Current Report — Form 8-K Filing Table of Contents
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1: 8-K Current Report HTML 40K
2: EX-1.1 Underwriting Agreement HTML 178K
3: EX-4.1 Indenture HTML 732K
4: EX-4.2 Series Supplement HTML 58K
5: EX-5.1 Thelen Reid Brown Raysman & Steiner Opinion HTML 15K
6: EX-5.2 Richards, Layton & Finger Opinion HTML 24K
7: EX-8.2 Miles & Stockbridge Opinion HTML 20K
8: EX-10.1 Rate Stabilization Property Purchase and Sale HTML 152K
Agreement
9: EX-10.2 Rate Stabilization Property Servicing Agreement HTML 309K
10: EX-10.3 Administration Agreement HTML 49K
11: EX-10.4 Amended and Restated LLC Agreement HTML 185K
SECTION
1.02. Incorporation by Reference of Trust Indenture Act.
2
SECTION
1.03. Rules of Construction.
2
ARTICLE
II
THE
RATE STABILIZATION BONDS
SECTION
2.01. Form.
3
SECTION
2.02. Denominations; Rate Stabilization Bonds Issuable in
Series.
3
SECTION
2.03. Execution, Authentication and Delivery.
5
SECTION
2.04. Temporary Rate Stabilization Bonds.
5
SECTION
2.05. Registration; Registration of Transfer and Exchange of Rate
Stabilization Bonds.
5
SECTION
2.06. Mutilated, Destroyed, Lost or Stolen Rate Stabilization
Bonds.
7
SECTION
2.07. Persons Deemed Owner.
8
SECTION
2.08. Payment of Principal, Premium, if any, and Interest; Interest
on
Overdue Principal; Principal, Premium, if any, and Interest Rights
Preserved.
8
SECTION
2.09. Cancellation.
9
SECTION
2.10. Outstanding Amount; Authentication and Delivery of Rate
Stabilization Bonds.
Servicing
Criteria to be Addressed by Indenture Trustee in Assessment of
Compliance
APPENDIX
APPENDIX
A
Definitions
v
TRUST
INDENTURE ACT CROSS REFERENCE TABLE
TIA
Section
Indenture
Section
310
(a)(1)
6.11
(a)(2)
6.11
(a)(3)
6.10(b)(i)
(a)(4)
N.A.
(a)(5)
6.11
(b)
6.12
(c)
N.A.
311
(a)
6.13
(b)
6.13
(c)
N.A.
312
(a)
7.01
and 7.02
(b)
7.02
(c)
7.02
313
(a)
7.04
(b)(1)
7.04
(b)(2)
7.04
(c)
7.04
(d)
7.04
314
(a)
3.09,
4.01, and 7.03(a)
(b)
3.06
and 4.01
(c)(1)
2.10,
4.01 and 11.01(a)
(c)(2)
2.10,
4.01 and 11.01(a)
(c)(3)
2.10
4.01 and 11.01(a)
(d)
2.10,
8.04(b) and 10.01(b)
(e)
10.01(a)
(f)
10.01(a)
vi
TIA
Section
Indenture
Section
315
(a)
6.01(b)(i)(ii)
(b)
6.05
(c)
6.01
(a)
(d)
6.01(c)(i)-(iii)
(e)
5.13
316
(a)
(last sentence)
Appendix
A – definition of “Outstanding”
(a)(1)(A)
5.11
(a)(1)(B)
5.12
(a)(2)
Omitted
(b)
5.07
(c)
Appendix
A – definition of “Record Date”
317
(a)(1)
5.03(a)
(a)(2)
5.03(c)(iv)
(b)
3.03
318
(a)
10.07
** “N.A.”
shall mean “not applicable”.
THIS
CROSS REFERENCE TABLE SHALL NOT, FOR ANY PURPOSE, BE DEEMED TO BE PART OF THIS
INDENTURE.
vii
This
INDENTURE dated as of June 29, 2007, by and between RSB BONDCO LLC, a Delaware
limited liability company (the “Issuer”), and DEUTSCHE BANK TRUST COMPANY
AMERICAS, a New York banking corporation, in its capacity as indenture trustee
(the “Indenture Trustee”) for the benefit of the Secured Parties (as
defined herein) and in its separate capacity as a securities intermediary (the
“Securities Intermediary”).
In
consideration of the mutual agreements herein contained, each party agrees
as
follows for the benefit of the other and each of the Holders:
RECITALS
OF THE ISSUER
The
Issuer has duly authorized the execution and delivery of this Indenture and
the
creation and issuance of Rate Stabilization Bonds issuable in Series hereunder,
each Series to be of substantially the tenor set forth herein and in the
respective Series Supplement relating to each such Series of Rate Stabilization
Bonds.
The
Rate
Stabilization Bonds shall be non-recourse obligations and shall be secured
by
and payable solely out of the proceeds of the Rate Stabilization Property and
the other Rate Stabilization Bond Collateral. If and to the extent
that such proceeds of Rate Stabilization Property and the other Rate
Stabilization Bond Collateral are insufficient to pay all amounts owing with
respect to the Rate Stabilization Bonds, then, except as otherwise expressly
provided hereunder, the Holders shall have no Claim in respect of such
insufficiency against the Issuer, and the Holders, by their acceptance of the
Rate Stabilization Bonds, waive any such Claim.
All
things necessary to (a) make the Rate Stabilization Bonds, when executed by
the
Issuer and authenticated and delivered by the Indenture Trustee hereunder and
duly issued by the Issuer, valid obligations, and (b) make this Indenture a
valid agreement of the Issuer, in each case, in accordance with their respective
terms, have been done.
NOW,
THEREFORE, THIS INDENTURE WITNESSETH:
That
the
Issuer, in consideration of the premises herein contained and of the purchase
of
the Rate Stabilization Bonds by the Holders and of other good and lawful
consideration, the receipt and sufficiency of which are hereby acknowledged,
and
to secure, equally and ratably without prejudice, priority or distinction,
except as specifically otherwise set forth in this Indenture, the payment of
the
Rate Stabilization Bonds, the payment of all other amounts due under or in
connection with this Indenture (including, without limitation, all fees,
expenses, counsel fees and expenses, and other amounts due and owing to the
Indenture Trustee) and the performance and observance of all of the covenants
and conditions contained herein or in such Rate Stabilization Bonds, has hereby
executed and delivered this Indenture and by these presents does hereby and
under one or more Series Supplements will convey, grant and assign, transfer
and
pledge, in each case, in and unto the Indenture Trustee, its successors and
assigns forever, for the benefit of the Secured Parties of the related Series,
all and singular the property described in one or more Series Supplements (such
property with respect to a particular Series hereinafter referred to as the
“Series Rate Stabilization Bond Collateral” and all such property,
collectively, hereinafter referred to as the “Rate Stabilization Bond
Collateral”). Each Series
Supplement
will more particularly describe the obligations of the Issuer secured by the
applicable Series Rate Stabilization Bond Collateral.
AND
IT IS
HEREBY COVENANTED, DECLARED AND AGREED between the parties hereto that all
Rate
Stabilization Bonds are to be issued, countersigned and delivered and that
all
of the Rate Stabilization Bond Collateral is to be held and applied, subject
to
the further covenants, conditions, releases, uses and trusts hereinafter set
forth, and the Issuer, for itself and any successor, does hereby covenant and
agree to and with the Indenture Trustee and its successors in said trust, for
the benefit of the Secured Parties, as follows:
ARTICLE
I
DEFINITIONS
AND INCORPORATION BY REFERENCE
SECTION
1.01. Definitions. Except as otherwise specified
herein or as the context may otherwise require, the capitalized terms used
herein shall have the respective meanings set forth in Appendix A
attached hereto and made a part hereof for all purposes of this
Indenture.
SECTION
1.02. Incorporation by Reference of Trust Indenture
Act. Whenever this Indenture refers to a provision of the TIA,
that provision is incorporated by reference in and made a part of this
Indenture. The following TIA terms used in this Indenture have the
following meanings:
“indenture
securities” means the Rate Stabilization Bonds.
“indenture
security holder” means a Holder.
“indenture
to be qualified” means this Indenture.
“indenture
trustee” or “institutional trustee” means the Indenture Trustee.
“obligor”
on the indenture securities means the Issuer and any other obligor on the
indenture securities.
All
other
TIA terms used in this Indenture that are defined by the TIA, defined by TIA
reference to another statute or defined by SEC rule have the meanings assigned
to them by such definitions.
SECTION
1.03. Rules of Construction. Unless the context
otherwise requires:
(i) a
term has the meaning assigned to it;
(ii) an
accounting term not otherwise defined has the meaning assigned to it in
accordance with generally accepted accounting principles in the United States
of
America as in effect from time to time;
(iii) “or”
is not exclusive;
2
(iv) “including”
means including without limitation;
(v) words
in the singular include the plural and words in the plural include the singular;
and
(vi) the
words “herein,”“hereof,”“hereunder” and other words of similar import refer to
this Indenture as a whole and not to any particular Article, Section or other
subdivision.
ARTICLE
II
THE
RATE
STABILIZATION BONDS
SECTION
2.01. Form. The Rate Stabilization Bonds and the
Indenture 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 Indenture or by the related Series Supplement and may have such letters,
numbers or other marks of identification and such legends or endorsements placed
thereon as may, consistently herewith, be determined by the officers executing
such Rate Stabilization Bonds, as evidenced by their execution of such Rate
Stabilization Bonds. Any portion of the text of any Rate
Stabilization Bond may be set forth on the reverse thereof, with an appropriate
reference thereto on the face of the Rate Stabilization Bond.
The
Rate
Stabilization Bonds shall be typewritten, printed, lithographed or engraved
or
produced by any combination of these methods (with or without steel engraved
borders), all as determined by the officers executing such Rate Stabilization
Bonds, as evidenced by their execution of such Rate Stabilization
Bonds.
Each
Rate
Stabilization Bond shall be dated the date of its authentication. The
terms of the Rate Stabilization Bonds set forth in Exhibit A are part of
the terms of this Indenture.
SECTION
2.02. Denominations; Rate Stabilization Bonds Issuable in
Series. The Rate Stabilization Bonds shall be issuable in the
Minimum Denomination specified in the applicable Series Supplement and, except
as otherwise provided in such Series Supplement, in integral multiples
thereof.
The
Rate
Stabilization Bonds may, at the election of and as authorized by a Responsible
Officer of the Issuer, be issued in one or more Series (each comprised of one
or
more Tranches), and shall be designated generally as the “Rate Stabilization
Bonds” of the Issuer, with such further particular designations added or
incorporated in such title for the Rate Stabilization Bonds of any particular
Series or Tranche as a Responsible Officer of the Issuer may
determine. Each Rate Stabilization Bond shall bear upon its face the
designation so selected for the Series or Tranche to which it
belongs. All Rate Stabilization Bonds of the same Series shall be
identical in all respects except for the denominations thereof, unless such
Series is comprised of one or more Tranches, in which case all Rate
Stabilization Bonds of the same Tranche shall be identical in all respects
except for the denominations thereof. All Rate Stabilization Bonds of
a particular Series or, if such Series is comprised of one or more
3
Tranches,
all Rate Stabilization Bonds of a particular Tranche thereof, in each case
issued under this Indenture, shall be in all respects equally and ratably
entitled to the benefits hereof without preference, priority or distinction
on
account of the actual time or times of authentication and delivery, all in
accordance with the terms and provisions of this Indenture.
No
Series
of Rate Stabilization Bonds shall be subordinated in right of payment to any
other Series of Rate Stabilization Bonds.
Each
Series of Rate Stabilization Bonds shall be created by a Series Supplement
authorized by a Responsible Officer of the Issuer and establishing the terms
and
provisions of such Series. The several Series and Tranches thereof
may differ as between Series and Tranches, in respect of any of the following
matters:
(1) designation
of the Series and, if applicable, the Tranches thereof;
(2) the
principal amount;
(3) the
Rate Stabilization Bond Interest Rate;
(4) the
Payment Dates;
(5) the
Scheduled Final Payment Dates;
(6) the
Final Maturity Date;
(7) the
Series Issuance Date;
(8) the
place or places for the payment of interest, principal and premium, if
any;
(9) the
Rate Stabilization Bond Collateral;
(10) the
Minimum Denominations;
(11) the
Expected Amortization Schedule;
(12) provisions
with respect to the definitions set forth in Appendix A
hereto;
(13) whether
or not the Rate Stabilization Bonds of such Series are to be Book-Entry Rate
Stabilization Bonds and the extent to which Section 2.11 should
apply;
(14) to
the extent applicable, the extent to which payments on the Rate Stabilization
Bonds of any Tranche of the related Series are subordinate to or pari
passu in right of payment of principal and interest to other Tranche of such
Series; and
(15) any
other provisions expressing or referring to the terms and conditions upon which
the Rate Stabilization Bonds of the applicable Series or Tranche are to be
issued under this Indenture that are not in conflict with the provisions of
this
Indenture and as to which the Rating Agency Condition is satisfied.
4
SECTION
2.03. Execution, Authentication and Delivery. The
Rate Stabilization Bonds shall be executed on behalf of the Issuer by any of
its
Responsible Officers. The signature of any such Responsible Officer
on the Rate Stabilization Bonds may be manual or facsimile.
Rate
Stabilization Bonds bearing the manual or facsimile signature of individuals
who
were at any time Responsible Officers of the Issuer shall bind the Issuer,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Rate Stabilization
Bonds or did not hold such offices at the date of such Rate Stabilization
Bonds.
At
any
time and from time to time after the execution and delivery of this Indenture,
the Issuer may deliver Rate Stabilization Bonds executed by the Issuer to the
Indenture Trustee pursuant to an Issuer Order for authentication; and the
Indenture Trustee shall authenticate and deliver such Rate Stabilization Bonds
as in this Indenture provided and not otherwise.
No
Rate
Stabilization Bond shall be entitled to any benefit under this Indenture or
be
valid or obligatory for any purpose, unless there appears on such Rate
Stabilization Bond a certificate of authentication substantially in the form
provided for therein executed by the Indenture Trustee by the manual signature
of one of its authorized signatories, and such certificate upon any Rate
Stabilization Bond shall be conclusive evidence, and the only evidence, that
such Rate Stabilization Bond has been duly authenticated and delivered
hereunder.
SECTION
2.04. Temporary Rate Stabilization Bonds. Pending
the preparation of Definitive Rate Stabilization Bonds pursuant to Section
2.13, the Issuer may execute, and upon receipt of an Issuer Order the
Indenture Trustee shall authenticate and deliver, Temporary Rate Stabilization
Bonds which are printed, lithographed, typewritten, mimeographed or otherwise
produced, of the tenor of the Definitive Rate Stabilization Bonds in lieu of
which they are issued and with such variations not inconsistent with the terms
of this Indenture as the officers executing such Rate Stabilization Bonds may
determine, as evidenced by their execution of such Rate Stabilization
Bonds.
If
Temporary Rate Stabilization Bonds are issued, the Issuer will cause Definitive
Rate Stabilization Bonds to be prepared without unreasonable
delay. After the preparation of Definitive Rate Stabilization Bonds,
the Temporary Rate Stabilization Bonds shall be exchangeable for Definitive
Rate
Stabilization Bonds upon surrender of the Temporary Rate Stabilization Bonds
at
the office or agency of the 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 Rate Stabilization Bonds, the Issuer
shall execute and the Indenture Trustee shall authenticate and deliver in
exchange therefor a like principal amount of Definitive Rate Stabilization
Bonds
in any Minimum Denominations. Until so delivered in exchange, the
Temporary Rate Stabilization Bonds shall in all respects be entitled to the
same
benefits under this Indenture as Definitive Rate Stabilization
Bonds.
SECTION
2.05. Registration; Registration of Transfer and Exchange of Rate
Stabilization Bonds. The Issuer shall cause to be kept a register
(the “Rate Stabilization Bond Register”) in which, subject to such
reasonable regulations as it may prescribe, the Issuer shall
5
provide
for the registration of Rate Stabilization Bonds and the registration of
transfers of Rate Stabilization Bonds. The Indenture Trustee shall be
“Rate Stabilization Bond Registrar” for the purpose of registering Rate
Stabilization Bonds and transfers of Rate Stabilization Bonds as herein
provided. Upon any resignation of any Rate Stabilization Bond
Registrar, the Issuer shall promptly appoint a successor or, if it elects not
to
make such an appointment, assume the duties of Rate Stabilization Bond
Registrar.
If
a
Person other than the Indenture Trustee is appointed by the Issuer as Rate
Stabilization Bond Registrar, the Issuer will give the Indenture Trustee prompt
written notice of the appointment of such Rate Stabilization Bond Registrar
and
of the location, and any change in the location, of the Rate Stabilization
Bond
Register, and the Indenture Trustee shall have the right to inspect the Rate
Stabilization Bond Register at all reasonable times and to obtain copies
thereof, and the Indenture Trustee shall have the right to rely conclusively
upon a certificate executed on behalf of the Rate Stabilization Bond Registrar
by a Responsible Officer thereof as to the names and addresses of the Holders
and the principal amounts and number of such Rate Stabilization Bonds
(separately stated by Series and Tranche).
Upon
surrender for registration of transfer of any Rate Stabilization Bond at the
office or agency of the Issuer to be maintained as provided in Section
3.02, provided that the requirements of Section 8-401 of the UCC are met,
the Issuer shall execute, and the Indenture Trustee shall authenticate and
the
Holder shall obtain from the Indenture Trustee, in the name of the designated
transferee or transferees, one or more new Rate Stabilization Bonds in any
Minimum Denominations, of the same Series (and, if applicable, Tranche) and
aggregate principal amount.
At
the
option of the Holder, Rate Stabilization Bonds may be exchanged for other Rate
Stabilization Bonds in any Minimum Denominations, of the same Series (and,
if
applicable, Tranche) and aggregate principal amount, upon surrender of the
Rate
Stabilization Bonds to be exchanged at such office or agency as provided in
Section 3.02. Whenever any Rate Stabilization Bonds are so
surrendered for exchange, the Issuer shall, provided that the requirements
of
Section 8-401 of the UCC are met, execute and, upon any such execution, the
Indenture Trustee shall authenticate and the Holder shall obtain from the
Indenture Trustee, the Rate Stabilization Bonds which the Holder making the
exchange is entitled to receive.
All
Rate
Stabilization Bonds issued upon any registration of transfer or exchange of
other Rate Stabilization Bonds shall be the valid obligations of the Issuer,
evidencing the same debt, and entitled to the same benefits under this
Indenture, as the Rate Stabilization Bonds surrendered upon such registration
of
transfer or exchange.
Every
Rate Stabilization Bond 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 Indenture 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) such
6
other
guarantee program acceptable to the Indenture Trustee, and (b) such other
documents as the Indenture Trustee may require.
No
service charge shall be made to a Holder for any registration of transfer or
exchange of Rate Stabilization Bonds, but the Issuer or the Indenture Trustee
may require payment of a sum sufficient to cover any tax or other governmental
charge or any fees or expenses of the Indenture Trustee that may be imposed
in
connection with any registration of transfer or exchange of Rate Stabilization
Bonds, other than exchanges pursuant to Sections 2.04 or 2.06 not
involving any transfer.
The
preceding provisions of this Section 2.05 notwithstanding, the Issuer
shall not be required to make, and the Rate Stabilization Bond Registrar need
not register, transfers or exchanges (i) of any Rate Stabilization Bond that
has
been submitted within fifteen (15) days preceding the due date for any payment
with respect to such Rate Stabilization Bond until after such due date has
occurred or (ii) of Unregistered Rate Stabilization Bonds unless Section
2.16 has been complied with in connection with such transfer or
exchange.
SECTION
2.06. Mutilated, Destroyed, Lost or Stolen Rate Stabilization
Bonds. If (i) any mutilated Rate Stabilization Bond is
surrendered to the Indenture Trustee, or the Indenture Trustee receives evidence
to its satisfaction of the destruction, loss or theft of any Rate Stabilization
Bond and (ii) there is delivered to the Indenture Trustee such security or
indemnity as may be required by it to hold the Issuer and the Indenture Trustee
harmless, then, in the absence of notice to the Issuer, the Rate Stabilization
Bond Registrar or the Indenture Trustee that such Rate Stabilization Bond has
been acquired by a Protected Purchaser, the Issuer shall, provided that the
requirements of Section 8-401 of the UCC are met, execute and, upon the Issuer’s
written request, the Indenture Trustee shall authenticate and deliver, in
exchange for or in lieu of any such mutilated, destroyed, lost or stolen Rate
Stabilization Bond, a replacement Rate Stabilization Bond of like Series (and,
if applicable, Tranche), tenor and principal amount, bearing a number not
contemporaneously outstanding; provided, however, that if any such
destroyed, lost or stolen Rate Stabilization Bond, but not a mutilated Rate
Stabilization Bond, shall have become or within seven (7) days shall be due
and
payable, instead of issuing a replacement Rate Stabilization Bond, the Issuer
may pay such destroyed, lost or stolen Rate Stabilization Bond when so due
or
payable without surrender thereof. If, after the delivery of such
replacement Rate Stabilization Bond or payment of a destroyed, lost or stolen
Rate Stabilization Bond pursuant to the proviso to the preceding sentence,
a
Protected Purchaser of the original Rate Stabilization Bond in lieu of which
such replacement Rate Stabilization Bond was issued presents for payment such
original Rate Stabilization Bond, the Issuer and the Indenture Trustee shall
be
entitled to recover such replacement Rate Stabilization Bond (or such payment)
from the Person to whom it was delivered or any Person taking such replacement
Rate Stabilization Bond from such Person to whom such replacement Rate
Stabilization Bond was delivered or any assignee of such Person, except a
Protected Purchaser, and shall be entitled to recover upon the security or
indemnity provided therefor to the extent of any loss, damage, cost or expense
incurred by the Issuer or the Indenture Trustee in connection
therewith.
Upon
the
issuance of any replacement Rate Stabilization Bond under this Section
2.06, the Issuer and/or the Indenture Trustee may require the payment by the
Holder of such Rate Stabilization Bond of a sum sufficient to cover any tax
or
other governmental charge that may be
7
imposed
in relation thereto and any other reasonable expenses (including the fees and
expenses of the Indenture Trustee and the Rate Stabilization Bond Registrar)
connected therewith.
Every
replacement Rate Stabilization Bond issued pursuant to this Section 2.06
in replacement of any mutilated, destroyed, lost or stolen Rate Stabilization
Bond shall constitute an original additional contractual obligation of the
Issuer, whether or not the mutilated, destroyed, lost or stolen Rate
Stabilization Bond shall be found at any time or enforced by any Person, and
shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Rate Stabilization Bonds duly issued
hereunder.
The
provisions of this Section 2.06 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 Rate Stabilization
Bonds.
SECTION
2.07. Persons Deemed Owner. Prior to due
presentment for registration of transfer of any Rate Stabilization Bond, the
Issuer, the Indenture Trustee, the Rate Stabilization Bond Registrar and any
agent of the Issuer or the Indenture Trustee may treat the Person in whose
name
any Rate Stabilization Bond is registered (as of the day of determination)
as
the owner of such Rate Stabilization Bond for the purpose of receiving payments
of principal of and premium, if any, and interest on such Rate Stabilization
Bond and for all other purposes whatsoever, whether or not such Rate
Stabilization Bond be overdue, and neither the Issuer, the Indenture Trustee
nor
any agent of the Issuer or the Indenture Trustee shall be affected by notice
to
the contrary.
SECTION
2.08. Payment of Principal, Premium, if any, and Interest;
Interest on Overdue Principal; Principal, Premium, if any, and Interest Rights
Preserved.
(a) The
Rate Stabilization Bonds shall accrue interest as provided in the related Series
Supplement at the applicable Rate Stabilization Bond Interest Rate, and such
interest shall be payable on each applicable Payment Date. Any
installment of interest, principal or premium, if any, payable on any Rate
Stabilization Bond which is punctually paid or duly provided for on the
applicable Payment Date shall be paid to the Person in whose name such Rate
Stabilization Bond (or one or more Predecessor Rate Stabilization Bonds) 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 Rate
Stabilization Bond Register on such Record Date or in such other manner as
may
be provided in the related Series Supplement except that (i) upon application
to
the Indenture Trustee by any Holder owning Rate Stabilization Bonds of any
Tranche in the principal amount of $10,000,000 or more not later than the
applicable Record Date payment will be made by wire transfer to an account
maintained by such Holder and (ii) with respect to Book-Entry Rate Stabilization
Bonds, payments will be made by wire transfer in immediately available funds to
the account designated by the Holder of the applicable Global Rate Stabilization
Bond unless and until such Global Rate Stabilization Bond is exchanged for
Definitive Rate Stabilization Bonds (in which event payments shall be made
as
provided above) and except for the final installment of principal and premium,
if any, payable with respect to such Rate Stabilization Bond 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.
8
(b) The
principal of each Rate Stabilization Bond of each Series (and, if applicable,
Tranche) shall be paid, to the extent funds are available therefor in the
applicable Collection Account, in installments on each Payment Date specified
in
the related Series Supplement; provided that installments of principal
not paid when scheduled to be paid in accordance with the Expected Amortization
Schedule shall be paid upon receipt of money available for such purpose, in
the
order set forth in the Expected Amortization Schedule. Failure to pay
principal in accordance with such Expected Amortization Schedule because moneys
are not available pursuant to Section 8.02 to make such payments shall
not constitute a Default or Event of Default under this Indenture;
provided, however that failure to pay the entire unpaid principal
amount of the Rate Stabilization Bonds of a Tranche or Series upon the Final
Maturity Date for the related Series shall constitute a Default or Event of
Default with respect to such Series under this
Indenture. Notwithstanding the foregoing, the entire unpaid principal
amount of the Rate Stabilization Bonds of a Series shall be due and payable,
if
not previously paid, on the date on which an Event of Default shall have
occurred and be continuing with respect to such Series, if the Indenture Trustee
or the Holders of the Rate Stabilization Bonds representing not less than a
majority of the Outstanding Amount of the Rate Stabilization Bonds of such
Series have declared the Rate Stabilization Bonds to be immediately due and
payable in the manner provided in Section 5.02. All payments
of principal and premium, if any, on the Rate Stabilization Bonds of any Series
shall be made pro rata to the Holders entitled thereto unless otherwise provided
in the related Series Supplement with respect to any Tranche of Rate
Stabilization Bonds included in such Series. The Indenture Trustee
shall notify the Person in whose name a Rate Stabilization Bond is registered
at
the close of business on the Record Date preceding the Payment Date on which
the
Issuer expects that the final installment of principal of and premium, if any,
and interest on such Rate Stabilization Bond will be paid. Such
notice shall be mailed no later than five (5) days prior to such final Payment
Date and shall specify that such final installment will be payable only upon
presentation and surrender of such Rate Stabilization Bond and shall specify
the
place where such Rate Stabilization Bond may be presented and surrendered for
payment of such installment.
(c) If
interest on the Rate Stabilization Bonds of any Series is not paid when due,
such defaulted interest shall be paid (plus interest on such defaulted interest
at the applicable Rate Stabilization Bond Interest Rate to the extent
lawful) to the Persons who are Holders on a subsequent Special Record
Date. The Issuer shall fix or cause to be fixed any such Special
Record Date and Special Payment Date, and, at least ten (10) days before any
such Special Record Date, the Issuer shall mail to each affected Holder a notice
that states the Special Record Date, the Special Payment Date and the amount
of
defaulted interest (plus interest on such defaulted interest) to be
paid.
SECTION
2.09. Cancellation. All Rate Stabilization Bonds
surrendered for payment, registration of transfer or exchange shall, if
surrendered to any Person other than the Indenture Trustee, be delivered to
the
Indenture Trustee and shall be promptly canceled by the Indenture
Trustee. The Issuer may at any time deliver to the Indenture Trustee
for cancellation any Rate Stabilization Bonds previously authenticated and
delivered hereunder which the Issuer may have acquired in any manner whatsoever,
and all Rate Stabilization Bonds so delivered shall be promptly canceled by
the
Indenture Trustee. No Rate Stabilization Bonds shall be authenticated
in lieu of or in exchange for any Rate Stabilization Bonds canceled as provided
in this Section 2.09, except as expressly permitted by this
Indenture. All canceled Rate
9
Stabilization
Bonds may be held or disposed of by the Indenture Trustee in accordance with
its
standard retention or disposal policy as in effect at the time.
SECTION
2.10. Outstanding Amount; Authentication and Delivery of Rate
Stabilization Bonds. The aggregate Outstanding Amount of Rate
Stabilization Bonds that may be authenticated and delivered under this Indenture
shall not exceed the aggregate of the amounts of Rate Stabilization Bonds that
are authorized in each Applicable Qualified Rate Order but otherwise shall
be
unlimited.
Rate
Stabilization Bonds of each Series created and established by a Series
Supplement may from time to time be executed by the Issuer and delivered to
the
Indenture Trustee for authentication and thereupon the same shall be
authenticated and delivered by the Indenture Trustee upon Issuer Request and
upon delivery by the Issuer to the Indenture Trustee, and receipt by the
Indenture Trustee, or the causing to occur by the Issuer, of the following;
provided, however, that compliance with such conditions and
delivery of such documents shall only be required in connection with the
original issuance of a Rate Stabilization Bond or Rate Stabilization Bonds
of
such Series:
(1) Issuer
Action. An Issuer Order authorizing and directing the
authentication and delivery of the Rate Stabilization Bonds by the Indenture
Trustee and specifying the principal amount of Rate Stabilization Bonds to
be
authenticated.
(2) Authorizations. Copies
of (x) a Qualified Rate Order related to such Series which shall be in full
force and effect and be Final, (y) certified resolutions of the Managers or
Member of the Issuer authorizing the execution and delivery of each Series
Supplement and the execution, authentication and delivery of such Rate
Stabilization Bonds and (z) a duly executed Series Supplement for the applicable
Series of Rate Stabilization Bonds to be issued.
(3) Opinions.
(a) An
Opinion of Counsel of external counsel of the Issuer that the Applicable
Qualified Rate Order is in full force and effect, that the Applicable Qualified
Rate Order is Final and that no other authorization, approval or consent of
any
governmental body or bodies at the time having jurisdiction in the premises
is
required for the valid issuance, authentication and delivery of such Rate
Stabilization Bonds, 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 and copies of which
have
been delivered with such Opinion of Counsel.
(b) An
Opinion of Counsel of external counsel of the Issuer that no authorization,
approval or consent of any governmental body or bodies at the time having
jurisdiction in the premises is required for the valid execution and delivery
by
the Issuer of each of the Basic Documents to which the Issuer is a party and
that is executed and delivered in connection with such Rate Stabilization Bond
issuance, except for such authorizations, approvals or consents of governmental
bodies that have been obtained and copies of which have been delivered with
such
Opinion of Counsel.
10
(4) Authorizing
Certificate. An Officer’s Certificate, dated the Series Issuance
Date, certifying that (a) the Issuer has duly authorized the execution and
delivery of this Indenture and the related Series Supplement and the execution
and delivery of the Rate Stabilization Bonds of such Series and (b) that the
Series Supplement for such Series of Rate Stabilization Bonds is in the form
attached thereto, which Series Supplement shall comply with the requirements
of
Section 2.02.
(5) The
Rate Stabilization Bond Collateral. The Issuer shall have made or
caused to be made all filings with the PSC, the Maryland State Department of
Assessments and Taxation, and the Delaware Secretary of State pursuant to the
Qualified Rate Order, the Rate Stabilization Law and the UCC and all other
filings necessary to perfect the Grant of the Series Rate Stabilization Bond
Collateral to the Indenture Trustee and the Lien of this Indenture.
(6) Certificates
of the Issuer and the Seller.
(a) An
Officer’s Certificate, dated as of the Series Issuance Date:
(i) to
the effect that (A) the Issuer is not in Default under this Indenture and that
the issuance of the Rate Stabilization Bonds will not result in any Default
or
in any breach of any of the terms, conditions or provisions of or constitute
a
default under the Qualified Rate Order relating to the Rate Stabilization Bonds
or any indenture, mortgage, deed of trust or other agreement or instrument
to
which the 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
Issuer is a party or by which it or its property may be bound or to which it
or
its property may be subject and (B) that all conditions precedent provided
in
this Indenture relating to the execution, authentication and delivery of the
Rate Stabilization Bonds have been complied with;
(ii) to
the effect that the Issuer has not assigned any interest or participation in
the
Series Rate Stabilization Bond Collateral except for the Grant contained in
the
Series Supplement for such Series; the Issuer has the power and right to Grant
the Series Rate Stabilization Bond Collateral to the Indenture Trustee as
security hereunder and thereunder; and the Issuer, subject to the terms of
this
Indenture, has Granted to the Indenture Trustee a first priority perfected
security interest in all of its right, title and interest in and to such Series
Rate Stabilization Bond 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 Issuer or through the Issuer, except Permitted
Liens;
(iii) to
the effect that the Issuer has appointed the firm of Independent registered
public accountants as contemplated in Section 8.06;
(iv) to
the effect that attached thereto are duly executed, true and complete copies
of
the Sale Agreement, the Servicing Agreement, and the Administration Agreement
which are, to the knowledge of the Issuer, in full force
11
and
effect and, to the knowledge of the Issuer, that no party is in default of
its
obligations under such agreements; and
(v) stating
that all filings with the PSC, the Maryland State Department of Assessments
and
Taxation and the Delaware Secretary of State pursuant to the Rate Stabilization
Law, the Qualified Rate Order and the UCC and relating to the Rate Stabilization
Bonds and all UCC financing statements with respect to the Series Rate
Stabilization Bond Collateral which are required to be filed by the terms of
the
Qualified Rate Order, the Rate Stabilization Law, the Sale Agreement, the
Servicing Agreement and this Indenture, or as otherwise necessary to perfect
the
Grant of the Series Rate Stabilization Bond Collateral to the Indenture Trustee
and the Lien of this Indenture, have been filed as required.
(b) An
officer’s certificate from the Seller, dated as of the Series Issuance Date, to
the effect that, in the case of the Rate Stabilization Property identified
in
the related Bill of Sale, immediately prior to the conveyance thereof to the
Issuer pursuant to the Sale Agreement:
(i) the
Seller was the original and the sole owner of such Rate Stabilization Property,
free and clear of any Lien; the Seller had not assigned any interest or
participation in such Rate Stabilization Property and the proceeds thereof;
the
Seller has the power, authority and right to own, sell and assign such Rate
Stabilization Property and the proceeds thereof to the Issuer; and the Seller,
subject to the terms of the Sale Agreement, will have validly sold and assigned
to the Issuer all of its right, title and interest in and to such Rate
Stabilization Property and the proceeds thereof, free and clear of any Lien
(other than Permitted Liens) and such sale and assignment will be absolute
and
irrevocable and will be perfected; and
(ii) the
attached copy of the Qualified Rate Order creating such Rate Stabilization
Property is true and complete, is in full force and effect and is
Final.
(7) Opinion
of Tax Counsel. The Seller shall have received and delivered to
the Issuer and the Indenture Trustee an opinion of outside tax counsel (as
selected by the Seller, and in form and substance reasonably satisfactory to
the
Issuer and the Indenture Trustee) to the effect that (a) the Issuer will not
be
subject to United States federal income tax as an entity separate from its
sole
owner and that the Rate Stabilization Bonds will be treated as debt of the
Issuer's sole owner for United States federal income tax purposes; (b) for
United States federal income tax purposes, the issuance of the Rate
Stabilization Bonds will not result in gross income to the Seller; and
(c) in the case of a subsequent issuance of Rate Stabilization Bonds only,
such issuance will not adversely affect the characterization of any then
outstanding Rate Stabilization Bonds as obligations of the Issuer's sole
owner. The opinion of outside tax counsel described above may, if the
Seller so chooses, be conditioned on the receipt by the Seller of one or more
letter rulings from the Internal Revenue Service (unless the Internal Revenue
Service has announced that it will not rule on the issues described in this
paragraph) and in rendering such opinion outside tax counsel shall be entitled
to rely on the rulings
12
contained
in such letter rulings and to rely on the representations made, and information
supplied, to the Internal Revenue Service in connection with such letter
rulings.
(8) Opinion
of Counsel. Unless otherwise specified in a Series Supplement, an
Opinion or Opinions of Counsel, dated the Series Issuance Date, in each case
subject to the customary exceptions, qualifications and assumptions contained
therein, substantively to the collective effect that:
(a) The
Indenture has been duly qualified under the Trust Indenture Act, and the related
Series Supplement either is qualified under the Trust Indenture Act or no such
qualification is necessary under the Trust Indenture Act.
(b) All
instruments furnished to the Indenture Trustee pursuant to the Indenture conform
to the requirements set forth in the Indenture and constitute all of the
documents required to be delivered under the Indenture for the Indenture Trustee
to authenticate and deliver the Rate Stabilization Bonds. All
conditions precedent provided for in the Indenture relating to the
authentication and delivery of the Rate Stabilization Bonds have been complied
with.
(c) The
Rate Stabilization Bonds have been duly authorized by the Issuer and, when
executed and delivered on behalf of the Issuer by the Member, any Manager or
any
officer of the Issuer, acting singly or collectively, and when duly
authenticated by the Indenture Trustee in accordance with the provisions of
the
Indenture and delivered against payment of the purchase price therefor, as
provided in the Underwriting Agreement, the Rate Stabilization Bonds will
constitute legal, valid and binding obligations of the Issuer and will be
enforceable against the Issuer in accordance with their terms, except to the
extent enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance or other laws of general applicability
relating to or affecting the enforcement of creditors’ rights and by the effect
of general principles of equity (regardless of whether enforceability is
considered in a proceeding in equity or at law).
(d) Each
of the Indenture, each Series Supplement, the Administration Agreement, the
Sale
Agreement and the Servicing Agreement has been duly authorized, executed and
delivered by the Issuer and is a legal, valid and binding agreement of the
Issuer, enforceable against the Issuer in accordance with its terms, except
to
the extent enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or other laws of general
applicability relating to or affecting the enforcement of creditors’ rights and
by the effect of general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at
law). Each of the Administration Agreement, the Sale Agreement and
the Servicing Agreement has been duly authorized, executed and delivered by
BGE
and constitutes a legal, valid and binding agreement of BGE, enforceable against
BGE in accordance with its terms, except to the extent enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance or other laws of general applicability relating to or affecting
the
enforcement of creditors’ rights and by the effect of general
13
principles
of equity (regardless of whether such enforceability is considered in a
proceeding in equity or at law).
(e) 1.With
respect to the Series Rate Stabilization Bond Collateral, upon the giving of
value by the Holders to the Issuer with respect to such Series Rate
Stabilization Bond Collateral, the Indenture, together with the related Series
Supplement, creates in favor of the Indenture Trustee, for the benefit of the
Secured Parties, a valid security interest under Section 7-542 of the Rate
Stabilization Law in such Series Rate Stabilization Bond Collateral (to the
extent such Series Rate Stabilization Bond Collateral is Rate Stabilization
Property) and Article 9 of the NY UCC in such Series Rate Stabilization Bond
Collateral (to the extent such Series Rate Stabilization Bond Collateral is
other than Rate Stabilization Property and is of a type in which a security
interest can be created under Article 9 of the NY UCC) to secure the payment
of
the Secured Obligations with respect to the related Series
Supplement. Assuming that the collateral described in the Delaware
Financing Statements is Rate Stabilization Bond Collateral pursuant to the
Indenture, then insofar as Section 9-509 of the NY UCC is applicable, the
Indenture Trustee is authorized to file the Delaware Financing
Statements.
