ENTERGY ARKANSAS RESTORATION FUNDING,LLC, Issuer, and THE BANK OF NEW YORK MELLON, Indenture Trustee and Securities Intermediary ______________________________ INDENTURE Dated as of August 18, 2010 ______________________________ TRUST INDENTURE ACT CROSS REFERENCE TABLE

Exhibit 4.1

EXECUTION COPY

 

(B) either (1) the Scheduled Final Payment Date has occurred with respect to all Storm Recovery Bonds not theretofore delivered to the Indenture Trustee for cancellation or (2) such Storm Recovery Bonds will be due and payable on the Scheduled Final Payment Date within one year, and in any such case, the Issuer has irrevocably deposited or caused to be irrevocably deposited in trust with the Indenture Trustee (i) cash and/or (ii) U.S. Government Obligations which through the scheduled payments of principal and interest in respect thereof in accordance with their terms are in an amount sufficient to pay principal, interest and premium, if any, on such Storm Recover y Bonds not theretofore delivered to the Indenture Trustee for cancellation and all other sums payable hereunder by the Issuer with respect to such Storm Recovery Bonds when scheduled to be paid and to discharge the entire indebtedness on such Storm Recovery Bonds when due;

 

(ii) the Issuer has paid or caused to be paid all other sums payable hereunder by the Issuer with respect to the Storm Recovery Bonds; and

 

(iii) the Issuer has delivered to the Indenture Trustee an Officer’s Certificate, an Opinion of Counsel of Independent counsel of the Issuer and (if required by the TIA or the Indenture Trustee) an Independent Certificate from a firm of registered public accountants, each meeting the applicable requirements of Section 10.01(a) and each stating that all conditions precedent herein provided for relating to the satisfaction and discharge of this Indenture with respect to Storm Recovery Bonds have been complied with.

 

(b) Subject to Sections 4.01(c) and 4.02, the Issuer at any time may terminate (i) all its obligations under this Indenture with respect to the Storm Recovery Bonds (“Legal Defeasance Option”) or (ii) its obligations under Sections 3.04, 3.05, 3.06, 3.07, 3.08, 3.09, 3.10, 3.12, 3.13, 3.14, 3.15, 3.16, 3.17, 3.18 and 3.19 and the operation of Section 5.01(iii) (“Covenant Defeasance Option”) with respect to the Sto rm Recovery Bonds.  The Issuer may exercise the Legal Defeasance Option with respect to the Storm Recovery Bonds notwithstanding its prior exercise of the Covenant Defeasance Option.

 

If the Issuer exercises the Legal Defeasance Option, the maturity of the Storm Recovery Bonds may not be accelerated because of an Event of Default.  If the Issuer exercises the Covenant Defeasance Option, the maturity of the Storm Recovery Bonds may not be accelerated because of an Event of Default specified in Section 5.01(iii).

 

Upon satisfaction of the conditions set forth herein to the exercise of the Legal Defeasance Option or the Covenant Defeasance Option, the Indenture Trustee, on reasonable written demand of and at the expense of the Issuer, shall execute proper instruments acknowledging satisfaction and discharge of the obligations that are terminated pursuant to such exercise.

 

(c) Notwithstanding Sections 4.01(a) and 4.01(b) above, (i) rights of registration of transfer and exchange, (ii) substitution of mutilated, destroyed, lost or stolen Storm Recovery Bonds, (iii) rights of Holders to receive payments of principal, premium, if any, and interest, (iv) Sections 4.03 and 4.04, (v) the rights, obligations and immunities of the Indenture Trustee hereunder (including the rights of the Indenture Trustee under Section 6.07 and the obligations of the Indenture Trustee under Section 4.03) and (vi) the rights of Holders as beneficiaries hereof with respect to the property deposited with the Indenture Trustee payable to all or any of them, shall survive until the Storm Recovery Bonds as to which this Indenture or certain obligations hereunder have been satisfied and discharged pursuant to Section 4.01(a) or 4.01(b) have been paid in full.  Thereafter the obligations in Sections 6.07 and 4.04 shall survive.

 

SECTION 4.02. Conditions to Defeasance

 

.  THE ISSUER MAY EXERCISE THE LEGAL DEFEASANCE OPTION OR THE COVENANT DEFEASANCE OPTION WITH RESPECT TO ANY OF THE STORM RECOVERY BONDS ONLY IF:

 

(a) the Issuer has irrevocably deposited or caused to be irrevocably deposited in trust with the Indenture Trustee (i) cash and/or (ii) U.S. Government Obligations which through the scheduled payments of principal and interest in respect thereof in accordance with their terms are in an amount sufficient to pay principal, interest and premium, if any, on the Storm Recovery Bonds not therefore delivered to the Indenture Trustee for cancellation and all other sums payable hereunder by the Issuer with respect to the Storm Recovery Bonds when scheduled to be paid and to discharge the entire indebtedness on the Storm Recovery Bonds when due;

 

(b) the Issuer delivers to the Indenture Trustee a certificate from a nationally recognized firm of Independent registered public accountants expressing its opinion that the payments of principal and interest when due and without reinvestment of the deposited U.S. Government Obligations plus any deposited cash without investment will provide cash at such times and in such amounts (but, in the case of the Legal Defeasance Option only, not more than such amounts) as will be sufficient to pay in respect of the Storm Recovery Bonds (i) principal in accordance with the Expected Amortization Schedule therefor, (ii) interest when due and (iii) all other sums payable hereunder by the Issuer with respect to such Storm Recovery Bonds;

 

(c) in the case of the Legal Defeasance Option, ninety-five (95) days pass after the deposit is made and during the ninety-five (95) day period no Default specified in Section 5.01(v) or (vi) occurs which is continuing at the end of the period;

 

(d) no Default has occurred and is continuing on the day of such deposit and after giving effect thereto;

 

(e) in the case of an exercise of the Legal Defeasance Option, the Issuer shall have delivered to the Indenture Trustee an Opinion of Counsel of Independent tax counsel of the Issuer stating that (i) the Issuer has received from, or there has been published by, the Internal Revenue Service a ruling, or (ii) since the date of execution of this Indenture, there has been a change in the applicable federal income tax law, in either case to the effect that, and based thereon such opinion shall confirm that, the Holders of the Storm Recovery Bonds will not recognize income, gain or loss for federal income tax purposes as a result of such legal defeasance and will be subject to federal income tax on the same amounts, in the same m anner and at the same times as would have been the case if such legal defeasance had not occurred;

 

(f) in the case of an exercise of the Covenant Defeasance Option, the Issuer shall have delivered to the Indenture Trustee an Opinion of Counsel of Independent tax counsel of the Issuer to the effect that the Holders of the Storm Recovery Bonds will not recognize income, gain or loss for federal income tax purposes as a result of such covenant defeasance and will be subject to federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such covenant defeasance had not occurred;

 

(g) the Issuer delivers to the Indenture Trustee an Officer’s Certificate and an Opinion of Counsel, each stating that all conditions precedent to the satisfaction and discharge of the Storm Recovery Bonds to the extent contemplated by this Article IV have been complied with;

 

(h) the Issuer delivers to the Indenture Trustee an Opinion of Counsel of Independent counsel of the Issuer to the effect that (i) in a case under the Bankruptcy Code in which EAI (or any of its Affiliates, other than the Issuer) is the debtor, the court would hold that the deposited moneys or U.S. Government Obligations would not be in the bankruptcy estate of EAI (or any of its Affiliates, other than the Issuer, that deposited the moneys or U.S. Government Obligations); and (ii) in the event EAI (or any of its Affiliates, other than the Issuer, that deposited the moneys or U.S. Government Obligations) were to be a debtor in a case under the Bankruptcy Code, the court would not disregard the separate legal existence of EAI (or any of its Affiliates, other than the Issuer, that deposited the moneys or U.S. Government Obligations) and the Issuer so as to order substantive consolidation under the Bankruptcy Code of the Issuer’s assets and liabilities with the assets and liabilities of EAI or such other Affiliate; and

 

(i) the Rating Agency Condition shall have been satisfied with respect to the exercise of any Legal Defeasance Option or Covenant Defeasance Option.

