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CL&P FUNDING LLC,
as Note Issuer
and
FIRST UNION TRUST COMPANY, NATIONAL ASSOCIATION,
as Note Trustee
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NOTE INDENTURE
Dated as of March __, 2001
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[$________]
CL&P FUNDING LLC NOTES
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TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS AND INCORPORATION BY REFERENCE.................... 2
Section 1.01. Definitions......................................... 2
Section 1.02. Incorporation by Reference of Trust Indenture Act... 12
Section 1.03. Rules of Construction............................... 13
ARTICLE II THE NOTES..................................................... 13
Section 2.01. Terms of the Notes.................................. 13
Section 2.02. Form................................................ 15
Section 2.03. Execution, Authentication and Delivery.............. 15
Section 2.04. Temporary Notes..................................... 16
Section 2.05. Registration; Registration of Transfer and
Exchange............................................ 16
Section 2.06. Mutilated, Destroyed, Lost or Stolen Notes.......... 17
Section 2.07. Persons Deemed Owner................................ 18
Section 2.08. Payment of Principal and Interest; Interest on
Overdue Principal; Principal and Interest Rights
Preserved........................................... 18
Section 2.09. Cancellation........................................ 19
Section 2.10. Authentication and Delivery of Notes................ 19
Section 2.11. Release of Collateral............................... 24
ARTICLE III COVENANTS..................................................... 24
Section 3.01. Payment of Principal and Interest................... 24
Section 3.02. Maintenance of Office or Agency..................... 25
Section 3.03. Money for Payments To Be Held in Trust.............. 25
Section 3.04. Existence........................................... 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................... 30
Section 3.10. Note Issuer May Consolidate, etc., Only on Certain
Terms............................................... 30
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
TABLE OF CONTENTS
(CONTINUED)
PAGE
Section 3.15. No Additional Notes................................. 32
Section 3.16. Guarantees, Loans, Advances and Other Liabilities... 32
Section 3.17. Capital Expenditures................................ 33
Section 3.18. Non-Routine Periodic Adjustment..................... 33
Section 3.19. Restricted Payments................................. 33
Section 3.20. Notice of Events of Default......................... 33
Section 3.21. Further Instruments and Acts........................ 33
ARTICLE IV SATISFACTION AND DISCHARGE; DEFEASANCE........................ 33
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...................................................... 36
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...................... 42
Section 5.11. Control by Noteholders.............................. 42
Section 5.12. Waiver of Past Defaults............................. 43
Section 5.13. Undertaking for Costs............................... 43
Section 5.14. Waiver of Stay or Extension Laws.................... 44
Section 5.15. Action on Notes..................................... 44
Section 5.16. Performance and Enforcement of Certain Obligations.. 44
Section 5.17. Inter-Creditor Agreement............................ 45
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TABLE OF CONTENTS
(CONTINUED)
PAGE
ARTICLE VI THE NOTE TRUSTEE.............................................. 45
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.................. 47
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....... 51
Section 6.11. Eligibility; Disqualification....................... 52
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................................ 53
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.............................. 54
Section 7.04. Reports by Note Trustee............................. 54
ARTICLE VIII Accounts, Disbursements and Releases.......................... 54
Section 8.01. Collection of Money................................. 54
Section 8.02. Collection Account.................................. 55
Section 8.03. General Provisions Regarding the Collection
Account............................................. 58
Section 8.04. Release of Collateral............................... 59
Section 8.05. Opinion of Counsel.................................. 59
Section 8.06. Reports by Independent Accountants.................. 60
ARTICLE IX SUPPLEMENTAL NOTE INDENTURES.................................. 60
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
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TABLE OF CONTENTS
(CONTINUED)
PAGE
Section 9.04. Effect of Supplemental Note Indenture............... 63
Section 9.05. Conformity with Trust Indenture Act................. 63
ARTICLE X REDEMPTION OF NOTES........................................... 64
Section 10.01. Optional Redemption by Note Issuer.................. 64
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................. 65
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................................................. 66
Section 11.01. Compliance Certificates and Opinions, etc........... 66
Section 11.02. Form of Documents Delivered to Note Trustee......... 67
Section 11.03. Acts of Noteholders................................. 68
Section 11.04. Notices............................................. 69
Section 11.05. Notices to Noteholders; Waiver...................... 71
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.......................... 72
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
Section 11.15. No Recourse to Certain Persons...................... 72
Section 11.16. No Recourse to Note Issuer.......................... 72
Section 11.17. Inspection.......................................... 73
Section 11.18. Nonpetition Covenants............................... 73
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NOTE INDENTURE dated as of March __, 2001, between CL&P FUNDING LLC, a
Delaware limited liability company (the "Note Issuer"), and FIRST UNION TRUST
COMPANY, NATIONAL ASSOCIATION, a national banking association, 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 [________] 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 Sections 3.10(b) or 3.19.
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 provided in this Note Indenture. This Note Indenture constitutes a
security agreement within the meaning of the UCC to the extent that, under
Connecticut 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. DEFINITIONS. (a) Except as otherwise specified herein or as
the context may otherwise require, the following terms have the respective
meanings set forth below for all purposes of this Note Indenture.
"ACT" has the meaning specified in Section 11.03(a).
"ADMINISTRATION AGREEMENT" means the Administration Agreement dated as of
March __, 2001, between The Connecticut Light and Power Company, as
Administrator, and the Note Issuer, as the same may be amended and supplemented
from time to time.
"ADMINISTRATION FEE" means the fee payable to the Administrator pursuant to
the Administration Agreement.
"ADMINISTRATOR" means The Connecticut Light and Power Company, a
Connecticut corporation, or any successor Administrator under the Administration
Agreement.
"AFFILIATE" means, with respect to any specified Person, any other Person
controlling or controlled by or under common control with such specified Person.
