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EXECUTION COPY
BEC FUNDING LLC,
AS NOTE ISSUER
AND
THE BANK OF NEW YORK,
AS NOTE TRUSTEE
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NOTE INDENTURE
DATED AS OF JULY 29, 1999
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$725,000,000
BEC FUNDING LLC NOTES
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TABLE OF CONTENTS
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ARTICLE I
Definitions and Incorporation by Reference
Section 1.01. Definitions............................................................................2
Section 1.02. Incorporation by Reference of Trust Indenture Act.....................................11
Section 1.03. Rules of Construction.................................................................11
ARTICLE II
The Notes
Section 2.01. Terms of the Notes....................................................................12
Section 2.02. Form..................................................................................14
Section 2.03. Execution, Authentication and Delivery................................................14
Section 2.04. Temporary Notes.......................................................................15
Section 2.05. Registration; Registration of Transfer and Exchange...................................15
Section 2.06. Mutilated, Destroyed, Lost or Stolen Notes............................................16
Section 2.07. Persons Deemed Owner..................................................................17
Section 2.08. Payment of Principal and Interest; Interest on Overdue Principal; Principal
and Interest Rights Preserved.........................................................17
Section 2.09. Cancellation..........................................................................18
Section 2.10. Authentication and Delivery of Notes..................................................18
Section 2.11. Release of Collateral.................................................................24
ARTICLE III
Covenants
Section 3.01. Payment of Principal and Interest.....................................................24
Section 3.02. Maintenance of Office or Agency.......................................................24
Section 3.03. Money for Payments To Be Held in Trust................................................24
Section 3.04. Existence.............................................................................26
Section 3.05. Protection of Collateral..............................................................26
Section 3.06. Opinions as to Collateral.............................................................27
Section 3.07. Performance of Obligations; Servicing; Commission Filings.............................27
Section 3.08. Negative Covenants....................................................................29
Section 3.09. Annual Statement as to Compliance.....................................................29
Section 3.10. Note Issuer May Consolidate, etc......................................................30
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Section 3.11. Successor or Transferee...............................................................32
Section 3.12. No Other Business.....................................................................32
Section 3.13. No Borrowing..........................................................................32
Section 3.14. Servicer's Obligations................................................................32
Section 3.15. No Additional Notes...................................................................32
Section 3.16. Guarantees, Loans, Advances and Other Liabilities.....................................32
Section 3.17. Capital Expenditures..................................................................32
Section 3.18. Non-Routine Periodic Adjustment.......................................................32
Section 3.19. Restricted Payments...................................................................32
Section 3.20. Notice of Events of Default...........................................................33
Section 3.21. Further Instruments and Acts..........................................................33
ARTICLE IV
Satisfaction and Discharge; Defeasance
Section 4.01. Satisfaction and Discharge of Note Indenture; Defeasance..............................33
Section 4.02. Conditions to Defeasance..............................................................35
Section 4.03. Application of Trust Money............................................................36
Section 4.04. Repayment of Moneys Held by Paying Agent..............................................36
ARTICLE V
Remedies
Section 5.01. Events of Default.....................................................................36
Section 5.02. Acceleration of Maturity; Rescission and Annulment....................................37
Section 5.03. Collection of Indebtedness and Suits for Enforcement by Note Trustee..................38
Section 5.04. Remedies; Priorities..................................................................40
Section 5.05. Optional Possession of the Collateral.................................................41
Section 5.06. Limitation of Suits...................................................................41
Section 5.07. Unconditional Rights of Noteholders To Receive Principal and Interest.................42
Section 5.08. Restoration of Rights and Remedies....................................................42
Section 5.09. Rights and Remedies Cumulative........................................................42
Section 5.10. Delay or Omission Not a Waiver........................................................43
Section 5.11. Control by Noteholders................................................................43
Section 5.12. Waiver of Past Defaults...............................................................43
Section 5.13. Undertaking for Costs.................................................................44
Section 5.14. Waiver of Stay or Extension Laws......................................................44
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Section 5.15. Action on Notes.......................................................................44
Section 5.16. Performance and Enforcement of Certain Obligations....................................44
ARTICLE VI
The Note Trustee
Section 6.01. Duties of Note Trustee................................................................45
Section 6.02. Rights of Note Trustee................................................................46
Section 6.03. Individual Rights of Note Trustee.....................................................47
Section 6.04. Note Trustee's Disclaimer.............................................................47
Section 6.05. Notice of Defaults....................................................................47
Section 6.06. Reports by Note Trustee to Holders....................................................48
Section 6.07. Compensation and Indemnity............................................................48
Section 6.08. Replacement of Note Trustee...........................................................49
Section 6.09. Successor Note Trustee by Merger......................................................50
Section 6.10. Appointment of Co-Trustee or Separate Trustee.........................................50
Section 6.11. Eligibility; Disqualification.........................................................51
Section 6.12. Preferential Collection of Claims Against Note Issuer.................................52
Section 6.13. Representations and Warranties of Note Trustee........................................52
Section 6.14. Covenants of the Note Trustee.........................................................52
ARTICLE VII
Noteholders' Lists and Reports
Section 7.01. Note Issuer To Furnish Note Trustee Names and Addresses of Noteholders................53
Section 7.02. Preservation of Information; Communications to Noteholders............................53
Section 7.03. Reports by Note Issuer................................................................53
Section 7.04. Reports by Note Trustee...............................................................54
ARTICLE VIII
Accounts, Disbursements and Releases
Section 8.01. Collection of Money...................................................................54
Section 8.02. Collection Account....................................................................55
Section 8.03. General Provisions Regarding the Collection Account...................................57
Section 8.04. Release of Collateral.................................................................59
Section 8.05. Opinion of Counsel....................................................................59
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Section 8.06. Reports by Independent Accountants....................................................59
ARTICLE IX
Supplemental Note Indentures
Section 9.01. Supplemental Note Indentures Without Consent of Noteholders...........................60
Section 9.02. Supplemental Note Indentures with Consent of Noteholders..............................61
Section 9.03. Execution of Supplemental Note Indentures.............................................63
Section 9.04. Effect of Supplemental Note Indenture.................................................63
Section 9.05. Conformity with Trust Indenture Act...................................................63
ARTICLE X
Redemption of Notes
Section 10.01. Optional Redemption by Note Issuer....................................................63
Section 10.02. Form of Optional Redemption Notice....................................................64
Section 10.03. Notes Payable on Optional Redemption Date or Payment Date.............................64
Section 10.04. Mandatory Redemption by Note Issuer...................................................64
Section 10.05. Form of Mandatory Redemption Notice...................................................65
Section 10.06. Notes Payable on Mandatory Redemption Date or Payment Date............................65
ARTICLE XI
Miscellaneous
Section 11.01. Compliance Certificates and Opinions, etc.............................................65
Section 11.02. Form of Documents Delivered to Note Trustee...........................................67
Section 11.03. Acts of Noteholders...................................................................68
Section 11.04. Notices...............................................................................68
Section 11.05. Notices to Noteholders; Waiver........................................................70
Section 11.06. Conflict with Trust Indenture Act.....................................................71
Section 11.07. Effect of Headings and Table of Contents..............................................71
Section 11.08. Successors and Assigns................................................................71
Section 11.09. Severability..........................................................................71
Section 11.10. Benefits of Note Indenture............................................................71
Section 11.11. Legal Holidays........................................................................72
Section 11.12. Governing Law.........................................................................72
Section 11.13. Counterparts..........................................................................72
Section 11.14. Recording of Note Indenture...........................................................72
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Section 11.15. Trust Obligation......................................................................72
Section 11.16. No Recourse to Note Issuer............................................................72
Section 11.17. Inspection............................................................................72
SIGNATURE PAGE.........................................................................................S-1
SCHEDULE A -- Expected Amortization Schedule
SCHEDULE B -- Required Overcollateralization Level Schedule
EXHIBIT A-1 -- Form of Sale Agreement
EXHIBIT A-2 -- Form of Servicing Agreement
EXHIBIT B -- Form of Note
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NOTE INDENTURE dated as of July 29, 1999, between BEC FUNDING LLC, a
Delaware limited liability company (the "Note Issuer"), and THE BANK OF NEW
YORK, a New York banking corporation, as trustee (the "Note Trustee").
RECITALS
The Note Issuer has duly authorized the execution and delivery of this
Note Indenture to provide for the issuance of its Notes with an aggregate
principal amount of $725,000,000 and the Note Issuer and the Note Trustee are
executing and delivering this Note Indenture in order to provide for the
issuance of the Notes.
GRANTING CLAUSE
The Note Issuer hereby Grants to the Note Trustee at the Issuance Date,
as Note Trustee for the benefit of the Holders of the Notes, all of the Note
Issuer's right, title and interest in and to (a) the Transition Property
transferred by the Seller to the Note Issuer pursuant to the Sale Agreement and
all proceeds thereof, (b) the Sale Agreement, (c) the Servicing Agreement, (d)
the Administration Agreement, (e) the Collection Account (including all
subaccounts thereof) and all amounts or investment property on deposit therein
or credited thereto from time to time, (f) all other property of whatever kind
owned from time to time by the Note Issuer, including accounts, general
intangibles, equipment and inventory, (g) the security interest with respect to
the Transition Property granted by the Seller to the Note Issuer in the Sale
Agreement, (h) all present and future claims, demands, causes and choses in
action in respect of any or all of the foregoing and all payments on or under
and all proceeds of every kind and nature whatsoever in respect of any or all of
the foregoing, including all proceeds of the conversion thereof, voluntary or
involuntary, into cash or other liquid property, all cash proceeds, accounts,
accounts receivable, notes, drafts, acceptances, chattel paper, checks, deposit
accounts, insurance proceeds, condemnation awards, rights to payment of any and
every kind, and other forms of obligations and receivables, instruments and
other property which at any time constitute all or part of or are included in
the proceeds of any of the foregoing and (i) all proceeds of the foregoing
(collectively, the "Collateral"; it being understood that the following do not
constitute Collateral: (i) amounts required to be released pursuant to or
contemplated in the terms hereof, including net investment earnings on the
Capital Subaccount that are required to be released to the Note Issuer pursuant
to Article VIII and (ii) proceeds from the sale of the Notes required to pay
costs of issuance with respect to the Notes or the Certificates as set forth on
the flow of funds memorandum delivered on the Issuance Date (together with any
interest earnings thereon), it being understood that such amounts described in
clauses (i) and (ii) above shall not be subject to Section 3.16.
The foregoing Grant is made in trust to secure the payment of principal
of, interest on, and any other amounts (which shall include all amounts payable
to the Note Trustee, the Certificate Trustee and the Delaware Trustee under
this Note Indenture, the Certificate Indenture and the Fee and Indemnity
Agreement) owing in respect of, the Notes, equally and ratably without
prejudice, priority or distinction, except as expressly provided in this Note
Indenture, and to secure compliance with the provisions of this Note Indenture
with respect to the Notes, all as
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provided in this Note Indenture. This Note Indenture constitutes a security
agreement within the meaning of the UCC to the extent that, under Massachusetts
law, the provisions of the UCC are applicable hereto.
The Note Trustee, as trustee on behalf of the Holders of the Notes,
acknowledges such grant, accepts the trusts hereunder in accordance with the
provisions hereof and agrees to perform its duties herein required.
AND IT IS HEREBY COVENANTED, DECLARED AND AGREED between the parties
hereto that all Notes are to be issued, countersigned and delivered and that all
of the Collateral is to be held and applied, subject to the further covenants,
conditions, releases, uses and trusts hereinafter set forth, and the Note
Issuer, for itself and any successor, does hereby covenant and agree to and with
the Note Trustee and its successors in said trust, for the benefit of the
Holders, as follows:
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.01. (a) Definitions. Except as otherwise specified herein
or as the context may otherwise require, the following terms have the respective
meanings set forth below for all purposes of this Note Indenture.
"Act" has the meaning specified in Section 11.03(a).
"Administration Agreement" means the Administration Agreement dated as
of July 29, 1999, between Boston Edison Company, as Administrator, and the Note
Issuer, as the same may be amended and supplemented from time to time.
"Administrator" means Boston Edison Company, a Massachusetts
corporation, or any successor Administrator under the Administration Agreement.
"Administration Fee" means the fee payable to the Administrator
pursuant to the Administration Agreement.
"Affiliate" means, with respect to any specified Person, any other
Person controlling or controlled by or under common control with such specified
Person. For the purposes of this definition, "control" when used with respect to
any specified Person means the power to direct the management and policies of
such Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"Agencies" means collectively the Massachusetts Development Finance
Agency and the Massachusetts Health and Educational Facilities Authority.
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"Authorized Officer" means, with respect to the Note Issuer, any
officer of the Note Issuer who is authorized to act for the Note Issuer in
matters relating to the Note Issuer and who is identified on the list of
Authorized Officers delivered by the Note Issuer to the Note Trustee on the
Issuance Date (as such list may be modified or supplemented by the Note Issuer
from time to time thereafter).
"Basic Documents" means, collectively, this Note Indenture, the
Certificate Indenture, the Declaration of Trust, the Sale Agreement, the
Servicing Agreement, the Administration Agreement, the Note Purchase Agreement,
the Fee and Indemnity Agreement and the Underwriting Agreement.
"Business Day" means any day other than a Saturday, a Sunday or a day
on which banking institutions or trust companies in New York, New York, Boston,
Massachusetts or Wilmington, Delaware are authorized or obligated by law,
regulation or executive order to remain closed.
"Capital Subaccount" has the meaning set forth in Section 8.02(a).
"Certificate Issuer" has the meaning set forth in the Certificate
Indenture.
"Certificate Indenture" means the Certificate Indenture dated as of
July 29, 1999, between the Certificate Issuer, the Delaware Trustee and the
Certificate Trustee, as the same may be further amended and supplemented from
time to time.
"Certificate Trustee" means the Person acting as certificate trustee
under the Certificate Indenture.
"Certificates" has the meaning set forth in the Certificate Indenture.
"Class" means any one of the classes of Notes.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time, and Treasury Regulations promulgated thereunder.
"Collateral" has the meaning specified in the Granting Clause of this
Note Indenture.
"Collection Account" has the meaning specified in Section 8.02(a).
"Corporate Trust Office" means the principal office of the Note Trustee
at which at any particular time its corporate trust business shall be
administered, which office at the date of the execution of this Note Indenture
is located at 101 Barclay Street, Floor 12 East, New York, New York 10286,
Attention: Asset Backed Finance Unit, or at such other address as the Note
Trustee may designate from time to time by notice to the Noteholders and the
Note Issuer, or the principal corporate trust office of any successor Note
Trustee (the address of which the successor Note Trustee will notify the
Noteholders and the Note Issuer).
"Covenant Defeasance Option" has the meaning specified in Section
4.01(b).
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"Declaration of Trust" has the meaning set forth in the Certificate
Indenture.
"Default" means any occurrence that is, or with notice or the lapse of
time or both would become, an Event of Default.
"Delaware Trustee" means the Person acting as Delaware Trustee under
the Declaration of Trust and the Certificate Indenture.
"DTC Agreement" has the meaning set forth in the Certificate Indenture.
"DTE" means the Massachusetts Department of Telecommunications and
Energy and any successor thereto.
"Duff & Phelps" means Duff & Phelps Credit Rating Co. or its successor.
"Eligible Deposit Account" means either (a) a segregated trust account
with an Eligible Institution or (b) a segregated trust account with the
corporate trust department of a depository institution organized under the laws
of the United States of America or any one of the states thereof or the District
of Columbia (or any domestic branch of a foreign bank), having corporate trust
powers and acting as trustee for funds deposited in such account, so long as any
of the securities of such depository institution shall have a credit rating from
each Rating Agency in one of its generic rating categories which signifies
investment grade.
"Eligible Institution" means (a) the corporate trust department of the
Note Trustee or (b) a depository institution organized under the laws of the
United States of America, any State or the District of Columbia (or any domestic
branch of a foreign bank), (i) which has either (A) a long-term unsecured debt
rating of AAA by Standard & Poor's and Aaa by Moody's or (B) a certificate of
deposit rating of A-1+ by Standard & Poor's and P-1 by Moody's, or any other
long-term, short-term or certificate of deposit rating acceptable to the Rating
Agencies and (ii) whose deposits are insured by the FDIC. If so qualified under
clause (b) above, the Note Trustee may be considered an Eligible Institution for
the purposes of clause (a) of the definition of Eligible Deposit Account.
"Eligible Investments" mean instruments or investment property
denominated in United States currency which evidence:
(a) direct obligations of, or obligations fully and
unconditionally guaranteed as to timely payment by, the United States
of America;
(b) demand deposits, time deposits, certificates of deposit or
bankers' acceptances of depository institutions meeting the
requirements of clause (b) of the definition of Eligible Institution;
(c) commercial paper (other than commercial paper of the
Seller) having, at the time of the investment or contractual commitment
to invest therein, a rating from each
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of the Rating Agencies from which a rating is available in the highest
investment category granted thereby;
(d) investments in money market funds having a rating from
each of the Rating Agencies from which a rating is available in the
highest investment category granted thereby (including funds for which
the Note Trustee or any of its Affiliates is investment manager or
advisor);
(e) repurchase obligations with respect to any security that
is a direct obligation of, or fully guaranteed by, the United States of
America or any agency or instrumentality thereof the obligations of
which are backed by the full faith and credit of the United States of
America, in either case entered into with depository institutions
meeting the requirements of clause (b) of the definition of Eligible
Institution;
(f) any other investment permitted by each of the Rating
Agencies; and
(g) The Bank of New York Deposit Reserve, an interest bearing
account of The Bank of New York,
in each case which mature on or before the Business Day preceding the next
Payment Date.
"Event of Default" has the meaning specified in Section 5.01.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Expected Amortization Schedule" means, with respect to each Class of
Notes, the schedule attached as Schedule A hereto.
"FDIC" means the Federal Deposit Insurance Corporation or any
successor.
"Fee and Indemnity Agreement" means the fee and indemnity agreement
dated as of July 29, 1999, among the Note Issuer, the Delaware Trustee, the
Certificate Trustee, the Certificate Issuer and the Agencies.
"Final Maturity Date" means, with respect to any Class of Notes, the
Final Maturity Date therefor, as specified in Section 2.01(b).
"Financial Asset" means a "financial asset" as defined in Section
8-102(a)(9) of the Mass. UCC.
"Fitch IBCA" means Fitch IBCA, Inc. or its successor.
"General Subaccount" has the meaning set forth in Section 8.02(a).
"Grant" means mortgage, pledge, collaterally assign and grant a lien
upon and a security interest pursuant to this Note Indenture. A Grant of the
Collateral or of any other agreement or
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instrument shall include all rights, powers and options (but none of the
obligations) of the Granting party thereunder, including after an Event of
Default which is continuing the immediate and continuing right to claim for,
collect, receive and give receipt for payments in respect of the Collateral and
all other moneys payable thereunder, to give and receive notices and other
communications, to make waivers or other agreements, to exercise all rights and
options, to bring Proceedings in the name of the Granting party or otherwise and
generally to do and receive anything that the Granting party is or may be
entitled to do or receive thereunder or with respect thereto.
"Independent" means, when used with respect to any specified Person,
that the Person (a) is in fact independent of the Note Issuer, any other obligor
upon the Notes, the Seller, the Servicer and any Affiliate of any of the
foregoing Persons, (b) does not have any direct financial interest or any
material indirect financial interest in the Note Issuer, any such other obligor,
the Seller, the Servicer or any Affiliate of any of the foregoing Persons and
(c) is not connected with the Note Issuer, any such other obligor, the Seller,
the Servicer or any Affiliate of any of the foregoing Persons as an officer,
employee, promoter, underwriter, trustee, partner, director or person performing
similar functions.
"Independent Certificate" means a certificate or opinion to be
delivered to the Note Trustee under the circumstances described in, and
otherwise complying with, the applicable requirements of Section 11.01, made by
an Independent appraiser or other expert appointed by an Issuer Order and
consented to by the Note Trustee, and such opinion or certificate shall state
that the signer has read the definition of "Independent" in this Note Indenture
and that the signer is Independent within the meaning thereof.
"Issuance Date" has the meaning set forth in Section 2.01(c)(i).
"Issuer Order" and "Issuer Request" means a written order or request
signed in the name of the Note Issuer by any one of its Authorized Officers and
delivered to the Note Trustee.
"Legal Defeasance Option" has the meaning specified in Section 4.01(b).
"Mandatory Redemption Date" has the meaning specified in Section 10.04.
"Mandatory Redemption Price" has the meaning specified in Section
10.04.
"Massachusetts UCC" means Mass. G.L. c.106.
"Minimum Denomination" means $1,000 or any integral multiple thereof.
"Moody's" means Moody's Investors Service Inc. or its successor.
"New York UCC" means N.Y. U.C.C. (McKinney 1991).
"Noteholder" or "Holder" means the Person in whose name a Note is
registered on the Note Register.
"Note Indenture" or "this Note Indenture" means this instrument as
originally executed and, as from time to time supplemented or amended by one or
more indentures supplemental
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hereto entered into pursuant to the applicable provisions hereof, as so
supplemented or amended, or both, and shall include the forms and terms of the
Notes established hereunder.
"Note Interest Rate" has the meaning specified in Section 2.01(b).
"Note Issuer" means the party named as such in this Note Indenture
until a successor replaces it and, thereafter, means the successor and, for
purposes of any provision contained herein and required by the Trust Indenture
Act, each other obligor on the Notes.
"Note Purchase Agreement" has the meaning set forth in the Certificate
Indenture.
"Note Register" and "Note Registrar" have the respective meanings
specified in Section 2.05.
"Notes" has the meaning specified in Section 2.01(a).
"Note Trustee" means The Bank of New York, a New York banking
corporation, as Note Trustee under this Note Indenture, or any successor Note
Trustee under this Note Indenture.
"Officer's Certificate" means a certificate signed by any Authorized
Officer of the Note Issuer, under the circumstances described in, and otherwise
complying with, the applicable requirements of Section 11.01, and delivered to
the Note Trustee.
"Operating Expenses" means all fees, costs and expenses of, and
indemnities owed by, the Note Issuer, including all amounts owed by the Note
Issuer to the Note Trustee, the Certificate Issuer, the Certificate Trustee, the
Delaware Trustee and the Agencies, the Servicing Fee, the Administration Fee,
any fees, costs and expenses payable or reimbursable by the Note Issuer to the
Administrator, Seller or Servicer and legal and accounting fees, costs and
expenses of the Note Issuer and the Certificate Issuer.
"Opinion of Counsel" means one or more written opinions of counsel who
may, except as otherwise expressly provided in this Note Indenture, be an
employee of or counsel to the Note Issuer and who shall be reasonably
satisfactory to the Note Trustee, and which opinion or opinions shall be
addressed to the Note Trustee, as trustee, shall comply with any applicable
requirements of Section 11.01, and shall be in form and substance reasonably
satisfactory to the Note Trustee.
"Optional Redemption Date" means the Payment Date specified by the Note
Issuer for the redemption of the Notes pursuant to Section 10.01.
"Optional Redemption Price" has the meaning specified in Section 10.01.
"Outstanding" means, as of the date of determination, all Notes
theretofore authenticated and delivered under this Note Indenture except:
(i) Notes theretofore cancelled by the Note Registrar or
delivered to the Note Registrar for cancellation;
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(ii) Notes or portions thereof the payment for which money in
the necessary amount has been theretofore deposited with the Note
Trustee or any Paying Agent in trust for the Holders of such Notes
(provided, however, that if such Notes are to be redeemed, notice of
such redemption has been duly given pursuant to this Note Indenture or
provision made therefor, reasonably satisfactory to the Note Trustee);
and
(iii) Notes in exchange for or in lieu of other Notes which
have been authenticated and delivered pursuant to this Note Indenture
unless proof satisfactory to the Note Trustee is presented that any
such Notes are held by a bona fide purchaser;
provided, however, that in determining whether the Holders of the requisite
Outstanding Amount of the Notes or any Class thereof have given any request,
demand, authorization, direction, notice, consent or waiver hereunder or under
any Basic Document, Notes owned by the Note Issuer, any other obligor upon the
Notes, the Seller or any Affiliate of any of the foregoing Persons shall be
disregarded and deemed not to be Outstanding, except that, in determining
whether the Note Trustee shall be protected in relying upon any such request,
demand, authorization, direction, notice, consent or waiver, only Notes that the
Note Trustee actually knows to be so owned shall be so disregarded. Notes so
owned that have been pledged in good faith may be regarded as Outstanding if the
pledgee establishes to the satisfaction of the Note Trustee the pledgee's right
so to act with respect to such Notes and that the pledgee is not the Note
Issuer, any other obligor upon the Notes, the Seller or any Affiliate of any of
the foregoing Persons.
"Outstanding Amount" means the aggregate principal amount of all Notes
or, if the context requires, all Notes of a Class, Outstanding at the date of
determination.
"Overcollateralization Subaccount" has the meaning specified in Section
8.02(a).
"Paying Agent" means the Note Trustee or any other Person that meets
the eligibility standards for the Note Trustee specified in Section 6.11 and is
authorized by the Note Issuer to make payment of principal of or interest on the
Notes on behalf of the Note Issuer.
"Payment Date" has the meaning specified in Section 2.01(c)(ii).