 

Notwithstanding any other provision of this Section 4.02, no delivery of moneys or U.S. Government Obligations to the Indenture Trustee shall terminate any obligation of the Issuer to the Indenture Trustee under this Indenture or the Series Supplement or any obligation of the Issuer to apply such moneys or U.S. Government Obligations under Section 4.03 until such Storm Recovery Bonds shall have been redeemed in accordance with the provisions of this Indenture and the Series Supplement.

 

SECTION 4.03. Application of Trust Money

 

.  ALL MONEYS OR U.S. GOVERNMENT OBLIGATIONS DEPOSITED WITH THE INDENTURE TRUSTEE PURSUANT TO SECTION 4.01 OR 4.02 SHALL BE HELD IN TRUST AND APPLIED BY IT, IN ACCORDANCE WITH THE PROVISIONS OF THE STORM RECOVERY BONDS AND THIS INDENTURE, TO THE PAYMENT, EITHER DIRECTLY OR THROUGH ANY PAYING AGENT, AS THE INDENTURE TRUSTEE MAY DETERMINE, TO THE HOLDERS OF THE PARTICULAR STORM RECOVERY BONDS FOR THE PAYMENT OF WHICH SUCH MONEYS HAVE BEEN DEPOSITED WITH THE INDENTURE TRUSTEE, OF ALL SUMS DUE AND TO BECOME DUE THEREON FOR PRINCIPAL, PREMIUM, IF ANY, AND INTEREST; BUT SUCH MONEYS NEED NOT BE SEGREGATED FROM OTHER FUNDS EXCEPT TO THE EXTENT REQUIRED HEREIN OR IN THE SERVICING AGREEMENT OR REQUIRED BY LAW.  NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THIS ARTICLE IV, THE INDENTURE TRUSTEE SHALL DELIVER OR PAY TO THE ISSUER FROM TIME TO TIME UPON ISSUER REQUEST ANY MONEYS OR U.S. GOVERNMENT OBLIGATIONS HELD BY IT PURSUANT TO SECTION 4.02 WHICH, IN THE OPINION OF A NATIONALLY RECOGNIZED FIRM OF INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS EXPRESSED IN A WRITTEN CERTIFICATION THEREOF DELIVERED TO THE INDENTURE TRUSTEE (AND NOT AT THE COST OR EXPENSE OF THE INDENTURE TRUSTEE), ARE IN EXCESS OF THE AMOUNT THEREOF WHICH WOULD BE REQUIRED TO BE DEPOSITED FOR THE PURPOSE FOR WHICH SUCH MONEYS OR U.S. GOVERNMENT OBLIGATIONS WERE DEPOSITED, PROVIDED THAT ANY SUCH PAYMENT SHALL BE SUBJECT TO THE SATISFACTION OF THE RATING AGENCY CONDITION.

 

SECTION 4.04. Repayment of Moneys Held by Paying Agent

 

.  IN CONNECTION WITH THE SATISFACTION AND DISCHARGE OF THIS INDENTURE OR THE COVENANT DEFEASANCE OPTION OR LEGAL DEFEASANCE OPTION WITH RESPECT TO THE STORM RECOVERY BONDS, ALL MONEYS THEN HELD BY ANY PAYING AGENT OTHER THAN THE INDENTURE TRUSTEE UNDER THE PROVISIONS OF THIS INDENTURE WITH RESPECT TO SUCH STORM RECOVERY BONDS SHALL, UPON DEMAND OF THE ISSUER, BE PAID TO THE INDENTURE TRUSTEE TO BE HELD AND APPLIED ACCORDING TO SECTION 3.03 AND THEREUPON SUCH PAYING AGENT SHALL BE RELEASED FROM ALL FURTHER LIABILITY WITH RESPECT TO SUCH MONEYS.

 

ARTICLE V

 

REMEDIES

 

SECTION 5.01. Events of Default

 

.  “EVENT OF DEFAULT” WITH RESPECT TO THE STORM RECOVERY BONDS, WHEREVER USED HEREIN, MEANS ANY ONE OR MORE OF THE FOLLOWING EVENTS (WHATEVER THE REASON FOR SUCH EVENT OF DEFAULT AND WHETHER IT SHALL BE VOLUNTARY OR INVOLUNTARY OR BE EFFECTED BY OPERATION OF LAW OR PURSUANT TO ANY JUDGMENT, DECREE OR ORDER OF ANY COURT OR ANY ORDER, RULE OR REGULATION OF ANY ADMINISTRATIVE OR GOVERNMENTAL BODY):

 

(i) default in the payment of any interest on any Storm Recovery Bond when the same becomes due and payable (whether such failure to pay interest is caused by a shortfall in Storm Recovery Charges received or otherwise), and such default shall continue for a period of five (5) Business Days; or

 

(ii) default in the payment of the then unpaid principal of the Storm Recovery Bonds on the Final Maturity Date; or

 

(iii) default in the observance or performance of any covenant or agreement of the Issuer made in this Indenture (other than defaults specified in clauses (i) or (ii) above), and such default shall continue or not be cured, for a period of thirty (30) days after the earlier of (A) the date that there shall have been given, by registered or certified mail, to the Issuer by the Indenture Trustee or to the Issuer and the Indenture Trustee by the Holders of at least 25 percent of the Outstanding Amount of the Storm Recovery Bonds, a written notice spe cifying such default and requiring it to be remedied and stating that such notice is a “Notice of Default” hereunder or (B) the date that the Issuer has actual knowledge of the default; or

 

(iv) any representation or warranty of the Issuer made in this Indenture or in any certificate or other writing delivered pursuant hereto or in connection herewith proving to have been incorrect in any material respect as of the time when the same shall have been made, and the circumstance or condition in respect of which such misrepresentation or warranty was incorrect shall not have been eliminated or otherwise cured, within thirty (30) days after the earlier of (A) the date that there shall have been given, by registered or certified mail, to the Issuer by the Indenture Trustee or to the Issuer and the Indenture Trustee by the Holders of at least 25 percent of the Outstanding Amount of the Storm Recovery Bonds, a written notice specifying such incorrect representation or warranty and requiring it to be remedied and stating that such notice is a “Notice of Default” hereunder or (B) the date the Issuer has actual knowledge of the default, or

 

(v) the filing of a decree or order for relief by a court having jurisdiction in the premises in respect of the Issuer or any substantial part of the Storm Recovery Bond Collateral in an involuntary case or proceeding under any applicable federal or state bankruptcy, insolvency or other similar law now or hereafter in effect, or appointing a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official of the Issuer or for any substantial part of the Storm Recovery Bond Collateral, or ordering the winding-up or liquidation of the Issuer’s affairs, and such decree or order shall remain unstayed and in effect for a period of ninety (90) consecutive days ; or

 

(vi) the commencement by the Issuer of a voluntary case under any applicable federal or state bankruptcy, insolvency or other similar law now or hereafter in effect, or the consent by the Issuer to the entry of an order for relief in an involuntary case or proceeding under any such law, or the consent by the Issuer to the appointment or taking possession by a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official of the Issuer or for any substantial part of the Storm Recovery Bond Collateral, or the making by the Issuer of any general assignment for the benefit of creditors, or the failure by the Issuer generally to pay its debts as such debts become due, or the taking of action by the Issuer in furtherance of any of the foregoing; or

 

(vii) any act or failure to act by the State of Arkansas or any of its agencies (including the APSC), officers or employees which violates or is not in accordance with the State Pledge; or

 

(viii) any other event designated as such in the Series Supplement.

 

The Issuer shall deliver to a Responsible Officer of the Indenture Trustee and to the Rating Agencies, within five (5) days after a Responsible Officer of the Issuer has knowledge of the occurrence thereof, written notice in the form of an Officer’s Certificate of any event (I) which is an Event of Default under clauses (i), (ii), (v), (vi), (vii), or (viii) or (II) which with the giving of notice, the lapse of time, or both, w ould become an Event of Default under clause (iii) or (iv), including, in each case, the status of such Event of Default and what action the Issuer is taking or proposes to take with respect thereto.

