in any certificate or other document made or delivered
pursuant hereto
unless otherwise defined therein.
(d) The words "hereof," "herein," "hereunder" and words of
similar import
when used in this Agreement refer to this Agreement as a whole
and not to any
particular provision of this Agreement; Section, Schedule and
Exhibit
references contained in this Agreement are
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references to Sections, Schedules and Exhibits in or to this
Agreement unless
otherwise specified; and the term "including" means "including
without
limitation."
(e) The definitions contained in this Agreement are applicable
to the
singular as well as the plural forms of such terms.
ARTICLE II
CONVEYANCE OF TRANSFERRED BGS BONDABLE TRANSITION PROPERTY
Section 2.1. Conveyance of Initial Transferred BGS Bondable
Transition Property.
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(a) In consideration of the Issuer's payment to or upon the
order of the
Seller of $________________, net of the underwriting discount,
original issue
discount and the financial advisory fee for the BGS Transition
Bonds in the
aggregate amount of $__________________, or $__________________
(the "Initial
Purchase Price") by wire transfer of funds immediately available
on the date
hereof to Seller's account no. __________________ for further
credit to
account no. _____________ at __________________, routing transit
ABA#
_____________, subject to the conditions specified in Section
2.2, the Seller
does hereby irrevocably sell, transfer, assign and otherwise
convey to the
Issuer, without recourse (subject to the obligations of the
Seller herein),
all right, title and interest of the Seller in, to and under the
Initial
Transferred BGS Bondable Transition Property identified in the
Bill of Sale
delivered pursuant to Section 2.2(a) on or prior to the Initial
Transfer Date
(such sale, transfer, assignment and conveyance of the Initial
Transferred BGS
Bondable Transition Property to include, to the fullest extent
permitted by
the Competition Act, the New Jersey UCC and the Delaware UCC,
the assignment
of all revenues, collections, claims, rights, payments, money or
proceeds of
or arising from the BGS Transition Bond Charges related to the
Initial
Transferred BGS Bondable Transition Property, as the same may be
adjusted from
time to time). Such sale, transfer, assignment and conveyance of
the Initial
Transferred BGS Bondable Transition Property is hereby expressly
stated to be
a sale or other absolute transfer and, pursuant to Section 23.a.
of the
Competition Act, shall constitute a sale or other absolute
transfer of all of
the Seller's right, title and interest, in, to and under and not
a borrowing
secured by, the Initial Transferred BGS Bondable Transition
Property. The
preceding sentence is the statement referred to in Section 23.a.
of the
Competition Act. The Seller agrees and confirms that upon
payment of the
Initial Purchase Price and the execution and delivery of this
Agreement and
the related Bill of Sale, the Seller shall have no right, title
or interest
in, to or under the Initial Transferred BGS Bondable Transition
Property.
(b) Subject to the conditions specified in Section 2.2, the
Issuer does
hereby purchase the Initial Transferred BGS Bondable Transition
Property from
the Seller for the consideration set forth in paragraph (a)
above.
(c) The Seller and the Issuer each acknowledge and agree that
the
purchase price for the Initial Transferred BGS Bondable
Transition Property
sold pursuant to this Agreement is equal to its fair market
value at the time
of sale.
(d) The Seller and the Issuer further agree that from time to
time the
Seller may offer to sell, and the Issuer may purchase,
Subsequent Transferred
BGS Bondable Transition Property
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as of Subsequent Transfer Dates, subject to the conditions
specified in Section
2.2, in exchange for consideration to be agreed upon (the
"Subsequent Purchase
Price"). The Seller and the Issuer hereby agree that each such
sale, transfer,
assignment and conveyance of any Subsequent Transferred BGS
Bondable Transition
Property shall include, to the fullest extent permitted by the
Competition Act,
the New Jersey UCC and the Delaware UCC, the assignment of all
revenues,
collections, claims, rights, payments, money or proceeds of or
arising from the
BGS Transition Bond Charges related to the Subsequent
Transferred BGS Bondable
Transition Property, as the same may be adjusted from time to
time. Such sale,
transfer, assignment and conveyance of the Subsequent
Transferred BGS Bondable
Transition Property is hereby expressly stated to be a sale or
other absolute
transfer and, pursuant to Section 23.a. of the Competition Act,
shall constitute
a sale or other absolute transfer of all of the Seller's right,
title and
interest, in, to and under and not a borrowing secured by, the
Subsequent
Transferred BGS Bondable Transition Property. The preceding
sentence is the
statement referred to in Section 23.a. of the Competition Act.
The Seller agrees
and confirms that after giving effect to any sale contemplated
by this paragraph
(d) and the execution and delivery of the related Bill of Sale,
it shall have no
right, title or interest in, to or under the Subsequent
Transferred BGS Bondable
Transition Property.