(ii) Under
Section 9-305(a)(3) of the NY UCC, the local law of the Securities
Intermediary’s jurisdiction as specified in Section 8-110(e) of the NY UCC
governs perfection, the effect of perfection or nonperfection and priority
in
the Securities Account and Security Entitlements. Under the
Indenture, for purposes of Section 8-110(e) of the NY UCC, the jurisdiction
of
the Securities Intermediary is the State of New York.
(iii) To
the extent that any Collection Account is a Securities Account, the provisions
of the Indenture are effective to perfect by control the security interest
of
the Indenture Trustee, for the benefit of the Secured Parties, in each such
Collection Account and the Issuer’s Security Entitlements with respect to the
Financial Assets credited to each such Collection Account and, subject to and
to
the extent provided in Section 9-315 of the NY UCC and the Federal Book-Entry
Regulations, identifiable cash proceeds thereof. Such security
interest will have priority over any security interest held by a secured party
perfected by a means other than control.
(iv) Insofar
as Article 9 of the NY UCC is applicable, and except as provided in (ii) and
(iii) above, (A) pursuant to Section 9-301 of the NY UCC, the law of the
location of the debtor governs the perfection of a nonpossessory security
interest in the Rate Stabilization Bond Collateral (other than Rate
Stabilization Property); (B) pursuant to 9-307 of the NY UCC, a registered
organization that is organized under the law of a State is deemed to be located
in that State for purposes of Section 9-301; (C) the Issuer is a “registered
organization” as defined in Section 9-102(a)(70) of the NY UCC organized in the
State of Delaware; and (D) therefore, the law of the State of Delaware governs
the perfection of a nonpossessory security interest in the Rate Stabilization
Bond Collateral other than Rate Stabilization Property.
14
(f) The
Registration Statement covering the Rate Stabilization Bonds has become
effective under the Securities Act; and, to the knowledge of such counsel,
no
stop order suspending the effectiveness of the Registration Statement has been
issued under the Securities Act and no proceedings for that purpose have been
initiated or are pending or threatened by the SEC.
(g) Neither
the Issuer nor BGE is now and, assuming that the Issuer uses the net proceeds
of
the sale of the Rate Stabilization Bonds for the purpose of acquiring Rate
Stabilization Property in accordance with the terms of the Sale Agreement
following the sale of the Rate Stabilization Bonds to the Underwriters pursuant
to the Underwriting Agreement, neither the Issuer nor BGE will be required
to be
registered under the Investment Company Act.
(h) In
accordance with the Rate Stabilization Law, (i) the rights and interests of
BGE
under the Qualified Rate Order are assignable and become Rate Stabilization
Property when they are first transferred to the Issuer in connection with the
issuance of Rate Stabilization Bonds; (ii) upon the transfer by BGE of the
Rate
Stabilization Property to the Issuer, the Issuer shall have all of the rights
of
BGE with respect to such Rate Stabilization Property; (iii) the Qualified Rate
Order authorizes issuance of the Rate Stabilization Bonds, the sale or other
absolute transfer of the Rate Stabilization Property to the Issuer, the Issuer’s
pledge of the Rate Stabilization Property to the Indenture Trustee hereunder
and
the imposition of the Qualified Rate Stabilization Charge and periodic
adjustment of the Qualified Rate Stabilization Charge; (iv) the transaction,
as
contemplated by the Basic Documents, conforms to the terms of the Qualified
Rate
Order; and (v) the Rate Stabilization Bonds are “Rate Stabilization Bonds”
within the meaning of Section 7-520(f) of the Rate Stabilization
Law.
(i)
No governmental approvals are required
for the valid issuance, authentication and delivery of the Rate Stabilization
Bonds or the performance by either BGE or the Issuer of its respective
obligations under the Basic Documents, and the proviso (relating to the
creation, attachment and perfection of any Liens created hereunder in Rate
Stabilization Property governed by Maryland law) to Section 10.12, and
the portions of this Indenture referred to by such proviso, to which either
BGE
or the Issuer is a party, except for (i) the Qualified Rate Order related to
the
Rate Stabilization Bonds and the governmental approvals expressly contemplated
therein and (ii) the filings contemplated by paragraphs (l) and
(n) below.
(j)
The choice of New York law to govern the
Indenture, each Series Supplement and the Underwriting Agreement, to the extent
the law of that state is chosen, is a valid and effective choice of law under
the laws of the State of Maryland and, in a properly presented case, a Maryland
court and a federal court sitting in the State of Maryland and applying Maryland
choice-of-law principles would (a) recognize and enforce the choice of New
York
law, to the extent the law of that state is chosen, to govern the Indenture,
each Series Supplement and the Underwriting Agreement, and (b) give effect
to
the choice of Maryland law as and to the extent provided in Section 10.12 of
the
Indenture.
15
(k) Under
the terms of Section 7-542 of the Rate Stabilization Law, the transfer of the
Rate Stabilization Property by BGE to the Issuer is perfected under Section
7-542 of the Rate Stabilization Law against all third parties, including
subsequent judicial or other lien creditors.
(l) The
provisions of the Indenture, as amended and supplemented by the Series
Supplement, are effective to create on the Closing Date, in favor of the
Indenture Trustee (for the benefit of the Secured Parties) to secure the
obligations of the Issuer under the Indenture, a valid security interest in
all
of the Issuer’s right, title and interest in, to and under the Rate
Stabilization Property under the Rate Stabilization Law. The security
interest in favor of the Indenture Trustee (for the benefit of the Secured
Parties) in the Issuer’s right, title, and interest in, to and under the Rate
Stabilization Property has been perfected under Maryland law against all third
parties, including subsequent judicial or other lien creditors.
(m) Lien
searches identify no secured party, other than the Indenture Trustee, who has
filed with the Maryland State Department of Assessments and Taxation or the
Maryland Secretary of State, naming BGE or the Issuer as debtor and describing
any of the Rate Stabilization Bond Collateral.
(n) The
Rate Stabilization Property Notices related to the Rate Stabilization Bonds
are
in appropriate form for filing pursuant to Section 7-542 of the Rate
Stabilization Law.
(o) The
Issuer has been duly formed and is validly existing in good standing as a
limited liability company under the laws of the State of Delaware.
(p) The
Certificate of Formation has been duly filed with the Secretary of State of
the
State of Delaware.
(q) The
LLC Agreement constitutes a legal, valid and binding agreement of BGE and is
enforceable against BGE, in its capacity as member of the Issuer, in accordance
with its terms.
(r) Under
the LLC Act and the LLC Agreement, the Issuer has the limited liability company
power and authority to execute and deliver each of the Basic Documents to which
the Issuer is a party and the Rate Stabilization Bonds and to perform its
obligations thereunder. Under the LLC Act and the LLC Agreement, the
execution and delivery by the Issuer of each of the Basic Documents to which
the
Issuer is a party and the Rate Stabilization Bonds, and the performance by
the
Issuer of its obligations hereunder or thereunder, have been duly authorized
by
all necessary limited liability company action on the part of the
Issuer. Under the LLC Act and the LLC Agreement, upon execution and
delivery on behalf of the Issuer by the Member, any Manager or any officer
of
the Issuer, acting singly or collectively, of the Basic Documents to which
the
Issuer is a party and the Rate Stabilization Bonds, the Basic Documents to
which
the Issuer is a party and the Rate Stabilization Bonds will be duly executed
and
delivered by the Issuer.
16
(s) Under
the LLC Act and the LLC Agreement, the issuance of the Rate Stabilization Bonds
has been duly authorized by all necessary limited liability company action
on
the part of the Issuer.
(t)
Neither the execution or
delivery by the Issuer or BGE of each of the Basic Documents to which it is
a
party or the Rate Stabilization Bonds nor the compliance by the Issuer or BGE,
as the case may be, with the terms hereof or thereof, nor the consummation
by
the Issuer or BGE, as the case may be, of any of the transactions contemplated
hereby or thereby requires the consent or approval of, the giving of notice
to,
the registration with, or the taking of any other action with respect to any
Delaware court, or Delaware governmental or Delaware regulatory authority or
Delaware agency under the laws of the State of Delaware, except for the filing
of the Certificate of Formation with the Secretary of State, which Certificate
of Formation has been duly filed.
(u) Neither
the execution and delivery by the Issuer or BGE of the Basic Documents to which
it is a party or the Rate Stabilization Bonds nor the compliance by the Issuer
or BGE, as the case may be, with the terms hereof or thereof, nor the
consummation by the Issuer or BGE, as the case may be, of any of the
transactions contemplated hereby or thereby conflicts with or constitutes a
breach of or default under the Certificate of Formation or the LLC Agreement,
or
violates any law, governmental rule or regulation of the State of
Delaware.
(v) After
due inquiry, limited to, and solely to the extent reflected on the results
of
computer searches of court dockets for active cases of the Court of Chancery
of
the State of Delaware in and for New Castle County, Delaware, of the Superior
Court of the State of Delaware in and for New Castle County, Delaware, and
of
the United States District Court sitting in the State of Delaware, such counsel
is not aware of any legal or governmental proceeding pending against the
Issuer.
(w) If
properly presented to a Delaware court, a Delaware court applying Delaware
law
would conclude that (i) in order for any Person to file a voluntary bankruptcy
petition on behalf of the Issuer, the affirmative vote of its Member and the
affirmative vote of all of the Managers, including all of the Independent
Managers, as provided in Section 1.08(b) of the LLC Agreement, is
required and (ii) such provision, contained in Section 1.08(b) of the LLC
Agreement that requires the affirmative vote of its Member and the affirmative
vote of all of the Managers, including all of the Independent Managers, in
order
for a Person to file a voluntary bankruptcy petition on behalf of the Issuer,
constitutes a legal, valid and binding agreement of the Member, and is
enforceable against the Member, in accordance with its terms.
(x) Under
the LLC Act and the LLC Agreement, the bankruptcy (as defined in the LLC Act)
or
dissolution of BGE will not, by itself, cause the Issuer to be dissolved or
its
affairs to be wound up.
(y) While
under the LLC Act, on application to a court of competent jurisdiction, a
judgment creditor of the Member may be able to charge the Member’s
17
share
of
any profits and losses of the Issuer and the Member’s right to receive
distributions of the Issuer’s assets (“Member’s Interest”), to the extent
so charged, the judgment creditor has only the right to receive any distribution
or distributions to which the Member would otherwise have been entitled in
respect of such Member’s Interest. Under the LLC Act, no creditor of
the Member shall have any right to obtain possession of, or otherwise exercise
legal or equitable remedies with respect to, the property of the
Issuer. Thus, under the LLC Act, a judgment creditor of the Member
may not satisfy its claims against the Member by asserting a claim against
the
assets of the Issuer.
(z) Under
the LLC Act (i) the Issuer is a separate legal entity, and (ii) the existence
of
the Issuer as a separate legal entity shall continue until the cancellation
of
its Certificate of Formation.
(aa) The
Delaware Financing Statement is in an appropriate form for filing in the State
of Delaware under Section 9-502(a) and 9-516 of the Delaware UCC.
(bb) Insofar
as Article 9 of the Delaware UCC is applicable (without regard to conflict
of
laws principles), upon the filing of the Delaware Financing Statement with
the
Secretary of State of the State of Delaware (Uniform Commercial Code Section)
(the “Division”), the Indenture Trustee will have a perfected security
interest in the Issuer’s rights in that portion of the Series Rate Stabilization
Bond Collateral (other than Rate Stabilization Property) that may be perfected
by the filing of a UCC financing statement with the Division (the “Filing
Collateral”) and the proceeds (as defined in Section 9-102(a)(64) of the
Delaware UCC) thereof, and such security interest will be prior to any other
security interest in the Filing Collateral granted by the Issuer that is
perfected solely by the filing of financing statements with the Division under
the Delaware UCC. Insofar as Article 9 of the Delaware UCC is
applicable (without regard to conflict of laws principles), the Division is
the
appropriate place to file a financing statement to perfect a security interest
except for as-extracted collateral or timber to be cut (as described in Section
9-501(a)(1)(A) of the Delaware UCC) or fixture filings where the collateral
is
goods that are or are to become fixtures (as described in Section 9-501(a)(1)(B)
of the Delaware UCC).
(cc) The
UCC lien search sets forth the proper filing office and the proper debtor
necessary to identify those Persons who under the Delaware UCC have on file
financing statements against the Issuer covering the Filing Collateral as of
the
effective time. The UCC lien search identifies no secured party who
has on file with the Division a currently effective financing statement naming
the Issuer as debtor and describing the Filing Collateral prior to the effective
time.
(dd) Insofar
as Article 9 of the Delaware UCC is applicable (without regard to conflict
of
laws principles), the provisions of the Indenture are sufficient to constitute
authorization by the Issuer of the filing of the Delaware Financing Statement
for purposes of Section 9-509 of the Delaware UCC.
(ee) Insofar
as Article 9 of the Delaware UCC is applicable (without regard to conflict
of
laws principles), for purposes of the Delaware UCC, the Issuer is a “registered
18
organization”
(as defined in Section 9-102(a)(70) of the Delaware UCC). The Issuer
is “located” (within the meaning of Section 9-307 of the Delaware UCC) in the
State of Delaware. Under the Delaware UCC (including the choice of
laws provisions thereof), while a debtor is “located” in a jurisdiction, the
local law of that jurisdiction governs perfection of a nonpossessory security
interest in collateral if the collateral constitutes “accounts,”“general
intangibles,”“negotiable documents,” goods” (other than as-extracted
collateral, timber to be cut, goods covered by a certificate of title, and
goods
as to which a security interest therein is perfected by filing a fixture
filing), “instruments” or “chattel paper.”
(9) Accountant’s
Certificate or Letter. One or more certificates or letters,
addressed to the Issuer complying with the requirements of
Section 10.01(a), of a firm of Independent registered public
accountants of recognized national reputation to the effect that (a) such
accountants are Independent with respect to the Issuer within the meaning of
this Indenture, and are independent public accountants within the meaning of
the
standards of The American Institute of Certified Public Accountants, and (b)
with respect to the Series Rate Stabilization Bond Collateral, they have applied
such procedures as instructed by the addressee’s of such certificate or
letter.
(10) Rating
Agency Condition. The Indenture Trustee shall receive evidence
reasonably satisfactory to it that the Rating Agency Condition will be satisfied
with respect to the issuance of such new Series.
(11) Requirements
of Series Supplement. Such other funds, accounts, documents,
certificates, agreements, instruments or opinions as may be required by the
terms of the Series Supplement creating such Series.
(12) Required
Capital Level. Evidence satisfactory to the Indenture Trustee
that the Required Capital Level for such Series has been credited to the related
Capital Subaccount for such Series.
(13) Other
Requirements. Such other documents, certificates, agreements,
instruments or opinions as the Indenture Trustee may reasonably
require.
SECTION
2.11. Book-Entry Rate Stabilization Bonds. Unless
the applicable Series Supplement provides otherwise, all of the related Series
of Rate Stabilization Bonds shall be issued in Book-Entry Form, and the Issuer
shall execute and the Indenture Trustee shall, in accordance with this
Section 2.11 and the Issuer Order with respect to such Series,
authenticate and deliver one or more Global Rate Stabilization Bonds, evidencing
the Rate Stabilization Bonds of such Series which (i) shall be an aggregate
original principal amount equal to the aggregate original principal amount
of
such Rate Stabilization Bonds to be issued pursuant to the applicable Issuer
Order, (ii) shall be registered in the name of the Clearing Agency therefor
or
its nominee, which shall initially be Cede & Co., as nominee for The
Depository Trust Company, the initial Clearing Agency, (iii) shall be delivered
by the Indenture Trustee pursuant to such Clearing Agency’s or such nominee’s
instructions, and (iv) shall bear a legend substantially to the effect set
forth
in Exhibit A.
19
Each
Clearing Agency designated pursuant to this Section 2.11 must, at the
time of its designation and at all times while it serves as Clearing Agency
hereunder, be a “clearing agency” registered under the Exchange Act and any
other applicable statute or regulation.
No
Holder
of any Series of Rate Stabilization Bonds issued in Book-Entry Form shall
receive a Definitive Rate Stabilization Bond representing such Holder’s interest
in any such Rate Stabilization Bonds, except as provided in Section
2.13. Unless (and until) certificated, fully registered Rate
Stabilization Bonds of any Series (the “Definitive Rate Stabilization
Bonds”) have been issued to the Holders of such Series pursuant to
Section 2.13 or pursuant to any applicable Series Supplement relating
thereto:
(a) the
provisions of this Section 2.11 shall be in full force and
effect;
(b) the
Issuer, the Servicer, the Paying Agent, the Rate Stabilization Bond Registrar
and the Indenture Trustee may deal with the Clearing Agency for all purposes
(including the making of distributions or other payments on the Rate
Stabilization Bonds of such Series and the giving of instructions or directions
hereunder) as the authorized representatives of the Holders of such
Series;
(c) to
the extent that the provisions of this Section 2.11 conflict with any
other provisions of this Indenture, the provisions of this Section 2.11
shall control;
(d) the
rights of Holders of such Series shall be exercised only through the Clearing
Agency and the Clearing Agency Participants and shall be limited to those
established by law and agreements between such Holders and the Clearing Agency
and/or the Clearing Agency Participants. Pursuant to the Letter of
Representations, unless and until Definitive Rate Stabilization Bonds are issued
pursuant to Section 2.13, the initial Clearing Agency will make
book-entry transfers among the Clearing Agency Participants and receive and
transmit distributions of principal and interest on the Book-Entry Rate
Stabilization Bonds to such Clearing Agency Participants; and
(e) whenever
this Indenture requires or permits actions to be taken based upon instruction
or
directions of the Holders evidencing a specified percentage of the Outstanding
Amount of any Series of Rate Stabilization Bonds, the Clearing Agency shall
be
deemed to represent such percentage only to the extent that it has received
instructions to such effect from the Holders and/or the Clearing Agency
Participants owning or representing, respectively, such required percentage
of
the beneficial interest in such Series of Rate Stabilization Bonds and has
delivered such instructions to a Responsible Officer of the Indenture
Trustee.
SECTION
2.12. Notices to Clearing Agency. Unless and until
Definitive Rate Stabilization Bonds shall have been issued to Holders of such
Series pursuant to Section 2.13, whenever notice, payment, or other
communications to the holders of Book-Entry Rate Stabilization Bonds of any
Series is required under this Indenture, the Indenture Trustee, the Servicer
and
the Paying Agent, as applicable, shall give all such notices and communications
specified herein to be given to Holders of such Series to the Clearing
Agency.
SECTION
2.13. Definitive Rate Stabilization Bonds. If (a)
(i) the Issuer advises the Indenture Trustee in writing that the Clearing Agency
is no longer willing or able to properly
20
discharge
its responsibilities under any Letter of Representations and (ii) the Issuer
is
unable to locate a qualified successor Clearing Agency, (b) the Issuer, at
its
option, advises the Indenture Trustee in writing that, with respect to any
Series, it elects to terminate the book-entry system through the Clearing Agency
or (c) after the occurrence of an Event of Default hereunder, Holders holding
Rate Stabilization Bonds aggregating not less than a majority of the aggregate
Outstanding Amount of any Series of Rate Stabilization Bonds maintained as
Book-Entry Rate Stabilization Bonds advise the Indenture Trustee, the Issuer
and
the Clearing Agency (through the Clearing Agency Participants) in writing that
the continuation of a book-entry system through the Clearing Agency is no longer
in the best interests of the Holders of such Series, the Issuer shall notify
the
Clearing Agency, the Indenture Trustee and all such Holders of such Series
in
writing of the occurrence of any such event and of the availability of
Definitive Rate Stabilization Bonds of such Series to the Holders of such Series
requesting the same. Upon surrender to the Indenture Trustee of the
Global Rate Stabilization Bonds of such Series by the Clearing Agency
accompanied by registration instructions from such Clearing Agency for
registration, the Issuer shall execute, and the Indenture Trustee shall
authenticate and deliver, Definitive Rate Stabilization Bonds of such Series
in
accordance with the instructions of the Clearing Agency. None of the
Issuer, the Rate Stabilization Bond Registrar, the Paying Agent or the Indenture
Trustee shall be liable for any delay in delivery of such instructions and
may
conclusively rely on, and shall be fully protected in relying on, such
instructions. Upon the issuance of Definitive Rate Stabilization
Bonds of any Series, the Indenture Trustee shall recognize the Holders of the
Definitive Rate Stabilization Bonds as Holders hereunder.
Definitive
Rate Stabilization Bonds will be transferable and exchangeable at the offices
of
the Rate Stabilization Bonds Registrar.
SECTION
2.14. CUSIP Number. The Issuer in issuing any Rate
Stabilization Bond or Series of Rate Stabilization Bonds may use a “CUSIP”
number and, if so used, the Indenture Trustee shall use the CUSIP number
provided to it by the Issuer in any notices to the Holders thereof as a
convenience to such Holders; provided, that any such notice may state
that no representation is made as to the correctness or accuracy of the CUSIP
number printed in the notice or on the Rate Stabilization Bonds and that
reliance may be placed only on the other identification numbers printed on
the
Rate Stabilization Bonds. The Issuer shall promptly notify the
Indenture Trustee in writing of any change in the CUSIP number with respect
to
any Rate Stabilization Bond.
SECTION
2.15. Letter of Representations. Notwithstanding
anything to the contrary in this Indenture or any Series Supplement, the parties
hereto shall comply with the terms of each Letter of Representations applicable
to such party.
SECTION
2.16. Special Terms Applicable to Subsequent Transfers of Certain
Rate Stabilization Bonds.
(a) Certain
Series of Rate Stabilization Bonds may not be registered under the Securities
Act, or the securities laws of any other jurisdiction. Consequently,
such Unregistered Rate Stabilization Bonds shall not be transferable other
than
pursuant to an exemption from the registration requirements of the Securities
Act and satisfaction of certain other provisions specified herein or in the
related Series Supplement. Unless otherwise provided in the related
21
Series
Supplement, no sale, pledge or other transfer of any Unregistered Rate
Stabilization Bond (or interest therein) may be made by any Person unless either
(i) such sale, pledge or other transfer is made (A) to a “qualified
institutional buyer” (as defined under Rule 144A under the Securities Act) or
(B) to an “institutional accredited investor” (as described in Rule 501(a)(l),
(2), (3) or (7) under the Securities Act) which executes and delivers a
certificate to such effect in the form attached hereto as Exhibit C or
(ii) such sale, pledge or other transfer is otherwise made in a transaction
exempt from, or not subject to, the registration requirements of the Securities
Act, in which case the Indenture Trustee shall require a written Opinion of
Counsel (which shall not be at the expense of the Issuer, the Servicer or the
Indenture Trustee) satisfactory to the Issuer and the Indenture Trustee to
the
effect that such transfer will not violate the Securities Act. None
of the Seller, the Issuer, the Indenture Trustee or the Servicer shall be
obligated to register any Unregistered Rate Stabilization Bonds under the
Securities Act, qualify any Unregistered Rate Stabilization Bonds under the
securities laws of any State or provide registration rights to any purchaser
or
holder thereof.
(b) Unless
otherwise provided in the related Series Supplement, the Unregistered Rate
Stabilization Bonds may not be acquired by or for the account of a Restricted
Plan and, by accepting and holding an Unregistered Rate Stabilization Bond,
the
Holder of an Unregistered Rate Stabilization Bond in global form shall be deemed
to have represented and warranted that it is not a Restricted Plan and, the
Holder of an Unregistered Rate Stabilization Bond in definitive form shall
execute and deliver to the Indenture Trustee a certificate to such effect in
the
form attached hereto as Exhibit D.
(c) Unless
otherwise provided in the related Series Supplement, Unregistered Rate
Stabilization Bonds shall be issued in the form of Definitive Rate Stabilization
Bonds, shall be in fully registered form and Sections 2.11 and
2.12 shall not apply thereto.
(d) Each
Unregistered Rate Stabilization Bond shall bear legends to the effect set forth
in subsections (a) and (b) (if subsection (b) is
applicable) above.
SECTION
2.17. Tax Treatment. The Issuer and the Indenture
Trustee, by entering into this Indenture, and the Holders and any Persons
holding a beneficial interest in any Rate Stabilization Bond, by acquiring
any
Rate Stabilization Bond or interest therein, (a) express their intention that,
solely for the purposes of federal taxes and, to the extent consistent with
applicable state, local and other tax law, solely for the purposes of state,
local and other taxes, the Rate Stabilization Bonds qualify under applicable
tax
law as indebtedness of the Member secured by the Rate Stabilization Bond
Collateral and (b) solely for the purposes of federal taxes and, to the extent
consistent with applicable state, local and other tax law, solely for purposes
of state, local and other taxes, so long as any of the Rate Stabilization Bonds
are outstanding, agree to treat the Rate Stabilization Bonds as indebtedness
of
the Member secured by the Rate Stabilization Bond Collateral unless otherwise
required by appropriate taxing authorities.
SECTION
2.18. State Pledge. Under the laws of the State of
Maryland in effect on the Closing Date, the State of Maryland has agreed for
the
benefit of the Holders, pursuant to Section 7-535 of the Rate Stabilization
Law, as follows:
22
“The
state pledges, for the benefit and protection of financing parties and the
electric company, that it will not take or allow any action that would impair
the value of rate stabilization property, or, except as allowed in accordance
with Sections 7-531, 7-533, and 7-534 of [the Rate Stabilization Law], reduce,
alter, or impair the qualified rate stabilization charges to be imposed,
collected, and remitted to financing parties, until the principal, interest
and
premium, and any other charges incurred and contracts to be performed in
connection with the related rate stabilization bonds have been paid and
performed in full. Any party issuing rate stabilization bonds is
authorized to include this pledge in any documentation relating to those
bonds.”
The
Issuer hereby acknowledges that the purchase of any Rate Stabilization Bond
by a
Holder or the purchase of any beneficial interest in a Rate Stabilization Bond
by any Person and the Indenture Trustee’s obligations to perform hereunder are
made in reliance on such agreement and pledge by the State of
Maryland.
SECTION
2.19. Security Interests. The Issuer hereby makes
the following representations and warranties. Other than the security
interests granted to the Indenture Trustee pursuant to this Indenture, the
Issuer has not pledged, granted, sold, conveyed or otherwise assigned any
interests or security interests in the Rate Stabilization Bond Collateral and
no
security agreement, financing statement or equivalent security or Lien
instrument listing the Issuer as debtor covering all or any part of the Rate
Stabilization Bond Collateral is on file or of record in any jurisdiction,
except such as may have been filed, recorded or made by the Issuer in favor
of
the Indenture Trustee on behalf of the Secured Parties in connection with this
Indenture. This Indenture constitutes a valid and continuing lien on,
and first priority perfected security interest in, the Rate Stabilization Bond
Collateral in favor of the Indenture Trustee on behalf of the Secured Parties,
which lien and security interest is prior to all other Liens and is enforceable
as such as against creditors of and purchasers from the Issuer in accordance
with its terms, except as such enforceability may be limited by bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other similar
laws affecting creditors’ rights generally or by general equitable principles,
whether considered in a proceeding at law or in equity and by an implied
covenant of good faith and fair dealing. With respect to all Series
Rate Stabilization Bond Collateral, this Indenture, together with the related
Series Supplement, creates a valid and continuing first priority perfected
security interest (as defined in the UCC and pursuant to
the provisions of the Rate Stabilization Law governing the creation,
priority and perfection of security interests) in such Series Rate Stabilization
Bond Collateral, which security interest is prior to all other Liens and is
enforceable as such as against creditors of and purchasers from the Issuer
in
accordance with its terms, except as such enforceability may be limited by
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and
other similar laws affecting creditors’ rights generally or by general equitable
principles, whether considered in a proceeding at law or in equity and by an
implied covenant of good faith and fair dealing. The Issuer has good
and marketable title to the Rate Stabilization Bond Collateral free and clear
of
any Lien, claim or encumbrance of any Person other than Permitted
Liens. All of the Rate Stabilization Bond Collateral constitutes
either Rate Stabilization Property or accounts, deposit accounts, investment
property or general intangibles (as each such term is defined in the UCC) except
that proceeds of the Rate Stabilization Bond Collateral may also take the form
of instruments. The Issuer has taken, or caused the Servicer to take,
all action necessary to perfect the security interest in the Series Rate
Stabilization Bond Collateral granted to the Indenture Trustee, for the
23
benefit
of the Secured Parties of each related Series. The Issuer has filed
(or has caused the Servicer to file) all appropriate financing statements in
the
proper filing offices in the appropriate jurisdictions under applicable law
in
order to perfect the security interest in the Rate Stabilization Bond Collateral
granted to the Indenture Trustee. The Issuer has not authorized the filing
of
and is not aware, after due inquiry, of any financing statements against the
Issuer that include a description of the Rate Stabilization Bond Collateral
other than those filed in favor of the Indenture Trustee. The Issuer
is not aware of any judgment or tax Lien filings against the
Issuer. Each Collection Account (including all subaccounts thereof)
constitutes a “securities account” within the meaning of the UCC. The
Issuer has taken all steps necessary to cause the Securities Intermediary of
each such securities account to identify in its records the Indenture Trustee
as
the person having a security entitlement against the Securities Intermediary
in
such securities account, no Collection Account is in the name of any person
other than the Indenture Trustee, and the Issuer has not consented to the
Securities Intermediary of any Collection Account to comply with entitlement
orders of any person other than the Indenture Trustee. All of the
Series Rate Stabilization Bond Collateral constituting investment property
has
been and will have been credited to the applicable Collection Account or a
subaccount thereof, and the Securities Intermediary for each Collection Account
has agreed to treat all assets credited to each Collection Account as "financial
assets" within the meaning of the UCC. Accordingly, the
Indenture Trustee has a first priority perfected security interest in each
Collection Account, all funds and financial assets on deposit therein, and
all
securities entitlements relating thereto. The representations and
warranties set forth in this Section 2.19 shall survive the execution and
delivery of this Indenture and the issuance of any Rate Stabilization Bonds,
shall be deemed re-made on each date on which any funds in each Collection
Account are distributed to the Issuer or otherwise released from the Lien of
the
Indenture and may not be waived by any party hereto except pursuant to a
supplemental indenture executed in accordance with Article IX and as to
which the Rating Agency Condition has been satisfied.
ARTICLE
III
COVENANTS
SECTION
3.01. Payment of Principal, Premium, if any, and
Interest. The principal of and premium, if any, and interest on
the Rate Stabilization Bonds shall be duly and punctually paid by the Issuer,
or
the Servicer on behalf of the Issuer, in accordance with the terms of the Rate
Stabilization Bonds and this Indenture; provided that except on the Final
Maturity Date or upon the acceleration of the Rate Stabilization Bonds following
the occurrence of an Event of Default, the Issuer shall only be obligated to
pay
the principal of such Rate Stabilization Bonds on each Payment Date therefor
to
the extent moneys are available for such payment pursuant to Section
8.02. Amounts properly withheld under the Code or other tax laws
by any Person from a payment to any Holder of interest or principal or premium,
if any, shall be considered as having been paid by the Issuer to such Holder
for
all purposes of this Indenture.
SECTION
3.02. Maintenance of Office or Agency. The Issuer
shall maintain in the Borough of Manhattan, the City of New York, an office
or
agency at the Corporate Trust Office where Rate Stabilization Bonds may be
surrendered for registration of transfer or exchange. The Issuer
hereby initially appoints the Indenture Trustee to serve as its agent for the
foregoing purposes. The Issuer shall give prompt written notice to
the Indenture Trustee of the
24
location,
and of any change in the location, of any such office or agency. If
at any time the Issuer shall fail to maintain any such office or agency or
shall
fail to furnish the Indenture Trustee with the address thereof, such surrenders
may be made at the office of the Indenture Trustee located at the Corporate
Trust Office, and the Issuer hereby appoints the Indenture 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 Rate Stabilization Bonds that are to be made from amounts
withdrawn from the applicable Collection Account pursuant to Section
8.02(d) shall be made on behalf of the Issuer by the Indenture Trustee or by
another Paying Agent, and no amounts so withdrawn from such applicable
Collection Account for payments with respect to any Rate Stabilization Bonds
shall be paid over to the Issuer except as provided in this Section 3.03
and Section 8.02.
The
Issuer will cause each Paying Agent other than the Indenture Trustee to execute
and deliver to the Indenture Trustee an instrument in which such Paying Agent
shall agree with the Indenture Trustee (and if the Indenture Trustee acts as
Paying Agent, it hereby so agrees), subject to the provisions of this Section
3.03, that such Paying Agent will:
(i)
hold all sums held by it for the payment of amounts due with respect to the
Rate
Stabilization Bonds in trust for the benefit of the Persons entitled thereto
until such sums shall be paid to such Persons or otherwise disposed of as herein
provided and pay such sums to such Persons as herein provided;
(ii) give
the Indenture Trustee written notice of any Default by the Issuer of which
it
has actual knowledge in the making of any payment required to be made with
respect to the Rate Stabilization Bonds;
(iii) at
any time during the continuance of any such Default, upon the written request
of
the Indenture Trustee, forthwith pay to the Indenture Trustee all sums so held
in trust by such Paying Agent;
(iv) immediately
resign as a Paying Agent and forthwith pay to the Indenture Trustee all sums
held by it in trust for the payment of Rate Stabilization Bonds if at any time
the Paying Agent determines that it has ceased to meet the standards required
to
be met by a Paying Agent at the time of such determination; and
(v) comply
with all requirements of the Code and other tax laws with respect to the
withholding from any payments made by it on any Rate Stabilization Bonds of
any
applicable withholding taxes imposed thereon and with respect to any applicable
reporting requirements in connection therewith.
The
Issuer may at any time, for the purpose of obtaining the satisfaction and
discharge of this Indenture or for any other purpose, by Issuer Order direct
any
Paying Agent to pay to the Indenture Trustee all sums held in trust by such
Paying Agent, such sums to be held by the Indenture 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 Indenture Trustee, such Paying Agent shall
be
released from all further liability with respect to such money.
25
Subject
to applicable laws with respect to escheat of funds, any money held by the
Indenture Trustee or any Paying Agent in trust for the payment of any amount
due
with respect to any Rate Stabilization Bond and remaining unclaimed for two
(2)
years after such amount has become due and payable shall be discharged from
such
trust and be paid to the Issuer on an Issuer Request; and, subject to Section
10.11, the Holder of such Rate Stabilization Bond shall thereafter, as an
unsecured general creditor, look only to the Issuer for payment thereof (but
only to the extent of the amounts so paid to the Issuer), and all liability
of
the Indenture Trustee or such Paying Agent with respect to such trust money
shall thereupon cease; provided, however, that the Indenture
Trustee or such Paying Agent, before being required to make any such repayment,
may at the expense of the Issuer, cause to be published once, in a newspaper
published in the English language, customarily published on each Business Day
and of general circulation in The City of New York, notice that such money
remains unclaimed and that, after a date specified therein, which shall not
be
less than thirty (30) days from the date of such publication, any unclaimed
balance of such money then remaining will be repaid to the
Issuer. The Indenture Trustee may also adopt and employ, at the
expense of the Issuer, any other reasonable means of notification of such
repayment (including mailing notice of such repayment to Holders whose right
to
or interest in moneys due and payable but not claimed is determinable from
the
records of the Indenture Trustee or of any Paying Agent, at the last address
of
record for each such Holder).
SECTION
3.04. Existence. The Issuer shall keep in full
effect its existence, rights and franchises as a limited liability company
under
the laws of the State of Delaware (unless it becomes, or any successor Issuer
hereunder is or becomes, organized under the laws of any other State or of
the
United States of America, in which case the Issuer will keep in full effect
its
existence, rights and franchises under the laws of such other jurisdiction)
and
will obtain and preserve its qualification to do business in each jurisdiction
in which such qualification is or shall be necessary to protect the validity
and
enforceability of this Indenture, the other Basic Documents, the Rate
Stabilization Bonds, the Rate Stabilization Bond Collateral and each other
instrument or agreement referenced herein or therein.
SECTION
3.05. Protection of Rate Stabilization Bond
Collateral. The Issuer shall from time to time execute and
deliver all such supplements and amendments hereto and all filings with the
PSC
or the Maryland State Department of Assessments and Taxation pursuant to the
Qualified Rate Order or to the Rate Stabilization Law and all financing
statements, continuation statements, instruments of further assurance and other
instruments (including under the Delaware UCC), and shall take such other action
necessary or advisable to:
(i)
maintain or preserve the Lien and
security interest (and the priority thereof) of this Indenture and the related
Series Supplement or carry out more effectively the purposes
hereof;
(ii) perfect,
publish notice of or protect the validity of any Grant made or to be made by
this Indenture;
(iii) enforce
any of the Rate Stabilization Bond Collateral;
26
(iv) preserve
and defend title to the Rate Stabilization Bond Collateral and the rights of
the
Indenture Trustee and the Holders in such Rate Stabilization Bond Collateral
against the Claims of all Persons and parties, including, without limitation,
the challenge by any party to the validity or enforceability of any Qualified
Rate Order, any Tariff, the Rate Stabilization Property, the Rate Stabilization
Law or any proceeding relating thereto and institute any action or proceeding
necessary to compel performance by the PSC or the State of Maryland of any
of
its obligations or duties under the Rate Stabilization Law, the State Pledge,
or
any Qualified Rate Order or Tariff; or
(v) pay
any and all taxes levied or assessed upon all or any part of the Rate
Stabilization Bond Collateral.
The
Issuer hereby designates the Indenture Trustee its agent and attorney-in-fact
to
execute or authorize, as the case may be, any filings with the Maryland State
Department of Assessments and Taxation, financing statements, continuation
statements or other instruments (including with the Delaware Secretary of State)
required pursuant to this Section 3.05, it being understood that the
Indenture Trustee shall have no such obligation or any duty to prepare such
documents.
SECTION
3.06. Opinions as to Rate Stabilization Bond
Collateral.
(a) On
the Series Issuance Date for each Series (including the Closing Date), the
Issuer shall furnish to the Indenture Trustee an Opinion of Counsel of external
counsel of the Issuer either stating that, in the opinion of such counsel,
such
action has been taken with respect to the recording and filing of this
Indenture, any indentures supplemental hereto, and any other requisite
documents, and with respect to the execution and filing of any filings with
the
PSC or the Maryland State Department of Assessments and Taxation pursuant to
the
Rate Stabilization Law and the Applicable Qualified Rate Order and any financing
statements and continuation statements, as are necessary to perfect and make
effective the Lien, and the first priority perfected security interest created
by this Indenture and the related Series Supplement, and no other Lien or
security interest is equal or prior to the Lien and security interest of the
Indenture Trustee in the Series Rate Stabilization Bond Collateral, and reciting
the details of such action, or stating that, in the opinion of such counsel,
no
such action is necessary to make effective such Lien and security
interest.
(b) Within
ninety (90) days after the beginning of each calendar year beginning with the
calendar year beginning January 1, 2008, the Issuer shall furnish to the
Indenture Trustee an Opinion of Counsel of external counsel of the Issuer either
stating that, in the opinion of such counsel, such action has been taken with
respect to the recording, filing, re-recording and refiling of this Indenture,
any indentures supplemental hereto and any other requisite documents and with
respect to the execution and filing of any filings with the PSC or the Maryland
State Department of Assessments and Taxation pursuant to the Rate Stabilization
Law and the Applicable Qualified Rate Order and any financing statements and
continuation statements as are necessary to maintain the Lien created by this
Indenture and reciting the details of such action or stating that, in the
opinion of such counsel, no such action is necessary to maintain such
Lien. Such Opinion of Counsel shall also describe the recording,
filing, re-recording and refiling of this Indenture, any indentures supplemental
hereto and any other requisite documents and the execution and filing of any
filings with the PSC or the Maryland
27
State
Department of Assessments and Taxation, financing statements and continuation
statements that will, in the opinion of such counsel, be required within the
twelve-month period following the date of such opinion to maintain the Lien
created by this Indenture.