 

SECTION 5.02. Acceleration of Maturity; Rescission and Annulment

 

.  IF AN EVENT OF DEFAULT (OTHER THAN AN EVENT OF DEFAULT UNDER CLAUSE (VII) OF SECTION 5.01) SHOULD OCCUR AND BE CONTINUING, THEN AND IN EVERY SUCH CASE THE INDENTURE TRUSTEE OR THE HOLDERS REPRESENTING NOT LESS THAN A MAJORITY OF THE OUTSTANDING AMOUNT OF THE STORM RECOVERY BONDS MAY DECLARE THE STORM RECOVERY BONDS TO BE IMMEDIATELY DUE AND PAYABLE, BY A NOTICE IN WRITING TO THE ISSUER (AND TO THE INDENTURE TRUSTEE IF GIVEN BY HOLDERS), AND UPON ANY SUCH DECLARATION THE UNPAID PRINCIPAL AMOUNT OF THE STORM RECOVERY BONDS, TOGETHER WITH ACCRUED AND UNPAID INTEREST THEREON THROUGH THE DATE OF ACCELERATION, SHALL BECOME IMMEDIATELY DUE AND PAYABLE.

 

At any time after such declaration of acceleration of maturity has been made and before a judgment or decree for payment of the money due has been obtained by the Indenture Trustee as hereinafter in this Article V provided, the Holders representing not less than a majority of the Outstanding Amount of the Storm Recovery Bonds, by written notice to the Issuer and the Indenture Trustee, may rescind and annul such declaration and its consequences if:

 

(i) the Issuer has paid or deposited with the Indenture Trustee a sum sufficient to pay:

 

(A) all payments of principal of and premium, if any, and interest on all Storm Recovery Bonds due and owing at such time as if such Event of Default had not occurred and was not continuing and all other amounts that would then be due hereunder or upon the Storm Recovery Bonds if the Event of Default giving rise to such acceleration had not occurred; and

 

(B) all sums paid or advanced by the Indenture Trustee hereunder and the reasonable compensation, expenses, disbursements and advances of the Indenture Trustee and its agents and counsel; and

 

(ii) all Events of Default, other than the nonpayment of the principal of the Storm Recovery Bonds that have become due solely by such acceleration, have been cured or waived as provided in Section 5.12.

 

No such rescission shall affect any subsequent default or impair any right consequent thereto.

 

SECTION 5.03. Collection of Indebtedness and Suits for Enforcement by Indenture Trustee.

 

(a) If an Event of Default under Section 5.01(i) or (ii) has occurred and is continuing, subject to Section 10.18, the Indenture Trustee, in its own name and as trustee of an express trust, may institute a Proceeding for the collection of the sums so due and unpaid, and may prosecute such Proceeding to judgment or final decree, and, subject to the limitations on recourse set forth herein, may enforce the same against the Issuer or other obligor upon such Storm Recovery Bonds and collect in the manner provided by law out of the property of the Issuer or other obligor upon such Storm Recovery Bonds, wherever situated the moneys payable, or the related Storm Recovery Bond Collateral and the proceeds thereof, the whole amount then due and payable on the Storm Recovery Bonds for principal, premium, if any, and interest, with interest upon the overdue principal and premium, if any, and, to the extent payment at such rate of interest shall be legally enforceable, upon overdue installments of interest, at the rate borne by the Storm Recovery Bonds and in addition thereto such further amount as shall be sufficient to cover the costs and expenses of collection, including the reasonable compensation, expenses, disbursements and advances of the Indenture Trustee and its agents and counsel.

 

(b) If an Event of Default (other than Event of Default under clause (vii) of Section 5.01) occurs and is continuing, the Indenture Trustee shall, as more particularly provided in Section 5.04, in its discretion, proceed to protect and enforce its rights and the rights of the Holders, by such appropriate Proceedings as the Indenture Trustee shall deem most effective to protect and enforce any such rights, whether for the specific enforcement of any covenant or agreement in this Indenture or in aid of the exercise of any power g ranted herein, or to enforce any other proper remedy or legal or equitable right vested in the Indenture Trustee by this Indenture and the Series Supplement or by law, including foreclosing or otherwise enforcing the Lien of the Storm Recovery Bond Collateral securing the Storm Recovery Bonds or applying to a court of competent jurisdiction for sequestration of revenues arising with respect to the Storm Recovery Property.

 

(c) If an Event of Default under Section 5.01(v) or (vi) has occurred and is continuing, the Indenture Trustee, irrespective of whether the principal of any Storm Recovery Bonds shall then be due and payable as therein expressed or by declaration or otherwise and irrespective of whether the Indenture Trustee shall have made any demand pursuant to the provisions of this Section 5.04, shall be entitled and empowered, by intervention in any Proceedings related to such Event of Default or otherwise:

 

(i) to file and prove a claim or claims for the whole amount of principal, premium, if any, and interest owing and unpaid in respect of the Storm Recovery Bonds and to file such other papers or documents as may be necessary or advisable in order to have the claims of the Indenture Trustee (including any claim for reasonable compensation to the Indenture Trustee and each predecessor Indenture Trustee, and their respective agents, attorneys and counsel, and for reimbursement of all expenses and liabilities incurred, and all advances made, by the Indenture Trustee and each predecessor Indenture Trustee, except as a result of negligence or bad faith) and of the Holders allowed in such Pro ceedings;

 

(ii) unless prohibited by applicable law and regulations, to vote on behalf of the Holders in any election of a trustee in bankruptcy, a standby trustee or Person performing similar functions in any such Proceedings;

 

(iii) to collect and receive any moneys or other property payable or deliverable on any such claims and to distribute all amounts received with respect to the claims of the Holders and of the Indenture Trustee on their behalf; and

 

(iv) to file such proofs of claim and other papers and documents as may be necessary or advisable in order to have the claims of the Indenture Trustee or the Holders allowed in any judicial proceeding relative to the Issuer, its creditors and its property.

 

and any trustee, receiver, liquidator, custodian or other similar official in any such Proceeding is hereby authorized by each of such Holders to make payments to the Indenture Trustee, and, in the event that the Indenture Trustee shall consent to the making of payments directly to such Holders, to pay to the Indenture Trustee such amounts as shall be sufficient to cover reasonable compensation to the Indenture Trustee, each predecessor Indenture Trustee and their respective agents, attorneys and counsel, and all other expenses and liabilities incurred, and all advances made, by the Indenture Trustee and each predecessor Indenture Trustee except as a result of negligence or bad faith.

 

(d) Nothing herein contained shall be deemed to authorize the Indenture Trustee to authorize or consent to or vote for or accept or adopt on behalf of any Holder any plan of reorganization, arrangement, adjustment or composition affecting the Storm Recovery Bonds or the rights of any Holder thereof or to authorize the Indenture Trustee to vote in respect of the claim of any Holder in any such proceeding except, as aforesaid, to vote for the election of a trustee in bankruptcy or similar Person.

 

(e) All rights of action and of asserting claims under this Indenture, or under any of the Storm Recovery Bonds, may be enforced by the Indenture Trustee without the possession of any of the Storm Recovery Bonds or the production thereof in any trial or other Proceedings relative thereto, and any such action or proceedings instituted by the Indenture Trustee shall be brought in its own name as trustee of an express trust, and any recovery of judgment, subject to the payment of the expenses, disbursements and compensation of the Indenture Trustee, each predecessor Indenture Trustee and their respective agents and attorneys, shall be for the ratable benefit of the Holders of the Storm Recovery Bonds.

 

(f) In any Proceedings brought by the Indenture Trustee (and also any Proceedings involving the interpretation of any provision of this Indenture to which the Indenture Trustee shall be a party), the Indenture Trustee shall be held to represent all the Holders of the Storm Recovery Bonds, and it shall not be necessary to make any Holder a party to any such Proceedings.

 

SECTION 5.04. Remedies; Priorities.

