EXHIBIT 4.4
EXECUTION COPY
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AMENDED AND RESTATED DECLARATION AND AGREEMENT OF TRUST
by and among
California Infrastructure and Economic Development Bank,
as Originator,
Bankers Trust (Delaware),
as Delaware Trustee,
and
Bankers Trust Company of California, N.A.,
as Certificate Trustee
Dated as of December 8, 1997
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TABLE OF CONTENTS
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ARTICLE I
DEFINITIONS
Page
____
Section 1.01. Definitions......................................... 1
Section 1.02. Compliance Certificates and Opinions................ 11
Section 1.03. Form of Documents Delivered to Certificate Trustee.. 12
Section 1.04. Acts of Certificateholders.......................... 13
ARTICLE II
ORGANIZATION; ACQUISITION OF NOTES;
ORIGINAL ISSUANCE OF CERTIFICATES
Section 2.01. Name; Declaration and Statement of Intent; Office;
Operations........................................ 15
Section 2.02. Trust Property.................................... 15
Section 2.03. Tax Treatment; Construction....................... 16
Section 2.04. Purpose and Powers................................ 16
Section 2.05. Acquisition and Acceptance of Notes by Certificate
Trustee........................................... 16
Section 2.06. Issuance of Certificates.......................... 16
Section 2.07. Representations and Warranties of the
Originator........................................ 19
Section 2.08. Execution of Basic Documents...................... 20
ARTICLE III
THE CERTIFICATES
Section 3.01. Form, Denomination and Execution of
Certificates..................................... 21
Section 3.02. Authentication of Certificates................... 21
Section 3.03. Temporary Certificates........................... 22
Section 3.04. Registration of Transfer and Exchange
of Certificates.................................. 22
Section 3.05. Certificateholders' Lists and Reports by
Certificate Trustee.............................. 23
Section 3.06. Mutilated, Destroyed, Lost or Stolen
Certificates..................................... 24
Section 3.07. Persons Deemed Owners............................ 24
Section 3.08. Cancellation..................................... 25
Section 3.09. Limitation of Liability for Payments............. 25
Section 3.10. Book-Entry and Definitive Certificates........... 25
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ARTICLE IV
DISTRIBUTIONS; STATEMENTS TO CERTIFICATEHOLDERS
Page
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Section 4.01. Certificate Accounts..................... 28
Section 4.02. Distributions from Certificate Accounts.. 28
Section 4.03. Statements to Certificateholders......... 30
Section 4.04. Investment of Special Payment Moneys..... 31
Section 4.05. Reduction in Principal................... 32
ARTICLE V
DEFAULT
Section 5.01. Events of Default........................ 33
Section 5.02. Incidents of Sale of Notes............... 34
Section 5.03. Judicial Proceedings Instituted by
Certificate Trustee; Certificate Trustee
May Bring Suit........................... 34
Section 5.04. Control by Certificateholders............ 34
Section 5.05. Waiver of Past Defaults.................. 35
Section 5.06. Right of Certificateholders To Receive
Payments Not To Be Impaired.............. 36
Section 5.07. Certificateholders May Not Bring Suit
Except Under Certain Conditions.......... 36
Section 5.08. Remedies Cumulative...................... 37
ARTICLE VI
THE CERTIFICATE TRUSTEE
Section 6.01. Notice of Defaults....................... 38
Section 6.02. Certain Rights of Certificate Trustee.... 38
Section 6.03. Not Responsible for Recitals or Issuance
of Certificates.......................... 40
Section 6.04. May Hold Certificates.................... 40
Section 6.05. Money Held in Trust...................... 40
Section 6.06. Compensation and Reimbursement;
Indemnification.......................... 40
Section 6.07. Corporate Certificate Trustee Required;
Eligibility.............................. 41
Section 6.08. Resignation and Removal; Appointment of
Successor................................ 41
Section 6.09. Acceptance of Appointment by Successor... 43
Section 6.10. Merger, Conversion, Consolidation or
Succession to Business................... 44
Section 6.11. Maintenance of Agencies.................. 44
Section 6.12. Money for Certificate Payments To Be
Held in Trust............................ 45
Section 6.13. Registration of Notes in Certificate
Trustee's Name........................... 46
Section 6.14. Representations and Warranties of
Certificate Trustee...................... 46
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Page
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Section 6.15. Withholding Taxes; Information Reporting........... 47
ARTICLE VII
THE DELAWARE TRUSTEE
Section 7.01. Appointment........................................ 48
Section 7.02. Duties and Responsibilities........................ 48
Section 7.03. Acceptance of the Trusts........................... 48
Section 7.04. Limitation of Liability............................ 48
Section 7.05. Other Protections.................................. 49
Section 7.06. Compensation and Reimbursement; Indemnification.... 49
Section 7.07. Resignation........................................ 50
ARTICLE VIII
SUPPLEMENTAL TRUST AGREEMENTS
Section 8.01. Supplemental Trust Agreements Without Consent of
Certificateholders................................. 51
Section 8.02. Supplemental Trust Agreements With Consent of
Certificateholders................................. 51
Section 8.03. Documents Affecting Immunity or Indemnity.......... 52
Section 8.04. Execution of Supplemental Trust Agreements......... 53
Section 8.05. Effect of Supplemental Trust Agreements............ 53
Section 8.06. Conformity with Trust Indenture Act................ 53
Section 8.07. Reference in Certificates to Supplemental Trust
Agreements......................................... 53
ARTICLE IX
AMENDMENTS AND SUPPLEMENTS TO NOTES, NOTE INDENTURE
AND OTHER BASIC DOCUMENTS
Section 9.01. Amendments and Supplements to Notes, Note
Indenture and Other Basic Documents................ 54
ARTICLE X
TERMINATION OF TRUST
Section 10.01. Termination of the Trust.......................... 55
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ARTICLE XI
MISCELLANEOUS PROVISIONS
Section 11.01. Pledge of State of California; Certificates and
Notes Not Obligation of State of California,
Originator, or Seller............................. 57
Section 11.02. Limitation on Rights of Certificateholders........ 57
Section 11.03. [Intentionally Omitted]........................... 58
Section 11.04. Certificates Nonassessable and Fully Paid......... 58
Section 11.05. Notices........................................... 58
Section 11.06. Governing Law..................................... 60
Section 11.07. Severability of Provisions........................ 60
Section 11.08. Conflict With Trust Indenture Act................. 61
Section 11.09. Effect of Headings and Table of Contents.......... 61
Section 11.10. Successors and Assigns; Delegation................ 61
Section 11.11. Benefits of Trust Agreement....................... 61
Section 11.12. Legal Holidays.................................... 61
Section 11.13. Counterparts...................................... 61
Exhibit A--Form of Certificate........................... A-1
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AMENDED AND RESTATED DECLARATION AND AGREEMENT OF TRUST, dated as of December
8, 1997 (the "Trust Agreement"), by and among Bankers Trust (Delaware), as
Delaware Trustee, Bankers Trust Company of California, N.A., as Certificate
Trustee, and the California Infrastructure and Economic Development Bank, as
Originator.
WHEREAS, the Delaware Trustee and the Originator entered into a Declaration
and Agreement of Trust, dated as of November 7, 1997 (the "Declaration and
Agreement of Trust"), creating the California Infrastructure and Economic
Development Bank Special Purpose Trust PG&E-1, a not-for-profit business trust
organized under the laws of the State of Delaware (the "Trust"); and
WHEREAS, pursuant to Section 1(b) of the Declaration and Agreement of Trust,
the Delaware Trustee filed a certificate of trust with the Secretary of State on
November 7, 1997; and
WHEREAS, pursuant to Section 1(c) of the Declaration and Agreement of Trust,
the Delaware Trustee, the Originator and the Certificate Trustee desire to enter
into this Trust Agreement in order to provide for the operation of the Trust;
and
WHEREAS, the Note Issuer (as herein defined) intends to issue notes (the
"Notes") of one or more series or classes from time to time pursuant to the Note
Indenture (as herein defined); and
WHEREAS, it is contemplated that the Trust shall purchase the Notes of each
series pursuant to the Note Purchase Agreement (as herein defined) or a
Subsequent Note Purchase Agreement (as herein defined) relating to such Notes;
and
WHEREAS, in order to finance the purchase of the Notes of one or more series
or classes from the Note Issuer, the Trust shall issue pursuant to this Trust
Agreement rate reduction certificates (the "Certificates"), each of which shall
represent a fractional undivided beneficial interest in a corresponding series
and class of Notes and the proceeds thereof, together with payments made on any
related Swap (as defined herein);
NOW THEREFORE, in consideration of the mutual agreements herein contained, and
of other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01. Definitions. (a) For all purposes of this Trust Agreement,
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except as otherwise expressly provided or unless the context otherwise requires:
(i) the terms used herein that are defined in this Article have the
meanings assigned to them in this Article, and include the plural as well
as the singular;
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(ii) Whenever this Trust Agreement refers to a provision of the Trust
Indenture Act, the provision is incorporated by reference in and made a part
of this Trust Agreement. The following Trust Indenture Act terms have the
following corresponding terms and meanings when used in this Trust Agreement:
"Commission" means the Securities and Exchange Commission.
"indenture securities" means the Certificates.
"indenture security holder" means a Certificateholder.
"indenture to be qualified" means this Trust Agreement.
"indenture trustee" or "institutional trustee" means the Certificate
Trustee.
"obligor" on the indenture securities means the Originator and any other
obligor on the indenture securities.
All other Trust Indenture Act terms used in this Trust Agreement that are
defined by the Trust Indenture Act, defined by Trust Indenture Act reference to
another statute or defined by Commission rule have the meaning assigned to them
by such definitions.
(iii) all references in this Trust Agreement to designated
"Articles", "Sections" and other subdivisions are to the designated Articles,
Sections and other subdivisions of this Trust Agreement;
(iv) the words "include", "including" and similar terms shall be construed
as if followed by the phrase "without limitation"; and
(v) the words "herein", "hereof" and "hereunder" and other words of
similar import refer to this Trust Agreement as a whole and not to any
particular Article, Section or other subdivision.
"Act", when used with respect to any Certificateholder, has the meaning
specified in Section 1.04.
"Authentication Agent" means the authentication agent appointed pursuant to
Section 6.11(b).
"Authorized Agent" means any Paying Agent or Registrar.
"Authorized Officer" means, with respect to any entity, any officer of such
entity who is authorized to act for such entity in matters relating to such
entity and who is identified on the list of Authorized Officers delivered by
such entity to the Certificate Trustee on the Initial Closing Date (as such list
may be modified or supplemented from time to time thereafter).
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"Avoidable Tax" has the meaning set forth in Section 6.08(f).
"Book-Entry Certificates" means, with respect to any Certificate, a
beneficial interest in such Certificate, ownership and transfers of which shall
be made through book entries by a Clearing Agency as described in Section 3.10.
"Business Trust Statute" shall mean Chapter 38 of Title 12 of the Delaware
Code, 12 Del. C., (S) 3801 et seq., as the same may be amended from time to time
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and any successor statute.
"Certificate Account" means, with respect to any Series or Class of
Certificates, the account or accounts created and maintained with respect to
such Series or Class of Certificates pursuant to Section 4.01(a).
"Certificate Business Day" or "Business Day" means any day other than a
Saturday, a Sunday or a day on which banking institutions or trust companies in
New York, New York or San Francisco, California are authorized or obligated by
law, regulation or executive order to remain closed.
"Certificate Owner" means the Person who owns a Book-Entry Certificate.
"Certificate Trustee" means Bankers Trust Company of California, N.A., as
Certificate Trustee under this Trust Agreement, and its successors in interest,
and any successor Certificate Trustee appointed as provided herein.
"Certificate Trustee Expenses" has the meaning set forth in Section 6.06.
"Certificate Trustee Indemnified Persons" has the meaning set forth in
Section 6.06.
"Certificateholder" or "Holder" means the Person in whose name a
Certificate is registered on the Register.
"Certificates" has the meaning set forth in the preamble to this Trust
Agreement.
"Class" means, with respect to any Series of Certificates, any one of the
classes of Certificates of that Series; and, with respect to any Series of
Notes, any one of the classes of Notes of that Series.
"Clearing Agency" means an organization registered as a "clearing agency"
pursuant to Section 17A of the Exchange Act.
"Clearing Agency Participant" means a broker, dealer, bank, 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.
"Corporate Trust Office" means the principal office of the Certificate
Trustee or the Delaware Trustee, as the case may be, at which at any particular
time its corporate trust business
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shall be administered which office of the Certificate Trustee at the date of the
execution of this Trust Agreement is located at Bankers Trust Company of
California, N.A., c/o Bankers Trust Company, Four ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇, Attention: Structured Finance Group and which office of the
Delaware Trustee at the date of the execution of this Trust Agreement is located
at E.A. Delle Donne Corporate Center, ▇▇▇▇▇▇▇▇▇▇ Building, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, or at any other time at such other
address as the Certificate Trustee or the Delaware Trustee may designate from
time to time by notice given pursuant to Section 11.05.
"Declaration and Agreement of Trust" has the meaning set forth in the
preamble to this Trust Agreement.
"Definitive Certificates" has the meaning set forth in Section 3.10(a).
"Delaware Trustee" means Bankers Trust (Delaware), as Delaware Trustee
under this Trust Agreement, and its successors in interest, and any successor
Delaware Trustee appointed as provided herein.
"Delaware Trustee Expenses" has the meaning set forth in Section 7.06.
"Delaware Trustee Indemnified Persons" has the meaning set forth in Section
7.06.
"Distribution Date" means, with respect to any Series or Class of
Certificates, a Payment Date with respect to the Notes.
"DTC Agreement" means the agreement between the Certificate Trustee on
behalf of the Trust and The Depository Trust Company, as the initial Clearing
Agency, dated as of December 8, 1997, relating to the Certificates, as the same
may be amended and supplemented from time to time.
"Eligible Institution" means (a) the corporate trust department of the
Certificate Trustee; provided, that an account with the Certificate Trustee will
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only be an eligible deposit account if it is a segregated trust account, 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), that (i) has
either (A) a long-term unsecured debt rating of AAA by Standard & Poor's and A2
by Moody's or (B) a certificate of deposit rating of A-1+ by Standard & Poor's
and P-1 by Moody's, or any other long-term, short-term or certificate of deposit
rating acceptable to the Rating Agencies and (ii) whose deposits are insured by
the FDIC.
"Eligible Investments" means instruments or investment property that
evidence:
(i) direct obligations of, and obligations fully and unconditionally
guaranteed as to timely payment by, the United States of America;
(ii) demand deposits, time deposits, certificates of deposit or
bankers' acceptances of depository institutions meeting the requirements of
clause (b)
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of the definition of Eligible Institutions;
(iii) commercial paper (other than commercial paper of the Seller)
having, at the time of the investment or contractual commitment to invest
therein, a rating from each of the Rating Agencies in the highest
investment category granted thereby;
(iv) investments in money market funds having a rating from each of
the Rating Agencies in the highest investment category granted thereby
(including funds for which the Certificate Trustee or any of its Affiliates
is investment manager or advisor);
(v) repurchase obligations with respect to any security that is a
direct obligation of, or fully guaranteed by, the United States of America
or any agency or instrumentality thereof the obligations of which are
backed by the full faith and credit of the United States of America, in
either case entered into with depository institutions meeting the
requirements of clause (b) of the definition of Eligible Institution; and
(vi) any other investment permitted by each of the Rating Agencies.
"Event of Default" means, with respect to any Series or Class of
Certificates, (i) a Note Event of Default with respect to the corresponding
Series or Class of Notes, or (ii) a breach by the State of California of the
State Pledge described in Section 11.01(a).
"FDIC" means the Federal Deposit Insurance Corporation, and its successors.
"Fee and Indemnity Agreement" means the fee and indemnity agreement dated
as of December 8, 1997, among the Note Issuer, the Note Trustee, the Originator,
the Delaware Trustee and the Certificate Trustee.
"Initial Closing Date" means December 8, 1997.
"London Banking Day" means any day on which dealings in deposits in U.S.
dollars are transacted in the London interbank market.
"Minimum Denomination" means, with respect to any Certificate, the minimum
denomination therefor specified in the applicable Trust Supplement, which
minimum denomination shall not be less than $1,000.
"Note Event of Default" means, with respect to any Series or Class of
Notes, any Event of Default (as such term is defined in the Note Indenture) with
respect to such Series or Class of Notes.
"Note Indenture" means the Indenture dated as of December 8, 1997, between
the Note Issuer and the Note Trustee, as amended and supplemented from time to
time, including by any Series Supplement.
"Note Issuer" means PG&E Funding LLC, a Delaware limited liability company,
and its
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successors in interest.
"Note Purchase Agreement" means the Note Purchase Agreement dated as of
December 8, 1997, between the Note Issuer and the Trust, as the same may be
amended or supplemented from time to time to accommodate the issuance of
additional Series or Classes of Notes and Certificates.
"Note Trustee" means the institution acting as Note Trustee under the Note
Indenture.
"Notes" has the meaning set forth in the preamble to this Trust Agreement.
"Officer's Certificate" means a certificate signed by any Authorized
Officer of the Originator, under the circumstances described in, and otherwise
complying with, the applicable requirements of Section 1.02, and delivered to
the Certificate Trustee.
"Opinion of Counsel" means one or more written opinions of counsel who may,
except as otherwise expressly provided in this Trust Agreement, be employees of
or counsel to the Originator and who shall be satisfactory to the Certificate
Trustee and the Delaware Trustee, if applicable, and which opinion or opinions
shall be addressed to the Certificate Trustee, as trustee, and the Delaware
Trustee, as trustee, if applicable, shall comply with any applicable
requirements of Section 1.02, and shall be in form and substance satisfactory to
the Certificate Trustee.
"Original Principal Amount" means, with respect to any Certificate, the
amount set forth as such on the face of such Certificate on the date of its
issuance.
"Originator" means the California Infrastructure and Economic Development
Bank, a public body established within the state government of the State of
California, and its successors in interest.
"Outstanding" means, as of the date of determination, all Certificates
theretofore authenticated and delivered under this Trust Agreement except:
(i) Certificates theretofore canceled by the Registrar or delivered to
the Registrar for cancellation;
(ii) Certificates or portions thereof the payment for which money in
the necessary amount has been theretofore deposited with the Certificate
Trustee or any Paying Agent in trust for the Holders of such Certificates
(provided, however, that if such Certificates are to be redeemed, notice of
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such redemption has been duly given pursuant to this Trust Agreement or
provision therefor, satisfactory to the Certificate Trustee, has been
made); and
(iii) Certificates in exchange for or in lieu of other Certificates
that have been authenticated and delivered pursuant to this Trust Agreement
unless proof satisfactory to the Certificate Trustee is presented that any
such Certificates are held by a protected purchaser;
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provided that in determining whether the Holders of the requisite Outstanding
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Amount of the Certificates or any Series or Class thereof have given any
request, demand, authorization, direction, notice, consent or waiver hereunder
or under any Basic Document, Certificates owned by the Note Issuer, the
Originator, the Seller, the Swap Counterparty (if applicable) or any Affiliate
of any of the foregoing Persons shall be disregarded and deemed not to be
Outstanding, except that, in determining whether the Certificate Trustee shall
be protected in relying upon any such request, demand, authorization, direction,
notice, consent or waiver, only Certificates that a Responsible Officer of the
Certificate Trustee actually knows to be so owned shall be so disregarded.
Certificates so owned that have been pledged in good faith may be regarded as
Outstanding if the pledgee establishes to the satisfaction of the Certificate
Trustee the pledgee's right so to act with respect to such Certificates and that
the pledgee is not the Note Issuer, any other obligor upon the Certificates, the
Originator, the Seller, the Swap Counterparty (if applicable) or any Affiliate
of any of the foregoing Persons.