"Person" means any individual, corporation, limited liability company,
estate, partnership, joint venture, association, joint stock company, trust
(including any beneficiary thereof), unincorporated organization or government
or any agency or political subdivision thereof.
"Predecessor Note" means, with respect to any particular Note, every
previous Note evidencing all or a portion of the same debt as that evidenced by
such particular Note; and, for the purpose of this definition, any Note
authenticated and delivered under Section 2.06 in lieu of a mutilated, lost,
destroyed or stolen Note shall be deemed to evidence the same debt as the
mutilated, lost, destroyed or stolen Note.
"Proceeding" means any suit in equity, action at law or other judicial
or administrative proceeding.
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"Projected Principal Balance" means, as of any Payment Date on any
Class of Notes, the projected outstanding principal amount of such Class of
Notes for such Payment Date set forth in the Expected Amortization Schedule.
"Rating Agency" means, collectively, Moody's, Standard & Poor's, Fitch
IBCA and Duff & Phelps. If no such organization or successor is any longer in
existence, "Rating Agency" shall be a nationally recognized statistical rating
organization or other comparable Person designated by the Note Issuer, notice of
which designation shall be given to the Note Trustee, the Certificate Trustee
and the Servicer.
"Rating Agency Condition" means, with respect to any action, that each
Rating Agency shall have been given ten days prior notice thereof and that each
of the Rating Agencies shall have notified the Servicer, the Note Issuer, the
Note Trustee, the Agencies and the Certificate Trustee in writing that such
action will not result in a reduction or withdrawal of the then current rating
by such Rating Agency of any Class of the Notes or any Class of the
Certificates.
"Record Date" means, with respect to a Payment Date, Optional
Redemption Date or Mandatory Redemption Date, the close of business on the last
day of the calendar month preceding the calendar month in which such Payment
Date, Optional Redemption Date or Mandatory Redemption Date occurs.
"Registered Holder" means the Person in whose name a Note is registered
on the Note Register on the applicable Record Date.
"Repurchase Date" has the meaning specified in the Sale Agreement.
"Required Capital Level" means, as of any Payment Date, .50 percent of
the initial principal amount of the Notes.
"Required Overcollateralization Level" means, as of any Payment Date,
the amount required to be on deposit in the Overcollateralization Subaccount as
specified in Schedule B hereto.
"Reserve Subaccount" has the meaning specified in Section 8.02(a).
"Responsible Officer" means any officer within the Corporate Trust
Office, including any Managing Director, Vice President, Assistant Vice
President, Secretary, Assistant Secretary or Assistant Treasurer or any other
officer of the Note Trustee customarily performing functions similar to those
performed by any of the above designated officers and also, with respect to a
particular matter, any other officer to whom such matter is referred because of
such officer's knowledge and familiarity with the particular subject.
"Sale Agreement" means the Transition Property Purchase and Sale
Agreement dated as of July 29, 1999, between the Note Issuer and the Seller, in
the form of Exhibit A-1, as amended and supplemented from time to time.
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"Scheduled Maturity Date" means, with respect to any Class of Notes,
the Scheduled Maturity Date therefor, as specified in Section 2.01(b).
"Securities Account" means the Collection Account which shall be a
"securities account," as defined in Section 8-501 of the N.Y. UCC.
"Securities Act" means the Securities Act of 1933, as amended.
"Securities Intermediary" means the Note Trustee, acting as a
"securities intermediary," as defined in Section 8-102(a)(14) of the N.Y. UCC.
"Security Entitlement" means a "security entitlement" as defined in
Section 8-102(a)(17) of the N.Y. UCC.
"Semiannual Interest" has the meaning specified in Section 2.01(c)(iv).
"Semiannual Principal" means, with respect to any Payment Date on any
Class of Notes, the excess, if any, of the Outstanding Amount of such Class of
Notes over the outstanding principal balance of such Class of Notes specified
for such Payment Date in the Expected Amortization Schedule.
"Servicing Agreement" means the Transition Property Servicing Agreement
dated as of July 29, 1999, between the Note Issuer and the Servicer, in the form
of Exhibit A-2, as amended and supplemented from time to time.
"Standard & Poor's" means Standard & Poor's Ratings Services, a
division of The McGraw-Hill Companies, Inc. or its successor.
"State" means any one of the 50 states of the United States of America
or the District of Columbia.
"Statute" means Chapter 164 of the Massachusetts Acts of 1997.
"Successor Servicer" has the meaning specified in Section 3.07(e).
"Trust Indenture Act" means the Trust Indenture Act of 1939 as in force
on the date hereof, unless otherwise specifically provided.
"UCC" means, unless the context otherwise requires, the Uniform
Commercial Code, as in effect in the relevant jurisdiction, as amended from time
to time.
"Underwriting Agreement" means the Underwriting Agreement dated as July
22, 1999, among the Seller, the Note Issuer and Lehman Brothers Inc. and
Goldman, Sachs & Co., as the representatives of the several underwriters named
therein.
"U.S. Government Obligations" means direct obligations (or certificates
representing an ownership interest in such obligations) of the United States of
America (including any agency or
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instrumentality thereof) for the payment of which the full faith and credit of
the United States of America is pledged.
(b) Except as otherwise specified herein or as the context may
otherwise require, the following terms have the respective meanings set forth in
the Servicing Agreement as in effect on the Issuance Date for all purposes of
this Note Indenture, and the definitions of such terms are equally applicable
both to the singular and plural forms of such terms:
Section of
Term Servicing Agreement
---- -------------------
Advice Letter...................................................................... Section 1.01
Financing Order.................................................................... Section 1.01
Non-Routine Periodic Adjustment.................................................... Section 1.01
Principal Balance.................................................................. Section 1.01
RTC Charge......................................................................... Section 1.01
RTC Charge Collections............................................................. Section 1.01
Seller............................................................................. Section 1.01
Servicer........................................................................... Section 1.01
Servicer Default................................................................... Section 1.01
Servicing Fee...................................................................... Section 1.01
Transition Property................................................................ Section 1.01
Section 1.02. Incorporation by Reference of Trust Indenture Act.
Whenever this Note Indenture refers to a provision of the Trust Indenture Act,
the provision is incorporated by reference in and made a part of this Note
Indenture. The following Trust Indenture Act terms used in this Note Indenture
have the following meanings:
"indenture securities" means the Notes.
"indenture security holder" means a Noteholder.
"indenture to be qualified" means this Note Indenture.
"indenture trustee" or "institutional trustee" means the Note Trustee.
"obligor" on the indenture securities means the Note Issuer and any
other obligor on the indenture securities.
All other Trust Indenture Act terms used in this Note Indenture that
are defined by the Trust Indenture Act, defined by Trust Indenture Act reference
to another statute or defined by Commission rule have the meanings assigned to
them by such definitions.
Section 1.03. Rules of Construction. Unless the context otherwise
requires:
(i) a term has the meaning assigned to it;
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(ii) 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;
(iii) "or" is not exclusive;
(iv) "including" means including without limitation;
(v) words in the singular include the plural and words in the
plural include the singular;
(vi) the words "herein," "hereof," "hereunder" and other words
of similar import refer to this Note Indenture as a whole and not to
any particular Article, Section or other subdivision; and
(vii) all references in this Note Indenture to designated
"Articles," "Sections" and other subdivisions are to the designated
Articles, Sections and other subdivisions of this Note Indenture;
ARTICLE II
THE NOTES
Section 2.01. Terms of the Notes.
(a) Authorization; Designation. The issuance of the Notes in an
aggregate initial principal amount of $725,000,000 is hereby authorized and the
Notes shall be designated as the BEC Funding LLC Notes (the "Notes"), and
further denominated as Classes A-1 through A-5.
(b) Initial Principal Amount; Note Interest Rate; Scheduled Maturity
Date; Final Maturity Date. The Notes of each Class shall have the initial
principal amount, bear interest at the rates per annum and shall have Scheduled
Maturity Dates and Final Maturity Dates as set forth below:
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Initial Principal Note Interest Scheduled
Class Amount Rate Maturity Date Final Maturity Date
----- ------ ---- ------------- -------------------
A-1 $108,500,000 5.99% 3/15/01 3/15/03
A-2 170,609,837 6.45 9/15/03 9/15/05
A-3 103,390,163 6.62 3/15/05 3/15/07
A-4 170,875,702 6.91 9/15/07 9/15/09
A-5 171,624,298 7.03 3/15/10 3/15/12
The Note Interest Rate shall be computed on the basis of a 360-day year
of twelve 30-day months.
The Notes shall be issuable in not less than Minimum Denominations.
(c) Authentication Date; Payment Dates; Expected Amortization Schedule
for Principal; Semiannual Interest.
(i) Authentication Date. The Notes that are authenticated and
delivered by the Note Trustee to or upon the order of the Note Issuer
on July 29 1999 (the "Issuance Date") shall have as their date of
authentication July 29, 1999.
(ii) Payment Dates. The Payment Dates for the Notes shall be
September 15 and March 15 of each year or, if any such date is not a
Business Day, the next succeeding Business Day, commencing on March 15,
2000 and continuing until the earlier of repayment of the Notes in full
or the Final Maturity Date for Class A-5 of the Notes.
(iii) Expected Amortization Schedule for Principal. Unless an
Event of Default shall have occurred and be continuing and the unpaid
principal amount of all Notes and accrued interest thereon has been
declared to be due and payable, on each Payment Date, the Note Trustee
shall pay to the Noteholders of record as of the related Record Date
amounts payable pursuant to Section 8.02(d) as principal, in the
following order and priority: (1) to the holders of the Class A-1
Notes, until the Outstanding Amount of such Class of Notes thereof has
been reduced to zero; (2) to the holders of the Class A-2 Notes, until
the Outstanding Amount of such Class of Notes thereof has been reduced
to zero; (3) to the holders of the Class A-3 Notes, until the
Outstanding Amount of such Class of Notes thereof has been reduced to
zero; (4) to the holders of the Class A-4 Notes, until the Outstanding
Amount of such Class of Notes thereof has been reduced to zero; and (5)
to the holders of the Class A-5 Notes until the Outstanding Amount of
such Class of Notes thereof has been reduced to zero; provided,
however, that in no event shall a principal payment pursuant to this
Section 2.01(c)(iii) on any Class on a Payment Date be greater than the
amount that reduces the Outstanding Amount of such Class of Notes to
the amount specified in the Expected Amortization Schedule. Partial
payments
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of any scheduled amortization payment shall be allocated within any
Class of Notes pro rata.
(iv) Semiannual Interest. Semiannual Interest will be payable
on each Class of Notes on each Payment Date in an amount equal to
one-half of the product of (i) the applicable Note Interest Rate and
(ii) the Outstanding Amount of the related Class of Notes as of the
close of business on the preceding Payment Date after giving effect to
all payments of principal made to the Holders of the related Class of
Notes on such preceding Payment Date; provided, however, that with
respect to the initial Payment Date or, if no payment has yet been
made, interest on the outstanding principal balance will accrue from
and including the Issuance Date to, but excluding, that Payment Date.
Section 2.02. Form. The Notes and the Note Trustee's certificate of
authentication shall be in substantially the forms set forth in Exhibit B, with
such appropriate insertions, omissions, substitutions and other variations as
are required or permitted by this Note Indenture 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 officers executing
such Notes, as evidenced by their execution of such Notes. Any portion of the
text of any Note may be set forth on the reverse thereof, with an appropriate
reference thereto on the face of the Note.
The Notes 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 officers executing such Notes, as evidenced
by their execution of such Notes.
The terms of the Notes set forth in Exhibit B are part of the terms of
this Note Indenture.
Section 2.03. Execution, Authentication and Delivery. The Notes shall
be executed on behalf of the Note Issuer by any of its Authorized Officers. The
signature of any such Authorized Officer on the Notes may be manual or
facsimile.
Notes bearing the manual or facsimile signature of individuals who were
at any time Authorized Officers of the Note Issuer shall bind the Note Issuer,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Notes or did not hold
such offices at the date of such Notes.
At any time and from time to time after the execution and delivery of
this Note Indenture, the Note Issuer may deliver Notes executed by the Note
Issuer to the Note Trustee pursuant to an Issuer Order for authentication; and
the Note Trustee shall authenticate and deliver such Notes as in this Note
Indenture provided and not otherwise.
No Note shall be entitled to any benefit under this Note Indenture or
be valid or obligatory for any purpose, unless there appears on such Note a
certificate of authentication substantially in the form provided for herein
executed by the Note Trustee by the manual signature of one of its authorized
signatories, and such certificate upon any Note shall be conclusive evidence,
and the only evidence, that such Note has been duly authenticated and delivered
hereunder.
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Section 2.04. Temporary Notes. Pending the preparation of definitive
Notes, the Note Issuer may execute, and upon receipt of an Issuer Order the Note
Trustee shall authenticate and deliver, temporary Notes which are printed,
lithographed, typewritten, mimeographed or otherwise produced, of the tenor of
the definitive Notes in lieu of which they are issued and with such variations
not inconsistent with the terms of this Note Indenture as the officers executing
such Notes may determine, as evidenced by their execution of such Notes.
If temporary Notes are issued, the Note Issuer will cause definitive
Notes to be prepared without unreasonable delay. After the preparation of
definitive Notes, the temporary Notes shall be exchangeable for definitive Notes
upon surrender of the temporary Notes at the office or agency of the Note Issuer
to be maintained as provided in Section 3.02, without charge to the Holder. Upon
surrender for cancellation of any one or more temporary Notes, the Note Issuer
shall execute and the Note Trustee shall authenticate and deliver in exchange
therefor a like principal amount of definitive Notes of Minimum Denominations.
Until so exchanged, the temporary Notes shall in all respects be entitled to the
same benefits under this Note Indenture as definitive Notes.
Section 2.05. Registration; Registration of Transfer and Exchange. The
Note Issuer shall cause to be kept a register (the "Note Register") in which,
subject to such reasonable regulations as it may prescribe, the Note Issuer
shall provide for the registration of Notes and the registration of transfers of
Notes. The Note Trustee shall be "Note Registrar" for the purpose of registering
Notes and transfers of Notes as herein provided. Upon any resignation of any
Note Registrar, the Note Issuer shall promptly appoint a successor or, if it
elects not to make such an appointment, assume the duties of Note Registrar.
If a Person other than the Note Trustee is appointed by the Note Issuer
as Note Registrar, the Note Issuer will give the Note Trustee prompt written
notice of the appointment of such Note Registrar and of the location, and any
change in the location, of the Note Register, and the Note Trustee shall have
the right to inspect the Note Register at all reasonable times and to obtain
copies thereof, and the Note Trustee shall have the right to rely upon a
certificate executed on behalf of the Note Registrar by a Responsible Officer
thereof as to the names and addresses of the Holders of the Notes and the
principal amounts and number of such Notes.
Upon surrender for registration of transfer of any Note at the office
or agency of the Note Issuer to be maintained as provided in Section 3.02, the
Note Issuer shall execute, and the Note Trustee shall authenticate and the
Noteholder shall obtain from the Note Trustee, in the name of the designated
transferee or transferees, one or more new Notes in any Minimum Denominations,
of a like Class and aggregate principal amount.
At the option of the Holder, Notes may be exchanged for other Notes in
any Minimum Denominations, of a like Class and aggregate principal amount, upon
surrender of the Notes to be exchanged at such office or agency. Whenever any
Notes are so surrendered for exchange, the Note Issuer shall execute, and the
Note Trustee shall authenticate and the Noteholder shall obtain from the Note
Trustee, the Notes which the Noteholder making the exchange is entitled to
receive.
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All Notes issued upon any registration of transfer or exchange of Notes
shall be the valid obligations of the Note Issuer, evidencing the same debt, and
entitled to the same benefits under this Note Indenture, as the Notes
surrendered upon such registration of transfer or exchange.
Every Note presented or surrendered for registration of transfer or
exchange shall be duly endorsed by, or be accompanied by (a) a written
instrument of transfer in form satisfactory to the Note Trustee duly executed by
the Holder thereof or such Holder's attorney duly authorized in writing, with
such signature guaranteed by an institution which is a member of one of the
following recognized Signature Guaranty Programs: (i) The Securities Transfer
Agent Medallion Program (STAMP); (ii) The New York Stock Exchange Medallion
Program (MSP); (iii) The Stock Exchange Medallion Program (SEMP); or (iv) in
such other guarantee program acceptable to the Note Trustee, and (b) such other
documents as the Note Trustee may require.
No service charge shall be made to a Holder for any registration of
transfer or exchange of Notes, but the Note Issuer may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any registration of transfer or exchange of Notes, other than
exchanges pursuant to Section 2.04 not involving any transfer.
The preceding provisions of this Section notwithstanding, the Note
Issuer shall not be required to make and the Note Registrar need not register
transfers or exchanges of Notes selected for redemption or of any Note for a
period of 15 days preceding the due date for any payment with respect to the
Note.
Section 2.06. Mutilated, Destroyed, Lost or Stolen Notes. If (i) any
mutilated Note is surrendered to the Note Trustee, or the Note Trustee receives
evidence to its satisfaction of the destruction, loss or theft of any Note, and
(ii) there is delivered to the Note Trustee such security or indemnity as may be
required by it to hold the Note Issuer and the Note Trustee harmless, then, in
the absence of notice to the Note Issuer, the Note Registrar or the Note Trustee
that such Note has been acquired by a protected purchaser, the Note Issuer shall
execute and, upon its request, the Note Trustee shall authenticate and deliver,
in exchange for or in lieu of any such mutilated, destroyed, lost or stolen
Note, a replacement Note of like Class, tenor and principal amount, bearing a
number not contemporaneously outstanding; provided, however, that if any such
destroyed, lost or stolen Note, but not a mutilated Note, shall have become or
within seven days shall be due and payable, or shall have been called for
redemption, instead of issuing a replacement Note, the Note Issuer may pay such
destroyed, lost or stolen Note when so due or payable or upon the Optional
Redemption Date or Mandatory Redemption Date, as applicable, without surrender
thereof. If, after the delivery of such replacement Note or payment of a
destroyed, lost or stolen Note pursuant to the proviso to the preceding
sentence, a protected purchaser of the original Note in lieu of which such
replacement Note was issued presents for payment such original Note, the Note
Issuer and the Note Trustee shall be entitled to recover such replacement Note
(or such payment) from the Person to whom it was delivered or any Person taking
such replacement Note from such Person to whom such replacement Note 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 Note Issuer or
the Note Trustee in connection therewith.
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Upon the issuance of any replacement Note under this Section, the Note
Issuer may require the payment by the Holder of such Note of a sum sufficient to
cover any tax or other governmental charge that may be imposed in relation
thereto and any other reasonable expenses (including the fees and expenses of
the Note Trustee) connected therewith.
Every replacement Note issued pursuant to this Section in replacement
of any mutilated, destroyed, lost or stolen Note shall constitute an original
additional contractual obligation of the Note Issuer, whether or not the
mutilated, destroyed, lost or stolen Note shall be at any time enforceable by
anyone, and shall be entitled to all the benefits of this Note Indenture equally
and proportionately with any and all other Notes duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Notes.
Section 2.07. Persons Deemed Owner. Prior to due presentment for
registration of transfer of any Note, the Note Issuer, the Note Trustee and any
agent of the Note Issuer or the Note Trustee may treat the Person in whose name
any Note is registered (as of the day of determination) as the owner of such
Note for the purpose of receiving payments of principal of and interest on such
Note and for all other purposes whatsoever, whether or not such Note be overdue,
and neither the Note Issuer, the Note Trustee nor any agent of the Note Issuer
or the Note Trustee shall be affected by notice to the contrary.
Section 2.08. Payment of Principal and Interest; Interest on Overdue
Principal; Principal and Interest Rights Preserved.
(a) Any installment of interest or principal payable on any Note which
is punctually paid or duly provided for by the Note Issuer on the applicable
Payment Date shall be paid to the Person in whose name such Note (or one or more
Predecessor Notes) is registered on the Record Date for such Payment Date, by
check mailed first-class, postage prepaid to such Person's address as it appears
on the Note Register on such Record Date, except that with respect to Notes
registered on the Record Date in the name of the Certificate Trustee payments
will be made by wire transfer in immediately available funds to the account
designated by the Certificate Trustee and except for the final installment of
principal payable with respect to such Note on a Payment Date which shall be
payable as provided below. The funds represented by any such checks returned
undelivered shall be held in accordance with Section 3.03 hereof.
(b) The principal of each Note of each Class shall be paid, to the
extent funds are available therefor in the Collection Account, in installments
on each Payment Date specified in Section 2.01. Notwithstanding the foregoing,
the entire unpaid principal amount of the Notes shall be due and payable, if not
previously paid, on the date on which an Event of Default shall have occurred
and be continuing, if the Note Trustee or the Holders of the Notes representing
not less than a majority of the Outstanding Amount of the Notes have declared
the Notes to be immediately due and payable in the manner provided in Section
5.02. In such event, all payments of principal on the Notes shall be made pro
rata. The Note Trustee shall notify the Person in whose name a Note is
registered at the close of business on the Record Date preceding
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the Payment Date on which the Note Issuer expects that the final installment of
principal of and interest on such Note will be paid. Such notice shall be mailed
no later than five days prior to such final Payment Date and shall specify that
such final installment will be payable only upon presentation and surrender of
such Note and shall specify the place where such Note may be presented and
surrendered for payment of such installment. Notices in connection with
redemptions of Notes shall be mailed to Noteholders as provided in Section
10.02.
(c) If the Note Issuer defaults in a payment of interest on the Notes
when due, the Note Issuer shall be required to pay such defaulted interest (plus
interest on such defaulted interest at the applicable Note Interest Rate to the
extent lawful) to the Persons who are Noteholders on a subsequent special record
date, which date shall be at least five Business Days prior to the payment date.
The Note Issuer shall fix or cause to be fixed any such special record date and
payment date, and, at least 20 days before any such special record date, the
Note Issuer shall mail to each affected Noteholder a notice that states the
special record date, the payment date and the amount of defaulted interest (plus
interest on such defaulted interest) to be paid.
Section 2.09. Cancellation. All Notes surrendered for payment,
registration of transfer, exchange or redemption shall, if surrendered to any
Person other than the Note Trustee, be delivered to the Note Trustee and shall
be promptly cancelled by the Note Trustee. The Note Issuer may at any time
deliver to the Note Trustee for cancellation any Notes previously authenticated
and delivered hereunder which the Note Issuer may have acquired in any manner
whatsoever, and all Notes so delivered shall be promptly cancelled by the Note
Trustee. No Notes shall be authenticated in lieu of or in exchange for any Notes
cancelled as provided in this Section, except as expressly permitted by this
Note Indenture. All cancelled Notes may be held or disposed of by the Note
Trustee in accordance with its standard retention or disposal policy as in
effect at the time.
Section 2.10. Authentication and Delivery of Notes. On the Issuance
Date, the Notes shall be executed by the Note Issuer and delivered to the Note
Trustee for authentication and thereupon the same shall be authenticated and
delivered by the Note Trustee upon Issuer Request and upon delivery by the Note
Issuer to the Note Trustee, and receipt by the Note Trustee, or the causing to
occur by the Note Issuer, of the following:
(1) Note Issuer Action. An Issuer Order authorizing and
directing the authentication and delivery of the Notes by the Note
Trustee and specifying the principal amount of Notes to be
authenticated.
(2) Authorizations.
(a) An Opinion of Counsel that no authorization,
approval or consent of any Massachusetts, Delaware or federal
governmental body or bodies at the time having jurisdiction in
the premises is required to be obtained by the Note Issuer for
the valid issuance, authentication and delivery of such Notes,
except for such registrations as are required under the blue
sky and securities laws of any State or such authorizations,
approvals or consents of governmental bodies that have been
obtained.
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(b) An Opinion of Counsel that no authorization,
approval or consent of any governmental body or bodies at the
time having jurisdiction in the premises is required for the
valid execution and delivery by the Note Issuer of each of the
Basic Documents to which the Note Issuer is a party, except
for such authorizations, approvals or consents of governmental
bodies that have been obtained.
(3) Authorizing Certificate. A certificate of an Authorized
Officer of the Note Issuer certifying that the Note Issuer has duly
authorized the execution and delivery of this Note Indenture and the
execution, authentication and delivery of the Notes.
(4) The Collateral. The Note Issuer shall have caused all
Collateral to have been Granted to the Note Trustee or, if requested by
the Note Trustee, its nominee and will have caused all related filings
with the DTE pursuant to the Statute, the Massachusetts UCC, the New
York UCC and such other filings in connection with such Grant to have
been duly made.
(5) Certificates of the Note Issuer and the Seller.