 

(a) If an Event of Default (other than an Event of Default under clause (vii) of Section 5.01) shall have occurred and be continuing, the Indenture Trustee may do one or more of the following (subject to Section 5.05):

 

(i) institute Proceedings in its own name and as trustee of an express trust for the collection of all amounts then payable on the Storm Recovery Bonds or under this Indenture with respect thereto, whether by declaration of acceleration or otherwise, and, subject to the limitations on recovery set forth herein, enforce any judgment obtained, and collect from the Issuer or any other obligor moneys adjudged due upon such Storm Recovery Bonds;

 

(ii) institute Proceedings from time to time for the complete or partial foreclosure of this Indenture with respect to the Storm Recovery Bond Collateral;

 

(iii) exercise any remedies of a secured party under the UCC, the Securitization Act or any other applicable law and take any other appropriate action to protect and enforce the rights and remedies of the Indenture Trustee and the Holders of the Storm Recovery Bonds;

 

(iv) at the written direction of the Holders of a majority of the Outstanding Amount of the Storm Recovery Bonds, sell the Storm Recovery Bond Collateral or any portion thereof or rights or interest therein, at one or more public or private sales called and conducted in any manner permitted by law; and

 

(v) exercise all rights, remedies, powers, privileges and claims of the Issuer against the Seller, the Administrator, EAI or the Servicer under or in connection with, and pursuant to the terms of, the Sale Agreement, the Administration Agreement or the Servicing Agreement;

 

provided, however, that the Indenture Trustee may not sell or otherwise liquidate any portion of the Storm Recovery Bond Collateral following such an Event of Default, other than an Event of Default described in Section 5.01(i), or (ii), with respect to the Storm Recovery Bonds unless (A) the Holders of 100 percent of the Outstanding Amount of the Storm Recovery Bonds consent thereto, (B) the proceeds of such sale or liquidation distributable to the Holders are sufficient to discharge in full all amounts then due and unpaid upon the Storm Recovery Bonds for principa l, premium, if any, and interest after taking into account payment of all amounts due prior thereto pursuant to the priorities set forth in Section 8.02(e) or (C) the Indenture Trustee determines that the Storm Recovery Bond Collateral will not continue to provide sufficient funds for all payments on the Storm Recovery Bonds as they would have become due if the Storm Recovery Bonds had not been declared due and payable, and the Indenture Trustee obtains the written consent of Holders of 66-2/3 percent of the Outstanding Amount of the Storm Recovery Bonds.  In determining such sufficiency or insufficiency with respect to clause (B) and (C), the Indenture Trustee may, but need not, obtain and conclusively rely upon an opinion of an Independent investment banking or accounting firm of national r eputation as to the feasibility of such proposed action and as to the sufficiency of the Storm Recovery Bond Collateral for such purpose.

 

(b) If an Event of Default under clause (vii) of Section 5.01 shall have occurred and be continuing, the Indenture Trustee, for the benefit of the Secured Parties, shall be entitled and empowered to the extent permitted by applicable law, to institute or participate in Proceedings necessary to compel performance of or to enforce the State Pledge and to collect any monetary damages incurred by the Holders or the Indenture Trustee as a result of any such Event of Default, and may prosecute any such Proceeding to final judgment or decree.  Such remedy shall be the only remedy that the Inde nture Trustee may exercise if the only Event of Default that has occurred and is continuing is an Event of Default under Section 5.01(vii).

 

(c) If the Indenture Trustee collects any money pursuant to this Article V, it shall pay out such money in accordance with the priorities set forth in Section 8.02(e).

 

SECTION 5.05. Optional Preservation of the Storm Recovery Bond Collateral

 

.  IF THE STORM RECOVERY BONDS HAVE BEEN DECLARED TO BE DUE AND PAYABLE UNDER SECTION 5.02 FOLLOWING AN EVENT OF DEFAULT AND SUCH DECLARATION AND ITS CONSEQUENCES HAVE NOT BEEN RESCINDED AND ANNULLED, THE INDENTURE TRUSTEE MAY, BUT NEED NOT, ELECT TO MAINTAIN POSSESSION OF THE RELATED STORM RECOVERY BOND COLLATERAL.  IT IS THE DESIRE OF THE PARTIES HERETO AND THE HOLDERS THAT THERE BE AT ALL TIMES SUFFICIENT FUNDS FOR THE PAYMENT OF PRINCIPAL OF AND PREMIUM, IF ANY, AND INTEREST ON THE STORM RECOVERY BONDS, AND THE INDENTURE TRUSTEE SHALL TAKE SUCH DESIRE INTO ACCOUNT WHEN DETERMINING WHETHER OR NOT TO MAINTAIN POSSESSION OF THE STORM RECOVERY BOND COLLATERAL.  IN DETERMINING WHETHER TO MAINTAIN POSSESSION OF THE STORM RECOVERY BOND COL LATERAL OR SELL OR LIQUIDATE THE SAME, THE INDENTURE TRUSTEE MAY, BUT NEED NOT, OBTAIN AND CONCLUSIVELY RELY UPON AN OPINION OF AN INDEPENDENT INVESTMENT BANKING OR ACCOUNTING FIRM OF NATIONAL REPUTATION AS TO THE FEASIBILITY OF SUCH PROPOSED ACTION AND AS TO THE SUFFICIENCY OF THE STORM RECOVERY BOND COLLATERAL FOR SUCH PURPOSE.

 

SECTION 5.06. Limitation of Suits

 

.  NOTWITHSTANDING ANY PROVISION HEREOF TO THE CONTRARY, NO HOLDER OF ANY STORM RECOVERY BOND SHALL HAVE ANY RIGHT TO INSTITUTE ANY PROCEEDING, JUDICIAL OR OTHERWISE, TO AVAIL ITSELF OF ANY REMEDIES PROVIDED IN THE SECURITIZATION ACT OR TO AVAIL ITSELF OF THE RIGHT TO FORECLOSE ON THE STORM RECOVERY BOND COLLATERAL OR OTHERWISE ENFORCE THE LIEN AND THE SECURITY INTEREST ON THE STORM RECOVERY BOND COLLATERAL WITH RESPECT TO THIS INDENTURE AND THE SERIES SUPPLEMENT, OR FOR THE APPOINTMENT OF A RECEIVER OR TRUSTEE, OR FOR ANY OTHER REMEDY HEREUNDER, UNLESS:

 

(i) such Holder previously has given written notice to the Indenture Trustee of a continuing Event of Default;

 

(ii) the Holders of not less than a majority of the Outstanding Amount of the Storm Recovery Bonds have made written request to the Indenture Trustee to institute such Proceeding in respect of such Event of Default in its own name as Indenture Trustee hereunder;

 

(iii) such Holder or Holders have offered to the Indenture Trustee indemnity satisfactory to it against the costs, expenses and liabilities to be incurred in complying with such request;

 

(iv) the Indenture Trustee for sixty (60) days after its receipt of such notice, request and offer of indemnity has failed to institute such Proceedings; and

 

(v) no direction inconsistent with such written request has been given to the Indenture Trustee during such sixty-day period by the Holders of a majority of the Outstanding Amount of the Storm Recovery Bonds;

 

it being understood and intended that no one or more Holders shall have any right in any manner whatever by virtue of, or by availing of, any provision of this Indenture to affect, disturb or prejudice the rights of any other Holders or to obtain or to seek to obtain priority or preference over any other Holders or to enforce any right under this Indenture, except in the manner herein provided.

 

In the event the Indenture Trustee shall receive conflicting or inconsistent requests and indemnity from two or more groups of Holders, each representing less than a majority of the Outstanding Amount of the Storm Recovery Bonds, the Indenture Trustee in its sole discretion may determine what action, if any, shall be taken, notwithstanding any other provisions of this Indenture.