For the purposes of this definition, "control" when used with respect to any
specified Person means the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"AUTHORIZED OFFICER" means, with respect to the Note Issuer, the
Administrator or the Servicer, as applicable, any officer of such Person who is
authorized to act for such Person in matters relating to such Person and who is
identified on the list of Authorized Officers or Responsible Officers delivered
by such Person to the Note Trustee on the Issuance Date (as such list may be
modified or supplemented by the Note Issuer, the Administrator or the Servicer,
as applicable, from time to time thereafter).
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"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, the Underwriting Agreement, the Inter-Creditor
Agreement and the Swap 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, Hartford,
Connecticut or Wilmington, Delaware are authorized or obligated by law,
regulation or executive order to remain closed.
"CAPITAL SUBACCOUNT" has the meaning specified in Section 8.02(a).
"CERTIFICATE INDENTURE" means the Certificate Indenture dated as of March
__, 2001, 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 ISSUER" has the meaning specified in the Certificate
Indenture.
"CERTIFICATE TRUSTEE" means the Person acting as certificate trustee under
the Certificate Indenture.
"CERTIFICATES" has the meaning specified 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).
"CONNECTICUT UCC" means Title 42a of the Connecticut General Statutes.
"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
the address provided in Section 11.04, 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).
"DECLARATION OF TRUST" has the meaning specified 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.
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"DELAWARE TRUSTEE" means the Person acting as Delaware Trustee under the
Declaration of Trust and the Certificate Indenture.
"DELAWARE UCC" means Del. Code Ann. tit. 6,ss.ss.1-101 to 11-109.
"DPUC" means the Connecticut Department of Public Utility Control and any
successor thereto.
"DTC AGREEMENT" has the meaning specified in the Certificate Indenture.
"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) with respect to any Eligible
Investment having a maturity of greater than one month, a long-term unsecured
debt rating of AAA by Standard & Poor's and Fitch and Aaa by Moody's or (B) with
respect to any Eligible Investment having a maturity of one month or less, a
certificate of deposit rating of A-1+ by Standard & Poor's, F1+ by Fitch and P-1
by Moody's, or any other long-term, short-term or certificate of deposit rating
acceptable to Standard & Poor's and Moody's 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 book-entry securities, negotiable instruments
or securities represented by instruments in bearer or registered form which
evidence:
(a) direct obligations of, and obligations fully and unconditionally
guaranteed as to timely payment by, the United States of America;
(b) demand deposits, time deposits or certificates of deposit of any
depository institution or trust company (any depositary institution or
trust company being referred to in this definition as a "financial
institution") incorporated under the laws of the United States or any state
thereof (or any domestic branch of a foreign bank) and subject to
supervision and examination by federal or state banking or depositary
institution authorities; provided, however, that at the time of the
investment or contractual commitment to invest therein, the commercial
paper or other short-term unsecured debt obligations (other than such
obligations the rating of which is based on the credit of a Person other
than such depositary institution or trust company) thereof shall have a
credit rating from each of the Rating Agencies in the highest investment
category granted thereby; meeting the requirements of clause (e) of the
definition of Eligible Institution;
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(c) commercial paper or other short term obligations of any
corporation organized under the laws of the United States of America (other
than the Seller or its Affiliates) whose ratings, at the time of the
investment or contractual commitment to invest therein, from each of the
Rating Agencies are in the highest investment category granted thereby;
(d) demand deposits, time deposits and certificates of deposit which
are fully insured by the Federal Deposit Insurance Corporation;
(e) investments in money market funds having a rating from each of the
Rating Agencies in the highest investment category granted thereby
(including funds for which the Note Trustee or any of its Affiliates act as
investment manager or advisor);
(f) banker's acceptances issued by any depositary institution or trust
company referred to in clause (b) above;
(g) repurchase obligations with respect to any security that is a
direct obligation of, or fully guaranteed by, the United States or any
agency or instrumentality thereof the obligations of which are backed by
the full faith and credit of the United States, in either case entered into
with a depository institution or trust company (acting as principal)
described in clause (b) above;
(h) repurchase obligations with respect to any security or whole loan
entered into with
(i) a financial institution (acting as principal) described
in clause (b) above and, with respect to Moody's only, a minimum
long-term unsecured rating of A1,
(ii) a broker/dealer (acting as principal) registered as a
broker or dealer under Section 15 of the Exchange Act (any
broker/dealer being referred to in this definition as a
"broker/dealer"), the unsecured short-term debt obligations of which
are rated P-1 by Moody's and A-1+ by Standard & Poor's at the time of
entering into this repurchase obligation and with respect to Moody's
only, a minimum long-term unsecured rating of A1, or
(iii) an unrated broker/dealer, acting as principal, that is a
wholly-owned subsidiary of a non-bank or bank holding company, the
unsecured short-term debt obligations of which are rated P-1 by
Moody's and A-1+ by Standard & Poor's at the time of purchase; or
(i) any other investment permitted by each Rating Agency;
provided, however, that, with respect to Moody's only, the obligor related to
clauses (b), (c), (d), (f), (g) and (h) above must have both a long term rating
of at least A1 and a short term rating of at least P-1, and provided, further,
that, unless otherwise permitted by each Rating Agency, upon the failure of any
Eligible Institution to maintain any applicable rating set forth in this
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definition or the definition of Eligible Institution, the related investments at
such institution shall be reinvested in Eligible Investments at a successor
Eligible Institution within 10 days.
"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 1 hereto.
"FDIC" means the Federal Deposit Insurance Corporation or any successor.
"FEE AND INDEMNITY AGREEMENT" means the fee and indemnity agreement dated
as of March __, 2001, among the Note Issuer, the Delaware Trustee, the
Certificate Trustee, the Certificate Issuer and the Finance Authority, as
amended and supplemented from time to time.
"FINAL MATURITY DATE" means, with respect to any Class of Notes, the Final
Maturity Date therefor, as specified in Section 2.01(b).
"FINANCE AUTHORITY" means the State of Connecticut, acting through the
office of the State Treasurer.