(a) An Officer's Certificate from the Note Issuer,
dated as of the Issuance Date:
(i) to the effect that the Note Issuer is
not in Default under this Note Indenture and that the
issuance of the Notes applied for will not result in
any Default or in any material breach of any of the
terms, conditions or provisions of or constitute a
default under any material indenture, mortgage, deed
of trust or other agreement or instrument to which
the Note Issuer is a party or by which it or its
property is bound or any order of any court or
administrative agency entered in any Proceeding to
which the Note Issuer is a party or by which it or
its property may be bound or to which it or its
property may be subject; and that all conditions
precedent provided in this Note Indenture relating to
the authentication and delivery of the Notes applied
for have been complied with;
(ii) all instruments furnished to the Note
Trustee pursuant to this Note Indenture conform to
the requirements set forth in this Note Indenture and
constitute all of the documents required to be
delivered hereunder for the Note Trustee to
authenticate and deliver the Notes applied for, and
all conditions precedent provided for in this Note
Indenture relating to the authentication and delivery
of the Notes have been complied with;
(iii) to the effect that the Note Issuer has
not assigned any interest or participation in the
Collateral except for the lien of this Note Indenture
and of the Statute; the Note Issuer has the power and
right to Grant the Collateral to the Note Trustee as
security hereunder; and the Note Issuer, subject to
the terms of this Note Indenture, has Granted to the
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Note Trustee all of its right, title and interest in
and to such Collateral free and clear of any lien,
mortgage, pledge, charge, security interest, adverse
claim or other encumbrance arising as a result of
actions of the Note Issuer or through the Note
Issuer, except the lien of this Note Indenture and of
the Statute;
(iv) to the effect that the Note Issuer has
appointed a firm of Independent certified public
accountants as contemplated in Section 8.06 hereof;
(v) to the effect that attached thereto are
duly executed, true and complete copies of the Sale
Agreement and the Servicing Agreement; and
(vi) stating that all filings with the DTE
pursuant to the Statute and all UCC financing
statements with respect to the Collateral which are
required to be filed by the terms of the Sale
Agreement, the Servicing Agreement or this Note
Indenture have been filed as required.
(b) An Officer's Certificate (as defined in the Sale
Agreement) from the Seller, dated as of the Issuance Date, to
the effect that (i) the representations and warranties set
forth in Article III of the Sale Agreement are true and
correct and (ii) the attached copies of the Financing Order
and Issuance Advice Letter creating the Transition Property
are true and correct.
(6) Opinion of Counsel. An Opinion of Counsel, portions of
which may be delivered by counsel for the Note Issuer, portions of
which may be delivered by counsel for the Seller and the Servicer, and
portions of which may be delivered by counsel for the Certificate
Issuer, dated the Issuance Date, in each case subject to the customary
exceptions, qualifications and assumptions contained therein, to the
collective effect that:
(a) the Note Indenture has been duly qualified under
the Trust Indenture Act;
(b) the Note Issuer has the limited liability company
power and authority to execute and deliver this Note Indenture
and to issue the Notes, and this Note Indenture and the Notes
have been duly authorized and the Note Issuer is duly formed
and is validly existing in good standing under the laws of the
jurisdiction of its organization;
(c) the Note Indenture has been duly authorized,
executed and delivered by the Note Issuer;
(d) the Notes applied for have been duly authorized
and executed and, when authenticated in accordance with the
provisions of the Note Indenture and delivered against payment
of the purchase price therefor, will constitute valid and
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binding obligations of the Note Issuer, entitled to the
benefits of the Note Indenture subject to bankruptcy,
insolvency, reorganization, moratorium, fraudulent transfer
and other laws relating to or affecting the rights of
creditors generally and general principles of equity
(regardless of whether such enforceability is considered in a
proceeding in equity or at law);
(e) this Note Indenture, the Sale Agreement, the
Servicing Agreement and the Fee and Indemnity Agreement are
valid and binding agreements of the Note Issuer, enforceable
in accordance with their respective terms, except as such
enforceability against the Note Issuer may be subject to
bankruptcy, insolvency, reorganization, moratorium, fraudulent
transfer and other laws relating to or affecting the rights of
creditors generally and general principles of equity
(regardless of whether such enforceability is considered in a
proceeding in equity or at law);
(f) (A) (i) under Section 1H(d)(1) of the Statute,
the provisions of this Note Indenture are sufficient to create
in favor of the Note Trustee a security interest in all right,
title and interest of the Note Issuer in the Transition
Property, (ii) the Financing Order authorizes the bondable
reimbursable transition costs amounts included in the
Transition Property, (iii) upon the giving of value by the
Note Trustee with respect to the aforesaid security interest
in Transition Property under this Note Indenture, the security
interest in Transition Property shall attach to the Transition
Property, (iv) financing statements which describe the
Transition Property by reference to the Financing Order have
been presented for filing, and all filing fees required in
connection therewith have been paid in accordance with article
9 of the Massachusetts UCC in the offices of the City Clerk of
Boston, Massachusetts and the Secretary of State of
Massachusetts, and (v) under Section 1H(d)(2) of the Statute,
such filings are sufficient to perfect the security interest
granted by this Note Indenture in the Transition Property,
which security interest is valid and enforceable against the
Note Issuer (subject to (x) the rights of any third parties
holding security interests in the Transition Property
perfected in the manner described in Sections 1H(d) and (e) of
the Statute prior to perfection by filing of the security
interest granted under this Note Indenture and (y) rights
arising under the first priority lien arising under Section
1H(e) of the Statute described in clause (B) of this Section
2.10(6)(f)); (B) (i) by operation of Section 1H(e) thereof,
the Statute creates, upon the effective date of the Financing
Order, a first priority lien in the Transition Property
securing all obligations, then existing or subsequently
arising, to the Certificateholders in respect of such
Certificates or to the Certificate Trustee in its capacity as
such, (ii) upon the effectiveness of the Financing Order, the
aforesaid first priority lien shall be valid, perfected and
enforceable against the Note Issuer and all third parties
without any further public notice, (iii) any financing
statement filed with respect to such first priority lien shall
be a protective filing under Section 1H(e) of the Statute, and
(iv) although the Statute and the Financing Order provide that
conflicting first priority liens on Transition Property
arising under Section 1H(e) of the Statute rank in
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order of time of perfection, the Financing Order does not
provide for any such conflicting first priority liens; and (C)
the provisions of this Note Indenture are sufficient to create
in favor of the Note Trustee a security interest under article
9 of the Massachusetts UCC in the right, title and interest of
the Note Issuer in respect of the Sale Agreement, the
Servicing Agreement, the Administration Agreement and all
accounts, general intangibles, equipment and inventory (the
"UCC Collateral") of the Note Issuer, (ii) upon the giving of
value by the Note Trustee with respect to the aforesaid
security interests in the Collateral under this Note
Indenture, the security interest in such UCC Collateral shall
attach to the UCC Collateral, (iii) financing statements which
describe the UCC Collateral have been presented for filing and
all filing fees required in connection therewith have been
paid in accordance with article 9 of the Massachusetts UCC in
the offices of the City Clerk of Boston, Massachusetts and the
Secretary of State of Massachusetts, (iv) such filings are
sufficient to perfect the security interest granted by this
Note Indenture in the UCC Collateral, which security interest
is valid and enforceable against the Note Issuer (subject to
the rights of any third parties holding security interests in
the UCC Collateral perfected in the manner described in
article 9 of the Massachusetts UCC prior to perfection by
filing of the security interest therein granted under this
Note Indenture);
(g) either (A) the Registration Statement covering
the Notes and the Certificates is effective under the
Securities Act and, to the best of such counsel's knowledge
and information, no stop order suspending the effectiveness of
such Registration Statement has been issued under the
Securities Act and no proceedings for that purpose have been
initiated or are pending or threatened by the Commission or
(B) the Notes and the Certificates are exempt from the
registration requirements under the Securities Act;
(h) the Note Issuer is not an "investment company" or
under the "control" of an "investment company" as such terms
are defined under the Investment Company Act of 1940, as
amended;
(i) the Sale Agreement is a valid and binding
agreement of the Seller enforceable against the Seller in
accordance with its terms except as such enforceability may be
subject to bankruptcy, insolvency, reorganization, moratorium,
fraudulent transfer and other laws relating to or affecting
the rights of creditors generally and general principles of
equity (regardless of whether such enforcement is considered
in a proceeding in equity or at law);
(j) the Servicing Agreement is a valid and binding
agreement of the Servicer enforceable against the Servicer in
accordance with its terms except as such enforceability may be
subject to bankruptcy, insolvency, reorganization, moratorium,
fraudulent transfer and other laws relating to or affecting
the rights of creditors generally and general principles of
equity (regardless of whether such enforcement is considered
in a proceeding in equity or at law);
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(k) upon the delivery of the fully executed Sale
Agreement to the Note Issuer and the payment of the purchase
price of the Transition Property by the Note Issuer to the
Seller pursuant to the Sale Agreement, then (I) the transfer
of the Transition Property by the Seller to the Note Issuer
pursuant to the Sale Agreement conveys the Seller's right,
title and interest in the Transition Property to the Note
Issuer and will be treated under the laws of The Commonwealth
of Massachusetts as an absolute transfer of all of the
Seller's right, title, and interest in the Transition
Property, other than for federal and state income and
franchise tax purposes, (II) such transfer of the Transition
Property is perfected, (III) such transfer has priority over
any other assignment of the Transition Property and (IV) the
Transition Property is free and clear of all liens created
prior to its transfer to the Note Issuer pursuant to the Sale
Agreement;
(l) (i) the Financing Order has been duly issued and
authorized by the DTE and the Financing Order, giving effect
to the Issuance Advance Letter, is effective; (ii) in reliance
on the opinion of Krokidas & Bluestein LLP that the
Certificates are "electric rate reduction bonds" under Section
1H(a) of the Statute, as of the issuance of the Certificates,
the Certificates are entitled to the protections provided in
Sections 1H(b)(3) and 1H(c)(4) of the Statute; (iii) the
Financing Order is no longer subject to appeal by any person
in state courts of The Commonwealth of Massachusetts; and (iv)
the Servicer is authorized to file periodic RTC Charge
adjustments to the extent necessary to ensure the timely
recovery of revenues sufficient to provide for the payment of
an amount equal to the sum of the periodic RRB payment
requirements for the upcoming year, which includes indemnity
obligations under the Basic Documents;
(m) any state action (whether by legislative, DTE,
citizen initiative or otherwise) to revoke or limit the
Financing Order, the Issuance Advice Letter, the Transition
Property or the RTC Charge in a manner which would
substantially impair the rights of Certificateholders would be
subject to a successful constitutional contracts clause
defense; and
(n) such other matters as the Note Trustee may
reasonably require.
(7) Accountant's Letter. A letter addressed to the Note Issuer
and the Note Trustee complying with the requirements of Section
11.01(a) hereof, 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 Note Issuer within the
meaning of the Note Indenture, and are independent public accountants
within the meaning of the standards of The American Institute of
Certified Public Accountants, and (b) with respect to the Collateral,
they have made certain specified recalculations of calculations and
information provided by the underwriters for the purpose of determining
that, based on certain specified assumptions used in calculating
estimated collections based on the initial RTC Charge, as of the
Issuance Date such estimated collections based on the initial RTC
Charge are sufficient to pay (a) assumed Operating Expenses when
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incurred, plus (b) the Overcollateralization Amount set forth in the
Final Prospectus (as such term is defined in the Underwriting
Agreement), plus (c) interest on the Notes at their respective Note
Interest Rates when due as set forth in the Final Prospectus, plus (d)
principal of the Notes in accordance with the Expected Amortization
Schedule set forth in the Final Prospectus and found the calculations
to be mathematically correct.
(8) Rating Agency Condition. The Note Trustee shall receive
evidence reasonably satisfactory to it that the Rating Agency Condition
will be satisfied.
(9) Other Requirements. Such other documents, certificates,
agreements, instruments or opinions as the Note Trustee may reasonably
require.
Section 2.11. Release of Collateral. Subject to Section 11.01, the Note
Trustee shall release property from the lien of this Note Indenture only as
specified in Section 8.02 or upon receipt of an Issuer Request accompanied by an
Officer's Certificate, an Opinion of Counsel and Independent Certificates in
accordance with Trust Indenture Act Sections 314(c) and 314(d)(l) or an Opinion
of Counsel in lieu of such Independent Certificates to the effect that the Trust
Indenture Act does not require any such Independent Certificates.
ARTICLE III
COVENANTS
Section 3.01. Payment of Principal and Interest. The Note Issuer will
duly and punctually pay the principal of and interest on the Notes in accordance
with the terms of the Notes and this Note Indenture. Amounts properly withheld
under the Code by any Person from a payment to any Noteholder of interest or
principal shall be considered as having been paid by the Note Issuer to such
Noteholder for all purposes of this Note Indenture.
Section 3.02. Maintenance of Office or Agency. The Note Issuer will
maintain in the Borough of Manhattan, The City of New York, an office or agency
where Notes may be surrendered for registration of transfer or exchange. The
Note Issuer hereby initially appoints the Note Trustee to serve as its agent for
the foregoing purposes. The Note Issuer will give prompt written notice to the
Note Trustee of the location, and of any change in the location, of any such
office or agency. If at any time the Note Issuer shall fail to maintain any such
office or agency or shall fail to furnish the Note Trustee with the address
thereof, such surrenders may be made at the Corporate Trust Office, and the Note
Issuer hereby appoints the Note Trustee as its agent to receive all such
surrenders.
Section 3.03. Money for Payments To Be Held in Trust. As provided in
Section 8.02(a), all payments of amounts due and payable with respect to any
Notes that are to be made from amounts withdrawn from the Collection Account
pursuant to Section 8.02(d) shall be made on behalf of the Note Issuer by the
Note Trustee or by another Paying Agent, and no amounts so withdrawn from the
Collection Account for payments of Notes shall be paid over to the Note Issuer
except as provided in this Section and Section 8.02.
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The Note Issuer will cause each Paying Agent other than the Note
Trustee to execute and deliver to the Note Trustee an instrument in which such
Paying Agent shall agree with the Note Trustee (and if the Note Trustee acts as
Paying Agent, it hereby so agrees), subject to the provisions of this Section,
that such Paying Agent will:
(i) hold all sums held by it for the payment of amounts due
with respect to the Notes 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 Note Trustee and the Certificate Trustee notice
of any Default by the Note Issuer (or any other obligor upon the Notes)
of which it has actual knowledge in the making of any payment required
to be made with respect to the Notes;
(iii) at any time during the continuance of any such Default,
upon the written request of the Note Trustee, forthwith pay to the Note
Trustee all sums so held in trust by such Paying Agent;
(iv) immediately resign as a Paying Agent and forthwith pay to
the Note Trustee all sums held by it in trust for the payment of Notes
if at any time it ceases to meet the standards required to be met by a
Paying Agent at the time of its appointment; and
(v) comply with all requirements of the Code with respect to
the withholding from any payments made by it on any Notes of any
applicable withholding taxes imposed thereon and with respect to any
applicable reporting requirements in connection therewith.
The Note Issuer may at any time, for the purpose of obtaining the
satisfaction and discharge of this Note Indenture or for any other purpose, by
Issuer Order direct any Paying Agent to pay to the Note Trustee all sums held in
trust by such Paying Agent, such sums to be held by the Note 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 Note Trustee, such Paying Agent
shall be released from all further liability with respect to such money.
Subject to applicable laws with respect to escheat of funds, any money
held by the Note Trustee or any Paying Agent in trust for the payment of any
amount due with respect to any Note 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 Note Issuer on Issuer Request; and, subject to Section 11.16, the
Holder of such Note shall thereafter, as an unsecured general creditor, look
only to the Note Issuer for payment thereof (but only to the extent of the
amounts so paid to the Note Issuer), and all liability of the Note Trustee or
such Paying Agent with respect to such trust money shall thereupon cease;
provided, however, that the Note Trustee or such Paying Agent, before being
required to make any such repayment, may at the expense of the Note Issuer cause
to be published once, in a newspaper published in the English language,
customarily published on each Business Day and of general circulation in The
City of New York, notice that such
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money remains unclaimed and that, after a date specified therein, which shall
not be less than 30 days from the date of such publication, any unclaimed
balance of such money then remaining will be repaid to the Note Issuer. The Note
Trustee may also adopt and employ, at the expense of the Note Issuer, any other
reasonable means of notification of such repayment (including mailing notice of
such repayment to Holders whose Notes 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 Note Trustee or
of any Paying Agent, at the last address of record for each such Holder).
Section 3.04. Existence. The Note Issuer will keep in full effect its
existence, rights and franchises as a limited liability company under the laws
of the State of Delaware (unless, subject to the provisions of Section 3.10
hereof, it becomes, or any successor Note Issuer hereunder is or becomes,
organized under the laws of any other State or of the United States of America,
in which case the Note 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 Note Indenture, the Notes, the Collateral and each other
instrument or agreement included in the Collateral.
Section 3.05. Protection of Collateral. The Note Issuer will from time
to time execute and deliver all such supplements and amendments hereto and all
such filings with the DTE pursuant to the Statute, financing statements,
continuation statements, instruments of further assurance and other instruments,
and will take such other action necessary or advisable to:
(i) maintain or preserve the lien and security interest (and
the priority thereof) of this Note 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 Note Indenture;
(iii) enforce any of the Collateral;
(iv) preserve and defend title to the Collateral and the
rights of the Note Trustee and the Noteholders in such Collateral
against the claims of all Persons and parties, including the challenge
by any party to the validity or enforceability of the Financing Order,
any Advice Letter or the Transition Property or any proceeding relating
thereto and institute any action or proceeding necessary to compel
performance by the DTE or The Commonwealth of Massachusetts of any of
its obligations or duties under the Statute, the Financing Order or any
Advice Letter; or
(v) pay any and all taxes levied or assessed upon all or any
part of the Collateral.
The Note Issuer hereby designates the Note Trustee its agent and
attorney-in-fact to execute any filings with the DTE pursuant to the Statute,
financing statement, continuation
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statement or other instrument required by the Note Trustee pursuant to this
Section, it being understood that the Note Trustee shall have no such
obligation.
Section 3.06. Opinions as to Collateral.
(a) On the Issuance Date, the Note Issuer shall furnish to the Note
Trustee an Opinion of Counsel either stating that, in the opinion of such
counsel, (A) such action has been taken (and reciting the details of such
action) with respect to the recording and filing of this Note Indenture and any
other requisite documents, and with respect to the execution and filing of any
filings with the DTE pursuant to the Statute, financing statements and
continuation statements, as are necessary to perfect the lien and security
interest of this Note Indenture, or (B) no such action is necessary to make such
lien and security interest effective.
(b) Prior to the effectiveness of any amendment to the Sale Agreement,
the Note Issuer shall furnish to the Note Trustee an Opinion of Counsel either
(A) stating that, in the opinion of such counsel, all filings, including filings
with the DTE pursuant to the Statute and any UCC financing statements, have been
executed and filed that are necessary fully to preserve and protect the interest
of the Note Issuer and the Note Trustee in the 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 (B) stating that, in the
opinion of such counsel, no such action shall be necessary to preserve and
protect such interest.
Section 3.07. Performance of Obligations; Servicing; Commission
Filings.
(a) The Note Issuer (i) will diligently pursue any and all actions to
enforce its rights under each instrument or agreement included in the Collateral
and (ii) will not take any action and will use its reasonable efforts not to
permit any action to be taken by others that would release any Person from any
of such Person's covenants or obligations under any such instrument or agreement
or that would result in the amendment, hypothecation, subordination, termination
or discharge of, or impair the validity or effectiveness of, any such instrument
or agreement, except, in each case, as expressly permitted in this Note
Indenture, the Sale Agreement, the Servicing Agreement or such other instrument
or agreement.
(b) The Note Issuer may contract with other Persons to assist it in
performing its duties under this Note Indenture, and any performance of such
duties by a Person identified to the Note Trustee in an Officer's Certificate of
the Note Issuer shall be deemed to be action taken by the Note Issuer.
Initially, the Note Issuer has contracted with the Administrator and the
Servicer to assist the Note Issuer in performing its duties under this Note
Indenture.
(c) The Note Issuer will punctually perform and observe all of its
obligations and agreements contained in this Note Indenture, the Basic Documents
and in the instruments and agreements included in the Collateral, including
filing or causing to be filed all filings with the DTE pursuant to the Statute,
UCC financing statements and continuation statements required to be filed by it
by the terms of this Note Indenture, the Sale Agreement and the Servicing
Agreement in accordance with and within the time periods provided for herein and
therein. Except as otherwise expressly permitted therein, the Note Issuer shall
not waive, amend, modify, supple-
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ment or terminate any Basic Document or any provision thereof without the
written consent of the Note Trustee (which consent shall not be withheld if (i)
the Note Trustee shall have received an Officer's Certificate stating that such
waiver, amendment, modification, supplement or termination shall not adversely
affect in any material respect the interests of the Noteholders or the holders
of Certificates and (ii) the Rating Agency Condition shall have been satisfied
with respect thereto) or the Holders of at least a majority of the Outstanding
Amount of Notes.
(d) If the Note Issuer shall have knowledge of the occurrence of a
Servicer Default under the Servicing Agreement, the Note Issuer shall promptly
give written notice thereof to the Note Trustee, the Certificate Trustee, the
Agencies and the Rating Agencies, and shall specify in such notice the action,
if any, the Note Issuer is taking with respect of such default. If a Servicer
Default shall arise from the failure of the Servicer to perform any of its
duties or obligations under the Servicing Agreement with respect to the
Transition Property, including the RTC Charge, the Note Issuer shall take all
reasonable steps available to it to remedy such failure.
(e) As promptly as possible after the giving of notice to the Servicer,
the Note Trustee, the Certificate Trustee, the Agencies and the Rating Agencies
of termination of the Servicer's rights and powers pursuant to Section 7.01 of
the Servicing Agreement, the Note Issuer, subject to the approval of the DTE
pursuant to the Financing Order, shall appoint a successor Servicer (the
"Successor Servicer") with the Note Trustee's prior written consent thereto
(which consent shall not be unreasonably withheld), and such Successor Servicer
shall accept its appointment by a written assumption in a form acceptable to the
Note Issuer and the Note Trustee. A Person shall qualify as a Successor Servicer
only if such Person satisfies the requirements of the Servicing Agreement. If
within 30 days after the delivery of the notice referred to above, the Note
Issuer shall not have obtained such a new Servicer, the Note Trustee may
petition the DTE or a court of competent jurisdiction to appoint a Successor
Servicer. In connection with any such appointment, the Note Issuer may make such
arrangements for the compensation of such successor as it and such successor
shall agree, subject to the limitations set forth below and in the Servicing
Agreement, and in accordance and in compliance with Section 7.02 of the
Servicing Agreement, the Note Issuer shall enter into an agreement with such
successor for the servicing of the Transition Property (such agreement to be in
form and substance satisfactory to the Note Trustee).
(f) Upon any termination of the Servicer's rights and powers pursuant
to the Servicing Agreement, the Note Trustee shall promptly notify the Note
Issuer, the Noteholders, the Certificate Trustee, the Agencies and the Rating
Agencies. As soon as a Successor Servicer is appointed, the Note Issuer shall
notify the Note Trustee, the Noteholders, the Certificate Trustee, the Agencies
and the Rating Agencies of such appointment, specifying in such notice the name
and address of such Successor Servicer.
(g) Without derogating from the absolute nature of the assignment
granted to the Note Trustee under this Note Indenture or the rights of the Note
Trustee hereunder, the Note Issuer agrees that it will not, without the prior
written consent of the Note Trustee or the Holders of at least a majority in
Outstanding Amount of the Notes, amend, modify, waive, supplement, terminate or
surrender, or agree to any amendment, modification, supplement, termination,
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waiver or surrender of, the terms of any Collateral or the Basic Documents, or
waive timely performance or observance of any material term by the Seller or the
Servicer under the Sale Agreement or the Servicing Agreement, respectively. If
any such amendment, modification, supplement or waiver shall be so consented to
by the Note Trustee or such Holders, the Note Issuer agrees to execute and
deliver, in its own name and at its own expense, such agreements, instruments,
consents and other documents as shall be necessary or appropriate in the
circumstances. The Note Issuer agrees that no such amendment, modification,
supplement or waiver shall adversely affect the rights of the Holders of the
Notes or Certificates Outstanding at the time of any such amendment,
modification, supplement or waiver, except as otherwise agreed to by the Holders
in accordance with the Basic Documents.
(h) The Note Issuer shall file with the Commission such periodic
reports, if any, as are required from time to time under Section 13 of the
Exchange Act.
(i) The Note Issuer shall make all filings required under the Statute
relating to the transfer of the ownership or security interest in the Transition
Property other than those required to be made by the Seller pursuant to the
Basic Documents.
Section 3.08. Negative Covenants. So long as any Notes are Outstanding,
the Note Issuer shall not:
(i) except as expressly permitted by this Note Indenture,
sell, transfer, exchange or otherwise dispose of any of the properties
or assets of the Note Issuer, including those included in the
Collateral, unless directed to do so by the Note Trustee in accordance
with Article V;
(ii) claim any credit on, or make any deduction from the
principal or interest payable in respect of, the Notes (other than
amounts properly withheld from such payments under the Code) or assert
any claim against any present or former Noteholder by reason of the
payment of the taxes levied or assessed upon any part of the
Collateral;
(iii) terminate its existence or dissolve or liquidate in
whole or in part; or
(iv) (A) permit the validity or effectiveness of this Note
Indenture to be impaired, or permit the lien of this Note Indenture to
be amended, subordinated, terminated or discharged, or permit any
Person to be released from any covenants or obligations with respect to
the Notes under this Note Indenture except as may be expressly
permitted hereby, (B) permit any lien, charge, excise, claim, security
interest, mortgage or other encumbrance (other than the lien of this
Note Indenture and any statutory lien under Section 1H(e) of the
Statute) to be created by the Note Issuer on or extend to or otherwise
arise upon or burden the Collateral or any part thereof or any interest
therein or the proceeds thereof or (C) subject to any statutory lien
under Section 1H(e) of the Statute, permit the lien of this Note
Indenture not to constitute a valid first priority security interest in
the Collateral.