 

SECTION 5.07. Unconditional Rights of Holders To Receive Principal, Premium, if any, and Interest

 

.  NOTWITHSTANDING ANY OTHER PROVISIONS IN THIS INDENTURE, THE HOLDER OF ANY STORM RECOVERY BOND SHALL HAVE THE RIGHT, WHICH IS ABSOLUTE AND UNCONDITIONAL, (A) TO RECEIVE PAYMENT OF (I) THE INTEREST, IF ANY, ON SUCH STORM RECOVERY BOND ON THE DUE DATES THEREOF EXPRESSED IN SUCH STORM RECOVERY BOND OR IN THIS INDENTURE OR (II) THE UNPAID PRINCIPAL, IF ANY, OF SUCH STORM RECOVERY BONDS ON THE FINAL MATURITY DATE THEREFOR AND (B) TO INSTITUTE SUIT FOR THE ENFORCEMENT OF ANY SUCH PAYMENT, AND SUCH RIGHT SHALL NOT BE IMPAIRED WITHOUT THE CONSENT OF SUCH HOLDER.

 

SECTION 5.08. Restoration of Rights and Remedies

 

.  IF THE INDENTURE TRUSTEE OR ANY HOLDER HAS INSTITUTED ANY PROCEEDING TO ENFORCE ANY RIGHT OR REMEDY UNDER THIS INDENTURE AND SUCH PROCEEDING HAS BEEN DISCONTINUED OR ABANDONED FOR ANY REASON OR HAS BEEN DETERMINED ADVERSELY TO THE INDENTURE TRUSTEE OR TO SUCH HOLDER, THEN AND IN EVERY SUCH CASE THE ISSUER, THE INDENTURE TRUSTEE AND THE HOLDERS SHALL, SUBJECT TO ANY DETERMINATION IN SUCH PROCEEDING, BE RESTORED SEVERALLY AND RESPECTIVELY TO THEIR FORMER POSITIONS HEREUNDER, AND THEREAFTER ALL RIGHTS AND REMEDIES OF THE INDENTURE TRUSTEE AND THE HOLDERS SHALL CONTINUE AS THOUGH NO SUCH PROCEEDING HAD BEEN INSTITUTED.

 

SECTION 5.09. Rights and Remedies Cumulative

 

.  NO RIGHT OR REMEDY HEREIN CONFERRED UPON OR RESERVED TO THE INDENTURE TRUSTEE OR TO THE HOLDERS IS INTENDED TO BE EXCLUSIVE OF ANY OTHER RIGHT OR REMEDY, AND EVERY RIGHT AND REMEDY SHALL, TO THE EXTENT PERMITTED BY LAW, BE CUMULATIVE AND IN ADDITION TO EVERY OTHER RIGHT AND REMEDY GIVEN HEREUNDER OR NOW OR HEREAFTER EXISTING AT LAW OR IN EQUITY OR OTHERWISE.  THE ASSERTION OR EMPLOYMENT OF ANY RIGHT OR REMEDY HEREUNDER, OR OTHERWISE, SHALL NOT PREVENT THE CONCURRENT ASSERTION OR EMPLOYMENT OF ANY OTHER APPROPRIATE RIGHT OR REMEDY.

 

SECTION 5.10. Delay or Omission Not a Waiver

 

.  NO DELAY OR OMISSION OF THE INDENTURE TRUSTEE OR ANY HOLDER TO EXERCISE ANY RIGHT OR REMEDY ACCRUING UPON ANY DEFAULT OR EVENT OF DEFAULT SHALL IMPAIR ANY SUCH RIGHT OR REMEDY OR CONSTITUTE A WAIVER OF ANY SUCH DEFAULT OR EVENT OF DEFAULT OR AN ACQUIESCENCE THEREIN.  EVERY RIGHT AND REMEDY GIVEN BY THIS ARTICLE V OR BY LAW TO THE INDENTURE TRUSTEE OR TO THE HOLDERS MAY BE EXERCISED FROM TIME TO TIME, AND AS OFTEN AS MAY BE DEEMED EXPEDIENT, BY THE INDENTURE TRUSTEE OR BY THE HOLDERS, AS THE CASE MAY BE.

 

SECTION 5.11. Control by Holders

 

.  THE HOLDERS OF NOT LESS THAN A MAJORITY OF THE OUTSTANDING AMOUNT OF THE STORM RECOVERY BONDS SHALL HAVE THE RIGHT TO DIRECT THE TIME, METHOD AND PLACE OF CONDUCTING ANY PROCEEDING FOR ANY REMEDY AVAILABLE TO THE INDENTURE TRUSTEE WITH RESPECT TO THE STORM RECOVERY BONDS OR EXERCISING ANY TRUST OR POWER CONFERRED ON THE INDENTURE TRUSTEE WITH RESPECT TO THE STORM RECOVERY BONDS; PROVIDED THAT:

 

(i) such direction shall not be in conflict with any rule of law or with this Indenture and shall not involve the Indenture Trustee in any personal liability or expense;

 

(ii) subject to other conditions specified in Section 5.04, any direction to the Indenture Trustee to sell or liquidate any Storm Recovery Bond Collateral shall be by the Holders representing not less than 100 percent of the Outstanding Amount of the Storm Recovery Bonds;

 

(iii) if the conditions set forth in Section 5.05 have been satisfied and the Indenture Trustee elects to retain the Storm Recovery Bond Collateral pursuant to Section 5.05, then any direction to the Indenture Trustee by Holders representing less than 100 percent of the Outstanding Amount of the Storm Recovery Bonds to sell or liquidate the Storm Recovery Bond Collateral shall be of no force and effect; and

 

(iv) the Indenture Trustee may take any other action deemed proper by the Indenture Trustee that is not inconsistent with such direction;

 

provided, however, that, the Indenture Trustee’s duties shall be subject to Section 6.01, and the Indenture Trustee need not take any action that it determines might involve it in liability or might materially adversely affect the rights of any Holders not consenting to such action.  Furthermore and without limiting the foregoing, the Indenture Trustee shall not be required to take any action for which it reasonably believes that it will not be indemnified to its satisfaction against any cost, expense or liabilities.

 

SECTION 5.12. Waiver of Past Defaults

 

.  PRIOR TO THE DECLARATION OF THE ACCELERATION OF THE MATURITY OF THE STORM RECOVERY BONDS AS PROVIDED IN SECTION 5.02, THE HOLDERS REPRESENTING NOT LESS THAN A MAJORITY OF THE OUTSTANDING AMOUNT OF THE STORM RECOVERY BONDS MAY WAIVE ANY PAST DEFAULT OR EVENT OF DEFAULT AND ITS CONSEQUENCES EXCEPT A DEFAULT (A) IN PAYMENT OF PRINCIPAL OF OR PREMIUM, IF ANY, OR INTEREST ON ANY OF THE STORM RECOVERY BONDS OR (B) IN RESPECT OF A COVENANT OR PROVISION HEREOF WHICH CANNOT BE MODIFIED OR AMENDED WITHOUT THE CONSENT OF THE HOLDER OF THE STORM RECOVERY BONDS.  IN THE CASE OF ANY SUCH WAIVER, THE ISSUER, THE INDENTURE TRUSTEE AND THE HOLDERS SHALL BE RESTORED TO THEIR FORMER POSITIONS AND RIGHTS HEREUNDER, RESPECTIVELY; BUT NO SUCH WAIVER SHALL EXTEND TO ANY SUBSEQUENT OR OTHER DEFAULT OR IMPAIR ANY RIGHT CONSEQUENT THERETO.

 

Upon any such waiver, such Default shall cease to exist and be deemed to have been cured and not to have occurred, and any Event of Default arising therefrom shall be deemed to have been cured and not to have occurred, for every purpose of this Indenture; but no such waiver shall extend to any subsequent or other Default or Event of Default or impair any right consequent thereto.