"FINANCIAL ASSET" means a "financial asset" as defined in Section
42a-8-102(a)(10) of the Connecticut UCC.
"FITCH" means Fitch, Inc. or its successor.
"GENERAL SUBACCOUNT" has the meaning specified in Section 8.02(a).
"GRANT" means mortgage, pledge, collaterally assign and grant a lien upon
and a security interest pursuant to this Note Indenture. A Grant of the
Collateral or of any other agreement or instrument shall include all rights,
powers and options (but none of the obligations) of the Granting party
thereunder, including 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.
"INDEMNIFIED PERSON" has the meaning specified in Section 6.07.
"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,
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employee, promoter, underwriter, trustee, partner, director or person performing
similar functions, provided, however, that an individual shall be deemed to be
an Independent director of the Note Issuer notwithstanding the fact that he or
she is or has been a director of one or more other single purpose bankruptcy
remote entities which are Affiliates of the Note Issuer, the Seller, the
Servicer or any Affiliate thereof.
"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.
"INTER-CREDITOR AGREEMENT" means the Inter-Creditor Agreement dated as of
March __, 2001 among Citicorp North America, Inc., Citibank, N.A., the Servicer,
the Note Trustee, the Note Issuer and CL&P Receivables Corporation, as amended,
supplemented or modified from time to time.
"ISSUANCE DATE" has the meaning specified 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.
"MINIMUM DENOMINATION" means $1,000 or any integral multiple of $1.00 in
excess thereof; provided, however, that one Note of each Class may be of a
smaller denomination.
"MOODY'S" means Moody's Investors Service Inc. or its successor.
"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 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 specified in the Certificate
Indenture.
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"NOTE REGISTER" and "NOTE REGISTRAR" have the respective meanings specified
in Section 2.05.
"NOTE TRUSTEE" means First Union Trust Company, National Association, a
national banking association, as Note Trustee under this Note Indenture, or any
successor Note Trustee under this Note Indenture.
"NOTEHOLDER" or "HOLDER" means the Person in whose name a Note is
registered on the Note Register.
"NOTES" has the meaning specified in Section 2.01(a).
"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, the Finance Authority and any other Indemnified Person, 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;
(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
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(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.
"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.
"QUARTERLY INTEREST" has the meaning specified in Section 2.01(c)(iv).
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"QUARTERLY 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.
"RATING AGENCY" means, collectively, Moody's, Standard & Poor's and Fitch.
If no such organization or successor is any longer in existence, "Rating Agency"
shall be a nationally recognized statistical rating organization or other
comparable Person designated by the 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, except as
otherwise expressly set forth in the related Basic Document, that each of the
Rating Agencies shall have notified the Servicer, the Note Issuer, the Note
Trustee, the Finance Authority 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 2 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 March __, 2001, between the Note Issuer and the Seller, 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 DELAWARE 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 DELAWARE UCC].
"SECURITY ENTITLEMENT" means a "security entitlement" as defined in
[SECTION 8-102(A)(17) OF THE DELAWARE UCC].
"SERVICING AGREEMENT" means the Transition Property Servicing Agreement
dated as of March __, 2001, between the Note Issuer and the Servicer, as amended
and supplemented from time to time.
"STANDARD & POOR'S" means Standard & Poor's Ratings Services, a division of
The 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.
"STATE TREASURER" means the Treasurer of the State of Connecticut.
"STATUTE" means Sections 16-245e to and including 16-245k of the
Connecticut General Statutes.
"SUCCESSOR SERVICER" has the meaning specified in Section 3.07(e).
"SWAP AGREEMENT" means any interest rate swap agreement entered into by the
Certificate Issuer with respect to any Class of Certificates, including, without
limitation, the ISDA Master Agreement and the related Schedule and Confirmation
between the Certificate Issuer and a swap counterparty, as same may be amended
or supplemented from time to time.
"SWAP COUNTERPARTY" means, with respect to any Swap Agreement, the swap
counterparty under that Swap Agreement.
"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 of March
__, 2001, among the Seller, the Note Issuer and Lehman Brothers Inc. and Salomon
Smith Barney Inc., as the representatives of the several underwriters named
therein.
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"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 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:
Term Section of
Servicing Agreement
Advice Letter......................................... Section 1.01
Financing Order....................................... Section 1.01
Non-Routine Periodic Adjustment....................... Section 1.01
Principal Balance..................................... Section 1.01
RRB Charge............................................ Section 1.01
RRB Charge Collections................................ Section 1.01
RRB Charge Payments................................... 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.
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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:
(a) a term has the meaning assigned to it;
(b) an accounting term not otherwise defined has the meaning assigned
to it in accordance with generally accepted accounting principles as in effect
from time to time;
(c) "or" is not exclusive;
(d) "including" means including without limitation;
(e) words in the singular include the plural and words in the plural
include the singular;
(f) the words "herein," "hereof," "hereunder" and other words of
similar import refer to this Note Indenture as a whole and not to any particular
Article, Section or other subdivision; and
(g) 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 [$________] is hereby authorized and the
Notes shall be designated as the CL&P Funding LLC Notes (the "Notes"), and
further denominated as Classes A-1 through A-[_].
(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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Class Initial Principal Note Interest Scheduled Final Maturity Date
Amount Rate Maturity Date
A-1 $ %
A-2
A-3
A-4
A-5
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; QUARTERLY 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
March __ 2001 (the "Issuance Date") shall have as their date of
authentication March __, 2001.
(ii) PAYMENT DATES. The Payment Dates for the Notes shall be
[________ __, _________ ___, ________ ___, and ____________ __] of each
year or, if any such date is not a Business Day, the next succeeding
Business Day, commencing on March __, 2001 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
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reduces the Outstanding Amount of such Class of Notes to the amount
specified in the Expected Amortization Schedule. Partial payments of any
scheduled amortization payment shall be allocated within any Class of Notes
pro rata.