"Outstanding Amount" means the aggregate principal amount of all
Certificates, or, if the context requires, all Certificates of a Series or
Class, Outstanding at the date of determination.
"Paying Agent" means the Certificate Trustee or any other Person that meets
the eligibility standards specified in Section 6.11(b) and is authorized by the
Originator (with the prior written approval of the Note Issuer) to make
distributions of principal of or interest with respect to the Certificates.
"Payment" means, with respect to any Series or Class of Notes, any payment
(other than a Special Payment but including any Redemption Payment) of principal
of or interest thereon.
"Payment Date" means, with respect to any Series or Class of Notes, the
date or dates specified as Payment Dates therefor in the applicable Series
Supplement.
"Record Date" means, with respect to any Distribution Date, the Business
Day immediately preceding such Distribution Date or, if Definitive Certificates
are issued, the last day of the calendar month preceding the calendar month in
which such Distribution Date occurs.
"Redemption Payment" means, with respect to any Series or Class of Notes,
any payment of principal of and interest on the Notes of such Series or Class
due from the Note Issuer upon the early redemption of such Series or Class of
Notes, other than any such payment due by reason of the occurrence of a Note
Event of Default with respect to such Series or Class of Notes.
"Register" has the meaning set forth in Section 3.04.
"Registrar" means, initially, the Certificate Trustee, pursuant to Section
3.04, and any successor registrar appointed pursuant to Section 6.11(b).
"Request" means a written request by the Originator setting forth the
subject matter of the request accompanied by an Officer's Certificate and an
Opinion of Counsel as provided in Section 1.02.
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"Responsible Officer" means, when used with respect to a Trustee, any
officer within the Corporate Trust Office of the related Trustee including any
Managing Director, Vice President, Assistant Vice President, Secretary,
Assistant Secretary or Assistant Treasurer or any other officer of the related
Trustee customarily performing functions similar to those performed by any of
the above designated officers and also, with respect to a particular matter, any
other officer to whom such matter is referred because of such officer's
knowledge of and familiarity with the particular subject.
"Sale Agreement" means the Transition Property Purchase and Sale Agreement
dated as of December 8, 1997, between the Seller and the Note Issuer, as amended
and supplemented from time to time.
"Scheduled Final Distribution Date" means, with respect to any Series or
Class of Certificates, the Scheduled Maturity Date of the related Series and
Class of Notes.
"Secretary of State" shall mean the Secretary of State of the State of
Delaware.
"Securities Act" means the Securities Act of 1933, as amended.
"Seller" means Pacific Gas and Electric Company, in its capacity as seller
under the Sale Agreement, including its successors in interest.
"Series," when referring to Certificates, means each series of Certificates
issued and authenticated pursuant to this Trust Agreement and a related Trust
Supplement, and, when referring to Notes, means each series of Notes issued and
authenticated pursuant to the Note Indenture and a related Series Supplement.
"Servicer" means Pacific Gas and Electric Company, in its capacity as
servicer under the Servicing Agreement, including its successors in interest,
until a successor Person shall have become the servicer pursuant to the
Servicing Agreement, and thereafter "Servicer" shall mean such successor Person.
"Servicing Agreement" means the Transition Property Servicing Agreement
dated as of December 8, 1997, between the Servicer and the Note Issuer, as
amended and supplemented from time to time.
"Special Distribution Date" means, with respect to the distribution of any
Special Payment with respect to any Series or Class of Notes, the later of (i)
the date receipt of such Special Payment is confirmed by the Certificate Trustee
and (ii) the date that is the earlier of (A) if the Certificate Trustee shall
have received such Special Payment without prior notice thereof, 20 days after
such receipt is confirmed or (B) unless such Special Payment represents the
proceeds of a sale of such Notes by the Certificate Trustee (in which event the
Special Payment Date for such proceeds shall be the earliest date for which it
is practicable for the Certificate Trustee to give the 20-day notice required by
Section 4.02(d)), the date that is 20 days after the Certificate Trustee
receives notice from the Note Issuer of the anticipated payment of such Special
Payment, provided that in the event of the repurchase of the Transition Property
by the Seller, the Special Distribution Date shall mean
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a date not later than five Business Days after receipt of such proceeds.
"Special Payment" means, with respect to any Series or Class of Notes, (i)
any payment of principal of or interest on (including any interest accruing upon
default), or any other amount in respect of, the Notes of such Series or Class
(including a payment under any Swap) that is not actually paid within five days
of the Payment Date applicable thereto or (ii) any proceeds from the sale of
such Notes by the Certificate Trustee pursuant to Article V hereof or the
repurchase of the Transition Property by the Seller pursuant to Article V of the
Sale Agreement.
"Special Record Date" means, with respect to any Special Distribution Date,
the close of business on the 15th day (whether or not a Business Day) preceding
such Special Distribution Date.
"State Pledge" has the meaning set forth in Section 11.01(a).
"Subsequent Closing Date" means any date (other than the Initial Closing
Date) specified in a Trust Supplement on which Certificates of any Series or
Class are issued.
"Subsequent Note Purchase Agreement" means any agreement substantially
similar to the Note Purchase Agreement executed in connection with the purchase
of a Series or Class of Notes on a Subsequent Closing Date.
"Swap" means an interest rate swap, cap, floor, collar or other hedging
transaction that may be entered into by the Trust, at the direction of the
Originator, for the purpose of managing interest rate risk with respect to a
specified Series or Class of Certificates that are being issued concurrently
with the execution of the Swap.
"Swap Counterparty" means the entity that is a party to a Swap with the
Trust.
"Swap Payment" means the payments made by the Trust to the Swap
Counterparty pursuant to any Swap, subject to any netting of payments provided
in the applicable Swap.
"Swap Revenues" means the payments paid by a Swap Counterparty to the Trust
pursuant to any Swap, subject to any netting of payments provided in the
applicable Swap.
"Termination Date" means, with respect to any Series or Class of
Certificates, the Final Maturity Date of the related Series and/or Class of
Notes.
"Trust" means the trust created by this Trust Agreement, the estate of
which consists of the Trust Property.
"Trust Agreement" means this Trust Agreement, as the same shall be amended
or supplemented from time to time.
"Trust Indenture Act", except as otherwise provided in Section 8.06, means
the Trust Indenture Act of 1939 as in force at the date as of which this
instrument was executed.
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"Trust Property" means, with respect to any Series or Class of
Certificates, (i) the Series or Class of Notes corresponding to such Series or
Class of Certificates held as the property of the Trust and all monies at any
time paid thereon and all monies due and to become due thereunder, all rights of
the Certificate Trustee or the Trust, as holder of such Series or Class of
Notes, in and to the Collateral and any proceeds thereof, funds from time to
time deposited in the Certificate Account for such Series or Class of
Certificates and any proceeds from the sale by the Certificate Trustee pursuant
to Article V hereof of Notes of such Series or Class and (ii) any Swap executed
in connection with such Series or Class of Certificates together with any Swap
Revenues payable to the Trust with respect thereto.
"Trust Supplement" means a supplement to this Trust Agreement that provides
for the issuance of a particular Series of Certificates.
"Trustee" means the Certificate Trustee and/or the Delaware Trustee, as the
context may require.
"Underwriters" means the underwriters who purchase Certificates of any
Series or Class from the Trust and sell such Certificates in a public offering.
(b) Except as otherwise specified herein or as the context may otherwise
require, the following terms have the respective meanings set forth in the Note
Indenture as in effect on the Initial Closing Date for all purposes of this
Trust Agreement.
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Section of
Term Note Indenture
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Administrative Services Agreement.. 1.01(a)
Administrator...................... 1.01(a)
Advice Letters..................... 1.01(b)
Affiliate.......................... 1.01(a)
Basic Documents.................... 1.01(a)
Capital Subaccount................. 1.01(a)
Collateral......................... 1.01(a)
Commission......................... 1.01(a)
Duff & ▇▇▇▇▇▇...................... 1.01(a)
Exchange Act....................... 1.01(a)
Expected Amortization Schedule..... 1.01(a)
FDIC............................... 1.01(a)
Final Maturity Date................ 1.01(a)
Financing Order.................... 1.01(b)
Fitch.............................. 1.01(b)
FTA Charge......................... 1.01(b)
▇▇▇▇▇'▇............................ 1.01(a)
Person............................. 1.01(a)
PU Code............................ 1.01(b)
Rating Agency...................... 1.01(a)
Rating Agency Condition............ 1.01(a)
Series Issuance Date............... 1.01(a)
Series Supplement.................. 1.01(a)
Standard & Poor's.................. 1.01(a)
State.............................. 1.01(a)
Transition Property................ 1.01(b)
(c) When reference is made herein to the Certificates of any Series or
Class, such reference shall mean the Certificates of such Series if there exists
only one Series, or the Certificates of any Class within a Series, if such
Series of Certificates contains more than one Class.
Section 1.02. Compliance Certificates and Opinions. Upon any application
------------------------------------
or request by the Originator to the Certificate Trustee to take any action under
any provision of this Trust Agreement, the Originator shall furnish to the
Certificate Trustee an Officer's Certificate stating that, in the opinion of the
signer thereof, all conditions precedent, if any, provided for in this Trust
Agreement relating to the proposed action have been complied with and an Opinion
of Counsel stating that in the opinion of such counsel all such conditions
precedent, if any, have been complied with, 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 Trust Agreement relating to such
particular application or request, no additional certificate or opinion need be
furnished. Any such application or request by the Originator to the Certificate
Trustee shall also be accompanied by evidence reasonably satisfactory to the
Certificate Trustee that the Note Issuer has given its prior written approval of
such application or request.
11
Every certificate or opinion with respect to compliance with a condition or
covenant provided for in this Trust Agreement shall include:
(a) a statement that each signatory of such certificate or opinion has
read or caused to be read such covenant or condition and the definitions
herein relating thereto;
(b) 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;
(c) 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
(d) a statement as to whether, in the opinion of each such signatory,
such condition or covenant has been complied with.
Section 1.03. Form of Documents Delivered to Certificate Trustee. In any
--------------------------------------------------
case where several matters are required to be certified by, or covered by an
opinion of, any specified Person, it is not necessary that all such matters be
certified by, or covered by the opinion of, only one such Person, or that they
be so certified or covered by only one document, but one such Person may certify
or give an opinion with respect to some matters and one or more other such
Persons as to other matters, and any such Person may certify or give an opinion
as to such matters in one or several documents.
Any certificate or opinion of an Authorized Officer of the Originator 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 certificate or
opinion is based are erroneous. Any such certificate of an Authorized Officer
or Opinion of Counsel may be based, insofar as it relates to factual matters,
upon a certificate or opinion of, or representations by, an officer or officers
of the Servicer, the Seller, the Note Issuer or the Administrator, stating that
the information with respect to such factual matters is in the possession of the
Servicer, the Seller, the Note Issuer or the Administrator, as the case may be,
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 Trust Agreement, in connection with any application or
certificate or report to the Certificate Trustee, it is provided that the
Originator shall deliver any document as a condition of the granting of such
application, or as evidence of the Originator'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 Originator to have such application
granted or to the sufficiency of such certificate or report. The
12
foregoing shall not, however, be construed to affect the Originator's right to
rely upon the truth and accuracy of any statement or opinion contained in any
such document as provided in Article VI.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Trust Agreement, they may, but need not, be consolidated
and form one instrument.
Section 1.04. Acts of Certificateholders. (a) Any request, demand,
--------------------------
authorization, direction, notice, consent, waiver or other action provided by
this Trust Agreement to be given or taken by Certificateholders may be embodied
in and evidenced by one or more instruments of substantially similar tenor
signed by such Certificateholders in person or by agents duly appointed in
writing; and except as herein otherwise expressly provided such request, demand,
authorization, direction, notice, consent, waiver or other action shall become
effective when such instrument or instruments are delivered to the Certificate
Trustee, and, where it is hereby expressly required, to the Originator and the
Note Trustee. Such instrument or instruments (and the action embodied therein
and evidenced thereby) are herein sometimes referred to as the "Act" of the
Certificateholders 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 Trust Agreement and (subject to Article VI)
conclusive in favor of the Certificate Trustee, the Originator and the Note
Trustee, if made in the manner provided in this Section.
(b) The fact and date of the execution by any Person of any such instrument
or writing may be proved in any manner that the Certificate Trustee deems
sufficient.
(c) The ownership of Certificates shall be proved by the Register.
(d) Any request, demand, authorization, direction, notice, consent, waiver
or other action by the Holder of any Certificates shall bind the Holder of every
Certificate 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
Certificate Trustee, the Originator or the Note Trustee in reliance thereon,
whether or not notation of such action is made upon such Certificate.
(e) The Originator may at its option by delivery of an Officer's
Certificate to the Certificate Trustee set a record date to determine the
Holders of any Series or Class of Certificates entitled to give any consent,
request, demand, authorization, direction, notice, waiver or other Act.
Notwithstanding Section 316(c) of the Trust Indenture Act, such record date
shall be the record date specified in such Officer's Certificate, which shall be
the date not more than 30 days prior to the first solicitation of
Certificateholders in connection therewith. If such a record date is fixed,
such consent, request, demand, authorization, direction, notice, waiver or other
Act may be given before or after such record date, but only the Holders of
record of Certificates of the applicable Series or Class at the close of
business on such record date shall be deemed to be Certificateholders of such
Series or Class for the purposes of determining whether Holders of the requisite
aggregate Outstanding Amount of Certificates of such Series or Class
have authorized or agreed or consented to such consent, request, demand,
authorization, direction, notice, waiver or other Act, and for that purpose the
aggregate Outstanding Amount of Certificates of such Series or Class shall be
computed as of such record date; provided that no such consent, request, demand,
--------
authorization,
13
direction, notice, waiver or other Act by the Holders of Certificates of such
Series or Class on such record date shall be deemed effective unless it shall
become effective pursuant to the provisions of this Trust Agreement not later
than one year after the record date.
(f) Except as otherwise provided in the definition of Outstanding,
Certificates of any Series or Class owned by or pledged to any Person shall have
an equal and proportional benefit under the provisions of this Trust Agreement,
without preference, priority or distinction as among all of the Certificates of
that Series or Class.
ARTICLE II
ORGANIZATION; ACQUISITION OF NOTES;
ORIGINAL ISSUANCE OF CERTIFICATES
Section 2.01. Name; Declaration and Statement of Intent; Office;
--------------------------------------------------
Operations. (a) The Trust created hereby shall be known as the "California
----------
Infrastructure and Economic Development Bank Special Purpose Trust - PG&E-1," in
which name the Delaware Trustee and the Certificate Trustee may engage in the
transactions contemplated hereby. It is the intention of the parties hereto
that the Trust constitute a not-for-profit business trust under the Business
Trust Statute and that this Trust Agreement constitute the governing instrument
of such business trust. Effective as of the date hereof, the Delaware Trustee
and the Certificate Trustee declare themselves co-trustees for the Trust.
(b) The office of the Trust shall be in care of the Delaware Trustee at its
Corporate Trust Office or at such other address in Delaware as the Delaware
Trustee may designate by written notice to the Originator, the Certificate
Trustee, the Note Issuer and the Certificateholders, and the Trust shall conduct
its business in such office separate and apart from that of the Originator and
its affiliates.
(c) The Certificate Trustee, as trustee on behalf of the
Certificateholders, accepts the trust created hereby in accordance with the
provisions hereof, accepts appointment as Certificate Trustee, as Paying Agent
and as Registrar hereunder, and agrees to perform its duties as herein required.
Section 2.02. Trust Property. (a) All bank accounts and other Trust
--------------
Property shall be established by the Certificate Trustee on behalf of the Trust
and held and maintained by the Certificate Trustee on behalf of the Trust at its
Corporate Trust Office or at another Eligible Institution. The Trust shall use
separate stationery and other business forms and shall maintain separate records
and books of account from those of the Originator. The Trust's assets shall not
be commingled with those of the Originator, and the Trust shall act solely in
its own name through its duly authorized agents in the conduct of its business.
(b) The Trust and the Originator each covenant and agree to hold itself out
to the public under its own name as a separate and distinct entity and will each
conduct its business so as not to mislead others as to its identity. The Trust
shall cause the preparation of its financial documents separate and apart from
those of the Originator.
14
(c) Except as otherwise contemplated by the Basic Documents, the Trust will
not engage in any business transactions with the Originator.
(d) The Certificate Trustee hereby declares that it shall hold the Trust
Property in trust upon and subject to the conditions set forth herein for the
use and benefit of the Certificateholders. The Certificate Trustee hereby
acknowledges that it has deposited the sum of $1 in the Certificate Account on
November 7, 1997, such sum constituting the initial Trust Property contributed
by the Originator.
Section 2.03. Tax Treatment; Construction. (a) It is the intention of
---------------------------
the parties hereto that the Trust shall be treated as a "grantor trust" for
federal income tax purposes and all transactions contemplated by this Trust
Agreement will be reported consistent with such treatment.
(b) The provisions of this Trust Agreement shall be construed, and the
affairs of the Trust shall be conducted, so as to achieve treatment of the Trust
as a "grantor trust" for federal income tax purposes.
Section 2.04. Purpose and Powers. The Trust is constituted solely for the
------------------
purpose of making the investment in the Notes and issuing the Certificates,
applying the proceeds of the Notes to the payment of the Certificates and
entering into and performing its obligations under the Basic Documents to which
it is a party, and, except as set forth herein, neither Trustee is authorized or
empowered to acquire any other investments or engage in any other activities on
behalf of the Trust (although the Trust may enter into a Swap with respect to a
Series or Class of Certificates as set forth in the related any Trust
Supplement) and, in particular, neither Trustee is authorized or empowered to do
anything that would cause the Trust to fail to qualify as a "grantor trust" for
federal income tax purposes.
Section 2.05. Acquisition and Acceptance of Notes by Certificate Trustee.
----------------------------------------------------------
The Certificate Trustee, upon the execution and delivery of this Trust
Agreement, hereby acknowledges its acceptance of all right, title, and interest
in and to the Notes acquired from time to time pursuant to the Note Purchase
Agreement and any Subsequent Note Purchase Agreement and hereby declares that it
will hold such right, title and interest in each Series or Class of Notes,
together with all other property constituting the Trust Property relating to
each such Series or Class of Notes, for the benefit of all present and future
holders of the corresponding Series or Class of Certificates.
Section 2.06. Issuance of Certificates. On the Initial Closing Date and
------------------------
on each Subsequent Closing Date, the Trust, subject to the provisions of the
Trust Supplement relating to the Series or Class of Certificates to be issued
and to the provisions of the Note Purchase Agreement or any Subsequent Note
Purchase Agreement, as the case may be, shall issue, and the Certificate Trustee
shall execute on behalf of the Trust and authenticate and deliver, in fully
registered form only, the Certificates of the Series or Class corresponding to
the Series or Class of Notes issued on such Initial Closing Date or Subsequent
Closing Date, as the case may be, all in accordance with the Note Purchase
Agreement or Subsequent Note Purchase Agreement, as the case may be. Each
Certificate represents a fractional undivided beneficial interest in a
corresponding Series or Class of Notes and the proceeds thereof, together with
payments made on any related Swap. Prior to the
15
execution and authentication of the Certificates of any Series or Class, the
Certificate Trustee shall have received the following:
(a) The Series or Class of Notes, duly executed by the Note Issuer and
authenticated by the Note Trustee, corresponding to the Series or Class of
Certificates to be issued;
(b) A certificate of an Authorized Officer of the Note Issuer to the effect
that all conditions required to be satisfied under Section 2.10 of the Note
Indenture for the issuance of such Series or Class of Notes and all conditions
required to be satisfied under the Note Purchase Agreement or any Subsequent
Note Purchase Agreement (as the case may be) for the purchase of the Notes by
the Trust have been satisfied, together with executed copies of all documents,
certificates, opinions, orders or approvals establishing satisfaction of such
conditions;
(c) An order of an Authorized Officer of the Originator (i) directing the
Delaware Trustee and the Certificate Trustee to execute any Trust Supplement to
be executed in connection with such Series or Class of Certificates, and the
Series or Class of Certificates to be issued hereunder or thereunder, (ii)
directing the Certificate Trustee on behalf of the Trust to execute the Note
Purchase Agreement and (iii) directing the Certificate Trustee to execute on
behalf of the Trust, authenticate, as Authentication Agent, and deliver such
Series or Class of such Certificates to the Underwriters named in said order for
the purchase price specified therein and directing the application of the
proceeds thereof;
(d) [Reserved.]