Section 3.09. Annual Statement as to Compliance. The Note Issuer will
deliver to the Note Trustee, the Certificate Trustee and the Rating Agencies not
later than March 31 of each year
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(commencing with March 31, 2000), an Officer's Certificate stating, as to the
Authorized Officer signing such Officer's Certificate, that
(i) a review of the activities of the Note Issuer during the
preceding twelve months ended December 31 (or, in the case of the
Officer's Certificate to be delivered on or before March 31, 2000, the
period of time from the date of this Note Indenture until December 31,
1999), and of performance under this Note Indenture has been made under
such Authorized Officer's supervision; and
(ii) to such Authorized Officer's knowledge, based on such
review, the Note Issuer has complied with all conditions and covenants
under this Note Indenture throughout such twelve month period, or, if
there has been a default in so complying with any such condition or
covenant, specifying each such default known to such Authorized Officer
and the nature and status thereof.
Section 3.10. Note Issuer May Consolidate, etc., Only on Certain Terms.
(a) The Note Issuer shall not consolidate or merge with or into any
other Person, unless
(i) the Person (if other than the Note Issuer) formed by or
surviving such consolidation or merger shall be a Person organized and
existing under the laws of the United States of America, any State or
the District of Columbia and shall expressly assume, by an indenture
supplemental hereto, executed and delivered to the Note Trustee, in
form and substance reasonably satisfactory to the Note Trustee, the due
and punctual payment of the principal of and interest on all Notes and
the performance or observance of every agreement and covenant of this
Note Indenture on the part of the Note Issuer to be performed or
observed, all as provided herein;
(ii) immediately after giving effect to such transaction, no
Default or Event of Default shall have occurred and be continuing;
(iii) the Rating Agency Condition shall have been satisfied
with respect to such transaction;
(iv) the Note Issuer shall have received an Opinion of Counsel
(and shall have delivered copies thereof to the Note Trustee) to the
effect that such transaction will not have any material adverse tax
consequence to the Note Issuer, the Certificate Issuer, any Noteholder
or any Certificateholder;
(v) any action as is necessary to maintain the lien and
security interest created by this Note Indenture shall have been taken;
and
(vi) the Note Issuer shall have delivered to the Note Trustee
an Officer's Certificate and an Opinion of Counsel each stating that
such consolidation or merger and such supplemental note indenture
comply with this Section 3.10 and that all conditions
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precedent herein provided for relating to such transaction have been
complied with (including any filing required by the Exchange Act).
(b) Except as specifically provided herein, the Note Issuer shall not
convey or transfer any of its properties or assets, including those included in
the Collateral, to any Person, unless
(i) the Person that acquires by conveyance or transfer the
properties and assets of the Note Issuer the conveyance or transfer of
which is hereby restricted shall (A) be a United States citizen or a
Person organized and existing under the laws of the United States of
America, any State or the District of Columbia, (B) expressly assumes,
by an indenture supplemental hereto, executed and delivered to the Note
Trustee, in form and substance reasonably satisfactory to the Note
Trustee, the due and punctual payment of the principal of and interest
on all Notes and the performance or observance of every agreement and
covenant of this Note Indenture on the part of the Note Issuer to be
performed or observed, all as provided herein, (C) expressly agrees by
means of such supplemental note indenture that all right, title and
interest so conveyed or transferred shall be subject and subordinate to
the rights of Holders of the Notes, (D) unless otherwise provided in
the supplemental note indenture referred to in clause (B) above,
expressly agrees to indemnify, defend and hold harmless the Note
Trustee against and from any loss, liability or expense arising under
or related to this Note Indenture and the Notes and (E) expressly
agrees by means of such supplemental note indenture that such Person
(or if a group of Persons, then one specified Person) shall make all
filings with the Commission (and any other appropriate Person) required
by the Exchange Act in connection with the Notes;
(ii) immediately after giving effect to such transaction, no
Default or Event of Default shall have occurred and be continuing;
(iii) the Rating Agency Condition shall have been satisfied
with respect to such transaction;
(iv) the Note Issuer shall have received an Opinion of Counsel
(and shall have delivered copies thereof to the Note Trustee) to the
effect that such transaction will not have any material adverse tax
consequence to the Note Issuer, the Certificate Issuer, any Noteholder
or any Certificateholder;
(v) any action as is necessary to maintain the lien and
security interest created by this Note Indenture shall have been taken;
and
(vi) the Note Issuer shall have delivered to the Note Trustee
an Officer's Certificate and an Opinion of Counsel each stating that
such conveyance or transfer and such supplemental note indenture comply
with this Section 3.10 and that all conditions precedent herein
provided for relating to such transaction have been complied with
(including any filing required by the Exchange Act).
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Section 3.11. Successor or Transferee.
(a) Upon any consolidation or merger of the Note Issuer in accordance
with Section 3.10(a), the Person formed by or surviving such consolidation or
merger (if other than the Note Issuer) shall succeed to, and be substituted for,
and may exercise every right and power of, the Note Issuer under this Note
Indenture with the same effect as if such Person had been named as the Note
Issuer herein.
(b) Except as set forth in Section 6.07, upon a conveyance or transfer
of all the assets and properties of the Note Issuer pursuant to Section 3.10(b),
BEC Funding LLC will be released from every covenant and agreement of this Note
Indenture to be observed or performed on the part of the Note Issuer with
respect to the Notes immediately upon the delivery of written notice by BEC
Funding LLC to the Note Trustee stating that BEC Funding LLC is to be so
released.
Section 3.12. No Other Business. The Note Issuer shall not engage in any
business other than financing, purchasing, owning and managing the Transition
Property in the manner contemplated by this Note Indenture and the Basic
Documents and activities incidental thereto.
Section 3.13. No Borrowing. The Note Issuer shall not issue, incur, assume,
guarantee or otherwise become liable, directly or indirectly, for any
indebtedness except for the Notes.
Section 3.14. Servicer's Obligations. The Note Issuer shall enforce the
Servicer's compliance with all of the Servicer's material obligations under the
Servicing Agreement.
Section 3.15. No Additional Notes. The Note Issuer shall not issue any
additional Notes hereunder, except pursuant to Section 2.05 or Section 2.06.
Section 3.16. Guarantees, Loans, Advances and Other Liabilities. Except as
otherwise contemplated by the Sale Agreement, the Servicing Agreement or this
Note Indenture, the Note Issuer shall not make any loan or advance or credit to,
or guarantee (directly or indirectly or by an instrument having the effect of
assuring another's payment or performance on any obligation or capability of so
doing or otherwise), endorse or otherwise become contingently liable, directly
or indirectly, in connection with the obligations, stocks or dividends of, or
own, purchase, repurchase or acquire (or agree contingently to do so) any stock,
obligations, assets or securities of, or any other interest in, or make any
capital contribution to, any other Person.
Section 3.17. Capital Expenditures. Other than expenditures in an aggregate
amount not to exceed $25,000 in any calendar year, the Note Issuer shall not
make any expenditure (by long-term or operating lease or otherwise) for capital
assets (either realty or personalty).
Section 3.18. Non-Routine Periodic Adjustment. The Note Issuer agrees that it
shall not consent to a Non-Routine Periodic Adjustment pursuant to Section
4.01(c) of the Servicing Agreement unless the Rating Agency Condition shall have
been satisfied.
Section 3.19. Restricted Payments. The Note Issuer shall not, directly or
indirectly, while the Notes are Outstanding (i) pay any dividend or make any
distribution (by reduction of capital or
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otherwise), whether in cash, property, securities or a combination thereof, to
any owner of a beneficial interest in the Note Issuer or otherwise with respect
to any ownership or equity interest or security in or of the Note Issuer, (ii)
redeem, purchase, retire or otherwise acquire for value any such ownership or
equity interest or security or (iii) set aside or otherwise segregate any
amounts for any such purpose; provided, however, that, if no Event of Default
shall have occurred and be continuing, the Note Issuer may make, or cause to be
made, any such distributions to any owner of a beneficial interest in the Note
Issuer or otherwise with respect to any ownership or equity interest or security
in or of the Note Issuer using funds distributed to the Note Issuer pursuant to
Section 8.02 to the extent that such distributions would not cause the amount of
the Capital Subaccount to decline below the Required Capital Level. The Note
Issuer will not, directly or indirectly, make payments to or distributions from
the Collection Account except in accordance with this Note Indenture and the
Basic Documents.
Section 3.20. Notice of Events of Default. The Note Issuer agrees to
give the Note Trustee, the Certificate Trustee, the Agencies and the Rating
Agencies prompt written notice of each Event of Default hereunder and each
default on the part of the Seller or the Servicer of its obligations under the
Sale Agreement or the Servicing Agreement, respectively.
Section 3.21. Further Instruments and Acts. Upon request of the Note
Trustee, the Note Issuer will execute and deliver such further instruments and
do such further acts as may be reasonably necessary or proper to carry out more
effectively the purpose of this Note Indenture.
ARTICLE IV
SATISFACTION AND DISCHARGE; DEFEASANCE
Section 4.01. Satisfaction and Discharge of Note Indenture; Defeasance.
(a) This Note Indenture shall cease to be of further effect with
respect to the Notes and the Note Trustee, on reasonable demand of and at the
expense of the Note Issuer, shall execute proper instruments acknowledging
satisfaction and discharge of this Note Indenture with respect to the Notes,
when
(A) either
(1) all Notes theretofore authenticated and delivered
(other than (i) Notes that have been mutilated, destroyed,
lost or stolen and that have been replaced or paid as provided
in Section 2.06 and (ii) Notes for whose payment money has
theretofore been deposited in trust or segregated and held in
trust by the Note Issuer and thereafter repaid to the Note
Issuer or discharged from such trust, as provided in Section
3.03) have been delivered to the Note Trustee for
cancellation; or
(2) the Scheduled Maturity Date or Redemption Date
has occurred with respect to all Notes not theretofore
delivered to the Note Trustee for
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cancellation, and the Note Issuer has irrevocably deposited or
caused to be irrevocably deposited with the Note Trustee cash,
in trust for such purpose, in an amount sufficient to pay and
discharge the entire indebtedness on such Notes not
theretofore delivered to the Note Trustee for cancellation on
the Scheduled Maturity Date therefor;
(B) the Note Issuer has paid or caused to be paid all other
sums payable hereunder by the Note Issuer; and
(C) the Note Issuer has delivered to the Note Trustee an
Officer's Certificate, an Opinion of Counsel and (if required by the
Trust Indenture Act or the Note Trustee) an Independent Certificate
from a firm of certified public accountants, each meeting the
applicable requirements of Section 11.01(a) and each stating that all
conditions precedent herein provided for relating to the satisfaction
and discharge of this Note Indenture with respect to the Notes have
been complied with.
(b) Subject to Sections 4.01(c) and 4.02, the Note Issuer at any time
may terminate (i) all its obligations under this Note Indenture with respect to
the Notes ("Legal Defeasance Option") or (ii) its obligations under Sections
3.04, 3.05, 3.06, 3.07, 3.08, 3.09, 3.10, 3.12, 3.13, 3.14, 3.15, 3.16, 3.17 and
3.18 and the operation of Section 5.01(iv) ("Covenant Defeasance Option") with
respect to the Notes. The Note Issuer may exercise the Legal Defeasance Option
notwithstanding its prior exercise of the Covenant Defeasance Option.
If the Note Issuer exercises the Legal Defeasance Option, the maturity
of the Notes may not be accelerated because of an Event of Default. If the Note
Issuer exercises the Covenant Defeasance Option, the maturity of the Notes may
not be accelerated because of an Event of Default specified in Section 5.01(iv).
Upon satisfaction of the conditions set forth herein to the exercise of
the Legal Defeasance Option or the Covenant Defeasance Option, the Note Trustee,
on reasonable demand of and at the expense of the Note Issuer, shall execute
proper instruments acknowledging satisfaction and discharge of the obligations
that are terminated pursuant to such exercise.
(c) Notwithstanding Sections 4.01(a) and 4.01(b) above, (i) rights of
registration of transfer and exchange, (ii) substitution of mutilated,
destroyed, lost or stolen Notes, (iii) rights of Noteholders to receive payments
of principal and interest, (iv) Sections 4.03 and 4.04, (v) the rights,
obligations and immunities of the Note Trustee hereunder (including the rights
of the Note Trustee under Section 6.07 and the obligations of the Note Trustee
under Section 4.03) and (vi) the rights of Noteholders as beneficiaries hereof
with respect to the property deposited with the Note Trustee payable to all or
any of them, shall survive until the Notes, as to which this Note Indenture or
certain obligations hereunder have been satisfied and discharged pursuant to
Section 4.01(a) or 4.01(b), have been paid in full. Thereafter, the obligations
in Sections 6.07 and 4.04 shall survive.
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Section 4.02. Conditions to Defeasance. The Note Issuer may exercise
the Legal Defeasance Option or the Covenant Defeasance Option of Notes only if:
(a) the Note Issuer irrevocably deposits or causes to be
deposited in trust with the Note Trustee cash or U.S. Government
Obligations for the payment of principal of and interest on each such
Note to the Scheduled Maturity Date, Optional Redemption Date or
Mandatory Redemption Date therefor, as applicable;
(b) the Note Issuer delivers to the Note Trustee a certificate
from a nationally recognized firm of Independent accountants expressing
its opinion that the payments of principal and interest when due and
without reinvestment on the deposited U.S. Government Obligations plus
any deposited cash without investment will provide cash at such times
and in such amounts (but, in the case of the Legal Defeasance Option
only, not more than such amounts) as will be sufficient to pay in
respect of the Notes (i) subject to clause (ii), principal in
accordance with the Expected Amortization Schedule therefor, (ii) if to
be redeemed, the Optional Redemption Price or Mandatory Redemption
Price, as applicable, therefor on the related Optional Redemption Date
or Mandatory Redemption Date, as applicable and (iii) interest when
due;
(c) in the case of the Legal Defeasance Option, 91 days pass
after the deposit is made and during the 91-day period no Default
specified in Section 5.01(v) or (vi) occurs which is continuing at the
end of the period;
(d) no Default has occurred and is continuing on the day of
such deposit and after giving effect thereto;
(e) in the case of an exercise of the Legal Defeasance Option,
the Note Issuer shall have delivered to the Note Trustee an Opinion of
Counsel stating that (i) the Note Issuer has received from, or there
has been published by, the Internal Revenue Service a ruling, or (ii)
since the date of execution of this Note Indenture, there has been a
change in the applicable federal income tax law, in either case to the
effect that, and based thereon such opinion shall confirm that, the
Holders of the Notes will not recognize income, gain or loss for
federal income tax purposes as a result of such legal defeasance and
will be subject to federal income tax on the same amounts, in the same
manner and at the same times as would have been the case if such legal
defeasance had not occurred;
(f) in the case of an exercise of the Covenant Defeasance
Option, the Note Issuer shall have delivered to the Note Trustee an
Opinion of Counsel to the effect that the Holders of the Notes will not
recognize income, gain or loss for federal income tax purposes as a
result of such covenant defeasance and will be subject to federal
income tax on the same amounts, in the same manner and at the same
times as would have been the case if such covenant defeasance had not
occurred; and
(g) the Note Issuer delivers to the Note Trustee an Officer's
Certificate and an Opinion of Counsel, each stating that all conditions
precedent to the satisfaction and
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discharge of the Notes to the extent contemplated by this Article IV
have been complied with.
Before or after a deposit pursuant to this Section 4.02, the Note
Issuer may make arrangements satisfactory to the Note Trustee for the redemption
of such Notes at a future date in accordance with Article X.
Section 4.03. Application of Trust Money. All moneys or U.S. Government
Obligations deposited with the Note Trustee pursuant to Section 4.01 or 4.02
hereof shall be held in trust and applied by it, in accordance with the
provisions of the Notes and this Note Indenture, to the payment, either directly
or through any Paying Agent, as the Note Trustee may determine, to the Holders
of the particular Notes for the payment or redemption of which such moneys have
been deposited with the Note Trustee, of all sums due and to become due thereon
for principal and interest, but such moneys need not be segregated from other
funds except to the extent required herein or in the Servicing Agreement or
required by law.
Section 4.04. Repayment of Moneys Held by Paying Agent. In connection
with the satisfaction and discharge of this Note Indenture or the Covenant
Defeasance Option or Legal Defeasance Option with respect to the Notes, all
moneys then held by any Paying Agent other than the Note Trustee under the
provisions of this Note Indenture with respect to such Notes shall, upon demand
of the Note Issuer, be paid to the Note Trustee to be held and applied according
to Section 3.03 and thereupon such Paying Agent shall be released from all
further liability with respect to such moneys.
ARTICLE V
REMEDIES
Section 5.01. Events of Default. "Event of Default", wherever used
herein, means any one of the following events (whatever the reason for such
Event of Default and whether it shall be voluntary or involuntary or be effected
by operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body):
(i) default in the payment of any interest on any Note when
the same becomes due and payable, and such default shall continue for a
period of five days; or
(ii) default in the payment of the then unpaid principal of
any Note on the Final Maturity Date; or
(iii) default in the payment of the Optional Redemption Price
for the Notes on the Optional Redemption Date therefor, or a default in
the payment of the Mandatory Redemption Price for the Notes on the
Mandatory Redemption Date;
(iv) default in the observance or performance in any material
respect of any covenant or agreement of the Note Issuer made in this
Note Indenture (other than a
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covenant or agreement, a default in the observance or performance of
which is elsewhere in this Section specifically dealt with), or any
representation or warranty of the Note Issuer made in this Note
Indenture or in any certificate or other writing delivered pursuant
hereto or in connection herewith proving to have been incorrect in any
material respect as of the time when the same shall have been made, and
such default shall continue or not be cured, or the circumstance or
condition in respect of which such misrepresentation or warranty was
incorrect shall not have been eliminated or otherwise cured, for a
period of 30 days after there shall have been given, by registered or
certified mail, to the Note Issuer by the Note Trustee or to the Note
Issuer and the Note Trustee by the Holders of at least 25 percent of
the Outstanding Amount of the Notes, a written notice specifying such
default or incorrect representation or warranty and requiring it to be
remedied and stating that such notice is a "Notice of Default"
hereunder; or
(v) the filing of a decree or order for relief by a court
having jurisdiction in the premises in respect of the Note Issuer or
any substantial part of the Collateral in an involuntary case under any
applicable federal or state bankruptcy, insolvency or other similar law
now or hereafter in effect, or appointing a receiver, liquidator,
assignee, custodian, trustee, sequestrator or similar official of the
Note Issuer or for any substantial part of the Collateral, or ordering
the winding-up or liquidation of the Note Issuer's affairs, and such
decree or order shall remain unstayed and in effect for a period of 60
consecutive days; or
(vi) the commencement by the Note Issuer of a voluntary case
under any applicable federal or state bankruptcy, insolvency or other
similar law now or hereafter in effect, or the consent by the Note
Issuer to the entry of an order for relief in an involuntary case under
any such law, or the consent by the Note Issuer to the appointment or
taking possession by a receiver, liquidator, assignee, custodian,
trustee, sequestrator or similar official of the Note Issuer or for any
substantial part of the Collateral, or the making by the Note Issuer of
any general assignment for the benefit of creditors, or the failure by
the Note Issuer generally to pay its debts as such debts become due, or
the taking of action by the Note Issuer in furtherance of any of the
foregoing.
The Note Issuer shall deliver to a Responsible Officer of the Note
Trustee, the Certificate Trustee and the Rating Agencies, within five days after
an Authorized Officer has knowledge of the occurrence thereof, written notice in
the form of an Officer's Certificate of any event which with the giving of
notice and the lapse of time would become an Event of Default under clause (iv),
its status and what action the Note Issuer is taking or proposes to take with
respect thereto.
Section 5.02. Acceleration of Maturity; Rescission and Annulment. If an
Event of Default should occur and be continuing, then and in every such case the
Note Trustee or the Holders of Notes representing not less than a majority of
the Outstanding Amount of the Notes may declare all the Notes to be immediately
due and payable, by a notice in writing to the Note Issuer (and to the Note
Trustee if given by Noteholders), and upon any such declaration the unpaid
principal amount of the Notes, together with accrued and unpaid interest thereon
through the date of acceleration, shall become immediately due and payable.
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At any time after such declaration of acceleration of maturity has been
made and before a judgment or decree for payment of the money due has been
obtained by the Note Trustee as hereinafter in this Article V provided, the
Holders of Notes representing a majority of the Outstanding Amount of the Notes,
by written notice to the Note Issuer and the Note Trustee, may rescind and annul
such declaration and its consequences if:
(i) the Note Issuer has paid or deposited with the Note
Trustee a sum sufficient to pay:
(A) all payments of principal of and interest on all
Notes and all other amounts that would then be due hereunder
or upon such Notes if the Event of Default giving rise to such
acceleration had not occurred; and
(B) all sums paid or advanced by the Note Trustee
hereunder and the reasonable compensation, expenses,
disbursements and advances of the Note Trustee and its agents
and counsel and all amounts due under the Fee and Indemnity
Agreement; and
(ii) all Events of Default, other than the nonpayment of the
principal of the Notes that has become due solely by such acceleration,
have been cured or waived as provided in Section 5.12.
No such rescission shall affect any subsequent Default or impair any
right consequent thereto.
Section 5.03. Collection of Indebtedness and Suits for Enforcement by
Note Trustee.
(a) The Note Issuer covenants that if (i) default is made in the
payment of any interest on any Note when the same becomes due and payable, and
such default continues for a period of five days, (ii) default is made in the
payment of the then unpaid principal of any Note on the Final Maturity Date for
such Note or (iii) default is made in the payment of the Optional Redemption
Price or Mandatory Redemption Price, as applicable, for any Note on the Optional
Redemption Date or Mandatory Redemption Date, as applicable, therefor, the Note
Issuer will, upon demand of the Note Trustee, pay to it, for the benefit of the
Holders of the Notes, the whole amount then due and payable on such Notes for
principal and interest, with interest upon the overdue principal and, to the
extent payment at such rate of interest shall be legally enforceable, upon
overdue installments of interest, at the respective rate borne by the Notes of
the applicable Class and in addition thereto such further amount as shall be
sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Note
Trustee and its agents and counsel and an amount sufficient to cover all amounts
required to be paid by the Note Issuer under the Fee and Indemnity Agreement.
(b) Subject to Section 11.16, in case the Note Issuer shall fail
forthwith to pay such amounts upon such demand, the Note Trustee, in its own
name and as trustee of an express trust, may institute a Proceeding for the
collection of the sums so due and unpaid, and may prosecute such Proceeding to
judgment or final decree, and may enforce the same against the Note Issuer or
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other obligor upon such Notes and collect in the manner provided by law out of
the property of the Note Issuer or other obligor upon such Notes, wherever
situated, the moneys adjudged or decreed to be payable.
(c) If an Event of Default occurs and is continuing, the Note Trustee
may, as more particularly provided in Section 5.04, in its discretion, proceed
to protect and enforce its rights and the rights of the Noteholders, by such
appropriate Proceedings as the Note Trustee shall deem most effective to protect
and enforce any such rights, whether for the specific enforcement of any
covenant or agreement in this Note Indenture or in aid of the exercise of any
power granted herein, or to enforce any other proper remedy or legal or
equitable right vested in the Note Trustee by this Note Indenture or by law.
(d) In case there shall be pending, relative to the Note Issuer or any
other obligor upon the Notes or any Person having or claiming an ownership
interest in the Collateral, Proceedings under Title 11 of the United States Code
or any other applicable federal or state bankruptcy, insolvency or other similar
law, or in case a receiver, assignee or trustee in bankruptcy or reorganization,
liquidator, sequestrator or similar official shall have been appointed for or
taken possession of the Note Issuer or its property or such other obligor or
Person, or in case of any other comparable judicial Proceedings relative to the
Note Issuer or other obligor upon the Notes, or to the creditors or property of
the Note Issuer or such other obligor, the Note Trustee, irrespective of whether
the principal of any Notes shall then be due and payable as therein expressed or
by declaration or otherwise and irrespective of whether the Note Trustee shall
have made any demand pursuant to the provisions of this Section, shall be
entitled and empowered, by intervention in such Proceedings or otherwise:
(i) to file and prove a claim or claims for the whole amount
of principal and interest owing and unpaid in respect of the Notes and
to file such other papers or documents as may be necessary or advisable
in order to have the claims of (A) the Note Trustee (including any
claim for reasonable compensation to the Note Trustee and each
predecessor Note Trustee, and their respective agents, attorneys and
counsel, and for reimbursement of all expenses and liabilities
incurred, and all advances made, by the Note Trustee and each
predecessor Note Trustee, except as a result of gross negligence or
willful misconduct), (B) the Noteholders and (C) each Person for whom a
claim may be made under the Fee and Indemnity Agreement, allowed in
such Proceedings;
(ii) unless prohibited by applicable law and regulations, to
vote on behalf of the Holders of Notes in any election of a trustee, a
standby trustee or Person performing similar functions in any such
Proceedings; and
(iii) to collect and receive any moneys or other property
payable or deliverable on any such claims and to distribute all amounts
received with respect to the claims of the Noteholders and of the Note
Trustee on their behalf;
and any trustee, receiver, liquidator, custodian or other similar official in
any such Proceeding is hereby authorized by each of such Noteholders to make
payments to the Note Trustee, and, in the event that the Note Trustee shall
consent to the making of payments directly to such Noteholders,
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to pay to the Note Trustee (or such other beneficiary of the Fee and Indemnity
Agreement) such amounts as shall be sufficient to cover reasonable compensation
and other amounts owing hereunder to the Note Trustee or such Person, each
predecessor Note Trustee and their respective agents, attorneys and counsel, and
all other reasonable expenses and liabilities incurred, and all advances made,
by the Note Trustee and each predecessor Note Trustee except as a result of
gross negligence or willful misconduct.