(c) Prior
to the effectiveness of any amendment to the Sale Agreement or the Servicing
Agreement, the Issuer shall furnish to the Indenture Trustee an Opinion of
Counsel of external counsel of the Issuer either (i) stating that, in the
opinion of such counsel, all filings, including UCC financing statements and
other filings with the PSC and the Maryland State Department of Assessments
and
Taxation pursuant to the Rate Stabilization Law or the Applicable Qualified
Rate
Order, have been executed and filed that are necessary fully to preserve and
protect the Lien and security interest of the Issuer and the Indenture Trustee
in the Rate Stabilization Property and the Rate Stabilization Bond Collateral,
respectively, 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 Lien and security interest.
SECTION
3.07. Performance of Obligations; Servicing.
(a) The
Issuer (i) shall diligently pursue any and all actions to enforce its rights
under each instrument or agreement included in the Rate Stabilization Bond
Collateral and (ii) shall not take any action and shall use its best efforts
not
to permit any action to be taken by others that would release any Person from
any of such Person’s covenants or obligations under any such instrument or
agreement or that would result in the amendment, hypothecation, subordination,
termination or discharge of, or impair the validity or effectiveness of, any
such instrument or agreement, except, in each case, as expressly provided in
the
Basic Documents to which the Issuer is a party or such other instrument or
agreement.
(b) The
Issuer may contract with other Persons to assist it in performing its duties
under this Indenture, and any performance of such duties by a Person identified
to the Indenture Trustee herein or in an Officer’s Certificate shall be deemed
to be action taken by the Issuer. Initially, the Issuer has
contracted with the Servicer to assist the Issuer in performing its duties
under
this Indenture.
(c) The
Issuer shall punctually perform and observe all of its obligations and
agreements contained in this Indenture, the related Series Supplement, the
other
Basic Documents to which the Issuer is a party and in the instruments and
agreements included in the Rate Stabilization Bond Collateral, including filing
or causing to be filed all filings with the PSC or the Maryland State Department
of Assessments and Taxation pursuant to the Rate Stabilization Law or the
Qualified Rate Order, all UCC financing statements and continuation statements
required to be filed by it by the terms of this Indenture, the related Series
Supplement, the Sale Agreement and the Servicing Agreement in accordance with
and within the time periods provided for herein and therein.
(d) If
the Issuer shall have knowledge of the occurrence of a Servicer Default under
the Servicing Agreement, the Issuer shall promptly give written notice thereof
to the Indenture Trustee and the Rating Agencies, and shall specify in such
notice the response or action, if any, the Issuer has taken or is taking with
respect to such default. If a Servicer Default
28
shall
arise from the failure of the Servicer to perform any of its duties or
obligations under the Servicing Agreement with respect to the Rate Stabilization
Property, the Rate Stabilization Bond Collateral or the Qualified Rate
Stabilization Charges, the Issuer shall take all reasonable steps available
to
it to remedy such failure.
(e) As
promptly as possible after the giving of notice of termination to the Servicer
and the Rating Agencies of the Servicer’s rights and powers pursuant
toSection 7.01 of the Servicing Agreement, the
Indenture Trustee may and shall, at the written direction of the Holders
evidencing not less than a majority of the Outstanding Amount of the Rate
Stabilization Bonds of all Series, appoint a successor Servicer (the
“Successor Servicer”), and such Successor Servicer shall accept its
appointment by a written assumption in a form acceptable to the Issuer and
the
Indenture Trustee. A Person shall qualify as a Successor Servicer
only if such Person satisfies the requirements of the Servicing
Agreement. If within thirty (30) days after the delivery of the
notice referred to above, a new Servicer shall not have been appointed, the
Indenture Trustee may petition a court of competent jurisdiction to appoint
a
Successor Servicer. In connection with any such appointment, BGE may
make such arrangements for the compensation of such Successor Servicer as it
and
such successor shall agree, subject to the limitations set forth in Section
8.02 and in the Servicing Agreement.
(f) Upon
any termination of the Servicer’s rights and powers pursuant to the Servicing
Agreement, the Indenture Trustee shall promptly notify the Issuer, the Holders
and the Rating Agencies. As soon as a Successor Servicer is
appointed, the Indenture Trustee shall notify the Issuer, the Holders and the
Rating Agencies of such appointment, specifying in such notice the name and
address of such Successor Servicer.
(g) The
Issuer shall (or shall cause the Sponsor to) file with or furnish to the SEC
periodic reports and other reports as are required from time to time under
Section 13 or Section 15(d) of the Exchange Act.
(h) The
Issuer shall make all filings required under the Rate Stabilization Law relating
to the transfer of the ownership or security interest in the Rate Stabilization
Property other than those required to be made by the Seller or the Servicer
pursuant to the Basic Documents.
SECTION
3.08. Certain Negative Covenants. So long as any
Rate Stabilization Bonds are Outstanding, the Issuer shall not:
(i) except
as expressly permitted by this Indenture and the other Basic Documents, sell,
transfer, exchange or otherwise dispose of any of the properties or assets
of
the Issuer, including those included in the Rate Stabilization Bond Collateral,
unless directed to do so by the Indenture Trustee in accordance with Article
V;
(ii) claim
any credit on, or make any deduction from the principal or premium, if any,
or
interest payable in respect of, the Rate Stabilization Bonds (other than amounts
properly withheld from such payments under the Code or other tax laws) or assert
any claim against any present or former Holder by reason of the payment of
the
taxes levied or assessed upon any part of the Rate Stabilization Bond
Collateral;
29
(iii) to
the fullest extent permitted by law, terminate its existence or dissolve or
liquidate in whole or in part, except in a transaction permitted by
Section 3.10;
(iv) (A)
permit the validity or effectiveness of this Indenture or the other Basic
Documents to be impaired, or permit the Lien of this Indenture and the related
Series Supplement to be amended, hypothecated, subordinated, terminated or
discharged, or permit any Person to be released from any covenants or
obligations with respect to the Rate Stabilization Bonds under this Indenture
except as may be expressly permitted hereby, (B) permit any Lien (other than
the
Lien of this Indenture or the related Series Supplement) to be created on or
extend to or otherwise arise upon or burden the Rate Stabilization Bond
Collateral or any part thereof or any interest therein or the proceeds thereof
(other than tax liens arising by operation of law with respect to amounts not
yet due) or (C) permit the Lien of any Series Supplement not to constitute
a
valid first priority perfected security interest in the Series Rate
Stabilization Bond Collateral;
(v) enter
into any swap, hedge or similar financial instrument;
(vi) elect
to be classified as an association taxable as a corporation for federal income
tax purposes or otherwise take any action, file any tax return, or make any
election inconsistent with the treatment of the Issuer, for purposes of federal
taxes and, to the extent consistent with applicable state tax law, state income
and franchise tax purposes, as a disregarded entity that is not separate from
the sole owner of the Issuer;
(vii) change
its name, identity or structure or the location of its chief executive office,
unless at least ten (10) days’ prior to the effective date of any such change
the Issuer delivers to the Indenture Trustee such documents, instruments or
agreements, executed by the Issuer, as are necessary to reflect such change
and
to continue the perfection of the security interest of this Indenture and the
related Series Supplement; or
(viii) take
any action which is subject to the Rating Agency Condition without satisfying
the Rating Agency Condition.
SECTION
3.09. Annual Statement as to Compliance. The Issuer
will deliver to the Indenture Trustee and the Rating Agencies not later than
March 30 of each year (commencing with March 30, 2008), an Officer’s Certificate
stating, as to the Responsible Officer signing such Officer’s Certificate,
that:
(i)
a review of the
activities of the Issuer during the preceding twelve (12) months ended December
31 (or, in the case of the first such Officer’s Certificate, since the Series
Issuance Date) and of performance under this Indenture has been made;
and
(ii) to
the best of such Responsible Officer’s knowledge, based on such review, the
Issuer has in all material respects complied with all conditions and covenants
under this Indenture throughout such twelve-month period (or such shorter period
in the case of the first such Officer’s Certificate), or, if there has been a
default in the compliance of any such condition or covenant, specifying each
such default known to such Responsible Officer and the nature and status
thereof.
30
SECTION
3.10. Issuer May Consolidate, etc., Only on Certain
Terms.
(a) The
Issuer shall not consolidate or merge with or into any other Person,
unless:
(i)
the Person (if other than the Issuer)
formed by or surviving such consolidation or merger shall (A) be a Person
organized and existing under the laws of the United States of America or any
State, (B) expressly assume, by an indenture supplemental hereto, executed
and
delivered to the Indenture Trustee, in form and substance satisfactory to the
Indenture Trustee, the performance or observance of every agreement and covenant
of this Indenture and the related Series Supplement on the part of the Issuer
to
be performed or observed, all as provided herein and in the applicable Series
Supplement, and (C) assume all obligations and succeed to all rights of the
Issuer under the Sale Agreement, the Servicing Agreement and each other Basic
Document to which the Issuer is a party;
(ii) immediately
after giving effect to such merger or consolidation, no Default, Event of
Default or Servicer Default shall have occurred and be continuing;
(iii) the
Rating Agency Condition shall have been satisfied with respect to such merger
or
consolidation;
(iv) the
Issuer shall have delivered to BGE, the Indenture Trustee and the Rating
Agencies an opinion or opinions of outside tax counsel (as selected by the
Issuer, in form and substance reasonably satisfactory to BGE and the Indenture
Trustee, and which may be based on a ruling from the Internal Revenue Service
(unless the Internal Revenue Service has announced that it will not rule on
the
issues described in this paragraph)) to the effect that the consolidation or
merger will not result in a material adverse federal or state income tax
consequence to the Issuer, BGE, the Indenture Trustee or the then existing
Bondholders;
(v) any
action as is necessary to maintain the Lien and the first priority perfected
security interest in the Rate Stabilization Bond Collateral created by this
Indenture and the related Series Supplement shall have been taken as evidenced
by an Opinion of Counsel of external counsel of the Issuer delivered to the
Indenture Trustee; and
(vi) the
Issuer shall have delivered to the Indenture Trustee an Officer’s Certificate
and an Opinion of Counsel of external counsel of the Issuer each stating that
such consolidation or merger and such supplemental indenture comply with this
Indenture, the related Series Supplement and that all conditions precedent
herein provided for in this Section 3.10(a) with respect to such
transaction have been complied with (including any filing required by the
Exchange Act).
(b) Except
as specifically provided herein, the Issuer shall not sell, convey, exchange,
transfer or otherwise dispose of any of its properties or assets included in
the
Rate Stabilization Bond Collateral, to any Person, unless:
31
(i)
the Person that acquires
the properties and assets of the Issuer, the conveyance, exchange, transfer
or
other disposal 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 or any State, (B) expressly assumes, by an indenture supplemental
hereto, executed and delivered to the Indenture Trustee, in form and substance
satisfactory to the Indenture Trustee, the performance or observance of every
agreement and covenant of this Indenture on the part of the Issuer to be
performed or observed, all as provided herein and in the applicable Series
Supplements, (C) expressly agrees by means of such supplemental indenture that
all right, title and interest so sold, conveyed, exchanged, transferred or
otherwise disposed of shall be subject and subordinate to the rights of Holders,
(D) unless otherwise provided in the supplemental indenture referred to in
clause (B) above, expressly agrees to indemnify, defend and hold harmless
the Issuer and the Indenture Trustee against and from any loss, liability or
expense arising under or related to this Indenture, the related Series
Supplements and the Rate Stabilization Bonds, (E) expressly agrees by means
of
such supplemental indenture that such Person (or if a group of Persons, then
one
specified Person) shall make all filings with the SEC (and any other appropriate
Person) required by the Exchange Act in connection with the Rate Stabilization
Bonds and (F) if such sale, conveyance, exchange, transfer or other disposal
relates to the Issuer’s rights and obligations under the Sale Agreement or the
Servicing Agreement, assume all obligations and succeed to all rights of the
Issuer under the Sale Agreement and the Servicing Agreement, as
applicable;
(ii) immediately
after giving effect to such transaction, no Default, Event of Default or
Servicer Default shall have occurred and be continuing;
(iii) the
Rating Agency Condition shall have been satisfied with respect to such
transaction;
(iv) the
Issuer shall have delivered to BGE, the Indenture Trustee and the Rating
Agencies an opinion or opinions of outside tax counsel (as selected by the
Issuer, in form and substance reasonably satisfactory to BGE and the Indenture
Trustee, and which may be based on a ruling from the Internal Revenue Service)
to the effect that the disposition will not result in a material adverse federal
or state income tax consequence to the Issuer, BGE, the Indenture Trustee or
the
then existing Bondholders;
(v) any
action as is necessary to maintain the Lien and the first priority perfected
security interest in the Rate Stabilization Bond Collateral created by this
Indenture and the related Series Supplement shall have been taken as evidenced
by an Opinion of Counsel of external counsel of the Issuer delivered to the
Indenture Trustee; and
(vi) the
Issuer shall have delivered to the Indenture Trustee an Officer’s Certificate
and an Opinion of Counsel of external counsel of the Issuer each stating that
such sale, conveyance, exchange, transfer or other disposition and
such supplemental indenture comply with this Indenture and the related Series
Supplement and that all conditions precedent herein provided for in this
Section 3.10(b) with respect to such transaction have been complied
with (including any filing required by the Exchange Act).
32
SECTION
3.11. Successor or Transferee.
(a) Upon
any consolidation or merger of the Issuer in accordance with Section
3.10(a), the Person formed by or surviving such consolidation or merger (if
other than the Issuer) shall succeed to, and be substituted for, and may
exercise every right and power of, the Issuer under this Indenture with the
same
effect as if such Person had been named as the Issuer herein.
(b) Except
as set forth in Section 6.07, upon a sale, conveyance, exchange, transfer
or other disposition of all the assets and properties of the Issuer in
accordance with Section 3.10(b), the Issuer will be released from
every covenant and agreement of this Indenture and the other Basic Documents
to
be observed or performed on the part of the Issuer with respect to the Rate
Stabilization Bonds and the Rate Stabilization Property immediately following
the consummation of such acquisition upon the delivery of written notice to
the
Indenture Trustee from the Person acquiring such assets and properties stating
that the Issuer is to be so released.
SECTION
3.12. No Other Business. The Issuer shall not
engage in any business other than financing, purchasing, owning and managing
the
Rate Stabilization Property and the other Rate Stabilization Bond Collateral
and
the issuance of the Rate Stabilization Bonds in the manner contemplated by
the
Qualified Rate Order and this Indenture and the Basic Documents and related
activities incidental thereto.
SECTION
3.13. No Borrowing. The Issuer shall not issue,
incur, assume, guarantee or otherwise become liable, directly or indirectly,
for
any indebtedness except for the Rate Stabilization Bonds and any other
indebtedness expressly permitted by or arising under the Basic
Documents.
SECTION
3.14. Servicer’s Obligations. The Issuer shall
enforce the Servicer’s compliance with and performance of all of the Servicer’s
material obligations under the Servicing Agreement.
SECTION
3.15. Guarantees, Loans, Advances and Other
Liabilities. Except as otherwise contemplated by the Sale
Agreement, the Servicing Agreement or this Indenture, the Issuer shall not
make
any loan or advance or credit to, or guarantee (directly or indirectly or by
an
instrument having the effect of assuring another’s payment or performance on any
obligation or capability of so doing or otherwise), endorse or otherwise become
contingently liable, directly or indirectly, in connection with the obligations,
stocks or dividends of, or own, purchase, repurchase or acquire (or agree
contingently to do so) any stock, obligations, assets or securities of, or
any
other interest in, or make any capital contribution to, any other
Person.
SECTION
3.16. Capital Expenditures. Other than the purchase
of Rate Stabilization Property from the Seller on each Series Issuance Date
and
other than expenditures made out of available funds in an aggregate amount
not
to exceed $25,000 in any calendar year, the Issuer shall not make any
expenditure (by long-term or operating lease or otherwise) for capital assets
(either realty or personalty).
SECTION
3.17. Restricted Payments. Except as provided
in Section 8.04(c), the Issuer shall not, directly or indirectly, (a) pay
any dividend or make any distribution (by reduction of capital or otherwise),
whether in cash, property, securities or a combination thereof,
33
to
any
owner of an interest in the Issuer or otherwise with respect to any ownership
or
equity interest or similar security in or of the Issuer, (b) redeem, purchase,
retire or otherwise acquire for value any such ownership or equity interest
or
similar security or (c) set aside or otherwise segregate any amounts for any
such purpose. The Issuer will not, directly or indirectly, make
payments to or distributions from any Collection Account except in accordance
with this Indenture and the other Basic Documents.
SECTION
3.18. Notice of Events of Default. The Issuer
agrees to give the Indenture Trustee and the Rating Agencies prompt written
notice of each Default or Event of Default hereunder as provided in Section
5.01, 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
3.19. Further Instruments and Acts. Upon request of
the Indenture Trustee, the Issuer shall 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 Indenture and to maintain the
first priority perfected security interest of the Indenture Trustee in the
Rate
Stabilization Bond Collateral.
SECTION
3.20. Purchase of Subsequent Rate Stabilization
Property.
(a) The
Issuer may from time to time purchase Subsequent Rate Stabilization Property
from the Seller pursuant to the Sale Agreement, subject to the conditions
specified in paragraph (b) below.
(b) The
Issuer shall be permitted to purchase from the Seller Subsequent Rate
Stabilization Property and the proceeds thereof only upon the satisfaction
of
each of the following conditions on or prior to the related Subsequent Transfer
Date:
(i)
the Seller shall have
provided the Issuer, the Indenture Trustee and the Rating Agencies with an
Addition Notice, which shall be given not later than ten (10) days prior to
the
related Subsequent Transfer Date, specifying the Subsequent Transfer Date for
such Subsequent Rate Stabilization Property and the aggregate amount of the
Qualified Rate Stabilization Charges related to such Subsequent Rate
Stabilization Property, and shall have provided any information reasonably
requested by any of the foregoing Persons with respect to the Subsequent Rate
Stabilization Property then being conveyed to the Issuer;
(ii) the
Rate Stabilization Law, the Sale Agreement and the related Qualified Rate Order
shall be in full force and effect and a filing shall have been made pursuant
to
Section 7-542 of the Rate Stabilization Law;
(iii) as
of such Subsequent Transfer Date, the Seller shall not be insolvent and will
not
have been made insolvent by such sale and transfer and the Seller is not aware
of any pending insolvency with respect to itself;
(iv) the
Rating Agency Condition shall have been satisfied with respect to such sale
and
transfer;
34
(v) the
Seller shall have received and delivered to the Issuer and the Indenture Trustee
an opinion of outside tax counsel (as selected by the Seller, and in form and
substance reasonably satisfactory to the Issuer and the Indenture Trustee)
to
the effect that (A) the Issuer will not be subject to United States federal
income tax as an entity separate from its sole owner and that the Rate
Stabilization Bonds will be treated as debt of the Issuer's sole owner for
United States federal income tax purposes, (B) for United States federal income
tax purposes, the issuance of the Rate Stabilization Bonds will not result
in
gross income to the Seller, and (C) such issuance will not adversely
affect the characterization of any then outstanding Rate Stabilization Bonds
as
obligations of the Issuer's sole owner; the opinion of outside tax counsel
described above may, if the Seller so chooses, be conditioned on the receipt
by
the Seller of one or more letter rulings from the Internal Revenue Service
(unless the Internal Revenue Service has announced that it will not rule on
the
issues described in this paragraph) and in rendering such opinion outside tax
counsel shall be entitled to rely on the rulings contained in such letter
rulings and to rely on the representations made, and information supplied,
to
the Internal Revenue Service in connection with such letter
rulings;
(vi) as
of such Subsequent Transfer Date, no breach by the Seller of its
representations, warranties or covenants in the Sale Agreement and no Servicer
Default shall exist;
(vii)
as of such Subsequent Transfer Date, the
Issuer shall have sufficient funds available to pay the purchase price for
the
Subsequent Rate Stabilization Property to be conveyed on such date and all
conditions to the issuance of one or more Series of Rate Stabilization Bonds
intended to provide such funds set forth in Section 2.10 of this
Indenture shall have been satisfied;
(viii) the
Issuer shall have delivered to the Indenture Trustee an Officer’s Certificate
confirming the satisfaction of each condition precedent specified in this
Section 3.20(b);
(ix) (A)
the Issuer shall have delivered to the Rating Agencies any Opinions of Counsel
requested by the Rating Agencies and (B) the Issuer shall have delivered to
the
Indenture Trustee the Opinion of Counsel required by Section 3.06(c);
and
(x) The
Seller and the Issuer shall have taken any action required to maintain the
Lien
and the first priority perfected ownership interest of the Issuer in the
Subsequent Rate Stabilization Property and the proceeds thereof, and the Issuer
shall have taken any action required to maintain the Lien and the first priority
perfected security interest of the Indenture Trustee in the Subsequent Rate
Stabilization Property and the proceeds thereof.
SECTION
3.21. Inspection. The Issuer agrees that, on
reasonable prior notice, it will permit any representative of the Indenture
Trustee, during the Issuer’s normal business hours, to examine all the books of
account, records, reports and other papers of the Issuer, to make copies and
extracts therefrom, to cause such books to be audited annually by Independent
registered public accountants, and to discuss the Issuer’s affairs, finances and
accounts with the Issuer’s officers, employees and Independent registered public
accountants, all at such
35
reasonable
times and as often as may be reasonably requested. The Indenture
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 Indenture Trustee may reasonably determine that such
disclosure is consistent with its obligations
hereunder. Notwithstanding anything herein to the contrary, the
preceding sentence shall not be construed to prohibit (a) disclosure of any
and
all information that is or becomes publicly known, or information obtained
by
the Indenture Trustee from sources other than the Issuer, provided such parties
are rightfully in possession of such information, (b) disclosure of any and
all
information (i) if required to do so by any applicable statute, law, rule or
regulation, (ii) pursuant to any subpoena, civil investigative demand or similar
demand or request of any court or regulatory authority exercising its proper
jurisdiction, (iii) in any preliminary or final offering circular, registration
statement or other document a copy of which has been filed with the SEC or
(iv)
to any affiliate, independent or internal auditor, agent, employee or attorney
of the Indenture Trustee having a need to know the same, provided that such
parties agree to be bound by the confidentiality provisions contained in this
Section 3.21, or (c) any other disclosure authorized by the
Issuer.
SECTION
3.22. Sale Agreement, Servicing Agreement and Administration
Agreement Covenants.
(a) The
Issuer agrees to take all such lawful actions to enforce its rights under the
Sale Agreement, the Servicing Agreement and the Administration Agreement and
to
compel or secure the performance and observance by the Seller, the Servicer,
the
Administrator and BGE of each of their respective obligations to the Issuer
under or in connection with the Sale Agreement, the Servicing Agreement and
the
Administration Agreement in accordance with the terms thereof. So
long as no Event of Default occurs and is continuing, but subject to Section
3.22(f), the Issuer may exercise any and all rights, remedies, powers and
privileges lawfully available to the Issuer under or in connection with the
Sale
Agreement, the Servicing Agreement and the Administration Agreement;
provided that such action shall not adversely affect the interests of the
Holders in any material respect.
(b) If
an Event of Default occurs and is continuing, the Indenture Trustee may, and
at
the direction (which direction shall be in writing) of Holders of a majority
of
the Outstanding Amount of the Rate Stabilization Bonds of all Series or Tranches
affected thereby shall, exercise all rights, remedies, powers, privileges and
claims of the Issuer against the Seller, BGE, the Administrator and the
Servicer, as the case may be, under or in connection with the Sale Agreement,
the Servicing Agreement and the Administration Agreement, including the right
or
power to take any action to compel or secure performance or observance by the
Seller, BGE, the Administrator or the Servicer of each of their obligations
to
the Issuer thereunder and to give any consent, request, notice, direction,
approval, extension or waiver under the Sale Agreement, the Servicing Agreement
and the Administration Agreement, and any right of the Issuer to take such
action shall be suspended.
(c) Except
as set forth in Section 3.22(e), with the prior written consent of the
Indenture Trustee, the Administration Agreement, the Sale Agreement and the
Servicing Agreement may be amended in accordance with the provisions thereof,
so
long as the Rating Agency Condition is satisfied in connection therewith, at
any
time and from time to time,
36
without
the consent of the Holders of Rate Stabilization Bonds of the related Series;
provided that such amendment, as evidenced by an Opinion of Counsel of
external counsel of the Issuer, shall not adversely affect the interest of
any
Holder of Rate Stabilization Bonds of that Series in any material
respect.
(d) Except
as set forth in Section 3.22(e), if the Issuer, the Seller, BGE, the
Administrator, the Servicer or any other party to the respective agreement
proposes to amend, modify, waive, supplement, terminate or surrender, or agree
to any amendment, modification, waiver, supplement, termination or surrender
of,
the terms of the Sale Agreement, the Administration Agreement, or the Servicing
Agreement, or waive timely performance or observance by the Seller, BGE, the
Administrator or the Servicer under the Sale Agreement, the
Administration Agreement or the Servicing Agreement, in each case in such a
way
as would materially and adversely affect the interests of any Holder of Rate
Stabilization Bonds of any Series, the Issuer shall first notify the Rating
Agencies of the proposed amendment, modification, waiver, supplement,
termination or surrender and shall promptly notify the Indenture Trustee in
writing and the Indenture Trustee shall notify the Holders of the Rate
Stabilization Bonds of such Series of the proposed amendment, modification,
waiver, supplement, termination or surrender and whether the Rating Agency
Condition has been satisfied with respect thereto. The Indenture
Trustee shall consent to such proposed amendment, modification, waiver,
supplement, termination or surrender only with the prior written consent of
the
Holders of a majority of the Outstanding Amount of Rate Stabilization Bonds
of
the Series or Tranches materially and adversely affected thereby. If
any such amendment, modification, waiver, supplement, termination or surrender
shall be so consented to by the Indenture Trustee or such Holders, the Issuer
agrees to execute and deliver, in its own name and at its own expense, such
agreements, instruments, consents and other documents as shall be necessary
or
appropriate in the circumstances.
(e) If
the Issuer or the Servicer proposes to amend, modify, waive, supplement,
terminate or surrender, or to agree to any amendment, modification, supplement,
termination, waiver or surrender of, the process for True-Up Adjustments, the
Issuer shall notify the Indenture Trustee in writing and the Indenture Trustee
shall notify the Holders of the Rate Stabilization Bonds of such proposal and
the Indenture Trustee shall consent thereto only with the prior written consent
of the Holders of a majority of the Outstanding Amount of Rate Stabilization
Bonds of the Series or Tranches affected thereby and only if the Rating Agency
Condition has been satisfied with respect thereto.
(f)
Promptly following a default by the
Seller under the Sale Agreement, by the Administrator under the Administration
Agreement, by BGE or the occurrence of a Servicer Default under the Servicing
Agreement, and at the Issuer’s expense, the Issuer agrees to take all such
lawful actions as the Indenture Trustee may request to compel or secure the
performance and observance by each of the Seller, BGE, the Administrator or
the
Servicer of their obligations under and in accordance with the Sale Agreement,
the Servicing Agreement and the Administration Agreement, as the case may be,
in
accordance with the terms thereof, and to exercise any and all rights, remedies,
powers and privileges lawfully available to the Issuer under or in connection
with such agreements to the extent and in the manner directed by the Indenture
Trustee, including the transmission of notices of any default by the Seller,
BGE, the Administrator or the Servicer, respectively, thereunder and the
institution of legal or
37
administrative
actions or Proceedings to compel or secure performance of their obligations
under the Sale Agreement, the Servicing Agreement or the Administration
Agreement, as applicable.
Before
consenting to any amendment, modification, supplement, termination, waiver
or
surrender under Sections 3.22(d) or (e), the Indenture 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 such action is authorized or permitted by this
Indenture.
SECTION
3.23. Taxes. So long as any of the Rate
Stabilization Bonds are Outstanding, the Issuer shall pay all taxes, assessments
and governmental charges imposed upon it or any of its properties or assets
or
with respect to any of its franchises, business, income or property before
any
penalty accrues thereon if the failure to pay any such taxes, assessments and
governmental charges would, after any applicable grace periods, notices or
other
similar requirements, result in a Lien on the Rate Stabilization Bond
Collateral; provided that no such tax need be paid if the Issuer is
contesting the same in good faith by appropriate proceedings promptly instituted
and diligently conducted and if the Issuer has established appropriate reserves
as shall be required in conformity with generally accepted accounting
principles.
ARTICLE
IV
SATISFACTION
AND DISCHARGE; DEFEASANCE
SECTION
4.01. Satisfaction and Discharge of Indenture;
Defeasance.
(a) This
Indenture shall cease to be of further effect with respect to the Rate
Stabilization Bonds of any Series and the Indenture Trustee, on reasonable
written demand of and at the expense of the Issuer, shall execute proper
instruments acknowledging satisfaction and discharge of this Indenture with
respect to the Rate Stabilization Bonds of such Series, when:
(i)
either
(A) all
Rate Stabilization Bonds of such Series theretofore authenticated and delivered
(other than (1) Rate Stabilization Bonds that have been destroyed, lost or
stolen and that have been replaced or paid as provided in Section 2.06
and (2) Rate Stabilization Bonds for whose payment money has theretofore been
deposited in trust or segregated and held in trust by the Issuer and thereafter
repaid to the Issuer or discharged from such trust, as provided in the last
paragraph of Section 3.03) have been delivered to the Indenture Trustee
for cancellation; or
(B) either
(1) the Final Maturity Date has occurred with respect to all Rate Stabilization
Bonds of such Series not theretofore delivered to the Indenture Trustee for
cancellation or (2) such Rate Stabilization Bonds will be due and payable on
their respective Final Maturity Dates within the same calendar year, and in
either case, the Issuer has irrevocably deposited or caused to be irrevocably
deposited in trust with the Indenture Trustee (i) cash and/or (ii) U.S.
Government Obligations which through the scheduled payments of principal and
interest in respect thereof in accordance with their terms are in an amount
sufficient to pay
38
principal,
interest and premium, if any, on such Rate Stabilization Bonds not theretofore
delivered to the Indenture Trustee for cancellation and all other sums payable
hereunder by the Issuer with respect to such Rate Stabilization Bonds when
scheduled to be paid and to discharge the entire indebtedness on such Rate
Stabilization Bonds when due;
(ii) the
Issuer has paid or caused to be paid all other sums payable hereunder by the
Issuer with respect to such Series; and
(iii) the
Issuer has delivered to the Indenture Trustee an Officer’s Certificate, an
Opinion of Counsel of external counsel of the Issuer and (if required by the
TIA
or the Indenture Trustee) an Independent Certificate from a firm of registered
public accountants, each meeting the applicable requirements of Section
10.01(a) and each stating that all conditions precedent herein provided for
relating to the satisfaction and discharge of this Indenture with respect to
Rate Stabilization Bonds of such Series have been complied with.
(b) Subject
to Sections 4.01(c) and 4.02, the Issuer at any time may terminate
(i) all its obligations under this Indenture with respect to the Rate
Stabilization Bonds of any Series (“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, 3.18 and 3.19 and the
operation of Section 5.01(iii) (“Covenant Defeasance Option”) with
respect to any Series of Rate Stabilization Bonds. The Issuer may
exercise the Legal Defeasance Option with respect to any Series of Rate
Stabilization Bonds notwithstanding its prior exercise of the Covenant
Defeasance Option with respect to such Series.
If
the
Issuer exercises the Legal Defeasance Option with respect to any Series, the
maturity of the Rate Stabilization Bonds of such Series may not be accelerated
because of an Event of Default. If the Issuer exercises the Covenant
Defeasance Option with respect to any Series, the maturity of the Rate
Stabilization Bonds of such Series may not be accelerated because of an Event
of
Default specified in Section 5.01(iii).
Upon
satisfaction of the conditions set forth herein to the exercise of the Legal
Defeasance Option or the Covenant Defeasance Option with respect to any Series
of Rate Stabilization Bonds, the Indenture Trustee, on reasonable written demand
of and at the expense of the 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
Rate Stabilization Bonds, (iii) rights of Holders to receive payments of
principal, premium, if any, and interest, (iv) Sections 4.03 and
4.04, (v) the rights, obligations and immunities of the Indenture
Trustee
hereunder (including the rights of the Indenture Trustee under Section
6.07 and the obligations of the Indenture Trustee under Section 4.03)
and (vi) the rights of Holders as beneficiaries hereof with respect to the
property deposited with the Indenture Trustee payable to all or any of them,
shall survive until the Rate Stabilization Bonds of the Series as to which
this
Indenture or certain obligations hereunder have been satisfied and discharged
pursuant to Section
39
4.01(a)
or 4.01(b) have been paid in full. Thereafter the obligations
in Sections 6.07 and 4.04 with respect to such Series shall
survive.
SECTION
4.02. Conditions to Defeasance. The Issuer may
exercise the Legal Defeasance Option or the Covenant Defeasance Option with
respect to any Series of Rate Stabilization Bonds only if:
(a) the
Issuer has irrevocably deposited or caused to be irrevocably deposited in trust
with the Indenture Trustee (i) cash and/or (ii) U.S. Government Obligations
which through the scheduled payments of principal and interest in respect
thereof in accordance with their terms are in an amount sufficient to pay
principal, interest and premium, if any, on such Rate Stabilization Bonds not
therefore delivered to the Indenture Trustee for cancellation and all other
sums
payable hereunder by the Issuer with respect to such Rate Stabilization Bonds
when scheduled to be paid and to discharge the entire indebtedness on such
Rate
Stabilization Bonds when due;
(b) the
Issuer delivers to the Indenture Trustee a certificate from a nationally
recognized firm of Independent registered public accountants expressing its
opinion that the payments of principal and interest when due and without
reinvestment of 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 Rate Stabilization
Bonds
of such Series (i) principal in accordance with the Expected Amortization
Schedule therefor, (ii) interest when due and (iii) all other sums payable
hereunder by the Issuer with respect to such Rate Stabilization
Bonds;
(c) in
the case of the Legal Defeasance Option, ninety-five (95) days pass after the
deposit is made and during the ninety-five (95)-day period no Default specified
in Section 5.01(v) or (vi) occurs which is continuing at the end
of the period;
(d) no
Default has occurred and is continuing on the day of such deposit and after
giving effect thereto;
(e) in
the case of an exercise of the Legal Defeasance Option, the Issuer shall have
delivered to the Indenture Trustee an Opinion of Counsel of external counsel
of
the Issuer stating that (i) the 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 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 Rate Stabilization Bonds of
such
Series 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 Issuer shall
have
delivered to the Indenture Trustee an Opinion of Counsel of external counsel
of
the Issuer to the effect that the Holders of the Rate Stabilization Bonds of
such Series will not recognize income, gain or loss for federal income tax
purposes as a result of such covenant
40
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;
(g) the
Issuer delivers to the Indenture Trustee an Officer’s Certificate and an Opinion
of Counsel, each stating that all conditions precedent to the satisfaction
and
discharge of the Rate Stabilization Bonds of such Series to the extent
contemplated by this Article IV have been complied with;
(h) the
Issuer delivers to the Indenture Trustee an Opinion of Counsel of external
counsel of the Issuer to the effect that (i) in a case under the Bankruptcy
Code
in which BGE (or any of its Affiliates, other than the Issuer) is the debtor,
the court would hold that the deposited moneys or U.S. Government Obligations
would not be in the bankruptcy estate of BGE (or any of its Affiliates, other
than the Issuer, that deposited the moneys or U.S. Government Obligations);
and
(ii) in the event BGE (or any of its Affiliates, other than the Issuer, that
deposited the moneys or U.S. Government Obligations) were to be a debtor in
a
case under the Bankruptcy Code, the court would not disregard the separate
legal
existence of BGE (or any of its Affiliates, other than the Issuer, that
deposited the moneys or U.S. Government Obligations) and the Issuer so as to
order substantive consolidation under the Bankruptcy Code of the Issuer’s assets
and liabilities with the assets and liabilities of BGE or such other Affiliate;
and
(i)
the Rating Agency
Condition shall have been satisfied with respect to the exercise of any Legal
Defeasance Option or Covenant Defeasance Option.
Notwithstanding
any other provision of this Section 4.02, no delivery of moneys or U.S.
Government Obligations to the Indenture Trustee shall terminate any obligation
of the Issuer to the Indenture Trustee under this Indenture or the related
Series Supplement or any obligation of the Issuer to apply such moneys or U.S.
Government Obligations under Section 4.03 until such Rate Stabilization
Bonds shall have been redeemed in accordance with the provisions of this
Indenture and the related Series Supplement.
SECTION
4.03. Application of Trust Money. All moneys or
U.S. Government Obligations deposited with the Indenture Trustee pursuant to
Section 4.01 or 4.02 shall be held in trust and applied by it, in
accordance with the provisions of the Rate Stabilization Bonds and this
Indenture, to the payment, either directly or through any Paying Agent, as
the
Indenture Trustee is directed by the Issuer in writing, to the Holders of the
particular Rate Stabilization Bonds for the payment of which such moneys have
been deposited with the Indenture Trustee, of all sums due and to become due
thereon for principal, premium, if any, 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. Notwithstanding anything to
the contrary in this Article IV, the Indenture Trustee shall deliver or
pay to the Issuer from time to time upon Issuer Request any moneys or U.S.
Government Obligations held by it pursuant to Section 4.02 which, in the
opinion of a nationally recognized firm of Independent registered public
accountants expressed in a written certification thereof delivered to the
Indenture Trustee (and not at the cost or expense of the Indenture Trustee),
are
in excess of the amount thereof which would be required to be deposited for
the
purpose for which such moneys or U.S. Government Obligations were
41
deposited,
provided that any such payment shall be subject to the satisfaction of
the Rating Agency Condition.
SECTION
4.04. Repayment of Moneys Held by Paying Agent. In
connection with the satisfaction and discharge of this Indenture or the Covenant
Defeasance Option or Legal Defeasance Option with respect to the Rate
Stabilization Bonds of any Series, all moneys then held by any Paying Agent
other than the Indenture Trustee under the provisions of this Indenture with
respect to such Rate Stabilization Bonds shall, upon demand of the Issuer,
be
paid to the Indenture 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”
with respect to any Series, wherever used herein, means any
one or more of the
following events (whatever the reason for such Event of Default and whether
it
shall be voluntary or involuntary or be effected by operation of law or pursuant
to any judgment, decree or order of any court or any order, rule or regulation
of any administrative or governmental body):
(i)
default in the
payment of any interest on any Rate Stabilization Bond when the same becomes
due
and payable (whether such failure to pay interest is caused by a shortfall
in
Qualified Rate Stabilization Charges received or otherwise), and such default
shall continue for a period of five (5) Business Days; or
(ii) default
in the payment of the then unpaid principal of any Rate Stabilization Bond
of
any Tranche or Series on the Final Maturity Date for such Tranche or Series;
or
(iii) default
in the observance or performance of any covenant or agreement of the Issuer
made
in this Indenture (other than defaults specified in clauses (i) or
(ii) above), and such default shall continue or not be cured, for
a
period of thirty (30) days after the earlier of (A) the date that there shall
have been given, by registered or certified mail, to the Issuer by the Indenture
Trustee or to the Issuer and the Indenture Trustee by the Holders of at least
25
percent of the Outstanding Amount of the Rate Stabilization Bonds of such
Series, a written notice specifying such default and requiring it to be remedied
and stating that such notice is a “Notice of Default” hereunder or (B)
the date that the Issuer has actual knowledge of the default; or
(iv) any
representation or warranty of the Issuer made in this 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 the circumstance or condition in respect of
which
such misrepresentation or warranty was incorrect shall not have been eliminated
or otherwise cured, within thirty (30) days after the earlier of (A) the date
that there shall have been given, by registered or certified mail, to the Issuer
by the Indenture Trustee or to the
42
Issuer
and the Indenture Trustee by the Holders of at least 25 percent of the
Outstanding Amount of the Rate Stabilization Bonds of such Series, a written
notice specifying such incorrect representation or warranty and requiring it
to
be remedied and stating that such notice is a “Notice of Default”
hereunder or (B) the date the Issuer has actual knowledge of the default,
or
(v) the
filing of a decree or order for relief by a court having jurisdiction in the
premises in respect of the Issuer or any substantial part of the Rate
Stabilization Bond Collateral in an involuntary case or proceeding 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 Issuer or for any substantial
part of the Rate Stabilization Bond Collateral, or ordering the winding-up
or
liquidation of the Issuer’s affairs, and such decree or order shall remain
unstayed and in effect for a period of ninety (90) consecutive days;
or
(vi) the
commencement by the 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 Issuer to the entry of an order for relief in an involuntary
case or proceeding under any such law, or the consent by the Issuer to the
appointment or taking possession by a receiver, liquidator, assignee, custodian,
trustee, sequestrator or similar official of the Issuer or for any substantial
part of the Rate Stabilization Bond Collateral, or the making by the Issuer
of
any general assignment for the benefit of creditors, or the failure by the
Issuer generally to pay its debts as such debts become due, or the taking of
action by the Issuer in furtherance of any of the foregoing; or
(vii) any
act or failure to act by the State of Maryland or any of its agencies (including
the PSC), officers or employees which violates or is not in accordance with
the
State Pledge; or
(viii) any
other event designated as such in a Series Supplement.