(iv) QUARTERLY INTEREST. Quarterly Interest will be payable on each
Class of Notes on each Payment Date in an amount equal to one-quarter 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 A, 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 A 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 and shall keep and maintain the
Note Register on behalf of the Note Issuer. 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 the Payment
Date on which the Note Issuer expects that the final installment of principal of
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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
or 10.05, as applicable.
(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:
(a) 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.
(b) AUTHORIZATIONS.
(i) An Opinion of Counsel that no authorization, approval or
consent of any Connecticut, 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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(ii) An Opinion of Counsel that no authorization, approval or
consent of any Connecticut, Delaware or federal 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.
(c) 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.
(d) 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 DPUC pursuant to
the Statute, the Connecticut UCC, the Delaware UCC and such other filings in
connection with such Grant to have been duly made.
(e) CERTIFICATES OF THE NOTE ISSUER AND THE SELLER.
(i) An Officer's Certificate from the Note Issuer, dated as of the
Issuance Date to the effect that:
(a) 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;
(b) all conditions precedent provided in this Note Indenture relating
to the authentication and delivery of the Notes applied for have been complied
with;
(c) 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;
(d) 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;
(e) 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 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;
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(f) the Note Issuer has appointed a firm of Independent certified
public accountants as contemplated in Section 8.06 hereof;
(g) attached thereto are duly executed, true and complete copies of
the Sale Agreement and the Servicing Agreement; and
(h) all filings with the DPUC 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.
(ii) An Officer's Certificate (as defined in the Sale Agreement)
from the Seller, dated as of the Issuance Date, to the effect that (a) the
representations and warranties set forth in Article III of the Sale
Agreement are true and correct and (b) the attached copies of the Financing
Order and Issuance Advice Letter creating the Transition Property are true
and correct.
(f) 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:
(i) the Note Indenture has been duly qualified under the Trust
Indenture Act;
(ii) 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;
(iii) the Note Indenture has been duly authorized, executed and
delivered by the Note Issuer;
(iv) 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 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);
(v) 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);
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(vi) (A) (I) under Section 16-245k(a) 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
RRB Charge 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 part 4
of article 9 of the Connecticut UCC in the offices of the Secretary of the
State of Connecticut, and (V) under Section 16-245k(b) 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 16-245k 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 16-245k(g) of the Statute described in clause (B) of this
Section 2.10(f)(vi)); (B) (I) by operation of Section 16-245k(g) thereof,
the Statute creates, upon the effective date of the Financing Order, a
first priority lien on all 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,
and any other entity specified in the Financing Order including the Note
Issuer and the Certificate Issuer, (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, and (III) the Statute provides that
conflicting first priority liens on Transition Property arising under
Section 16-245k(g) of the Statute rank in order of time of perfection; and
(C) (I) the provisions of this Note Indenture are sufficient to create in
favor of the Note Trustee a security interest under article 9 of the
Connecticut 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 Connecticut UCC in the offices of the Secretary of
the State of Connecticut, (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
Connecticut UCC prior to perfection by filing of the security interest
therein granted under this Note Indenture);
(vii) 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
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are pending or threatened by the Commission or (B) the Notes and the
Certificates are exempt from the registration requirements under the
Securities Act;
(viii) 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;
(ix) 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);
(x) 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);
(xi) 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 (A) 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 State of Connecticut 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 and
notwithstanding any contrary treatment of such transfer for accounting
purposes, (B) such transfer of the Transition Property is perfected, (C) a
financing statement has been filed in favor of the Note Issuer that
describes the Transition Property by reference to the Financing Order, in
accordance with Section 16-245k(j) of the Statute and (D) assuming that the
Note Issuer does not have notice or knowledge of any conflicting assignment
of the Transition Property, the transfer of the Transition Property to the
Note issuer will have priority over any other assignment of the Transition
Property;
(xii) (A) the Financing Order has been duly issued and authorized by
the DPUC and the Financing Order, giving effect to the Issuance Advice
Letter, is effective; (B) in reliance on the opinion of Pullman & Comley
LLC that the Certificates are "rate reduction bonds" under Section
16-245e(a)(1) of the Statute, as of the issuance of the Certificates, the
Certificates are entitled to the protections provided in Sections
16-245i(b) and 16-245j(b) of the Statute; (C) the Financing Order is no
longer subject to appeal by any person in state courts of the State of
Connecticut; and (D) the Servicer is authorized to file periodic RRB Charge
adjustments to the extent necessary to ensure the timely recovery of
revenues sufficient to provide for the payment of an amount equal to the
sum of the periodic RRB payment requirements for the upcoming year, which
includes indemnity obligations under the Basic Documents;
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(xiii) any state action (whether by legislative, DPUC, or otherwise)
to revoke or limit the Financing Order, the Issuance Advice Letter, the
Transition Property or the RRB Charge in a manner which would substantially
impair the rights of Certificateholders would be subject to a successful
constitutional contracts or takings clause defense; and
(xiv) such other matters as the Note Trustee may reasonably require.
(g) 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 RRB Charge, as of the Issuance Date such estimated collections based
on the initial RRB Charge are sufficient to pay (a) assumed Operating Expenses
when 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.
(h) RATINGS ON THE CERTIFICATES. The Note Trustee shall receive
evidence reasonably satisfactory to it that the Certificates shall have been
rated AAA by Standard & Poor's, Aaa by Moody's, and AAA by Fitch, or, in each
case, the equivalent.
(i) OTHER REQUIREMENTS. Such other documents, certificates,
agreements, instruments or opinions as the 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 ss.ss. 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.
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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.