(e) Notwithstanding the foregoing, in the event that any sale,
transfer,
assignment and conveyance of any Transferred BGS Bondable
Transition Property
is determined by a court of competent jurisdiction not to be a
true and
absolute sale as contemplated by the parties hereto and by the
Competition
Act, then such sale, transfer, assignment and conveyance shall
be treated as a
pledge of such Transferred BGS Bondable Transition Property and
the Seller
shall be deemed to have granted, and does hereby grant, as of
the date hereof
a security interest to the Issuer in such Transferred BGS
Bondable Transition
Property to secure a payment obligation incurred by the Seller
in the amount
paid by the Issuer for the Transferred BGS Bondable Transition
Property.
Section 2.2. Conditions to Conveyance of BGS Bondable
Transition
Property. The obligation of the Seller to sell, and the
obligation of the
Issuer to purchase BGS Bondable Transition Property upon any
Transfer Date
shall be subject to and conditioned upon the satisfaction or
waiver of each of
the following conditions:
(a) on or prior to the Transfer Date, the Seller shall
deliver
to the Issuer a duly executed Bill of Sale identifying the
BGS
Bondable Transition Property to be conveyed as of that date,
substantially in the form of Exhibit A hereto;
(b) as of the Transfer Date, no breach by the Seller of its
representations, warranties or covenants in this Agreement
shall
exist and the Seller shall have delivered to the Issuer and
the
Trustee an Officers' Certificate to such effect and no
Servicer
Default shall have occurred and be continuing;
(c) as of the Transfer Date:
(i) the Issuer shall have sufficient funds available to
pay the purchase price for the Transferred BGS Bondable
Transition Property to be conveyed on such date, and
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(ii) all conditions set forth in the Indenture to the
issuance of one or more Series of BGS Transition Bonds
intended to provide such funds shall have been satisfied or
waived;
(d) on or prior to the Transfer Date, the Seller shall have
taken all actions required under the Competition Act, the
Financing
Order, the New Jersey UCC and the Delaware UCC, including,
without
limitation, filings under the New Jersey UCC and the Delaware
UCC, to
transfer to the Issuer ownership of the Transferred BGS
Bondable
Transition Property to be conveyed on such date, free and clear
of
all Liens other than Liens created by the Issuer pursuant to
the
Indenture and to perfect such transfer and the Issuer shall
have
taken any action required for the Issuer to grant to the Trustee
a
first priority perfected security interest in the Collateral
and
maintain such security interest as of such date, including,
without
limitation, filings under the New Jersey UCC and the Delaware
UCC;
(e) in the case of any sale of Subsequent Transferred BGS
Bondable Transition Property only, the Seller shall have
provided the
Issuer and each Rating Agency with a notice specifying the
Subsequent
Transfer Date for the Subsequent Transferred BGS Bondable
Transition
Property not later than 10 days prior to the Subsequent
Transfer
Date;
(f) the Seller shall have delivered to each Rating Agency and
to
the Issuer:
(i) an Opinion of Counsel to the Seller with respect to
the transfer of the Transferred BGS Bondable Transition
Property then being conveyed to the Issuer substantially in
the form of Exhibit B hereto, and
(ii) an Opinion of Counsel to the Seller, substantially
in the form of Exhibit C hereto;
(g) the Seller shall have delivered to the Trustee and the
Issuer an Officers' Certificate confirming the satisfaction of
each
condition precedent specified in this Section 2.2;
(h) with respect to any Subsequent Sale, the Seller shall
have
taken any action necessary in order for the Rating Agency
Condition
to have been satisfied; and
(i) the Seller shall have received the Initial Purchase Price
or
the Subsequent Purchase Price, as applicable, in funds
immediately
available on the applicable Transfer Date.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLER
As of the Transfer Date, the Seller makes the following
representations
and warranties on which the Issuer has relied and will rely in
acquiring
Transferred BGS Bondable Transition Property. The following
representations
and warranties are made under existing law as in effect
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as of the Transfer Date. The Seller shall not be in breach of
any representation
or warranty herein as a result of a change in law occurring
after the Transfer
Date. The representations and warranties shall survive the sale
of Transferred
BGS Bondable Transition Property to the Issuer and the pledge
thereof to the
Trustee pursuant to the Indenture.
Section 3.1. Organization and Good Standing. The Seller is a
corporation
duly organized and in good standing under the laws of the State
of New Jersey,
with corporate power and authority to own its properties and
conduct its
business as currently owned or conducted.
Section 3.2. Due Qualification. The Seller is duly qualified to
do
business as a foreign corporation in good standing, and has
obtained all
necessary licenses and approvals, in all jurisdictions in which
the ownership
or lease of property or the conduct of its business requires
such
qualifications, licenses or approvals (except where the failure
to so qualify
and to obtain such licenses and approvals would not be
reasonably likely to
have a material adverse effect on the Seller's business,
operations, assets,
revenues, properties or prospects).