The
Issuer shall deliver to a Responsible Officer of the Indenture Trustee and
to
the Rating Agencies, within five (5) days after a Responsible Officer of the
Issuer has knowledge of the occurrence thereof, written notice in the form
of an
Officer’s Certificate of any event (I) which is an Event of Default under
clauses (i), (ii), (v), (vi), (vii), or
(viii) or (II) which with the giving
of notice, the lapse of time, or
both, would become an Event of Default under clause (iii) or (iv),
including, in each case, the status of such Event of Default and what action
the
Issuer is taking or proposes to take with respect thereto. An Event
of Default with respect to one Series of Rate Stabilization Bonds will not
automatically trigger an Event of Default with respect to any other Outstanding
Series of Rate Stabilization Bonds.
SECTION
5.02. Acceleration of Maturity; Rescission and
Annulment. If an Event of Default (other than an Event of Default
under clause (vii) of Section 5.01) should occur and be continuing
with respect to any Series, then and in every such case the Indenture Trustee
or
the Holders representing not less than a majority of the Outstanding Amount
of
the Rate Stabilization Bonds of such Series may declare the Rate Stabilization
Bonds of such Series to be immediately due and payable, by a notice in writing
to the Issuer (and to the Indenture Trustee if
43
given
by
Holders), and upon any such declaration the unpaid principal amount of the
Rate
Stabilization Bonds of such Series, 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
Indenture Trustee as hereinafter in this Article V provided, the Holders
representing not less than a majority of the Outstanding Amount of the Rate
Stabilization Bonds of such Series, by written notice to the Issuer and the
Indenture Trustee, may rescind and annul such declaration and its consequences
if:
(i) the
Issuer has paid or deposited with the Indenture Trustee a sum sufficient to
pay:
(A) all
payments of principal of and premium, if any, and interest on all Rate
Stabilization Bonds of such Series due and owing at such time as if such Event
of Default had not occurred and was not continuing and all other amounts that
would then be due hereunder or upon such Rate Stabilization Bonds if the Event
of Default giving rise to such acceleration had not occurred; and
(B) all
sums paid or advanced by the Indenture Trustee hereunder and the reasonable
compensation, expenses, disbursements and advances of the Indenture Trustee
and
its agents and counsel; and
(ii) all
Events of Default with respect to such Series, other than the nonpayment of
the
principal of the Rate Stabilization Bonds of such Series 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
Indenture Trustee.
(a) If
an Event of Default under Section 5.01(i) or (ii) has occurred and
is continuing with respect to any Series, subject to Section 10.15, the
Indenture 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, subject to the
limitations on recourse set forth herein, may enforce the same against the
Issuer or other obligor upon such Rate Stabilization Bonds and collect in the
manner provided by law out of the property of the Issuer or other obligor upon
such Rate Stabilization Bonds, wherever situated the moneys payable, or the
related Series Rate Stabilization Bond Collateral and the proceeds thereof,
the
whole amount then due and payable on the Rate Stabilization Bonds of such Series
for principal, premium, if any, and interest, with interest upon the overdue
principal and premium, if any, 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 Rate Stabilization Bonds of such Series or
the
applicable Tranche of such Series and in addition thereto such
44
further
amount as shall be sufficient to cover the costs and expenses of collection,
including the reasonable compensation, expenses, disbursements and advances
of
the Indenture Trustee and its agents and counsel.
(b) If
an Event of Default (other than Event of Default under clause (vii) of
Section 5.01) occurs and is continuing with respect to any Series, the
Indenture Trustee shall, as more particularly provided in Section 5.04,
in its discretion, proceed to protect and enforce its rights and the rights
of
the Holders of such Series, by such appropriate Proceedings as the Indenture
Trustee shall deem most effective to protect and enforce any such rights,
whether for the specific enforcement of any covenant or agreement in this
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 Indenture
Trustee by this Indenture and the related Series Supplement or by law, including
foreclosing or otherwise enforcing the Lien of the Series Rate Stabilization
Bond Collateral securing such Series of Rate Stabilization Bonds or applying
to
a court of competent jurisdiction for sequestration of revenues arising with
respect to such Rate Stabilization Property.
(c) If
an Event of Default under Section 5.01(v) or (vi) has occurred and
is continuing, the Indenture Trustee, irrespective of whether the principal
of
any Rate Stabilization Bonds of any Series shall then be due and payable as
therein expressed or by declaration or otherwise and irrespective of whether
the
Indenture Trustee shall have made any demand pursuant to the provisions of
this
Section 5.04, shall be entitled and empowered, by intervention in any
Proceedings related to such Event of Default or otherwise:
(i)
to file and prove a claim or claims for the
whole amount of principal, premium, if any, and interest owing and unpaid in
respect of the Rate Stabilization Bonds and to file such other papers or
documents as may be necessary or advisable in order to have the claims of the
Indenture Trustee (including any claim for reasonable compensation to the
Indenture Trustee and each predecessor Indenture Trustee, and their respective
agents, attorneys and counsel, and for reimbursement of all expenses and
liabilities incurred, and all advances made, by the Indenture Trustee and each
predecessor Indenture Trustee, except as a result of negligence or bad faith)
and of the Holders allowed in such Proceedings;
(ii) unless
prohibited by applicable law and regulations, to vote on behalf of the Holders
in any election of a trustee in bankruptcy, a standby trustee or Person
performing similar functions in any such Proceedings;
(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 Holders and of the Indenture Trustee on their behalf; and
(iv) to
file such proofs of claim and other papers and documents as may be necessary
or
advisable in order to have the claims of the Indenture Trustee or the Holders
allowed in any judicial proceeding relative to the Issuer, its creditors and
its
property;
and
any
trustee, receiver, liquidator, custodian or other similar official in any such
Proceeding is hereby authorized by each of such Holders to make payments to
the
Indenture Trustee, and, in
45
the
event
that the Indenture Trustee shall consent to the making of payments directly
to
such Holders, to pay to the Indenture Trustee such amounts as shall be
sufficient to cover reasonable compensation to the Indenture Trustee, each
predecessor Indenture Trustee and their respective agents, attorneys and
counsel, and all other expenses and liabilities incurred, and all advances
made,
by the Indenture Trustee and each predecessor Indenture Trustee except as a
result of negligence or bad faith.
(d) Nothing
herein contained shall be deemed to authorize the Indenture Trustee to authorize
or consent to or vote for or accept or adopt on behalf of any Holder any plan
of
reorganization, arrangement, adjustment or composition affecting the Rate
Stabilization Bonds or the rights of any Holder thereof or to authorize the
Indenture Trustee to vote in respect of the claim of any Holder in any such
proceeding except, as aforesaid, to vote for the election of a trustee in
bankruptcy or similar Person.
(e) All
rights of action and of asserting claims under this Indenture, or under any
of
the Rate Stabilization Bonds of any Series, may be enforced by the Indenture
Trustee without the possession of any of the Rate Stabilization Bonds of such
Series or the production thereof in any trial or other Proceedings relative
thereto, and any such action or proceedings instituted by the Indenture 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 Indenture Trustee, each predecessor Indenture Trustee and
their respective agents and attorneys, shall be for the ratable benefit of
the
Holders of the Rate Stabilization Bonds of such Series.
(f)
In any Proceedings brought by
the Indenture Trustee (and also any Proceedings involving the interpretation
of
any provision of this Indenture to which the Indenture Trustee shall be a
party), the Indenture Trustee shall be held to represent all the Holders of
the
Rate Stabilization Bonds, and it shall not be necessary to make any Holder
a
party to any such Proceedings.
SECTION
5.04. Remedies; Priorities.
(a) If
an Event of Default (other than an Event of Default under clause (vii) of
Section 5.01) shall have occurred and be continuing with respect to a
Series, the Indenture 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 Rate Stabilization Bonds of such
Series or under this Indenture with respect thereto, whether by declaration
of
acceleration or otherwise, and, subject to the limitations on recovery set
forth
herein, enforce any judgment obtained, and collect from the Issuer or any other
obligor moneys adjudged due upon such Rate Stabilization Bonds;
(ii) institute
Proceedings from time to time for the complete or partial foreclosure of this
Indenture with respect to the Series Rate Stabilization Bond
Collateral;
(iii) exercise
any remedies of a secured party under the UCC, the Rate Stabilization Law or
any
other applicable law and take any other appropriate action to
46
protect
and enforce the rights and remedies of the Indenture Trustee and the Holders
of
the Rate Stabilization Bonds of such Series;
(iv) at
the written direction of the Holders of a majority of the Outstanding Amount
of
the Rate Stabilization Bonds of such Series, sell the Series Rate Stabilization
Bond 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; and
(v) exercise
all rights, remedies, powers, privileges and claims of the Issuer against the
Seller, the Administrator, BGE or the Servicer under or in connection with,
and
pursuant to the terms of, the Sale Agreement, the Administration Agreement
or
the Servicing Agreement;
provided,
however, that the Indenture Trustee may not sell or otherwise liquidate
any portion of the Rate Stabilization Bond Collateral following such an Event
of
Default, other than an Event of Default described in Section 5.01(i), or
(ii), with respect to any Series unless (A) the Holders of 100
percent of
the Outstanding Amount of the Rate Stabilization Bonds of all Series consent
thereto, (B) the proceeds of such sale or liquidation distributable to the
Holders of all Series are sufficient to discharge in full all amounts then
due
and unpaid upon such Rate Stabilization Bonds for principal, premium, if any,
and interest after taking into account payment of all amounts due prior thereto
pursuant to the priorities set forth in Section 8.02(e) or (C) the
Indenture Trustee determines that the Rate Stabilization Bond Collateral will
not continue to provide sufficient funds for all payments on the Rate
Stabilization Bonds of all Series as they would have become due if the Rate
Stabilization Bonds had not been declared due and payable, and the Indenture
Trustee obtains the written consent of Holders of 66-2/3 percent of the
Outstanding Amount of the Rate Stabilization Bonds of all Series. In
determining such sufficiency or insufficiency with respect to clause (B)
and (C), the Indenture Trustee may, but need not, obtain (at the Issuer’s
expense) 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 Rate Stabilization Bond
Collateral for such purpose.
(b) If
an Event of Default under clause (vii) of Section 5.01 shall have
occurred and be continuing, the Indenture Trustee, for the benefit of the
Secured Parties of the related Series, shall be entitled and empowered to the
extent permitted by applicable law, to institute or participate in Proceedings
necessary to compel performance of or to enforce the State Pledge and to collect
any monetary damages incurred by the Holders or the Indenture Trustee as a
result of any such Event of Default, and may prosecute any such Proceeding
to
final judgment or decree. Such remedy shall be the only remedy that
the Indenture Trustee may exercise if the only Event of Default that has
occurred and is continuing is an Event of Default under Section
5.01(vii).
(c) If
the Indenture 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(e).
SECTION
5.05. Optional Preservation of the Rate Stabilization Bond
Collateral. If the Rate Stabilization Bonds of any Series have
been declared to be due and payable under
47
Section
5.02 following an Event of Default and such declaration and its consequences
have not been rescinded and annulled, the Indenture Trustee may, but need not,
elect to maintain possession of the related Series Rate Stabilization Bond
Collateral. It is the desire of the parties hereto and the Holders
that there be at all times sufficient funds for the payment of principal of
and
premium, if any, and interest on the Rate Stabilization Bonds, and the Indenture
Trustee shall take such desire into account when determining whether or not
to
maintain possession of the Series Rate Stabilization Bond
Collateral. In determining whether to maintain possession of the
Series Rate Stabilization Bond Collateral or sell or liquidate the same, the
Indenture Trustee may, but need not, obtain (at the Issuer’s expense) 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 Series Rate Stabilization Bond
Collateral for such purpose.
SECTION
5.06. Limitation of Suits. No Holder of any Rate
Stabilization Bond of any Series shall have any right to institute any
Proceeding, judicial or otherwise, to avail itself of any remedies provided
in
the Rate Stabilization Law or to avail itself of the right to foreclose on
the
Rate Stabilization Bond Collateral or otherwise enforce the Lien and the
security interest on the Rate Stabilization Bond Collateral with respect to
this
Indenture and the related Series Supplement, or for the appointment of a
receiver or trustee, or for any other remedy hereunder, unless:
(i)
such Holder previously has
given written notice to the Indenture Trustee of a continuing Event of Default
with respect to such Series;
(ii) the
Holders of not less than a majority of the Outstanding Amount of the Rate
Stabilization Bonds of all Series have made written request to the Indenture
Trustee to institute such Proceeding in respect of such Event of Default in
its
own name as Indenture Trustee hereunder;
(iii) such
Holder or Holders have offered to the Indenture Trustee indemnity satisfactory
to it against the costs, expenses and liabilities to be incurred in complying
with such request;
(iv) the
Indenture Trustee for sixty (60) days after its receipt of such notice, request
and offer of indemnity has failed to institute such Proceedings;
and
(v) no
direction inconsistent with such written request has been given to the Indenture
Trustee during such sixty-day period by the Holders of a majority of the
Outstanding Amount of the Rate Stabilization Bonds of all Series;
it
being
understood and intended that no one or more Holders shall have any right in
any
manner whatever by virtue of, or by availing of, any provision of this Indenture
to affect, disturb or prejudice the rights of any other Holders or to obtain
or
to seek to obtain priority or preference over any other Holders or to enforce
any right under this Indenture, except in the manner herein
provided.
In
the
event the Indenture Trustee shall receive conflicting or inconsistent requests
and indemnity from two or more groups of Holders, each representing less than
a
48
majority
of the Outstanding Amount of the Rate Stabilization Bonds of all Series, the
Indenture Trustee in its sole discretion may determine what action, if any,
shall be taken, notwithstanding any other provisions of this
Indenture.
SECTION
5.07. Unconditional Rights of Holders To Receive Principal,
Premium, if any, and Interest. Notwithstanding any other
provisions in this Indenture, the Holder of any Rate Stabilization Bond shall
have the right, which is absolute and unconditional, (a) to receive payment
of
(i) the interest, if any, on such Rate Stabilization Bond on the due dates
thereof expressed in such Rate Stabilization Bond or in this Indenture or (ii)
the unpaid principal, if any, of such Rate Stabilization Bonds on the Final
Maturity Date 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
Indenture Trustee or any Holder has instituted any Proceeding to enforce any
right or remedy under this Indenture and such Proceeding has been discontinued
or abandoned for any reason or has been determined adversely to the Indenture
Trustee or to such Holder, then and in every such case the Issuer, the Indenture
Trustee and the Holders 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 Indenture Trustee and the Holders
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 Indenture Trustee or to the
Holders 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 Indenture Trustee or any Holder 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
Vor by law to the Indenture Trustee or to the Holders may be exercised from
time to time, and as often as may be deemed expedient, by the Indenture Trustee
or by the Holders, as the case may be.
SECTION
5.11. Control by Holders. The Holders of not less
than a majority of the Outstanding Amount of the Rate Stabilization Bonds of
an
affected Series or Tranche shall have the right to direct the time, method
and
place of conducting any Proceeding for any remedy available to the Indenture
Trustee with respect to the Rate Stabilization Bonds of such Series or Tranche
or Tranches or exercising any trust or power conferred on the Indenture Trustee
with respect to such Series or Tranche or Tranches; provided
that:
(i)
such direction shall not be in
conflict with any rule of law or with this Indenture and shall not involve
the
Indenture Trustee in any personal liability or expense;
49
(ii) subject
to other conditions specified in Section 5.04, any direction to the
Indenture Trustee to sell or liquidate any Series Rate Stabilization Bond
Collateral shall be by the Holders representing not less than 100 percent of
the
Outstanding Amount of the Rate Stabilization Bonds of the affected
Series;
(iii) if
the conditions set forth in Section 5.05 have been satisfied and the
Indenture Trustee elects to retain the Series Rate Stabilization Bond Collateral
pursuant to Section 5.05, then any direction to the Indenture Trustee by
Holders representing less than 100 percent of the Outstanding Amount of the
Rate
Stabilization Bonds of all Series to sell or liquidate the Series Rate
Stabilization Bond Collateral shall be of no force and effect; and
(iv) the
Indenture Trustee may take any other action deemed proper by the Indenture
Trustee that is not inconsistent with such direction;
provided,
however, that, the Indenture Trustee’s duties shall be subject to
Section 6.01, and the Indenture Trustee need not take any action that it
determines might involve it in liability or might materially adversely affect
the rights of any Holders not consenting to such action. Furthermore
and without limiting the foregoing, the Indenture Trustee shall not
be required to take any action for which it reasonably believes that it will
not
be indemnified to its satisfaction against any cost, expense or
liabilities.
SECTION
5.12. Waiver of Past Defaults. Prior to the
declaration of the acceleration of the maturity of the Rate Stabilization Bonds
of all Series as provided in Section 5.02, the Holders representing not
less than a majority of the Outstanding Amount of the Rate Stabilization Bonds
of an affected Series or Tranche may waive any past Default or Event of Default
and its consequences except a Default (a) in payment of principal of or premium,
if any, or interest on any of the Rate Stabilization Bonds or (b) in respect
of
a covenant or provision hereof which cannot be modified or amended without
the
consent of the Holder of each Rate Stabilization Bond of all Series or Tranches
affected. In the case of any such waiver, the Issuer, the Indenture
Trustee and the Holders 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
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
Indenture agree, and each Holder of any Rate Stabilization Bond 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 Indenture, or in any suit against the Indenture Trustee for any action
taken, suffered or omitted by it as Indenture 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,
50
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 5.13 shall not apply
to (a) any suit instituted by the Indenture Trustee, (b) any suit instituted
by
any Holder, or group of Holders, in each case holding in the aggregate more
than
ten (10) percent of the Outstanding Amount of the Rate Stabilization Bonds
of a
Series or (c) any suit instituted by any Holder for the enforcement of the
payment of (i) interest on any Rate Stabilization Bond on or after the due
dates
expressed in such Rate Stabilization Bond and in this Indenture or (ii) the
unpaid principal, if any, of any Rate Stabilization Bond on or after the Final
Maturity Date therefor.
SECTION
5.14. Waiver of Stay or Extension Laws. The 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 Indenture; and the 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 Indenture 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 Rate Stabilization Bonds. The
Indenture Trustee’s right to seek and recover judgment on the Rate Stabilization
Bonds or under this Indenture shall not be affected by the seeking, obtaining
or
application of any other relief under or with respect to this
Indenture. Neither the Lien of this Indenture nor any rights or
remedies of the Indenture Trustee or the Holders shall be impaired by the
recovery of any judgment by the Indenture Trustee against the Issuer or by
the
levy of any execution under such judgment upon any portion of the Rate
Stabilization Bond Collateral or any other assets of the Issuer.
ARTICLE
VI
THE
INDENTURE TRUSTEE
SECTION
6.01. Duties of Indenture Trustee.
(a) If
an Event of Default has occurred and is continuing, the Indenture Trustee shall
exercise the rights and powers vested in it by this 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 Indenture Trustee undertakes
to perform such duties and only such duties as are specifically set forth in
this Indenture and no implied covenants or obligations shall be read into this
Indenture against the Indenture Trustee; and
(ii) in
the absence of bad faith on its part, the Indenture 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 Indenture
Trustee and conforming to the requirements of this Indenture.
51
(c) The
Indenture Trustee may not be relieved from liability for its own negligent
action, its own bad faith, its own negligent failure to act or its own willful
misconduct, except that:
(i)
this paragraph (c) does not limit the
effect of paragraph (b) of this Section 6.01;
(ii) the
Indenture Trustee shall not be liable for any error of judgment made in good
faith by a Responsible Officer unless it is proved that the Indenture Trustee
was negligent in ascertaining the pertinent facts; and
(iii) the
Indenture 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
hereunder.
(d) Every
provision of this Indenture that in any way relates to the Indenture Trustee
is
subject to paragraphs (a), (b) and (c) of this Section
6.01.
(e) The
Indenture Trustee shall not be liable for interest on any money received by
it
except as the Indenture Trustee may agree in writing with the
Issuer.
(f) Money
held in trust by the Indenture Trustee need not be segregated from other funds
held by the Indenture Trustee except to the extent required by law or the terms
of this Indenture, the Sale Agreement, the Servicing Agreement or the
Administration Agreement
(g) No
provision of this Indenture shall require the Indenture Trustee to expend or
risk its own funds or otherwise incur financial liability in the performance
of
any of its duties hereunder or in the exercise of any of its rights or powers,
if it shall have reasonable grounds to believe that repayments of such funds
or
indemnity satisfactory to it against such risk or liability is not reasonably
assured to it.
(h) Every
provision of this Indenture relating to the conduct or affecting the liability
of or affording protection to the Indenture Trustee shall be subject to the
provisions of this Section 6.01 and to the provisions of the
TIA.
(i)
In the event that the Indenture
Trustee is also acting as Paying Agent, Rate Stabilization Bond Registrar or
Securities Intermediary hereunder, the protections of this Article VI
shall also be afforded to the Indenture Trustee in its capacity as Paying Agent,
Rate Stabilization Bond Registrar or Securities Intermediary.
(j)
Except for the express duties of
the Indenture Trustee with respect to the administrative functions set forth
in
the Basic Documents, the Indenture Trustee shall have no obligation to
administer, service or collect Rate Stabilization Property or to maintain,
monitor or otherwise supervise the administration, servicing or collection
of
the Rate Stabilization Property.
(k) Under
no circumstance shall the Indenture Trustee be liable for any indebtedness
of
the Issuer, the Servicer or the Seller evidenced by or arising under the Rate
Stabilization Bonds or the Basic Documents.
52
(l)
On or before March 15th of each
fiscal
year ending December 31, the Indenture Trustee shall (i) deliver to the Issuer
a
report (in form and substance reasonably satisfactory to the Issuer and
addressed to the Issuer and signed by an authorized officer of the Indenture
Trustee) regarding the Indenture Trustee’s assessment of compliance, during the
immediately preceding fiscal year ending December 31, with each of the
applicable servicing criteria specified on Exhibit E hereto as required
under Rules 13a-18 and 15d-18 of the Exchange Act and Item 1122 of Regulation
AB
and (ii) deliver to the Issuer a report of an Independent registered public
accounting firm reasonably acceptable to the Issuer that attests to and reports
on, in accordance with Rules 1-02(a)(3) and 2-02(g) of Regulation S-X under
the
Securities Act and the Exchange Act, the assessment of compliance made by the
Indenture Trustee and delivered pursuant to clause (i).
SECTION
6.02. Rights of Indenture
Trustee. b) The Indenture Trustee may conclusively
rely and shall be fully protected in relying on any document believed by it
to
be genuine and to have been signed or presented by the proper
person. The Indenture Trustee need not investigate any fact or matter
stated in such document.
(b) Before
the Indenture Trustee acts or refrains from acting, it may require and shall
be
entitled to receive an Officer’s Certificate or an Opinion of Counsel of
external counsel of the Issuer (at no cost or expense to the Indenture Trustee)
that such action is required or permitted hereunder. The Indenture
Trustee shall not be liable for any action it takes or omits to take in good
faith in reliance on such Officer’s Certificate or Opinion of
Counsel.
(c) The
Indenture 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 Indenture 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
Indenture 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 Indenture Trustee’s conduct does not
constitute willful misconduct, negligence or bad faith.
(e) The
Indenture Trustee may consult with counsel, and the advice or opinion of counsel
with respect to legal matters relating to this Indenture and the Rate
Stabilization Bonds shall be full and complete authorization and protection
from
liability in respect to any action taken, omitted or suffered by it hereunder
in
good faith and in accordance with the advice or opinion of such
counsel.
(f)
The Indenture Trustee shall be
under no obligation to take any action or exercise any of the rights or powers
vested in it by this Indenture or any other Basic Document, or to institute,
conduct or defend any litigation hereunder or thereunder or in relation hereto
or thereto, at the request, order or direction of any of the Bondholders
pursuant to the provisions of this Indenture and the related Series Supplement
or otherwise, unless it shall have grounds to believe in its discretion that
security or indemnity against the costs, expenses and liabilities which may
be
incurred therein or thereby is to its satisfaction assured to it.
53
(g) In
order to comply with laws, rules, regulations and executive orders in effect
from time to time applicable to banking institutions, including those relating
to the funding of terrorist activities and money laundering (“Applicable Law”),
the Indenture Trustee is required to obtain, verify and record certain
information relating to individuals and entities which maintain a business
relationship with the Indenture Trustee. Accordingly, each of the
parties agrees to provide to the Indenture Trustee upon its request from time
to
time such identifying information as may be available for such party in order
to
enable the Indenture Trustee to comply with Applicable Law.
SECTION
6.03. Individual Rights of Indenture Trustee. The
Indenture Trustee in its individual or any other capacity may become the owner
or pledgee of Rate Stabilization Bonds and may otherwise deal with the Issuer
or
its Affiliates with the same rights it would have if it were not Indenture
Trustee. Any Paying Agent, Rate Stabilization Bond Registrar,
co-registrar or co-paying agent or agent appointed under Section 3.02 may
do the same with like rights. However, the Indenture Trustee must
comply with Sections 6.11 and 6.12.
SECTION
6.04. Indenture Trustee’s Disclaimer. The Indenture
Trustee shall not be responsible for and makes no representation (other than
as
set forth in Section 6.13) as to the validity or adequacy of this
Indenture or the Rate Stabilization Bonds, it shall not be accountable for
the
Issuer’s use of the proceeds from the Rate Stabilization Bonds, and it shall not
be responsible for any statement of the Issuer in the Indenture or in any
document issued in connection with the sale of the Rate Stabilization Bonds
or
in the Rate Stabilization Bonds other than the Indenture Trustee’s certificate
of authentication. The Indenture Trustee shall not be responsible for
the form, character, genuineness, sufficiency, value or validity of any of
the
Rate Stabilization Bond Collateral, or for or in respect of the Rate
Stabilization Bonds (other than the certificate of authentication for the Rate
Stabilization Bonds) or the Basic Documents and the Indenture Trustee shall
in
no event assume or incur any liability, duty or obligation to any Holder, other
than as expressly provided in this Indenture. The Indenture Trustee
shall not be liable for the default or misconduct of the Issuer, the Seller,
the
Servicer or any other Person under the Basic Documents or otherwise, and the
Indenture Trustee shall have no obligation or liability to perform the
obligations of such Persons.
SECTION
6.05. Notice of Defaults.
(a) If
a Default occurs and is continuing with respect to any Series and if it is
actually known to a Responsible Officer of the Indenture Trustee, the Indenture
Trustee shall mail to each Rating Agency and each Bondholder of all Series
notice of the Default within ninety (90) days after actual notice of such
Default was received by a Responsible Officer of the Indenture
Trustee. Except in the case of a Default in payment of principal of
and premium, if any, or interest on any Rate Stabilization Bond, the Indenture
Trustee may withhold the notice if and so long as a committee of its Responsible
Officers in good faith determines that withholding the notice is in the
interests of Holders. Except for an Event of Default under
Sections 5.01(i) or (ii) that occur at a time when the Indenture
Trustee is acting as the Paying Agent, and except as provided in the first
sentence of this Section 6.05, in no event shall the Indenture Trustee be
deemed to have knowledge of a Default.
54
(b) If
a Default occurs and is continuing with respect to any Series and if it is
actually known to a Responsible Officer of the Indenture Trustee, the Indenture
Trustee shall promptly, but no more frequently than monthly, mail to the Issuer
notice of any legal fees or other expenses incurred by the Indenture Trustee
in
defending or prosecuting any actual or threatened litigation, including any
administrative proceeding, in respect of the Rate Stabilization Bonds or the
Rate Stabilization Bond Collateral relating to such Series.
SECTION
6.06. Reports by Indenture Trustee to Holders.
(a) So
long as Rate Stabilization Bonds are Outstanding and the Indenture Trustee
is
the Rate Stabilization Bond Registrar and Paying Agent, it shall deliver to
each
relevant current or former Holder such information in its possession as required
by applicable Requirements of Law in connection with such Holder’s preparation
of its federal income and any applicable local or state tax
returns. If the Rate Stabilization Bond Registrar and Paying Agent is
other than the Indenture Trustee, such Rate Stabilization Bond Registrar and
Paying Agent, within the prescribed period of time for tax reporting purposes
after the end of each calendar year, shall deliver to each relevant current
or
former Holder such information in its possession as may be required to enable
such Holder to prepare its federal income and any applicable local or state
tax
returns.
(b) With
respect to each Series of Rate Stabilization Bonds, on or prior to each Payment
Date or Special Payment Date therefor, the Indenture Trustee will deliver to
each Holder of such Rate Stabilization Bonds on such Payment Date or Special
Payment Date a statement as provided and prepared by the Servicer which will
include (to the extent applicable) the following information (and any other
information so specified in the applicable Series Supplement) as to the Rate
Stabilization Bonds of such Series with respect to such Payment Date or Special
Payment Date or the period since the previous Payment Date, as
applicable:
(i)
the amount of the payment to Holders
allocable to principal, if any;
(ii) the
amount of the payment to Holders allocable to interest;
(iii) the
aggregate Outstanding Amount of such Rate Stabilization Bonds, before and after
giving effect to any payments allocated to principal reported under clause
(i) above;
(iv) the
difference, if any, between the amount specified in clause (iii) above
and the Outstanding Amount specified in the related Expected Amortization
Schedule;
(v) any
other transfers and payments to be made on such Payment Date or Special Payment
Date, including amounts paid to the Indenture Trustee and to the Servicer;
and
(vi) the
amounts on deposit in the applicable Capital Subaccount and the applicable
Excess Funds Subaccount, after giving effect to the foregoing
payments.
(c) The
Issuer shall send a copy of each of the Certificate of Compliance delivered
to
it pursuant to Section 3.03 of the Servicing Agreement and the Annual
Accountant’s
55
Report
delivered to it pursuant to Section 3.04 of the Servicing Agreement to
the Rating Agencies. A copy of such certificate and report may be
obtained by any Holder by a request in writing to the Indenture
Trustee.
(d) The
Indenture Trustee may consult with counsel, and the advice or opinion of such
counsel with respect to legal matters relating to this Indenture and the Rate
Stabilization Bonds shall be full and complete authorization and protection
from
liability with respect of any action taken, omitted or suffered by it hereunder
in good faith and in accordance with the advice or opinion of such
counsel.
SECTION
6.07. Compensation and Indemnity. The Issuer shall
pay to the Indenture Trustee from time to time reasonable compensation for
its
services. The Indenture Trustee’s compensation shall not be limited
by any law on compensation of a trustee of an express trust. The
Issuer shall reimburse the Indenture Trustee for all reasonable out-of-pocket
expenses 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
Indenture Trustee’s agents, counsel, accountants and experts. The
Issuer shall indemnify and hold harmless the Indenture Trustee and its officers,
directors, employees and agents against any and all cost, damage, loss,
liability, tax or expense (including reasonable attorney’s fees and expenses)
incurred by it in connection with the administration and the enforcement of
this
Indenture and the Indenture Trustee’s rights, powers and obligations under this
Indenture and the related Series Supplement and the performance of its duties
hereunder and obligations under or pursuant to this Indenture and the related
Series Supplement. The Indenture Trustee shall notify the Issuer as
soon as is reasonably practicable of any claim for which it may seek
indemnity. The Issuer shall defend the claim and the Indenture
Trustee may have separate counsel and the Issuer shall pay the reasonable fees
and expenses of such counsel. The Issuer need not reimburse any
expense or indemnify against any loss, liability or expense incurred by the
Indenture Trustee through the Indenture Trustee’s own willful misconduct,
negligence or bad faith. The rights of the Indenture Trustee set
forth in this Section 6.07 are subject to and limited by the priority of
payments set forth in Section 8.02(e).
The
payment obligations to the Indenture Trustee pursuant to this Section
6.07 shall survive the discharge of this Indenture and any Series Supplement
or the earlier resignation or removal of the Indenture Trustee. When
the Indenture Trustee incurs expenses after the occurrence of a Default
specified in Section 5.01(v) or (vi) with respect to the Issuer,
the expenses are intended to constitute expenses of administration under the
Bankruptcy Code or any other applicable federal or state bankruptcy, insolvency
or similar law.
SECTION
6.08. Replacement of Indenture Trustee and Securities
Intermediary.
(a) The
Indenture Trustee may resign at any time upon thirty (30) days’ prior written
notice to the Issuer subject to clause (c) below. The Holders
of a majority of the Outstanding Amount of the Rate Stabilization Bonds of
all
Series may remove the Indenture Trustee by so notifying the Indenture Trustee
and may appoint a successor Indenture Trustee. The Issuer shall
remove the Indenture Trustee if:
(i)
the Indenture Trustee fails to
comply with Section 6.11;
56
(ii) the
Indenture Trustee is adjudged a bankrupt or insolvent;
(iii) a
receiver or other public officer takes charge of the Indenture Trustee or its
property;
(iv) the
Indenture Trustee otherwise becomes incapable of acting; or
(v) the
Indenture Trustee fails to provide to the Issuer any information reasonably
requested by the Issuer pertaining to the Indenture Trustee and necessary for
the Issuer or the Sponsor to comply with its reporting obligations under the
Exchange Act and Regulation AB and such failure is not resolved to the Issuer’s
and the Indenture Trustee’s mutual satisfaction within a reasonable period of
time.
Any
removal or resignation of the Indenture Trustee shall also constitute a removal
or resignation of the Securities Intermediary.
(b) If
the Indenture Trustee gives notice of resignation or is removed or if a vacancy
exists in the office of Indenture Trustee for any reason (the Indenture Trustee
in such event being referred to herein as the retiring Indenture Trustee),
the
Issuer shall promptly appoint a successor Indenture Trustee and Securities
Intermediary.
(c) A
successor Indenture Trustee shall deliver a written acceptance of its
appointment as the Indenture Trustee and as the Securities Intermediary to
the
retiring Indenture Trustee and to the Issuer. Thereupon the
resignation or removal of the retiring Indenture Trustee shall become effective,
and the successor Indenture Trustee shall have all the rights, powers and duties
of the Indenture Trustee and Securities Intermediary, as applicable, under
this
Indenture. No resignation or removal of the Indenture Trustee
pursuant to this Section 6.08 shall become effective until acceptance of
the appointment by a successor Indenture Trustee having the qualifications
set
forth in Section 6.11. The successor Indenture Trustee shall
mail a notice of its succession to Holders. The retiring Indenture
Trustee shall promptly transfer all property held by it as Indenture Trustee
(including unless otherwise agreed by the successor Indenture Trustee, all
TPC
Deposit Accounts held by the Indenture Trustee) to the successor Indenture
Trustee.
(d) If
a successor Indenture Trustee does not take office within sixty (60) days after
the retiring Indenture Trustee resigns or is removed, the retiring Indenture
Trustee, the Issuer or the Holders of a majority in Outstanding Amount of the
Rate Stabilization Bonds of all Series may petition any court of competent
jurisdiction for the appointment of a successor Indenture Trustee.
(e) If
the Indenture Trustee fails to comply with Section 6.11, any Holder may
petition any court of competent jurisdiction for the removal of the Indenture
Trustee and the appointment of a successor Indenture Trustee.
(f)
Notwithstanding the
replacement of the Indenture Trustee pursuant to this Section 6.08, the
Issuer’s obligations under Section 6.07 shall continue for the benefit of
the retiring Indenture Trustee.
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SECTION
6.09. Successor Indenture Trustee by Merger. If the
Indenture 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 or banking association without any further act shall be the
successor Indenture Trustee; provided, however, that if such successor
Indenture Trustee is not eligible under Section 6.11, then the
successor Indenture Trustee shall be replaced in accordance with
Section 6.08. Notice of any such event shall be promptly
given to each Rating Agency by the successor Indenture Trustee and any agent
in
Ireland appointed pursuant to Section 3.02.
In
case
at the time such successor or successors by merger, conversion, consolidation
or
transfer shall succeed to the trusts created by this Indenture any of the Rate
Stabilization Bonds shall have been authenticated but not delivered, any such
successor to the Indenture Trustee may adopt the certificate of authentication
of any predecessor trustee, and deliver such Rate Stabilization Bonds so
authenticated; and in case at that time any of the Rate Stabilization Bonds
shall not have been authenticated, any successor to the Indenture Trustee may
authenticate such Rate Stabilization Bonds either in the name of any predecessor
hereunder or in the name of the successor to the Indenture Trustee; and in
all
such cases such certificates shall have the full force which it is anywhere
in
the Rate Stabilization Bonds or in this Indenture provided that the certificate
of the Indenture Trustee shall have.
SECTION
6.10. Appointment of Co-Trustee or Separate
Trustee.
(a) Notwithstanding
any other provisions of this Indenture, at any time, for the purpose of meeting
any legal requirement of any jurisdiction in which any part of the trust created
by this Indenture or the Rate Stabilization Bond Collateral may at the time
be
located, the Indenture 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
trust created by this Indenture or the Rate Stabilization Bond Collateral,
and
to vest in such Person or Persons, in such capacity and for the benefit of
the
Secured Parties, such title to the Rate Stabilization Bond Collateral, or any
part hereof, and, subject to the other provisions of this Section 6.10,
such powers, duties, obligations, rights and trusts as the Indenture 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 Holders of the
appointment of any co-trustee or separate trustee shall be required under
Section 6.08.
(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 Indenture Trustee shall be conferred
or imposed upon and exercised or performed by the Indenture 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 Indenture
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
Indenture 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 Rate
58
Stabilization
Bond 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 Indenture Trustee;
(ii) no
trustee hereunder shall be personally liable by reason of any act or omission
of
any other trustee hereunder; and
(iii) the
Indenture 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 Indenture 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 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 Indenture Trustee or separately, as may be provided therein,
subject to all the provisions of this Indenture, specifically including every
provision of this Indenture relating to the conduct of, affecting the liability
of, or affording protection to, the Indenture Trustee. Every such
instrument shall be filed with the Indenture Trustee.
(d) Any
separate trustee or co-trustee may at any time constitute the Indenture 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 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
Indenture Trustee, to the extent permitted by law, without the appointment
of a
new or successor trustee.