(e) An Opinion of Counsel, portions of which may be delivered by counsel to
the Originator and portions of which may be delivered by counsel to the Delaware
Trustee, the Certificate Trustee, the Originator or the Trust, dated the Initial
Closing Date or the related Subsequent Closing Date, as the case may be, in each
case subject to the customary exceptions, qualifications and assumptions
contained therein (which may include, for the purpose of the Initial Closing
Date, the assumption that the Financing Order has been duly authorized by the
CPUC and is in full force and effect), to the effect that:
(i) this Trust Agreement and any Trust Supplement have been duly
authorized, executed and delivered by the parties hereto;
(ii) this Trust Agreement and any Trust Supplement are valid and
binding agreements of the parties hereto, enforceable in accordance with
their respective terms except as enforcement thereof may be subject to or
limited by bankruptcy, insolvency, moratorium, reorganization, fraudulent
conveyance or other similar laws relating to or affecting the enforcement
of creditors' rights generally, by general equitable principles (regardless
of whether such enforceability is considered in a proceeding in equity or
at law) and the limitations on legal remedies against public agencies in
the State of California;
(iii) all instruments furnished to the Delaware Trustee or the
Certificate Trustee as conditions precedent to the delivery of the
Certificates conform to the requirements of the Trust Agreement and
constitute all documents required to be delivered thereunder to
16
authorize the Certificate Trustee to execute, authenticate and deliver the
Certificates;
(iv) the Certificates to be issued have been duly authorized and
executed and, when authenticated in accordance with the provisions of this
Trust Agreement and any Trust Supplement and delivered, will be validly
issued by the Trust and entitled to the benefits of this Trust Agreement
and any Trust Supplement;
(v) the Note Purchase Agreement, including any supplements or
amendments thereto entered into in connection with the issuance of any
Series or Class of Notes, has been duly executed and delivered by the Trust
and constitutes the legal, valid and binding agreement of the Trust,
enforceable against the Trust in accordance with its terms;
(vi) the Trust is a duly organized and validly existing business
trust under the Business Trust Statute and is in good standing;
(vii) this Trust Agreement and any Trust Supplement to be executed
in connection with such Series or Class of Certificates have been duly
qualified under the Trust Indenture Act or no such qualification is
necessary;
(viii) the Trust constitutes a "special purpose trust" under
Section 63010 of the California Government Code and a "financing entity"
under Section 840 of the PU Code, and the Certificates constitute "rate
reduction bonds" under Section 840 of the PU Code and the Holders of the
Certificates are entitled to the rights and benefits thereunder;
(ix) the issuance of the Series or Class of Certificates shall not
adversely affect the status of the Trust as a grantor trust not taxable as
a corporation for federal income tax purposes; and
(x) such other matters as the Certificate Trustee or the Delaware
Trustee may reasonably require.
(f) [Reserved.]
(g) Sufficient funds to pay the purchase price for the related Series or
Class of Notes, as specified in Section 1(b) of the Note Purchase Agreement;
(h) The Rating Agency Condition shall have been satisfied with respect to
the issuance of the Series or Class of Certificates and the execution of any
related Swap; and
(i) If any Swap is to be executed in connection with the issuance of any
Series or Class of Certificates:
(i) a Trust Supplement providing the following:
(A) the form of the Swap to be executed by the Trust, together
with a direction to the Certificate Trustee from the Originator to
execute and deliver the
17
Swap on behalf of the Trust upon the satisfaction of any conditions
set forth in such Trust Supplement;
(B) a description of the manner by which interest will be
calculated on the Series or Class of Certificates to which the Swap
relates, together with the form of such Series or Class of
Certificates;
(C) the form of the Certificate for such Series or Class;
(D) such other matters as the Originator may reasonably deem
appropriate, or the Certificate Trustee or Delaware Trustee may
reasonably request, and that are not inconsistent with the provisions
hereof; and
(ii) the Originator shall provide evidence satisfactory to the
Certificate Trustee that the Rating Agency Condition will be satisfied with
respect to the issuance of such Series or Class of Certificates.
Section 2.07. Representations and Warranties of the Originator. The
------------------------------------------------
Originator will represent and warrant, as of each Series Issuance Date, the
following:
(a) the Originator has full power and authority, and has taken all
action necessary, to execute and deliver this Trust Agreement and any Trust
Supplement and to fulfill its obligations under, and to consummate the
transactions contemplated by, this Trust Agreement and any Trust
Supplement;
(b) the making and performance by the Originator of this Trust
Agreement and any Trust Supplement and all documents required to be
executed and delivered by it hereunder do not and will not violate any law
or regulation of the jurisdiction of its organization or any other law or
regulation applicable to it or violate any provision of, or constitute,
with or without notice or lapse of time, a default under, or result in the
creation or imposition of any lien on any properties included in the Trust
Property pursuant to, any mortgage, indenture, contract, agreement or other
undertaking to which it is a party;
(c) this Trust Agreement and any Trust Supplement have been duly
executed and delivered by the Originator and constitute its legal, valid
and binding obligations, enforceable in accordance with their terms;
(d) all consents, licenses, approvals, authorizations, exemptions,
registrations, filings, opinions and declarations from or with any agency,
department, administrative authority, statutory corporation or judicial
entity necessary for the validity or enforceability of its obligations
under this Trust Agreement and any Trust Supplement have been obtained, and
no governmental authorizations other than any already obtained are required
in connection with the execution, delivery and performance of this Trust
Agreement and any Trust Supplement; and
18
(e) the representations and warranties in Section 11.01 are true and
correct.
Section 2.08. Execution of Basic Documents. The Certificate Trustee
----------------------------
is hereby authorized and directed to execute and deliver on behalf of the Trust
each of the Basic Documents to which the Trust is a party, in each case in the
form presented to it by the Originator. The execution and delivery of the
Underwriting Agreement by the Originator on behalf of the Trust is hereby
ratified and confirmed in all respects.
19
ARTICLE III
THE CERTIFICATES
Section 3.01. Form, Denomination and Execution of Certificates. The
------------------------------------------------
Certificates of each Series shall be issued in registered form without coupons
and shall be substantially in the form attached hereto as Exhibit A, with the
following filled in: (a) the designation of such Series and, if applicable, the
Classes thereof, which shall be the same designation as the related Series or
Class or Classes of Notes, (b) the Certificate number or numbers thereof, (c)
the date of authentication thereof, which shall be the same as the Series
Issuance Date of the related Series or Class or Classes of Notes, and (d) the
Original Principal Amount thereof, which shall equal, in the aggregate, the
principal amount of the related Series of Notes; and with such omissions,
variations and insertions as are permitted by this Trust Agreement or any Trust
Supplement, and may have such letters, numbers or other marks of identification
and such legends or endorsements printed, lithographed or engraved thereon as
may be required to comply with the rules of any securities exchange on which any
Class or Classes of the Certificates of such Series may be listed or to conform
to any usage in respect thereof, or as may, consistently herewith, be prescribed
by the Certificate Trustee or by the Originator (with the prior written approval
of the Note Issuer), and as evidenced by the execution and authentication of
such Certificates.
Except as provided in Section 3.10, the definitive Certificates of
each Series or Class shall be printed, lithographed or engraved or produced by
any combination of these methods or may be produced in any other manner
permitted by the rules of any securities exchange on which the Certificates of
such Series or Class may be listed, as evidenced by an order by an Authorized
Officer of the Originator, relating to the authentication and execution of such
Certificates by the Certificate Trustee on behalf of the Trust.
The Certificates of each Series or Class shall be issued in Minimum
Denominations.
The Certificates shall be executed on behalf of the Trust by the
Certificate Trustee by manual or facsimile signature of a Responsible Officer of
the Certificate Trustee. Certificates bearing the manual or facsimile signature
of an individual who was, at the time when such signature was affixed,
authorized to sign on behalf of the Trust shall be validly issued by the Trust,
notwithstanding that such individual has ceased to be so authorized prior to the
authentication and delivery of such Certificates or did not hold such office at
the date of such Certificates. No Certificate shall be entitled to any benefit
under this Trust Agreement, or be valid for any purpose, unless there appears on
such Certificate a certificate of authentication substantially in the form set
forth in Exhibit A hereto, executed by the Certificate Trustee (or any
Authentication Agent) by manual signature, and such certificate of
authentication upon any Certificate shall be conclusive evidence, and the only
evidence, that such Certificate has been duly authenticated and delivered
hereunder. All Certificates shall be dated the date of their authentication.
Section 3.02. Authentication of Certificates. The Certificate
------------------------------
Trustee shall duly authenticate and deliver Certificates of each Series or Class
in authorized denominations equaling in the aggregate for each Series or Class
of Certificates the aggregate Original Principal Amount of the Notes of such
Series or Class.
20
Section 3.03. Temporary Certificates. Pending the preparation of
----------------------
definitive Certificates of any Series or Class, the Certificate Trustee on
behalf of the Trust may execute, and the Certificate Trustee or any
Authentication Agent upon written order of the Originator shall authenticate and
deliver, temporary Certificates of such Series or Class that are printed,
lithographed, typewritten or otherwise produced, in any denomination, containing
substantially the same terms and provisions as set forth in Exhibit A, except
for such appropriate insertions, omissions, substitutions and other variations
relating to their temporary nature as the Trust may determine, as evidenced by
the execution of such temporary Certificates by the Certificate Trustee on
behalf of the Trust.
If temporary Certificates of any Series or Class are issued, the Trust
will cause definitive Certificates of such Series or Class to be prepared
without unreasonable delay. After the preparation of definitive Certificates of
such Series or Class, the temporary Certificates shall be exchangeable for
definitive Certificates of such Series or Class upon surrender of the temporary
Certificates at the Corporate Trust Office of the Certificate Trustee, or at the
office or agency of the Certificate Trustee maintained in accordance with
Section 6.11, without charge to the Holder. Upon surrender for cancellation of
any one or more temporary Certificates, the Certificate Trustee, on behalf of
the Trust, shall execute, and the Certificate Trustee shall authenticate and
deliver in exchange therefor definitive Certificates (of the same Series or
Class as the temporary Certificates surrendered) of authorized denominations of
a like aggregate Original Principal Amount. Until so exchanged, such temporary
Certificates shall in all respects be entitled to the same benefits under this
Trust Agreement as definitive Certificates of the same Series or Class.
Section 3.04. Registration of Transfer and Exchange of Certificates.
-----------------------------------------------------
The Certificate Trustee shall cause to be kept at the office or agency to be
maintained by it in accordance with the provisions of Section 6.11 a register
(the "Register") in which, subject to such reasonable regulations as it may
prescribe, the Certificate Trustee shall provide for the registration of
Certificates and of transfers and exchanges of Certificates as herein provided.
The Certificate Trustee shall initially be the registrar (the "Registrar") for
the purpose of registering Certificates and transfers and exchanges of
Certificates as herein provided.
Subject to this Section 3.04, upon surrender for registration of
transfer of any Certificate at the Corporate Trust Office or such other office
or agency maintained by the Certificate Trustee in accordance with Section 6.11,
the Certificate Trustee, on behalf of the Trust, shall execute, and the
Certificate Trustee shall authenticate and deliver, in the name of the
designated transferee, one or more new Certificates (of the same Series or Class
as the Certificates surrendered for registration of transfer) in authorized
denominations of a like aggregate Original Principal Amount; provided, however,
-------- -------
that if any such surrendered Certificate shall have become or within seven days
shall be due and payable or shall have been called for redemption, instead of
issuing a replacement Certificate, the Certificate Trustee may pay such
surrendered Certificate when so due and payable or upon the Special Distribution
Date without surrender thereof.
At the option of a Certificateholder, Certificates may be exchanged
for other Certificates (of the same Series or Class as the Certificates
surrendered for registration of exchange) of authorized denominations of a like
aggregate Original Principal Amount, upon surrender of the Certificates to be
exchanged at any such office or agency. Whenever any Certificates are so
surrendered for
21
exchange, the Certificate Trustee, on behalf of the Trust, shall execute, and
the Certificate Trustee shall authenticate and deliver the Certificates that the
Certificateholder making the exchange is entitled to receive.
Every Certificate presented or surrendered for registration of
transfer or exchange shall be duly endorsed or accompanied by a written
instrument of transfer in form satisfactory to the Certificate Trustee and the
Registrar duly executed by the Certificateholder thereof or its attorney duly
authorized in writing.
No service charge shall be made to a Certificateholder for any
registration of transfer or exchange of Certificates, but the Certificate
Trustee shall require payment of a sum sufficient to cover any tax or
governmental charge that may be imposed in connection with any transfer or
exchange of Certificates.
All Certificates surrendered for registration of transfer or exchange
shall be canceled and subsequently destroyed by the Certificate Trustee in
accordance with its customary practices.
Section 3.05. Certificateholders' Lists and Reports by Certificate
----------------------------------------------------
Trustee.
-------
(a) The Trust To Furnish Certificate Trustee with Names and Addresses
-----------------------------------------------------------------
of Certificateholders. The Registrar, on behalf of the Trust, will furnish to
----------------------
the Certificate Trustee within 15 days after each Record Date, and at such other
times as the Certificate Trustee may request in writing, within 30 days after
receipt by the Trust of any such request, a list, in such form as the
Certificate Trustee may reasonably require, of all information in the possession
or control of the Trust as to the names and addresses of the Certificateholders,
in each case as of a date not more than 15 days prior to the time such list is
furnished; provided, however, that so long as the Certificate Trustee is the
------------------
sole Registrar, no such list need be furnished; and provided further, however,
--------------------------
that no such list need be furnished for so long as a copy of the Register is
being furnished to the Certificate Trustee pursuant to Section 6.11.
(b) Preservation of Information. The Certificate Trustee shall
----------------------------
preserve, in as current a form as is reasonably practicable, the names and
addresses of Certificateholders contained in the most recent list furnished to
the Certificate Trustee as provided in Section 6.11 or Section 3.05(a), as the
case may be, and the names and addresses of Certificateholders received by the
Certificate Trustee in its capacity as Registrar, if so acting. The Certificate
Trustee may destroy any list furnished to it as provided in Section 6.11 or
Section 3.05(a), as the case may be, upon receipt of a new list so furnished.
(c) Communications Among Certificateholders. Certificateholders may
---------------------------------------
communicate pursuant to Section 312(b) of the Trust Indenture Act with other
Certificateholders with respect to their rights under this Trust Agreement or
under the Certificates.
(d) Reports by Certificate Trustee. To the extent that any of the
-------------------------------
events described in Section 313(a) of the Trust Indenture Act shall have
occurred, within 60 days after December 31 of each year, commencing with the
year 1998, the Certificate Trustee shall transmit to the Certificateholders, as
provided in Section 313(c) of the Trust Indenture Act, a brief report dated as
22
of such December 31, if required by Section 313(a) of the Trust Indenture Act.
The Certificate Trustee also shall comply with Section 313(b) of the Trust
Indenture Act.
A copy of each report at the time of its mailing to Certificateholders
shall be filed by the Certificate Trustee with the Commission and with each
stock exchange, if any, on which the Certificates are listed and of which
listing the Certificate Trustee has been informed. The Originator shall notify
the Certificate Trustee if and when the Certificates are listed on any stock
exchange.
(e) Reports by the Trust. The Certificate Trustee shall furnish to
---------------------
the Certificate Owners, not less often than annually, a certificate of the
Certificate Trustee on behalf of the Trust as to his or her knowledge of the
Trust's compliance with all conditions and covenants under this Trust Agreement
and in accordance with Section 313 of the Trust Indenture Act. For purposes of
this Section 3.05(e) such compliance shall be determined without regard to any
period of grace or requirement of notice provided under this Trust Agreement.
(f) Protections. The Originator, the Certificate Trustee and the
-----------
Registrar shall have the protection of Section 312(c) of the Trust Indenture
Act.
Section 3.06. Mutilated, Destroyed, Lost or Stolen Certificates. If
-------------------------------------------------
(a) any mutilated Certificate is surrendered to the Registrar, or the Registrar
receives evidence to its satisfaction of the destruction, loss or theft of any
Certificate, and (b) there is delivered to the Registrar and the Certificate
Trustee such security, indemnity or bond as may be required by them to save each
of them harmless, then, in the absence of notice to the Registrar or the
Certificate Trustee that such Certificate has been acquired by a protected
purchaser, the Certificate Trustee, on behalf of the Trust, shall execute, and
the Certificate Trustee shall authenticate and deliver, in exchange for or in
lieu of any such mutilated, destroyed, lost or stolen Certificate, a new
Certificate (of the same Series or Class as the Certificate so mutilated,
destroyed, lost or stolen) of like Original Principal Amount. In connection
with the issuance of any new Certificate under this Section 3.06, the
Certificate Trustee shall require the payment of a sum sufficient to cover any
tax or other governmental charge that may be imposed in relation thereto and any
other expenses (including the fees and expenses of the Delaware Trustee, the
Certificate Trustee and the Registrar) connected therewith. Any duplicate
Certificate issued pursuant to this Section 3.06 shall constitute conclusive
evidence of the same interest in the Trust, as if originally issued, whether or
not the lost, stolen or destroyed Certificate shall be found at any time.
Section 3.07. Persons Deemed Owners. Prior to due presentation of a
---------------------
Certificate for registration of transfer, the Certificate Trustee, the Registrar
and any Paying Agent of the Certificate Trustee may treat the Person in whose
name any Certificate is registered as the owner of such Certificate for the
purpose of receiving distributions pursuant to Section 4.02 and for all other
purposes whatsoever, and none of the Certificate Trustee, the Registrar nor any
Paying Agent of the Certificate Trustee shall be affected by any notice to the
contrary.
Section 3.08. Cancellation. All Certificates surrendered for payment
------------
or transfer or exchange shall, if surrendered to any party hereto other than the
Registrar, be delivered to the Registrar for cancellation. No Certificates
shall be authenticated in lieu of or in exchange for any
23
Certificates canceled as provided in this Section, except as expressly permitted
by this Trust Agreement. All canceled Certificates held by the Registrar shall
be delivered to the Certificate Trustee and, in accordance with Section 3.04,
destroyed.
Section 3.09. Limitation of Liability for Payments. All payments or
------------------------------------
distributions made to Holders of Certificates under this Trust Agreement shall
be made only from the Trust Property with respect to that Series or Class of
Certificates and only to the extent that the Certificate Trustee shall have
sufficient income or proceeds from such Trust Property to make such payments in
accordance with the terms of Article IV of this Trust Agreement. Each Holder of
a Certificate of any Series or Class, by its acceptance of a Certificate of that
Series or Class, agrees that it will look solely to the income and proceeds from
the Trust Property with respect to that Series or Class to the extent available
for distribution to the Holder thereof as provided in this Trust Agreement. It
is expressly understood and agreed by the parties hereto that (a) the
Certificates are executed and delivered by Bankers Trust Company of California,
N.A. not individually or personally but solely as Certificate Trustee of the
Trust, in the exercise of the powers and authority conferred and vested in it,
and (b) under no circumstances shall Bankers Trust Company of California, N.A.,
be personally liable for the payment of any of the Certificates or any
indebtedness or expenses of the Trust or be liable for the breach or failure of
any obligation, representation, warranty or covenant made or undertaken by the
Trust under this Trust Agreement.