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:
(a) 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;
(b) 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;
(c) 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;
(d) 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
(e) 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
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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 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 DPUC pursuant to the Statute, financing statements,
continuation statements, instruments of further assurance and other instruments,
and will take such other action necessary or advisable to:
(a) maintain or preserve the lien and security interest (and the
priority thereof) of this Note Indenture or carry out more effectively the
purposes hereof;
(b) perfect, publish notice of or protect the validity of any Grant
made or to be made by this Note Indenture;
(c) enforce any of the Collateral;
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(d) 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 DPUC or the State of
Connecticut of any of its obligations or duties under the Statute, the Financing
Order or any Advice Letter; or
(e) 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 DPUC pursuant to the Statute,
financing statement, continuation 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. The Note Trustee agrees not to execute any such
filing (other than UCC financing statements, continuation statements or
amendments) prior to a Default unless the Note Issuer shall have failed to make
any such filing on a timely basis, which shall mean at least five Business Days
prior to the expiration date for such filing.
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, (i) 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 DPUC pursuant to the Statute, financing statements and
continuation statements, as are necessary to perfect the lien and security
interest of this Note Indenture, or (ii) 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
(i) stating that, in the opinion of such counsel, all filings, including filings
with the DPUC 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 (ii) 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
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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 DPUC 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, supplement 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
Finance Authority and the Rating Agencies, and shall specify in such notice the
action, if any, the Note Issuer is taking with respect to such default. If a
Servicer Default shall arise from the failure of the Servicer to perform any of
its duties or obligations under the Servicing Agreement with respect to the
Transition Property, including the RRB 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 Finance Authority 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 DPUC 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 DPUC 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
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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 reasonably 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 Finance Authority 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
Finance Authority 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 (which consent shall not be withheld if (i)
the Note Trustee shall have received an Officer's Certificate stating that such
amendment, modification, waiver, supplement, termination or surrender 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 in
Outstanding Amount of the Notes, amend, modify, waive, supplement, terminate or
surrender, or agree to any amendment, modification, waiver, supplement,
termination or surrender of, the terms of any Collateral or the Basic Documents,
or waive timely performance or observance of any material term by the Seller or
the Servicer under the Sale Agreement or the Servicing Agreement, respectively.
If any such amendment, modification, supplement or waiver shall be so consented
to by the 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 or 15(d) 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:
(a) 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;
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(b) 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;
(c) terminate its existence or dissolve or liquidate in whole or in
part; or
(d) (i) 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, (ii) 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 16-245k(g) 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 (iii) subject to any statutory lien under Section 16-245k(g)
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, the Finance Authority and
the Rating Agencies not later than March 31 of each year (commencing with March
31, 2002), an Officer's Certificate stating, as to the Authorized Officer
signing such Officer's Certificate, that
(a) 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, 2002, the period of time from the date of
this Note Indenture until December 31, 2001), and of performance under this Note
Indenture has been made under such Authorized Officer's supervision; and
(b) 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;
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(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 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;
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(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).
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),
CL&P 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 CL&P
Funding LLC to the Note Trustee stating that CL&P 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
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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 (a) pay any dividend or make any
distribution (by reduction of capital or otherwise), whether in cash, property,
securities or a combination thereof, to any owner of a beneficial interest in
the Note Issuer or otherwise with respect to any ownership or equity interest or
security in or of the Note Issuer, (b) redeem, purchase, retire or otherwise
acquire for value any such ownership or equity interest or security or (c) 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 Finance Authority 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
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(i) either all Notes theretofore authenticated and delivered (other
than (A) Notes that have been mutilated, destroyed, lost or stolen and that
have been replaced or paid as provided in Section 2.06 and (B) 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 the Scheduled
Maturity Date or Redemption Date has occurred with respect to all Notes not
theretofore delivered to the Note Trustee for 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;
(ii) the Note Issuer has paid or caused to be paid all other sums
payable hereunder by the Note Issuer; and
(iii) 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(d) ("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(d).
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(e) or (f) occurs which is continuing at the end of the period;
(d) no Default has occurred and is continuing on the day of such
deposit and after giving effect thereto;
(e) in the case of an exercise of the Legal Defeasance Option, the
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 discharge of the Notes to the extent
contemplated by this Article IV have been complied with.
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Before or after a deposit pursuant to this Section 4.02, the 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):
(a) 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
(b) default in the payment of the then unpaid principal of any Note on
the Final Maturity Date; or
(c) 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;
(d) (i) 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 covenant or agreement, a default in the observance or
performance of which is elsewhere in this Section specifically dealt with), or
(ii) any representation or warranty of the 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, in any case under clause (i) or
clause (ii), such default shall continue or not be cured, or the circumstance or
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condition in respect of which such misrepresentation or warranty was incorrect
shall not have been eliminated or otherwise cured, for a period of 30 days after
there shall have been given, by registered or certified mail, to the 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
(e) 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
(f) 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 Business Days after
an Authorized Officer of the Note Issuer has knowledge of the occurrence
thereof, written notice in the form of an Officer's Certificate of any event
which with the giving of notice and the lapse of time would become an Event of
Default under clause (d), 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.
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:
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(a) the Note Issuer has paid or deposited with the Note Trustee a sum
sufficient to pay:
(1) 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
(2) 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
(b) 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
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
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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, 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.
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(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
(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(a), (b) or (c), 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
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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:
(a) such Holder previously has given written notice to the Note
Trustee of a continuing Event of Default;
(b) 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;
(c) 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;
(d) the Note Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute such Proceedings; and
(e) no direction inconsistent with such written request has been given
to the 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.
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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.
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
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(a) such direction shall not be in conflict with any rule of law or
with this Note Indenture;
(b) 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;
(c) 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
(d) 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, which
Defaults may be waived only by the Holders of each Note, or each affected Class,
as the case may be. 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 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
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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 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
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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.
Section 5.17. INTER-CREDITOR AGREEMENT. So long as the Inter-Creditor
Agreement remains in effect, the rights and remedies set forth in this Article V
shall be subject to the provisions of the Inter-Creditor Agreement.
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 appear on their face to 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:
(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
or exercise of its discretion which is 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.
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(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 repayment
of such funds or indemnity satisfactory to it against such risk or liability is
not reasonably assured to it.