SECTION
6.11. Eligibility; Disqualification. The Indenture
Trustee shall at all times satisfy the requirements of TIA § 310(a)(1) and
§ 310(a)(5) and Section 26(a)(1) of the Investment Company
Act. The Indenture 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 “Baa3” or better by
Moody’s “BBB-” or better by Standard & Poor’s and, if Fitch provides a
rating thereon, “BBB-” or better by Fitch. The Indenture Trustee
shall comply with TIA § 310(b), including the optional provision permitted by
the second sentence of TIA § 310(b)(9); provided, however, that
there shall be excluded from the operation of TIA § 310(b)(1) any indenture or
indentures under which other securities of the Issuer are outstanding if the
requirements for such exclusion set forth in TIA § 310(b)(1) are
met.
SECTION
6.12. Preferential Collection of Claims Against
Issuer. The Indenture Trustee shall comply with TIA § 311(a),
excluding any creditor relationship listed in TIA § 311(b). An
Indenture Trustee who has resigned or been removed shall be subject to TIA
§
311(a) to the extent indicated therein.
SECTION
6.13. Representations and Warranties of Indenture
Trustee. The Indenture Trustee hereby represents and warrants
that:
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(a) the
Indenture Trustee is a banking corporation validly existing and in good standing
under the laws of the State of New York; and
(b) the
Indenture Trustee has full power, authority and legal right to execute, deliver
and perform this Indenture and the Basic Documents to which the Indenture
Trustee is a party and has taken all necessary action to authorize the
execution, delivery, and performance by it of this Indenture and such Basic
Documents.
SECTION
6.14. Annual Report by Independent Registered Public
Accountants. In the event the firm of Independent registered
public accountants requires the Indenture Trustee to agree or consent to the
procedures performed by such firm pursuant to Section 3.05 of the
Servicing Agreement, the Indenture Trustee shall deliver such letter of
agreement or consent in conclusive reliance upon the direction of the Issuer
in
accordance with Section 3.05 of the Servicing Agreement. In
the event such firm requires the Indenture Trustee to agree to the procedures
performed by such firm, the Issuer shall direct the Indenture Trustee in writing
to so agree; it being understood and agreed that the Indenture Trustee will
deliver such letter of agreement in conclusive reliance upon the direction
of
the Issuer, and the Indenture 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.
SECTION
6.15. Custody of Rate Stabilization Bond
Collateral. The Indenture Trustee shall hold such of the Rate
Stabilization Bond Collateral (and any other collateral that may be granted
to
the Indenture Trustee) as consists of instruments, deposit accounts, negotiable
documents, money, goods, letters of credit, and advices of credit in the State
of New York. The Indenture Trustee shall hold such of the Rate
Stabilization Bond Collateral as constitute investment property through the
Securities Intermediary (which, as of the date hereof, is Deutsche Bank Trust
Company Americas). The initial Securities Intermediary, hereby agrees
(and each future Securities Intermediary shall agree) with the Indenture Trustee
that (a) such investment property shall at all times be credited to a securities
account of the Indenture Trustee, (b) the Securities Intermediary shall treat
the Indenture Trustee as entitled to exercise the rights that comprise each
financial asset credited to such securities account, (c) all property credited
to such securities account shall be treated as a financial asset, (d) the
Securities Intermediary shall comply with entitlement orders originated by
the
Indenture Trustee without the further consent of any other person or entity,
(e)
the Securities Intermediary will not agree with any person other than the
Indenture Trustee to comply with entitlement orders originated by such other
person, (f) such securities accounts and the property credited thereto shall
not
be subject to any Lien, right of set-off in favor of the Securities Intermediary
or anyone claiming through it (other than the Indenture Trustee), and (g) such
agreement shall be governed by the internal laws of the State of New
York. Terms used in the preceding sentence that are defined in the
UCC and not otherwise defined herein shall have the meaning set forth in the
UCC. Except as permitted by this Section 6.15, or elsewhere in
this Indenture, the Indenture Trustee shall not hold Rate Stabilization Bond
Collateral through an agent or a nominee.
60
ARTICLE
VII
HOLDERS’
LISTS AND REPORTS
SECTION
7.01. Issuer To Furnish Indenture Trustee Names and Addresses of
Holders. The Issuer will furnish or cause to be furnished to the
Indenture Trustee (a) not more than five (5) days after the earlier of (i)
each
Record Date with respect to each Series and (ii) six (6) months after the last
Record Date with respect to each Series, a list, in such form as the Indenture
Trustee may reasonably require, of the names and addresses of the Bondholders
of
such Series as of such Record Date, (b) at such other times as the Indenture
Trustee may request in writing, within thirty (30) days after receipt by the
Issuer of any such request, a list of similar form and content as of a date
not
more than ten (10) days prior to the time such list is furnished;
provided, however, that so long as the Indenture Trustee is the
Rate Stabilization Bond Registrar, no such list shall be required to be
furnished.
SECTION
7.02. Preservation of Information; Communications to
Holders.
(a) The
Indenture Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of the Holders contained in the most recent
list furnished to the Indenture Trustee as provided in Section 7.01 and
the names and addresses of Holders received by the Indenture Trustee in its
capacity as Rate Stabilization Bond Registrar. The Indenture Trustee
may destroy any list furnished to it as provided in such Section 7.01
upon receipt of a new list so furnished.
(b) Holders
may communicate pursuant to TIA § 312(b) with other Holders with respect to
their rights under this Indenture or under the Rate Stabilization
Bonds. In addition, upon the written request of any Holder or group
of Holders of any Series or of all Outstanding Series of Rate Stabilization
Bonds evidencing not less than 10 percent of the Outstanding Amount of the
Rate
Stabilization Bonds of that Series or all Series, as applicable, the Indenture
Trustee shall afford the Holder or Holders making such request a copy of a
current list of Holders of that Series or all Outstanding Series, as applicable,
for purposes of communicating with other Holders with respect to their rights
hereunder.
(c) The
Issuer, the Indenture Trustee and the Rate Stabilization Bond Registrar shall
have the protection of TIA § 312(c).
SECTION
7.03. Reports by Issuer.
(a) The
Issuer shall:
(i)
so long as the Issuer or the Sponsor
is required to file such documents with the SEC, provide to the Indenture
Trustee, within fifteen (15) days after the Issuer is required to file the
same
with the SEC, 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 SEC
may
from time to time by rules and regulations prescribe) which the Issuer or the
Sponsor may be required to file with the SEC pursuant to Section 13 or 15(d)
of
the Exchange Act;
61
(ii) provide
to the Indenture Trustee, and file with the SEC, in accordance with rules and
regulations prescribed from time to time by the SEC, such additional
information, documents and reports with respect to compliance by the Issuer
with
the conditions and covenants of this Indenture as may be required from time
to
time by such rules and regulations; and
(iii) supply
to the Indenture Trustee (and the Indenture Trustee shall transmit by mail
to
all Holders described in TIA § 313(c)) such summaries of any information,
documents and reports required to be filed by the 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 SEC.
(b) Unless
the Issuer otherwise determines, the fiscal year of the Issuer shall end on
December 31 of each year.
SECTION
7.04. Reports by Indenture Trustee. If required by
TIA § 313(a), within sixty (60) days after March 30 of each year,
commencing with the year after the issuance of the Rate Stabilization Bonds
of
any Series, the Indenture Trustee shall mail to each Bondholder of such Series
as required by TIA § 313(c) a brief report dated as of such date that complies
with TIA § 313(a). The Indenture Trustee also shall comply with TIA § 313(b);
provided, however, that the initial report so issued shall be
delivered not more than twelve (12) months after the initial issuance of each
Series.
ARTICLE
VIII
ACCOUNTS,
DISBURSEMENTS AND RELEASES
SECTION
8.01. Collection of Money. Except as otherwise
expressly provided herein, the Indenture 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 Indenture Trustee pursuant to this
Indenture and the other Basic Documents. The Indenture Trustee shall
apply all such money received by it as provided in this
Indenture. Except as otherwise expressly provided in this Indenture,
if any default occurs in the making of any payment or performance under any
agreement or instrument that is part of the Rate Stabilization Bond Collateral,
the Indenture 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
Indenture and any right to proceed thereafter as provided in Article
V.
SECTION
8.02. Collection Accounts and TPC Deposit
Accounts.
(a) Prior
to the Series Issuance Date for each Series of Rate Stabilization Bonds issued
hereunder, the Issuer shall open or cause to be opened, at the Indenture
Trustee’s office located at the Corporate Trust Office, or at another Eligible
Institution, one or more segregated trust accounts in the Indenture Trustee’s
name for the deposit of Estimated QRSC Collections, QRSC
62
Collections
and all other amounts received with respect to the Series Rate Stabilization
Bond Collateral related to such Series (each, a “Collection
Account”). Each Collection Account will consist of three
subaccounts: a general subaccount (the “General Subaccount”), an excess
funds subaccount (the “Excess Funds Subaccount”) and a capital subaccount
(the “Capital Subaccount” and, together with the General Subaccount and
the Excess Funds Subaccount, the “Subaccounts”). For
administrative purposes, the Subaccounts for any Series may be established
by
the Indenture Trustee as separate accounts. Such separate accounts
will be recognized individually as a Subaccount and collectively as the
“Collection Account” for such Series. Prior to or concurrently
with the issuance of any Series of Rate Stabilization Bonds, the Member shall
deposit into the applicable Capital Subaccount an amount equal to the Required
Capital Level for such Series. All amounts in the applicable
Collection Account not allocated to any other subaccount shall be allocated
to
the applicable General Subaccount. Prior to the Initial Payment Date
for any Series, all amounts in the applicable Collection Account (other than
funds deposited into the applicable Capital Subaccount, up to the Required
Capital Level for any Series of Rate Stabilization Bonds) shall be allocated
to
the applicable General Subaccount. All references to the Collection
Account shall mean and be references to the applicable Collection Account for
any Series and shall be deemed to include reference to all subaccounts contained
therein. Withdrawals from and deposits to each of the foregoing
subaccounts of the applicable Collection Account shall be made as set forth
in
Section 8.02(d) and (e). Each Collection Account shall
at all times be maintained in an Eligible Account, will be under the sole
dominion and exclusive control of the Indenture Trustee, and only the Indenture
Trustee shall have access to each such Collection Account for the purpose of
making deposits in and withdrawals from each such Collection Account in
accordance with this Indenture. Funds in the Collection Account shall
not be commingled with any other moneys. All moneys deposited from time to
time
in each Collection Account, all deposits therein pursuant to this Indenture,
and
all investments made in Eligible Investments as directed in writing by the
Issuer with such moneys, including all income or other gain from such
investments, shall be held by the Indenture Trustee in the applicable Collection
Account as part of the Series Rate Stabilization Bond Collateral as herein
provided. The Indenture 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 its date of redemption or the failure of the Issuer
or
the Servicer to provide timely written investment direction.
(b) The
Securities Intermediary hereby confirms that (i) each Collection Account is,
or
at inception will be established as, a “securities account” as such term is
defined in Section 8-501(a) of the UCC, (ii) it is a “securities intermediary”
(as such term is defined in Section 8-102(a) (14) of the UCC) and is acting
in
such capacity with respect to such accounts, and (iii) the Indenture Trustee
for
the benefit of the Secured Parties is the sole “entitlement holder” (as such
term is defined in Section 8-102(a)(7) of the UCC) with respect to such accounts
and no other Person shall have the right to give “entitlement orders” (as such
term is defined in Section 8-102(a)(8)) with respect to such
accounts. The Securities Intermediary hereby further agrees that each
item of property (whether investment property, financial asset, security,
instrument or cash) received by it will be credited to the applicable Collection
Account and shall be treated by it as a “financial asset” within the meaning of
Section 8-102(a)(9) of the UCC. Notwithstanding anything to the
contrary, the State of New York shall be deemed to be the location and
jurisdiction of the Securities Intermediary for purposes of Section 8-110 of
the
63
UCC,
and
each Collection Account (as well as the securities entitlements related thereto)
shall be governed by the laws of the State of New York.
(c) The
Indenture Trustee shall have sole dominion and exclusive control over all moneys
in each Collection Account and shall apply such amounts therein as provided
in
this Section 8.02. The Indenture Trustee shall also pay
from each applicable Collection Account any amounts requested to be paid by
or
to the Servicer pursuant to Section 6.10(d) of the Servicing
Agreement.
(d) Estimated
QRSC Collections shall be deposited in the applicable General Subaccount as
provided in Section 6.10 of the Servicing Agreement. All
deposits to and withdrawals from each applicable Collection Account, all
allocations to the subaccounts of each such Collection Account and any amounts
to be paid to the Servicer under Section 8.02(c) shall be made by the
Indenture Trustee in accordance with the written instructions provided by the
Servicer in the Monthly Servicer’s Certificate, the Servicer’s Certificate or
upon other written notice provided by the Servicer pursuant to Section
6.10(a) of the Servicing Agreement, as applicable.
(e) On
each Payment Date for any Series of Rate Stabilization Bonds, the Indenture
Trustee shall apply all amounts on deposit in each applicable Collection
Account, including all net earnings thereon, to pay the following amounts,
in
accordance with the Servicer’s Certificate, in the following
priority:
(i)
all amounts owed by the Issuer to the
Indenture Trustee (including legal fees and expenses) shall be paid to the
Indenture Trustee (subject to Section 6.07) in an amount not to exceed
annually the amount set forth in the related Series Supplement, such amounts
to
be withdrawn from each Collection Account pro rata based on the respective
Outstanding Amounts of such Series;
(ii) the
Servicing Fee with respect to the related Series for such Payment Date and
all
unpaid Servicing Fees with respect to such Series for prior Payment Dates shall
be paid to the Servicer;
(iii) the
Administration Fee with respect to the related Series for such Payment Date
and
all unpaid Administration Fees with respect to such Series for prior Payment
Dates shall be paid to the Administrator;
(iv) all
other Operating Expenses for such Payment Date not described above shall be
paid
to the parties to which such Operating Expenses are owed, pro rata, in an amount
not to exceed annually the amount set forth in the related Series Supplement,
such amounts to be withdrawn from each Collection Account pro rata based on
the
respective Outstanding Amounts of such Series;
(v) Periodic
Interest for such Payment Date, including any overdue Periodic Interest
(together with, to the extent lawful, interest on such overdue Periodic Interest
at the applicable Rate Stabilization Bond Interest Rate), with respect to the
related Series of Rate Stabilization Bonds shall be paid to the Holders of
such
Series of Rate Stabilization Bonds;
64
(vi) principal
due and payable on the Rate Stabilization Bonds of the related Series as a
result of an Event of Default or on the Final Maturity Date of the Rate
Stabilization Bonds of such Series shall be paid to the Holders of such Series
of Rate Stabilization Bonds;
(vii) Periodic
Principal for such Payment Date, including any overdue Periodic Principal,
with
respect to the related Series of Rate Stabilization Bonds shall be paid to
the
Holders of such Series of Rate Stabilization Bonds;
(viii) any
other unpaid Operating Expenses and any remaining amounts owed pursuant to
the
Basic Documents, including indemnity amounts owed to the Indenture Trustee,
but
excluding the Servicing Fee and the Administration Fee to the extent they exceed
the amounts approved in the Series Supplement with respect to such Series,
such
amounts to be withdrawn from each Collection Account pro rata based on the
respective Outstanding Amounts of such Series;
(ix)
the amount, if any, by which the
Required Capital Level with respect to the applicable Series of Rate
Stabilization Bonds exceeds the amount in the applicable Capital Subaccount
as
of such Payment Date shall be allocated to the applicable Capital
Subaccount;
(x) the
balance, if any, shall be allocated to the applicable Excess Funds Subaccount
for distribution on subsequent Payment Dates; and
(xi) following
repayment in full of all amounts payable hereunder of principal of and premium,
if any, and interest on all Outstanding Series of Rate Stabilization Bonds,
and
all of the other foregoing amounts, including, without limitation, amounts
due
and payable to the Indenture Trustee under Section 6.07 or otherwise,
subclause (e)(x) shall cease to apply, and the balance (including all
amounts then held in the applicable Subaccounts), if any, shall be paid to
the
Issuer, free from the Lien of this Indenture and the related Series
Supplement.
All
payments to the Holders of a Series pursuant to clauses(v),
(vi) and (vii) above shall be made to such Holders pro rata
based
on the respective amounts of interest and/or principal owed, unless, in the
case
of a Series comprised of two or more Tranches, the Series Supplement for such
Series provides otherwise. Payments in respect of principal of and
premium, if any, and interest on any Tranche of Rate Stabilization Bonds will
be
made on a pro rata basis among all the Holders of such Tranche.
The
amounts paid during any calendar year pursuant to clauses (i) and
(iv) may not exceed the amounts approved in the Series Supplement
with
respect to any Series. The amounts paid during any
calendar year pursuant to clauses (ii) and (iii) may not exceed
the amounts approved in the Series Supplement with respect to any Series,
provided that BGE may seek approval from the PSC to recover from
Customers, in accordance with the Financing Credit Order, incremental costs
in
excess of the amounts approved in the Series Supplement with respect to any
Series, and furtherprovided that such incremental costs shall
neither be considered an Operating Expense nor be paid out of the Collection
Account or included in the calculation of True-Up Adjustments.
65
(f) If
on any Payment Date of any Series funds on deposit in the applicable General
Subaccount are insufficient to make the payments contemplated by clauses
(i) through (viii) of Section 8.02(e) above, the Indenture
Trustee shall (i) first, draw from amounts on deposit in the applicable
Excess Funds Subaccount and (ii) second, draw from amounts on deposit in
the applicable Capital Subaccount, in each case, up to the amount of such
shortfall in order to make the payments contemplated by clauses (i)
through (viii) of Section 8.02(e). In addition, if on
any Payment Date of any Series funds on deposit in the applicable General
Subaccount are insufficient to make the allocations contemplated by clause
(ix) above, the Indenture Trustee shall draw from amounts on deposit in the
applicable Excess Funds Subaccount to make such allocations.
(g) The
Indenture Trustee, shall, as directed by the Servicer under Section
3.05(e) of the Servicing Agreement, maintain one or more segregated accounts
in the Indenture Trustee’s name (the “TPC Deposit Accounts”) at its
office located at the Corporate Trust Office, or at another Eligible
Institution, for Third-Party Collector deposits provided pursuant to any
Qualified Rate Order or Tariff, each such account for the benefit of the
Indenture Trustee. Pursuant to and in accordance with the Applicable
Qualified Rate Order, amounts received from any Third-Party Collector as a
security deposit shall be deposited into the applicable TPC Deposit
Account. To the extent permitted by each Applicable Qualified Rate
Order, Tariff and PSC Regulations, the TPC Deposit Accounts shall at all times
be maintained in Eligible Accounts, shall be subject to a perfected first
priority security interest in favor of the Indenture Trustee for the benefit
of
the Secured Parties, and shall be under the sole dominion and exclusive control
of the Indenture Trustee. Funds in the TPC Deposit Accounts shall not
be commingled with any other moneys. All or a portion of the funds in
the TPC Deposit Accounts shall be invested in Eligible Investments and
reinvested by the Indenture Trustee in Eligible Investments pursuant to the
written direction of the Servicer (or, absent such direction, in accordance
with
Section 8.03(c)); provided, however, that (i) such Eligible
Investments shall not mature or be redeemed later than the Business Day prior
to
the next Payment Date or Special Payment Date, if applicable, for the related
Series of Rate Stabilization Bonds and (ii) such Eligible Investments shall
not
be sold, liquidated or otherwise disposed of at a loss prior to the maturity
or
the date of redemption thereof. All moneys deposited from time to
time in the TPC Deposit Accounts and all investments made in Eligible
Investments with such moneys, including all income or other gain from such
investments, shall be held by the Indenture Trustee in a TPC Deposit Account
as
part of the Rate Stabilization Bond Collateral as herein provided and shall
only
be allocated and released upon the direction of the Servicer in accordance
with
Section 3.05(d) of the Servicing Agreement as required or permitted by
this Indenture, each Applicable Qualified Rate Order, each applicable Tariff,
or
other applicable PSC Regulations. Any loss resulting from investment
made in Eligible Investments with moneys in a TPC Deposit Account shall be
charged to such TPC Deposit Account. The Indenture Trustee shall
release property from a TPC Deposit Account only as and to the extent directed
by the Servicer pursuant to the Applicable Qualified Rate Order and the
Servicing Agreement and as required or permitted by this
Indenture. The Indenture 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 its date of redemption or the failure
of the Issuer or the Servicer to provide timely written investment
direction.
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SECTION
8.03. General Provisions Regarding the Collection
Accounts.
(a) So
long as no Default or Event of Default shall have occurred and be continuing,
all or a portion of the funds in each Collection Account shall be invested
in
Eligible Investments and reinvested by the Indenture Trustee upon Issuer Order;
provided, however, that (i) such Eligible Investments shall not
mature or be redeemed later than the Business Day prior to the next Payment
Date
or Special Payment Date, if applicable, for the related Series of Rate
Stabilization Bonds and (ii) such Eligible Investments shall not be sold,
liquidated or otherwise disposed of at a loss prior to the maturity or the
date
of redemption thereof. All income or other gain from investments of
moneys deposited in any Collection Account shall be deposited by the Indenture
Trustee in such Collection Account, and any loss resulting from such investments
shall be charged to such Collection Account. The Issuer will not
direct the Indenture Trustee to make any investment of any funds or to sell
any
investment held in any 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 Indenture Trustee to make
any such investment or sale, if requested by the Indenture Trustee, the Issuer
shall deliver to the Indenture Trustee an Opinion of Counsel of external counsel
of the Issuer (at the Issuer’s cost and expense) to such effect. In
no event shall the Indenture Trustee be liable for the selection of Eligible
Investments or for investment losses incurred thereon. The Indenture
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 its
date
of redemption or the failure of the Issuer or the Servicer to provide timely
written investment direction. The Indenture 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.
(b) Subject
to Section 6.01(c), the Indenture Trustee shall not in any way be held
liable by reason of any insufficiency in any Collection Account resulting from
any loss on any Eligible Investment included therein except for losses
attributable to the Indenture Trustee’s failure to make payments on such
Eligible Investments issued by the Indenture Trustee, in its commercial capacity
as principal obligor and not as trustee, in accordance with their
terms.
(c) If
(i) the Issuer shall have failed to give written investment directions for
any
funds on deposit in any Collection Account to the Indenture Trustee by 11:00
a.m. Eastern Time (or such other time as may be agreed by the Issuer and
Indenture Trustee) on any Business Day; or (ii) a Default or Event of Default
shall have occurred and be continuing with respect to the Rate Stabilization
Bonds of any Series but the Rate Stabilization Bonds of such Series shall not
have been declared due and payable pursuant to Section 5.02, then the
Indenture Trustee shall, to the fullest extent practicable, invest and reinvest
funds in such Collection Account in one or more money market funds described
under clause (d) of the definition of “Eligible Investments” pursuant to
the most recent written investment directions delivered by the Issuer to the
Indenture Trustee with respect to such type of Eligible Investments;
provided that if the Issuer has never delivered written investment
directions to the Indenture Trustee, the Indenture Trustee shall not invest
or
reinvest such funds in any investments.
(d) The
parties hereto acknowledge that the Servicer may, pursuant to the Servicing
Agreement, select Eligible Investments on behalf of the Issuer.
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(e) The
Indenture Trustee and its Affiliates are permitted to receive additional
compensation from third parties, that could be deemed to be in the Indenture
Trustee’s or its Affiliates’ respective economic self-interest, for (i) serving
as an investment advisor, administrator, shareholder servicing agent, custodian
or sub-custodian with respect to certain Eligible Investments, (ii) using
Affiliates to effect transactions in certain Eligible Investments or (iii)
effecting transactions in certain Eligible Investments.
SECTION
8.04. Release of Rate Stabilization Bond
Collateral.
(a) So
long as the Issuer is not in default hereunder and no Default hereunder would
occur as a result of such action, the Issuer, through the Servicer, may collect,
sell or otherwise dispose of written-off receivables, at any time and from
time
to time in the ordinary course of business, without any notice to, or release
or
consent by, the Indenture Trustee, but only as and to the extent permitted
by
the Basic Documents; provided, however, that any and all proceeds
of such dispositions shall become Rate Stabilization Bond Collateral and be
deposited to the applicable General Subaccount immediately upon receipt thereof
by the Issuer or any other Person, including the Servicer. Without
limiting the foregoing, the Servicer, may, at any time and from time to time
without any notice to, or release or consent by, the Indenture Trustee, sell
or
otherwise dispose of any Rate Stabilization Bond Collateral which is part of
a
Bill previously written-off as a defaulted or uncollectible account in
accordance with the terms of the Servicing Agreement and the requirements of
the
proviso in the immediately preceding sentence.
(b) The
Indenture Trustee may, and when required by the provisions of this Indenture
shall, execute instruments to release property from the Lien of this Indenture,
or convey the Indenture Trustee’s interest in the same, in a manner and under
circumstances that are not inconsistent with the provisions of this
Indenture. No party relying upon an instrument executed by the
Indenture Trustee as provided in this Article VIII shall be bound to
ascertain the Indenture Trustee’s authority, inquire into the satisfaction of
any conditions precedent or see to the application of any moneys. The
Indenture Trustee shall release property from the Lien of this 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 of external
counsel of the Issuer (at the Issuer’s cost and expense) and (if required by the
TIA) Independent Certificates in accordance with TIA §§ 314(c) and 314(d)(1)
meeting the applicable requirements of Section 10.01.
(c) The
Indenture Trustee shall, at such time as there are no Rate Stabilization Bonds
of a Series Outstanding and all sums payable to the Indenture Trustee pursuant
to Section 6.07 or otherwise have been paid, release any remaining
portion of the Series Rate Stabilization Bond Collateral that secured such
Rate
Stabilization Bonds from the Lien of this Indenture, release to the Issuer
or
any other Person entitled thereto any funds or investments then on deposit
in or
credit to the applicable Collection Account and, subject to the instructions
of
the Servicer, shall release the TPC Deposit Accounts in accordance with
Section 8.02.
SECTION
8.05. Opinion of Counsel. The Indenture Trustee
shall receive at least seven (7) days’ notice when requested by the Issuer to
take any action pursuant to Section 8.04, accompanied by copies of
any instruments involved, and the Indenture Trustee shall also require, as
a
condition to such action, an Opinion of Counsel of external counsel of the
Issuer, in form
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and
substance satisfactory to the Indenture 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 Rate Stabilization Bonds or the rights of the Holders in contravention
of
the provisions of this Indenture and the related Series Supplement;
provided, however, that such Opinion of Counsel shall not be
required to express an opinion as to the fair value of the Rate Stabilization
Bond 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 Indenture Trustee in connection with any
such
action.
SECTION
8.06. Reports by Independent Registered Public
Accountants. As of the Closing Date, the Issuer shall appoint a
firm of Independent registered public accountants of recognized national
reputation for purposes of preparing and delivering the reports or certificates
of such accountants required by this Indenture and the related Series
Supplements. In the event such firm requires the Indenture Trustee to
agree to the procedures performed by such firm, the Issuer shall direct the
Indenture Trustee in writing to so agree; it being understood and agreed that
the Indenture Trustee will deliver such letter of agreement in conclusive
reliance upon the direction of the Issuer, and the Indenture 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, or termination by the Issuer of,
such firm the Issuer shall provide written notice thereof to the Indenture
Trustee and shall promptly appoint a successor thereto that shall also be a
firm
of Independent registered public accountants of recognized national
reputation. If the Issuer shall fail to appoint a successor to a firm
of Independent registered public accountants that has resigned or been
terminated within fifteen (15) days after such resignation or termination,
the
Indenture Trustee shall promptly notify the Issuer of such failure in
writing. If the Issuer shall not have appointed a successor within
ten (10) days thereafter the Indenture Trustee shall promptly appoint a
successor firm of Independent registered public accountants of recognized
national reputation; provided that the Indenture Trustee shall have no
liability with respect to such appointment. The fees of such
Independent registered public accountants and its successor shall be payable
by
the Issuer.
ARTICLE
IX
Supplemental
Indentures
SECTION
9.01. Supplemental Indentures Without Consent of
Holders.
(a) Without
the consent of the Holders of any Rate Stabilization Bonds but with prior notice
to the Rating Agencies, the Issuer and the Indenture 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
TIA
as in force at the date of the execution thereof), in form satisfactory to
the
Indenture Trustee, for any of the following purposes:
(i)
to correct or amplify the
description of any property, including, without limitation, the Rate
Stabilization Bond Collateral, at any time subject to the Lien of this
Indenture, or better to assure, convey and confirm unto the Indenture Trustee
any
69
property
subject or required to be subjected to the Lien of this Indenture and the
related Series Supplement, or to subject to the Lien of this Indenture and
the
related Series Supplement additional property;
(ii) to
evidence the succession, in compliance with the applicable provisions hereof,
of
another person to the Issuer, and the assumption by any such successor of the
covenants of the Issuer herein and in the Rate Stabilization Bonds;
(iii) to
add to the covenants of the Issuer, for the benefit of the Secured Parties,
or
to surrender any right or power herein conferred upon the Issuer;
(iv) to
convey, transfer, assign, mortgage or pledge any property to or with the
Indenture Trustee;
(v) to
cure any ambiguity, to correct or supplement any provision herein or in any
supplemental indenture, including any Series Supplement, which may be
inconsistent with any other provision herein or in any supplemental indenture,
including any Series Supplement, or to make any other provisions with respect
to
matters or questions arising under this Indenture or in any supplemental
indenture; provided that (i) such action shall not, as evidenced by an
Opinion of Counsel of external counsel of the Issuer, adversely affect in any
material respect the interests of the Holders of the Rate Stabilization Bonds
and (ii) the Rating Agency Condition shall have been satisfied with respect
thereto;
(vi) to
evidence and provide for the acceptance of the appointment hereunder by a
successor trustee with respect to the Rate Stabilization Bonds and to add to
or
change any of the provisions of this 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;
(vii) to
modify, eliminate or add to the provisions of this Indenture to such extent
as
shall be necessary to effect the qualification of this Indenture under the
TIA
or under any similar or successor federal statute hereafter enacted and to
add
to this Indenture such other provisions as may be expressly required by the
TIA;
(viii) to
set forth the terms of any Tranche or any Series that has not theretofore been
authorized by a Series Supplement;
(ix)
to qualify the Rate Stabilization
Bonds for registration with a Clearing Agency; or
(x) to
satisfy any Rating Agency requirements.
The
Indenture Trustee is hereby authorized to join in the execution of any such
supplemental indenture and to make any further appropriate agreements and
stipulations that may be therein contained.
(b) The
Issuer and the Indenture Trustee, when authorized by an Issuer Order, may,
also
without the consent of any of the Holders of the Rate Stabilization
Bonds, enter into
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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 Indenture or of modifying in any manner the rights of the Holders
of
the Rate Stabilization Bonds under this Indenture; provided,
however, that (i) such action shall not, as evidenced by an Opinion
of
Counsel of nationally recognized counsel of the Issuer experienced in structured
finance transactions, adversely affect in any material respect the interests
of
the Holders and (ii) the Rating Agency Condition shall have been satisfied
with
respect thereto.
SECTION
9.02. Supplemental Indentures with Consent of
Holders. The Issuer and the Indenture Trustee, when authorized by
an Issuer Order, also may, with prior notice to the Rating Agencies and with
the
consent of the Holders of not less than a majority of the Outstanding Amount
of
the Rate Stabilization Bonds of each Series or Tranche to be affected, by Act
of
such Holders delivered to the Issuer and the Indenture 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 Indenture or of modifying in any manner the rights of the Holders
of
the Rate Stabilization Bonds under this Indenture; provided,
however, that no such supplemental indenture shall, without the consent
of the Holder of each Outstanding Rate Stabilization Bond of each Series or
Tranche affected thereby:
(i)
change the date of payment of any
installment of principal of or premium, if any, or interest on any Rate
Stabilization Bond of such Series or Tranche, or reduce the principal amount
thereof, the interest rate thereon or premium, if any, with respect thereto,
change the provisions of this Indenture and the related applicable Series
Supplement relating to the application of collections on, or the proceeds of
the
sale of, the Rate Stabilization Bond Collateral to payment of principal of
or
premium, if any, or interest on the Rate Stabilization Bonds, or change any
place of payment where, or the coin or currency in which, any Rate Stabilization
Bond or the interest thereon is payable, or impair the right to institute suit
for the enforcement of the provisions of this Indenture requiring the
application of funds available therefor, as provided in Article V, to the
payment of any such amount due on the Rate Stabilization Bonds on or after
the
respective due dates thereof;
(ii) reduce
the percentage of the Outstanding Amount of the Rate Stabilization Bonds or
of a
Series or Tranche thereof, the consent of the Holders of which is required
for
any such supplemental indenture, or the consent of the Holders of which is
required for any waiver of compliance with certain provisions of this Indenture
or certain defaults hereunder and their consequences provided for in this
Indenture;
(iii) reduce
the percentage of the Outstanding Amount of the Rate Stabilization Bonds
required to direct the Indenture Trustee to direct the Issuer to sell or
liquidate the Rate Stabilization Bond Collateral pursuant to Section
5.04;
(iv) modify
any provision of this Section 9.02 except to increase any percentage
specified herein or to provide that those provisions of this Indenture or the
other Basic Documents referenced in this Section 9.02 cannot be modified
or waived without the consent of the Holder of each Outstanding Rate
Stabilization Bond affected thereby;
71
(v) modify
any of the provisions of this Indenture in such manner as to affect the
calculation of the amount of any payment of interest, principal or premium,
if
any, due on any Rate Stabilization Bond on any Payment Date (including the
calculation of any of the individual components of such calculation) or change
the Expected Amortization Schedules or Final Maturity Dates of any Tranche
or
Series of Rate Stabilization Bonds;
(vi)
decrease the Required
Capital Level with respect to any Series;
(vii) permit
the creation of any Lien ranking prior to or on a parity with the Lien of this
Indenture with respect to any part of the Rate Stabilization Bond Collateral
or,
except as otherwise permitted or contemplated herein, terminate the Lien of
this
Indenture on any property at any time subject hereto or deprive the Holder
of
any Rate Stabilization Bond of the security provided by the Lien of this
Indenture; or
(viii) cause
any material adverse federal income tax consequence to the Seller, the Issuer,
the Managers, the Indenture Trustee or the then existing Holders.
It
shall
not be necessary for any Act of Holders under this Section 9.02 to
approve the particular form of any proposed supplemental indenture, but it
shall
be sufficient if such Act shall approve the substance thereof.
Promptly
after the execution by the Issuer and the Indenture Trustee of any supplemental
indenture pursuant to this Section 9.02, the Issuer shall mail to the
Rating Agencies and the Holders of the Rate Stabilization Bonds to which such
supplemental indenture relates a notice setting forth in general terms the
substance of such supplemental indenture. Any failure of the Issuer
to mail such notice, or any defect therein, shall not, however, in any way
impair or affect the validity of any such supplemental indenture.
SECTION
9.03. Execution of Supplemental Indentures. In
executing, or permitting the additional trusts created by, any supplemental
indenture permitted by this Article IX or the modifications thereby
of the trusts created by this Indenture, the Indenture 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 indenture is authorized or permitted by this
Indenture. The Indenture Trustee may, but shall not be obligated to,
enter into any such supplemental indenture that affects the Indenture Trustee’s
own rights, duties, liabilities or immunities under this Indenture or
otherwise.
SECTION
9.04. Effect of Supplemental Indenture. Upon the
execution of any supplemental indenture pursuant to the provisions hereof,
this
Indenture shall be and be deemed to be modified and amended in accordance
therewith with respect to each Series or Tranche of Rate Stabilization Bonds
affected thereby, and the respective rights, limitations of rights, obligations,
duties, liabilities and immunities under this Indenture of the Indenture
Trustee, the Issuer and the Holders 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 indenture
shall be and be deemed to be part of the terms and conditions of this Indenture
for any and all purposes.
72
SECTION
9.05. Conformity with Trust Indenture Act. Every
amendment of this Indenture and every supplemental indenture executed pursuant
to this Article IX shall conform to the requirements of the TIA as then
in effect so long as this Indenture shall then be qualified under the
TIA.
SECTION
9.06. Reference in Rate Stabilization Bonds to Supplemental
Indentures. Rate Stabilization Bonds authenticated and delivered
after the execution of any supplemental indenture pursuant to this Article
IX may, and if required by the Indenture Trustee shall, bear a notation in
form approved by the Indenture Trustee as to any matter provided for in such
supplemental indenture. If the Issuer or the Indenture Trustee shall
so determine, new Rate Stabilization Bonds so modified as to conform, in the
opinion of the Indenture Trustee and the Issuer, to any such supplemental
indenture may be prepared and executed by the Issuer and authenticated and
delivered by the Indenture Trustee in exchange for Outstanding Rate
Stabilization Bonds.
ARTICLE
X
MISCELLANEOUS
SECTION
10.01. Compliance Certificates and Opinions, etc.
(a) Upon
any application or request by the Issuer to the Indenture Trustee to take any
action under any provision of this Indenture, the Issuer shall furnish to the
Indenture Trustee (i) an Officer’s Certificate stating that all conditions
precedent, if any, provided for in this 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 TIA) an Independent Certificate
from
a firm of registered public accountants meeting the applicable requirements
of
this Section 10.01, 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 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 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
73
(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 Rate Stabilization Bond Collateral or other property
or securities with the Indenture Trustee that is to be made the basis for the
release of any property or securities subject to the Lien of this Indenture,
the
Issuer shall, in addition to any obligation imposed in Section 10.01(a)
or elsewhere in this Indenture, furnish to the Indenture Trustee an Officer’s
Certificate certifying or stating the opinion of each person signing such
certificate as to the fair value (within ninety (90) days of such deposit)
to
the Issuer of the Rate Stabilization Bond Collateral or other property or
securities to be so deposited.
(ii) Whenever
the Issuer is required to furnish to the Indenture Trustee an Officer’s
Certificate certifying or stating the opinion of any signer thereof as to the
matters described in clause (i) above, the Issuer shall also deliver to
the Indenture Trustee an Independent Certificate as to the same matters, if
the
fair value to the Issuer of the securities to be so deposited and of all other
such securities made the basis of any such withdrawal or release since the
commencement of the then-current fiscal year of the 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 Rate
Stabilization Bonds of all Series, but such a certificate need not be furnished
with respect to any securities so deposited, if the fair value thereof to the
Issuer as set forth in the related Officer’s Certificate is less than the lesser
of (A) $25,000 or (B) one percent of the Outstanding Amount of the Rate
Stabilization Bonds of all Series.
(iii) Whenever
any property or securities are to be released from the Lien of this Indenture
other than pursuant to Section 8.02(e), the Issuer shall also furnish to
the Indenture Trustee an Officer’s Certificate certifying or stating the opinion
of each person signing such certificate as to the fair value (within ninety
(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 Indenture in contravention of the provisions
hereof.
(iv) Whenever
the Issuer is required to furnish to the Indenture Trustee an Officer’s
Certificate certifying or stating the opinion of any signatory thereof as to
the
matters described in clause (iii) above, the Issuer shall also furnish to
the Indenture Trustee an Independent Certificate as to the same matters if
the
fair value of the property or securities and of all other property with respect
to such Series, or securities released from the Lien of this Indenture (other
than pursuant to Section 8.02(e)) 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 Rate Stabilization Bonds of all Series, 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 the lesser of (A) $25,000 or (B) one percent of the
then Outstanding Amount of the Rate Stabilization Bonds of all
Series.