Section 3.10. Book-Entry and Definitive Certificates. (a) The
--------------------------------------
Certificates of any Series or Class may be issued in the form of one or more
typewritten certificates representing the Book-Entry Certificates of that Series
or Class, to be delivered to The Depository Trust Company, the initial Clearing
Agency, by, or on behalf of, the Originator. In such case, the Certificates of
such Series or Class delivered to The Depository Trust Company shall initially
be registered on the Register in the name of Cede & Co., the nominee of the
initial Clearing Agency, and no Certificate Owner will receive a definitive
Certificate representing such Certificate Owner's interest in the Certificate of
such Series or Class, except as provided in Section 3.10(c) below. Unless and
until definitive, fully registered Certificates ("Definitive Certificates") of
such Series or Class have been issued pursuant to Section 3.10(c) below:
(i) the provisions of this Section 3.10 shall be in full force and
effect with respect to the Certificates of such Series or Class;
(ii) the Originator, the Paying Agent, the Registrar and the
Certificate Trustee may deal with the Clearing Agency for all purposes
(including the making of distributions on the Certificates of such Series
or Class) as the authorized representative of the Certificate Owners of
Certificates of such Series or Class;
(iii) to the extent that the provisions of this Section 3.10
conflict with any other provisions of this Trust Agreement, the provisions
of this Section 3.10 shall control;
(iv) the rights of Certificate Owners of Certificates of such Series
or Class shall be exercised only through the Clearing Agency and shall be
limited to those established by law and agreements between such Certificate
Owners and the Clearing Agency Participants; and until Definitive
Certificates of such Series or Class are issued pursuant to Section 3.10(c)
24
below, the Clearing Agency will make book-entry transfers among the
Clearing Agency Participants and receive and transmit distributions of
principal of and interest on the Certificates of such Series or Class to
such Clearing Agency Participants; and
(v) whenever this Trust Agreement requires or permits actions to be
taken based upon instructions or directions of Certificateholders holding
Certificates of such Series or Class representing a specified percentage of
the aggregate Outstanding Amount of Certificates of such Series or Class,
the Clearing Agency shall be deemed to represent such percentage only to
the extent that it has received instructions to such effect from
Certificate Owners or Clearing Agency Participants owning or representing,
respectively, Certificates representing such percentage of the aggregate
Outstanding Amount of Certificates of such Series or Class, and has
delivered such instructions to the Certificate Trustee; the Certificate
Trustee shall have no obligation to determine whether the Clearing Agency
has in fact received any such instructions.
(b) Whenever notice or other communication to the Holders of Certificates
of any Series or Class issued in the form of Certificates representing Book-
Entry Certificates is required under this Trust Agreement, unless and until
Definitive Certificates of such Series or Class shall have been issued pursuant
to Section 3.10(c), the Certificate Trustee shall give all such notices and
communications specified herein to be given to Holders of Certificates of such
Series or Class to the Clearing Agency.
(c) If (i) the Clearing Agency advises the Certificate Trustee in writing
that the Clearing Agency is no longer willing or able to properly discharge its
responsibilities with respect to the Certificates of a Series or Class, and the
Certificate Trustee or the Originator is unable to locate a qualified successor,
(ii) the Originator (with the prior written approval of the Note Issuer) at its
option advises the Certificate Trustee in writing that it elects to terminate
the book-entry system through the Clearing Agency with respect to the
Certificates of such Series or Class or (iii) after the occurrence of a Note
Event of Default with respect to any Series or Class of Certificates,
Certificate Owners representing beneficial interests aggregating at least a
majority of the Outstanding Amount of the Certificates of all Series advise the
Clearing Agency and the Certificate Trustee in writing that the continuation of
a book-entry system through the Clearing Agency is no longer in the best
interests of the Certificate Owners, then the Clearing Agency shall notify all
Certificate Owners and the Certificate Trustee of the occurrence of any such
event and of the availability of Definitive Certificates to Certificate Owners
requesting the same. Upon surrender to the Certificate Trustee of the
typewritten certificate or certificates representing the Book-Entry Certificates
by the Clearing Agency, accompanied by registration instructions, and upon
written direction by the Note Issuer, the Certificate Trustee shall execute on
behalf of the Trust and the Certificate Trustee shall authenticate the
Definitive Certificates in accordance with the instructions of the Clearing
Agency. None of the Originator, the Registrar, the Delaware Trustee or the
Certificate 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 Certificates, the
Certificate Trustee shall recognize the Holders of the Definitive Certificates
as Certificateholders.
25
ARTICLE IV
DISTRIBUTIONS; STATEMENTS TO CERTIFICATEHOLDERS
Section 4.01. Certificate Accounts. (a) The Trust shall establish and
--------------------
maintain with the Certificate Trustee on behalf of the Holders of Certificates
of each Series or Class a Certificate Account with respect to such Series or
Class as one or more segregated trust accounts, which shall be non-interest
bearing except as provided in Section 4.04, in the corporate trust department of
an Eligible Institution, in the name of the Certificate Trustee for the benefit
of such Certificateholders. The Certificate Trustee shall hold each Certificate
Account in trust for the benefit of the Holders of Certificates of the
corresponding Series or Class, and shall make or permit withdrawals therefrom
only as provided in this Trust Agreement. On each day when a Payment or Special
Payment (other than a Special Payment that represents the proceeds of any sale
pursuant to Article V hereof by the Certificate Trustee of any Note) is made to
the Certificate Trustee, as holder of Notes of any Series or Class, the
Certificate Trustee upon receipt shall immediately deposit the aggregate amount
of such Payment or Special Payment in the Certificate Account for the
corresponding Series or Class of Certificates. If a Swap has been executed with
respect to any Series or Class of Certificates, the proceeds of such Payment or
Special Payment in any Certificate Account shall be applied to satisfy any Swap
Payment, or if a payment is due to the Trust under the Swap, any Swap Revenue
shall be credited to such Certificate Account. Upon the sale of any Note by the
Certificate Trustee pursuant to Article V and the realization of any proceeds
thereof, the Certificate Trustee shall deposit the aggregate amount of such
proceeds as a Special Payment in the Certificate Account for the Series or Class
of Certificates corresponding to the Series or Class of the Note so sold.
(b) The Certificate Trustee shall present to the Note Trustee for payment
each Note on its Final Maturity Date, or, in the case of any redemption or
repayment of such Note in full prior to its Final Maturity Date, on the
applicable Payment Date therefor.
(c) The Certificate Trustee (or any Paying Agent other than the Certificate
Trustee) shall have sole dominion and exclusive control over all monies in the
Certificate Accounts and shall apply such amounts therein as provided in this
Article.
Section 4.02. Distributions from Certificate Accounts. (a) On any
---------------------------------------
Distribution Date, the Certificate Trustee shall distribute out of the
Certificate Account for the corresponding Series or Class of Certificates, in
the manner described in Section 4.02(e), the entire amount of such Payment (as
reduced by any Swap Payment or increased by any Swap Revenues) deposited therein
pursuant to Section 4.01(a); provided, however, that in the event receipt of any
------------------
such Payment is not confirmed by the Certificate Trustee by 10:00 a.m. (New York
City time) on such Distribution Date, distribution thereof shall be made on the
day receipt thereof is confirmed by the Certificate Trustee by 10:00 a.m. (New
York City time) or, if receipt thereof is confirmed by the Certificate Trustee
after 10:00 a.m. (New York City time), on the following Certificate Business
Day. There shall be so distributed to each Holder of record of such Series or
Class of Certificates on the Record Date with respect to such Distribution Date
(other than as provided in Section 10.01 with respect to a final distribution)
such Certificateholder's pro rata share (based on the aggregate Outstanding
Amount of Certificates of such Series or Class held by such Certificateholder)
of the aggregate amount in the related Certificate Account. The foregoing
notwithstanding, if a Payment (or Swap
26
Revenue) is not received by the Certificate Trustee by the day that is five days
after the related Payment Date, it will be treated as a Special Payment pursuant
to Section 4.02(b).
The final distribution with respect to any Certificate, however, will be
made only upon presentation and surrender of such Certificate at the office or
agency of the Certificate Trustee specified in the notice given by the
Certificate Trustee with respect to such final payment. The Certificate
Trustee will provide notice of a final distribution to each Holder of record as
of the date such notice is given with respect to any Certificate as soon as
practicable following receipt of notice from the Note Trustee of a final payment
on a corresponding Note.
(b) On each Special Distribution Date with respect to the distribution of
any Special Payment with respect to any Series or Class of Notes, the
Certificate Trustee shall distribute out of the Certificate Account for the
corresponding Series or Class of Certificates, in the manner described in
Section 4.02(e), the entire amount of such Special Payment (as reduced by any
Swap Payment or increased by any Swap Revenues) deposited therein pursuant to
Section 4.01(a) and any income and earnings received from the investment of such
Special Payment pursuant to Section 4.04; provided, however, that in the event
------------------
receipt of any such Special Payment is not confirmed by the Certificate Trustee
by 10:00 a.m. (New York City time) on such Special Distribution Date,
distribution thereof shall be made on the day receipt thereof is confirmed by
the Certificate Trustee by 10:00 a.m. (New York City time) or, if receipt
thereof is confirmed by the Certificate Trustee after 10:00 a.m. (New York City
time), on the following Certificate Business Day. There shall be so distributed
to each Holder of record of such Series or Class of Certificates on the Special
Record Date with respect to such Special Distribution Date (other than as
provided in Section 10.01 with respect to a final distribution) such
Certificateholder's pro rata share (based on the aggregate Outstanding Amount of
Certificates of such Series or Class held by such Certificateholder) of the
aggregate amount of such Special Payment (as reduced by any Swap Payment or
increased by any Swap Revenues) and any income and earnings received from the
investment of such Special Payment pursuant to Section 4.04.
(c) The Certificate Trustee shall allocate amounts distributed to Holders
of Certificates of any Series or Class on any Distribution Date or Special
Distribution Date as follows: (i) to the extent such amounts represent payments
of principal of the corresponding Series or Class of Notes (including
prepayments or redemption price), or the proceeds of the sale of any such Note
by the Certificate Trustee pursuant to Article V (to the extent such proceeds
exceed the unpaid interest on the related class of Notes), such amounts shall be
allocated to principal of such Certificates and (ii) all other such amounts
shall be allocated to interest on such Certificates. The Certificate Trustee
may conclusively rely on the payment statement received by it from the Servicer
pursuant to the Servicing Agreement with any payment in respect of any Series or
Class of Notes as to whether the amount so paid in respect of such Notes is in
respect of principal of or interest on such Notes, provided that any Swap
Payment or Swap Revenues shall be attributable to interest. If no statement is
received, such payments received with respect to any Series or Class of Notes
shall first be allocable to interest to the extent of any interest accrued and
payable on such Series or Class of Notes, and then to principal.
27
(d) The Certificate Trustee shall cause notice of each Special Payment with
respect to any Series or Class of Notes to be mailed to each Holder of
Certificates of the corresponding Series or Class at its address as it appears
in the Register. In the event of (i) the optional redemption of the Notes of
any Series or Class, such notice shall be mailed not less than five days nor
more than 25 days prior to the Special Distribution Date on which any such
Redemption Payment is scheduled to be distributed, and (ii) the mandatory
redemption of the Notes of any Series or Class, such notice shall be mailed not
less than five days prior to the Special Distribution Date on which any such
Redemption Payment is scheduled to be distributed. In the case of any other
Special Payment, such notice shall be mailed not less than 20 days prior to the
Special Distribution Date on which any Special Payment is scheduled to be
distributed in respect of Certificates of such Series or Class stating such
anticipated Special Distribution Date. Any such notice mailed by the
Certificate Trustee shall set forth:
(i) the Special Distribution Date or the Distribution Date, as
applicable, and the Special Record Date or Record Date therefor, as
applicable (except as otherwise provided in Section 10.01);
(ii) the amount of the Special Distribution for each $1,000 Original
Principal Amount of Certificates of the applicable Series or Class and the
amount thereof constituting principal and interest;
(iii) the reason for the Special Distribution; and
(iv) the total amount to be received on such date for each $1,000
Original Principal Amount of Certificates of the applicable Series or Class
but only, in the case of a Special Payment, if the related Special
Distribution Date is also a Distribution Date.
(e) Distributions to Holders of Certificates shall be by check sent by
first-class mail to the address of such Holder appearing on the Register at the
relevant Record Date or Special Record Date or, upon written application of a
Holder of Certificates of any Series or Class in the Original Principal Amount
of $1,000,000 or more to the Certificate Trustee made at any time not later than
such Record Date or Special Record Date or continuing in effect from a prior
request, by wire transfer in immediately available funds to the account of such
Holder at such bank located in New York, New York having wire transfer
capability as may be designated by such Holder; provided, however, that the
------------------
final distribution in respect of any Certificate shall be made only as provided
in Section 10.01. The foregoing notwithstanding, any distributions made to Cede
& Co., as the nominee of the initial Clearing Agency, shall be made by wire
transfer of immediately available funds.
Section 4.03. Statements to Certificateholders. (a) On each Distribution
--------------------------------
Date, Special Distribution Date or any other date specified herein for
distribution of any payments with respect to any Series or Class of
Certificates, or as soon as practicable following such Distribution Date,
Special Distribution Date or other date, if the Certificate Trustee and the Note
Trustee are different entities, the Certificate Trustee will send, with respect
to each distribution, to Holders of Certificates of such Series or Class a
statement with respect to such distribution to be made
on such Distribution Date, Special Distribution Date or other date, as the case
may be, setting forth the
28
following information:
(i) the amount of such distribution to Holders of Certificates
allocable to (A) principal and (B) interest, in each case per $1,000
Original Principal Amount of each Series or Class of Certificates;
(ii) the amount of any Swap Payment or Swap Revenues with respect to
any Series or Class of Certificates;
(iii) the aggregate outstanding principal balance of the
Certificates, after giving effect to payments allocated to principal
reported under (i) above; and
(iv) the difference, if any, between the amount specified in (iii)
above and the principal amount scheduled to be outstanding on such date
according to the Expected Amortization Schedule.
On each date on which the Certificate Trustee distributes any such report to the
Holders of the Certificates of any Series or Class, the Certificate Trustee
shall also distribute such report to each Rating Agency.
(b) Within a reasonable period of time after the end of each calendar year
but not later than the latest date permitted by law, the Certificate Trustee
shall furnish to each Person who at any time during such calendar year was a
Holder of any Series or Class of Certificates a statement containing the sum of
the amounts determined pursuant to clause (a)(i) above with respect to such
Series or Class of Certificates for such calendar year, or, in the event such
Person was a Holder of such Series or Class of Certificates during a portion of
such calendar year, for the applicable portion of such year, and such other
items as are readily available to the Certificate Trustee and that a
Certificateholder shall reasonably request as necessary for the purpose of such
Certificateholder's preparation of its federal income tax returns.
Section 4.04. Investment of Special Payment Moneys. Any money received by
------------------------------------
the Certificate Trustee pursuant to Section 4.01(a) representing a Special
Payment (or Swap Revenue) that is not to be promptly distributed, to the extent
practicable, shall be invested in Eligible Investments at the written direction
of the Servicer by the Certificate Trustee pending distribution of such Special
Payment pursuant to Section 4.02. Any investment made pursuant to this Section
4.04 shall be in such Eligible Investments maturing in not more than 60 days or
such lesser time as is required for the distribution of any such funds on a
Special Payment Date pending the distribution of such funds to
Certificateholders as described herein. The Certificate Trustee shall hold any
such Eligible Investments until maturity. Such Eligible Investments (i) shall
not mature later than the Certificate Business Day immediately preceding the
Special Distribution Date relating to such invested funds, (ii) (A) if such
Eligible Investments have a maturity of one month or less, such Eligible
Investments (or the provider thereof) must have a long term unsecured debt
rating of at least A2 by ▇▇▇▇▇'▇ or a certificate of deposit rating of at least
P-1 by ▇▇▇▇▇'▇, and (B) if such Eligible Investments have a maturity of greater
than one month, such Eligible Investments (or the provider thereof) must have a
long term unsecured debt rating of at least A1 by ▇▇▇▇▇'▇ and a certificate of
deposit rating of at least P-1 by ▇▇▇▇▇'▇. The Certificate Trustee shall have no
29
liability with respect to any investment made pursuant to this Section 4.04
(including any losses on such investments), other than by reason of the willful
misconduct or negligence of the Certificate Trustee. All income and earnings
from such investments shall be distributed, if and as received, on such Special
Distribution Date as part of such Special Payment and shall be treated as
payments of interest on the Certificates.
Section 4.05. Reduction in Principal. Any reduction in the principal
----------------------
amount of any Certificate effected by any distribution in respect of principal
thereof shall be binding upon all Holders of such Certificate and of any
Certificate issued upon the registration or transfer thereof or in lieu thereof,
whether or not noted thereon.
ARTICLE V
DEFAULT
Section 5.01. Events of Default. (a) If any Note Event of Default shall
-----------------
occur and be continuing with respect to any Series or Class of Certificates,
then, and in each and every case, the Certificate Trustee may, and, upon the
written direction of Holders representing not less than a majority of the
Outstanding Amount of the Certificates of all Series then Outstanding, shall
vote all the Notes of all Series in favor of declaring the unpaid principal
amount of all the Notes of all Series then outstanding and accrued interest
thereon to be due and payable in accordance with the provisions thereof. In
addition, if a Note Event of Default shall have occurred and be continuing with
respect to any Series or Class of Certificates, the Certificate Trustee may,
and, upon the written direction of Holders representing not less than a majority
of the Outstanding Amount of the Certificates of all Series then Outstanding,
shall vote all the Notes of all Series in favor of directing the Note Trustee
acting in accordance with the written direction of the Certificateholders as to
the time, method and place of conducting any proceeding for any remedy available
to the Note Trustee or of exercising any trust or power conferred on the Note
Trustee under the Note Indenture.
(b) In addition, after a Note Event of Default shall have occurred and be
continuing with respect to the Certificates of any Series or Class, subject to
Section 5.01(c), the Certificate Trustee may, and upon the written direction of
Holders of Certificates representing not less than a majority of the Outstanding
Amount of Certificates of such Series or Class, by such officer or agent as it
may appoint, shall sell, convey, transfer and deliver any Note or Notes, without
recourse to or warranty by the Certificate Trustee or any Certificateholder, to
any Person, all upon such terms and conditions as the Certificateholders may
reasonably deem advisable and at such prices as the Certificateholders may
reasonably deem advisable, for cash. If the Certificate Trustee so decides or
is required to sell or otherwise dispose of the Notes pursuant to this Section,
the Certificate Trustee may, but is not obligated to, take such of the actions
described above as it may reasonably deem most effectual to complete the sale or
other disposition of the Notes, so as to provide for the payment in full of all
amounts due on the Certificates of all Series.
(c) The foregoing provisions of Section 5.01(b) notwithstanding, the
Certificate Trustee shall not sell any Notes following the occurrence of any
Event of Default, other than a Note Event of Default described in Section
5.01(i), (ii) or (iii) of the Note Indenture, with respect to any Series or
Class of Certificates unless (i) the Certificate Trustee determines that the
amounts receivable from the Collateral with respect to each Series or Class of
Notes are not sufficient to pay in full the
30
principal of and accrued interest on the Notes of each such Series or Class and
to pay an allocable share of all sums due to the Certificate Trustee and any
other administrative expenses specified in this Trust Agreement and the
Certificate Trustee obtains the written consent of Holders of Certificates of
each such Series or Class representing 66 2/3 percent of the aggregate
Outstanding Amount of the Certificates of each such Series or Class, or (ii) the
Certificate Trustee obtains the written consent of Holders of Certificates
representing 100 percent of the aggregate Outstanding Amount of the Certificates
of each such Series or Class.