(e) Nothing herein contained shall be deemed to authorize the Note
Trustee to authorize or consent to or vote for or accept or adopt on behalf of
any Noteholder any plan of reorganization, arrangement, adjustment or
composition affecting the Notes or the rights of any Holder thereof or to
authorize the Note Trustee to vote in respect of the claim of any Noteholder in
any such proceeding except, as aforesaid, to vote for the election of a trustee
in bankruptcy or similar Person.
(f) All rights of action and of asserting claims under this Note
Indenture, or under any of the Notes, may be enforced by the Note Trustee
without the possession of any of the Notes or the production thereof in any
trial or other Proceedings relative thereto, and any such action or proceedings
instituted by the Note Trustee shall be brought in its own name as trustee of an
express trust, and any recovery of judgment, subject to the payment of the
expenses, disbursements and compensation of the Note Trustee, each predecessor
Note Trustee and their respective agents and attorneys, shall be for the ratable
benefit of the Holders of the Notes.
(g) In any Proceedings brought by the Note Trustee (and also any
Proceedings involving the interpretation of any provision of this Note Indenture
to which the Note Trustee shall be a party), the Note Trustee shall be held to
represent all the Holders of the Notes, and it shall not be necessary to make
any Noteholder a party to any such Proceedings.
Section 5.04. Remedies; Priorities.
(a) If an Event of Default shall have occurred and be continuing, the
Note Trustee may do one or more of the following (subject to Section 5.05):
(i) institute Proceedings in its own name and as trustee of an
express trust for the collection of all amounts then payable on the
Notes or under this Note Indenture with respect thereto, whether by
declaration or otherwise, enforce any judgment obtained, and collect
from the Note Issuer and any other obligor upon such Notes moneys
adjudged due;
(ii) institute Proceedings from time to time for the complete
or partial foreclosure of this Note Indenture with respect to the
Collateral;
(iii) exercise any remedies of a secured party under the UCC
or the Statute and take any other appropriate action to protect and
enforce the rights and remedies of the Note Trustee and the Holders of
the Notes; and
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(iv) sell the Collateral or any portion thereof or rights or
interest therein, at one or more public or private sales called and
conducted in any manner permitted by law;
provided, however, that the Note Trustee may not sell or otherwise liquidate any
portion of the Collateral following an Event of Default, other than an Event of
Default described in Section 5.01(i), (ii) or (iii), unless (A) the Holders of
100 percent of the Outstanding Amount of the Notes consent thereto, (B) the
proceeds of such sale or liquidation distributable to the Noteholders are
sufficient to discharge in full all amounts then due and unpaid upon such Notes
for principal and interest after taking into account payment of all amounts due
prior thereto pursuant to the priorities set forth in Section 8.02(d) or (C) the
Note Trustee determines that the Collateral will not continue to provide
sufficient funds for all payments on the Notes as they would have become due if
the Notes had not been declared due and payable, and the Note Trustee obtains
the consent of Holders of 66-2/3 percent of the Outstanding Amount of the Notes.
In determining such sufficiency or insufficiency with respect to clause (B) and
(C), the Note Trustee may, but need not, obtain and conclusively rely upon an
opinion of an Independent investment banking or accounting firm of national
reputation as to the feasibility of such proposed action and as to the
sufficiency of the Collateral for such purpose.
(b) If the Note Trustee collects any money pursuant to this Article V,
it shall pay out such money in accordance with the priorities set forth in
Section 8.02(d).
Section 5.05. Optional Possession of the Collateral. If the Notes have
been declared to be due and payable under Section 5.02 following an Event of
Default and such declaration and its consequences have not been rescinded and
annulled, the Note Trustee may, but need not, elect to maintain possession of
the Collateral. It is the desire of the parties hereto and the Noteholders that
there be at all times sufficient funds for the payment of principal of and
interest on the Notes, and the Note Trustee shall take such desire into account
when determining whether or not to maintain possession of the Collateral. In
determining whether to maintain possession of the Collateral, the Note Trustee
may, but need not, obtain and conclusively rely upon an opinion of an
Independent investment banking or accounting firm of national reputation as to
the feasibility of such proposed action and as to the sufficiency of the
Collateral for such purpose.
Section 5.06. Limitation of Suits. No Holder of any Note shall have any
right to institute any Proceeding, judicial or otherwise, with respect to this
Note Indenture, or for the appointment of a receiver or trustee, or for any
other remedy hereunder, unless:
(i) such Holder previously has given written notice to the
Note Trustee of a continuing Event of Default;
(ii) the Holders of not less than 25 percent of the
Outstanding Amount of the Notes have made written request to the Note
Trustee to institute such Proceeding in respect of such Event of
Default in its own name as Note Trustee hereunder;
(iii) such Holder or Holders have offered to the Note Trustee
indemnity satisfactory to it against the costs, expenses and
liabilities to be incurred in complying with such request;
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(iv) the Note Trustee for 60 days after its receipt of such
notice, request and offer of indemnity has failed to institute such
Proceedings; and
(v) no direction inconsistent with such written request has
been given to the Note Trustee during such 60-day period by the Holders
of a majority of the Outstanding Amount of the Notes;
it being understood and intended that no one or more Holders of Notes shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Note Indenture to affect, disturb or prejudice the rights of any other
Holders of Notes or to obtain or to seek to obtain priority or preference over
any other Holders or to enforce any right under this Note Indenture, except in
the manner herein provided.
In the event the Note Trustee shall receive conflicting or inconsistent
requests and indemnity from two or more groups of Holders of Notes, each
representing less than a majority of the Outstanding Amount of the Notes, the
Note Trustee in its sole discretion may determine what action, if any, shall be
taken, notwithstanding any other provisions of this Note Indenture.
Section 5.07. Unconditional Rights of Noteholders To Receive Principal
and Interest. Notwithstanding any other provisions in this Note Indenture, the
Holder of any Note shall have the right, which is absolute and unconditional,
(a) to receive payment of (i) the interest, if any, on such Note on or after the
due dates thereof expressed in such Note or in this Note Indenture, (ii) the
unpaid principal, if any, of such Notes on or after the Final Maturity Date
therefor or (iii) in the case of redemption, receive payment of the unpaid
principal of and interest, if any, on such Note on or after the Optional
Redemption Date or Mandatory Redemption Date, as applicable, therefor and (b) to
institute suit for the enforcement of any such payment, and such right shall not
be impaired without the consent of such Holder.
Section 5.08. Restoration of Rights and Remedies. If the Note Trustee
or any Noteholder has instituted any Proceeding to enforce any right or remedy
under this Note Indenture and such Proceeding has been discontinued or abandoned
for any reason or has been determined adversely to the Note Trustee or to such
Noteholder, then and in every such case the Note Issuer, the Note Trustee and
the Noteholders shall, subject to any determination in such Proceeding, be
restored severally and respectively to their former positions hereunder, and
thereafter all rights and remedies of the Note Trustee and the Noteholders shall
continue as though no such Proceeding had been instituted.
Section 5.09. Rights and Remedies Cumulative. No right or remedy herein
conferred upon or reserved to the Note Trustee or to the Noteholders is intended
to be exclusive of any other right or remedy, and every right and remedy shall,
to the extent permitted by law, be cumulative and in addition to every other
right and remedy given hereunder or now or hereafter existing at law or in
equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
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Section 5.10. Delay or Omission Not a Waiver. No delay or omission of
the Note Trustee or any Noteholder to exercise any right or remedy accruing upon
any Default or Event of Default shall impair any such right or remedy or
constitute a waiver of any such Default or Event of Default or an acquiescence
therein. Every right and remedy given by this Article V or by law to the Note
Trustee or to the Noteholders may be exercised from time to time, and as often
as may be deemed expedient, by the Note Trustee or by the Noteholders, as the
case may be.
Section 5.11. Control by Noteholders. The Holders of a majority of the
Outstanding Amount of the Notes (or, if less than all Classes are affected, the
affected Class or Classes) shall have the right to direct the time, method and
place of conducting any Proceeding for any remedy available to the Note Trustee
with respect to the Notes of such Class or Classes or exercising any trust or
power conferred on the Note Trustee with respect to such Class or Classes;
provided, however, that
(i) such direction shall not be in conflict with any rule of
law or with this Note Indenture;
(ii) subject to the express terms of Section 5.04, any
direction to the Note Trustee to sell or liquidate the Collateral shall
be by the Holders of Notes representing not less than 100 percent of
the Outstanding Amount of the Notes;
(iii) if the conditions set forth in Section 5.05 have been
satisfied and the Note Trustee elects to retain the Collateral pursuant
to such Section, then any direction to the Note Trustee by Holders of
Notes representing less than 100 percent of the Outstanding Amount of
the Notes to sell or liquidate the Collateral shall be of no force and
effect; and
(iv) the Note Trustee may take any other action deemed proper
by the Note Trustee that is not inconsistent with such direction;
provided, however, that, subject to Section 6.01, the Note Trustee need not take
any action that it determines might involve it in liability or might materially
adversely affect the rights of any Noteholders not consenting to such action.
Section 5.12. Waiver of Past Defaults. Prior to the declaration of the
acceleration of the maturity of the Notes as provided in Section 5.02, the
Holders of Notes of not less than a majority of the Outstanding Amount of the
Notes may waive any past Default or Event of Default and its consequences except
a Default (a) in payment of principal of or interest on any of the Notes or (b)
in respect of a covenant or provision hereof which cannot be modified or amended
without the consent of the Holder of each Note or of all Classes affected. In
the case of any such waiver, the Note Issuer, the Note Trustee and the Holders
of the Notes shall be restored to their former positions and rights hereunder,
respectively; but no such waiver shall extend to any subsequent or other Default
or impair any right consequent thereto.
Upon any such waiver, such Default shall cease to exist and be deemed
to have been cured and not to have occurred, and any Event of Default arising
therefrom shall be deemed to
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have been cured and not to have occurred, for every purpose of this Note
Indenture; but no such waiver shall extend to any subsequent or other Default or
Event of Default or impair any right consequent thereto.
Section 5.13. Undertaking for Costs. All parties to this Note Indenture
agree, and each Holder of any Note by such Holder's acceptance thereof shall be
deemed to have agreed, that any court may in its discretion require, in any suit
for the enforcement of any right or remedy under this Note Indenture, or in any
suit against the Note Trustee for any action taken, suffered or omitted by it as
Note Trustee, the filing by any party litigant in such suit of an undertaking to
pay the costs of such suit, and that such court may in its discretion assess
reasonable costs, including reasonable attorneys' fees, against any party
litigant in such suit, having due regard to the merits and good faith of the
claims or defenses made by such party litigant; but the provisions of this
Section shall not apply to (a) any suit instituted by the Note Trustee, (b) any
suit instituted by any Noteholder, or group of Noteholders, in each case holding
in the aggregate more than 10 percent of the Outstanding Amount of the Notes or
(c) any suit instituted by any Noteholder for the enforcement of the payment of
(i) interest on any Note on or after the due dates expressed in such Note and in
this Note Indenture, (ii) the unpaid principal, if any, of any Note on or after
the Final Maturity Date therefor or (iii) in the case of redemption, the unpaid
principal of and interest on any Note on or after the Optional Redemption Date
or Mandatory Redemption Date, as applicable, therefor.
Section 5.14. Waiver of Stay or Extension Laws. The Note Issuer
covenants (to the extent that it may lawfully do so) that it will not at any
time insist upon, or plead or in any manner whatsoever, claim or take the
benefit or advantage of, any stay or extension law wherever enacted, now or at
any time hereafter in force, that may affect the covenants or the performance of
this Note Indenture; and the Note Issuer (to the extent that it may lawfully do
so) hereby expressly waives all benefit or advantage of any such law, and
covenants that it will not hinder, delay or impede the execution of any power
herein granted to the Note Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.
Section 5.15. Action on Notes. The Note Trustee's right to seek and
recover judgment on the Notes or under this Note Indenture shall not be affected
by the seeking, obtaining or application of any other relief under or with
respect to this Note Indenture. Neither the lien of this Note Indenture nor any
rights or remedies of the Note Trustee or the Noteholders shall be impaired by
the recovery of any judgment by the Note Trustee against the Note Issuer or by
the levy of any execution under such judgment upon any portion of the Collateral
or upon any of the assets of the Note Issuer.
Section 5.16. Performance and Enforcement of Certain Obligations.
(a) Promptly following a request from the Note Trustee to do so and at
the Note Issuer's expense, the Note Issuer agrees to take all such lawful action
as the Note Trustee may reasonably request to compel or secure the performance
and observance by the Seller and the Servicer, as applicable, of each of their
obligations to the Note Issuer under or in connection with the Sale Agreement
and the Servicing Agreement, respectively, in accordance with the terms thereof,
and
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to exercise any and all rights, remedies, powers and privileges lawfully
available to the Note Issuer under or in connection with the Sale Agreement and
the Servicing Agreement, respectively, to the extent and in the manner directed
by the Note Trustee, including the transmission of notices of default on the
part of the Seller or the Servicer thereunder and the institution of legal or
administrative actions or proceedings to compel or secure performance by the
Seller or the Servicer of each of their obligations under the Sale Agreement and
the Servicing Agreement, respectively.
(b) If an Event of Default has occurred, the Note Trustee may, and, at
the direction (which direction shall be in writing or by telephone (confirmed in
writing promptly thereafter)) of the Holders of 66-2/3 percent of the
Outstanding Amount of the Notes shall, subject to Article VI, exercise all
rights, remedies, powers, privileges and claims of the Note Issuer against the
Seller or the Servicer under or in connection with the Sale Agreement and the
Servicing Agreement, respectively, including the right or power to take any
action to compel or secure performance or observance by the Seller or the
Servicer of each of their obligations to the Note Issuer thereunder and to give
any consent, request, notice, direction, approval, extension or waiver under the
Sale Agreement or the Servicing Agreement, respectively, and any right of the
Note Issuer to take such action shall be suspended.
ARTICLE VI
THE NOTE TRUSTEE
Section 6.01. Duties of Note Trustee.
(a) If an Event of Default has occurred and is continuing, the Note
Trustee shall exercise the rights and powers vested in it by this Note Indenture
and use the same degree of care and skill in their exercise as a prudent person
would exercise or use under the circumstances in the conduct of such person's
own affairs.
(b) Except during the continuance of an Event of Default:
(i) the Note Trustee undertakes to perform such duties and
only such duties as are specifically set forth in this Note Indenture
and no implied covenants or obligations shall be read into this Note
Indenture against the Note Trustee; and
(ii) in the absence of bad faith on its part, the Note Trustee
may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Note Trustee and conforming to the
requirements of this Note Indenture; however, the Note Trustee shall
examine the certificates and opinions to determine whether or not they
conform to the requirements of this Note Indenture.
(c) The Note Trustee may not be relieved from liability for its own
grossly negligent action, its own grossly negligent failure to act or its own
willful misconduct, except that:
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(i) this paragraph does not limit the effect of paragraph (b)
of this Section;
(ii) the Note Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer unless it is
proved that the Note Trustee was grossly negligent in ascertaining the
pertinent facts; and
(iii) the Note Trustee shall not be liable with respect to any
action it takes or omits to take in good faith in accordance with a
direction received by it pursuant to Section 5.11.
(d) Every provision of this Note Indenture that in any way relates to
the Note Trustee is subject to paragraphs (a) , (b) and (c) of this Section.
(e) The Note Trustee shall not be liable for interest on any money
received by it except as the Note Trustee may agree in writing with the Note
Issuer.
(f) Money held in trust by the Note Trustee need not be segregated from
other funds except to the extent required by law or the terms of this Note
Indenture, the Sale Agreement or the Servicing Agreement.
(g) No provision of this Note Indenture shall require the Note Trustee
to expend or risk its own funds or otherwise incur financial liability in the
performance of any of its duties hereunder or in the exercise of any of its
rights or powers, if it shall have reasonable grounds to believe that repayments
of such funds or indemnity satisfactory to it against such risk or liability is
not reasonably assured to it.
(h) Every provision of this Note Indenture relating to the conduct or
affecting the liability of or affording protection to the Note Trustee shall be
subject to the provisions of this Section and to the provisions of the Trust
Indenture Act.
(i) In the event that the Note Trustee is also acting as Paying Agent
or Note Registrar hereunder, this Article VI shall also be afforded to such
Paying Agent or Note Registrar.
Section 6.02. Rights of Note Trustee.
(a) The Note Trustee may conclusively rely and shall be fully protected
in relying on any document believed in good faith by it to be genuine and to
have been signed or presented by the proper person. The Note Trustee need not
investigate any fact or matter stated in the document.
(b) Before the Note Trustee acts or refrains from acting, it may
require an Officer's Certificate or an Opinion of Counsel. The Note Trustee
shall not be liable for any action it takes or omits to take in good faith in
reliance on the Officer's Certificate or Opinion of Counsel.
(c) The Note Trustee may execute any of the trusts or powers hereunder
or perform any duties hereunder either directly or by or through agents or
attorneys or a custodian or nominee, and the Note Trustee shall not be
responsible for any misconduct or negligence on the part of, or
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for the supervision of, any such agent, attorney, custodian or nominee appointed
with due care by it hereunder.
(d) The Note Trustee shall not be liable for any action it takes or
omits to take in good faith which it believes to be authorized or within its
rights or powers; provided, however, that the Note Trustee's conduct does not
constitute willful misconduct or gross negligence.
(e) The Note Trustee may consult with counsel, and the advice or
opinion of counsel with respect to legal matters relating to this Note Indenture
and the Notes shall be full and complete authorization and protection from
liability in respect to any action taken, omitted or suffered by it hereunder in
good faith and in accordance with the advice or opinion of such counsel.
(f) The Note Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Note Indenture at the request or
direction of any Holder pursuant to this Note Indenture, unless such Holder
shall have offered to the Note Trustee reasonable security or indemnity against
the costs, expenses and liabilities which might be incurred by it in compliance
with such request or direction.
(g) The Note Trustee shall not be charged with knowledge of any Default
or Event of Default, unless either (1) a Responsible Officer of the Note Trustee
shall have actual knowledge of the Default or Event of Default, or (2) written
notice of such Default or Event of Default shall have been given to the Note
Trustee by the Note Issuer or by a Holder of the Notes.
Section 6.03. Individual Rights of Note Trustee. The Note Trustee in its
individual or any other capacity may become the owner or pledgee of Notes and
may otherwise deal with the Note Issuer or its affiliates with the same rights
it would have if it were not Note Trustee. Any Paying Agent, Note Registrar,
co-registrar or co-paying agent may do the same with like rights. However, the
Note Trustee must comply with Sections 6.11 and 6.12.
Section 6.04. Note Trustee's Disclaimer. The Note Trustee shall not be
responsible for and makes no representation as to the validity or adequacy of
this Note Indenture or the Notes, it shall not be accountable for the Note
Issuer's use of the proceeds from the Notes, and it shall not be responsible for
any statement of the Note Issuer in the Note Indenture or in any document issued
in connection with the sale of the Notes or in the Notes other than the Note
Trustee's certificate of authentication.
Section 6.05. Notice of Defaults. If a Default occurs and is continuing and if
it is actually known to a Responsible Officer of the Note Trustee, the Note
Trustee shall mail to the Agencies, each Holder of Notes and to the Rating
Agencies notice of the Default within 30 days after it occurs. Except in the
case of a Default in payment of principal of or interest on any Note, the Note
Trustee may withhold the notice if and so long as a committee of its Responsible
Officers in good faith after consultation with the Certificate Trustee
determines that withholding the notice is in the interests of Noteholders and
the Certificateholders.
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Section 6.06. Reports by Note Trustee to Holders.
(a) So long as the Note Trustee is the Note Registrar and Paying Agent,
it shall deliver to each Noteholder such information in its possession as may be
required to enable such Holder to prepare its federal and state income tax
returns.
(b) On or prior to each Payment Date therefor, the Note Trustee will
deliver to each Holder of Notes on such Payment Date a statement as provided and
prepared by the Servicer which will include (to the extent applicable) the
following information as to the Notes with respect to such Payment Date or the
period since the previous Payment Date, as applicable:
(i) the amount of the distribution to Noteholders allocable to
principal;
(ii) the amount of the distribution to Noteholders allocable
to interest;
(iii) the aggregate outstanding Principal Balance of the
Notes, after giving effect to payments allocated to principal reported
under (i) above; and
(iv) the difference, if any, between the Principal Balance and
the Projected Principal Balance as of such Payment Date, after giving
effect to distributions to be made on such Payment Date.
(c) The Note Issuer shall send a copy of each Certificate of Compliance
delivered to it pursuant to Section 3.03 of the Servicing Agreement and each
Annual Accountant's Report delivered to it pursuant to Section 3.04 of the
Servicing Agreement to the Note Trustee, the Noteholders and the Rating
Agencies.
If the Note Trustee is also serving as the Certificate Trustee, it
shall also prepare the statements required to be delivered to Certificateholders
pursuant to Section 4.02(d) of the Certificate Indenture.
Section 6.07. Compensation and Indemnity. The Note Issuer shall pay to the Note
Trustee from time to time reasonable compensation for its services. The Note
Trustee's compensation shall not be limited by any law on compensation of a
trustee of an express trust. The Note Issuer shall reimburse the Note Trustee
for all reasonable out-of-pocket expenses, disbursements and advances incurred
or made by it, including costs of collection, in addition to the compensation
for its services. Such expenses shall include the reasonable compensation and
expenses, disbursements and advances of the Note Trustee's agents, counsel,
accountants and experts. The Note Issuer shall indemnify, defend and hold
harmless the Note Trustee and any of its affiliates, officers, directors,
employees and agents (the "Indemnified Persons") from and against any and all
losses, claims, actions, suits, taxes, damages, expenses (including, without
limitation, legal fees and expenses) and liabilities (including liabilities
under state or federal securities laws) of any kind and nature whatsoever
(collectively, "Expenses"), to the extent that such Expenses arise out of or are
imposed upon or asserted against such Indemnified Persons with respect to the
creation, administration, operation or termination of this trust and the
performance by the Note Trustee of its duties hereunder, the failure of the Note
Issuer or any other Person (other than the Person being indemnified) to
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perform its obligations hereunder or under any of the Basic Documents, or
otherwise in connection with the Basic Documents or the transactions
contemplated thereby, provided, however, that the Note Issuer is not required to
indemnify any Indemnified Person for any Expenses that result from the willful
misconduct or gross negligence of such Indemnified Person. The willful
misconduct or gross negligence of any Note Trustee shall not affect the rights
of any predecessor or successor Note Trustee hereunder. The Note Trustee shall
notify the Note Issuer as soon as is reasonably practicable of any claim for
which it may seek indemnity. Failure by the Note Trustee to so notify the Note
Issuer shall not relieve the Note Issuer of its obligations hereunder. The Note
Issuer shall defend the claim and the Note Trustee may have separate counsel and
the Note Issuer shall pay the fees and expenses of such counsel.
The Note Issuer's payment obligations to the Note Trustee pursuant to
this Section shall survive the discharge of this Note Indenture or the earlier
resignation or removal of the Note Trustee. When the Note Trustee incurs
expenses after the occurrence of a Default specified in Section 5.01(v) or (vi)
with respect to the Note Issuer, the expenses are intended to constitute
expenses of administration under Title 11 of the United States Code or any other
applicable federal or state bankruptcy, insolvency or similar law.
The Note Issuer acknowledges and agrees that under the Certificate
Indenture the Certificate Trustee shall pay the fees and expenses of, and shall
indemnify and hold harmless the Note Trustee and the Delaware Trustee, to the
extent that payments required to be made by the Note Issuer to the Note Trustee
under this Section 6.07 or to the Delaware Trustee under the Fee and Indemnity
Agreement, as the case may be, are not made by the Note Issuer when due.
Section 6.08. Replacement of Note Trustee. The Note Trustee may resign at any
time by so notifying the Note Issuer, provided, however, that no such
resignation shall be effective until either (a) the Collateral has been
completely liquidated and the proceeds of the liquidation distributed to the
Noteholders or (b) a successor trustee having the qualifications set forth in
Section 6.11 has been designated and has accepted such trusteeship. The Holders
of a majority in Outstanding Amount of the Notes may remove the Note Trustee by
so notifying the Note Trustee and may appoint a successor Note Trustee. The Note
Issuer shall remove the Note Trustee if:
(i) the Note Trustee fails to comply with Section 6.11;
(ii) the Note Trustee is adjudged a bankrupt or insolvent;
(iii) a receiver or other public officer takes charge of the
Note Trustee or its property; or
(iv) the Note Trustee otherwise becomes incapable of acting.
If the Note Trustee resigns or is removed or if a vacancy exists in the
office of Note Trustee for any reason (the Note Trustee in such event being
referred to herein as the retiring Note Trustee), the Note Issuer shall promptly
appoint a successor Note Trustee.