(h) Every provision of this 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 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 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.
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(f) The Note Trustee shall not be charged with knowledge of any
Default or Event of Default, unless either (i) a Responsible Officer of the Note
Trustee shall have actual knowledge of the Default or Event of Default, or (ii)
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 Finance Authority, each Holder of Notes and to
the Rating Agencies notice of the Default within 30 days after it has such
actual knowledge.
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.
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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, officials, officers,
directors, employees, consultants, counsel and agents (the "Indemnified
Persons") from and against any and all losses, claims, actions, suits, taxes,
damages, expenses (including, without limitation, legal fees and expenses) and
liabilities (including liabilities under state or federal securities laws) of
any kind and nature whatsoever (collectively, "Expenses"), to the extent that
such Expenses arise out of or are imposed upon or asserted against such
Indemnified Persons with respect to the creation, administration, operation 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 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 and,
provided, further, that any Expenses payable to any Indemnified Person hereunder
shall be paid to the Note Trustee for deposit into and distribution from the
Collection Account in accordance with Article VIII hereof. 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 Issuer shall
not be required to indemnify an Indemnified Person for any amount paid or
payable by such Indemnified Person pursuant to this Section 6.07 in the
settlement of any action, proceeding or investigation without the written
consent of the Note Issuer, which consent shall not be unreasonably withheld.
Promptly after receipt by an Indemnified Person of notice of its involvement in
any action, proceeding or investigation, such Indemnified Person shall, if a
claim for indemnification in respect thereof is to be made against the Note
Issuer under this Section 6.07, notify the Note Issuer in writing of such
involvement. Failure by an Indemnified Person to so notify the Note Issuer shall
relieve the Note Issuer from the obligation to indemnify and hold harmless such
Indemnified Person under this Section 6.07, only to the extent that the Note
Issuer suffers actual prejudice as a result of such failure. With respect to any
action, proceeding or investigation brought by a third party for which
indemnification may be sought under this Section 6.07, the Note Issuer shall be
entitled to assume the defense of any such action, proceeding or investigation.
Upon assumption by the Note Issuer of the defense of any such action, proceeding
or investigation, the Indemnified Person shall have the right to participate in
such action or proceeding and to retain its own counsel. The Note Issuer shall
be entitled to appoint counsel of the Note Issuer's choice at the Note Issuer's
expense to represent the Indemnified Person in any action, proceeding or
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investigation for which a claim of indemnification is made against the Note
Issuer under this Section 6.07 (in which case the Note Issuer shall not
thereafter be responsible for the fees and expenses of any separate counsel
retained by the Indemnified Person except as set forth below); provided,
however, that such counsel shall be reasonably satisfactory to the Indemnified
Person. Notwithstanding the Note Issuer's election to appoint counsel to
represent the Indemnified Person in an action, proceeding or investigation, the
Indemnified Person shall have the right to employ separate counsel (including
local counsel), and the Note Issuer shall bear the reasonable fees, costs and
expenses of such separate counsel if (i) the use of counsel chosen by the Note
Issuer to represent the Indemnified Person would present such counsel with a
conflict of interest, (ii) the actual or potential defendants in, or targets of,
any such action include both the Indemnified Person and the Note Issuer and the
Indemnified Person shall have reasonably concluded that there may be legal
defenses available to it that are different from or additional to those
available to the Note Issuer, (iii) the Note Issuer shall not have employed
counsel reasonably satisfactory to the Indemnified Person to represent the
Indemnified Person within a reasonable time after notice of the institution of
such action or (iv) the Note Issuer shall authorize the Indemnified Person to
employ separate counsel at the expense of the Note Issuer. Notwithstanding the
foregoing, the Note Issuer shall not be obligated to pay for the fees, costs and
expenses of more than one separate counsel for the Indemnified Persons (in
addition to local counsel). The Note Issuer will not, without the prior written
consent of the Indemnified Person, settle or compromise or consent to the entry
of any judgment with respect to any pending or threatened claim, action, suit or
proceeding in respect of which indemnification may be sought under this Section
6.07 (whether or not the Indemnified Person is an actual or potential party to
such claim or action) unless such settlement, compromise or consent includes an
unconditional release of the Indemnified Person from all liability arising out
of such claim, action, suit or proceeding. Indemnification under this Section
6.07 shall include reasonable fees and out-of-pocket expenses of investigation
and litigation (including reasonable attorneys' fees and expenses), except as
otherwise provided in this Agreement.
The 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(e) or (f)
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.
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 with the
prior written consent of the Note Issuer which shall not be unreasonably
withheld. The Note Issuer shall remove the Note Trustee if:
(a) the Note Trustee fails to comply with Section 6.11;
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(b) the Note Trustee is adjudged a bankrupt or insolvent;
(c) a receiver or other public officer takes charge of the Note
Trustee or its property; or
(d) the Note Trustee otherwise becomes incapable of acting.
The Note Issuer may remove the Note Trustee if the Note Trustee fails to
perform its obligations hereunder in any material respect and shall not have
cured such failure within 30 days after written notice thereof from the Note
Issuer.
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.
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, consolidation or transfer to the
Rating Agencies and the Note Issuer.
In case at the time such successor or successors by merger, conversion,
consolidation or transfer 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.
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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 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.
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(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 ss. 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 ss. 310(b), including the optional provision permitted by the
second sentence of Trust Indenture Act ss. 310(b)(9); provided, however, that
there shall be excluded from the operation of Trust Indenture Act ss. 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 ss. 310(b)(1) are met.
Section 6.12. PREFERENTIAL COLLECTION OF CLAIMS AGAINST NOTE ISSUER. The
Note Trustee shall comply with Trust Indenture Act ss. 311(a), excluding any
creditor relationship listed in Trust Indenture Act ss. 311(b). A Note Trustee
who has resigned or been removed shall be subject to Trust Indenture Act ss.