(v) Notwithstanding
Section 2.16 or any other provision of this Section 10.01, the
Indenture Trustee may (A) collect, liquidate, sell or otherwise dispose of
the
Rate
74
Stabilization
Property and the other Rate Stabilization Bond Collateral as and to the extent
permitted or required by the Basic Documents and (B) make cash payments out
of
each Collection Account as and to the extent permitted or required by the Basic
Documents.
SECTION
10.02. Form of Documents Delivered to Indenture
Trustee. In any case where several matters are required to be
certified by, or covered by an opinion of, any specified Person, it is not
necessary that all such matters be certified by, or covered by the opinion
of,
only one such Person, or that they be so certified or covered by only one
document, but one such Person may certify or give an opinion with respect to
some matters and one or more other such Persons as to other matters, and any
such Person may certify or give an opinion as to such matters in one or several
documents.
Any
certificate or opinion of a Responsible Officer of the Issuer may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise
of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his or her certificate or opinion is
based are erroneous. Any such certificate of a Responsible 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 or the Issuer stating that the information with respect to such
factual matters is in the possession of the Servicer or the Issuer, unless
such
counsel knows, or in the exercise of reasonable care should know, that the
certificate or opinion or representations with respect to such matters are
erroneous.
Whenever
in this Indenture, in connection with any application or certificate or report
to the Indenture Trustee, it is provided that the Issuer shall deliver any
document as a condition of the granting of such application, or as evidence
of
the 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 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 Indenture Trustee’s right to rely conclusively upon the
truth and accuracy of any statement or opinion contained in any such document
as
provided in Article VI.
Where
any
Person is required to make, give or execute two or more applications, requests,
consents, certificates, statements, opinions or other instruments under this
Indenture, they may, but need not, be consolidated and form one
instrument.
SECTION
10.03. Acts of Holders.
(a) Any
request, demand, authorization, direction, notice, consent, waiver or other
action provided by this Indenture to be given or taken by Holders may be
embodied in and evidenced by one or more instruments of substantially similar
tenor signed by such Holders 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 Indenture
Trustee, and, where it is hereby expressly required, to the
Issuer. Such instrument or
75
instruments
(and the action embodied therein and evidenced thereby) are herein sometimes
referred to as the “Act” of the Holders 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
Indenture and (subject to Section 6.01) conclusive in favor of the
Indenture Trustee and the Issuer, if made in the manner provided in this
Section 10.03.
(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 Indenture Trustee deems
sufficient.
(c) The
ownership of Rate Stabilization Bonds shall be proved by the Rate Stabilization
Bond Register.
(d) Any
request, demand, authorization, direction, notice, consent, waiver or other
action by the Holder of any Rate Stabilization Bonds shall bind the Holder
of
every Rate Stabilization Bond issued upon the registration thereof or in
exchange therefor or in lieu thereof, in respect of anything done, omitted
or
suffered to be done by the Indenture Trustee or the Issuer in reliance thereon,
whether or not notation of such action is made upon such Rate Stabilization
Bond.
SECTION
10.04. Notices, etc., to Indenture Trustee, Issuer and Rating
Agencies.
(a) Any
request, demand, authorization, direction, notice, consent, waiver or Act of
Holders or other documents provided or permitted by this Indenture to be made
upon, given or furnished to or filed with:
(i)
the Indenture Trustee by
any Holder or by the Issuer shall be sufficient for every purpose hereunder
if
made, given, furnished or filed in writing by facsimile transmission,
first-class mail or overnight delivery service to or with the Indenture Trustee
at the Corporate Trust Office,
(ii) the
Issuer by the Indenture Trustee or by any Holder shall be sufficient for every
purpose hereunder if in writing and mailed, first-class, postage prepaid, to
the
Issuer addressed to: RSB BONDCO LLC, Suite 202, 103 Foulk Road,
Wilmington, Delaware19803, Attention: Manager, Telephone: (302) 691-6409,
Facsimile: (302) 652-8667, or at any other address previously furnished in
writing to the Indenture Trustee by the Issuer. The Issuer shall
promptly transmit any notice received by it from the Holders to the Indenture
Trustee, or
(iii) the
PSC by the Seller, the Issuer or the Indenture Trustee shall be sufficient
for
every purpose hereunder if in writing and mailed, first-class, postage prepaid,
to the PSC addressed to: PUBLIC SERVICE COMMISSION OF MARYLAND, William D.
Schaefer Tower, 6 St. Paul Street, 12th Floor, Baltimore, Maryland21202, Attention: Executive Secretary, Telephone: (410) 767-8000,
Facsimile: (410) 333-6495.
(b) Notices
required to be given to the Rating Agencies by the Issuer or the Indenture
Trustee shall be in writing, facsimile, personally delivered or mailed by
certified mail, return receipt requested to:
76
(i)
in the case of Moody’s, to:
Moody’s Investors Service, Inc., ABS Monitoring Department, 99 Church Street,
New York, New York10007, Telephone: (212) 553-3686, Facsimile
(212) 553-0573,
(ii) in
the case of Standard & Poor’s, to: Standard & Poor’s Ratings Services, a
division of The McGraw-Hill Companies, Inc., 55 Water Street, 41st Floor, NewYork, New York10041, Attention: Asset Backed Surveillance Department,
Telephone: (212) 438-2000, Facsimile: (212) 438-2665,
(iii) in
the case of Fitch, to Fitch Ratings, One State Street Plaza, New York, NewYork10004, Attention: ABS Surveillance, Telephone: (212) 908-0500, Facsimile: (212)
908-0355, and
(iv) as
to each of the foregoing, at such other address as shall be designated by
written notice to the other parties.
SECTION
10.05. Notices to Holders; Waiver. Where this
Indenture provides for notice to Holders 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 Holder affected by such event,
at such Holder’s address as it appears on the Rate Stabilization Bond 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
Holders is given by mail, neither the failure to mail such notice nor any defect
in any notice so mailed to any particular Holder shall affect the sufficiency
of
such notice with respect to other Holders, and any notice that is mailed in
the
manner herein provided shall conclusively be presumed to have been duly
given.
Where
this 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 Holders shall be filed with the
Indenture 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 Holders when such notice is required to be given pursuant to any
provision of this Indenture, then any manner of giving such notice as shall
be
satisfactory to the Indenture Trustee shall be deemed to be a sufficient giving
of such notice.
Where
this 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
10.06. 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 Indenture by any of the provisions
of
the TIA, such required provision shall control.
The
provisions of TIA §§ 310 through 317 that impose duties on any person (including
the provisions automatically deemed included herein unless expressly excluded
by
77
this
Indenture) are a part of and govern this Indenture, whether or not physically
contained herein.
SECTION
10.07. 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
10.08. Successors and Assigns. All covenants and
agreements in this Indenture and the Rate Stabilization Bonds by the Issuer
shall bind its successors and assigns, whether so expressed or
not. All agreements of the Indenture Trustee in this Indenture shall
bind its successors.
SECTION
10.09. Severability. Any provision in this
Indenture or in the Rate Stabilization Bonds that is prohibited or unenforceable
in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent
of such prohibition or unenforceability without invalidating the remainder
of
such provision (if any) or the remaining provisions hereof (unless such
construction shall be unreasonable), and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
SECTION
10.10. Benefits of Indenture. Nothing in this
Indenture or in the Rate Stabilization Bonds, express or implied, shall give
to
any Person, other than the parties hereto and their successors hereunder, and
the Holders, and any other party secured hereunder, and any other Person with
an
ownership interest in any part of the Rate Stabilization Bond Collateral, any
benefit or any legal or equitable right, remedy or claim under this
Indenture.
SECTION
10.11. 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 Rate Stabilization Bonds or this 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
10.12. GOVERNING LAW. THIS INDENTURE SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS (OTHER THAN
SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW), AND THE OBLIGATIONS,
RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE
WITH SUCH LAWS; PROVIDED THAT THE CREATION, ATTACHMENT AND PERFECTION OF
ANY LIENS CREATED HEREUNDER IN RATE STABILIZATION PROPERTY, AND ALL RIGHTS
AND
REMEDIES OF THE INDENTURE TRUSTEE AND THE HOLDERS WITH RESPECT TO SUCH RATE
STABILIZATION PROPERTY, SHALL BE GOVERNED BY THE LAWS OF THE STATE OF
MARYLAND.
SECTION
10.13. Counterparts. This 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.
78
SECTION
10.14. Recording of Indenture. If this Indenture is
subject to recording in any appropriate public recording offices, such recording
is to be effected by the Issuer and at its expense accompanied by an Opinion
of
Counsel at the Issuer’s cost and expense (which may be counsel to the Indenture
Trustee or any other counsel reasonably acceptable to the Indenture Trustee
or,
if requested by the Indenture Trustee, external counsel of the Issuer) to the
effect that such recording is necessary either for the protection of the Holders
or any other Person secured hereunder or for the enforcement of any right or
remedy granted to the Indenture Trustee under this Indenture.
SECTION
10.15. Issuer Obligation. No recourse may be taken,
directly or indirectly, with respect to the obligations of the Issuer or the
Indenture Trustee on the Rate Stabilization Bonds or under this Indenture or
any
certificate or other writing delivered in connection herewith or therewith,
against (i) the Indenture Trustee or the Managers in their respective
individual capacities, (ii) any owner of a limited liability company interest
in
the Issuer (including BGE) or (iii) any shareholder, partner, owner,
beneficiary, agent, officer, or employee of the Indenture Trustee, the Managers
or any owner of a limited liability company interest in the Issuer (including
BGE) in its respective individual capacity, or of any successor or assign of
any
of them in their respective individual or corporate capacities, except as any
such Person may have expressly agreed in writing (it being understood that
none
of the Indenture Trustee, the Managers or BGE has any such obligations in their
respective individual or corporate capacities).
SECTION
10.16. No Recourse to Issuer. Notwithstanding any
provision of this Indenture or any Series Supplement to the contrary, Holders
shall have no recourse against the Issuer, but shall look only to the Rate
Stabilization Bond Collateral with respect to any amounts due to the Holders
hereunder and under the Rate Stabilization Bonds.
SECTION
10.17. Basic Documents. The Indenture Trustee is
hereby authorized to execute and deliver the Servicing Agreement and to execute
and deliver any other Basic Document which it is requested to
acknowledge.
SECTION
10.18. No Petition. The Indenture Trustee, solely
in its capacity as a creditor of the Issuer, by entering into this Indenture,
each Holder, by accepting a Rate Stabilization Bond (or interest therein) issued
hereunder, hereby covenant and agree that they shall not, prior to the date
which is one year and one day after the termination of this Indenture,
acquiesce, petition or otherwise invoke or cause the Issuer or any Manager
to
invoke the process of any court or government authority for the purpose of
commencing or sustaining an involuntary case against the Issuer under any
insolvency law or appointing a receiver, liquidator, assignee, trustee,
custodian, sequestrator or other similar official of the Issuer or any
substantial part of its respective property, or ordering the dissolution,
winding up or liquidation of the affairs of the Issuer. Nothing in
this paragraph shall preclude, or be deemed to estop, such Holder or the
Indenture Trustee (A) from taking or omitting to take any action prior to such
date in (i) any case or proceeding voluntarily filed or commenced by or on
behalf of the Issuer under or pursuant to any such law or the LLC Agreement
or
(ii) any involuntary case or proceeding pertaining to the Issuer which is filed
or commenced by or on behalf of a Person other than such Holder and is not
joined in by such Holder (or any person to which such Holder shall have
assigned, transferred or otherwise conveyed any part of the obligations of
the
Issuer hereunder) under or pursuant to any
79
such
law,
or (B) from commencing or prosecuting any legal action which is not an
involuntary case or proceeding under or pursuant to any such law against the
Issuer or any of its properties.
[SIGNATURE
PAGE
FOLLOWS]
80
IN
WITNESS WHEREOF, the Issuer and the Indenture Trustee have caused this Indenture
to be duly executed by their respective officers thereunto duly authorized
and
duly attested, all as of the day and year first above written.
RSB
BONDCO LLC, as Issuer
By:
/s/
Charles A. Berardesco
Name:
Charles A. Berardesco
Title:
Secretary
Issuer
Signature Page to
Indenture
DEUTSCHE
BANK TRUST COMPANY AMERICAS, not in its individual capacity
but solely as Indenture Trustee and as Securities
Intermediary
By:
/s/
Eileen Hughes
Name: Eileen
Hughes
Title: Vice
President
By:
/s/
Louis Bodi
Name:
Louis Bodi
Title:
Vice President
Trustee
Signature Page to
Indenture
STATE
OF
NEW
YORK )
) ss: CITY
OF
BALTIMORE
)
On
the
29th day of June, 2007, before me, Holly Anne Hertsgaard, a Notary
Public in and for said county and state, personally appeared Charles A.
Berardesco, personally known to me (or proved to me on the basis of satisfactory
evidence) to be the person and officer whose name is subscribed to the within
instrument and acknowledged to me that such person executed the same in such
person’s authorized capacity, and that by the signature on the instrument
Deutsche Bank Trust Company Americas, a national banking association, and the
entity upon whose behalf the person acted, executed this
instrument.
WITNESS
my hand and official seal.
/s/
Holly Anne Hertsgaard
Notary
Public
My
commission expires: 2/1/08
STATE
OF
NEW YORK ) )
ss:
COUNTY
OF
MANHATTAN )
On
the
27th day of June, 2007, before me, Winsome Ferguson, a Notary Public
in and for said county and state, personally appeared Eileen Hughes, personally
known to me (or proved to me on the basis of satisfactory evidence) to be the
person and officer whose name is subscribed to the within instrument and
acknowledged to me that such person executed the same in such person’s
authorized capacity, and that by the signature on the instrument Deutsche Bank
Trust Company Americas, a national banking association, and the entity upon
whose behalf the person acted, executed this instrument.
On
the
27th day of June, 2007, before me, Winsome Ferguson, a Notary Public
in and for said county and state, personally appeared Louis Bodi, personally
known to me (or proved to me on the basis of satisfactory evidence) to be the
person whose name is subscribed to the within instrument and acknowledged to
me
that he executed the same in his capacity as a manager of RSB BONDCO LLC, and
that by his signature on the instrument RSB BONDCO LLC, a Delaware limited
liability company and the entity upon whose behalf such person acted, executed
this instrument.
UNLESS
AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES IN DEFINITIVE
REGISTERED FORM, THIS SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY
THE
DEPOSITARY TO THE NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY
TO
THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR
ANY
SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR
DEPOSITARY. UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”),
TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT,
AND ANY SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH
OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF
FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
REGISTERED
No. _____ $________
SEE
REVERSE FOR CERTAIN DEFINITIONS
CUSIP
NO.
THE
PRINCIPAL OF THIS SERIES [ ],
TRANCHE
[ - ]
RATE
STABILIZATION BOND (“THIS TRANCHE [ - ]
RATE STABILIZATION BOND”) WILL BE PAID IN INSTALLMENTS AS SET FORTH
HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS TRANCHE
[ - ]
RATE
STABILIZATION BOND AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE
HEREOF. THE HOLDER OF THIS TRANCHE [ - ]
RATE
STABILIZATION BOND HAS NO RECOURSE TO THE ISSUER HEREOF AND AGREES TO LOOK
ONLY
TO THE RATE STABILIZATION BOND COLLATERAL, AS DESCRIBED IN THE INDENTURE AND
THE
SERIES SUPPLEMENT REFERRED TO ON THE REVERSE HEREOF, FOR PAYMENT OF ANY AMOUNTS
DUE HEREUNDER. ALL OBLIGATIONS OF THE ISSUER OF THIS TRANCHE [ - ]
RATE
STABILIZATION BOND UNDER THE TERMS OF THE INDENTURE WILL BE RELEASED AND
DISCHARGED UPON PAYMENT IN FULL HEREOF OR AS OTHERWISE PROVIDED IN SECTION
3.10(b) OR ARTICLE IV OF THE INDENTURE. THE HOLDER OF THIS
TRANCHE [ - ]
RATE
STABILIZATION BOND HEREBY COVENANTS AND AGREES THAT PRIOR TO THE DATE WHICH
IS
ONE (1) YEAR AND ONE (1) DAY AFTER THE PAYMENT IN FULL OF THE
SERIES
EXHIBIT
A
1
[]
RATE
STABILIZATION BONDS, IT WILL NOT ACQUIESCE, PETITION OR OTHERWISE INVOKE OR
CAUSE THE ISSUER OR ANY MANAGER TO INVOKE THE PROCESS OF ANY COURT OR
GOVERNMENTAL AUTHORITY FOR THE PURPOSE OF COMMENCING OR SUSTAINING AN
INVOLUNTARY CASE AGAINST THE ISSUER UNDER ANY INSOLVENCY LAW OR APPOINTING
A
RECEIVER, LIQUIDATOR, ASSIGNEE, TRUSTEE, CUSTODIAN, SEQUESTRATOR OR OTHER
SIMILAR OFFICIAL OF THE ISSUER OR ANY SUBSTANTIAL PART OF ITS RESPECTIVE
PROPERTY, OR ORDERING THE DISSOLUTION, WINDING UP OR LIQUIDATION OF THE AFFAIRS
OF THE ISSUER. NOTHING IN THIS PARAGRAPH SHALL PRECLUDE, OR BE DEEMED
TO ESTOP, SUCH HOLDER (A) FROM TAKING OR OMITTING TO TAKE ANY ACTION PRIOR
TO
SUCH DATE IN (I) ANY CASE OR PROCEEDING VOLUNTARILY FILED OR COMMENCED BY OR
ON
BEHALF OF THE ISSUER UNDER OR PURSUANT TO ANY SUCH LAW OR THE LLC AGREEMENT
OR
(II) ANY INVOLUNTARY CASE OR PROCEEDING PERTAINING TO THE ISSUER WHICH IS FILED
OR COMMENCED BY OR ON BEHALF OF A PERSON OTHER THAN SUCH HOLDER AND IS NOT
JOINED IN BY SUCH HOLDER (OR ANY PERSON TO WHICH SUCH HOLDER SHALL HAVE
ASSIGNED, TRANSFERRED OR OTHERWISE CONVEYED ANY PART OF THE OBLIGATIONS OF
THE
ISSUER HEREUNDER) UNDER OR PURSUANT TO ANY SUCH LAW, OR (B) FROM COMMENCING
OR
PROSECUTING ANY LEGAL ACTION WHICH IS NOT AN INVOLUNTARY CASE OR PROCEEDING
UNDER OR PURSUANT TO ANY SUCH LAW AGAINST THE ISSUER OR ANY OF ITS
PROPERTIES.
THE
STATE
OF MARYLAND AND ANY OTHER GOVERNMENTAL UNIT ARE NOT OBLIGED TO PAY THE PRINCIPAL
OF OR INTEREST ON RSB BONDCO LLC RATE STABILIZATION BONDS, INCLUDING THIS
TRANCHE [ ] RATE
STABILIZATION
BOND. NEITHER THE FULL FAITH AND CREDIT NOR THE TAXING POWER OF THE
STATE OF MARYLAND OR ANY OTHER GOVERNMENTAL UNIT IS PLEDGED TO THE PAYMENT
OF
THE PRINCIPAL OF OR INTEREST ON RSB BONDCO LLC RATE STABILIZATION BONDS,
INCLUDING THIS TRANCHE [
] RATE
STABILIZATION
BOND. THE STATE OF MARYLAND HAS PLEDGED, FOR THE BENEFIT AND
PROTECTION OF THE HOLDERS OF RSB BONDCO LLC RATE STABILIZATION BONDS,
INCLUDING THIS TRANCHE [
] RATE
STABILIZATION BOND,
THAT IT WILL NOT TAKE OR ALLOW ANY ACTION THAT WOULD IMPAIR THE VALUE OF THE
RATE STABILIZATION PROPERTY, OR, EXCEPT AS ALLOWED BY APPLICABLE SECTIONS OF
THE
RATE STABILIZATION ACT, REDUCE, ALTER OR IMPAIR THE QUALIFIED RATE STABILIZATION
CHARGES TO BE IMPOSED, COLLECTED AND REMITTED TO THE INDENTURE TRUSTEE FOR
THE
BENEFIT OF THE HOLDERS OF RATE STABILIZATION BONDS, INCLUDING THIS TRANCHE
[
] RATE
STABILIZATION BOND,
UNTIL THE PRINCIPAL, INTEREST AND PREMIUM, AND ANY OTHER CHARGES INCURRED AND
CONTRACTS TO BE PERFORMED IN CONNECTION WITH THE RSB BONDCO LLC RATE STABILIZATION BONDS,
INCLUDING THIS TRANCHE [
] RATE
STABILIZATION BOND,
HAVE BEEN PAID AND PERFORMED IN FULL.
EXHIBIT
A
2
RSB
BONDCO LLC RATE STABILIZATION BONDS,
SERIES
[
],
Tranche
[ - ].
INTEREST
RATE
ORIGINAL
PRINCIPAL
AMOUNT
FINAL
MATURITY
DATE
RSB
BONDCO LLC, a limited liability company formed under the laws of the State
of
Delaware (herein referred to as the “Issuer”), for value received, hereby
promises to pay to [
],
or
registered assigns, the Original Principal Amount shown above [in
semi-annual
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 Indenture, in each
year, commencing on the date determined as provided on the reverse hereof and
ending on or before the Final Maturity Date shown above and to pay interest,
at
the Interest Rate shown above, on each April 1st and October
1st or if any
such day
is not a Business Day, the next succeeding Business Day, commencing on [
]
and
continuing until the earlier of the payment in full of the principal hereof
and
the Final Maturity Date (each a “Payment Date”), on the principal amount
of this Series [
],
Tranche
[ - ]
Rate
Stabilization Bond (hereinafter referred to as this “Tranche [ - ]
Rate Stabilization Bond”). Interest on this Tranche [ - ]
Rate
Stabilization Bond 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 the date of issuance. Interest will
be computed on the basis of [specify
method
of computation]. Such
principal of and interest on this Tranche [ - ]
Rate
Stabilization Bond shall be paid in the manner specified on the reverse
hereof.
The
principal of and interest on this Tranche [ - ]
Rate
Stabilization Bond 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 Issuer with respect to this
Tranche [ - ]
Rate
Stabilization Bond shall be applied first to interest due and payable on this
Tranche [ - ]
Rate
Stabilization Bond as provided above and then to the unpaid principal of and
premium, if any, on this Tranche [ - ]
Rate
Stabilization Bond, all in the manner set forth in the Indenture.
Reference
is made to the further provisions of this Tranche [ - ]
Rate
Stabilization Bond set forth on the reverse hereof, which shall have the same
effect as though fully set forth on the face of this Tranche [ - ]
Rate
Stabilization Bond.
Unless
the certificate of authentication hereon has been executed by the Indenture
Trustee whose name appears below by manual signature, this Tranche [ - ]
Rate
Stabilization
EXHIBIT
A
3
Bond
shall not be entitled to any benefit under the Indenture referred to on the
reverse hereof, or be valid or obligatory for any purpose.
IN
WITNESS WHEREOF, the Issuer has caused this instrument to be signed, manually
or
in facsimile, by its Responsible Officer.
Date:
RSB
BONDCO LLC
By:
Name:
Title:
EXHIBIT
A
4
INDENTURE
TRUSTEE’S CERTIFICATE OF AUTHENTICATION
Dated: __________
___, ____
This
is
one of the Series [
],
Tranche
[ - ]
Rate
Stabilization Bonds, designated above and referred to in the within-mentioned
Indenture.
DEUTSCHE
BANK TRUST COMPANY AMERICAS, not in its individual capacity but
solely as
Indenture Trustee and as Securities Intermediary
This
Series [
],
Tranche
[ - ]
Rate
Stabilization Bond is one of a duly authorized issue of Rate Stabilization
Bonds
of the Issuer (herein called the “Rate Stabilization Bonds”), issued and
to be issued in one or more Series, which Series are issuable in one or more
Tranches, and the Series [
]
Rate
Stabilization Bonds consists of [
]
Tranches,
including this Tranche [ - ]
Rate
Stabilization Bond (herein called the “Tranche [ - ]
Rate Stabilization Bonds”), all issued and to be issued under that certain
Indenture dated as of June 29, 2007 (as supplemented by the Series Supplement
(as defined below), the “Indenture”), between the Issuer and Deutsche
Bank Trust Company Americas, in its capacity as indenture trustee (the
“Indenture Trustee”, which term includes any successor indenture trustee
under the Indenture) and in its separate capacity as a securities intermediary
(the “Securities Intermediary”, which term includes any successor
securities intermediary under the Indenture), to which Indenture and all
indentures supplemental thereto reference is hereby made for a statement of
the
respective rights and obligations thereunder of the Issuer, the Indenture
Trustee and the Holders of the Rate Stabilization Bonds. For purposes
herein, “Series Supplement” means that certain Series Supplement dated as of
June 29, 2007, between the Issuer and the Indenture Trustee. All
terms used in this Tranche [ - ]
Rate
Stabilization Bond that are defined in the Indenture, as amended, restated,
supplemented or otherwise modified from time to time, shall have the meanings
assigned to such terms in the Indenture.
The
Tranche [ - ]
Rate
Stabilization Bonds, the other Tranches of Series [
]
Rate
Stabilization Bonds (all of such Tranches being referred to herein as “Series
[]
Rate Stabilization Bonds”) and any other Series of Rate Stabilization Bonds
issued by the Issuer are and will be equally and ratably secured by the Series
Rate Stabilization Bond Collateral pledged as security therefor as provided
in
the Indenture.
The
principal of this Tranche [ - ]
Rate
Stabilization Bond shall be payable on each Payment Date only to the extent
that
amounts in the applicable 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 related Series Supplement as Schedule A,
unless payable earlier because an Event of Default shall have occurred and
be
continuing and the Indenture Trustee or the Bondholders representing not less
than a majority of the Outstanding Amount of the Rate Stabilization Bonds of
this Series have declared such Rate Stabilization Bonds to be immediately due
and payable in accordance with Section 5.02 of the Indenture (unless such
declaration shall have been rescinded and annulled in accordance with
Section 5.02 of the Indenture). 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
Indenture. The entire unpaid principal amount of this Tranche [ - ]
Rate
Stabilization Bond shall be due and payable on the Final Maturity
Date
*The
form of the reverse of a
Rate Stabilization Bond is substantially as follows, unless otherwise specified
in the related Series Supplement.
EXHIBIT
A
6
hereof. Notwithstanding
the foregoing, the entire unpaid principal amount of the Rate Stabilization
Bonds 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
Indenture Trustee or the Holders of the Rate Stabilization Bonds representing
not less than a majority of the Outstanding Amount of the Rate Stabilization
Bonds of this Series have declared the Rate Stabilization Bonds of this Series
to be immediately due and payable in the manner provided in Section 5.02
of the Indenture (unless such declaration shall have been rescinded and annulled
in accordance with Section 5.02 of the Indenture). All
principal payments on the Tranche [ - ]
Rate
Stabilization Bonds shall be made pro rata to the Tranche [ - ]
Holders
entitled thereto based on the respective principal amounts of the Tranche [ - ]
Rate
Stabilization Bonds held by them.
Payments
of interest on this Tranche [ - ]
Rate
Stabilization Bond due and payable on each Payment Date, together with the
installment of principal or premium, if any, shall be made by check mailed
first-class, postage prepaid, to the Person whose name appears as the Registered
Holder of this Tranche [ - ]
Rate
Stabilization Bond (or one or more Predecessor Rate Stabilization Bonds) on
the
Rate Stabilization Bond Register on the Record Date or in such other manner
as
may be provided in the Indenture or the related Series Supplement, except that
(i) upon application to the Indenture Trustee by any Holder owning a Global
Rate
Stabilization Bond evidencing this Tranche [ - ]
Rate
Stabilization Bond in the principal amount of $10,000,000 or more not later
than
the applicable Record Date payment will be made by wire transfer to an account
maintained by such Holder and (ii) if this Tranche [ - ]
Rate
Stabilization Bond is held in Book-Entry Form, payments will be made by wire
transfer in immediately available funds to the account designated by the Holder
of the applicable Global Rate Stabilization Bond evidencing this Tranche [ - ]
Rate
Stabilization Bond unless and until such Global Rate Stabilization Bond is
exchanged for Definitive Rate Stabilization Bonds (in which event payments
shall
be made as provided above) and except for the final installment of principal
and
premium, if any, payable with respect to this Tranche [ - ]
Rate
Stabilization Bond 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 Rate Stabilization Bond Register
as of the applicable Record Date without requiring that this Tranche [ - ]
Rate
Stabilization Bond be submitted for notation of payment. Any
reduction in the principal amount of this Tranche [ - ]
Rate
Stabilization Bond (or any one or more Predecessor Rate Stabilization Bonds)
effected by any payments made on any Payment Date shall be binding upon all
future Holders of this Tranche [ - ]
Rate
Stabilization Bond and of any Rate Stabilization Bond 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 Indenture, for payment in full of the then remaining unpaid
principal amount of this Tranche [ - ]
Rate
Stabilization Bond on a Payment Date, then the Indenture Trustee, in the name
of
and on behalf of the 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 (5) days prior to such final Payment Date and shall specify
that such final installment will be payable only upon presentation and surrender
of this Tranche [ - ]
Rate
Stabilization Bond and shall specify the place where this Tranche [ - ]
Rate
Stabilization Bond may be presented and surrendered for payment of such
installment.
EXHIBIT
A
7
The
Issuer shall pay interest on overdue installments of interest at the Rate
Stabilization Bond Interest Rate to the extent lawful.
This
Rate
Stabilization Bond is a “Rate Stabilization Bond” as such term is defined in the
Rate Stabilization Law. Principal and interest due and payable on
this Rate Stabilization Bond are payable from and secured primarily by Rate
Stabilization Property created and established by a Qualified Rate Order
obtained from the Public Service Commission of Maryland pursuant to the Rate
Stabilization Law. Rate Stabilization Property consists of the rights
and interests of the Seller in the relevant Qualified Rate Order, including
the
right to impose, collect and recover certain charges (defined in the Rate
Stabilization Law as “Qualified Rate Stabilization Charges”) to be
included in regular electric utility bills of existing and future residential
electric delivery service customers within the service territory of BGE, a
Maryland electric utility, or its successors or assigns, as more fully described
in the Qualified Rate Order.
The
Rate
Stabilization Law provides that: “The state pledges for the benefit
and protection of financing parties and the electric company, that it will
not
take or allow any action that would impair the value of rate stabilization
property, or, except as allowed in accordance with Sections 7-531, 7-533, and
7-534 [of the Rate Stabilization Law], reduce, alter, or impair the qualified
rate stabilization charges to be imposed, collected, and remitted to financing
parties, until the principal, interest and premium, and any other charges
incurred and contracts to be performed in connection with the related rate
stabilization bonds have been paid and performed in full. Any party
issuing rate stabilization bonds is authorized to include this pledge in any
documentation relating to those bonds.”
As
a
result of the foregoing pledge, the State of Maryland may not, except as
provided in the succeeding sentence, in any way reduce, alter or impair the
Qualified Rate Stabilization Charges until the Rate Stabilization Bonds,
together with interest thereon, are fully paid and
discharged. Notwithstanding the immediately preceding sentence, the
State of Maryland would be allowed to effect a temporary impairment of the
Holders’ rights if it could be shown that such impairment was necessary to
advance a significant and legitimate public purpose.
The
Issuer and BGE hereby acknowledge that the purchase of this Rate Stabilization
Bond by the Holder hereof or the purchase of any beneficial interest herein
by
any Person are made in reliance on the foregoing pledge.
As
provided in the Indenture and subject to certain limitations set forth therein,
the transfer of this Tranche [ - ]
Rate
Stabilization Bond may be registered on the Rate Stabilization Bond Register
upon surrender of this Tranche [ - ]
Rate
Stabilization Bond for registration of transfer at the office or agency
designated by the Issuer pursuant to the Indenture, duly endorsed by, or
accompanied by (a) a written instrument of transfer in form satisfactory to
the
Indenture Trustee duly executed by the Holder hereof 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 Indenture Trustee, and (b) such other documents as the
Indenture Trustee may
EXHIBIT
A
8
require,
and thereupon one or more new Tranche [ - ]
Rate
Stabilization Bonds 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 Tranche [ - ]
Rate
Stabilization Bond, 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 Sections 2.04 or 2.06 of the Indenture not involving
any transfer.
Each
Rate
Stabilization Bond holder, by acceptance of a Rate Stabilization Bond, covenants
and agrees that no recourse may be taken, directly or indirectly, with respect
to the obligations of the Issuer or the Indenture Trustee on the Rate
Stabilization Bonds or under the Indenture or any certificate or other writing
delivered in connection therewith, against (i) the Indenture Trustee or the
Managers in their respective individual capacities, (ii) any owner of a limited
liability company interest in the Issuer (including BGE) or (iii) any
shareholder, partner, owner, beneficiary, agent, officer or employee of the
Indenture Trustee, the Managers or any owner of a limited liability company
interest in the Issuer (including BGE) in its respective individual or corporate
capacities, or of any successor or assign of any of them in their individual
or
corporate capacities, except as any such Person may have expressly agreed in
writing (it being understood that none of the Indenture Trustee, the Managers
or
BGE has any such obligations in their respective individual or corporate
capacities).
Prior
to
the due presentment for registration of transfer of this Tranche [ - ]
Rate
Stabilization Bond, the Issuer, the Indenture Trustee and any agent of the
Issuer or the Indenture Trustee may treat the Person in whose name this Tranche
[ - ]
Rate
Stabilization Bond is registered (as of the day of determination) as the owner
hereof for the purpose of receiving payments of principal of and premium, if
any, and interest on this Tranche [ - ]
Rate
Stabilization Bond and for all other purposes whatsoever, whether or not this
Tranche [ - ]
Rate
Stabilization Bond be overdue, and neither the Issuer, the Indenture Trustee
nor
any such agent shall be affected by notice to the contrary.
The
Indenture permits, with certain exceptions as therein provided, the amendment
thereof and the modification of the rights and obligations of the Issuer and
the
rights of the Holders of the Rate Stabilization Bonds under the Indenture at
any
time by the Issuer with the consent of the Bondholders representing not less
than a majority of the Outstanding Amount of all Rate Stabilization Bonds at
the
time outstanding of each Series or Tranche to be affected. The
Indenture also contains provisions permitting the Bondholders representing
specified percentages of the Outstanding Amount of the Rate Stabilization Bonds
of all Series, on behalf of the Holders of all the Rate Stabilization Bonds,
to
waive compliance by the Issuer with certain provisions of the Indenture and
certain past defaults under the Indenture and their consequences. Any
such consent or waiver by the Holder of this Tranche [ - ]
Rate
Stabilization Bond (or any one of more Predecessor Rate Stabilization Bonds)
shall be conclusive and binding upon such Holder and upon all future Holders
of
this Tranche [ - ]
Rate
Stabilization Bond and of any Rate Stabilization Bond 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 Tranche [ - ]
Rate
Stabilization Bond. The Indenture also permits the Indenture Trustee
to amend or waive
EXHIBIT
A
9
certain
terms and conditions set forth in the Indenture without the consent of Holders
of the Rate Stabilization Bonds issued thereunder.
The
Indenture contains provisions for defeasance at any time of (a) the entire
indebtedness of the Issuer on this Tranche [ - ]
Rate
Stabilization Bond and (b) certain restrictive covenants and the related Events
of Default, upon compliance by the Issuer with certain conditions set forth
therein, which provisions apply to this Tranche [ - ]
Rate
Stabilization Bond.
The
term
“Issuer” as used in this Tranche [ - ]
Rate
Stabilization Bond includes any successor to the Issuer under the
Indenture.
The
Issuer is permitted by the Indenture, under certain circumstances, to merge
or
consolidate, subject to the rights of the Indenture Trustee and the Bondholders
under the Indenture.
The
Tranche [ - ]
Rate
Stabilization Bonds are issuable only in registered form in denominations as
provided in the Indenture and the related Series Supplement subject to certain
limitations therein set forth.
THIS
TRANCHE [ - ]
RATE
STABILIZATION BOND, THE INDENTURE AND THE RELATED SERIES SUPPLEMENT SHALL BE
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT
REFERENCE TO ITS CONFLICT OF LAW PROVISIONS (OTHER THAN SECTION 5-1401 OF THE
NEW YORK GENERAL OBLIGATIONS LAW), AND THE OBLIGATIONS, RIGHTS AND REMEDIES
OF
THE PARTIES HEREUNDER AND THEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH
SUCH
LAWS; PROVIDED THAT THE CREATION, ATTACHMENT AND PERFECTION OF ANY LIENS
CREATED UNDER THE INDENTURE IN RATE STABILIZATION PROPERTY, AND ALL RIGHTS
AND
REMEDIES OF THE INDENTURE TRUSTEE AND THE HOLDERS WITH RESPECT TO SUCH RATE
STABILIZATION PROPERTY, SHALL BE GOVERNED BY THE LAWS OF THE STATE OF
MARYLAND.
No
reference herein to the Indenture and no provision of this Tranche [ - ]
Rate
Stabilization Bond or of the Indenture shall alter or impair the obligation,
which is absolute and unconditional, to pay the principal of and interest on
this Tranche [ - ]
Rate
Stabilization Bond at the times, place, and rate, and in the coin or currency
herein prescribed.
The
Holder of this Tranche [ - ]
Rate
Stabilization Bond by the acceptance hereof agrees that, notwithstanding any
provision of the Indenture or the related Series Supplement to the contrary,
the
Holder shall have no recourse against the Issuer, but shall look only to the
Rate Stabilization Bond Collateral, with respect to any amounts due to the
Holder under this Tranche [ - ]
Rate
Stabilization Bond.
The
Issuer and the Indenture Trustee, by entering into the Indenture, and the
Holders and any Persons holding a beneficial interest in any Tranche [ - ]
Rate
Stabilization Bond, by acquiring any Tranche [ - ]
Rate
Stabilization
EXHIBIT
A
10
Bond
or
interest therein, (i) express their intention that, solely for the purpose
of
federal taxes and, to the extent consistent with applicable state, local and
other tax law, solely for the purpose of state, local and other taxes, the
Tranche [ - ]
Rate
Stabilization Bonds qualify under applicable tax law as indebtedness of the
sole
owner of the Issuer secured by the Rate Stabilization Bond Collateral and (ii)
solely for purposes of federal taxes and, to the extent consistent with
applicable state, local and other tax law, solely for purposes of state, local
and other taxes, so long as any of the Tranche [ - ]
Rate
Stabilization Bonds are outstanding, agree to treat the Tranche [ - ]
Rate
Stabilization Bonds as indebtedness of the sole owner of the Issuer secured
by
the Rate Stabilization Bond Collateral unless otherwise required by appropriate
taxing authorities.
EXHIBIT
A
11
ABBREVIATIONS
The
following abbreviations, when used in the inscription of the face of this
Tranche [ - ]
Rate
Stabilization Bond, shall be construed as though they were written out in full
according to applicable laws or regulations.
TEN
COM
as
tenants in common
TEN
ENT
as
tenants by the entireties
JT
TEN
as
joint tenants with right of survivorship and not as tenants
Under
Uniform Gifts to Minor Act (____________________)
(State)
Additional
abbreviations may also be used though not in the above list.
EXHIBIT
A
12
ASSIGNMENT
Social
Security or taxpayer I.D. or other identifying number of assignee
_______________________
FOR
VALUE
RECEIVED, the undersigned2 hereby sells,
assigns and transfers unto
(name
and
address of assignee)
the
within Tranche [ - ]
Rate
Stabilization Bond and all rights thereunder, and hereby irrevocably constitutes
and appoints
______,
attorney, to transfer said Tranche [ - ]
Rate
Stabilization Bond on the books kept for registration thereof, with full power
of substitution in the premises.