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A successor Note Trustee shall deliver a written acceptance of its
appointment to the retiring Note Trustee and to the Note Issuer. Thereupon the
resignation or removal of the retiring Note Trustee shall become effective, and
the successor Note Trustee shall have all the rights, powers and duties of the
Note Trustee under this Note Indenture. The successor Note Trustee shall mail a
notice of its succession to Noteholders and to the Rating Agencies. The retiring
Note Trustee shall promptly transfer all property held by it as Note Trustee to
the successor Note Trustee.
If a successor Note Trustee does not take office within 60 days after
the retiring Note Trustee resigns or is removed, the retiring Note Trustee, the
Note Issuer or the Holders of a majority in Outstanding Amount of the Notes may
petition any court of competent jurisdiction for the appointment of a successor
Note Trustee.
If the Note Trustee fails to comply with Section 6.11, any Noteholder
may petition any court of competent jurisdiction for the removal of the Note
Trustee and the appointment of a successor Note Trustee.
Notwithstanding the replacement of the Note Trustee pursuant to this
Section, the Note Issuer's obligations under Section 6.07 shall continue for the
benefit of the retiring Note Trustee.
Section 6.09. Successor Note Trustee by Merger. If the Note Trustee
consolidates with, merges or converts into, or transfers all or substantially
all its corporate trust business or assets to, another corporation or banking
association, the resulting, surviving or transferee corporation without any
further act shall be the successor Note Trustee. The successor Note Trustee
shall mail a notice of its merger, conversion or consolidation to the Rating
Agencies.
In case at the time such successor or successors by merger, conversion
or consolidation to the Note Trustee shall succeed to the trusts created by this
Note Indenture any of the Notes shall have been authenticated but not delivered,
any such successor to the Note Trustee may adopt the certificate of
authentication of any predecessor trustee, and deliver such Notes so
authenticated; and in case at that time any of the Notes shall not have been
authenticated, any successor to the Note Trustee may authenticate such Notes
either in the name of any predecessor hereunder or in the name of the successor
to the Note Trustee; and in all such cases such certificates shall be valid for
all purposes hereunder and under the Notes.
Section 6.10. Appointment of Co-Trustee or Separate Trustee.
(a) Notwithstanding any other provisions of this Note Indenture, at any
time, for the purpose of meeting any legal requirement of any jurisdiction in
which any part of the Collateral may at the time be located, the Note Trustee
shall have the power and may execute and deliver all instruments to appoint one
or more Persons to act as a co-trustee or co-trustees, or separate trustee or
separate trustees, of all or any part of the Collateral, and to vest in such
Person or Persons, in such capacity and for the benefit of the Noteholders, such
title to the Collateral, or any part hereof, and, subject to the other
provisions of this Section, such powers, duties, obligations, rights and trusts
as the Note Trustee may consider necessary or desirable. No co-trustee or
separate trustee hereunder shall be required to meet the terms of eligibility as
a
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successor trustee under Section 6.11 and no notice to Noteholders of the
appointment of any co-trustee or separate trustee shall be required under
Section 6.08 hereof.
(b) Every separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following provisions and
conditions:
(i) all rights, powers, duties and obligations conferred or
imposed upon the Note Trustee shall be conferred or imposed upon and
exercised or performed by the Note Trustee and such separate trustee or
co-trustee jointly (it being understood that such separate trustee or
co-trustee is not authorized to act separately without the Note Trustee
joining in such act), except to the extent that under any law of any
jurisdiction in which any particular act or acts are to be performed
the Note Trustee shall be incompetent or unqualified to perform such
act or acts, in which event such rights, powers, duties and obligations
(including the holding of title to the Collateral or any portion
thereof in any such jurisdiction) shall be exercised and performed
singly by such separate trustee or co-trustee, but solely at the
direction of the Note Trustee;
(ii) no trustee hereunder shall be personally liable by reason
of any act or omission of any other trustee hereunder; and
(iii) the Note Trustee may at any time accept the resignation
of or remove any separate trustee or co-trustee.
(c) Any notice, request or other writing given to the Note Trustee
shall be deemed to have been given to each of the then separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Note Indenture
and the conditions of this Article VI. Each separate trustee and co-trustee,
upon its acceptance of the trusts conferred, shall be vested with the estates or
property specified in its instrument of appointment, either jointly with the
Note Trustee or separately, as may be provided therein, subject to all the
provisions of this Note Indenture, specifically including every provision of
this Note Indenture relating to the conduct of, affecting the liability of, or
affording protection to, the Note Trustee. Every such instrument shall be filed
with the Note Trustee.
(d) Any separate trustee or co-trustee may at any time constitute the
Note Trustee, its agent or attorney-in-fact with full power and authority, to
the extent not prohibited by law, to do any lawful act under or in respect of
this Note Indenture on its behalf and in its name. If any separate trustee or
co-trustee shall die, become incapable of acting, resign or be removed, all of
its estates, properties, rights, remedies and trusts shall vest in and be
exercised by the Note Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee.
Section 6.11. Eligibility; Disqualification. The Note Trustee shall at all
times satisfy the requirements of Trust Indenture Act Section 310(a) and Section
26(a)(i) of the Investment Company Act of 1940. The Note Trustee shall have a
combined capital and surplus of at least $50,000,000 as set forth in its most
recent published annual report of condition and it shall have a long term debt
rating of A (or the equivalent thereof) or better by all of the Rating Agencies
from which a rating is available. The Note Trustee shall comply with Trust
Indenture Act Section 310(b), including
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the optional provision permitted by the second sentence of Trust Indenture Act
Section 310(b)(9); provided, however, that there shall be excluded from the
operation of Trust Indenture Act Section 310(b)(1) any indenture or indentures
under which other securities of the Note Issuer are outstanding if the
requirements for such exclusion set forth in Trust Indenture Act Section
310(b)(1) are met.
Section 6.12. Preferential Collection of Claims Against Note Issuer. The Note
Trustee shall comply with Trust Indenture Act Section 311(a), excluding any
creditor relationship listed in Trust Indenture Act Section 311(b). A Note
Trustee who has resigned or been removed shall be subject to Trust Indenture Act
Section 311(a) to the extent indicated.
Section 6.13. Representations and Warranties of Note Trustee. The Note Trustee
hereby represents and warrants that:
(a) the Note Trustee is a banking corporation validly existing in good
standing under the laws of the State of New York; and
(b) the Note Trustee has full power, authority and legal right to
execute, deliver and perform this Note Indenture and the Basic Documents to
which the Note Trustee is a party and has taken all necessary action to
authorize the execution, delivery, and performance by it of this Note Indenture
and such Basic Documents.
Section 6.14. Covenants of the Note Trustee. The Note Trustee hereby covenants
and agrees as follows:
(a) the Note Trustee will establish the Collection Account as a
Securities Account;
(b) the Note Trustee, acting as Securities Intermediary, will identify
the Collection Account in its records as a Securities Account of the Note
Trustee and will identify the Note Trustee in such records as the Person having
the Security Entitlement against the Securities Intermediary with respect to the
Securities Account and all Security Entitlements carried in the Securities
Account;
(c) the Note Trustee, acting as Securities Intermediary, will maintain
accurate and complete records of the Financial Assets in the Securities Account
such that the Collateral is objectively determinable;
(d) the Note Trustee, acting as Securities Intermediary, will in the
ordinary course of its business, maintain securities accounts for its customers,
will act in that capacity in holding the Securities Account under this Note
Indenture and will at all times be located in and maintain its books and records
relating to all of these securities in the State of New York;
(e) the Note Trustee, acting as Securities Intermediary, will treat all
Eligible Investments as Financial Assets and will duly hold the Eligible
Investments in the Securities Account; and
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(f) the Note Trustee, acting as Securities Intermediary, will not agree
to comply with entitlement orders of any secured party other than the Note
Trustee with respect to the Securities Account or any Security Entitlements
carried in the Securities Account.
ARTICLE VII
NOTEHOLDERS' LISTS AND REPORTS
Section 7.01. Note Issuer To Furnish Note Trustee Names and Addresses of
Noteholders. The Note Issuer will furnish or cause to be furnished to the Note
Trustee (a) not more than five days after the earlier of (i) each Record Date
and (ii) six months after the last Record Date, a list, in such form as the Note
Trustee may reasonably require, of the names and addresses of the Holders of
Notes as of such Record Date, (b) at such other times as the Note Trustee may
request in writing, within 30 days after receipt by the Note Issuer of any such
request, a list of similar form and content as of a date not more than 10 days
prior to the time such list is furnished; provided, however, that so long as the
Note Trustee is the Note Registrar, no such list shall be required to be
furnished.
Section 7.02. Preservation of Information; Communications to Noteholders.
(a) The Note Trustee shall preserve, in as current a form as is
reasonably practicable, the names and addresses of the Holders of Notes
contained in the most recent list furnished to the Note Trustee as provided in
Section 7.01 and the names and addresses of Holders of Notes received by the
Note Trustee in its capacity as Note Registrar. The Note Trustee may destroy any
list furnished to it as provided in such Section 7.01 upon receipt of a new list
so furnished.
(b) Noteholders may communicate pursuant to Trust Indenture Act Section
312(b) with other Noteholders with respect to their rights under this Note
Indenture or under the Notes.
(c) The Note Issuer, the Note Trustee and the Note Registrar shall have
the protection of Trust Indenture Act Section 312(c).
Section 7.03. Reports by Note Issuer.
(a) The Note Issuer shall:
(i) so long as the Note Issuer is required to file such
documents with the Commission, file with the Note Trustee, within 15
days after the Note Issuer is required to file the same with the
Commission, copies of the annual reports and of the information,
documents and other reports (or copies of such portions of any of the
foregoing as the Commission may from time to time by rules and
regulations prescribe) which the Note Issuer may be required to file
with the Commission pursuant to Section 13 or 15(d) of the Exchange
Act;
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(ii) file with the Note Trustee and the Commission in
accordance with rules and regulations prescribed from time to time by
the Commission such additional information, documents and reports with
respect to compliance by the Note Issuer with the conditions and
covenants of this Note Indenture as may be required from time to time
by such rules and regulations; and
(iii) supply to the Note Trustee (and the Note Trustee shall
transmit by mail to all Noteholders described in Trust Indenture Act
Section 313(c)) such summaries of any information, documents and
reports required to be filed by the Note Issuer pursuant to clauses (i)
and (ii) of this Section 7.03(a) as may be required by rules and
regulations prescribed from time to time by the Commission.
(b) Unless the Note Issuer otherwise determines, the fiscal year of the
Note Issuer shall end on December 31 of each year.
Section 7.04. Reports by Note Trustee. If required by Trust Indenture Act
Section 313(a), within 60 days after December 31 of each year, commencing
December 31, 1999, the Note Trustee shall mail to each Holder of Notes as
required by Trust Indenture Act Section 313(c) a brief report dated as of such
date that complies with Trust Indenture Act Section 313(a). The Note Trustee
also shall comply with Trust Indenture Act Section 313(b).
A copy of each report at the time of its mailing to Noteholders shall
be filed by the Note Trustee with the Commission and each stock exchange, if
any, on which the Notes are listed. The Note Issuer shall notify the Note
Trustee if and when the Notes are listed on any stock exchange.
ARTICLE VIII
ACCOUNTS, DISBURSEMENTS AND RELEASES
Section 8.01. Collection of Money. Except as otherwise expressly provided
herein, the Note Trustee may demand payment or delivery of, and shall receive
and collect, directly and without intervention or assistance of any fiscal agent
or other intermediary, all money and other property payable to or receivable by
the Note Trustee, the Certificate Trustee or the Delaware Trustee pursuant to
this Note Indenture, the Certificate Indenture and the Fee and Indemnity
Agreement. The Note Trustee shall apply all such money received by it as
provided in this Note Indenture. Except as otherwise expressly provided in this
Note Indenture, if any default occurs in the making of any payment or
performance under any agreement or instrument that is part of the Collateral,
the Note Trustee may take such action as may be appropriate to enforce such
payment or performance, subject to Article VI, including the institution and
prosecution of appropriate Proceedings. Any such action shall be without
prejudice to any right to claim a Default or Event of Default under this Note
Indenture and any right to proceed thereafter as provided in Article V.
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Section 8.02. Collection Account.
(a) Prior to the Issuance Date, the Note Issuer shall open, at the Note
Trustee's Corporate Trust Office, or at another Eligible Institution, one or
more segregated trust accounts in the Note Trustee's name for the deposit of
Estimated RTC Charge Payments and other amounts remitted under the Servicing
Agreement (collectively, the "Collection Account"). The Note Trustee shall hold
the Collection Account for the benefit of Noteholders. The Collection Account
will consist of four subaccounts: a general subaccount (the "General
Subaccount"), a reserve subaccount (the "Reserve Subaccount"), an
overcollateralization subaccount (the "Overcollateralization Subaccount") and a
capital subaccount (the "Capital Subaccount"). All amounts in the Collection
Account not allocated to any other subaccount shall be allocated to the General
Subaccount. Prior to the initial Payment Date, all amounts in the Collection
Account (other than funds deposited into the Capital Subaccount, together with
interest earnings thereon) shall be allocated to the General Subaccount. All
references to the Collection Account shall be deemed to include reference to all
subaccounts contained therein. Withdrawals from and deposits to each of the
foregoing subaccounts of the Collection Account shall be made as set forth in
Section 8.02. The Collection Account shall at all times be maintained in an
Eligible Deposit Account and only the Note Trustee shall have access to the
Collection Account for the purpose of making deposits in and withdrawals from
the Collection Account in accordance with this Note Indenture. Funds in the
Collection Account shall not be commingled with any other moneys. Except as
provided in Section 8.03, all moneys deposited from time to time in the
Collection Account, all deposits therein pursuant to this Note Indenture, and
all investments made in Eligible Investments with such moneys, including all
income or other gain from such investments, shall be held by the Note Trustee in
the Collection Account as part of the Collateral as herein provided.
(b) The Note Trustee shall have sole dominion and exclusive control
over all moneys in the Collection Account and shall apply such amounts therein
as provided in this Section 8.02. The Note Trustee shall also pay from the
Collection Account any amounts requested to be paid by the Servicer pursuant to
Section 4.03(b) of the Servicing Agreement.
(c) All Estimated RTC Charge Payments and other remittances under the
Servicing Agreement shall be deposited in the General Subaccount as provided in
Section 4.03 of the Servicing Agreement. All deposits to and withdrawals from
the Collection Account and all allocations to the subaccounts of the Collection
Account shall be made by the Note Trustee in accordance with the written
instructions provided by the Servicer in the Semiannual Servicer Certificate or
as otherwise provided herein.
(d) On any Business Day upon which the Note Trustee receives a written
request from the Administrator stating that any Operating Expense payable by the
Note Issuer (but only as described in clauses (i) through (iv) below) will
become due and payable prior to the next succeeding Payment Date, and setting
forth the amount and nature of such Operating Expenses, as well any supporting
documentation that the Note Trustee may reasonably request, the Note Trustee,
upon receipt of such information, will make payment of such Operating Expenses
on or before the date such payment is due from amounts on deposit in the General
Subaccount, the
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Reserve Subaccount, the Overcollateralization Subaccount and the Capital
Subaccount, in that order and only to the extent required to make such payment.
On each Payment Date, the Note Trustee shall apply, at the direction of
the Servicer, all amounts on deposit in the Collection Account, including all
net earnings thereon (other than on amounts in the Capital Subaccount), to pay
the following amounts, in accordance with the Semiannual Servicer Certificate,
in the following priority:
(i) all amounts owed by the Note Issuer to the Note Trustee
(including indemnity payments and legal fees and expenses) shall be
paid to the Note Trustee (subject to Section 6.07), all amounts owed by
the Note Issuer to the Certificate Trustee, the Delaware Trustee , the
Agencies and the Certificate Issuer under the Fee and Indemnity
Agreement, as well as an amount sufficient to compensate the
Certificate Trustee for all amounts payable by the Certificate Trustee
under Section 6.16 of the Certificate Indenture, as described in the
last paragraph of Section 6.07, shall be paid to the Certificate
Trustee, the Delaware Trustee, the Agencies and the Certificate Issuer,
as appropriate;
(ii) the Servicing Fee for such Payment Date and all unpaid
Servicing Fees from prior Payment Dates shall be paid to the Servicer;
(iii) the Administration Fee and all unpaid Administration
Fees from prior Payment Dates shall be paid to the Administrator;
(iv) so long as no Default or Event of Default shall have
occurred and be continuing or would result from such payment, all other
Operating Expenses shall be paid to the Persons entitled thereto;
provided, however, that the amount of such other Operating Expenses
paid by the Note Trustee from, but not including, the previous Payment
Date to, and including, the current Payment Date shall not in the
aggregate exceed $100,000;
(v) (A) any overdue Semiannual Interest (together with, to the
extent lawful, interest on such overdue Semiannual Interest at the
applicable Note Interest Rate) and (B) Semiannual Interest for such
Payment Date shall be paid to the Noteholders;
(vi) (A) principal due and payable on the Notes as a result of
an Event of Default or on the Final Maturity Date of the Notes, shall
be paid to the Noteholders and (B) Semiannual Principal for such
Payment Date shall be paid to the Noteholders;
(vii) unpaid Operating Expenses shall be paid to the Persons
entitled thereto;
(viii) the amount, if any, by which the Required Capital Level
with respect to all Outstanding Notes exceeds the amount in the Capital
Subaccount (disregarding any interest earnings held in the Capital
Subaccount which have not been remitted to the Note Issuer) as of such
Payment Date shall be allocated to the Capital Subaccount;
(ix) the amount, if any, by which the Required
Overcollateralization Level, with respect to all Outstanding Notes,
exceeds the amount in the Overcollateralization
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Subaccount as of such Payment Date shall be allocated to the
Overcollateralization Subaccount;
(x) the balance, if any, shall be allocated to the Reserve
Subaccount for distribution on subsequent Payment Dates; and
(xi) after principal of and interest on all Notes, and all of
the other foregoing amounts, have been paid in full, the balance, if
any, shall be paid to the Note Issuer, free from the lien of this Note
Indenture.
(e) All payments of interest and all payments of principal pursuant to
clause (vi)(A) shall be made to such holders pro rata based on the respective
principal amounts of Notes held by such Holders. All payments of principal
pursuant to clause (vi)(B) above shall be made to the Holders of the Class then
entitled to payment, based upon the Expected Amortization Schedule in accordance
with the priority set forth in Section 2.01(c)(iii). Payments in respect of
principal of and interest on any Class of Notes will be made on a pro rata basis
among all the Noteholders of such Class.
(f) If on any Payment Date, or for any amounts payable under clauses
(i) through (iv) above, on any Business Day, funds on deposit in the General
Subaccount are insufficient to make the payments contemplated by clauses (i)
through (vi) of Section 8.02(d) above, the Note Trustee shall (i) first, draw
from amounts on deposit in the Reserve Subaccount, (ii) second, draw from
amounts on deposit in the Overcollateralization Subaccount and (iii) third, draw
from amounts on deposit in the Capital Subaccount, in each case, up to the
amount of such shortfall in order to make the payments contemplated by clauses
(i) through (vi) of Section 8.02(d). In addition, if on any Payment Date funds
on deposit in the General Subaccount are insufficient to make the allocations
contemplated by clauses (viii) and (ix) above, the Note Trustee shall draw from
amounts on deposit in the Reserve Subaccount to make such allocations. If on any
Payment Date funds on deposit in the Collection Account are insufficient to make
the transfers contemplated by clause (v) above, the Note Trustee will allocate
the funds in the Collection Account among the classes pro rata.
(g) On any Optional Redemption Date or Mandatory Redemption Date, the
Note Trustee shall pay to the Noteholders the Optional Redemption Price or
Mandatory Redemption Price, as the case may be.
(h) On the last day of each month, if the amount in the Capital
Subaccount exceeds the Required Capital Level, the Note Trustee shall pay to the
Note Issuer, upon receipt of an Issuer Request, free from the lien of this Note
Indenture, all amounts in the Capital Subaccount in excess of the Required
Capital Level.
Section 8.03. General Provisions Regarding the Collection Account.
(a) So long as no Default or Event of Default shall have occurred and
be continuing, all or a portion of the funds in the Collection Account shall be
invested in Eligible Investments and reinvested by the Note Trustee upon Issuer
Order; provided, however, that (i) such Eligible
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Investments shall not mature later than the Business Day prior to the next
Payment Date, (ii) such Eligible Investments shall not be sold, liquidated or
otherwise disposed of at a loss prior to the maturity thereof and (iii) if such
Eligible Investments have a maturity of one month or less, such Eligible
Investments (or the provider thereof) must have a long-term unsecured debt
rating of at least A2 by Moody's (or the equivalent thereof by the other Rating
Agencies) or a short-term rating of at least P-1 by Moody's (or the equivalent
thereof by the other Rating Agencies), and if such Eligible Investments have a
maturity of greater than one month, such Eligible Investments (or the provider
thereof) must have a long-term unsecured debt rating of at least Aaa by Moody's
(or the equivalent thereof by the other Rating Agencies) and a short-term rating
of at least P-1 by Moody's (or the equivalent thereof by the other Rating
Agencies). All income or other gain from investments of moneys deposited in the
Collection Account shall be deposited by the Note Trustee in the Collection
Account, and any loss resulting from such investments shall be charged to the
Collection Account; provided, however, that all income or other gain from
investments of moneys deposited in the Capital Subaccount shall be retained in
the Capital Subaccount, and any loss resulting from such investments shall be
charged to the Capital Subaccount. The Note Issuer will not direct the Note
Trustee to make any investment of any funds or to sell any investment held in
the Collection Account unless the security interest Granted and perfected in
such account will continue to be perfected in such investment or the proceeds of
such sale, in either case without any further action by any Person, and, in
connection with any direction to the Note Trustee to make any such investment or
sale, if requested by the Note Trustee, the Note Issuer shall deliver to the
Note Trustee an Opinion of Counsel, reasonably acceptable to the Note Trustee,
to such effect. In no event shall the Note Trustee be liable for the selection
of Eligible Investments or for investment losses incurred thereon. The Note
Trustee shall have no liability in respect of losses incurred as a result of the
liquidation of any Eligible Investment prior to its stated maturity or the
failure of the Note Issuer to provide timely written investment direction. The
Note Trustee shall have no obligation to invest or reinvest any amounts held
hereunder in the absence of written investment direction pursuant to an Issuer
Order. If the rating of the Eligible Institution, which may be the Note
Trustee's Corporate Trust Office, falls below the rating requirements set forth
in clause (b)(i) of the definition of Eligible Institution, the Delaware
Trustee, on behalf of the Certificate Issuer, shall, within one month after
notice of such rating change, cause the Collection Account to be transferred to
an institution meeting the requirements set forth in clause (b)(i) of the
definition of "Eligible Institution."
(b) Subject to Section 6.01(c), the Note Trustee shall not in any way
be held liable by reason of any insufficiency in the Collection Account
resulting from any loss on any Eligible Investment included therein except for
losses attributable to the Note Trustee's failure to make payments on such
Eligible Investments issued by the Note Trustee, in its commercial capacity as
principal obligor and not as trustee, in accordance with their terms.
(c) If (i) the Note Issuer shall have failed to give written investment
directions for any funds on deposit in the Collection Account to the Note
Trustee by 11:00 a.m. Eastern Time (or such other time as may be agreed by the
Note Issuer and Note Trustee) on any Business Day; or (ii) a Default or Event of
Default shall have occurred and be continuing with respect to the Notes but the
Notes shall not have been declared due and payable pursuant to Section 5.02;
then the Note Trustee shall, to the fullest extent practicable, invest and
reinvest funds in the Collection
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Account in one or more investments described under paragraph (g) of the
definition of Eligible Investments.
Section 8.04. Release of Collateral.
(a) The Note Trustee may, and when required by the provisions of this
Note Indenture shall, execute instruments to release property from the lien of
this Note Indenture, or convey the Note Trustee's interest in the same, in a
manner and under circumstances that are not inconsistent with the provisions of
this Note Indenture. No party relying upon an instrument executed by the Note
Trustee as provided in this Article VIII shall be bound to ascertain the Note
Trustee's authority, inquire into the satisfaction of any conditions precedent
or see to the application of any moneys.
(b) The Note Trustee shall, at such time as there are no Notes
Outstanding, release any remaining portion of the Collateral that secured the
Notes from the lien of this Note Indenture and release to the Note Issuer or any
other Person entitled thereto any funds then on deposit in the Collection
Account. The Note Trustee shall release property from the lien of this Note
Indenture pursuant to this Section 8.04(b) only upon receipt of an Issuer
Request accompanied by an Officer's Certificate, an Opinion of Counsel and (if
required by the Trust Indenture Act) Independent Certificates in accordance with
Trust Indenture Act Sections 314(c) and 314(d)(1) meeting the applicable
requirements of Section 11.01.
Section 8.05. Opinion of Counsel. The Note Trustee shall receive at least seven
days' notice when requested by the Note Issuer to take any action pursuant to
Section 8.04(a), accompanied by copies of any instruments involved, and the Note
Trustee shall also require, as a condition to such action, an Opinion of
Counsel, in form and substance reasonably satisfactory to the Note Trustee,
stating the legal effect of any such action, outlining the steps required to
complete the same, and concluding that all conditions precedent to the taking of
such action have been complied with and such action will not materially and
adversely impair the security for the Notes or the rights of the Noteholders in
contravention of the provisions of this Note Indenture; provided, however, that
such Opinion of Counsel shall not be required to express an opinion as to the
fair value of the Collateral. Counsel rendering any such opinion may rely,
without independent investigation, on the accuracy and validity of any
certificate or other instrument delivered to the Note Trustee in connection with
any such action.