 

SECTION 5.13. Undertaking for Costs

 

.  ALL PARTIES TO THIS INDENTURE AGREE, AND EACH HOLDER OF ANY STORM RECOVERY BOND BY SUCH HOLDER’S ACCEPTANCE THEREOF SHALL BE DEEMED TO HAVE AGREED, THAT ANY COURT MAY IN ITS DISCRETION REQUIRE, IN ANY SUIT FOR THE ENFORCEMENT OF ANY RIGHT OR REMEDY UNDER THIS INDENTURE, OR IN ANY SUIT AGAINST THE INDENTURE TRUSTEE FOR ANY ACTION TAKEN, SUFFERED OR OMITTED BY IT AS INDENTURE TRUSTEE, THE FILING BY ANY PARTY LITIGANT IN SUCH SUIT OF AN UNDERTAKING TO PAY THE COSTS OF SUCH SUIT, AND THAT SUCH COURT MAY IN ITS DISCRETION ASSESS REASONABLE COSTS, INCLUDING REASONABLE ATTORNEYS’ FEES, AGAINST ANY PARTY LITIGANT IN SUCH SUIT, HAVING DUE REGARD TO THE MERITS AND GOOD FAITH OF THE CLAIMS OR DEFENSES MADE BY SUCH PARTY LITIGANT; BUT THE PROVISIONS OF THIS SECTION  5.13 SHALL NOT APPLY TO (A) ANY SUIT INSTITUTED BY THE INDENTURE TRUSTEE, (B) ANY SUIT INSTITUTED BY ANY HOLDER, OR GROUP OF HOLDERS, IN EACH CASE HOLDING IN THE AGGREGATE MORE THAN TEN (10) PERCENT OF THE OUTSTANDING AMOUNT OF THE STORM RECOVERY BONDS OR (C) ANY SUIT INSTITUTED BY ANY HOLDER FOR THE ENFORCEMENT OF THE PAYMENT OF (I) INTEREST ON ANY STORM RECOVERY BOND ON OR AFTER THE DUE DATES EXPRESSED IN SUCH STORM RECOVERY BOND AND IN THIS INDENTURE OR (II) THE UNPAID PRINCIPAL, IF ANY, OF ANY STORM RECOVERY BOND ON OR AFTER THE FINAL MATURITY DATE THEREFOR.

 

SECTION 5.14. Waiver of Stay or Extension Laws

 

.  THE ISSUER COVENANTS (TO THE EXTENT THAT IT MAY LAWFULLY DO SO) THAT IT WILL NOT AT ANY TIME INSIST UPON, OR PLEAD OR IN ANY MANNER WHATSOEVER, CLAIM OR TAKE THE BENEFIT OR ADVANTAGE OF, ANY STAY OR EXTENSION LAW WHEREVER ENACTED, NOW OR AT ANY TIME HEREAFTER IN FORCE, THAT MAY AFFECT THE COVENANTS OR THE PERFORMANCE OF THIS INDENTURE; AND THE ISSUER (TO THE EXTENT THAT IT MAY LAWFULLY DO SO) HEREBY EXPRESSLY WAIVES ALL BENEFIT OR ADVANTAGE OF ANY SUCH LAW, AND COVENANTS THAT IT WILL NOT HINDER, DELAY OR IMPEDE THE EXECUTION OF ANY POWER HEREIN GRANTED TO THE INDENTURE TRUSTEE, BUT WILL SUFFER AND PERMIT THE EXECUTION OF EVERY SUCH POWER AS THOUGH NO SUCH LAW HAD BEEN ENACTED.

 

SECTION 5.15. Action on Storm Recovery Bonds

 

.  THE INDENTURE TRUSTEE’S RIGHT TO SEEK AND RECOVER JUDGMENT ON THE STORM RECOVERY BONDS OR UNDER THIS INDENTURE SHALL NOT BE AFFECTED BY THE SEEKING, OBTAINING OR APPLICATION OF ANY OTHER RELIEF UNDER OR WITH RESPECT TO THIS INDENTURE.  NEITHER THE LIEN OF THIS INDENTURE NOR ANY RIGHTS OR REMEDIES OF THE INDENTURE TRUSTEE OR THE HOLDERS SHALL BE IMPAIRED BY THE RECOVERY OF ANY JUDGMENT BY THE INDENTURE TRUSTEE AGAINST THE ISSUER OR BY THE LEVY OF ANY EXECUTION UNDER SUCH JUDGMENT UPON ANY PORTION OF THE STORM RECOVERY BOND COLLATERAL OR ANY OTHER ASSETS OF THE ISSUER.

 

ARTICLE VI

 

THE INDENTURE TRUSTEE

 

SECTION 6.01. Duties of Indenture Trustee.

 

(a) If an Event of Default has occurred and is continuing, the Indenture Trustee shall exercise the rights and powers vested in it by this Indenture and use the same degree of care and skill in their exercise as a prudent person would exercise or use under the circumstances in the conduct of such person’s own affairs.

 

(b) Except during the continuance of an Event of Default:

 

(i) the Indenture Trustee undertakes to perform such duties and only such duties as are specifically set forth in this Indenture and no implied covenants or obligations shall be read into this Indenture against the Indenture Trustee; and

 

(ii) in the absence of bad faith on its part, the Indenture Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Indenture Trustee and conforming to the requirements of this Indenture.

 

(c) The Indenture Trustee may not be relieved from liability for its own negligent action, its own bad faith, its own negligent failure to act or its own willful misconduct, except that:

 

(i) this paragraph (c) does not limit the effect of paragraph (b) of this Section 6.01;

 

(ii) the Indenture Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer unless it is proved that the Indenture Trustee was negligent in ascertaining the pertinent facts; and

 

(iii) the Indenture Trustee shall not be liable with respect to any action it takes or omits to take in good faith in accordance with a direction received by it hereunder.

 

(d) Every provision of this Indenture that in any way relates to the Indenture Trustee is subject to paragraphs (a), (b) and (c) of this Section 6.01.

 

(e) The Indenture Trustee shall not be liable for interest on any money received by it except as the Indenture Trustee may agree in writing with the Issuer.

 

(f) Money held in trust by the Indenture Trustee need not be segregated from other funds held by the Indenture Trustee except to the extent required by law or the terms of this Indenture, the Sale Agreement, the Servicing Agreement or the Administration Agreement.

 

(g) No provision of this Indenture shall require the Indenture Trustee to expend or risk its own funds or otherwise incur financial liability in the performance of any of its duties hereunder or in the exercise of any of its rights or powers, if it shall have reasonable grounds to believe that repayments of such funds or indemnity satisfactory to it against such risk or liability is not reasonably assured to it.

 

(h) Every provision of this Indenture relating to the conduct or affecting the liability of or affording protection to the Indenture Trustee shall be subject to the provisions of this Section 6.01 and to the provisions of the TIA.

 

(i) In the event that the Indenture Trustee is also acting as Paying Agent or Storm Recovery Bond Registrar hereunder, the protections of this Article VI shall also be afforded to the Indenture Trustee in its capacity as Paying Agent or Storm Recovery Bond Registrar.

 

(j) Except for the express duties of the Indenture Trustee with respect to the administrative functions set forth in the Basic Documents, the Indenture Trustee shall have no obligation to administer, service or collect Storm Recovery Property or to maintain, monitor or otherwise supervise the administration, servicing or collection of the Storm Recovery Property.

 

(k) Under no circumstance shall the Indenture Trustee be liable for any indebtedness of the Issuer, the Servicer or the Seller evidenced by or arising under the Storm Recovery Bonds or the Basic Documents.

 

(l) Until the Issuer notifies the Trustee that neither the Issuer nor the Sponsor is no longer required to make filings under the Exchange Act, on or before March 31 of each fiscal year ending December 31, the Indenture Trustee shall (i) deliver to the Issuer a report (in form and substance reasonably satisfactory to the Issuer and addressed to the Issuer and signed by an authorized officer of the Indenture Trustee) regarding the Indenture Trustee’s assessment of compliance, during the immediately preceding fiscal year ending December 31, with each of the applicable servicing criteria specified on Exhibit C hereto as required under Rules 1 3a-18 and 15d-18 of the Exchange Act and Item 1122 of Regulation AB and (ii) deliver to the Issuer a report of an Independent registered public accounting firm reasonably acceptable to the Issuer that attests to and reports on, in accordance with Rules 1-02(a)(3) and 2-02(g) of Regulation S-X under the Securities Act and the Exchange Act, the assessment of compliance made by the Indenture Trustee and delivered pursuant to clause (i).