Dated:
________________
Signature
Guaranteed:
2 RATE
STABILIZATION BOND: The signature to this assignment must correspond
with the name of the registered owner as it appears on the face of the within
Tranche [ - ]
Rate
Stabilization Bond in every particular, without alteration, enlargement or
any
change whatsoever.
NOTE: Signature(s)
must be
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)
such
other guarantee program acceptable to the Indenture Trustee.
EXHIBIT
A
13
EXHIBIT
B
FORM
OF SERIES SUPPLEMENT
This
SERIES SUPPLEMENT dated as of June 29, 2007 (this “Series Supplement”),
by and between RSB BONDCO LLC, a limited liability company formed under the
laws
of the State of Delaware (the “Issuer”), and DEUTSCHE BANK TRUST COMPANY
AMERICAS, a New York banking corporation (“Deutsche Bank”), in its capacity as
indenture trustee (the “Indenture Trustee”) for the benefit of the
Secured Parties under the Indenture dated as of June 29, 2007, by and between
the Issuer and Deutsche Bank, in its capacity as Indenture Trustee and in its
separate capacity as a securities intermediary (the
“Indenture”).
PRELIMINARY
STATEMENT
Section
2.02 of the Indenture provides, among other things, that the Issuer and the
Indenture Trustee may at any time and from time to time enter into one or more
Series Supplements for the purposes of authorizing the issuance by the Issuer
of
a Series of Rate Stabilization Bonds and establishing the terms
thereof. The Issuer has duly authorized the creation of a Series of
Rate Stabilization Bonds with an initial aggregate principal amount of
$623,200,000 to be known as RSB BondCo LLC Rate Stabilization Bonds, Series
A
(the “Series A Rate Stabilization Bonds”), and the Issuer and the
Indenture Trustee are executing and delivering this Series Supplement in order
to provide for the creation of the Series A Rate Stabilization
Bonds.
All
terms
used in this Series Supplement that are defined in the Indenture, either
directly or by reference therein, have the meanings assigned to them therein,
except to the extent such terms are defined or modified in this Series
Supplement or the context clearly requires otherwise. In the event
that any term or provision contained herein shall conflict with or be
inconsistent with any term or provision contained in the Indenture, the terms
and provisions of this Series Supplement shall govern.
GRANTING
CLAUSE
With
respect to the Series A Rate Stabilization Bonds, the Issuer hereby Grants
to
the Indenture Trustee, as Indenture Trustee for the benefit of the Secured
Parties of the Series A Rate Stabilization Bonds, all of the Issuer’s right,
title and interest (whether now owned or hereafter acquired or arising) in
and
to the following (collectively, the “Series A Rate Stabilization Bond
Collateral”): (a) the Rate Stabilization Property created under and pursuant
to the Applicable Qualified Rate Order, and transferred by the Seller to the
Issuer pursuant to the Sale Agreement (including, to the fullest extent
permitted by law, the right to impose, collect and receive Qualified Rate
Stabilization Charges, all revenues, collections, claims, rights, payments,
money or proceeds of or arising from the Qualified Rate Stabilization Charges
authorized in the Applicable Qualified Rate Order and any Tariffs filed pursuant
thereto and any contractual rights to collect such Qualified Rate Stabilization
Charges from Customers and Third-Party Collectors), (b) all Qualified Rate
Stabilization Charges related to such Rate Stabilization Property, (c) the
Sale
Agreement and each Bill of Sale executed in connection therewith and all
property and interests in property transferred under the Sale Agreement and
such
Bills of Sale with respect to
EXHIBIT
B
1
such
Rate
Stabilization Property and the Series A Rate Stabilization Bonds, (d) the
Servicing Agreement, the Administration Agreement and any subservicing, agency,
administration, collection or other agreements executed in connection therewith,
to the extent related to the foregoing Rate Stabilization Property and the
Series A Rate Stabilization Bonds, (e) the Collection Account for such Series,
all subaccounts thereof and all amounts of cash, instruments, investment
property or other assets on deposit therein or credited thereto from time to
time and all financial assets and securities entitlements carried therein or
credited thereto, (f) all rights to compel the Servicer to file for and obtain
adjustments to the Qualified Rate Stabilization Charges in accordance with
Section 7-531 of the Rate Stabilization Law, the Applicable Qualified Rate
Order
or any Tariff filed in connection therewith, (g) all deposits, guarantees,
surety bonds, letters of credit and other forms of credit support provided
by or
on behalf of Third-Party Collectors pursuant to such Applicable Qualified Rate
Order or Tariff, including investment earnings thereon and all amounts on
deposit in the TPC Deposit Accounts, (h) all present and future
claims, demands, causes and choses in action in respect of any or all of the
foregoing, whether such claims, demands, causes and choses in action constitute
Rate Stabilization Property, accounts, general intangibles, instruments,
contract rights, chattel paper or proceeds of such items or any other form
of
property, (i) all accounts, chattel paper, deposit accounts, documents, general
intangibles, goods, instruments, investment property, letters of credit,
letters-of-credit rights, money, commercial tort claims and supporting
obligations related to the foregoing, and (j) all payments on or under, and
all
proceeds in respect of, any or all of the foregoing; it being understood that
the following do not constitute Series A Rate Stabilization Bond Collateral:
(i) following retirement of all Outstanding Series of Rate Stabilization Bonds,
cash that has been released pursuant to Section 8.04(c) of the Indenture,
(ii) amounts deposited with the Issuer on any Series Issuance Date, including
the Closing Date, for payment of costs of issuance with respect to the related
Series (together with any interest earnings thereon) and (iii) the Initial
Capital Contribution by the Member to the Issuer pursuant to Section 2.01
of the LLC Agreement, it being understood that such amounts described in
clauses (i),(ii) and (iii) above shall not be subject to
Section 3.17 of the Indenture.
The
foregoing Grant is made in trust to secure the payment of principal of and
premium, if any, interest on, and any other amounts owing in respect of, the
Series A Rate Stabilization Bonds and all fees, expenses, counsel fees and
expenses and other amounts due and payable to the Indenture Trustee
(collectively, the “Secured Obligations”) equally and ratably without
prejudice, priority or distinction, except as expressly provided in the
Indenture, to secure compliance with the provisions of the Indenture with
respect to the Series A Rate Stabilization Bonds, all as provided in the
Indenture and to secure the performance by the Issuer of all of its obligations
under the Indenture. The Indenture and this Series Supplement
constitutes a security agreement within the meaning of the Rate Stabilization
Law and under the UCC to the extent that the provisions of the UCC are
applicable hereto. In addition, the Issuer shall cause the filing of
one or more financing statements to evidence the security interest of the
Indenture Trustee in the Series A Rate Stabilization Bond
Collateral.
The
Indenture Trustee, as indenture trustee on behalf of the Secured Parties of
the
Series A Rate Stabilization Bonds, acknowledges such Grant and accepts the
trusts under this Series Supplement and the Indenture in accordance with the
provisions of this Series Supplement and the Indenture.
EXHIBIT
B
2
SECTION
1. Designation. The Series A Rate Stabilization Bonds shall be
designated generally as the Rate Stabilization Bonds, Series A and further
denominated as Tranches A-1 through A-3.
SECTION
2. Initial Principal Amount; Rate Stabilization Bond Interest Rate; Scheduled
Final Payment Date; Final Maturity Date. The Series A Rate
Stabilization Bonds of each Tranche shall have the initial principal amount,
bear interest at the rates per annum (as to each Tranche, the “Rate
Stabilization Bond Interest Rate”) and shall have the Scheduled Final
Payment Dates and the Final Maturity Dates set forth below:
Tranche
Initial
Principal
Amount
Rate
Stabilization
Bond
Interest
Rate
Scheduled
Final
Payment
Date
Final
Maturity
Date
Tranche
A-1
$284,000,000
5.47%
10/1/2012
10/1/2014
Tranche
A-2
$220,000,000
5.72%
4/1/2016
4/1/2018
Tranche
A-3
$119,200,000
5.82%
4/1/2017
6/28/2019
The
Rate
Stabilization Bond Interest Rate shall be computed on the basis of a 360-day
year of twelve (12) 30-day months.
SECTION
3. Authentication Date; Payment Dates; Expected Amortization
Schedule for Principal; Periodic Interest; No Premium; Other
Terms.
(a) Authentication
Date. The Series A Rate Stabilization Bonds that are
authenticated and delivered by the Indenture Trustee to or upon the order of
the
Issuer on June 29, 2007 (the “Series Issuance Date”) shall have as their
date of authentication June 29, 2007.
(b) Payment
Dates. The Payment Dates for the Series A Rate Stabilization
Bonds are April 1 and October 1 of each year or, if any such date is not a
Business Day, the following Business Day, commencing on April 1, 2008 and
continuing until the earlier of repayment of the Series A, Tranche A-3 Rate
Stabilization Bonds in full and the Final Maturity Date for the Series A,
Tranche A-3 Rate Stabilization Bonds.
(c) Expected
Amortization Schedule for Principal. Unless an Event of Default
shall have occurred and be continuing on each Payment Date, the Indenture
Trustee shall distribute to the Holders of record as of the related Record
Date
amounts payable pursuant to Section 8.02(e) of the Indenture as
principal, in the following order and priority: (1) to the holders of the
Tranche A-1 Rate Stabilization Bonds, until the Outstanding Amount of such
Tranche of Rate Stabilization Bonds thereof has been reduced to zero; (2) to
the
holders of the Tranche A-2 Rate Stabilization Bonds, until the Outstanding
Amount of such Tranche of Rate Stabilization Bonds thereof has been reduced
to
zero; and (3) to the holders of the Tranche A-3 Rate Stabilization Bonds, until
the Outstanding Amount of such Tranche of Rate Stabilization Bonds thereof
has
been reduced to zero; provided, however, that in no event shall a
principal payment pursuant to this Section 3(c) on any Tranche on a
Payment Date be greater than the
EXHIBIT
B
3
amount
necessary to reduce the Outstanding Amount of such Tranche of Rate Stabilization
Bonds to the amount specified in the Expected Amortization Schedule which is
attached as Schedule A hereto for such Tranche and Payment
Date.
(d) Periodic
Interest. Periodic Interest will be payable on each Tranche of
the Series A Rate Stabilization Bonds on each Payment Date in an amount equal
to
one-half of the product of (i) the applicable Rate Stabilization Bond Interest
Rate and (ii) the Outstanding Amount of the related Tranche of Series A Rate
Stabilization Bonds as of the close of business on the preceding Payment Date
(or, with respect to the Initial Payment Date, the Outstanding Amount of the
related Tranche of Series A Rate Stabilization Bonds on the Series Issuance
Date) after giving effect to all payments of principal made to the Holders
of
the related Tranche of Series A Rate Stabilization Bonds on such preceding
Payment Date.
(e) Book-Entry
Rate Stabilization Bonds. The Series A Rate Stabilization Bonds
shall be Book-Entry Rate Stabilization Bonds and the applicable provisions
of
Section 2.11 of the Indenture shall apply to such Rate Stabilization
Bonds.
(f) Waterfall
Caps.
(i) The
amount payable with respect to the Series A Rate Stabilization Bonds pursuant
to
Section 8.02(e)(i) of the Indenture shall not exceed $850,000
annually.
(ii) The
amount payable with respect to the Series A Rate Stabilization Bonds pursuant
to
Section 8.02(e)(ii) of the Indenture shall not exceed on an annual basis
(A) for so long as BGE is the Servicer, 0.05% of the aggregate initial principal
amount of Series A Rate Stabilization Bonds, provided that BGE may seek
approval from the PSC to recover from Customers, in accordance with the
Financing Credit Order, any incremental costs it incurs to service the Rate
Stabilization Property to the extent such incremental costs exceed 0.05% of
the
aggregate initial principal amount of Series A Rate Stabilization Bonds, and
furtherprovided that such excess amount shall neither be
considered an Operating Expense nor be paid out of the Collection Account or
included in the calculation of True-Up Adjustments, or (B) if BGE is not the
Servicer, 1.25% of the aggregate initial principal amount of Series A Rate
Stabilization Bonds, provided, however, that BGE may seek approval
from the PSC for a higher fee to be payable under Section 8.02(e)(ii) of
the Indenture if it can reasonably demonstrate to the PSC that the services
cannot be obtained under then-current market conditions for a fee of 1.25%
of
the aggregate initial principal amount of Series A Rate Stabilization
Bonds.
(iii) The
amount payable for the Series A Rate Stabilization Bonds pursuant to Section
8.02(e)(iii) of the Indenture, shall not exceed $100,000 in the aggregate
annually, provided that BGE may seek approval from the PSC to recover
from Customers, in accordance with the Financing Credit Order, any incremental
costs it incurs to provide administrative support services to the Issuer to
the
extent such incremental costs exceed $100,000, and furtherprovided
that such excess amount shall neither be considered an Operating Expense nor
be
paid out of the Collection Account or included in the calculation of True-Up
Adjustments.
EXHIBIT
B
4
(iv) The
amount payable with respect to the ordinary periodic Operating Expenses not
described above pursuant to Section 8.02(e)(iv) shall not exceed $250,000
in the aggregate annually.
SECTION
4. Minimum Denominations. The Series A Rate
Stabilization Bonds shall be issuable in the Minimum Denomination and in
integral multiples of $1,000 thereof.
SECTION
5. Certain Defined Terms. Article I of the
Indenture provides that the meanings of certain defined terms used in the
Indenture shall, when applied to the Rate Stabilization Bonds of a particular
Series, be as defined in Appendix A to the
Indenture. Additionally, Article II of the Indenture provides
that with respect to a particular Series of Rate Stabilization Bonds, certain
terms will have the meanings specified in the related Series
Supplement. With respect to the Series A Rate Stabilization Bonds,
the following definitions shall apply:
“Initial
Payment Date” shall mean the first Payment Date for a Tranche
of Series A Rate Stabilization Bonds specified in the Expected
Amortization Schedule which is attached as Schedule A
hereto.
“Minimum
Denomination” shall mean $100,000, or integral multiples of $1,000 in excess
thereof, except for one Rate Stabilization Bond of each Tranche which may be
of
a smaller denomination.
“Rate
Stabilization Bond Interest Rate” has the meaning set forth in Section
2 of this Series Supplement.
“Payment
Date” has the meaning set forth in Section 3(b) of this Series
Supplement.
“Periodic
Interest” has the meaning set forth in Section 3(d) of this Series
Supplement.
“Series
Issuance Date” has the meaning set forth in Section 3(a) of this
Series Supplement.
SECTION
6. Delivery and Payment for the Series A Rate Stabilization Bonds;
Form of the Series A Rate Stabilization Bonds. The
Indenture Trustee shall deliver the Series A Rate Stabilization Bonds to the
Issuer when authenticated in accordance with Section 2.03 of the
Indenture. The Series A Rate Stabilization Bonds of each
Tranche shall be in the form of Exhibits A-1 through A-3 hereto.
SECTION
7. Ratification of Agreement. As supplemented by
this Series Supplement, the Indenture is in all respects ratified and confirmed
and the Indenture, as so supplemented by this Series Supplement, shall be read,
taken, and construed as one and the same instrument. This Series
Supplement amends, modifies and supplements the Indenture only in so far as
it
relates to the Series A Rate Stabilization Bonds.
EXHIBIT
B
5
SECTION
8. Counterparts. This Series Supplement may be
executed in any number of counterparts, each of which when so executed shall
be
deemed to be an original, but all of such counterparts shall together constitute
but one and the same instrument.
SECTION
9.
GOVERNING LAW. THIS SERIES SUPPLEMENT SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT
REFERENCE TO ITS CONFLICT OF LAW PROVISIONS (OTHER THAN SECTION 5-1401 OF THE
NEW YORK GENERAL OBLIGATIONS LAW), AND THE OBLIGATIONS, RIGHTS AND REMEDIES
OF
THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS; PROVIDED
THAT THE CREATION, ATTACHMENT AND PERFECTION OF ANY LIENS CREATED UNDER THE
INDENTURE IN RATE STABILIZATION PROPERTY, AND ALL RIGHTS AND REMEDIES OF THE
INDENTURE TRUSTEE AND THE HOLDERS WITH RESPECT TO SUCH RATE STABILIZATION
PROPERTY, SHALL BE GOVERNED BY THE LAWS OF THE STATE OF MARYLAND.
SECTION
10. Issuer Obligation. No recourse may be taken
directly or indirectly, by the Holders with respect to the obligations of the
Issuer on the Rate Stabilization Bonds, under the Indenture or under this Series
Supplement or any certificate or other writing delivered in connection herewith
or therewith, against (i) the Indenture Trustee or the Managers in their
respective individual capacities, (ii) any owner of a limited liability company
interest in the Issuer (including BGE) or (iii) any shareholder, partner, owner,
beneficiary, agent, officer, director, employee or agent of the Indenture
Trustee, the Managers or any owner of a limited liability company interest
in
the Issuer (including BGE) in its individual capacity, or of any successor
or
assign of any of them in their respective individual or corporate capacities,
except as any such Person may have expressly agreed (it being understood that
none of the Indenture Trustee, the Managers and BGE have any such obligations
in
their respective individual or corporate capacities).
EXHIBIT
B
6
IN
WITNESS WHEREOF, the Issuer and the Indenture Trustee have caused this Series
Supplement to be duly executed by their respective officers thereunto duly
authorized as of the first day of the month and year first above
written.
RSB
BONDCO LLC, as Issuer
By:
Name:
Title:
DEUTSCHE
BANK TRUST COMPANY AMERICAS,
not
in its individual capacity but solely in its capacity as Indenture
Trustee
[___________________]
(the
“Purchaser”) intends to purchase from [___________________]
the [designate
Rate
Stabilization Bond] (the
“Rate
Stabilization Bond”), issued pursuant to that certain Indenture (the
“Indenture”), dated as of June 29, 2007, among RSB BONDCO LLC, as Issuer
(the “Issuer”), and Deutsche Bank Trust Company Americas, a New York
banking corporation, as indenture trustee (the “Indenture Trustee”) and
that certain Series Supplement, dated as of [__________],
2007 (the
“Series Supplement”) among the Issuer and the Indenture
Trustee. Capitalized terms used herein and not otherwise defined
herein shall have the meanings set forth in the Indenture and, if not defined
therein, as defined in the Series Supplement.
In
connection with the proposed transfer, the Purchaser represents and warrants
to
the Issuer and the Indenture Trustee that on [insert
date of
transfer],
the
Purchaser is either:
(a) a
“qualified institutional buyer” as such term is defined in Rule 144A under
the Securities Act of 1933, as amended (the “Securities Act”),
or
(b)
an “institutional accredited investor” as described in Rule 501(a)(l), (2), (3)
or (7) under the Securities Act.
[___________________]
(the
“Purchaser”) intends to purchase from [___________________]
the [designate
Rate
Stabilization Bond] (the
“Rate
Stabilization Bond”), issued pursuant to that certain Indenture (the
“Indenture”), dated as of June 29, 2007 among RSB BONDCO LLC, as Issuer
(the “Issuer”), and Deutsche Bank Trust Company Americas, a New York
banking corporation, as indenture trustee (the “Indenture Trustee”) and
that certain Series Supplement, dated as of [__________],
2007 (the
“Series Supplement”) among the Issuer and the Indenture
Trustee. Capitalized terms used herein and not otherwise defined
herein shall have the meanings set forth in the Indenture and, if not defined
therein, as defined in the Series Supplement.
In
connection with the proposed transfer, the Purchaser represents and warrants
to
the Issuer and the Indenture Trustee that the Purchaser is not, and on [insert
date of
transfer]
will not be, and on such date will not be investing the funds of, (a) an
“employee benefit plan” as defined in and subject to Title I of the Employee
Retirement Income Security Act of 1974, as amended (“ERISA”), (b) a
“plan” as defined in and subject to Section 4975 of the Internal Revenue Code
of
1986, as amended (the "Code"), (c) an entity whose underlying assets include
the
assets of such employee benefit plan or plan or (d) a governmental or church
plan which is subject to any federal, state or local law that is substantially
similar to the provisions of Section 406 of ERISA or Section 4975 of the
Code.
EXHIBIT
D
1
Very
truly
yours,
[PURCHASER]
By: ____________________
Name:
Title:
EXHIBIT
D
2
EXHIBIT
E
SERVICING
CRITERIA TO BE ADDRESSED
BY
INDENTURE TRUSTEE IN ASSESSMENT OF COMPLIANCE
Reg
AB
Reference
Servicing
Criteria
Applicable
Indenture
Trustee
Responsibility
General
Servicing Considerations
1122(d)(1)(i)
Policies
and procedures are instituted to monitor any performance or other
triggers
and events of default in accordance with the transaction
agreements.
1122(d)(1)(ii)
If
any material servicing activities are outsourced to third parties,
policies and procedures are instituted to monitor the third party’s
performance and compliance with such servicing activities.
1122(d)(1)(iii)
Any
requirements in the transaction agreements to maintain a back-up
servicer
for the pool assets are maintained.
1122(d)(1)(iv)
A
fidelity bond and errors and omissions policy is in effect on the
party
participating in the servicing function throughout the reporting
period in
the amount of coverage required by and otherwise in accordance with
the
terms of the transaction agreements.
Cash
Collection and Administration
1122(d)(2)(i)
Payments
on pool assets are deposited into the appropriate custodial bank
accounts
and related bank clearing accounts no more than two (2) business
days
following receipt, or such other number of days specified in the
transaction agreements.
X
1122(d)(2)(ii)
Disbursements
made via wire transfer on behalf of an obligor or to an investor
are made
only by authorized personnel.
X
1122(d)(2)(iii)
Advances
of funds or guarantees regarding collections, cash flows or distributions,
and any interest or other fees charged for such advances, are made,
reviewed and approved as specified in the transaction
agreements.
1122(d)(2)(iv)
The
related accounts for the transaction, such as cash reserve accounts
or
accounts established as a form of overcollateralization, are separately
maintained (e.g., with respect to commingling of cash) as set forth
in the
transaction agreements.
X
1122(d)(2)(v)
Each
custodial account is maintained at a federally insured depository
institution as set forth in the transaction agreements. For purposes
of
this criterion, “federally insured depository institution” with respect to
a foreign financial institution means a foreign financial institution
that
meets the requirements of Rule 13k-1(b)(1) of the Securities Exchange
Act.
1122(d)(2)(vi)
Unissued
checks are safeguarded so as to prevent unauthorized
access.
1122(d)(2)(vii)
Reconciliations
are prepared on a monthly basis for all asset-backed securities related
bank accounts, including custodial accounts and related bank clearing
accounts. These reconciliations are (A) mathematically accurate;
(B)
prepared within thirty (30) calendar days after the bank statement
cutoff
date, or such other number of days specified in the transaction
agreements; (C) reviewed and approved by someone other than the person
who
prepared the reconciliation; and (D) contain explanations for reconciling
items. These reconciling items are resolved within ninety (90) calendar
days of their original identification, or such other number of days
specified in the transaction agreements.
Investor
Remittances and Reporting
1122(d)(3)(i)
Reports
to investors, including those to be filed with the SEC, are maintained
in
accordance with the transaction agreements and applicable SEC
requirements. Specifically, such reports (A) are prepared in accordance
with timeframes and other terms set forth in the transaction agreements;
(B) provide information calculated in accordance with the terms specified
in the transaction agreements; (C) are filed with the SEC as required
by
its rules and regulations; and (D) agree with investors’ or the trustee’s
records as to the total unpaid principal balance and number of pool
assets
serviced by the servicer.
1122(d)(3)(ii)
Amounts
due to investors are allocated and remitted in accordance with timeframes,
distribution priority and other terms set forth in the transaction
agreements.
X
1122(d)(3)(iii)
Disbursements
made to an investor are posted within two (2) business days to the
servicer’s investor records, or such other number of days specified in the
transaction agreements.
X
EXHIBIT
E
1
Reg
AB
Reference
Servicing
Criteria
Applicable
Indenture
Trustee
Responsibility
1122(d)(3)(iv)
Amounts
remitted to investors per the investor reports agree with cancelled
checks, or other form of payment, or custodial bank
statements.
X
Pool
Asset Administration
1122(d)(4)(i)
Collateral
or security on pool assets is maintained as required by the transaction
agreements or related pool asset documents.
1122(d)(4)(ii)
Pool
assets and related documents are safeguarded as required by the
transaction agreements.
1122(d)(4)(iii)
Any
additions, removals or substitutions to the asset pool are made,
reviewed
and approved in accordance with any conditions or requirements in
the
transaction agreements.
1122(d)(4)(iv)
Payments
on pool assets, including any payoffs, made in accordance with the
related
pool asset documents are posted to the servicer’s obligor records
maintained no more than two (2) business days after receipt, or such
other
number of days specified in the transaction agreements, and allocated
to
principal, interest or other items (e.g., escrow) in accordance with
the
related pool asset documents.
1122(d)(4)(v)
The
servicer’s records regarding the pool assets agree with the servicer’s
records with respect to an obligor’s unpaid principal
balance.
1122(d)(4)(vi)
Changes
with respect to the terms or status of an obligor's pool assets (e.g.,
loan modifications or re-agings) are made, reviewed and approved
by
authorized personnel in accordance with the transaction agreements
and
related pool asset documents.
1122(d)(4)(vii)
Loss
mitigation or recovery actions (e.g., forbearance plans, modifications
and
deeds in lieu of foreclosure, foreclosures and repossessions, as
applicable) are initiated, conducted and concluded in accordance
with the
timeframes or other requirements established by the transaction
agreements.
1122(d)(4)(viii)
Records
documenting collection efforts are maintained during the period a
pool
asset is delinquent in accordance with the transaction agreements.
Such
records are maintained on at least a monthly basis, or such other
period
specified in the transaction agreements, and describe the entity’s
activities in monitoring delinquent pool assets including, for example,
phone calls, letters and payment rescheduling plans in cases where
delinquency is deemed temporary (e.g., illness or
unemployment).
1122(d)(4)(ix)
Adjustments
to interest rates or rates of return for pool assets with variable
rates
are computed based on the related pool asset documents.
1122(d)(4)(x)
Regarding
any funds held in trust for an obligor (such as escrow accounts):
(A) such
funds are analyzed, in accordance with the obligor’s pool asset documents,
on at least an annual basis, or such other period specified in the
transaction agreements; (B) interest on such funds is paid, or credited,
to obligors in accordance with applicable pool asset documents and
state
laws; and (C) such funds are returned to the obligor within thirty
(30)
calendar days of full repayment of the related pool assets, or such
other
number of days specified in the transaction agreements.
1122(d)(4)(xi)
Payments
made on behalf of an obligor (such as tax or insurance payments)
are made
on or before the related penalty or expiration dates, as indicated
on the
appropriate bills or notices for such payments, provided that such
support
has been received by the servicer at least thirty (30) calendar days
prior
to these dates, or such other number of days specified in the transaction
agreements.
1122(d)(4)(xii)
Any
late payment penalties in connection with any payment to be made
on behalf
of an obligor are paid from the servicer’s funds and not charged to the
obligor, unless the late payment was due to the obligor’s error or
omission.
1122(d)(4)(xiii)
Disbursements
made on behalf of an obligor are posted within two (2) business days
to
the obligor’s records maintained by the servicer, or such other number of
days specified in the transaction agreements.
1122(d)(4)(xiv)
Delinquencies,
charge-offs and uncollectible accounts are recognized and recorded
in
accordance with the transaction agreements.
1122(d)(4)(xv)
Any
external enhancement or other support, identified in Item 1114(a)(1)
through (3) or Item 1115 of Regulation AB, is maintained as set forth
in
the transaction agreements.
EXHIBIT
E
2
APPENDIX
A
DEFINITIONS
This
is
Appendix A to the Indenture.
A. Defined
Terms. As used in the Indenture, the Sale Agreement, the LLC
Agreement, the Servicing Agreement, the Administration Agreement, any Series
Supplement or any other Basic Document as hereinafter defined, as the case
may
be (unless the context requires a different meaning), the following terms
have
the following meanings:
“Act”
is defined in Section 10.03(a) of the Indenture.
“Actual
QRSC Collections” means the sum of the QRSC Payments which are actually
received by the Servicer, directly or indirectly (including through a
Third-Party Collector), from or on behalf of Customers less an allowance
for
Charge-Offs.
“Addition
Notice” means, with respect to the transfer of Subsequent Rate Stabilization
Property to the Issuer pursuant to Section 2.02 of the Sale Agreement,
notice, which shall be given by the Seller to the Issuer and the Rating Agencies
not later than ten (10) days prior to the related Subsequent Transfer Date,
specifying the Subsequent Transfer Date for such Subsequent Rate Stabilization
Property.
“Administration
Agreement” means the Administration Agreement, dated as of June 29, 2007, by
and between BGE and the Issuer, as the same may be amended, restated,
supplemented or otherwise modified from time to time.
“Administration
Fee” is defined in Section 2 of 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.
“Agency
Office” means the office of the Issuer maintained pursuant to Section
3.02 of the Indenture.
“Amendatory
Tariff” means an amendment or revision to a Tariff regarding the Qualified
Rate Stabilization Charge filed with the PSC.
“Annual
Accountant’s Report” is defined in Section 3.04 of the Servicing
Agreement.
“Applicable
Qualified Rate Order” means, with respect to any Series, the Qualified Rate
Order authorizing the creation of the Rate Stabilization Property pledged
as
collateral for such Series.
“Applicable
Third-Party Collector” means, with respect to each Customer, the Third-Party
Collector, if any, responsible for billing and collecting all charges to
such
Customer, including the Qualified Rate Stabilization Charges.
“Application”
means the Application of BGE for a Qualified Rate Order to securitize rate
stabilization and other qualified costs filed by BGE with the PSC dated November3, 2007 pursuant to the Rate Stabilization Law, or any subsequent similar
Application of BGE.
“Bankruptcy
Code” means Title 11 of the United States Code (11 U.S.C. § 101 et
seq.), as amended from time to time.
“Basic
Documents” means the Indenture, the Rate Stabilization Bonds, the
Administration Agreement, the Sale Agreement, the Certificate of Formation,
the
LLC Agreement, the Servicing Agreement, each Series Supplement, each Letter
of
Representations, each Underwriting Agreement and all other documents and
certificates delivered in connection therewith.
“Benefit
Plan” means, with respect to any Person, any defined benefit plan (as
defined in Section 3(35) of ERISA) that (a) is or was at any time during
the
past six years maintained by such Person or any ERISA Affiliate of such person,
or to which contributions by any such Person are or were at any time during
the
past six (6) years required to be made or under which such Person has or
could
have any liability or (b) is subject to the provisions of Title IV of
ERISA.
“BGE”
means Baltimore Gas and Electric Company, a Maryland corporation and any
of its
successors or permitted assigns.
“Bill”
or “Bills” means each of the regular monthly bills, summary bills,
Opening Bills and Closing Bills issued to Customers by BGE or Third-Party
Collectors or to Third-Party Collectors by BGE on its own behalf and in its
capacity as Servicer.
“Bill
of Sale” means a bill of sale substantially in the form of Exhibit A to the
Sale Agreement and delivered pursuant to Section 2.03(i) of the Sale
Agreement.
“Billed
QRSCs” is defined in Annex I to the Servicing Agreement.
“Billing
Period” means the period created by dividing the calendar year into twelve
(12) consecutive periods of approximately twenty-one (21) Servicer Business
Days.
“Book-Entry
Form” means, with respect to any Rate Stabilization Bond or Series of Rate
Stabilization Bonds, that such Rate Stabilization Bond or Series is not
certificated and the ownership and transfers thereof shall be made through
book
entries by a Clearing Agency as described in Section 2.11 of the
Indenture and the applicable Series Supplement pursuant to which such Rate
Stabilization Bond or Series was issued.
2
“Book-Entry
Rate Stabilization Bonds” means any Rate Stabilization Bonds issued in
Book-Entry Form; provided, however, that after the occurrence of a
condition whereupon book-entry registration and transfer are no longer permitted
and Definitive Rate Stabilization Bonds are to be issued to the Holder of
such
Rate Stabilization Bonds, such Rate Stabilization Bonds shall no longer be
“Book-Entry Rate Stabilization Bonds”.
“Business
Day” means any day other than a Saturday, a Sunday or a day on which banking
institutions in Baltimore, Maryland or New York, New York are, or DTC is,
authorized or obligated by law, regulation or executive order to remain
closed.
“Calculation
Period” for any Series means initially, the period commencing on its Series
Issuance Date and ending on the six month anniversary date of the Series
Issuance Date and, thereafter, each period of six Collection Periods ending
immediately preceding the next Semi-Annual True-Up Adjustment Date;
provided, that, with respect to a Quarterly True-Up Adjustment, the
Calculation Period for such Quarterly True-Up Adjustment shall mean each
period
of three Collection Periods ending immediately preceding the next Quarterly
True-Up Adjustment Date; and, provided, that, if an Interim True-Up
Adjustment is required, then the Calculation Period for such Interim True-Up
Adjustment shall mean the Collection Periods commencing with the date on
which
such Interim True-Up Adjustment is implemented and ending on the date
immediately preceding the next Semi-Annual True-Up Adjustment Date, or
Quarterly True-Up Adjustment Date, as applicable.
“Capital
Contribution” means the amount of cash contributed to the Issuer by the
Member as specified in the LLC Agreement.
“Capital
Subaccount” is defined in Section 8.02(a) of the
Indenture.
“Certificate
of Compliance” means the certificate referred to in Section 3.03 of
the Servicing Agreement and substantially in the form of Exhibit B
attached to the Servicing Agreement.
“Certificate
of Formation” means the Certificate of Formation filed with the Secretary of
State of the State of Delaware on March 8, 2007 pursuant to which the Issuer
was
formed, as amended or amended and restated from time to time.
“Charge-Offs”
means arrears that that have been written off to bad debt expense in accordance
with generally accepted accounting principles.
“Claim”
means a “claim” as defined in Section 101(5) of the Bankruptcy
Code.
“Clearing
Agency” means an organization registered as a “clearing agency” pursuant to
Section 17A of the Exchange Act.
“Clearing
Agency Participant” means a securities broker, dealer, bank, trust company,
clearing corporation or other financial institution or other Person for whom
from time to time a Clearing Agency effects book entry transfers and pledges
of
securities deposited with the Clearing Agency.
3
“Closing
Bill” means the final Bill issued to a Customer at the time electric service
is terminated.
“Code”
means the Internal Revenue Code of 1986, as amended.
“Collection
Account” means, with respect to any Series, the account established and
maintained by the Indenture Trustee in accordance with Section 8.02(a) of
the Indenture and any subaccounts contained therein.
“Collection
Period” means any period commencing on the first Servicer Business Day of
any Billing Period and ending on the last Servicer Business Day of such Billing
Period.
“Collections
Curve” means a forecast, prepared on an annual basis for twelve-month
periods, of the percentages of amounts billed in each Billing Period that
are
expected to be received, without regard to Charge-Offs, on each Business
Day
during that Billing Period and during each of the following six
months.
“Corporate
Trust Office” means the principal office of the Indenture Trustee at which,
at any particular time, its corporate trust business shall be administered,
which office as of the Closing Date is located at 60 Wall Street, MS-NYC60-2606,
26th Floor,
NewYork, New York10005 Attention: Asset Backed Securities Unit-Mark
DiGiacomo, Telephone: (908) 608-4091, Facsimile: (212) 553-2459 or at such
other
address as the Indenture Trustee may designate from time to time by notice
to
the Holders of Rate Stabilization Bonds and the Issuer, or the principal
corporate trust office of any successor trustee by like notice.
“Covenant
Defeasance Option” is defined in Section 4.01(b) of the
Indenture.
“Customers”
means all existing and future residential electric customers of BGE and all
other existing and future residential electric customers who are obligated
to
pay Qualified Rate Stabilization Charges pursuant to any Qualified Rate Order
or
any Tariff.
“Daily
Remittance” is defined in Section 6.10(a) of the Servicing
Agreement.
“Default”
means any occurrence that is, or with notice or the lapse of time or both
would
become, an Event of Default as defined in Section 5.01 of the
Indenture.
“Definitive
Rate Stabilization Bonds” means Rate Stabilization Bonds issued in
definitive form in accordance with Section 2.13 of the
Indenture.
“Delaware
Financing Statements” means one or more Uniform Commercial Code financing
statements to be filed in the appropriate filing office in the State of
Delaware.
“Delaware
UCC” means the Uniform Commercial Code as in effect on the date hereof in
the State of Delaware.
4
“Depositing
TPC” means a Third-Party Collector who provides a cash deposit pursuant to
Section 3.05(e) of the Servicing Agreement.
“DTC”
means The Depository Trust Company or any successor thereto.
“Electric
Bill” or “Electric Bills” means the portion of each of the regular
monthly bills, summary bills, Opening Bills and Closing Bills issued to
Customers by BGE or Third-Party Collectors or to Third-Party Collectors by
BGE
on its own behalf and in its capacity as Servicer reflecting the amount owed
by
the Customer for electric service, including, but not limited to Billed
QRSCs.
“Eligible
Account” means either a segregated non-interest-bearing trust account (a)
with an Eligible Institution or (b) with the corporate trust department of
a
depository institution organized under the laws of the United States of America
or any State (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 Indenture Trustee or a subsidiary thereof,
so
long as any of the securities of the Indenture Trustee or a subsidiary thereof
have a credit rating from each Rating Agency in one of its generic rating
categories which signifies investment grade; or
(b) a
depository institution organized under the laws of the United States of America
or any State (or any domestic branch of a foreign bank), which (i) has either
(A) a long-term unsecured debt rating of AAA by Standard & Poor’s, A2 by
Moody’s, and AAA by Fitch or (B) a certificate of deposit rating of A-1+ by
Standard & Poor’s and P-1 by Moody’s or any other long-term, short-term or
certificate of deposit rating acceptable to the Rating Agencies and (ii)
whose
deposits are insured by the FDIC.
If
so
qualified under clause (b) above, the Indenture Trustee may be considered
an Eligible Institution for the purposes of clause (a) of this
definition.
“Eligible
Investments” mean instruments or investment property 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, certificates of deposit or bankers’ acceptances of
depository institutions meeting the requirements of clause (b) of the
definition of Eligible Institution;
(c) commercial
paper (other than commercial paper of BGE or any of its Affiliates) having,
at
the time of the investment or contractual commitment to invest
5
therein, a rating from each of the Rating Agencies from which a rating is
available in the highest investment category granted thereby;
(d) investments
in money market funds having a rating in the highest investment category
granted
thereby (including funds for which the Indenture Trustee or any of its
Affiliates is investment manager or advisor) from Moody’s, Standard & Poor’s
and Fitch, if rated by Fitch;
(e) repurchase
obligations with respect to any security that is a direct obligation of,
or
fully guaranteed by, the United States of America or any agency or
instrumentality thereof the obligations of which are backed by the full faith
and credit of the United States of America, in either case entered into with
depository institutions or trust companies meeting the requirements of clause
(b) of the definition of Eligible Institutions;
(f) repurchase
obligations with respect to any security or whole loan entered into
with:
(g) (i) a
depository institution or trust company (acting as principal) meeting the
requirements of clause (b) of the definition of Eligible
Institutions,
(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 at least “P-1” by Moody’s, “A-1+” by Standard & Poor’s and,
if Fitch provides a rating thereon, “F-1+” by Fitch at the time of entering into
this repurchase obligation, 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 at least “P-1” by Moody’s, “A-1+” by Standard & Poor’s and,
if Fitch provides a rating thereon, “F-1+” by Fitch at the time of purchase so
long as the obligations of such unrated broker/dealer are unconditionally
guaranteed by such non-bank or bank holding company; and
(h) any
other investment permitted by each of the Rating Agencies;
in
each
case maturing not later than the Business Day immediately preceding the next
Payment Date or Special Payment Date, if applicable (for the avoidance of
doubt,
investments in money market funds or similar instruments which are redeemable
on
demand shall be deemed to satisfy the foregoing
requirement). Notwithstanding the foregoing, any securities or
investments which mature in thirty-two (32) days or more shall not be “Eligible
Investments” unless the issuer thereof has a long-term unsecured debt rating of
at least A1 from Moody’s and A+ from Standard & Poor’s, any securities or
investments described in clauses (b) through (f) above which
have maturities of less than or equal to three (3) months shall not
be “Eligible Investments” unless the issuer thereof has a long-term and
short-term unsecured debt rating of at least A1/P-1 from Moody’s and any
securities or investments described in clauses (b) through (f)
above which have maturities of more than three (3) months shall not
be an “Eligible Investment”
6
unless
the issuer thereof has a long-term and short-term unsecured debt rating of
at
least Aa3/P-1 from Moody’s.