Section 8.06. Reports by Independent Accountants. As of the Issuance Date, the
Note Issuer shall appoint a firm of Independent certified public accountants of
recognized national reputation for purposes of preparing and delivering the
reports or certificates of such accountants required by this Note Indenture. In
the event such firm requires the Note Trustee to agree to the procedures
performed by such firm, the Note Issuer shall direct the Note Trustee in writing
to so agree; it being understood and agreed that the Note Trustee will deliver
such letter of agreement in conclusive reliance upon the direction of the Note
Issuer, and the Note Trustee makes no independent inquiry or investigation to,
and shall have no obligation or liability in respect of, the sufficiency,
validity or correctness of such procedures. Upon any resignation by such firm
the Note Issuer shall provide written notice thereof to the Note Trustee and
shall promptly appoint a
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successor thereto that shall also be a firm of Independent certified public
accountants of recognized national reputation. If the Note Issuer shall fail to
appoint a successor to a firm of Independent certified public accountants that
has resigned within 15 days after such resignation, the Note Trustee shall
promptly notify the Note Issuer of such failure in writing. If the Note Issuer
shall not have appointed a successor within 10 days thereafter the Note Trustee
shall promptly appoint a successor firm of Independent certified public
accountants of recognized national reputation; provided, however, that the Note
Trustee shall have no liability with respect to such appointment if the Note
Trustee acted with due care with respect thereto. The fees of such Independent
certified public accountants and its successor shall be payable by the Note
Issuer.
ARTICLE IX
SUPPLEMENTAL NOTE INDENTURES
Section 9.01. Supplemental Note Indentures Without Consent of Noteholders.
(a) Without the consent of the Holders of any Notes but with prior
notice to the Rating Agencies, the Note Issuer, the Note Trustee and the
Certificate Trustee, when authorized by an Issuer Order, at any time and from
time to time, may enter into one or more indentures supplemental hereto (which
shall conform to the provisions of the Trust Indenture Act as in force at the
date of the execution thereof), in form reasonably satisfactory to the Note
Trustee, for any of the following purposes:
(i) to correct or amplify the description of any property at
any time subject to the lien of this Note Indenture, or better to
assure, convey and confirm unto the Note Trustee any property subject
or required to be subjected to the lien of this Note Indenture, or to
subject to the lien of this Note Indenture additional property;
(ii) to evidence the succession, in compliance with the
applicable provisions hereof, of another person to the Note Issuer, and
the assumption by any such successor of the covenants of the Note
Issuer herein and in the Notes contained;
(iii) to add to the covenants of the Note Issuer, for the
benefit of the Holders of the Notes, or to surrender any right or power
herein conferred upon the Note Issuer;
(iv) to convey, transfer, assign, mortgage or pledge any
property to or with the Note Trustee;
(v) to cure any ambiguity, to correct or supplement any
provision herein or in any supplemental note indenture which may be
inconsistent with any other provision herein or in any supplemental
note indenture or to make any other provisions with respect to matters
or questions arising under this Note Indenture or in any supplemental
note indenture; provided, however, that such action shall not adversely
affect the interests of the Holders of the Notes or holders of the
Certificates;
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(vi) to evidence and provide for the acceptance of the
appointment hereunder by a successor trustee with respect to the Notes
and to add to or change any of the provisions of this Note Indenture as
shall be necessary to facilitate the administration of the trusts
hereunder by more than one trustee, pursuant to the requirements of
Article VI; or
(vii) to modify, eliminate or add to the provisions of this
Note Indenture to such extent as shall be necessary to effect the
qualification of this Note Indenture under the Trust Indenture Act or
under any similar federal statute hereafter enacted and to add to this
Note Indenture such other provisions as may be expressly required by
the Trust Indenture Act.
The Note Trustee is hereby authorized to join in the execution of any
such supplemental note indenture and to make any further appropriate agreements
and stipulations that may be therein contained.
(b) The Note Issuer and the Note Trustee, when authorized by an Issuer
Order, may, also without the consent of any of the Holders of the Notes, enter
into an indenture or indentures supplemental hereto for the purpose of adding
any provisions to, or changing in any manner or eliminating any of the
provisions of, this Note Indenture or of modifying in any manner the rights of
the Holders of the Notes under this Note Indenture; provided, however, that (i)
such action shall not, as evidenced by an Officer's Certificate, adversely
affect in any material respect the interests of the Noteholders or the holders
of Certificates and (ii) the Rating Agency Condition shall have been satisfied
with respect thereto.
Section 9.02. Supplemental Note Indentures with Consent of Noteholders. The
Note Issuer and the Note Trustee, when authorized by an Issuer Order, also may,
with prior notice to the Rating Agencies, the Agencies and with the consent of
the Holders of not less than a majority of the Outstanding Amount of the Notes
of each Class to be affected, by Act of such Holders delivered to the Note
Issuer and the Note Trustee, enter into an indenture or indentures supplemental
hereto for the purpose of adding any provisions to, or changing in any manner or
eliminating any of the provisions of, this Note Indenture or of modifying in any
manner the rights of the Holders of the Notes under this Note Indenture;
provided, however, that no such supplemental note indenture shall, without the
consent of the Holder of each Outstanding Note of each Class affected thereby:
(i) change the date of payment of any installment of principal
of or interest on any Note, or reduce the principal amount thereof or
the interest rate thereon, change the provisions of this Note Indenture
relating to the application of collections on, or the proceeds of the
sale of, the Collateral to payment of principal of or interest on the
Notes, or change any place of payment where, or the coin or currency in
which, any Note or the interest thereon is payable, or impair the right
to institute suit for the enforcement of the provisions of this Note
Indenture requiring the application of funds available therefor, as
provided in Article V, to the payment of any such amount due on the
Notes on or after the respective due dates thereof (or, in the case of
optional or mandatory redemption, on or after the Optional Redemption
Date or Mandatory Redemption Date, as applicable);
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(ii) reduce the percentage of the Outstanding Amount of the
Notes or of a Class thereof, the consent of the Holders of which is
required for any such supplemental note indenture, or the consent of
the Holders of which is required for any waiver of compliance with
certain provisions of this Note Indenture or certain defaults hereunder
and their consequences provided for in this Note Indenture;
(iii) modify or alter the provisions of the proviso to the
definition of the term "Outstanding";
(iv) reduce the percentage of the Outstanding Amount of the
Notes required to direct the Note Trustee to direct the Note Issuer to
sell or liquidate the Collateral pursuant to Section 5.04;
(v) modify any provision of this Section except to increase
any percentage specified herein or to provide that certain additional
provisions of this Note Indenture or the Basic Documents cannot be
modified or waived without the consent of the Holder of each
Outstanding Note affected thereby;
(vi) modify any of the provisions of this Note Indenture in
such manner as to affect the calculation of the amount of any payment
of interest or principal due on any Note on any Payment Date (including
the calculation of any of the individual components of such
calculation) or to affect the rights of the Holders of Notes to the
benefit of any provisions for the mandatory redemption of the Notes
contained herein; or
(vii) permit the creation of any lien ranking prior to or on a
parity with the lien of this Note Indenture with respect to any part of
the Collateral or, except as otherwise permitted or contemplated
herein, terminate the lien of this Note Indenture on any property at
any time subject hereto or deprive the Holder of any Note of the
security provided by the lien of this Note Indenture.
The Note Trustee, after consultation with the Certificate Trustee, may
in its discretion determine whether or not any Notes or Certificates of a Class
would be affected by any supplemental note indenture and any such determination
shall be conclusive upon the Holders of all Notes and holders of all
Certificates of such Class, whether theretofore or thereafter authenticated and
delivered hereunder. The Note Trustee shall not be liable for any such
determination made in good faith.
It shall not be necessary for any Act of Noteholders under this Section
to approve the particular form of any proposed supplemental note indenture, but
it shall be sufficient if such Act shall approve the substance thereof.
Promptly after the execution by the Note Issuer and the Note Trustee of
any supplemental note indenture pursuant to this Section, the Note Issuer shall
mail to the Rating Agencies, the Certificate Trustee, the Agencies and the
Holders of the Notes to which such amendment or supplemental note indenture
relates a notice setting forth in general terms the substance of such
supplemental note indenture. Any failure of the Note Trustee to mail such
notice, or any defect
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therein, shall not, however, in any way impair or affect the validity of any
such supplemental note indenture.
Section 9.03. Execution of Supplemental Note Indentures. In executing any
supplemental note indenture permitted by this Article IX or the modifications
thereby of the trusts created by this Note Indenture, the Note Trustee shall be
entitled to receive, and subject to Sections 6.01 and 6.02, shall be fully
protected in relying upon, an Opinion of Counsel stating that the execution of
such supplemental note indenture is authorized or permitted by this Note
Indenture. The Note Trustee may, but shall not be obligated to, enter into any
such supplemental note indenture that affects the Note Trustee's own rights,
duties, liabilities or immunities under this Note Indenture or otherwise.
Section 9.04. Effect of Supplemental Note Indenture. Upon the execution of any
supplemental note indenture pursuant to the provisions hereof, this Note
Indenture shall be and be deemed to be modified and amended in accordance
therewith with respect to each Class of Notes affected thereby, and the
respective rights, limitations of rights, obligations, duties, liabilities and
immunities under this Note Indenture of the Note Trustee, the Note Issuer and
the Holders of the Notes shall thereafter be determined, exercised and enforced
hereunder subject in all respects to such modifications and amendments, and all
the terms and conditions of any such supplemental note indenture shall be and be
deemed to be part of the terms and conditions of this Note Indenture for any and
all purposes. If required by the Note Trustee, Notes may bear a notation in form
approved by the Note Trustee as to any matter provided for in such supplemental
note indenture. If the Note Issuer or the Note Trustee shall so determine, new
Notes so modified as to conform, in the opinion of the Note Trustee and the Note
Issuer, to any such supplemental note indenture may be prepared and executed by
the Note Issuer and authenticated and delivered by the Note Trustee in exchange
for Outstanding Notes.
Section 9.05. Conformity with Trust Indenture Act. Every amendment of this Note
Indenture and every supplemental note indenture executed pursuant to this
Article IX shall conform to the requirements of the Trust Indenture Act as then
in effect so long as this Note Indenture shall then be qualified under the Trust
Indenture Act.
ARTICLE X
REDEMPTION OF NOTES
Section 10.01. Optional Redemption by Note Issuer. The Note Issuer may, at its
option, redeem all, but not less than all, of the Notes on any Payment Date if,
after giving effect to payments that would otherwise be made on such Payment
Date, the Outstanding Amount has been reduced to less than five percent of the
initial principal balance thereof at a price equal to the outstanding principal
amount of the Notes to be redeemed plus accrued and unpaid interest thereon at
the Note Interest Rate to the Optional Redemption Date (such price being called
the "Optional Redemption Price"). If the Note Issuer shall elect to redeem the
Notes pursuant to this Section 10.01, it shall furnish written notice (which
notice shall state all items listed in
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Section 10.02) of such election to the Note Trustee, the Certificate Trustees,
the Agencies, the Rating Agencies not later than 25 days prior to the Optional
Redemption Date and shall deposit with the Note Trustee not later than one
Business Day prior to the Optional Redemption Date the Optional Redemption Price
of the Notes to be redeemed whereupon all such Notes shall be due and payable on
the Optional Redemption Date upon the furnishing of a notice complying with
Section 10.02 hereof to each Holder of the Notes pursuant to this Section 10.01.
Section 10.02. Form of Optional Redemption Notice. Notice of redemption under
Section 10.01 hereof shall be given by the Note Trustee by first-class mail,
postage prepaid, mailed not less than five days nor more than 25 days prior to
the Optional Redemption Date to each Holder of Notes to be redeemed, as of the
close of business on the Record Date preceding the Optional Redemption Date at
such Holder's address appearing in the Note Register.
All notices of redemption shall state:
(1) the Optional Redemption Date;
(2) the Optional Redemption Price; and
(3) the place where such Notes are to be surrendered for
payment of the Optional Redemption Price (which shall be the office or
agency of the Note Issuer to be maintained as provided in Section 3.02
hereof).
Notice of redemption of the Notes to be redeemed shall be given by the
Note Trustee in the name and at the expense of the Note Issuer. Failure to give
notice of redemption, or any defect therein, to any Holder of any Note selected
for redemption shall not impair or affect the validity of the redemption of any
other Note.
Section 10.03. Notes Payable on Optional Redemption Date or Payment Date.
Notice of redemption having been given as provided in Section 10.02 hereof, the
Notes to be redeemed shall on the Optional Redemption Date become due and
payable at the Optional Redemption Price and (unless the Note Issuer shall
default in the payment of the Optional Redemption Price) no interest shall
accrue on the Optional Redemption Price for any period after the date to which
accrued interest is calculated for purposes of calculating the Optional
Redemption Price.
Section 10.04. Mandatory Redemption by Note Issuer. If the Seller is required
to repurchase the Transition Property pursuant to Section 5.01(b) of the Sale
Agreement, the Note Issuer shall be required to redeem all outstanding Notes on
or before the fifth Business Day following the Repurchase Date (such date of
mandatory redemption, the "Mandatory Redemption Date") for a purchase price
equal to the then outstanding principal amount of the Notes plus accrued and
unpaid interest thereon at the Note Interest Rate to the Mandatory Redemption
Date (such price being called the "Mandatory Redemption Price"). If the Note
Issuer is required to redeem the Notes pursuant to this Section 10.04, it shall
furnish written notice (which notice shall state all items listed in Section
10.05) of such redemption to the Note Trustee, the Certificate Trustee, the
Agencies and the Rating Agencies not later than one Business Day before such
Repurchase Date and shall deposit with the Note Trustee, not later than one
Business Day prior to the Mandatory
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Redemption Date, the Mandatory Redemption Price of the Notes to be redeemed
whereupon all such Notes shall be due and payable on the Mandatory Redemption
Date upon the furnishing of a notice complying with Section 10.05 hereof to each
Holder of the Notes pursuant to this Section 10.04.
Section 10.05. Form of Mandatory Redemption Notice. Notice of redemption under
Section 10.04 hereof shall be given by the Note Trustee by first-class mail,
postage prepaid, mailed not less than five days prior to the Mandatory
Redemption Date to each Holder of Notes to be redeemed, as of the close of
business on the Record Date preceding the Mandatory Redemption Date at such
Holder's address appearing in the Note Register.
All notices of redemption shall state:
(1) the Mandatory Redemption Date;
(2) the Mandatory Redemption Price; and
(3) the place where such Notes are to be surrendered for
payment of the Mandatory Redemption Price (which shall be the office or
agency of the Note Issuer to be maintained as provided in Section 3.02
hereof).
Notice of redemption of the Notes to be redeemed shall be given by the
Note Trustee in the name and at the expense of the Note Issuer. Failure to give
notice of redemption, or any defect therein, to any Holder of any Note selected
for redemption shall not impair or affect the validity of the redemption of any
other Note.
Section 10.06. Notes Payable on Mandatory Redemption Date or Payment Date.
Notice of redemption having been given as provided in Section 10.05 hereof, the
Notes to be redeemed shall on the Mandatory Redemption Date become due and
payable at the Mandatory Redemption Price and (unless the Note Issuer shall
default in the payment of the Mandatory Redemption Price) no interest shall
accrue on the Mandatory Redemption price for any period after the date to which
accrued interest is calculated for purposes of calculating the Mandatory
Redemption Price.
ARTICLE XI
MISCELLANEOUS
Section 11.01. Compliance Certificates and Opinions, etc.
(a) Upon any application or request by the Note Issuer to the Note
Trustee to take any action under any provision of this Note Indenture, the Note
Issuer shall furnish to the Note Trustee (i) an Officer's Certificate stating
that all conditions precedent, if any, provided for in this Note Indenture
relating to the proposed action have been complied with, (ii) an Opinion of
Counsel stating that in the opinion of such counsel all such conditions
precedent, if any, have been complied with and (iii) (if required by the Trust
Indenture Act) an Independent Certificate
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from a firm of certified public accountants meeting the applicable requirements
of this Section, except that, in the case of any such application or request as
to which the furnishing of such documents is specifically required by any
provision of this Note Indenture, no additional certificate or opinion need be
furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Note Indenture shall include:
(i) a statement that each signatory of such certificate or
opinion has read or has caused to be read such covenant or condition
and the definitions herein relating thereto;
(ii) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(iii) a statement that, in the opinion of each such signatory,
such signatory has made such examination or investigation as is
necessary to enable such signatory to express an informed opinion as to
whether or not such covenant or condition has been complied with; and
(iv) a statement as to whether, in the opinion of each such
signatory, such condition or covenant has been complied with.
(b) (i) Prior to the deposit of any Collateral or other property or
securities with the Note Trustee that is to be made the basis for the
release of any property or securities subject to the lien of this Note
Indenture, the Note Issuer shall, in addition to any obligation imposed
in Section 11.01(a) or elsewhere in this Note Indenture, furnish to the
Note Trustee an Officer's Certificate certifying or stating the opinion
of each person signing such certificate as to the fair value (within 90
days of such deposit) to the Note Issuer of the Collateral or other
property or securities to be so deposited.
(ii) Whenever the Note Issuer is required to furnish to the
Note Trustee an Officer's Certificate certifying or stating the opinion
of any signer thereof as to the matters described in clause (i) above,
the Note Issuer shall also deliver to the Note Trustee an Independent
Certificate as to the same matters, if the fair value to the Note
Issuer of the securities to be so deposited and of all other such
securities made the basis of any such withdrawal or release since the
commencement of the then-current fiscal year of the Note Issuer, as set
forth in the certificates delivered pursuant to clause (i) above and
this clause (ii), is ten percent or more of the Outstanding Amount of
the Notes, but such a certificate need not be furnished with respect to
any securities so deposited, if the fair value thereof to the Note
Issuer as set forth in the related Officer's Certificate is less than
$25,000 or less than one percent of the Outstanding Amount of the
Notes.
(iii) Whenever any property or securities are to be released
from the lien of this Note Indenture other than pursuant to Section
8.02, the Note Issuer shall also furnish to
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the Note Trustee an Officer's Certificate certifying or stating the
opinion of each person signing such certificate as to the fair value
(within 90 days of such release) of the property or securities proposed
to be released and stating that in the opinion of such person the
proposed release will not impair the security under this Note Indenture
in contravention of the provisions hereof.
(iv) Whenever the Note Issuer is required to furnish to the
Note Trustee an Officer's Certificate certifying or stating the opinion
of any signer thereof as to the matters described in clause (iii)
above, the Note Issuer shall also furnish to the Note Trustee an
Independent Certificate as to the same matters if the fair value of the
property or securities and of all other property, or securities
released from the lien of this Note Indenture (other than pursuant to
Section 8.02 hereof) since the commencement of the then-current
calendar year, as set forth in the certificates required by clause
(iii) above and this clause (iv), equals 10 percent or more of the
Outstanding Amount of the Notes, but such certificate need not be
furnished in the case of any release of property or securities if the
fair value thereof as set forth in the related Officer's Certificate is
less than $25,000 or less than one percent of the then Outstanding
Amount of the Notes.
(v) Notwithstanding Section 2.11 or any other provision of
this Section, the Note Issuer may (A) collect, liquidate, sell or
otherwise dispose of the Transition Property and the RTC Charge as and
to the extent permitted or required by the Basic Documents and (B)
cause the Note Trustee to make cash payments out of the Collection
Account as and to the extent permitted or required by the Basic
Documents.
Section 11.02. Form of Documents Delivered to Note Trustee. In any case where
several matters are required to be certified by, or covered by an opinion of,
any specified Person, it is not necessary that all such matters be certified by,
or covered by the opinion of, only one such Person, or that they be so certified
or covered by only one document, but one such Person may certify or give an
opinion with respect to some matters and one or more other such Persons as to
other matters, and any such Person may certify or give an opinion as to such
matters in one or several documents.
Any certificate or opinion of an Authorized Officer of the Note Issuer
may be based, insofar as it relates to legal matters, upon a certificate or
opinion of, or representations by, counsel, unless such officer knows, or in the
exercise of reasonable care should know, that the certificate or opinion or
representations with respect to the matters upon which his or her certificate or
opinion is based are erroneous. Any such certificate of an Authorized Officer or
Opinion of Counsel may be based, insofar as it relates to factual matters, upon
a certificate or opinion of, or representations by, an officer or officers of
the Servicer, the Seller, the Note Issuer or the Administrator, stating that the
information with respect to such factual matters is in the possession of the
Servicer, the Seller, the Note Issuer or the Administrator, unless such counsel
knows, or in the exercise of reasonable care should know, that the certificate
or opinion or representations with respect to such matters are erroneous.
Whenever in this Note Indenture, in connection with any application or
certificate or report to the Note Trustee, it is provided that the Note Issuer
shall deliver any document as a
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condition of the granting of such application, or as evidence of the Note
Issuer's compliance with any term hereof, it is intended that the truth and
accuracy, at the time of the granting of such application or at the effective
date of such certificate or report (as the case may be), of the facts and
opinions stated in such document shall in such case be conditions precedent to
the right of the Note Issuer to have such application granted or to the
sufficiency of such certificate or report. The foregoing shall not, however, be
construed to affect the Note Trustee's right to rely upon the truth and accuracy
of any statement or opinion contained in any such document as provided in
Article VI.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Note Indenture, they may, but need not, be consolidated
and form one instrument.
Section 11.03. Acts of Noteholders.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Note Indenture to be given or taken by
Noteholders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Noteholders in person or by agents
duly appointed in writing; and except as herein otherwise expressly provided
such action shall become effective when such instrument or instruments are
delivered to the Note Trustee, and, where it is hereby expressly required, to
the Note Issuer. Such instrument or instruments (and the action embodied therein
and evidenced thereby) are herein sometimes referred to as the "Act" of the
Noteholders signing such instrument or instruments. Proof of execution of any
such instrument or of a writing appointing any such agent shall be sufficient
for any purpose of this Note Indenture and (subject to Section 6.01) conclusive
in favor of the Note Trustee and the Note Issuer, if made in the manner provided
in this Section.
(b) The fact and date of the execution by any person of any such
instrument or writing may be proved in any manner that the Note Trustee deems
sufficient.
(c) The ownership of Notes shall be proved by the Note Register.
(d) Any request, demand, authorization, direction, notice, consent,
waiver or other action by the Holder of any Notes shall bind the Holder of every
Note issued upon the registration thereof or in exchange therefor or in lieu
thereof, in respect of anything done, omitted or suffered to be done by the Note
Trustee or the Note Issuer in reliance thereon, whether or not notation of such
action is made upon such Note.
Section 11.04. Notices.
(a) Unless otherwise specifically provided herein, all notices,
directions, consents and waivers required under the terms and provisions of this
Note Indenture shall be in English and in writing, and any such notice,
direction, consent or waiver may be given by United States mail, courier
service, facsimile transmission or electronic mail (confirmed by telephone,
United States mail or courier service in the case of notice by facsimile
transmission or electronic mail) or any other customary means of communication,
and any such notice, direction, consent or waiver shall
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be effective when delivered, or if mailed, three days after deposit in the
United States mail with proper postage for ordinary mail prepaid,
if to the Agencies, to:
Massachusetts Development Finance Agency
75 Federal Street
Boston, Massachusetts 02110
Attention: General Counsel
Facsimile: (617) 727-8741
Telephone: (617) 451-2477
and
Massachusetts Health and Educational Facilities Authority
99 Summer Street
10th Floor
Boston, Massachusetts 02110
Attention: General Counsel
Facsimile: (617) 737-8366
Telephone: (617) 737-8377
if to the Certificate Issuer, to:
The Bank of New York (Delaware), as Delaware Trustee for the
Massachusetts RRB Special Purpose Trust BEC-1
c/o The Bank of New York
101 Barclay Street
Floor 12 East
New York, New York 10286
Attention: Asset Backed Finance Unit
Facsimile: (212) 815-5544
Telephone: (212) 815-5286
(with copies to the Agencies at the addresses listed herein)
if to the Note Issuer, to:
BEC Funding LLC
800 Boylston Street, 35th Floor
Boston, Massachusetts 02199
Attention: President
Facsimile: (617) 424-2605
Telephone: (617) 369-6000
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if to the Note Trustee or the Certificate Trustee, to:
The Bank of New York
101 Barclay Street
Floor 12 East
New York, New York 10286
Attention: Asset Backed Finance Unit
Facsimile: (212) 815-5544
Telephone: (212) 815-5286
if to the Rating Agencies, to:
Standard & Poor's Ratings Services
55 Water Street, 40th Floor
New York, New York 10041
Attention: Asset Backed Surveillance Department
Facsimile: (212) 438-2655
Telephone: (212) 438-2000
Moody's Investors Service
99 Church Street
New York, New York 10007
Attention: ABS Monitoring Department
Facsimile: (212) 553-0573
Telephone: (212) 553-3686
Fitch IBCA, Inc.
One State Street Plaza
New York, New York 10004
Attention: ABS Surveillance
Facsimile: (212) 635-0476
Telephone: (212) 908-0200
and
Duff & Phelps Credit Rating Co.