 

SECTION 6.02. Rights of Indenture Trustee

 

.  THE INDENTURE TRUSTEE MAY CONCLUSIVELY RELY AND SHALL BE FULLY PROTECTED IN RELYING ON ANY DOCUMENT BELIEVED BY IT TO BE GENUINE AND TO HAVE BEEN SIGNED OR PRESENTED BY THE PROPER PERSON.  THE INDENTURE TRUSTEE NEED NOT INVESTIGATE ANY FACT OR MATTER STATED IN SUCH DOCUMENT.

 

(a) Before the Indenture Trustee acts or refrains from acting, it may require and shall be entitled to receive an Officer’s Certificate or an Opinion of Counsel of Independent counsel of the Issuer (at no cost or expense to the Indenture Trustee) that such action is required or permitted hereunder.  The Indenture Trustee shall not be liable for any action it takes or omits to take in good faith in reliance on such Officer’s Certificate or Opinion of Counsel.

 

(b) The Indenture Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents or attorneys or a custodian or nominee, and the Indenture Trustee shall not be responsible for any misconduct or negligence on the part of, or for the supervision of, any such agent, attorney, custodian or nominee appointed with due care by it hereunder.

 

(c) The Indenture Trustee shall not be liable for any action it takes or omits to take in good faith which it believes to be authorized or within its rights or powers; provided, however, that the Indenture Trustee’s conduct does not constitute willful misconduct, negligence or bad faith.

 

(d) The Indenture Trustee may consult with counsel, and the advice or opinion of counsel with respect to legal matters relating to this Indenture and the Storm Recovery Bonds shall be full and complete authorization and protection from liability in respect to any action taken, omitted or suffered by it hereunder in good faith and in accordance with the advice or opinion of such counsel.

 

(e) The Indenture Trustee shall be under no obligation to take any action or exercise any of the rights or powers vested in it by this Indenture or any other Basic Document, or to institute, conduct or defend any litigation hereunder or thereunder or in relation hereto or thereto, at the request, order or direction of any of the Bondholders pursuant to the provisions of this Indenture and the Series Supplement or otherwise, unless it shall have grounds to believe in its discretion that security or indemnity against the costs, expenses and liabilities which may be incurred therein or thereby is to its satisfaction assured to it.

 

SECTION 6.03. Individual Rights of Indenture Trustee

 

.  THE INDENTURE TRUSTEE IN ITS INDIVIDUAL OR ANY OTHER CAPACITY MAY BECOME THE OWNER OR PLEDGEE OF STORM RECOVERY BONDS AND MAY OTHERWISE DEAL WITH THE ISSUER OR ITS AFFILIATES WITH THE SAME RIGHTS IT WOULD HAVE IF IT WERE NOT INDENTURE TRUSTEE.  ANY PAYING AGENT, STORM RECOVERY BOND REGISTRAR, CO-REGISTRAR OR CO-PAYING AGENT OR AGENT APPOINTED UNDER SECTION 3.02 MAY DO THE SAME WITH LIKE RIGHTS.  HOWEVER, THE INDENTURE TRUSTEE MUST COMPLY WITH SECTIONS 6.11 AND 6.12.

 

SECTION 6.04. Indenture Trustee’s Disclaimer

 

.  THE INDENTURE TRUSTEE SHALL NOT BE RESPONSIBLE FOR AND MAKES NO REPRESENTATION (OTHER THAN AS SET FORTH IN SECTION 6.13) AS TO THE VALIDITY OR ADEQUACY OF THIS INDENTURE OR THE STORM RECOVERY BONDS, IT SHALL NOT BE ACCOUNTABLE FOR THE ISSUER’S USE OF THE PROCEEDS FROM THE STORM RECOVERY BONDS, AND IT SHALL NOT BE RESPONSIBLE FOR ANY STATEMENT OF THE ISSUER IN THE INDENTURE OR IN ANY DOCUMENT ISSUED IN CONNECTION WITH THE SALE OF THE STORM RECOVERY BONDS OR IN THE STORM RECOVERY BONDS OTHER THAN THE INDENTURE TRUSTEE’S CERTIFICATE OF AUTHENTICATION.  THE INDENTURE TRUSTEE SHALL NOT BE RESPONSIBLE FOR THE FORM, CHARACTER, GENUINENESS, SUFFICIENCY, VALUE OR VALIDITY OF ANY OF THE STORM RECOVERY BOND COLLATERAL, OR FOR OR IN RESPECT OF THE STORM RECOVERY BONDS (OTHER THAN THE CERTIFICATE OF AUTHENTICATION FOR THE STORM RECOVERY BONDS) OR THE BASIC DOCUMENTS AND THE INDENTURE TRUSTEE SHALL IN NO EVENT ASSUME OR INCUR ANY LIABILITY, DUTY OR OBLIGATION TO ANY HOLDER, OTHER THAN AS EXPRESSLY PROVIDED IN THIS INDENTURE.  THE INDENTURE TRUSTEE SHALL NOT BE LIABLE FOR THE DEFAULT OR MISCONDUCT OF THE ISSUER, THE SELLER, THE SERVICER OR ANY OTHER PERSON UNDER THE BASIC DOCUMENTS OR OTHERWISE, AND THE INDENTURE TRUSTEE SHALL HAVE NO OBLIGATION OR LIABILITY TO PERFORM THE OBLIGATIONS OF SUCH PERSONS.

 

SECTION 6.05. Notice of Defaults.

 

(a) If a Default occurs and is continuing and if it is actually known to a Responsible Officer of the Indenture Trustee, the Indenture Trustee shall mail to the APSC, each Rating Agency and each Bondholder notice of the Default within ninety (90) days after actual notice of such Default was received by a Responsible Officer of the Indenture Trustee.  Except in the case of a Default in payment of principal of and premium, if any, or interest on any Storm Recovery Bond, the Indenture Trustee may withhold the notice if and so long as a committee of its Responsible Officers in good faith determines that withholding the notice is in the interests of Holders.  Except for an Event of Default under Sections 5.01(i) or (ii) that occur at a time when the Indenture Trustee is acting as the Paying Agent, and except as provided in the first sentence of this Section 6.05, in no event shall the Indenture Trustee be deemed to have knowledge of a Default.

 

(b) If a Default occurs and is continuing and if it is actually known to a Responsible Officer of the Indenture Trustee, the Indenture Trustee shall promptly, but no more frequently than monthly, mail to the APSC notice of any legal fees or other expenses incurred by the Indenture Trustee in defending or prosecuting any actual or threatened litigation, including any administrative proceeding, in respect of the Storm Recovery Bonds or the Storm Recovery Bond Collateral.

 

SECTION 6.06. Reports by Indenture Trustee to Holders.

 

(a) So long as Storm Recovery Bonds are Outstanding and the Indenture Trustee is the Storm Recovery Bond Registrar and Paying Agent, upon the written request of any Holder or the Issuer, within the prescribed period of time for tax reporting purposes after the end of each calendar year, it shall deliver to each relevant current or former Holder such information in its possession as may be required to enable such Holder to prepare its federal income and any applicable local or state tax returns.  If the Storm Recovery Bond Registrar and Paying Agent is other than the Indenture Trustee, such Storm Recovery Bond Registrar and Paying Agent, within the prescribed period of time for tax reporting purposes after the end of each ca lendar year, shall deliver to each relevant current or former Holder such information in its possession as may be required to enable such Holder to prepare its federal income and any applicable local or state tax returns.

 

(b) With respect to the Storm Recovery Bonds, on or prior to the Payment Date or Special Payment Date therefor, the Indenture Trustee will deliver to the APSC and each Holder of the Storm Recovery Bonds on such Payment Date or Special Payment Date a statement as provided and prepared by the Servicer which will include (to the extent applicable) the following information (and any other information so specified in the Series Supplement) as to the Storm Recovery Bonds with respect to such Payment Date or Special Payment Date or the period since the previous Payment Date, as applicable:

 

(i) the amount of the payment to Holders allocable to principal, if any;

 

(ii) the amount of the payment to Holders allocable to interest;

 

(iii) the aggregate Outstanding Amount of such Storm Recovery Bonds, before and after giving effect to any payments allocated to principal reported under clause (i) above;

 

(iv) the difference, if any, between the amount specified in clause (iii) above and the Outstanding Amount specified in the related Expected Amortization Schedule;

 

(v) any other transfers and payments to be made on such Payment Date or Special Payment Date, including amounts paid to the Indenture Trustee and to the Servicer; and

 

(vi) the amounts on deposit in the applicable Capital Subaccount and the applicable Excess Funds Subaccount, after giving effect to the foregoing payments.