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 national banking association validly
existing under the federal laws of the United States; 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;
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(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 [DELAWARE];
(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
(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 ss.
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 ss. 312(c).
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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;
(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 ss. 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
ss. 313(a), within 60 days after December 31 of each year, commencing December
31, 2001, the Note Trustee shall mail to each Holder of Notes as required by
Trust Indenture Act ss. 313(c) a brief report dated as of such date that
complies with Trust Indenture Act ss. 313(a). The Note Trustee also shall comply
with Trust Indenture Act ss. 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
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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.
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
RRB 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.
(c) All RRB Charge Payments and other remittances under the Servicing
Agreement shall be deposited in the General Subaccount as provided in Section
4.03 of the Servicing Agreement. All deposits to and withdrawals from the
Collection Account and all allocations to the subaccounts of the Collection
Account shall be made by the Note Trustee in accordance with the written
instructions provided by the Servicer in the Quarterly Servicer Certificate or
as otherwise provided herein.
(d) On any Business Day upon which the 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
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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 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, or for any amount payable under clauses (i) through
(iv) below, on any Business Day, the Note Trustee shall apply all amounts on
deposit in the Collection Account, including all net earnings thereon (other
than on amounts in the Capital Subaccount), to pay the following amounts, in
accordance with the Quarterly Servicer Certificate, in the following priority:
(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 Finance
Authority and the Certificate Issuer under the Fee and Indemnity Agreement
shall be paid to the Certificate Trustee, the Delaware Trustee, the Finance
Authority and the Certificate Issuer, as appropriate; provided, however,
that the amount paid by the Note Trustee on behalf of the Note Issuer
pursuant to this clause (i) to (A) the Note Trustee, the Certificate
Trustee and the Delaware Trustee shall not in the aggregate exceed $10
million and (B) the Finance Authority and the Certificate Issuer shall not
in the aggregate exceed $5 million, unless, in each case, Standard & Poor's
shall have notified the Servicer, the Note Issuer, the Note Trustee, the
Finance Authority 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.
(ii) the Servicing Fee for such Payment Date and all unpaid
Servicing Fees from prior Payment Dates shall be paid to the Servicer;
(iii) the Administration Fee and all unpaid Administration Fees from
prior Payment Dates shall be paid to the Administrator;
(iv) so long as no Default or Event of Default shall have occurred
and be continuing or would result from such payment, all other Operating
Expenses shall be paid to the Persons entitled thereto (other than the
Persons referred to in clause (i) above); provided, however, that the
amount of such other Operating Expenses paid by the 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 Quarterly Interest (together with, to the
extent lawful, interest on such overdue Quarterly Interest at the
applicable Note Interest Rate) and (B) Quarterly Interest for such Payment
Date shall be paid to the Noteholders;
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(vi) (A) principal due and payable on the Notes (x) as a result of
an Event of Default or (y) on the Final Maturity Date of the Notes, shall
be paid to the Noteholders and (B) Quarterly 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 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.
In the case of any deficiency in the amount required under clause (v)
above, amounts available to make payments under clause (v) above will be
allocated among each Class of Notes pro rata based upon the respective amounts
of interest owed on the Notes of each Class, and allocated and paid to holders
within each Class pro rata based upon the respective principal amount of Notes
held. In the case of any deficiency in the amount required under clause (vi)
above, amounts available to make payments under clause (vi) above will be
allocated among each Class of Notes pro rata based upon the respective principal
amount of Notes due (in the case of clause (vi)(A)(x)) or scheduled to be paid
(in the case of clauses (vi)(A)(y) and (vi)(B), based on the priorities set
forth in Section 2.01(c)(iii) and according to the expected amortization
schedule for such Class), and allocated and paid to the holders within each
Class pro rata based upon the principal amount of Notes held.
(e) If on any Payment Date, or for any amounts payable under clauses
(i) through (iv) above, on any Business Day, funds on deposit in the General
Subaccount are insufficient to make the payments contemplated by clauses (i)
through (vi) of Section 8.02(d) 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.
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(f) 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.
(g) 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 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 Note Trustee shall notify the Delaware Trustee and the
Certificate Indenture provides that 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."
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(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 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 ss.ss. 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.
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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 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 and the Note 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;
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(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;
(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 Finance Authority 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:
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(a) 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);
(b) 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;
(c) modify or alter the provisions of the proviso to the definition of
the term "Outstanding";
(d) reduce the percentage of the Outstanding Amount of the Notes
required to direct the Note Trustee to direct the Note Issuer to sell or
liquidate the Collateral pursuant to Section 5.04;
(e) modify any provision of this Section except to increase any
percentage specified herein or to provide that certain additional provisions of
this Note Indenture or the Basic Documents cannot be modified or waived without
the consent of the Holder of each Outstanding Note affected thereby;
(f) 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
(g) 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. Neither the Note Trustee nor the Certificate Trustee shall
be liable for any such determination made in good faith.
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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 Finance Authority 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 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.
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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 Section 10.02) of such election to the
Note Trustee, the Certificate Trustees, the Finance Authority, 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:
(i) the Optional Redemption Date;
(ii) the Optional Redemption Price; and
(iii) 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.
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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, or elects to repurchase the Transition Property pursuant to
Section 5.01(e) 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 Finance Authority and the Rating Agencies not later
than one Business Day before such Repurchase Date and shall deposit with the
Note Trustee, on the Repurchase 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:
(i) the Mandatory Redemption Date;
(ii) the Mandatory Redemption Price; and
(iii) 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.
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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 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
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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 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 RRB Charge as and to the extent
permitted or required by the Basic Documents, (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 and (C) exercise its Legal
Defeasance Option or its Covenant Defeasance Option, as applicable,
pursuant to Article IV.
Section 11.02. FORM OF DOCUMENTS DELIVERED TO NOTE TRUSTEE.
(a) In any case where several matters are required to be certified by,
or covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
(b) Any certificate or opinion of an Authorized Officer of the 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
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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.