Section 3.3. Power and Authority. The Seller has the corporate
power and
authority to execute and deliver this Agreement and to carry out
its terms;
the Seller has full corporate power and authority to own the BGS
Bondable
Transition Property and sell and assign the Transferred BGS
Bondable
Transition Property to the Issuer, and the Seller has duly
authorized such
sale and assignment to the Issuer by all necessary corporate
action; and the
execution, delivery and performance of this Agreement has been
duly authorized
by the Seller by all necessary corporate action.
Section 3.4. Binding Obligation. This Agreement constitutes a
legal,
valid and binding obligation of the Seller enforceable against
the Seller in
accordance with its terms subject to bankruptcy, receivership,
insolvency,
reorganization, moratorium or other laws affecting creditors'
rights generally
from time to time in effect and to general principles of equity
(regardless of
whether considered in a proceeding in equity or at law).
Section 3.5. No Violation. The consummation of the
transactions
contemplated by this Agreement and the fulfillment of the terms
hereof do not
conflict with, result in any breach of any of the terms and
provisions of, or
constitute (with or without notice or lapse of time) a default
under, the
articles of incorporation or by-laws of the Seller, or any
indenture,
agreement or other instrument to which the Seller is a party or
by which it is
bound; nor result in the creation or imposition of any Lien upon
any of its
properties pursuant to the terms of any such indenture,
agreement or other
instrument (except as contemplated by the Basic Documents and as
set forth in
Section 2.1(e) hereof); nor violate any law or any order, rule
or regulation
applicable to the Seller of any court or of any federal or State
regulatory
body, administrative agency or other governmental
instrumentality having
jurisdiction over the Seller or its properties. The BGS Bondable
Transition
Property is not subject to any Lien thereon created by the
indenture, dated
August 1, 1924 (as amended and supplemented by 95 supplemental
indentures), of
Public Service Electric and Gas Company to Fidelity Union Trust
Company, as
successor trustee.
Section 3.6. No Proceedings. Except as disclosed in writing by
the Seller
to the Issuer, there are no proceedings or investigations
pending or, to the
Seller's best knowledge, threatened,
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before any court, federal or State regulatory body,
administrative agency or
other governmental instrumentality having jurisdiction over the
Seller or its
properties:
(a) asserting the invalidity of the Basic Documents, the BGS
Transition Bonds, the Competition Act or the Financing
Order;
(b) seeking to prevent the issuance of the BGS Transition
Bonds
or the consummation of any of the transactions contemplated by
the
Basic Documents or the BGS Transition Bonds;
(c) challenging the Seller's treatment of the BGS Transition
Bonds as debt of the Seller for federal and State income,
gross
receipts or franchise tax purposes; or
(d) seeking any determination or ruling that could reasonably
be
expected to materially and adversely affect the performance by
the
Seller of its obligations under, or the validity or
enforceability
of, the Basic Documents or the BGS Transition Bonds.
Section 3.7. Approvals. Except for the filing of financing
statements and
continuation statements under the New Jersey UCC and the
Delaware UCC, no
approval, authorization, consent, order or other action of, or
filing with,
any court, federal or State regulatory body, administrative
agency or other
governmental instrumentality is required in connection with the
execution and
delivery by the Seller of this Agreement, the performance by the
Seller of the
transactions contemplated hereby or the fulfillment by the
Seller of the terms
hereof, except those that have been obtained or made. The
Pricing Advice
Certificate (as defined in the Financing Order) has been filed
in accordance
with the Financing Order and is final and incontestable in
accordance with its
terms.
Section 3.8. The Transferred BGS Bondable Transition
Property.
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(a) Information. All information provided by the Seller to the
Issuer
with respect to the Transferred BGS Bondable Transition Property
is correct in
all material respects.
(b) Effect of Transfer. Each sale, transfer, assignment and
conveyance
herein contemplated constitutes a sale or other absolute
transfer, of all
right, title and interest of the Seller in, to and under the
Transferred BGS
Bondable Transition Property from the Seller to the Issuer; upon
execution and
delivery of this Agreement and the related Bill of Sale, the
Seller will have
no right, title or interest in, to or under the Transferred BGS
Bondable
Transition Property; and the Transferred BGS Bondable Transition
Property
would not be part of the estate of the Seller as debtor in the
event of the
filing of a bankruptcy petition by or against the Seller under
any bankruptcy
law.
(c) Transfer Filings. The Seller is the sole owner of the
Transferred BGS
Bondable Transition Property sold to the Issuer on the Transfer
Date; and the
Transferred BGS Bondable Transition Property will have been
validly sold,
assigned, transferred and conveyed to the Issuer free and clear
of all Liens
other than Liens created by the Issuer pursuant to the
Indenture. All actions
or filings, including filings with the New Jersey Division of
Revenue/Office
of Commercial Recording under the New Jersey UCC and the
Delaware UCC
necessary in any jurisdiction to give the Issuer a valid first
priority
perfected ownership interest in the Transferred
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BGS Bondable Transition Property and to grant to the Trustee a
first p
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