Section 5.02. Incidents of Sale of Notes. Upon any sale of the Notes made
--------------------------
either under the power of sale given under this Trust Agreement or otherwise for
the enforcement of this Trust Agreement, the following shall be applicable:
(a) Certificateholders and Certificate Trustee May Purchase Notes.
-------------------------------------------------------------
Any Certificateholder, the Certificate Trustee in its individual or any
other capacity or any other Person (other than the Seller) may bid for and
purchase any of the Notes, and upon compliance with the terms of sale, may
hold, retain, possess and dispose of such Notes in their own absolute right
without further accountability.
(b) Receipt of Certificate Trustee Shall Discharge Purchaser. The
--------------------------------------------------------
receipt of the Certificate Trustee, on behalf of the Trust, shall be a
sufficient discharge to any purchaser for its purchase money, and, after
paying such purchase money and receiving such receipt, such purchaser or
its personal representative or assigns shall not be obliged to see to the
application of such purchase money, or be in any way answerable for any
loss, misapplication or nonapplication thereof.
(c) Application of Moneys Received upon Sale. Any moneys collected by
----------------------------------------
the Trust upon any sale made either under the power of sale given by this
Trust Agreement or otherwise for the enforcement of this Trust Agreement,
shall be applied as provided in Section 4.02.
Section 5.03. Judicial Proceedings Instituted by Certificate Trustee;
-------------------------------------------------------
Certificate Trustee May Bring Suit. (a) If there shall be a failure to make
----------------------------------
payment of the principal of or interest on any Note, then the Certificate
Trustee, in its own name, and as trustee of an express trust, as holder of such
Note, if directed in writing by the Holders of a majority of the Outstanding
Amount of the Certificates of all Series but subject to the provisions of
Article VI, shall be, to the extent permitted by and in accordance with the
terms of the Notes, entitled and empowered to institute any suits, actions or
proceedings at law, in equity or otherwise, including the power to make a demand
on the Note Trustee to take action under the Note Indenture to enforce the
Notes, for the collection of the sums so due and unpaid on such Note and may
prosecute any such claim or proceeding to judgment or final decree with respect
to the whole amount of any such sums so due and unpaid.
(b) If there shall be a breach of the State Pledge by the State of
California, then the Certificate Trustee, in its own name and as trustee of an
express trust, as holder of the Notes, if directed in writing by the Holders of
a majority of the Outstanding Amount of the Certificates of all Series but
subject to the provisions of Article VI hereof, shall be, to the extent
permitted by state and federal law, entitled and empowered to institute any
suits, actions or proceedings at law, in
31
equity or otherwise, to enforce the State Pledge and to collect any monetary
damages as a result of a breach thereof, and may prosecute any such suit, action
or proceeding to judgment or final decree.
Section 5.04. Control by Certificateholders. Subject to Section 2.03, the
-----------------------------
Holders of a majority of the Outstanding Amount of the Certificates of all
Series (or, if less than all Series or Classes are affected, the affected Series
or Class or Classes) shall have the right to direct the time, method and place
of conducting any proceeding for any remedy available to the Certificate
Trustee, or exercising any trust or power conferred on the Certificate Trustee
under this Trust Agreement, including any right of the Certificate Trustee as
holder of the Notes of the corresponding Series or Class or Classes, in each
case unless a different percentage is specified herein; provided that:
--------
(a) such direction shall not be in conflict with any rule of law or
with this Trust Agreement and would not involve the Certificate Trustee in
personal liability or expense;
(b) the Certificate Trustee shall not determine that the action so
directed would be unjustly prejudicial to the Holders of Certificates of
such Series or Class or Classes not taking part in such direction;
(c) the Certificate Trustee may take any other action deemed proper by
the Certificate Trustee that is not inconsistent with such direction; and
(d) if a Note Event of Default with respect to such Series or Class of
Notes shall have occurred and be continuing, such direction shall not
obligate the Certificate Trustee to vote more than a corresponding majority
of the related Notes held by the Trust in favor of declaring the unpaid
principal amount of the Notes of all Series and accrued interest thereon to
be due and payable or directing any action by the Note Trustee with respect
to such Note Event of Default.
Section 5.05. Waiver of Past Defaults. Prior to the declaration of the
-----------------------
acceleration of the maturity of the Notes of all Series as provided in Section
5.01, the Holders of Certificates of not less than a majority of the Outstanding
Amount of the Certificates of all Series may waive any past default or Note
Event of Default and its consequences except a default (a) in payment of
principal of or interest on any of the Notes, (b) in respect of a covenant or
provision hereof that cannot be modified or amended without the consent of the
Holder of each Certificate of all Series or Classes affected or (c) in the
deposit or distribution of any Payment or Special Payment under Section 4.01
with respect to any Series or Class of Certificates or in the distribution of
any payment under Section 4.02 on any Series or Class of Certificates. Upon any
such direction, the Certificate Trustee shall vote such percentage of the Notes
of the corresponding Series or Class held by the Certificate Trustee as
corresponds to the percentage of the aggregate Outstanding Amount of the
Certificates of such Series or Class held by Holders who directed the
Certificate Trustee to waive such default or Note Event of Default hereunder.
Upon any waiver that is effective under the terms of such Series or Class
of Notes to waive such default or Note Event of Default, such default or Note
Event of Default shall cease to exist with respect to this Trust Agreement, and,
in the case of a default, any Note Event of Default arising therefrom shall be
deemed to have been cured for every purpose of this Trust Agreement
32
and any written direction given by the Certificate Trustee on behalf of such
Certificateholders to the Note Trustee or in respect of any Notes shall be
annulled with respect thereto; but no such waiver shall extend to any subsequent
or other default or Note Event of Default or impair any right consequent
thereon.
Section 5.06. Right of Certificateholders To Receive Payments Not To Be
---------------------------------------------------------
Impaired. Anything in this Trust Agreement to the contrary notwithstanding,
--------
including Section 5.07 hereof, the right of any Certificateholder to receive
distributions of payments required pursuant to Section 4.02 hereof on the
Certificates when due, or to institute suit for the enforcement of any such
payment on or after the applicable Distribution Date, Special Distribution Date
or other date specified herein for the making of such payment, shall not be
impaired or affected without the consent of such Certificateholder.
Section 5.07. Certificateholders May Not Bring Suit Except Under Certain
----------------------------------------------------------
Conditions. A Certificateholder shall not have the right to institute any suit,
----------
action or proceeding at law or in equity or otherwise with respect to this Trust
Agreement, for the appointment of a receiver or for the enforcement of any other
remedy under this Trust Agreement, unless:
(a) such Certificateholder has previously given written notice to
the Certificate Trustee of a continuing Note Event of Default with respect
to the Series or Class of Certificates held by such Holder;
(b) the Holders of not less than 25 percent of the Outstanding
Amount of the Certificates of all Series have made written request to the
Certificate Trustee to institute such action, suit or proceeding in respect
of such Note Event of Default in its own name as Certificate Trustee
hereunder;
(c) such Certificateholder or Certificateholders have offered to the
Certificate Trustee indemnity satisfactory to it against the costs,
expenses (including legal fees and expenses) and liabilities to be incurred
in complying with such request;
(d) the Certificate Trustee for 60 days after its receipt of such
notice, request and offer of indemnity has failed to institute such action,
suit or proceedings; and
(e) no direction inconsistent with such written request has been
given to the Certificate Trustee during such 60-day period by the Holders
of a majority of the Outstanding Amount of the Certificates of all Series;
it being understood and intended that no one or more Holders of Certificates
shall have any right in any manner whatever by virtue of, or by availing of, any
provision of this Trust Agreement to affect, disturb or prejudice the rights of
any other Holders of Certificates or to obtain or to seek to obtain priority or
preference over any other Certificateholders or to enforce any right under this
Trust Agreement, except in the manner herein provided. The provisions of this
Section 5.07 shall be deemed to modify, to the fullest extent permitted by law,
the rights of the Certificateholders under Section 3816 of the Business Trust
Statute.
33
In the event the Certificate Trustee shall receive conflicting or
inconsistent requests and indemnity from two or more groups of Holders of
Certificates, each representing less than a majority of the Outstanding Amount
of the Certificates of all Series, the Certificate Trustee in its sole
discretion may determine what action, if any, shall be taken, notwithstanding
any other provisions of this Trust Agreement.
Section 5.08. Remedies Cumulative. Every remedy given hereunder to the
-------------------
Certificate Trustee or to any of the Certificateholders shall not be exclusive
of any other remedy or remedies, and every such remedy shall be cumulative and
in addition to every other remedy given hereunder or now or hereafter given by
statute, law, equity or otherwise.
ARTICLE VI
THE CERTIFICATE TRUSTEE
Section 6.01. Notice of Defaults. As promptly as practicable after, and
------------------
in any event within 30 days after, receipt by a Responsible Officer of the
Certificate Trustee of written notice or actual knowledge of the occurrence of
any default (as such term is defined below) hereunder with respect to any Series
or Class of Certificates, the Certificate Trustee shall transmit by mail to the
Originator, the Note Trustee and the Holders of Certificates of all Series in
accordance with Section 313(c) of the Trust Indenture Act, notice of such
default, unless such default shall have been cured or waived; provided, however,
------------------
that, except in the case of a default in the payment of the principal of or
interest on any Note of the corresponding Series or Class, the Certificate
Trustee shall be fully protected in withholding such notice if and so long as a
trust committee of Responsible Officers of the Certificate Trustee in good faith
determines that the withholding of such notice is in the interests of the
Holders of the Certificates. For the purpose of this Section, the term
"default" means, with respect to any Series or Class of Certificates, any event
that is, or after notice or lapse of time or both would become, a Note Event of
Default with respect to such Series or Class of Certificates.
Section 6.02. Certain Rights of Certificate Trustee. Subject to the
-------------------------------------
provisions of Section 315 of the Trust Indenture Act:
(a) the Certificate Trustee may conclusively rely and shall be fully
protected in acting or refraining from acting in reliance upon any
resolution, certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, bond, debenture or other paper or
document believed by it to be genuine and to have been signed or presented
by the proper party or parties;
(b) any request or direction of the Originator mentioned herein shall
be sufficiently evidenced by a Request, accompanied by evidence reasonably
satisfactory to the Certificate Trustee that the Note Issuer has given its
prior written approval of such request or direction;
(c) whenever in the administration of this Trust Agreement the
Certificate Trustee shall deem it desirable that a matter be proved or
established prior to taking,
34
suffering or omitting any action hereunder, the Certificate Trustee (unless
other evidence be herein specifically prescribed) may, in the absence of
bad faith on its part, conclusively rely upon an Officers' Certificate of
the Originator;
(d) the Certificate Trustee may consult with counsel and the advice of
such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or
omitted by it hereunder in good faith and in reliance thereon;
(e) the Certificate Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by this Trust Agreement at the
request or direction of any of the Certificateholders pursuant to this
Trust Agreement, unless such Certificateholders shall have offered to the
Certificate Trustee reasonable security or indemnity satisfactory to it
against the cost, expenses (including reasonable legal fees and expenses)
and liabilities that might be incurred by it in compliance with such
request or direction;
(f) the Certificate Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture or other paper or document;
(g) the Certificate Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents, attorneys, custodians or nominees and the Certificate Trustee shall
not be responsible, for any misconduct or negligence on the part of, or for
the supervision of, any agent, attorney, custodian or nominee appointed
with due care by it hereunder;
(h) the Certificate Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in good faith in accordance with
the direction of the Holders of Certificates relating to the time, method
and place of conducting any proceeding for any remedy available to the
Certificate Trustee, or exercising any trust or power conferred upon the
Certificate Trustee, under this Trust Agreement;
(i) the Certificate Trustee shall not be required to expend or risk
its own funds 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 for believing that repayment of such funds or indemnity
satisfactory to it against such risk is not reasonably assured to it;
(j) the Certificate Trustee shall not be personally liable for any
action taken or suffered or omitted to be taken by it in good faith and
reasonably believed by it to be authorized or within the discretion or
rights or powers conferred upon it by this Trust Agreement; provided, that
--------
the Certificate Trustee's conduct does not constitute willful misconduct,
gross negligence or bad faith;
(k) in the event that the Certificate Trustee is also acting as Paying
Agent, Authenticating Agent or Registrar hereunder, the rights and
protections afforded to the Certificate Trustee pursuant to this Article VI
shall also be afforded to such Paying Agent,
35
Authenticating Agent or Registrar;
(l) the Certificate Trustee shall not be charged with knowledge of an
Event of Default unless a Responsible Officer obtains actual knowledge of
such event or the Certificate Trustee receives written notice of such event
from the Originator, the Note Trustee, the Servicer or a majority of the
Holders of Certificates of the Series or Class or Classes so affected; and
(m) without limiting its rights under bankruptcy law, when the
Certificate Trustee incurs expenses or renders services in connection with
the insolvency or bankruptcy of any party hereto or with the Basic
Documents to which it is a party, such expenses (including the fees and
expenses of its counsel) and the compensation for such services are
intended to constitute expenses of administration under any bankruptcy or
insolvency law.
Section 6.03. Not Responsible for Recitals or Issuance of Certificates.
--------------------------------------------------------
The recitals contained herein and in the Certificates, except the execution
thereof and the certificates of authentication, shall not be taken as the
statements of the Certificate Trustee, and the Certificate Trustee assumes no
responsibility for their correctness. Subject to Section 6.14, the Certificate
Trustee makes no representations as to the validity or sufficiency of this Trust
Agreement, the Notes, any Basic Document or the Certificates.
Section 6.04. May Hold Certificates. The Certificate Trustee, any Paying
---------------------
Agent, any Registrar or any of their Affiliates or any other agent, in their
respective individual or any other capacity, may become the owner or pledgee of
Certificates and, subject to Sections 310(b) and 311 of the Trust Indenture Act,
may otherwise deal with the Originator, the Note Issuer or the Note Trustee with
the same rights it would have if it were not Certificate Trustee, Paying Agent,
Registrar or such other agent.
Section 6.05. Money Held in Trust. Money held by the Certificate Trustee
-------------------
or the Paying Agent in trust hereunder need not be segregated from other funds
except to the extent required herein or by law and neither the Certificate
Trustee nor the Paying Agent shall have any liability for interest upon any such
moneys except as provided for herein.
Section 6.06. Compensation and Reimbursement; Indemnification. (a)
-----------------------------------------------
Pursuant to the Fee and Indemnity Agreement, the Note Issuer has agreed to pay,
or cause to be paid, to the Certificate Trustee from time to time reasonable
compensation for its services and to reimburse it for its reasonable expenses.
(b) The Originator shall execute the Fee and Indemnity Agreement, pursuant
to which the Note Issuer shall, but solely from amounts payable under the Fee
and Indemnity Agreement, shall indemnify, defend and hold harmless the
Certificate Trustee and any of the affiliates, officers, directors, employees
and agents of the Certificate Trustee (the "Certificate Trustee Indemnified
Persons") from and against any and all losses, claims, taxes, damages, expenses
and liabilities (including liabilities under state or federal securities laws)
of any kind and nature whatsoever (collectively, "Certificate Trustee
Expenses"), to the extent that such Certificate Trustee Expenses arise out of or
are imposed upon or asserted against such Certificate Trustee Indemnified
Persons
36
with respect to the creation, operation or termination of the Trust, the
execution, delivery or performance of this Trust Agreement or the transactions
contemplated hereby; provided, however, that the Note Issuer shall not be
------------------
required to indemnify any Certificate Trustee Indemnified Person for any
Certificate Trustee Expenses that result from the willful misconduct or gross
negligence of such Certificate Trustee Indemnified Person. The obligations of
the Note Issuer to indemnify the Certificate Trustee Indemnified Persons in the
Trust Agreement shall survive the termination of this Trust Agreement and the
resignation or removal of the Certificate Trustee Indemnified Persons.
Notwithstanding anything to the contrary in this Trust Agreement, the
Certificate Trustee shall have no recourse against the Originator or the Trust
Property for payment of any amounts required to be paid to the Certificate
Trustee under this Section 6.06(b).
Section 6.07. Corporate Certificate Trustee Required; Eligibility. (a)
---------------------------------------------------
This Trust Agreement shall at all times have a certificate trustee that shall be
eligible to act as a trustee under Section 310(a) of the Trust Indenture Act,
shall have a combined capital and surplus of at least $50,000,000 and shall have
a long-term debt rating of at least A by Moody's and Standard & Poor's. If such
entity publishes reports of conditions at least annually, pursuant to law or to
the requirements of federal, state, territorial or District of Columbia
supervising or examining authority, then for the purposes of this Section 6.07,
the combined capital and surplus of such entity shall be deemed to be its
combined capital and surplus as set forth in its most recent report of condition
so published.
(b) In determining whether the Certificate Trustee has a conflicting
interest with respect to any Series or Class of Certificates under Section
310(b) of the Trust Indenture Act and this Section, each other Series or Class
of Certificates will be treated as having been issued under an indenture other
than this Trust Agreement.
(c) If at any time the Certificate Trustee shall cease to be eligible in
accordance with the provisions of this Section 6.07, the Certificate Trustee
shall resign immediately in the manner and with the effect specified in Section
6.08.
Section 6.08. Resignation and Removal; Appointment of Successor. (a) No
-------------------------------------------------
resignation or removal of the Certificate Trustee and no appointment of a
successor Certificate Trustee pursuant to this Article shall become effective
(i) until the acceptance of appointment by the successor Certificate Trustee
under Section 6.09 and (ii) other than in the case of paragraph (b) below,
unless a successor Certificate Trustee has been appointed and has accepted such
appointment and the Delaware Trustee, the Note Issuer and the Originator has
received written confirmation from each of the Rating Agencies that no lowering
or withdrawal of the then current Ratings of any Series or Class of Certificates
will result from such appointment.
(b) The Certificate Trustee may resign at any time in the case of a
conflicting interest as determined in accordance with Section 6.07(b), with
respect to one or more Series or Classes of Certificates, by giving written
notice thereof to the Originator, the Authorized Agents, the Note Issuer and the
Note Trustee. If an instrument of acceptance by a successor Certificate Trustee
with respect to such Series or Class or Classes of Certificates shall not have
been delivered to the Originator and the Certificate Trustee within 30 days
after the giving of such notice of resignation,
37
the resigning Certificate Trustee may petition any court of competent
jurisdiction for the appointment of a successor Certificate Trustee with respect
to such Series or Class or Series or Classes of Certificates.
(c) The Certificate Trustee may be removed at any time in the case of a
conflicting interest as determined in accordance with Section 6.07(b), with
respect to any Series or Class of Certificates, by Act of Certificateholders
holding Certificates of such Series or Class representing not less than 51
percent of the Outstanding Amount of the Certificates of that Series or Class
delivered to the Certificate Trustee and to the Originator, the Note Issuer and
the Note Trustee.
(d) Upon 30 days' written notice, the Certificate Trustee (i) may resign
with respect to the Certificates as a whole by giving such written notice to the
Originator, the Delaware Trustee, the Authorized Agents, the Note Issuer and the
Note Trustee or (ii) may be removed with respect to the Certificates as a whole
by Act of Certificateholders holding Certificates representing not less than a
majority of the Outstanding Amount of Certificates of all the Series delivered
to the Delaware Trustee, the Originator, the Note Issuer and the Note Trustee.