(c) 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 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.
(d) Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this 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
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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 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 Finance Authority, to:
Office of the State Treasurer
55 Elm Street
Hartford, Connecticut 06103
Attention: Assistant Treasurer - Debt Management
Facsimile: (860) 702-3127
Telephone: (860) 702-3034
if to the Certificate Issuer, to:
Connecticut RRB Special Purpose Trust CL&P-1
c/o First Union Trust Company, National Association
One Rodney Square
920 King Street, 1st Floor
Wilmington, DE 19801-7475
Attention: Corporate Trust Administration
Facsimile: (302) 888-7544
Telephone: (302) 888-7500
(with copies to the Finance Authority at the addresses listed herein)
if to the Note Issuer, to:
CL&P Funding LLC
c/o The Connecticut Light and Power Company
107 Selden Street
Berlin, CT 06037
Facsimile: (860) 665-5457
Telephone: (860) 665-3258
Email: shoopra@nu.com
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with a copy to:
The Connecticut Light and Power Company
if by U.S. Mail:
P.O. Box 270
Hartford, CT 06141-0270
if by courier:
107 Selden Street
Berlin, CT 06037
Attention: Assistant Treasurer-Finance
Facsimile: (860) 665-5457
Telephone: (860) 665-3258
Email: shoopra@nu.com
if to the Note Trustee or the Certificate Trustee, to:
First Union Trust Company, National Association
One Rodney Square
920 King Street, 1st Floor
Wilmington, DE 19801-7475
Attention: Corporate Trust Administration
Facsimile: (302) 888-7544
Telephone: (302) 888-7500
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) 438-2001
Moody's Investors Service
99 Church Street
New York, New York 10007
Attention: ABS Monitoring Department
Facsimile: (212) 553-0573
Telephone: (212) 553-3686
and
Fitch, Inc.
One State Street Plaza
New York, New York 10004
Attention: ABS Surveillance
Facsimile: (212) 635-0476
Telephone: (212) 908-0200
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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 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 ss.ss. 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.
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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 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 STATE OF CONNECTICUT, 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 STATE OF CONNECTICUT.
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. NO RECOURSE TO CERTAIN PERSONS. 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 membership 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 membership 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.
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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 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.
Section 11.18. NONPETITION COVENANTS. Notwithstanding any prior termination
of this Note Indenture, but subject to the DPUC's right to order the
sequestration and payment of revenues arising with respect to the Transition
Property notwithstanding any bankruptcy, reorganization or other insolvency
proceedings with respect to the debtor, pledgor or transferor of the Transition
Property pursuant to Sections 16-245k(e) and 16-245k(g) of the Statute, the Note
Trustee shall not, prior to the date which is one year and one day after the
termination of this Note Indenture with respect to the Note Issuer, petition or
otherwise invoke or cause the Note Issuer or the Certificate Issuer to invoke
the process of any court or governmental authority for the purpose of commencing
or sustaining a case against the Note Issuer or the Certificate Issuer under any
federal or state bankruptcy, insolvency or similar law or appointing a receiver,
liquidator, assignee, trustee, custodian, sequestrator or other similar official
of the Note Issuer or the Certificate Issuer or any substantial part of the
property of the Note Issuer or the Certificate Issuer, or ordering the winding
up or liquidation of the affairs of the Note Issuer or the Certificate Issuer.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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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, all as of the day and year first above written.
CL&P FUNDING LLC
By:______________________________________
Name:
Title:
FIRST UNION TRUST COMPANY,
NATIONAL ASSOCIATION,
not in its individual capacity but solely
as Note Trustee,
By:______________________________________
Name:
Title:
-S-1-
SCHEDULE 1
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 $ $ $ $ $
-1-1-
SCHEDULE 2
REQUIRED OVERCOLLATERALIZATION LEVEL SCHEDULE
Payment Date Required Payment Date Required
Overcollateralization Overcollateralization
Level Level
$ $
-2-1-
EXHIBIT A
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.
CL&P FUNDING LLC NOTES
CLASS A-[ ]
Note Interest Rate Original Principal Amount Final Maturity Date
[ ]% $[ ]
PRINCIPAL AMOUNT:
CL&P 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 Connecticut RRB Special Purpose Trust
CL&P-1, or registered assigns, the Original Principal Amount shown above in
quarterly installments on the Payment Dates and in the amounts specified on the
reverse hereof or, if less, the amounts determined pursuant to Section 8.02 of
the 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 [___________,___________,
___________ and __________] or if any such day is not a Business Day, the next
succeeding Business Day, commencing on __________ __, 2001 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 [ ], 2001. Interest will
be computed on the basis of a 360-day year of twelve 30-day months. Such
principal of and interest on this Class A-[ ] 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
-A-1-
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: [ ], ______
CL&P FUNDING LLC
By:______________________________________
Name:
Title:
-A-2-
NOTE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
Dated: [ ], ______
This is one of the Notes referred to in the within-mentioned Note
Indenture.
FIRST UNION TRUST COMPANY,
NATIONAL ASSOCIATION,
not in its individual capacity but solely
as Note Trustee,
By:______________________________________
Name:
Title:
-A-3-
[REVERSE OF NOTE]
This Class A-[ ] Note is one of a duly authorized issue of Notes of the
Note Issuer, designated as its CL&P 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 March __, 2001
(together with all amendments and supplements thereto, the "Note Indenture"),
between the Note Issuer and First Union Trust Company, National Association, 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 shall have the meanings assigned to them in the Note
Indenture.
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 1, 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.
-A-4-
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 Transfer Agent
Medallion Program (STAMP); (ii) The New York Stock Exchange Medallion Program
-A-5-
(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 membership
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 membership 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
certain terms and conditions set forth in the Note Indenture without the consent
of Holders of the Notes issued thereunder.
-A-6-
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 State of Connecticut, 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.
-A-7-
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.
-A-8-