“ERISA”
means the Employee Retirement Income Security Act of 1974, as
amended.
“ERISA
Affiliate” means with respect to any Person at any time, each trade or
business (whether or not incorporated) that would, at that time, be treated
together with such Person as a single employer under Section 401 of ERISA
or
Section 414(b), (c), (m) or (o) of the Code.
“Estimated
QRSC Collections” means the sum of the QRSC Payments which are deemed to
have been received by the Servicer, directly or indirectly (including through
a
Third-Party Collector), from or on behalf of Customers, based on the Collections
Curve less an allowance for Charge-Offs, to be remitted to the Collection
Account.
“Event
of Default” is defined in Section 5.01 of the Indenture.
“Excess
Funds Subaccount” is defined in Section 8.02(a) of the
Indenture.
“Excess
Remittance” means the amount, if any, calculated for a particular
Reconciliation Period, by which all Estimated QRSC Collections remitted to
the
Collection Account during such Reconciliation Period exceed Actual QRSC
Collections during such Reconciliation Period.
“Exchange
Act” means the Securities Exchange Act of 1934, as amended.
“Expected
Amortization Schedule” means, with respect to any Series or Tranche, the
expected amortization schedule for such Series or Tranche set forth in the
related Series Supplement.
“FDIC”
means the Federal Deposit Insurance Corporation or any Governmental Authority
succeeding to the duties of such agency.
“Federal
Book-Entry Regulations” means 31 C.F.R. Part 357 et seq. (Department of
Treasury).
“Federal
Book-Entry Securities” means securities issued in book-entry form by the
United States Treasury.
“FERC”
means the Federal Energy Regulatory Commission or any Governmental Authority
succeeding to the duties of such commission.
“Final”
means, with respect to any Qualified Rate Order, that such Qualified Rate
Order
has become final, is not being appealed and that the time for filing an appeal
therefrom has expired.
7
“Final
Maturity Date” means, with respect to any Series or Tranche of Rate
Stabilization Bonds, the Final Maturity Date therefor, as specified in the
related Series Supplement.
“Financial
Asset” means “financial asset” as set forth in Section 8-102(a)(9) of the NY
UCC.
“Financing
Credit Order” means the Financing Credit Order dated December 28, 2006, as
corrected on January 2, 2007, issued by the PSC (Order No. 81182).
“Fitch”
means Fitch, Inc. or any successor thereto.
“General
Subaccount” is defined in Section 8.02(a) of the
Indenture.
“Global
Rate Stabilization Bond” means a Rate Stabilization Bond evidencing all or
any part of a Series of Rate Stabilization Bonds to be issued to the Holders
thereof in Book-Entry Form, which Global Rate Stabilization Bond shall be
issued
to the Clearing Agency, or its nominee, for such Series, in accordance with
Section 2.11 of the Indenture and the applicable Series Supplement
pursuant to which the Rate Stabilization Bond is issued.
“Governmental
Authority” means any nation or government, any federal, state, local or
other political subdivision thereof and any court, administrative agency
or
other instrumentality or entity exercising executive, legislative, judicial,
regulatory or administrative function of government.
“Grant”
means mortgage, pledge, bargain, sell, warrant, alienate, remise, release,
convey, grant, transfer, create, and grant a lien upon and a security interest
in and right of set-off against, deposit, set over and confirm pursuant to
the
Indenture and the related Series Supplement. A Grant of the Rate
Stabilization Bond Collateral or of any other agreement or instrument included
therein shall include all rights, powers and options (but none of the
obligations) of the Granting party thereunder, including the immediate and
continuing right to claim for, collect, receive and give receipt for payments
in
respect of the Rate Stabilization Bond 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.
“Holder”,
“Registered Holder” or “Bondholder” means the Person in whose name a Rate
Stabilization Bond is registered on the Rate Stabilization Bond
Register.
“Indenture”
means the Indenture, dated as of June 29, 2007, by and between the Issuer
and
Deutsche Bank Trust Company Americas, a New York banking corporation, as
Indenture Trustee and as Securities Intermediary, as originally executed
and, as
from time to time supplemented or amended by one or more Series Supplements
or
indentures supplemental thereto entered into pursuant to the applicable
provisions of the Indenture,
8
as
so
supplemented or amended, or both, and shall include the forms and terms of
the
Rate Stabilization Bonds established thereunder.
“Indenture
Trustee” means Deutsche Bank Trust Company Americas, a New York banking
corporation, as indenture trustee for the benefit of the Secured Parties,
or any
successor indenture trustee under the Indenture.
“Independent”
means, when used with respect to any specified Person, that the Person (a)
is in
fact independent of the Issuer, any other obligor on the Rate Stabilization
Bonds, 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 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 Issuer, any such other obligor, the Seller, the Servicer
or
any Affiliate of any of the foregoing Persons as an officer, employee, promoter,
underwriter, trustee, partner, director (other than as an independent director
or manager) or person performing similar functions.
“Independent
Certificate” means a certificate or opinion to be delivered to the Indenture
Trustee under the circumstances described in, and otherwise complying with,
the
applicable requirements of Section 10.01 of the Indenture, made by an
Independent appraiser or other expert appointed by an Issuer Order and consented
to by the Indenture Trustee, and such opinion or certificate shall state
that
the signer has read the definition of “Independent” in the Indenture and that
the signer is Independent within the meaning thereof.
“Independent
Manager” is defined in Section 4.01 of the LLC
Agreement.
“Independent
Manager Fee” is defined in Section 4.01(a) of the LLC
Agreement.
“Indirect
Participant” means a securities broker, dealer, bank, trust company or other
Person that clears through or maintains a custodial relationship with a Clearing
Agency Participant, either directly or indirectly.
“Initial
Payment Date” means the first Payment Date set forth in the Expected
Amortization Schedule relating to any Series or Tranche.
“Initial
Qualified Rate Order ” means the final Qualified Rate Order dated December28, 2006 issued by the PSC pursuant to the Rate Stabilization Law, Case No.
9089
(Order No. 81181).
“Initial
Rate Stabilization Bonds” means the Series A Rate Stabilization Bonds issued
pursuant to the Initial Qualified Rate Order.
“Initial
Rate Stabilization Property” means all Rate Stabilization Property created
in favor of the Issuer pursuant to the Initial Qualified Rate Order, including
the right to impose, collect and receive the Qualified Rate Stabilization
Charges authorized in the Initial Qualified Rate Order, and sold, transferred,
assigned, set over and conveyed by the Seller to the Issuer as of the Closing
Date pursuant to the Sale Agreement.
9
“Initial
Tariff” means the initial Tariff filed with the PSC to evidence the
Qualified Rate Stabilization Charges pursuant to the Initial Qualified Rate
Order.
“Insolvency
Event” means, with respect to a specified Person, (a) the filing of a decree
or order for relief by a court having jurisdiction in the premises in respect
of
such Person or any substantial part of its property 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 for such Person or for
any
substantial part of its property, or ordering the winding-up or liquidation
of
such Person’s affairs, and such decree or order shall remain unstayed and in
effect for a period of sixty (60) consecutive days; or (b) the commencement
by
such Person 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 such Person to the entry of an order for relief in an involuntary
case under any such law, or the consent by such Person to the appointment
of or
taking possession by a receiver, liquidator, assignee, custodian, trustee,
sequestrator or similar official for such Person or for any substantial part
of
its property, or the making by such Person of any general assignment for
the
benefit of creditors, or the failure by such Person generally to pay its
debts
as such debts become due, or the taking of action by such Person in furtherance
of any of the foregoing.
“Insolvency
Law” means any applicable federal or state bankruptcy, insolvency or other
similar law now or hereafter in effect.
“Interim
True-Up Adjustment” means each adjustment to the Qualified Rate
Stabilization Charges made pursuant to the terms of the related Qualified
Rate
Order and in accordance with Section 4.01(b)(ii) of the Servicing
Agreement.
“Interim
True-Up Adjustment Date” means the effective date of any Interim True-Up
Adjustment.
“Internal
Revenue Service” means the Internal Revenue Service of the United States of
America.
“Investment
Company Act” means the Investment Company Act of 1940, as
amended.
“Investment
Earnings” means investment earnings on funds deposited in the Collection
Account net of losses and investment expenses.
“Issuance
Advice Letter” means the final Issuance Advice Letter filed with the PSC
pursuant to the Qualified Rate Order with respect to any Qualified Rate
Stabilization Charges.
“Issuer”
means RSB BondCo LLC, a Delaware limited liability company, named as such
in the
Indenture until a successor replaces it and, thereafter, means the successor
and, for purposes of any provision contained herein and required by the TIA,
each other obligor on the Rate Stabilization Bonds.
10
“Issuer
Order” and “Issuer Request” mean a written order or request signed in
the name of the Issuer by any one of its Responsible Officers and delivered
to
the Indenture Trustee or Paying Agent, as applicable.
“Legal
Defeasance Option” is defined in Section 4.01(b) of the
Indenture.
“Letter
of Representations” means any applicable agreement between the Issuer and
the applicable Clearing Agency, with respect to such Clearing Agency’s rights
and obligations (in its capacity as a Clearing Agency) with respect to any
Book-Entry Rate Stabilization Bonds, as the same may be amended, supplemented,
restated or otherwise modified from time to time.
“Lien”
means a security interest, lien, mortgage, charge, pledge, claim, equity
or
encumbrance of any kind.
“LLC
Act” means the Delaware Limited Liability Company Act, as
amended.
“LLC
Agreement” means the Amended and Restated Limited Liability Company
Agreement of RSB BondCo LLC, dated as of June 29, 2007, as the same may be
amended, restated, supplemented or otherwise modified from time to
time.
“Losses”
means (i) any and all amounts of principal and interest on the Rate
Stabilization Bonds not paid when due or when scheduled to be paid in accordance
with their terms and the amounts of any deposits by or to the Issuer required
to
have been made in accordance with the terms of the Basic Documents or any
Qualified Rate Order which are not made when so required and (ii) any and
all
other liabilities, obligations, losses, claims, damages, payments, costs
or
expenses of any kind whatsoever.
“Manager”
means each manager of the Issuer under the LLC Agreement.
“Maryland
UCC” means the Uniform Commercial Code as in effect on the date hereof in
the State of Maryland.
“Member”
has the meaning specified in the first paragraph of the LLC
Agreement.
“Minimum
Denomination” shall mean $100,000, or integral multiples of $1,000 in excess
thereof, except for one Rate Stabilization Bond of each Tranche which may
be of
a smaller denomination.
“Monthly
Servicer’s Certificate” means a certificate, substantially in the form of
Exhibit A to the Servicing Agreement, completed and executed by a
Responsible Officer of the Servicer pursuant to Section 3.01(b)(i) of the
Servicing Agreement.
“Moody’s”
means Moody’s Investors Service, Inc. or any successor thereto.
“Notice
of Default” is defined in Section 5.01 of the Indenture.
11
“NY
UCC” means the Uniform Commercial Code as in effect on the date hereof in
the State of New York.
“Officer’s
Certificate” means a certificate signed by a Responsible Officer of the
Issuer under the circumstances described in, and otherwise complying with,
the
applicable requirements of Section 10.01 of the Indenture, and delivered
to the Indenture Trustee.
“Opening
Bill” means the first Bill issued to a Customer at the time electric service
is initiated.
“Operating
Expenses” means all fees, costs, expenses and indemnity payments of the
Issuer, including all amounts owed by the Issuer to the Indenture Trustee,
any
Manager, including any Independent Manager, legal and accounting fees of
the
Issuer, Rating Agency fees, costs and expenses of the Servicer under the
Servicing Agreement, including legal costs of the Servicer under Section
5.02(d)
of the Servicing Agreement, costs and expenses of the Seller under the Sale
Agreement, including legal costs of the Seller under Section 4.07 of the
Sale
Agreement, and any taxes owed on investment income in the Collection Account,
but excluding the Servicing Fee and the Administration Fee.
“Opinion
of Counsel” means one or more written opinions of counsel who may, except as
otherwise expressly provided in the Basic Documents, be employees of or counsel
to the party providing such opinion of counsel, which counsel shall be
reasonably acceptable to the party receiving such opinion of counsel, and
shall
be in form and substance reasonably acceptable to such party.
“Outstanding”
means, as of the date of determination, all Rate Stabilization Bonds theretofore
authenticated and delivered under this Indenture except:
(a) Rate
Stabilization Bonds theretofore canceled by the Rate Stabilization Bond
Registrar or delivered to the Rate Stabilization Bond Registrar for
cancellation;
(b) Rate
Stabilization Bonds or portions thereof the payment for which money in the
necessary amount has been theretofore irrevocably deposited with the Indenture
Trustee or any Paying Agent in trust for the Holders of such Rate Stabilization
Bonds; and
(c) Rate
Stabilization Bonds in exchange for or in lieu of other Rate Stabilization
Bonds
which have been issued pursuant to this Indenture unless proof satisfactory
to
the Indenture Trustee is presented that any such Rate Stabilization Bonds
are
held by a Protected Purchaser;
provided
that in determining whether the Holders of the requisite Outstanding Amount
of
the Rate Stabilization Bonds or any Series or Tranche thereof have given
any
request, demand, authorization, direction, notice, consent or waiver hereunder
or under any Basic Document, Rate Stabilization Bonds owned by the Issuer,
any
other obligor upon the Rate Stabilization Bonds, the Member, the Seller,
the
Servicer or any Affiliate of any of the foregoing Persons shall be
12
disregarded
and deemed not to be Outstanding, except that, in determining whether the
Indenture Trustee shall be protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only Rate Stabilization
Bonds that the Indenture Trustee actually knows to be so owned shall be so
disregarded. Rate Stabilization Bonds so owned that have been pledged
in good faith may be regarded as Outstanding if the pledgee establishes to
the
satisfaction of the Indenture Trustee the pledgee’s right so to act with respect
to such Rate Stabilization Bonds and that the pledgee is not the Issuer,
any
other obligor upon the Rate Stabilization Bonds, the Member, the Seller,
the
Servicer or any Affiliate of any of the foregoing Persons.
“Outstanding
Amount” means the aggregate principal amount of all Rate Stabilization Bonds
or, if the context requires, all Rate Stabilization Bonds of a Series or
Tranche, Outstanding at the date of determination.
“Paying
Agent” means with respect to the Indenture, the Indenture Trustee and any
other Person appointed as a paying agent for the Rate Stabilization Bonds
pursuant to the Indenture.
“Payment
Date” means, with respect to any Series or Tranche of Rate Stabilization
Bonds, the dates specified in the related Series Supplement; provided
that if any such date is not a Business Day, the Payment Date shall be the
Business Day immediately succeeding such date.
“Periodic
Billing Requirement” means, for any Calculation Period, the aggregate amount
of Qualified Rate Stabilization Charges calculated by the Servicer as necessary
to be billed during such period in order to collect the Periodic Payment
Requirements on or before the end of the Collection Period immediately preceding
the next Semi-Annual True-Up Adjustment Date, or Quarterly True-Up Adjustment
Date, as applicable.
“Periodic
Interest” means, with respect to any Payment Date and any Series of Rate
Stabilization Bonds, the periodic interest for such Payment Date and Series
as
specified in the related Series Supplement.
“Periodic
Payment Requirement” for any Calculation Period means the total dollar
amount of QRSC Collections reasonably calculated by the Servicer in accordance
with Section 4.01 of the Servicing Agreement as necessary to be received
during such period (after giving effect to the allocation and distribution
of
amounts on deposit in the Excess Funds Subaccount at the time of calculation
and
which will be available for payments on the Rate Stabilization Bonds at the
end
of such Calculation Period and including any shortfalls in Periodic Payment
Requirements for any prior Calculation Period) in order to ensure that, as
of
the last Payment Date occurring in such Calculation Period, (1) all accrued
and
unpaid interest on the Rate Stabilization Bonds then due shall have been
paid in
full, (2) the Outstanding Amount of the Rate Stabilization Bonds is equal
to the
Projected Unrecovered Balance, (3) the balance on deposit in the Capital
Subaccount equals the aggregate Required Capital Level and (4) all other
fees
and expenses due and owing and required or allowed to be paid under Section
8.02 of the Indenture as of such date shall have been paid in full;
provided that, with respect to any
13
Quarterly
True-Up Adjustment or Interim True-Up Adjustment occurring after the last
Scheduled Final Payment Date for any Rate Stabilization Bonds, the Periodic
Payment Requirements shall be calculated to ensure that sufficient Qualified
Rate Stabilization Charges will be collected to retire such Rate Stabilization
Bonds in full as of the earlier of (x) the Payment Date preceding the next
Quarterly True-Up Adjustment Date and (y) the Final Maturity Date for such
Rate
Stabilization Bonds.
“Periodic
Principal” means, with respect to any Payment Date and any Series of Rate
Stabilization Bonds, the excess, if any, of the Outstanding Amount of such
Series of Rate Stabilization Bonds over the outstanding Unrecovered Balance
specified for such Payment Date on the Expected Amortization
Schedule.
“Permitted
Lien” means the Lien created by the Indenture.
“Permitted
Successor” is defined in Section 5.02 of the Sale
Agreement.
“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.
“PJM”
means PJM Interconnection, LLC, a limited liability company.
“Predecessor
Rate Stabilization Bond” means, with respect to any particular Rate
Stabilization Bond, every previous Rate Stabilization Bond evidencing all
or a
portion of the same debt as that evidenced by such particular Rate Stabilization
Bond, and, for the purpose of this definition, any Rate Stabilization Bond
authenticated and delivered under Section 2.06 of the Indenture in lieu
of a mutilated, lost, destroyed or stolen Rate Stabilization Bond shall be
deemed to evidence the same debt as the mutilated, lost, destroyed or stolen
Rate Stabilization Bond.
“Proceedings”
means any suit in equity, action at law or other judicial or administrative
proceeding.
“Projected
Unrecovered Balance” means, as of any Payment Date, the sum of the projected
outstanding principal amount of each Series of Rate Stabilization Bonds for
such
Payment Date set forth in the Expected Amortization Schedule.
“Protected
Purchaser” has the meaning specified in Section 8-303 of the
UCC.
“PSC”
means the Public Service Commission of Maryland, or any Governmental Authority
succeeding to the duties of such commission.
“PSC
Regulations” means the regulations, including proposed or temporary
regulations, promulgated under the Utilities Code.
“QRSC
Collections” means Qualified Rate Stabilization Charges remitted to the
Collection Account.
14
“QRSC
Payments” means the payments, including any partial payments allocated in
accordance with Section 6(b) of Annex 1 of the Servicing Agreement, made
by or on behalf of Customers (including through a Third-Party Collector)
based
on the Qualified Rate Stabilization Charges.
“Qualified
Costs” means all rate stabilization costs as defined in Section 7-520(g)(1)
and (2) of the Rate Stabilization Law.
“Qualified
Rate Order” means, as the context may require, (i) the Initial Qualified
Rate Order and/or (ii) any Subsequent Qualified Rate Order.
“Qualified
Rate Stabilization Charge” means any qualified rate stabilization charge as
defined in Section 7-520(e) of the Rate Stabilization Law which is
authorized by a Qualified Rate Order.
“Quarterly
True-Up Adjustment” means each adjustment to the Qualified Rate
Stabilization Charges made pursuant to the terms of the related Qualified
Rate
Order in accordance with Section 4.01(b)(iv) of the Servicing
Agreement.
“Quarterly
True-Up Adjustment Date” means the rolling three month anniversary date of
the Series Issuance Date of the Initial Rate Stabilization Bonds, commencing
on
June 29, 2017 (or, in the case of any subsequent Series, the rolling three
month
anniversary date of such Series, based on its Series Issuance Date, beginning
with the first such date after the Scheduled Final Payment Date of the last
Tranche of such Series).
“Rate
Stabilization Bond Collateral” has the meaning specified in the
Indenture.
“Rate
Stabilization Bond Interest Rate” means, with respect to any Series or
Tranche of Rate Stabilization Bonds, the rate at which interest accrues on
the
Rate Stabilization Bonds of such Series or Tranche, as specified in the related
Series Supplement.
“Rate
Stabilization Bond Register” means the register maintained pursuant to
Section 2.05 of the Indenture, providing for the registration of the Rate
Stabilization Bonds and transfers and exchanges thereof.
“Rate
Stabilization Bond Registrar” means the registrar at any time of the Rate
Stabilization Bond Register, appointed pursuant to Section 2.05 of the
Indenture.
“Rate
Stabilization Bonds” means one or more Series of Rate Stabilization Bonds
authorized by the Initial Qualified Rate Order and any Subsequent Qualified
Rate
Order and issued under the Indenture.
“Rate
Stabilization Law” means §§7-520 – 7-549 of the Maryland Public Utility
Companies Article, as amended from time to time.
“Rate
Stabilization Property” means all rate stabilization property as defined in
Section 7-520(i)(1) and (2) of the Rate Stabilization Law created pursuant
to a
Qualified
15
Rate
Order and sold or otherwise conveyed to the Issuer under the Sale Agreement,
including the Initial Rate Stabilization Property and any Subsequent Rate
Stabilization Property. As used in the Basic Documents, unless the
context requires otherwise, the term “Rate Stabilization Property” when used
with respect to BGE includes the contract rights of BGE that exist prior
to the
time that such rights are first transferred in connection with the issuance
of
the Rate Stabilization Bonds, at which time they become rate stabilization
property in accordance with Section 7-537 of the Rate Stabilization
Law.
“Rate
Stabilization Property Notices” means rate stabilization property notices
filed with the Maryland State Department of Assessments and Taxation pursuant
to
Section 7-542 of the Rate Stabilization Law.
“Rate
Stabilization Property Records” is defined in Section 5.01 of the
Servicing Agreement.
“Rating
Agency” , with respect to any Series or Tranche of Rate Stabilization Bonds,
means any of Moody’s, Standard & Poor’s or Fitch which provides a rating
with respect to such Series of Rate Stabilization Bonds. 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 Issuer, notice of which designation shall be given to the
Indenture Trustee and the Servicer.
“Rating
Agency Condition” means, with respect to any action, the notification in
writing by the Issuer of such action to each Rating Agency , and written
confirmation from Standard & Poor’s to the Seller, the Servicer, the
Indenture Trustee and the Issuer that such action will not result in a
suspension, reduction or withdrawal of the then current rating by such Rating
Agency of any Outstanding Series or Tranche of Rate Stabilization
Bonds.
“Reconciliation
Date” means the last Business Day of September of each year, commencing with
September 30, 2008 and continuing through September 30, 2019 (or such
earlier month as the Servicer shall have specified to the Issuer and the
Indenture Trustee by not less than thirty days prior written
notice).
“Reconciliation
Period” means, with respect to the twelve-month period ending the last day
of June of each year; provided, that the initial Reconciliation Period
shall commence on the Closing Date and that a shorter Reconciliation Period
may
be established pursuant to Section 6.10(d) of the Servicing
Agreement.
“Record
Date” means, with respect to a Payment Date, in the case of Definitive Rate
Stabilization Bonds, the close of business on the last day of the calendar
month
preceding the calendar month in which such Payment Date occurs, and, in the
case
of Book-Entry Rate Stabilization Bonds, the close of business one Business
Day
prior to such Payment Date.
“Registration
Statement” means the registration statement of the Sponsor and the Issuer on
Form S-3 (File No. 333-141366), filed with the SEC under the Securities
Act
16
relating
to the offering and sale of the Rate Stabilization Bonds and including all
amendments thereto, and any subsequent registration statement relating to
Rate
Stabilization Bonds and including all amendments thereto.
“Regulation
AB” means the rules of the SEC promulgated under Subpart 229.1100 – Asset
Backed Securities (Regulation AB), 17 C.F.R. §§229.1100-229.1123, as such may be
amended from time to time.
“Remittance
Requirement” means, with respect to any Third-Party Collector, the
requirement that such Third-Party Collector remit Qualified Rate Stabilization
Charges to the Servicer within a prescribed number of days of billing by
the
Servicer in accordance with applicable Requirements of Law or any agreement
with
BGE.
“Remittance
Shortfall” means the amount, if any, calculated for a particular
Reconciliation Period, by which Actual QRSC Collections during such
Reconciliation Period exceed all Estimated QRSC Collections remitted to the
Collection Account during such Reconciliation Period.
“REP”
means a retail electric provider as defined in the Qualified Rate
Order.
“Required
Capital Level” means, with respect to each Series of Rate Stabilization
Bonds, an amount equal to 0.50% of the initial principal amount of such Series,
or such other amount as may be permitted or required under the Applicable
Qualified Rate Order and applicable Internal Revenue Service rulings, deposited
into the Capital Subaccount by the Member prior to or upon the issuance of
such
Series.
“Requirements
of Law” means any foreign, federal, state or local laws, statutes,
regulations, rules, codes or ordinances enacted, adopted, issued or promulgated
by any Governmental Authority or common law, including the Utilities Code
(including the Rate Stabilization Law), PSC Regulations, any applicable
Qualified Rate Order, any Tariff and Regulation AB.
“Responsible
Officer” means with respect to (a) the Issuer, any Manager or any duly
authorized officer; (b) the Indenture Trustee, any officer within the Corporate
Trust Office of such trustee (including the President, any Vice President,
Assistant Vice President, Secretary or Assistant Treasurer, Trust Officer
or any
other officer of the Indenture Trustee customarily performing functions similar
to those performed by persons who at the time shall be such officers,
respectively, and that has direct responsibility for the administration of
the
Indenture and also, with respect to a particular matter, any other officer
to
whom such matter is referred to because of such officer’s knowledge and
familiarity with the particular subject); (c) any corporation (other than
the
Indenture Trustee), the Chief Executive Officer, the President, any Vice
President, the Chief Financial Officer, the Treasurer, the Assistant Treasurer
or any other duly authorized officer of such Person who has been authorized
to
act in the circumstances; (d) any partnership, any general partner thereof;
and
(e) any other Person (other than an individual or the Indenture Trustee),
any
duly authorized officer or member of such
17
Person,
as the context may require, who is authorized to act in matters relating
to such
Person.
“Restricted
Plan” means (a) an “employee benefit plan” as defined in and subject to
Title I of ERISA, (b) a “plan” as defined in and subject to section 4975 of the
Code, (c) an entity whose underlying assets include the assets of such employee
benefit plan or (d) a governmental or church plan which is subject to any
federal, state or local law that is substantially similar to the provisions
of
section 406 of ERISA or section 4975 of the Code.
“Retirement
of the Rate Stabilization Bonds” means any day on which the final
distribution is made to the Indenture Trustee in respect of the last Outstanding
Rate Stabilization Bonds.
“Sale
Agreement” means the Rate Stabilization Property Purchase and Sale
Agreement, dated as of June 29, 2007, by and between BGE and the Issuer,
as the
same may be amended, restated, supplemented or otherwise modified from time
to
time.
“Scheduled
Final Payment Date” means, with respect to each Series or, if applicable,
each Tranche of Rate Stabilization Bonds, the date when all interest and
principal is scheduled to be paid with respect to that Series or Tranche
in
accordance with the Expected Amortization Schedule, as specified in the related
Series Supplement. For the avoidance of doubt, the Scheduled Final
Payment Date with respect to any Series or Tranche shall be the last Payment
Date set forth in the Expected Amortization Schedule relating to such Series
or
Tranche.
“SEC”
means the U.S. Securities and Exchange Commission, or any Governmental Authority
succeeding to the duties of such commission.
“Secretary
of State” means the Secretary of State of the State of Delaware or the
Secretary of State of the State of Maryland, as the case may be, or any
Governmental Authority succeeding to the duties of such offices.
“Secured
Obligations” is defined in the applicable Series Supplement with respect to
each Series or Tranche of Rate Stabilization Bonds.
“Secured
Parties” means, with respect to each Series, the Indenture Trustee, the
relevant Bondholders and any credit enhancer described in the applicable
Series
Supplement.
“Securities
Account” means the Collection Account (to the extent it constitutes a
securities account as defined in the NY UCC and Federal Book-Entry
Regulations).
“Securities
Act” means the Securities Act of 1933, as amended.
“Securities
Intermediary” means Deutsche Bank Trust Company Americas, a New York banking
corporation, solely in the capacity of a “securities intermediary”
as
18
defined
in the NY UCC and Federal Book-Entry Regulations or any successor securities
intermediary under the Indenture.
“Security
Entitlement” means “security entitlement” (as defined in Section
8-102(a)(17) of the NY UCC) with respect to Financial Assets now or
hereafter credited to the Securities Account and, with respect to Federal
Book-Entry Regulations, with respect to Federal Book-Entry Securities now
or
hereafter credited to the Securities Account, as applicable.
“Seller”
is defined in the preamble of the Sale Agreement.
“Semi-Annual
True-Up Adjustment” means each adjustment to the Qualified Rate
Stabilization Charges made pursuant to the terms of the related Qualified
Rate
Order in accordance with Section 4.01(b)(i) of the Servicing
Agreement.
“Semi-Annual
True-Up Adjustment Date” means the rolling six month anniversary date of the
Series Issuance Date of the Initial Rate Stabilization Bonds, commencing
on
December 29, 2007 (or, in the case of any subsequent Series, the corresponding
rolling six month anniversary date of such Series based on its Series Issuance
Date).
“Series”
means each series of Rate Stabilization Bonds issued and authenticated pursuant
to the Indenture and a related Series Supplement.
“Series
Issuance Date” means, with respect to any Series, the date on which the Rate
Stabilization Bonds of such Series are to be originally issued in accordance
with Section 2.10 of the Indenture and the related Series
Supplement.
“Series
Supplement” means an indenture supplemental to the Indenture that authorizes
the issuance of a particular Series of Rate Stabilization Bonds, a form of
which
is attached as Exhibit B to the Indenture.
“Series
Rate Stabilization Bond Collateral” has the meaning specified in the
Indenture.
“Servicer”
means BGE, as Servicer under the Servicing Agreement, or any successor Servicer
to the extent permitted under the Servicing Agreement.
“Servicer
Business Day” means any day other than a Saturday, Sunday or holiday on
which the Servicer maintains normal office hours and conducts
business.
“Servicer
Default” is defined in Section 7.01 of the Servicing
Agreement.
“Servicer’s
Certificate” means a certificate, substantially in the form of Exhibit
C to the Servicing Agreement, completed and executed by a Responsible
Officer of the Servicer pursuant to Section 4.01(c)(ii) of the Servicing
Agreement.
19
“Servicing
Agreement” means the Rate Stabilization Property Servicing Agreement, dated
as of June 29, 2007, by and between the Issuer and BGE, as the same may be
amended, restated, supplemented or otherwise modified from time to
time.
“Servicing
Fee” means the fee payable to the Servicer on each Payment Date for services
rendered during the period from, but not including, the preceding Payment
Date
(or from the Closing Date in the case of the first Payment Date) to and
including the current Payment Date, determined pursuant to Section 6.05
of the Servicing Agreement.
“Servicing
Standard” means the obligation of the Servicer to calculate, apply, remit
and reconcile proceeds of the Rate Stabilization Property, including QRSC
Payments, and all other Rate Stabilization Bond Collateral for the benefit
of
the Issuer and the Holders (i) with the same degree of care and diligence
as the
Servicer applies with respect to payments owed to it for its own account,
(ii)
in accordance with all applicable procedures and requirements established
by the
PSC for collection of electric utility tariffs and (iii) in accordance with
the
other terms of the Servicing Agreement.
“Special
Member” is defined in Section 1.02 of the LLC Agreement.
“Special
Payment” means with respect to any Series or Tranche of Rate Stabilization
Bonds, any payment of principal of or interest on (including any interest
accruing upon default), or any other amount in respect of, the Rate
Stabilization Bonds of such Series or Tranche that is not actually paid within
five (5) days of the Payment Date applicable thereto.
“Special
Payment Date” means the date on which a Special Payment is to be made by the
Indenture Trustee to the Holders.
“Special
Record Date” means with respect to any Special Payment Date, the close of
business on the fifteenth (15th) day
(whether or
not a Business Day) preceding such Special Payment Date.
“Sponsor”
means BGE, in its capacity as “sponsor” of the Rate Stabilization Bonds within
the meaning of Regulation AB.
“Standard
& Poor’s” means Standard & Poor’s Ratings Services, a division of
The McGraw-Hill Companies, Inc., or any successor thereto.
“State”
means any one of the fifty states of the United States of America or the
District of Columbia.
“State
Pledge” means the pledge of the State of Maryland as set forth in
Section 7-535(d) of the Rate Stabilization Law.
“Subaccounts”
is defined in Section 8.02(a) of the Indenture.
20
“Subsequent
Closing Date” means any date (other than the Closing Date) specified in a
Series Supplement under which Rate Stabilization Bonds of any Series or Tranche
are issued.
“Subsequent
Creation Date” means any date on which Subsequent Rate Stabilization
Property is created in favor of BGE pursuant to a Subsequent Qualified Rate
Order.
“Subsequent
Qualified Rate Order” means a qualified rate order (other than the Initial
Qualified Rate Order ) issued hereafter by the PSC in favor of BGE.
“Subsequent
Sale” means the sale of Initial Rate Stabilization Property or Subsequent
Rate Stabilization Property after the Closing Date, subject to the satisfaction
of the conditions specified in the Sale Agreement and the
Indenture.
“Subsequent
Tariff” means a Tariff filed with the PSC in connection with a Subsequent
Qualified Rate Order.
“Subsequent
Transfer Date” means any date on which a Subsequent Sale will be effective,
as specified in an Addition Notice.
“Subsequent
Rate Stabilization Property” means Rate Stabilization Property (identified
in the related Bill of Sale) sold by the Seller to the Issuer as of a Subsequent
Transfer Date pursuant to the Sale Agreement.
“Successor
Servicer” is defined in Section 3.07(e) of the
Indenture.
“Tariff”
means any tariff filed by BGE with the PSC pursuant to the Rate
Stabilization Law to evidence any Qualified Rate Stabilization Charges, or any
other applicable tariff filed by BGE with the PSC.
“Temporary
Rate Stabilization Bonds” means Rate Stabilization Bonds executed, and upon
the receipt of an Issuer Order, authenticated and delivered by the Indenture
Trustee pursuant to Section 2.04 of the Indenture, pending the
preparation of Definitive Rate Stabilization Bonds.
“Termination
Notice” is defined in Section 7.01 of the Servicing
Agreement.
“Third-Party
Collector” means each third party, including each REP, electric utility,
municipally owned utility and/or cooperative, which, pursuant to applicable
Requirements of Law or any agreement with BGE, is obligated to bill, pay
or
collect Qualified Rate Stabilization Charges.
“TPC
Credit Requirements” means the credit and collection policies applicable to
Third-Party Collectors pursuant to applicable Requirements of Law or contractual
obligations.
“TPC
Deposit Accounts” is defined in Section 8.02(g) of the
Indenture.
21
“TPC
Deposit Requirements” means the deposit, credit rating and alternative
credit support requirements applicable to Third-Party Collectors pursuant
to
applicable Requirements of Law or contractual obligations.
“Tranche”
means, with respect to any Series of Rate Stabilization Bonds, any one of
the
tranches of Rate Stabilization Bonds of that Series.
“Transfer
Date” means, with respect to the Initial Rate Stabilization Property, the
Closing Date and, with respect to any Subsequent Rate Stabilization Property,
the Subsequent Transfer Date related thereto.
“Transferred
Rate Stabilization Property” means, collectively, the Initial Rate
Stabilization Property and any Subsequent Rate Stabilization
Property.
“Treasury
Regulations” means the regulations, including proposed or temporary
regulations, promulgated under the Code. References herein to
specific provisions of proposed or temporary regulations shall include analogous
provisions of final Treasury Regulations or other successor Treasury
Regulations.
“True-Up
Adjustment” means any Semi-Annual True-Up Adjustment or Interim True-Up
Adjustment, as the case may be.
“True-Up
Adjustment Mechanism” means the mechanism by which the Servicer adjusts the
Qualified Rate Stabilization Charge through a True-Up Adjustment pursuant
to
Section 4.01(b) of the Servicing Agreement.
“Trust
Indenture Act” or “TIA” means the Trust Indenture Act of
1939, as amended by the Trust Indenture Reform Act of 1990, as in force on
the
Closing Date, 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.
“Underwriters”
means the underwriters who purchase Rate Stabilization Bonds of any Series
or
Tranche from the Issuer and resell such Rate Stabilization Bonds in a public
offering pursuant to the Registration Statement.
“Underwriting
Agreement” means (i) with respect to the initial Series, the Underwriting
Agreement, dated as of June 22, 2007, by and among BGE, the Underwriters
and the
Issuer, as the same may be amended, restated, supplemented or otherwise modified
from time to time, and (ii) with respect to any subsequent Series, an
underwriting agreement by and among BGE, the Underwriters and the Issuer,
as the
same may be amended, restated, supplemented or otherwise modified from time
to
time.
“Unrecovered
Balance” means, as of any Payment Date, the sum of the Outstanding Amount of
each Series of Rate Stabilization Bonds less the amount in the Excess Funds
Subaccount available to make principal payments on such Series of Rate
Stabilization Bonds.
22
“Unregistered
Rate Stabilization Bonds” means any Rate Stabilization Bonds not registered
under the Securities Act or the securities laws of any other
jurisdiction.
“Utilities
Code” means the Maryland Public Utility Companies Article of the Annotated
Code of Maryland, as amended from time to time.
“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
and
which are not callable at the option of the issuer thereof.
B. Other
Terms. All accounting terms not specifically defined herein shall
be construed in accordance with United States generally accepted accounting
principles. To the extent that the definitions of accounting terms in
any Basic Document are inconsistent with the meanings of such terms under
generally accepted accounting principles or regulatory accounting principles,
the definitions contained in such Basic Document shall control. As
used in the Basic Documents, the term “including” means
“including without limitation,” and other forms of the verb “to include” have
correlative meanings. All references to any Person shall include such
Person’s permitted successors.
C. Computation
of Time Periods. Unless otherwise stated in any of the Basic
Documents, as the case may be, in the computation of a period of time from
a
specified date to a later specified date, the word “from” means “from and
including” and the words “to” and “until” each means “to but
excluding”.
D. Reference;
Captions. The words “hereof”, “herein” and “hereunder” and words
of similar import when used in any Basic Document shall refer to such Basic
Document as a whole and not to any particular provision of such Basic Document;
and references to “Section”, “subsection”, “Schedule” and “Exhibit” in any Basic
Document are references to Sections, subsections, Schedules and Exhibits
in or
to such Basic Document unless otherwise specified in such Basic
Document. The various captions (including the tables of contents) in
each Basic Document are provided solely for convenience of reference
and shall not affect the meaning or interpretation of any Basic
Document.
E. The
definitions contained in this Appendix A are applicable to the singular as
well
as the plural forms of such terms and to the masculine as well as to the
feminine and neuter forms of such terms.
23
Dates Referenced Herein and Documents Incorporated by Reference