If an instrument of acceptance by a successor Certificate Trustee with respect
to the Certificates as a whole shall not have been delivered to the Originator,
the Delaware Trustee, the Note Issuer and the Note Trustee within 90 days after
the giving of such notice of resignation or Act by the Certificateholders as a
whole for removal of the Certificate Trustee, the Delaware Trustee or the
Originator may petition any court of competent jurisdiction for the appointment
of a successor Certificate Trustee with respect to the Certificates as a whole.
(e) If at any time:
(i) the Certificate Trustee shall fail to comply with Section 310 of
the Trust Indenture Act after written request therefor by the Originator or
by any Holder of Certificates of any Series or Class affected thereby who
has been a bona fide Holder of Certificates of such Series or Class for at
least six months; or
(ii) the Certificate Trustee shall cease to be eligible under Section
6.07 and shall fail to resign after written request therefor by the
Originator or by any Certificateholder; or
(iii) the Certificate Trustee shall become incapable of acting or
shall be adjudged a bankrupt or insolvent or a receiver of the Certificate
Trustee or of its property shall be appointed or any public officer shall
take charge or control of the Certificate Trustee or of its property or
affairs for the purpose of rehabilitation, conservation or liquidation;
then, in any case, (x) the Originator may remove the Certificate Trustee with
respect to any Series or Class of Certificates affected thereby or (y) any
Holder of Certificates of any Series or Class affected thereby who has been a
bona fide Holder of Certificates of such Series or Class for at least six months
may, on behalf of himself and all others similarly situated, petition any court
of competent jurisdiction for the removal of the Certificate Trustee with
respect to such Series or Class of Certificates and the appointment of a
successor Certificate Trustee with respect to such Series or Class.
38
(f) If a Responsible Officer of the Certificate Trustee shall have received
written notice of an Avoidable Tax that has been or is likely to be asserted,
the Certificate Trustee shall promptly notify the Originator and the Note Issuer
thereof and shall, within 30 days of such notification, resign hereunder unless
within such 30-day period the Certificate Trustee shall have received notice
that either the Originator or the Note Issuer has agreed to pay such tax. In
such event, the Originator (with the prior written approval of the Note Issuer)
shall promptly appoint a successor Certificate Trustee in a jurisdiction where
there are no Avoidable Taxes. As used herein, an "Avoidable Tax" means a state
or local tax: (i) upon (w) the Trust, (x) the Trust Property, (y) the
Certificateholders or (z) the Certificate Trustee for which the Certificate
Trustee is entitled to seek reimbursement from the Trust Property, and (ii) that
would be avoided if the Certificate Trustee were located in another state, or
jurisdiction within a state, within the United States. A tax shall not be an
Avoidable Tax if either the Originator or the Note Issuer shall agree to pay,
and shall pay, such tax.
(g) With respect to any Series or Class of Certificates, if the Certificate
Trustee shall resign, be removed or become incapable of acting, or if a vacancy
shall occur in the office of the Certificate Trustee for any cause, the
Originator (with the prior written approval of the Note Issuer) shall promptly
appoint a successor Certificate Trustee. If, within one year after such
resignation, removal or incapability, or the occurrence of such vacancy with
respect to any Series or Class of Certificates, a successor Certificate Trustee
shall be appointed by Act of the Certificateholders holding Certificates of such
Series or Class representing not less than a majority of the Outstanding Amount
of the Certificates of such Series or Class delivered to the Originator, the
Note Trustee and the retiring Certificate Trustee, the successor Certificate
Trustee so appointed shall, forthwith upon its acceptance of such appointment,
become the successor Certificate Trustee with respect to such Series or Class
and supersede the successor Certificate Trustee appointed as provided above. If
no successor Certificate Trustee shall have been so appointed as provided above
and accepted appointment in the manner hereinafter provided, any Holder of
Certificates of any affected Series or Class who has been a bona fide Holder of
Certificates of such Series or Class for at least six months may, on behalf of
himself and all others similarly situated, petition any court of competent
jurisdiction for the appointment of a successor Certificate Trustee with respect
to the affected Series or Class of Certificates.
(h) The successor Certificate Trustee shall give notice of the resignation
and removal of the Certificate Trustee and appointment of the successor
Certificate Trustee, in each case with respect to any Series or Class of
Certificates, by mailing written notice of such event by first-class mail,
postage prepaid, to the Holders of the affected Series or Class as their names
and addresses appear in the Register and to each Rating Agency. Each notice
shall include the name of such successor Certificate Trustee and the address of
the corporate trust office of such successor Certificate Trustee.
(i) The Originator shall notify the Rating Agencies of any resignation and
removal of the Certificate Trustee and appointment of a successor Certificate
Trustee under this Section 6.08.
Section 6.09. Acceptance of Appointment by Successor. Every successor
--------------------------------------
Certificate Trustee appointed hereunder shall execute, acknowledge and deliver
to the Originator and to the retiring Certificate Trustee an instrument
accepting such appointment, and thereupon the resigna-
39
tion or removal of the retiring Certificate Trustee shall become effective and
such successor Certificate Trustee, without any further act, deed or conveyance,
shall become vested with all the rights, powers, trusts and duties of the
retiring Certificate Trustee with respect to any Series or Class of Certificates
as to which the retiring Certificate Trustee is retiring; but, on request of the
Originator or the successor Certificate Trustee, such retiring Certificate
Trustee shall execute and deliver an instrument transferring to such successor
Certificate Trustee all the rights, powers and trusts of the retiring
Certificate Trustee with respect to such Series or Class of Certificates and
shall duly assign, transfer and deliver to such successor Certificate Trustee
all property and money held by such retiring Certificate Trustee hereunder with
respect to such Series or Class of Certificates. Upon request of any such
successor Certificate Trustee, the Originator, the retiring Certificate Trustee
and such successor Certificate Trustee shall execute and deliver any and all
instruments containing such provisions as shall be necessary or desirable to
transfer and confirm to, and for more fully and certainly vesting in, such
successor Certificate Trustee all such rights, powers and trusts. No Certificate
Trustee hereunder shall be liable for the acts or omissions of any successor
Certificate Trustee.
No successor Certificate Trustee shall accept its appointment unless at the
time of such acceptance such successor Certificate Trustee shall be qualified
and eligible under this Article and any and all amounts due and payable to the
predecessor trustee have been paid.
Section 6.10. Merger, Conversion, Consolidation or Succession to Business.
-----------------------------------------------------------
Any corporation into which the Certificate Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Certificate Trustee shall be a party,
or any corporation succeeding to all or substantially all of the corporate trust
business of the Certificate Trustee, shall be the successor of the Certificate
Trustee hereunder, provided such corporation shall be otherwise qualified and
eligible under this Article, without the execution or filing of any paper or any
further act on the part of any of the parties hereto. In case any Certificates
shall have been authenticated, but not delivered, by the Certificate Trustee
then in office, any successor by merger, conversion or consolidation to such
authenticating Certificate Trustee may adopt such authentication and deliver the
Certificates so authenticated with the same effect as if such successor
Certificate Trustee had itself authenticated such Certificates.
Section 6.11. Maintenance of Agencies. (a) There shall at all times be
-----------------------
maintained in the Borough of Manhattan, The City of New York, an office or
agency where Certificates may be presented or surrendered for registration of
transfer or for exchange, and for payment thereof and where notices and demands
to or upon the Certificate Trustee on behalf of the Trust in respect of the
Certificates or of this Trust Agreement may be served. At no time shall there
be any other such office or agency outside the United States. Such office or
agency shall be initially at Bankers Trust Company, Corporate Trust and Agency
Services, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇. Written notice of any
change of location thereof shall be given by the Certificate Trustee on behalf
of the Trust to the Originator, the Note Trustee, the Note Issuer, the
Certificateholders and the Rating Agencies. In the event that no such office or
agency shall be maintained or no such notice of location or of change of
location shall be given, presentations and demands may be made and notices may
be served at the Corporate Trust Office of the Certificate Trustee.
40
(b) There shall at all times be a Registrar, an Authentication Agent and a
Paying Agent hereunder. Each such Authorized Agent shall be a bank or trust
company, shall be a corporation organized and doing business under the laws of
the United States or any state, with a combined capital and surplus of at least
$50,000,000, shall have a long-term debt rating of at least A by Moody's and
Standard & Poor's and shall be authorized under such laws to exercise corporate
trust powers, subject to supervision by federal or state authorities. The
Certificate Trustee shall initially be the Paying Agent, Authentication Agent,
and, as provided in Section 3.04, Registrar hereunder. Each Registrar, if other
than the Certificate Trustee, shall furnish to the Certificate Trustee, at
stated intervals of not more than six months, and at such other times as the
Certificate Trustee may request in writing, a copy of the Register.
(c) Any corporation into which any Authorized Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, consolidation or conversion to which any Authorized Agent shall
be a party, or any corporation succeeding to the corporate trust business of any
Authorized Agent, shall be the successor of such Authorized Agent hereunder, if
such successor corporation is otherwise eligible under this Section, without the
execution or filing of any paper or any further act on the part of the parties
hereto or such Authorized Agent or such successor corporation.
(d) Any Authorized Agent may at any time resign by giving written notice of
resignation to the Certificate Trustee, the Originator and the Note Trustee.
The Originator (with the prior written approval of the Note Issuer) may, and at
the request of the Certificate Trustee shall, at any time terminate the agency
of any Authorized Agent by giving written notice of termination to such
Authorized Agent, the Note Trustee and to the Certificate Trustee. Upon the
resignation or termination of an Authorized Agent or in case at any time any
such Authorized Agent shall cease to be eligible under this Section (when, in
either case, no other Authorized Agent performing the functions of such
Authorized Agent shall have been appointed by the Certificate Trustee), the
Originator (with the prior written approval of the Note Issuer) shall promptly
appoint one or more qualified successor Authorized Agents, reasonably
satisfactory to the Certificate Trustee, to perform the functions of the
Authorized Agent that has resigned or whose agency has been terminated or who
shall have ceased to be eligible under this Section. The Originator shall give
written notice of any such appointment made by it to the Certificate Trustee and
the Note Trustee; and in each case the Certificate Trustee shall mail notice of
such appointment to all Certificateholders as their names and addresses appear
on the Register.
(e) Pursuant to the Fee and Indemnity Agreement, the Note Issuer has agreed
to pay, or cause to be paid, from time to time to each Authorized Agent
reasonable compensation for its services and to reimburse it for its reasonable
expenses; provided, that the Note Issuer shall have given prior consent to the
--------
appointment of such Authorized Agent pursuant to the Fee and Indemnity
Agreement, and no Authorized Agent shall have any recourse against the
Originator or the Trust Property for payment of such amounts.
Section 6.12. Money for Certificate Payments To Be Held in Trust. (a) All
--------------------------------------------------
moneys deposited with any Paying Agent for the purpose of any payment on
Certificates shall be deposited and held in trust for the benefit of the
Certificateholders entitled to such payment, subject to the provisions of this
Section. Moneys so deposited and held in trust shall constitute a separate
trust
41
fund for the benefit of the Certificateholders with respect to which such money
was deposited.
The Certificate Trustee may at any time, for the purpose of obtaining the
satisfaction and discharge of this Trust Agreement or for any other purpose,
direct any Paying Agent to pay to the Certificate Trustee all sums held in trust
by such Paying Agent, such sums to be held by the Certificate Trustee upon the
same trusts as those upon which such sums were held by such Paying Agent; and,
upon such payment by any Paying Agent to the Certificate Trustee, such Paying
Agent shall be released from all further liability with respect to such money.
(b) The Certificate Trustee will cause each Paying Agent other than the
Certificate Trustee to execute and deliver to the Certificate Trustee an
instrument in which such Paying Agent shall agree with the Certificate Trustee
(and, if the Certificate Trustee acts as Paying Agent, it hereby so agrees),
subject to the provisions of this Section, that such Paying Agent will:
(i) hold all sums held by it for the payment of amounts due with
respect to the Notes in trust for the benefit of the Persons entitled
thereto until such sums shall be paid to such Persons or otherwise disposed
of as herein provided and pay such sums to such Persons as herein provided;
(ii) give the Certificate Trustee notice of any default under the
Notes of which it has actual knowledge (or any other obligor on the
Certificates) in the making of any payment required to be made with respect
to the Certificates;
(iii) at any time during the continuance of such default, upon the
written request of the Certificate Trustee, forthwith pay to the
Certificate Trustee all sums held by it in trust for the payment of the
Certificates if at any time it ceases to meet the standards required to be
met by a Paying Agent at the time of its appointment; and
(iv) comply with all requirements of the Code with respect to the
withholding from any payments made by it on any Certificates of any
applicable withholding taxes imposed thereon and with respect to any
applicable reporting requirements in connection therewith.
Section 6.13. Registration of Notes in Certificate Trustee's Name. The
---------------------------------------------------
Certificate Trustee agrees that all Notes and Eligible Investments, if any,
shall be issued in the name of the Certificate Trustee or its nominee, on behalf
of the Trust, and held by the Certificate Trustee, or, if not so held, the
Certificate Trustee or its nominee, on behalf of the Trust, shall be reflected
as the owner of such Notes or Eligible Investments, as the case may be, in the
register of the issuer of such Notes or Eligible Investments. In no event shall
the Certificate Trustee invest in, or hold, Notes or Eligible Investments in a
manner that would cause the Certificate Trustee not to have the ownership
interest in such Notes or Eligible Investments under the applicable provisions
of the Uniform Commercial Code in effect where the Certificate Trustee holds
such Notes or Eligible Investments or other applicable law then in effect.
42
Section 6.14. Representations and Warranties of Certificate Trustee. The
-----------------------------------------------------
Certificate Trustee hereby represents and warrants that:
(a) the Certificate Trustee is a national banking association
validly existing under the laws of the United States;
(b) the Certificate Trustee has full power, authority and legal
right to execute, deliver and perform this Trust Agreement and the Basic
Documents to which the Certificate Trustee is a party and has taken all
necessary action to authorize the execution, delivery, and performance by
it of this Trust Agreement and such Basic Documents; and
(c) when delivered by the Certificate Trustee, the Certificates of
any Series or Class will have been duly executed by the Certificate Trustee
on behalf of the Trust and duly authenticated by the Certificate Trustee.
Section 6.15. Withholding Taxes; Information Reporting. The Certificate
----------------------------------------
Trustee, as trustee of a grantor trust, shall exclude and withhold from each
distribution of principal and interest and other amounts due hereunder or under
the Certificates any and all withholding taxes applicable thereto as required by
law. The Certificate Trustee agrees that it will act as such withholding agent
and, in connection therewith, whenever any present or future taxes or similar
charges are required to be withheld with respect to any amounts payable in
respect of the Certificates, to withhold such amounts and timely pay the same to
the appropriate authority in the name of and on behalf of the
Certificateholders, that it will file any necessary withholding tax returns or
statements when due, and that, as promptly as possible after the payment
thereof, it will deliver to each Certificateholder appropriate documentation
showing the payment thereof, together with such additional documentary evidence
as such Certificateholders may reasonably request from time to time. The
Certificate Trustee agrees to file any other information reports as it may be
required to file with respect to taxes. For purposes of reporting on Internal
Revenue Service Form 1041 (and any statement attached thereto) or any successor
form thereto, the Certificate Trustee will separately set forth information
reported with respect to each Series or Class of Certificates.
ARTICLE VII
THE DELAWARE TRUSTEE
Section 7.01. Appointment. For valuable consideration received, it is
-----------
mutually covenanted and agreed in accordance with the terms of Section 2.01 of
this Trust Agreement that the Delaware Trustee has been and by this document is,
appointed to serve as the trustee of the Trust in the State of Delaware pursuant
to Section 3807 of the Business Trust Statute.
Section 7.02. Duties and Responsibilities. It is understood and agreed
---------------------------
that the duties and responsibilities of the Delaware Trustee shall be limited to
(a) accepting legal process served on the Trust in the State of Delaware and (b)
the execution and delivery of all certificates required to be filed with the
Secretary of State in order to form and maintain the existence of the Trust
under the Business Trust Statute.
43
Section 7.03. Acceptance of the Trusts. By the execution hereof, the
------------------------
Delaware Trustee accepts the trusts created hereinabove and in Section 2.01.
Except as otherwise expressly required by Section 7.02, the Delaware Trustee
shall not have any duty or liability with respect to the administration of the
Trust, the investment of the Trust's property or the payment of dividends or
other distributions of income or principal to the Certificateholders.
Section 7.04. Limitation of Liability. The Delaware Trustee shall not be
-----------------------
liable for the acts or omissions of the Certificate Trustee, nor shall the
Delaware Trustee be liable for supervising or monitoring the performance of the
duties and obligations of the Certificate Trustee or the Trust under this Trust
Agreement or any related document. The Delaware Trustee shall not be personally
liable under any circumstances, except for its own willful misconduct or gross
negligence. In particular, but not by way of limitation:
(a) the Delaware Trustee shall not be personally liable for any error
of judgment made in good faith by a Responsible Officer of the Delaware
Trustee;
(b) no provision of this Trust Agreement shall require the Delaware
Trustee to expend or risk its personal funds or otherwise incur any
financial liability in the performance of its rights or powers hereunder,
if the Delaware Trustee shall have reasonable grounds for believing that
repayment of such funds or indemnity satisfactory to it against such risk
or liability is not reasonably assured or provided to it;
(c) it is expressly understood and agreed by the parties hereto that
(i) this Trust Agreement is executed and delivered by Bankers Trust
(Delaware), not individually or personally but solely as Delaware Trustee
of the Trust, in the exercise of the powers and authority conferred and
vested in it, (ii) the representations, undertakings and agreements herein
made on the part of the Trust are made and intended not as personal
representations, undertakings and agreements by Bankers Trust (Delaware),
but are made and intended for the purpose of binding only the Trust, (iii)
nothing herein contained shall be construed as creating any liability on
Bankers Trust (Delaware), individually or personally, to perform any
covenant either expressed or implied contained herein, all such liability,
if any, being expressly waived by the parties who are signatories to this
Trust Agreement and by any Person claiming by, through or under such
parties and (iv) under no circumstances shall Bankers Trust (Delaware) be
personally liable for the payment of any indebtedness or expenses of the
Trust or be liable for the breach or failure of any obligation,
representation, warranty or covenant made or undertaken by the Trust under
this Trust Agreement;
(d) the Delaware Trustee shall not be personally responsible for or in
respect of the validity or sufficiency of this Trust Agreement or the
Certificates or for the due execution hereof by the Originator or the
Certificate Trustee;
(e) the Delaware Trustee shall incur no liability to anyone in acting
upon any signature, instrument, notice, resolution, request, consent,
order, certificate, report, opinion, bond or other document or paper
believed by it to be genuine and believed by it to be signed by the proper
party or parties; the Delaware Trustee may accept a certified copy of a
resolution of the board of directors or other governing body of any
corporate party as
44
conclusive evidence that such resolution has been duly adopted by such body
and that the same is in full force and effect;
(f) in the exercise or administration of the trusts hereunder, the
Delaware Trustee (i) may act directly or through agents, attorneys,
custodians or nominees pursuant to agreements entered into with any of
them, and the Delaware Trustee shall not be liable for the default or
misconduct or supervision of such agents, attorneys, custodians or nominees
if such agents, attorneys, custodians or nominees shall have been selected
by the Delaware Trustee in good faith and (ii) may consult with counsel,
accountants and other skilled persons to be selected in good faith and
employed by it, and it shall not be liable for anything done, suffered or
omitted in good faith by it in accordance with the advice or opinion of any
such counsel, accountants or other skilled persons; and
(g) except as expressly provided in this Section 7.04, in accepting
and performing the trusts hereby created the Delaware Trustee acts solely
as trustee for the Trust and not in its individual capacity, and all
persons having any claim against the Delaware Trustee by reason of the
transactions contemplated by this Trust Agreement shall look only to the
Trust's property for payment or satisfaction thereof.