17 State Street, 12th Floor
New York, New York 10004
Attention: Asset Backed Securities
Facsimile: (212) 908-0222
Telephone: (212) 908-0200
Section 11.05. Notices to Noteholders; Waiver. Where this Note Indenture
provides for notice to Noteholders of any event, such notice shall be
sufficiently given (unless otherwise herein expressly provided) if in writing
and mailed, first-class, postage prepaid to each Noteholder affected by such
event, at such Noteholder's address as it appears on the Note Register, not
later
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than the latest date, and not earlier than the earliest date, prescribed for the
giving of such notice. In any case where notice to Noteholders is given by mail,
neither the failure to mail such notice nor any defect in any notice so mailed
to any particular Noteholder shall affect the sufficiency of such notice with
respect to other Noteholders, and any notice that is mailed in the manner herein
provided shall conclusively be presumed to have been duly given.
Where this Note Indenture provides for notice in any manner, such
notice may be waived in writing by any Person entitled to receive such notice,
either before or after the event, and such waiver shall be the equivalent of
such notice. Waivers of notice by Noteholders shall be filed with the Note
Trustee but such filing shall not be a condition precedent to the validity of
any action taken in reliance upon such a waiver.
In case, by reason of the suspension of regular mail service as a
result of a strike, work stoppage or similar activity, it shall be impractical
to mail notice of any event of Noteholders when such notice is required to be
given pursuant to any provision of this Note Indenture, then any manner of
giving such notice as shall be satisfactory to the Note Trustee shall be deemed
to be a sufficient giving of such notice.
Where this Note Indenture provides for notice to the Rating Agencies,
failure to give such notice shall not affect any other rights or obligations
created hereunder, and shall not under any circumstance constitute a Default or
Event of Default.
Section 11.06. Conflict with Trust Indenture Act. If any provision hereof
limits, qualifies or conflicts with another provision hereof that is required to
be included in this Note Indenture by any of the provisions of the Trust
Indenture Act, such required provision shall control.
The provisions of Trust Indenture Act Sections 310 through 317 that
impose duties on any person (including the provisions automatically deemed
included herein unless expressly excluded by this Note Indenture) are a part of
and govern this Note Indenture, whether or not physically contained herein.
Section 11.07. Effect of Headings and Table of Contents. The Article and
Section headings herein and the Table of Contents are for convenience only and
shall not affect the construction hereof.
Section 11.08. Successors and Assigns. All covenants and agreements in this
Note Indenture and the Notes by the Note Issuer shall bind its successors and
assigns, whether so expressed or not.
All agreements of the Note Trustee in this Note Indenture shall bind
its successors.
Section 11.09. Severability. In case any provision in this Note Indenture or in
the Notes shall be invalid, illegal or unenforceable, the validity, legality,
and enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.
Section 11.10. Benefits of Note Indenture. Nothing in this Note Indenture or in
the Notes, express or implied, shall give to any Person, other than the parties
hereto and their successors hereunder, and the Noteholders, and any other party
secured hereunder, and any other Person with an
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ownership interest in any part of the Collateral, any benefit or any legal or
equitable right, remedy or claim under this Note Indenture.
Section 11.11. Legal Holidays. In any case where the date on which any payment
is due shall not be a Business Day, then (notwithstanding any other provision of
the Notes or this Note Indenture) payment need not be made on such date, but may
be made on the next succeeding Business Day with the same force and effect as if
made on the date on which nominally due, and no interest shall accrue for the
period from and after any such nominal date.
Section 11.12. GOVERNING LAW. THIS NOTE INDENTURE SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS, WITHOUT REFERENCE
TO ITS CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF
THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS. THE
PERFECTION OF ANY INTERESTS IN THE SECURITIES ACCOUNT AND THE SECURITIES
ENTITLEMENTS SHALL BE DETERMINED BY THE LAWS OF THE COMMONWEALTH OF
MASSACHUSETTS.
Section 11.13. Counterparts. This Note Indenture may be executed in any number
of counterparts, each of which so executed shall be deemed to be an original,
but all such counterparts shall together constitute but one and the same
instrument.
Section 11.14. Recording of Note Indenture. If this Note Indenture is subject
to recording in any appropriate public recording offices, such recording is to
be effected by the Note Issuer and at its expense accompanied by an Opinion of
Counsel (which may be counsel to the Note Trustee or any other counsel
reasonably acceptable to the Note Trustee) to the effect that such recording is
necessary either for the protection of the Noteholders or any other Person
secured hereunder or for the enforcement of any right or remedy granted to the
Note Trustee under this Note Indenture.
Section 11.15. Trust Obligation. No recourse may be taken, directly or
indirectly, with respect to the obligations of the Note Issuer or the Note
Trustee on the Notes or under this Note Indenture or any certificate or other
writing delivered in connection herewith or therewith, against (i) the Note
Trustee in its individual capacity, (ii) any owner of a beneficial interest in
the Note Issuer or (iii) any partner, owner, beneficiary, agent, officer,
director or employee of the Note Trustee in its individual capacity, any holder
of a beneficial interest in the Note Issuer or the Note Trustee or of any
successor or assign of the Note Trustee in its individual capacity, except as
any such Person may have expressly agreed (it being understood that the Note
Trustee has no such obligations in its individual capacity).
Section 11.16. No Recourse to Note Issuer. Notwithstanding any provision of
this Note Indenture or any Supplemental Note Indenture to the contrary,
Noteholders shall have no recourse against the Note Issuer, but shall look only
to the Collateral, with respect to any amounts due to the Noteholders hereunder.
Section 11.17. Inspection. The Note Issuer agrees that, on reasonable prior
notice, it will permit any representative of the Note Trustee, during the Note
Issuer's normal business hours, to
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examine all the books of account, records, reports, and other papers of the Note
Issuer, to make copies and extracts therefrom, to cause such books to be audited
by Independent certified public accountants, and to discuss the Note Issuer's
affairs, finances and accounts with the Note Trustee's officers, employees, and
Independent certified public accountants, all at such reasonable times and as
often as may be reasonably requested. The Note Trustee shall and shall cause its
representatives to hold in confidence all such information except to the extent
disclosure may be required by law (and all reasonable applications for
confidential treatment are unavailing) and except to the extent that the Note
Trustee may reasonably determine that such disclosure is consistent with its
obligations hereunder. Notwithstanding anything herein to the contrary, the
foregoing shall not be construed to prohibit (i) disclosure of any and all
information that is or becomes publicly known, or information obtained by the
Note Trustee from sources other than the Note Issuer, provided such parties are
rightfully in possession of such information and do not have an obligation of
confidentiality, (ii) disclosure of any and all information (A) if required to
do so by any applicable statute, law, rule or regulation, (B) pursuant to any
subpoena, civil investigative demand or similar demand or request of any court
or regulatory authority exercising its proper jurisdiction, (C) in any
preliminary or final offering circular, registration statement or contract or
other document pertaining to the transactions contemplated by this Note
Indenture or the Basic Documents approved in advance by the Note Issuer or (D)
to any affiliate, independent or internal auditor, agent, employee or attorney
of the Note Trustee having a need to know the same, provided that such parties
agree to be bound by the confidentiality provisions contained in this Section
11.17, or (iii) any other disclosure authorized by the Note Issuer.
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IN WITNESS WHEREOF, the Note Issuer and the Note Trustee have caused
this Note Indenture to be duly executed by their respective officers, thereunto
duly authorized and duly attested, all as of the day and year first above
written.
BEC FUNDING LLC
By: /s/ Emilie G. O'Neil
-------------------------------------
Name: Emilie G. O'Neil
Title: Vice President and Treasurer
THE BANK OF NEW YORK,
not in its individual capacity but solely
as Note Trustee,
By: /s/ Cheryl L. Laser
-------------------------------------
Name: Cheryl L. Laser
Title: Assistant Vice President
S-1
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COMMONWEALTH OF MASSACHUSETTS, )
) ss.:
COUNTY OF Suffolk, )
On the 29th day of July, 1999, before me, Denise Cosby, a Notary Public
in and for said county and state, personally appeared Emilie G. O'Neil,
personally known to me (or proved to me on the basis of satisfactory evidence)
to be the person and officer whose name is subscribed to the within instrument
and acknowledged to me that he executed the same in his authorized capacity, and
that by his signature on the instrument BEC Funding LLC, a Delaware limited
liability company and the entity upon which the person acted, executed this
instrument.
WITNESS my hand and official seal.
/s/ Denise Cosby
----------------------------------------
Notary Public
My commission expires: 7/20/2001
82
COMMONWEALTH OF MASSACHUSETTS, )
) ss.:
COUNTY OF Suffolk, )
On the 29th day of July, 1999, before me, Frances E. DeFiore, a Notary
Public in and for said county and state, personally appeared Cheryl L. Laser,
personally known to me (or proved to me on the basis of satisfactory evidence)
to be the person and officer whose name is subscribed to the within instrument
and acknowledged to me that he executed the same in his authorized capacity, and
that by his signature on the instrument The Bank of New York, the entity upon
which the person acted, executed this instrument.
WITNESS my hand and official seal.
/s/ Frances E. DeFiore
----------------------------------------
Notary Public
My commission expires: 5/24/2002
83
SCHEDULE A
EXPECTED AMORTIZATION SCHEDULE
OUTSTANDING PRINCIPAL BALANCE
Payment Date Class A-1 Class A-2 Class A-3 Class A-4 Class A-5
------------ --------- --------- --------- --------- ---------
Issuance Date $108,500,000 $170,609,837 $103,390,163 $170,875,702 $171,624,298
03/15/00 68,500,000 170,609,837 103,390,163 170,875,702 171,624,298
09/15/00 30,058,542 170,609,837 103,390,163 170,875,702 171,624,298
03/15/01 0 170,609,837 103,390,163 170,875,702 171,624,298
09/15/01 0 138,240,115 103,390,163 170,875,702 171,624,298
03/15/02 0 102,109,837 103,390,163 170,875,702 171,624,298
09/15/02 0 68,014,173 103,390,163 170,875,702 171,624,298
03/15/03 0 33,609,837 103,390,163 170,875,702 171,624,298
09/15/03 0 0 103,390,163 170,875,702 171,624,298
03/15/04 0 0 68,500,000 170,875,702 171,624,298
09/15/04 0 0 34,649,752 170,875,702 171,624,298
03/15/05 0 0 0 170,875,702 171,624,298
09/15/05 0 0 0 137,123,948 171,624,298
03/15/06 0 0 0 102,375,702 171,624,298
09/15/06 0 0 0 68,519,879 171,624,298
03/15/07 0 0 0 33,875,702 171,624,298
09/15/07 0 0 0 0 171,624,298
03/15/08 0 0 0 0 137,000,000
09/15/08 0 0 0 0 103,134,628
03/15/09 0 0 0 0 68,500,000
09/15/09 0 0 0 0 34,631,016
03/15/10 0 0 0 0 0
84
SCHEDULE B
REQUIRED OVERCOLLATERALIZATION LEVEL SCHEDULE
Payment Date Required Payment Date Required
Overcollateralization Level Overcollateralization Level
--------------------------- ---------------------------
03/15/00 $329,545 09/15/05 $2,142,045
09/15/00 494,318 03/15/06 2,306,818
03/15/01 659,091 09/15/06 2,471,591
09/15/01 823,864 03/15/07 2,636,364
03/15/02 988,636 09/15/07 2,801,136
09/15/02 1,153,409 03/15/08 2,965,909
03/15/03 1,318,182 09/15/08 3,130,682
09/15/03 1,482,955 03/15/09 3,295,455
03/15/04 1,647,727 09/15/09 3,460,227
09/15/04 1,812,500 03/15/10 3,625,000
03/15/05 1,977,273
85
EXHIBIT B
FORM OF NOTE
REGISTERED
NO. [ ] $ [ ]
SEE REVERSE FOR CERTAIN DEFINITIONS
THE PRINCIPAL OF THIS CLASS A-[ ] NOTE WILL BE PAID IN INSTALLMENTS AS
SET FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS CLASS
A-[ ] NOTE AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
BEC FUNDING LLC NOTES
CLASS A-[ ]
Interest Rate Original Principal Amount Final Maturity Date
------------- ------------------------- -------------------
[ ]% $[ ]
PRINCIPAL AMOUNT:
BEC Funding LLC, a limited liability company formed and existing under
the laws of the State of Delaware (herein referred to as the "Note Issuer"), for
value received, hereby promises to pay to Massachusetts RRB Special Purpose
Trust BEC-1, or registered assigns, the Original Principal Amount shown above in
semiannual installments on the Payment Dates and in the amounts specified on the
reverse hereof or, if less, the amounts determined pursuant to Section 8.02 of
the Note Indenture, in each year, commencing on the date determined as provided
on the reverse hereof and ending on or before the Final Maturity Date and to pay
interest, at the Interest Rate shown above, on each September 15 and March 15 or
if any such day is not a Business Day, the next succeeding Business Day,
commencing on March 15, 2000 and continuing until the earlier of the payment of
the principal hereof or the Final Maturity Date (each a "Payment Date"), on the
principal amount of this Class A-[ ] Note. Interest on this Class A-[ ] Note
will accrue for each Payment Date from the most recent Payment Date on which
interest has been paid to but excluding such Payment Date or, if no interest has
yet been paid, from [ ], 1999. Interest will be computed on the basis of a
360-day year of twelve 30-day months. Such
B-1
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principal of and interest on this Class A-[ ] Note shall be paid in the manner
specified on the reverse hereof.
The principal of and interest on this Class A-[ ] Note are payable in
such coin or currency of the United States of America as at the time of payment
is legal tender for payment of public and private debts. All payments made by
the Note Issuer with respect to this Class A-[ ] Note-shall be applied first to
interest due and payable on this Class A-[ ] Note as provided above and then to
the unpaid principal of this Class A-[ ] Note, all in the manner set forth in
Section 8.02 of the Note Indenture.
Reference is made to the further provisions of this Class A-[ ] Note
set forth on the reverse hereof, which shall have the same effect as though
fully set forth on the face of this Class A-[ ] Note.
Unless the certificate of authentication hereon has been executed by
the Note Trustee whose name appears below by manual signature, this Class A-[ ]
Note shall not be entitled to any benefit under the Note Indenture referred to
on the reverse hereof, or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Note Issuer has caused this instrument to be
signed, manually or in facsimile, by its Authorized Officer.
Date: [ ], 1999
BEC FUNDING LLC
By:
-------------------------------------
Name:
Title:
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NOTE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
Dated: [ ], 1999
This is one of the Notes referred to in the within-mentioned Note
Indenture.
THE BANK OF NEW YORK,
not in its individual capacity but solely
as Note Trustee,
By:
-------------------------------------
Name:
Title:
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[REVERSE OF NOTE]
This Class A-[ ] Note is one of a duly authorized issue of Notes of the
Note Issuer, designated as its BEC Funding LLC Notes (herein called the
"Notes"), issuable in one or more Classes, and further designated as a Class A-[
] Note (collectively with all other Class A-[ ] Notes of this issue, the "Class
A-[ ] Notes"), all issued under a Note Indenture dated as of [ ], 1999 (the
"Note Indenture"), between the Note Issuer and The Bank of New York, as Note
Trustee (the "Note Trustee," which term includes any successor trustee under the
Note Indenture), to which Note Indenture and all indentures supplemental thereto
reference is hereby made for a statement of the respective rights and
obligations thereunder of the Note Issuer, the Note Trustee and the Holders of
the Notes. All terms used in this Class A-[ ] Note that are defined in the Note
Indenture, as supplemented or amended, shall have the meanings assigned to them
in the Note Indenture, as supplemented or amended.
The Class A-[ ] Notes and the other Classes of Notes issued by the Note
Issuer are and will be equally and ratably secured by the collateral pledged as
security therefor, as provided in the Note Indenture.
The principal of this Class A-[ ] Note shall be payable on each Payment
Date only to the extent that amounts in the Collection Account are available
therefor, and only until the outstanding principal balance thereof on such
Payment Date (after giving effect to all payments of principal, if any, made on
such Payment Date) has been reduced to the principal balance specified in the
Expected Amortization Schedule which is attached to the Note Indenture as
Schedule A, unless payable earlier either because (x) an Event of Default shall
have occurred and be continuing and the Note Trustee or the Holders of Notes
representing not less than a majority of the Outstanding Amount of the Notes
have declared the Notes to be immediately due and payable in accordance with
Section 5.02 of the Note Indenture, (y) the Note Issuer, at its option, shall
have called for the redemption of the Notes pursuant to Section 10.01 of the
Note Indenture or (z) the Note Issuer shall have called for the redemption of
the Notes pursuant to Section 10.04 of the Note Indenture if the Seller is
required to repurchase the Transition Property pursuant to Section 5.01(b) of
the Sale Agreement. However, actual principal payments may be made in lesser
than expected amounts and at later than expected times as determined pursuant to
Section 8.02 of the Note Indenture. The entire unpaid principal amount of this
Class A-[ ] Note shall be due and payable on the earlier of the Final Maturity
Date hereof, the optional Redemption Date, if any, and the Mandatory Redemption
Date, if any, herefor. Notwithstanding the foregoing, the entire unpaid
principal amount of the Notes shall be due and payable, if not then previously
paid, on the date on which an Event of Default shall have occurred and be
continuing and the Note Trustee or the Holders of the Notes representing not
less than a majority of the Outstanding Amount of the Notes have declared the
Notes to be immediately due and payable in the manner provided in Section 5.02
of the Note Indenture. All principal payments on the Class A-[ ] Notes shall be
made pro rata to the Class A-[ ] Noteholders entitled thereto based on the
respective principal amounts of the Class A-[ ] Notes held by them.
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Payments of interest on this Class A-[ ] Note due and payable on each
Payment Date, together with the installment of principal shall be made by check
mailed first-class, postage prepaid, to the Person whose name appears as the
Registered Holder of this Class A-[ ] Note (or one or more Predecessor Notes) on
the Note Register as of the close of business on the Record Date, except that
with respect to Notes registered on the Record Date in the name of the
Certificate Trustee, payments will be made by wire transfer in immediately
available funds to the account designated by the Certificate Trustee and except
for the final installment of principal payable with respect to this Class A-[ ]
Note on a Payment Date which shall be payable as provided below. Such checks
shall be mailed to the Person entitled thereto at the address of such Person as
it appears on the Note Register as of the applicable Record Date without
requiring that this Class A-[ ] Note be submitted for notation of payment. Any
reduction in the principal amount of this Class A-[ ] Note (or any one or more
Predecessor Notes) effected by any payments made on any Payment Date shall be
binding upon all future Holders of this Class A-[ ] Note and of any Note issued
upon the registration of transfer hereof or in exchange hereof or in lieu
hereof, whether or not noted hereon. If funds are expected to be available, as
provided in the Note Indenture, for payment in full of the then remaining unpaid
principal amount of this Class A-[ ] Note on a Payment Date, then the Note
Trustee, in the name of and on behalf of the Note Issuer, will notify the Person
who was the Registered Holder hereof as of the Record Date preceding such
Payment Date by notice mailed no later than five days prior to such final
Payment Date and shall specify that such final installment will be payable only
upon presentation and surrender of this Class A-[ ] Note and shall specify the
place where this Class A-[ ] Note may be presented and surrendered for payment
of such installment.
The Note Issuer shall pay interest on overdue installments of interest
at the Note Interest Rate to the extent lawful.
As provided in the Note Indenture, the Class A-[ ] Notes may be
redeemed, in whole but not in part, at the option of the Note Issuer on any
Payment Date at the Optional Redemption Price if, after giving effect to
payments that would otherwise be made on such Payment Date, the Outstanding
Amount of the Notes has been reduced to less than five percent of the initial
principal balance thereof. In addition, as provided in the Note Indenture, if
the Seller is required to repurchase the Transition Property pursuant to Section
5.01(b) of the Sale Agreement, the Note Issuer will be required to redeem all
outstanding Notes, including the Class A-[ ] Notes, on or before the fifth
Business Day following the Repurchase Date (as defined in the Sale Agreement).
As provided in the Note Indenture and subject to certain limitations
set forth therein, the transfer of this Class A-[ ] Note may be registered on
the Note Register upon surrender of this Class A-[ ] Note for registration of
transfer at the office or agency designated by the Note Issuer pursuant to the
Note Indenture, duly endorsed by, or accompanied by (a) a written instrument of
transfer in form satisfactory to the Note Trustee duly executed by the Holder
hereof or his attorney duly authorized in writing, with such signature
guaranteed by an institution which is a member of one of the following
recognized Signature Guaranty Programs: (i) The Securities
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Transfer Agent Medallion Program (STAMP); (ii) The New York Stock Exchange
Medallion Program (MSP); (iii) The Stock Exchange Medallion Program (SEMP); or
(iv) in such other guarantee program acceptable to the Note Trustee, and (b)
such other documents as the Note Trustee may require, and thereupon one or more
new Class A-[ ] Notes of Minimum Denominations and in the same aggregate
principal amount will be issued to the designated transferee or transferees. No
service charge will be charged for any registration of transfer or exchange of
this Class A-[ ] Note, but the transferor may be required to pay a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any such registration of transfer or exchange, other than
exchanges pursuant to Section 2.04 of the Note Indenture not involving any
transfer.
Each Noteholder, by acceptance of a Note, covenants and agrees that no
recourse may be taken, directly or indirectly, with respect to the obligations
of the Note Issuer or the Note Trustee on the Notes or under the Note Indenture
or any certificate or other writing delivered in connection therewith, against
(i) the Note Trustee in its individual capacity, (ii) any owner of a beneficial
interest in the Note Issuer or (iii) any partner, owner, beneficiary, agent,
officer, director or employee of the Note Trustee in its individual capacity,
any holder of a beneficial interest in the Note Issuer or the Note Trustee or of
any successor or assign of the Note Trustee in its individual capacity, except
as any such Person may have expressly agreed (it being understood that the Note
Trustee has no such obligations in its individual capacity).
Prior to the due presentment for registration of transfer of this Class
A-[ ] Note, the Note Issuer, the Note Trustee and any agent of the Note Issuer
or the Note Trustee may treat the Person in whose name this Class A-[ ] Note is
registered (as of the day of determination) as the owner hereof for the purpose
of receiving payments of principal of and interest on this Class A-[ ] Note and
for all other purposes whatsoever, whether or not this Class A-[ ] Note be
overdue, and neither the Note Issuer, the Note Trustee nor any such agent shall
be affected by notice to the contrary.
The Note Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Note Issuer and the rights of the Holders of the Notes under
the Note Indenture at any time by the Note Issuer with the consent of the
Holders of Notes representing a majority of the Outstanding Amount of all Notes
at the time Outstanding of each Class to be affected. The Note Indenture also
contains provisions permitting the Holders of Notes representing specified
percentages of the Outstanding Amount of the Notes, on behalf of the Holders of
all the Notes, to waive compliance by the Note Issuer with certain provisions of
the Note Indenture and certain past defaults under the Note Indenture and their
consequences. Any such consent or waiver by the Holder of this Class A-[ ] Note
(or any one of more Predecessor Notes) shall be conclusive and binding upon such
Holder and upon all future Holders of this Class A-[ ] Note and of any Note
issued upon the registration of transfer hereof or in exchange hereof or in lieu
hereof whether or not notation of such consent or waiver is made upon this Class
A-[ ] Note. The Note Indenture also permits the Note Trustee to amend or waive
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certain terms and conditions set forth in the Note Indenture without the consent
of Holders of the Notes issued thereunder.
The term "Note Issuer" as used in this Class A-[ ] Note includes any
successor to the Note Issuer under the Note Indenture.
The Note Issuer is permitted by the Note Indenture, under certain
circumstances, to merge or consolidate, subject to the rights of the Note
Trustee and the Holders of Notes under the Note Indenture.
The Class A-[ ] Notes are issuable only in registered form in
denominations as provided in the Note Indenture, subject to certain limitations
therein set forth.
This Class A-[ ] Note and the Note Indenture shall be construed in
accordance with the laws of The Commonwealth of Massachusetts, without reference
to its conflict of law provisions, and the obligations, rights and remedies of
the parties hereunder and thereunder shall be determined in accordance with such
laws.
No reference herein to the Note Indenture and no provision of this
Class A-[ ] Note or of the Note Indenture shall alter or impair the obligation
of the Note Issuer, which is absolute and unconditional, to pay the principal of
and interest on this Class A-[ ] Note at the times, place, and rate, and in the
coin or currency herein prescribed.
The Holder of this Class A-[ ] Note by the acceptance hereof agrees
that, notwithstanding any provision of the Note Indenture to the contrary, the
Holder shall have no recourse against the Note Issuer, but shall look only to
the Collateral, with respect to any amounts due to the Holder under this Class
A-[ ] Note.
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ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of
assignee: _________________
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto___________________________________________________________________________
_______________________________________________________________________________
(name and address of assignee)
the within Class A-[ ] Note and all rights thereunder, and hereby irrevocably
constitutes and appoints __________________, attorney, to transfer said Class
A-[ ] Note on the books kept for registration thereof, with full power of
substitution in the premises.
Dated: _____________________ ___________________________________
Signature Guaranteed:
__________________________________ ___________________________________
___________________
* NOTE: The signature to this assignment must correspond with the name of the
registered owner as it appears on the face of the within Class A-[ ] Note
in every particular, without alteration, enlargement or any change
whatsoever.
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