Section 7.05. Other Protections. The Delaware Trustee shall be entitled
-----------------
to all of the other benefits and protections provided to the Certificate Trustee
in this Trust Agreement.
Section 7.06. Compensation and Reimbursement; Indemnification. (a)
-----------------------------------------------
Pursuant to the Fee and Indemnity Agreement, the Note Issuer has agreed to pay,
or cause to be paid, to the Delaware Trustee from time to time compensation for
its services and to reimburse it for its reasonable expenses.
(b) The Originator shall execute the Fee and Indemnity Agreement, pursuant
to which the Note Issuer shall, but solely from amounts payable under the Fee
and Indemnity Agreement, shall indemnify, defend and hold harmless the Delaware
Trustee and any of the affiliates, officers, directors, employees and agents of
the Delaware Trustee (the "Delaware Trustee Indemnified Persons") from and
against any and all losses, claims, taxes, damages, expenses and liabilities
(including liabilities under state or federal securities laws) of any kind and
nature whatsoever (collectively, "Delaware Trustee Expenses"), to the extent
that such Delaware Trustee Expenses arise out of or are imposed upon or asserted
against such Delaware Trustee Indemnified Persons with respect to the creation,
operation or termination of the Trust, the execution, delivery or performance of
this Trust Agreement or the transactions contemplated hereby; provided, however,
------------------
that the Note Issuer shall not be required to indemnify any Delaware Trustee
Indemnified Person for any Delaware Trustee Expenses that result from the
willful misconduct or negligence of such Delaware Trustee Indemnified Person.
The obligations of the Note Issuer to indemnify the Delaware Trustee Indemnified
Persons in the Trust Agreement shall survive the termination of this Trust
Agreement and the resignation or removal of the Delaware Trustee Indemnified
Persons.
Notwithstanding anything to the contrary in this Trust Agreement, the
Delaware Trustee shall have no recourse against the Originator or the Trust
Property for payment of any amounts required to be paid to the Delaware Trustee
under this Section 7.06(b).
45
Section 7.07. Resignation. The Delaware Trustee may resign upon 30 days'
-----------
prior written notice to the Certificate Trustee, the Originator and the Note
Issuer; provided, however, that a successor Delaware Trustee satisfactory to the
------------------
Certificate Trustee shall have been appointed and agreed to serve. If a
successor Delaware Trustee shall not have been appointed within such 30-day
period, the Delaware Trustee may apply to the Court of Chancery of the State of
Delaware for the appointment of a successor Delaware Trustee. Any successor
Delaware Trustee must satisfy the requirement of Section 3807(a) of the Business
Trust Statute.
ARTICLE VIII
SUPPLEMENTAL TRUST AGREEMENTS
Section 8.01. Supplemental Trust Agreements Without Consent of
------------------------------------------------
Certificateholders. Without the consent of Certificateholders, the Originator
------------------
(with the prior written approval of the Note Issuer) may, and the Certificate
Trustee and the Delaware Trustee (subject to Section 8.03) shall, at any time
and from time to time enter into one or more agreements supplemental hereto, in
form satisfactory to the Certificate Trustee and the Delaware Trustee, for any
of the following purposes:
(a) to add to the covenants of the Originator for the benefit of the
Certificateholders, or to surrender any right or power herein conferred
upon the Originator;
(b) to correct or supplement any provision herein or in any
supplemental agreement that may be defective or inconsistent with any other
provision herein or in any supplemental agreement or to make any other
provisions with respect to matters or questions arising under this Trust
Agreement; provided that any such action shall not adversely affect in any
--------
material respect the interests of the Certificateholders;
(c) to cure any ambiguity or correct any mistake;
(d) to qualify, if necessary, this Trust Agreement (including any
supplemental agreement) under the Trust Indenture Act, or under any similar
federal statute hereafter enacted, and to add to this Trust Agreement such
other provisions as may be expressly permitted by the Trust Indenture Act,
excluding, however, the provisions referred to in Section 316(a)(2) of the
Trust Indenture Act as in effect at the date as of which this instrument
was executed or any corresponding provision in any similar federal statute
hereafter enacted; or
(e) to provide for the issuance of the Certificates of any Class or
Series, or to provide for the execution and delivery of any Swap in
connection with such an issuance.
46
Section 8.02. Supplemental Trust Agreements With Consent of
---------------------------------------------
Certificateholders. With the consent of the Certificateholders holding
------------------
Certificates representing not less than a majority of the aggregate Outstanding
Amount of Certificates of each Series or Class affected thereby, by Act of said
Certificateholders delivered to the Originator, the Note Trustee, the Delaware
Trustee and the Certificate Trustee, the Originator (with the prior written
approval of the Note Issuer) may, and the Certificate Trustee and the Delaware
Trustee (subject to Section 8.03) shall, enter into an agreement or agreements
supplemental hereto for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of this Trust Agreement or of
modifying in any manner the rights and obligations of the Holders of
Certificates of each such Series or Class under this Trust Agreement; provided,
---------
however, that no such supplemental agreement shall, without the consent of the
--------
Certificateholder of each Outstanding Certificate affected thereby:
(a) reduce in any manner the amount of, or delay the timing of, any
receipt by the Certificate Trustee of payments on the Notes or
distributions that are required to be made herein on any Certificate, or
change any date of payment on any Certificate, or change the place of
payment where, or the coin or currency in which, any Certificate is
payable, or impair the right to institute suit for the enforcement of any
such payment or distribution on or after the Distribution Date, Special
Distribution Date or other date specified herein applicable thereto;
(b) permit the disposition of any Note in the Trust Property except as
permitted by this Trust Agreement, or otherwise deprive any Holder of
Certificates of any Series or Class of the benefit of the ownership of the
Notes of the corresponding Series or Class in the Trust;
(c) reduce the percentage of the aggregate Outstanding Amount of the
Certificates of any Series or Class that is required for any such
supplemental agreement, or reduce such percentage required for any waiver
or consent (of compliance with certain provisions of this Trust Agreement
or certain defaults hereunder and their consequences) provided for in this
Trust Agreement;
(d) modify any of the provisions of this Section, except to increase
any percentage set forth herein or to provide that certain other provisions
of this Trust Agreement cannot be modified or waived without the consent of
the Holder of each Certificate affected thereby; or
(e) adversely affect the status of the Trust as a grantor trust for
federal income tax purposes.
It shall not be necessary for any Act of Certificateholders under this
Section to approve the particular form of any proposed supplemental agreement,
but it shall be sufficient if such Act shall approve the substance thereof. The
Note Issuer shall give each Rating Agency five business days prior written
notice of any such proposed supplemental agreement. Promptly after the
execution by the Originator, the Delaware Trustee and the Certificate Trustee of
any supplemental agreement pursuant to this Section, the Certificate Trustee
shall mail to the Holders of the Certificates to which such agreement relates a
notice setting forth in general terms the substance of such agreement. Any
47
failure of the Certificate Trustee to mail such notice, or any defect therein,
shall not, however, in any way impair or affect the validity of any such
agreement.
Section 8.03. Documents Affecting Immunity or Indemnity. If in the
-----------------------------------------
opinion of the Certificate Trustee or the Delaware Trustee any document required
to be executed by it pursuant to the terms of Section 8.01 or 8.02 affects any
interest, right, duty, immunity or indemnity in favor of such entity under this
Trust Agreement, the Certificate Trustee or the Delaware Trustee may in its
discretion decline to execute such document.
Section 8.04. Execution of Supplemental Trust Agreements. In executing,
------------------------------------------
or accepting the additional trusts created by, any supplemental agreement
permitted by this Article or the modifications thereby of the trusts created by
this Trust Agreement, the Certificate Trustee and the Delaware Trustee shall be
entitled to receive, and shall be fully protected in relying upon, an Opinion of
Counsel stating that the execution of such supplemental agreement is authorized
or permitted by this Trust Agreement.
Section 8.05. Effect of Supplemental Trust Agreements. Upon the execution
---------------------------------------
of any supplemental agreement under this Article, this Trust Agreement shall be
modified in accordance therewith, and such supplemental agreement shall form a
part of this Trust Agreement for all purposes; and every Holder of any
Certificate theretofore or thereafter authenticated and delivered hereunder
shall be bound thereby.
Section 8.06. Conformity with Trust Indenture Act. Every supplemental
-----------------------------------
agreement executed pursuant to this Article shall conform to the requirements of
the Trust Indenture Act as then in effect.
Section 8.07. Reference in Certificates to Supplemental Trust Agreements.
----------------------------------------------------------
Certificates authenticated and delivered after the execution of any supplemental
agreement pursuant to this Article may bear a notation in form approved by the
Certificate Trustee as to any matter provided for in such supplemental
agreement; and, in such case, suitable notation may be made upon Outstanding
Certificates after proper presentation and demand.
ARTICLE IX
AMENDMENTS AND SUPPLEMENTS TO NOTES, NOTE INDENTURE
AND OTHER BASIC DOCUMENTS
Section 9.01. Amendments and Supplements to Notes, Note Indenture and
-------------------------------------------------------
Other Basic Documents. In the event that the Certificate Trustee, as holder of
---------------------
the Notes of any Series or Class in trust for the benefit of the Holders of
Certificates of the corresponding Series or Class, receives a request for a
consent to any amendment, modification, waiver or supplement under such Notes,
the Note Indenture or any other Basic Document to which the Certificate Trustee
is a party, the Certificate Trustee shall forthwith send a notice of such
proposed amendment, modification, waiver or supplement, to each Holder of
Certificates of such Series or Class registered on the Register as of such date.
The Certificate Trustee shall request from such Certificateholders directions as
to (a) whether or not the Certificate Trustee should take or refrain from taking
any action that a holder
48
of such Note has the option to direct, (b) whether or not to give or execute any
waivers, consents, amendments, modifications or supplements as a holder of such
Note and (c) how to vote such Note if a vote has been called for with respect
thereto; provided however, in the case of any change to the terms of, or
-------- -------
modification to, the Notes, the Certificateholders may not direct any such
action to be taken or direct whether or not to give or execute any such waiver,
consent, amendment, modification or supplement that is not pursuant to the
original terms of the Notes, unless the Certificate Trustee obtains an opinion
at the expense of the Trust of independent tax counsel to the effect that after
any such action, waiver, consent, amendment, modification or supplement the
Trust will continue to be treated as a "grantor trust" for federal income tax
purposes. Provided such a request for Certificateholder direction shall have
been made, in directing any action or casting any vote or giving any consent as
the holder of the Notes, the Certificate Trustee shall vote or consent with
respect to such Notes in the same proportion as the Certificates of the
corresponding Series or Class were actually voted by Acts of the Holders thereof
delivered to the Certificate Trustee prior to two Certificate Business Days
before the Certificate Trustee takes such action or casts such vote or gives
such consent.
ARTICLE X
TERMINATION OF TRUST
Section 10.01. Termination of the Trust. The respective obligations and
------------------------
responsibilities of the Originator, the Certificate Trustee, the Delaware
Trustee and the Trust created hereby shall terminate with respect to any Series
or Class of Certificates upon the earlier of (i) the distribution to all Holders
of Certificates of such Series or Class and the Certificate Trustee of all
amounts required to be distributed to them pursuant to this Trust Agreement and
the disposition of all property held as part of the Trust Property with respect
to such Series or Class and (ii) the expiration of 21 years from the death of
the survivor of the descendants of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, the late Ambassador of the
United States to the Court of St. James's, living on the date hereof. Upon the
termination of all Series of Certificates and the election of the Originator,
the Trust shall dissolve. The Originator shall pay or provide for the payment
of all remaining liabilities of the Trust, the Certificate Trustee and the
Delaware Trustee, but solely from amounts payable under the Fee and Indemnity
Agreement, and thereupon the Delaware Trustee shall file a certificate of
cancellation under the Business Trust Statute and the Trust shall terminate, and
any fees associated with such filing shall be paid from amounts payable under
the Fee and Indemnity Agreement.
Notice of any termination of the Trust shall be mailed promptly by the
Certificate Trustee to Holders of Certificates of any Series or Class then
outstanding. Such notice shall specify the Distribution Date or Special
Distribution Date, as the case may be, upon which the Holders of Certificates of
such Series or Class may surrender their Certificates to the Certificate Trustee
for payment of the final distribution and cancellation. Such notice shall be
mailed (a) if with respect to a final distribution, as soon as practicable
following receipt of notice from the Note Trustee of a final payment on a
corresponding Note, (b) if with respect to a Special Payment other than a
Special Payment constituting a redemption, not earlier than the 60th day and not
later than the 20th day next preceding such final distribution or (c) if with
respect to a Special Payment constituting a redemption of Notes, then in
accordance with the provisions of the relevant Section of Article IV hereof.
Such notice shall specify (a) the Distribution Date or Special Distribution
49
Date, as the case may be, upon which the proposed final payment of the
Certificates of such Series or Class will be made upon presentation and
surrender of such Certificates at the office or agency of the Certificate
Trustee therein specified, (b) the amount of any such proposed final payment and
(c) that the Record Date otherwise applicable to such Distribution Date or the
Special Record Date otherwise applicable to such Special Distribution Date, as
the case may be, is not applicable, payments being made only upon presentation
and surrender of the Certificates of such Series or Class at the office or
agency of the Certificate Trustee therein specified. The Certificate Trustee
shall give such notice to the Registrar at the time such notice is given to
Holders of Certificates of such Series or Class. Upon presentation and surrender
of such Certificates, the Certificate Trustee shall cause to be distributed to
the Holders thereof amounts distributable thereon on such Distribution Date or
Special Distribution Date, as the case may be, pursuant to Section 4.02.
In the event that all of the Holders of Certificates of such Series or
Class shall not surrender their Certificates for cancellation within six months
after the date specified in the above mentioned written notice, the Certificate
Trustee shall give a second written notice to the remaining Holders of such
Certificates to surrender their Certificates for cancellation and receive the
final distribution with respect thereto. In the event that any money held by
the Certificate Trustee for the payment of distributions on the Certificates of
any Series or Class shall remain unclaimed for two years (or such lesser time as
the Certificate Trustee shall be satisfied, after 60 days' notice from the
Originator (with the prior written approval of the Note Issuer), is one month
prior to the escheat period provided under applicable law) after the final
distribution date with respect thereto, the Certificate Trustee shall pay such
money to the Note Trustee for deposit into the collection account relating to
the related Notes or, if such collection account no longer exists, to the Note
Issuer and the Certificate Trustee or Note Issuer shall give written notice
thereof to the Note Trustee, the Note Issuer and the Originator.
ARTICLE XI
MISCELLANEOUS PROVISIONS
Section 11.01. Pledge of State of California; Certificates and Notes Not
---------------------------------------------------------
Obligation of State of California, Originator, or Seller. (a) The Originator
--------------------------------------------------------
hereby finds and determines, and hereby represents and warrants, that the Trust
constitutes a "special purpose trust" under Section 63010 of the California
Government Code and a "financing entity" under Section 840 of the PU Code, and
that the Certificates constitute "rate reduction bonds" under Section 840 of the
PU Code and that the Holders of the Certificates are entitled to the rights and
benefits thereunder. Pursuant to Section 841(c) of the PU Code, the Originator,
on behalf of the State of California, does hereby pledge and agree with the Note
Issuer, the Trust and the Holders of the Certificates that the State of
California shall neither limit nor alter the FTA Charges, the Transition
Property, or the Financing Order or Advice Letters relating thereto, and all
rights thereunder, until the Certificates, together with the interest thereon,
are fully paid and discharged, provided nothing contained in this Section shall
preclude such limitation or alteration if and when adequate provision shall be
made by law for the protection of the Note Issuer, the Trustee and the Holders
(the "State Pledge"). Further, the Originator does hereby pledge and agree with
the Note Issuer, the Trust and the Holders of the Certificates that the
Originator will not act in a manner inconsistent with the State Pledge and will
not take any action that would impair any rights of the Note Issuer, the Trust
or the Holders of the
50
Certificates in the Notes, the Transition Property or the Certificates. The
Originator hereby further agrees to treat the Notes as debt of the Note Issuer
secured by, among other things, the Transition Property and the equity of the
Note Issuer on deposit in the Capital Subaccount for all purposes.
(b) Each Certificate represents a fractional undivided beneficial interest
in a corresponding Series or Class of Notes and the proceeds thereof, together
with payments made on any related Swap. The Certificates do not represent an
interest in or obligation of the State of California, the Originator, any other
governmental agency or instrumentality or the Seller or any of its affiliates.
None of the Certificates, the Notes or the underlying Transition Property will
be guaranteed or insured by the State of California, the Originator, the Trust
or any other governmental agency or instrumentality or by the Seller or its
affiliates.
Neither the full faith and credit nor the taxing power of the State of
California, the Originator or any other governmental agency or instrumentality
is pledged to the payment of the principal, purchase price of, or interest on,
the Certificates or the Notes, or to the payments in respect of the Transition
Property, nor is the State of California, the Originator or any other
governmental agency or instrumentality in any manner obligated to make any
appropriation for the payment thereof.
Section 11.02. Limitation on Rights of Certificateholders. The death or
------------------------------------------
incapacity of any Certificateholder shall not operate to terminate this Trust
Agreement or the Trust, nor entitle such Certificateholder's legal
representatives or heirs to claim an accounting or to take any action or
commence any proceeding in any court for a partition or winding up of the Trust,
nor otherwise affect the rights, obligations, and liabilities of the parties
hereto or any of them.
Section 11.03. [Intentionally omitted.]
Section 11.04. Certificates Nonassessable and Fully Paid.
-----------------------------------------
Certificateholders shall not be personally liable for obligations of the Trust,
the interests in the Trust represented by the Certificates shall be
nonassessable for any losses or expenses of the Trust or for any reason
whatsoever, and Certificates upon authentication thereof by the Certificate
Trustee pursuant to Section 3.02 are and shall be deemed fully paid and non-
assessable. No Certificateholder shall have any right (except as expressly
provided herein) to vote or in any manner otherwise control the operation and
management of the Trust Property, the Trust established hereunder, or the
obligations of the parties hereto, nor shall anything set forth herein, or
contained in the terms of the Certificates, be construed so as to constitute the
Certificateholders from time to time as partners or members of an association.
51
Section 11.05. Notices. Unless otherwise specifically provided
-------
herein, all notices, directions, consents and waivers required under the terms
and provisions of this Trust Agreement shall be in English and in writing, and
any such notice, direction, consent or waiver may be given by United States
mail, courier service, telegram, telex, telemessage, telecopy, telefax, cable or
facsimile (confirmed by telephone or in writing in the case of notice by
telegram, telex, telemessage, telecopy, telefax, cable or facsimile) or any
other customary means of communication, and any such notice, direction, consent
or waiver shall be effective when delivered, or if mailed, three days after
deposit in the United States mail with proper postage for ordinary mail prepaid;
provided, however, that such notices, directions, consents and waivers to the
------------------
Delaware Trustee and/or the Certificate Trustee shall be given by United States
first-class mail, courier service, facsimile or overnight mail,
if to the Originator, to:
California Infrastructure and Economic Development Bank
c/o California Trade and Commerce Agency
▇▇▇ ▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Executive Director
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
if to the Delaware Trustee, to:
Bankers Trust (Delaware)
E.A. Delle Donne Corporate Center
▇▇▇▇▇▇▇▇▇▇ Building
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: President
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
(with a copy to the Certificate Trustee)
if to the Certificate Trustee, to:
Bankers Trust Company of California, N.A.
c/o Bankers Trust Company
Corporate Trust and Agency Services
Four ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Structured Finance Group
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
52
if to the Note Issuer, to:
PG&E Funding LLC
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
if to the Note Trustee, to:
Bankers Trust Company of California, N.A.
c/o Bankers Trust Company
Corporate Trust and Agency Services
Four ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Structured Finance Group
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
if to the Rating Agencies, to:
Standard & Poor's Ratings Services
▇▇ ▇▇▇▇▇▇▇▇ (▇▇▇▇ ▇▇▇▇▇)
New York, New York 10004
Attention: Asset-Backed Surveillance Department
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇▇'▇ Investors Service, Inc.
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ABS Monitoring Department
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇,
Fitch Investors Service, L.P.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: Commercial Asset Backed Securities
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇, and
Duff & ▇▇▇▇▇▇ Credit Rating Co.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
53
(b) The Originator, the Delaware Trustee, the Certificate Trustee, the Note
Issuer or the Note Trustee, by notice to the others, may designate additional or
different addresses for subsequent notices or communications.
(c) Any notice or communication to Certificateholders shall be mailed by
first-class mail to the addresses for each Certificateholder shown on the
Register kept by the Registrar. Failure so to mail a notice or communication or
any defect in such notice or communication shall not affect its sufficiency with
respect to other Certificateholders.
(d) If a notice or communication is mailed in the manner provided above
within the time prescribed, it is conclusively presumed to have been duly given,
whether or not the addressee receives it.
(e) If the Originator mails a notice or communication to the
Certificateholders, it shall mail a copy to the Certificate Trustee, to each
Paying Agent and to the Note Issuer at the same time.
(f) Notwithstanding the foregoing, all communications or notices to the
Certificate Trustee shall be deemed to be given only when received by a
Responsible Officer of the Certificate Trustee.
Section 11.06. Governing Law. THIS TRUST AGREEMENT SHALL BE GOVERNED BY
-------------
AND CONSTRUED IN ACCORDANCE WITH THE DOMESTIC LAW OF THE STATE OF DELAWARE,
WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS
AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH
SUCH LAW; PROVIDED, HOWEVER, THAT MATTERS REGARDING THE AUTHORITY OF THE
-------- -------
ORIGINATOR AND THE VALIDITY OF ACTIONS TAKEN BY THE ORIGINATOR HEREUNDER AND
OTHER MATTERS REFERENCED IN SECTION 11.01 ABOVE SHALL BE GOVERNED BY THE
DOMESTIC LAW OF THE STATE OF CALIFORNIA.
Section 11.07. Severability of Provisions. If any one or more of the
--------------------------
covenants, agreements, provisions or terms of this Trust Agreement shall be for
any reason whatsoever held invalid, then such covenants, agreements, provisions
or terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Trust Agreement and shall in no way affect the
validity or enforceability of the other provisions of this Trust Agreement or
the Trust, or of the Certificates or the rights of the Certificateholders
thereof.
Section 11.08. 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 Trust Agreement by any of the provisions of the
Trust Indenture Act, such required provision shall control.
The provisions of Sections 310 through 317 of the Trust Indenture Act that
impose duties on any Person (including the provisions automatically deemed
included herein unless expressly excluded by this Trust Agreement) are a part of
and govern this Trust Agreement, whether or not physically contained herein.
54
Section 11.09. Effect of Headings and Table of Contents. The Article
----------------------------------------
and Section headings herein and in the Table of Contents are for convenience
only and shall not affect the construction hereof.
Section 11.10. Successors and Assigns; Delegation. All covenants,
----------------------------------
agreements, representations and warranties in this Trust Agreement by the
Certificate Trustee, the Delaware Trustee and the Originator shall bind and, to
the extent permitted hereby, shall inure to the benefit of and be enforceable by
their respective successors and assigns, whether so expressed or not.
(b) No party to this Trust Agreement shall assign or delegate this Trust
Agreement or all or any part of its rights or obligations hereunder to any
Person without the prior written consent of the other parties.
Section 11.11. Benefits of Trust Agreement. Nothing in this Trust
---------------------------
Agreement or in the Certificates, express or implied, shall give to any Person,
other than the parties hereto and their successors hereunder, the
Certificateholders and, to the extent provided herein, the Note Issuer, any
benefit or any legal or equitable right, remedy or claim under this Trust
Agreement.
Section 11.12. Legal Holidays. In any case where any date for any
--------------
distribution in respect of any Certificate shall not be a Certificate Business
Day, then (notwithstanding any other provision of this Trust Agreement) payment
need not be made on such date, but may be made on the next succeeding
Certificate Business Day with the same force and effect as if made on such first
date, and no interest shall accrue during the intervening period.
Section 11.13. Counterparts. For the purpose of facilitating the
------------
execution of this Trust Agreement and for other purposes, this Trust Agreement
may be executed simultaneously in any number of counterparts, each of which
counterparts shall be deemed to be an original, and all of which counterparts
shall constitute but one and the same instrument.
55
IN WITNESS WHEREOF, the Originator, the Delaware Trustee and the
Certificate Trustee have caused this Trust Agreement to be duly executed by duly
authorized officers, all as of the day and year first above written.
CALIFORNIA INFRASTRUCTURE AND ECONOMIC
DEVELOPMENT BANK,
as Originator
By:____________________________________
Name:
Title:
BANKERS TRUST (DELAWARE),
as Delaware Trustee
By:____________________________________
Name:
Title:
BANKERS TRUST COMPANY OF CALIFORNIA, N.A.,
as Certificate Trustee
By:____________________________________
Name:
Title:
S-1
EXHIBIT A
FORM OF FIXED RATE CERTIFICATE
REGISTERED REGISTERED
NO . $.
CALIFORNIA INFRASTRUCTURE AND ECONOMIC DEVELOPMENT BANK
SPECIAL PURPOSE TRUST PG&E-1
SERIES 199[]-[]
CLASS .
RATE REDUCTION CERTIFICATE
SCHEDULED
FINAL
INTEREST DISTRIBUTION TERMINATION
RATE DATE DATE CUSIP
---------- ------------ ----------- -----
REGISTERED OWNER: Cede & Co.
PRINCIPAL AMOUNT:
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUST
OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE 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 THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
This Certificate evidences a fractional undivided beneficial interest
in an underlying note of a corresponding class and series issued by PG&E Funding
LLC and the proceeds thereof, held by a trust, as more fully described herein.
This Certificate does not represent an interest in or obligation of
the State of California, the California Infrastructure and Economic Development
Bank, a public body established within the
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state government of the State of California(the "Originator"), any other
governmental agency or instrumentality or Pacific Gas & Electric Company, a
California corporation ("PG&E"), or any of its affiliates. None of the
Certificates, the Underlying Note or the underlying Transition Property (as
defined in the Trust Agreement) will be guaranteed or insured by the State of
California, the Originator, the Trust or any other governmental agency or
instrumentality or by PG&E or its affiliates.
Neither the full faith and credit nor the taxing power of the State of
California, the Originator or any other governmental agency or instrumentality
is pledged to the payment of the principal of, purchase price of, or interest
on, this Certificate or the Underlying Note, or to the payments in respect of
the Transition Property, nor is the State of California, the Originator or any
other governmental agency or instrumentality in any manner obligated to make any
appropriation for the payment thereof.
THIS CERTIFIES THAT CEDE & CO., as nominee for The Depository Trust
Company, for value received, is the registered owner of a Principal Amount
(stated above) of nonassessable, fully-paid, fractional undivided beneficial
interest in certain property held by the California Infrastructure and Economic
Development Bank Special Purpose Trust PG&E-1 (the "Trust"). The Trust is
created pursuant to, and this Certificate is issued under and is subject to the
terms, provisions, and conditions of, an Amended and Restated Declaration and
Agreement of Trust, as supplemented by a First Supplemental Agreement of Trust,
each dated as of December 8, 1997 (collectively, the "Trust Agreement"), by and
among Bankers Trust (Delaware), as Delaware Trustee (the "Delaware Trustee"),
Bankers Trust Company of California, N.A., as Certificate Trustee (the
"Certificate Trustee"), and the Originator, a summary of certain of the
pertinent provisions of which is set forth below. This Certificate is one of
the duly authorized class of Certificates designated as "California
Infrastructure and Economic Development Bank Special Purpose Trust PG&E-1 Class
. Rate Reduction Certificates, Series 199[]-[]" (herein called the "Class .
Certificates"). The Class . Certificates are one of a series of classes of
Certificates issued under the Trust Agreement (such Class . Certificates,
together with other Certificates heretofore or hereafter issued under the Trust
Agreement being herein called the "Certificates"). The holder of this
Certificate, by virtue of its acceptance hereof, assents and agrees to be bound
by the terms of the Trust Agreement. This Class . Certificate represents a
fractional undivided beneficial interest in the note of a related class (the
"Underlying Note") issued by PG&E Funding LLC, as Note Issuer, together with the
proceeds of the Underlying Note. The Underlying Note is one of a series of
notes secured by a security interest in the property right created under the PU
Code, pursuant to a Financing Order (Decision 97-09-.) issued by the CPUC on
September 3, 1997, and Advice Letters issued pursuant thereto, representing the
irrevocable right of PG&E or its assignee to be paid the amount that is
determined in the Financing Order through the collection of certain
nonbypassable charges, as adjusted from time to time, on residential and small
commercial customers within PG&E's historic service territory, together with
certain related collateral, all as more fully described in the Note Indenture.
To the extent not otherwise defined herein, the capitalized terms used
herein have the meanings assigned to them in the Trust Agreement.
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As provided in the Trust Agreement, additional Certificates may be
issued thereunder from time to time pursuant to trust supplements in one or more
series or classes, in various principal amounts equal to the corresponding
series or class of underlying notes, may bear interest at different rates and
may otherwise vary as provided in the Trust Agreement. The aggregate principal
amount of Certificates equals the aggregate amount of the corresponding series
or class of underlying notes, and all Certificates of a Series issued and to be
issued under the Trust Agreement are and will be equally secured by the pledge
and covenants made therein, except as otherwise expressly provided or permitted
in the Trust Agreement.
Subject to and in accordance with the terms of the Trust Agreement,
there will be distributed on each March 25, June 25, September 25 and December
26 of each year or, if any such day is not a Business Day, the next succeeding
Business Day (each, a "Distribution Date"), commencing on March 25, 1998 to the
person in whose name this Certificate is registered at the close of business on
the last Business Day immediately preceding the related Distribution Date or, if
Definitive Certificates are issued, the last day of the immediately preceding
calendar month (each, a "Record Date"), such Holder's pro rata interest in the
payments made on the Underlying Note due on the related Payment Date, the
receipt of which has been confirmed by the Certificate Trustee. Subject to and
in accordance with the terms of the Trust Agreement, in the event that a Special
Payment on the Underlying Note is received by the Certificate Trustee, from
funds then available to the Certificate Trustee, there will be distributed on
the applicable Special Payment Date, to the Person in whose name this
Certificate is registered on the Record Date preceding the Special Payment Date,
as applicable, such Holder's pro rata share of such amount. The Special Payment
Date will be determined as provided in the Trust Agreement. The Certificate
Trustee will mail notice of each Special Payment and the related Special Payment
Date to the Certificateholder of this Certificate as provided in the Trust
Agreement.
Distributions on this Certificate will be made as provided in the
Trust Agreement by the Certificate Trustee by wire transfer or check mailed to
the Certificateholder of record in the Certificate Register without the
presentation or surrender of this Certificate or the making of any notation
hereon, except that with respect to Certificates registered on the Record Date
in the name of the nominee of the Clearing Agency (initially, such nominee to be
Cede & Co.), payments will be made by wire transfer in immediately available
funds to the account designated by such nominee. Except as otherwise provided
in the Trust Agreement and notwithstanding the above, the final distribution on
this Certificate will be made after due notice by the Certificate Trustee of the
pendency of such distribution and only upon presentation and surrender of this
Certificate at the office of the Paying Agent or the office or agency maintained
for that purpose by the Certificate Trustee in The City of New York.
Subject to and in accordance with the terms of the Trust Agreement,
the Originator has represented and warranted under the Trust Agreement that the
Trust constitutes a "special purpose trust" under Section 63010 of the
California Government Code and a "financing entity" under Section 840 of the PU
Code, and that the Certificates constitute "rate reduction bonds" under Section
840 of the PU Code and that the Holders of the Certificates are entitled to the
rights and benefits thereunder. Pursuant to Section 841(c) of the PU Code, the
Originator, on behalf of the State of California, has additionally pledged and
agreed with the Note Issuer, Trust and the Certificateholders that the State of
California will neither limit nor alter the FTA Charges, the
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Transition Property, or the Financing Order or Advice Letters relating thereto,
and all rights thereunder, until the Certificates, together with the interest
thereon, are fully paid and discharged, provided that nothing in the pledge and
agreement will preclude such limitation or alteration if and when adequate
provision is made by law for the protection of the Note Issuer, the Trust and
the Holders. In addition, the Originator has pledged and agreed with the Note
Issuer, the Trust and the Holders of the Certificates that the Originator will
not act in a manner inconsistent with the State Pledge and will not take any
action that would impair any rights of the Note Issuer, the Trust or the Holders
of the Certificates in the Notes, the Transition Property or the Certificates.
Reference is hereby made to the further provisions of this Certificate
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon shall have been
executed by an authorized officer of the Certificate Trustee, by manual
signature, this Certificate shall not entitle the holder hereof to any benefit
under the Trust Agreement or any other Basic Document or be valid for any
purpose.
THIS TRUST CERTIFICATE SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE DOMESTIC LAW OF THE STATE OF DELAWARE, WITHOUT REFERENCE TO
ITS CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAW; PROVIDED,
--------
HOWEVER, THAT MATTERS REGARDING THE AUTHORITY OF THE ORIGINATOR AND THE VALIDITY
-------
OF ACTIONS TAKEN BY THE ORIGINATOR HEREUNDER SHALL BE GOVERNED BY THE DOMESTIC
LAW OF THE STATE OF CALIFORNIA.
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Any reduction in the principal amount of any Certificate effected by
any distribution in respect of principal thereof shall be binding upon all
Holders of such Certificate and of any Certificate issued upon the registration
or transfer thereof or in lieu thereof, whether or not noted thereon.
It is expressly agreed and understood by the parties hereto that (a)
this Certificate is executed and delivered by Bankers Trust Company of
California, N.A., not individually or personally but solely as Certificate
Trustee on behalf of the Trust in the exercise of the powers and authority
concerned and vested in it, (b) the representations, undertakings and agreements
herein made by the Certificate Trustee on behalf of the Trust are made and
intended not as personal representations, undertakings and agreements by Bankers
Trust Company of California, N.A., but are made and intended for the purpose of
binding only the Trust, (c) nothing herein contained shall be construed as
creating any liability on Bankers Trust Company of California, N.A.,
individually or personally, to perform any covenant either expressed or implied
herein, except in its capacity as Certificate Trustee, all such liability being
expressly waived by all Persons, and (d) under no circumstances shall Bankers
Trust Company of California, N.A., be personally liable for the payment of any
indebtedness or expenses of the Trust, or be personally liable for the breach or
failure of any obligation, representation, warranty or covenant made or
undertaken by the Trust under this Trust Agreement.
A-5
IN WITNESS WHEREOF, the Certificate Trustee has on behalf of the Trust
caused this Certificate to be duly executed.
CALIFORNIA INFRASTRUCTURE AND ECONOMIC
DEVELOPMENT BANK SPECIAL PURPOSE TRUST PG&E-1
By: BANKERS TRUST COMPANY OF CALIFORNIA,
N.A., not in its individual capacity but
solely as Certificate Trustee
By:__________________________________________
Name:
Title:
CERTIFICATE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
Dated: __________, 1997
This is one of the Certificates referred
to in the within-mentioned Trust Agreement.
BANKERS TRUST COMPANY OF CALIFORNIA, N.A.,
not in its individual capacity but solely as
Certificate Trustee
By:________________________________________
Authorized Officer
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[FORM OF REVERSE OF CERTIFICATE]
The Certificates are limited in right of payment, all as more
specifically set forth on the face hereof and in the Trust Agreement. All
payments or distributions made to Certificateholders under the Trust Agreement
shall be made only from the Trust Property and only to the extent that the
Certificate Trustee shall have sufficient income or proceeds from the Trust
Property to make such payments in accordance with the terms of the Trust
Agreement. Each Holder of this Certificate, by its acceptance hereof, agrees
that it will look solely to the income and proceeds from the Trust Property to
the extent available for distribution to such Certificateholder as provided in
the Trust Agreement. This Certificate does not purport to summarize the Trust
Agreement and reference is made to the Trust Agreement for information with
respect to the interests, rights, benefits, obligations, proceeds, and duties
evidenced hereby. A copy of the Trust Agreement may be examined during normal
business hours at the principal office of the Certificate Trustee, and at such
other places, if any, designated by the Certificate Trustee, by any Holder upon
request.
The Trust Agreement permits, with certain exceptions therein provided,
the amendment thereof and the modification of the rights of the
Certificateholders under the Trust Agreement at any time by the Originator (with
the prior written approval of the Note Issuer) and the Certificate Trustee with
the consent of the Certificateholders holding Certificates evidencing fractional
undivided beneficial interests aggregating not less than a majority in interest
in each affected Series or Class of Certificates issued by the Trust. Any such
consent by the Certificateholder of this Certificate shall be conclusive and
binding on such Certificateholder and upon all future Certificateholders of this
Certificate and of any Certificate issued upon the transfer hereof or in
exchange hereof or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Trust Agreement also permits the amendment
thereof, in certain limited circumstances, without the consent of the
Certificateholders of any of the Certificates.
As provided in the Trust Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registerable in the
Register upon surrender of this Certificate for registration of transfer at the
offices or agencies maintained by the Certificate Trustee in its capacity as
Registrar, or by any successor Registrar, in the Borough of Manhattan, The City
of New York, duly endorsed or accompanied by a written instrument of transfer in
form satisfactory to the Certificate Trustee and the Registrar duly executed by
the Certificateholder hereof or such Certificateholder's attorney duly
authorized in writing, and thereupon one or more new Certificates of authorized
denominations evidencing the same aggregate fractional undivided beneficial
interest in the Underlying Note will be issued to the designated transferee or
transferees.
The Certificates are issuable only as registered Certificates without
coupons in Minimum Denominations of [] Original Principal Amount and integral
multiples thereof. As provided in the Trust Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of authorized denominations evidencing the same aggregate
fractional undivided beneficial interest in the Underlying Note, as requested by
the Certificateholder surrendering the same.
THE HOLDER OF THIS CERTIFICATE, BY PURCHASE OF THIS CERTIFICATE, WILL
BE DEEMED TO REPRESENT THAT SUCH PURCHASE WILL NOT RESULT IN A NON-EXEMPT
PROHIBITED TRANSACTION UNDER THE
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INTERNAL REVENUE CODE OF 1986, AS AMENDED, OR THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED, AND, IN EACH CASE, THE RULES AND REGULATIONS
THEREUNDER.
No service charge will be made for any such registration of transfer
or exchange, but the Certificate Trustee shall require payment of a sum
sufficient to cover any tax or governmental charge payable in connection
therewith.
The Certificate Trustee, the Registrar, and any agent of the
Certificate Trustee or the Registrar may treat the person in whose name this
Certificate is registered as the owner hereof for all purposes, and neither the
Certificate Trustee, the Registrar, nor any such agent shall be affected by any
notice to the contrary.
The obligations and responsibilities created by the Trust Agreement
and the Trust created thereby shall terminate with respect to the Certificates
upon the distribution to the Certificateholders of all amounts required to be
distributed to them pursuant to the Trust Agreement and the disposition of all
property held as part of the Trust Property, except certain indemnity
obligations of the Originator to the Certificate Trustee and the Delaware
Trustee.
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