 

(c) The Issuer shall send a copy of each of the Certificate of Compliance delivered to it pursuant to Section 3.03 of the Servicing Agreement and the Annual Accountant’s Report delivered to it pursuant to Section 3.04 of the Servicing Agreement to the Rating Agencies.  A copy of such certificate and report may be obtained by any Holder by a request in writing to the Indenture Trustee.

 

(d) The Indenture Trustee may consult with counsel, and the advice or opinion of such counsel with respect to legal matters relating to this Indenture and the Storm Recovery Bonds shall be full and complete authorization and protection from liability with respect of any action taken, omitted or suffered by it hereunder in good faith and in accordance with the advice or opinion of such counsel.

 

SECTION 6.07. Compensation and Indemnity

 

.  THE ISSUER SHALL PAY TO THE INDENTURE TRUSTEE FROM TIME TO TIME REASONABLE COMPENSATION FOR ITS SERVICES.  THE INDENTURE TRUSTEE’S COMPENSATION SHALL NOT BE LIMITED BY ANY LAW ON COMPENSATION OF A TRUSTEE OF AN EXPRESS TRUST.  THE ISSUER SHALL REIMBURSE THE INDENTURE TRUSTEE FOR ALL REASONABLE OUT-OF-POCKET EXPENSES INCURRED OR MADE BY IT, INCLUDING COSTS OF COLLECTION, IN ADDITION TO THE COMPENSATION FOR ITS SERVICES.  SUCH EXPENSES SHALL INCLUDE THE REASONABLE COMPENSATION AND EXPENSES, DISBURSEMENTS AND ADVANCES OF THE INDENTURE TRUSTEE’S AGENTS, COUNSEL, ACCOUNTANTS AND EXPERTS.  THE ISSUER SHALL INDEMNIFY AND HOLD HARMLESS THE INDENTURE TRUSTEE AND ITS OFFICERS, DIRECTORS, EMPLOYEES AND AGENTS AGAINST ANY AND ALL COST, DAMAGE, LOSS, LIABILITY, TAX OR EXPENSE (INCLUD ING REASONABLE ATTORNEY’S FEES AND EXPENSES) INCURRED BY IT IN CONNECTION WITH THE ADMINISTRATION AND THE ENFORCEMENT OF THIS INDENTURE, THE SERIES SUPPLEMENT AND THE BASIC DOCUMENTS AND THE INDENTURE TRUSTEE’S RIGHTS, POWERS AND OBLIGATIONS UNDER THIS INDENTURE, THE SERIES SUPPLEMENT AND THE BASIC DOCUMENTS AND THE PERFORMANCE OF ITS DUTIES HEREUNDER AND OBLIGATIONS UNDER OR PURSUANT TO THIS INDENTURE, THE SERIES SUPPLEMENT AND THE BASIC DOCUMENTS.  THE INDENTURE TRUSTEE SHALL NOTIFY THE ISSUER AS SOON AS IS REASONABLY PRACTICABLE OF ANY CLAIM FOR WHICH IT MAY SEEK INDEMNITY.  FAILURE BY THE INDENTURE TRUSTEE TO SO NOTIFY THE ISSUER SHALL NOT RELIEVE THE ISSUER OF ITS OBLIGATIONS HEREUNDER.  THE ISSUER SHALL DEFEND THE CLAIM AND THE INDENTURE TRUSTEE MAY HAVE SEPARATE COUNSEL AND THE ISSUER SHALL PAY THE REASONABLE FEES AND EXPENSES OF SUCH COUNSEL.  THE ISSUER NEED NOT REIMBURSE ANY EXPENSE OR INDEMNIFY AGAINST ANY LOSS, LIABILITY OR EXPENSE INCURRED BY T HE INDENTURE TRUSTEE THROUGH THE INDENTURE TRUSTEE’S OWN WILLFUL MISCONDUCT, NEGLIGENCE OR BAD FAITH.  THE RIGHTS OF THE INDENTURE TRUSTEE SET FORTH IN THIS SECTION 6.07 ARE SUBJECT TO AND LIMITED BY THE PRIORITY OF PAYMENTS SET FORTH IN SECTION 8.02(E).

 

The payment obligations to the Indenture Trustee pursuant to this Section 6.07 shall survive the discharge of this Indenture and the Series Supplement or the earlier resignation or removal of the Indenture Trustee.  When the Indenture Trustee incurs expenses after the occurrence of a Default specified in Section 5.01(v) or (vi) with respect to the Issuer, the expenses are intended to constitute expenses of administration under the Bankruptcy Code or any other applicable federal or state bankruptcy, insolvency or similar law.

 

SECTION 6.08. Replacement of Indenture Trustee and Securities Intermediary.

 

(a) The Indenture Trustee may resign at any time upon thirty (30) days’ prior written notice to the Issuer subject to clause (c) below.  The Holders of a majority of the Outstanding Amount of the Storm Recovery Bonds may remove the Indenture Trustee by so notifying the Indenture Trustee and may appoint a successor Indenture Trustee.  The Issuer shall remove the Indenture Trustee if:

 

(i) the Indenture Trustee fails to comply with Section 6.11;

 

(ii) the Indenture Trustee is adjudged a bankrupt or insolvent;

 

(iii) a receiver or other public officer takes charge of the Indenture Trustee or its property;

 

(iv) the Indenture Trustee otherwise becomes incapable of acting; or

 

(v) the Indenture Trustee fails to provide to the Issuer any information reasonably requested by the Issuer pertaining to the Indenture Trustee and necessary for the Issuer or the Sponsor to comply with its reporting obligations under the Exchange Act and Regulation AB and such failure is not resolved to the Issuer’s and the Indenture Trustee’s mutual satisfaction within a reasonable period of time.

 

Any removal or resignation of the Indenture Trustee shall also constitute a removal or resignation of the Securities Intermediary.

 

(b) If the Indenture Trustee gives notice of resignation or is removed or if a vacancy exists in the office of Indenture Trustee for any reason (the Indenture Trustee in such event being referred to herein as the retiring Indenture Trustee), the Issuer shall promptly appoint a successor Indenture Trustee and Securities Intermediary.

 

(c) A successor Indenture Trustee shall deliver a written acceptance of its appointment as the Indenture Trustee and as the Securities Intermediary to the retiring Indenture Trustee and to the Issuer.  Thereupon the resignation or removal of the retiring Indenture Trustee shall become effective, and the successor Indenture Trustee shall have all the rights, powers and duties of the Indenture Trustee and Securities Intermediary, as applicable, under this Indenture.  No resignation or removal of the Indenture Trustee pursuant to this Section 6.08 shall become effective until acceptance of the appointment by a successor Indenture Trustee having the qualifications set forth in Section 6.11.  The successor Indenture Trustee shall mail a notice of its succession to Holders.  The retiring Indenture Trustee shall promptly transfer all property held by it as Indenture Trustee to the successor Indenture Trustee.

 

(d) If a successor Indenture Trustee does not take office within sixty (60) days after the retiring Indenture Trustee resigns or is removed, the retiring Indenture Trustee, the Issuer or the Holders of a majority in Outstanding Amount of the Storm Recovery Bonds may petition any court of competent jurisdiction for the appointment of a successor Indenture Trustee.

 

(e) If the Indenture Trustee fails to comply with Section 6.11, any Holder may petition any court of competent jurisdiction for the removal of the Indenture Trustee and the appointment of a successor Indenture Trustee.

 

(f) Notwithstanding the replacement of the Indenture Trustee pursuant to this Section 6.08, the Issuer’s obligations under Section 6.07 shall continue for the benefit of the retiring Indenture Trustee.

 

SECTION 6.09. Successor Indenture Trustee by Merger

 

.  IF THE INDENTURE TRUSTEE CONSOLIDATES WITH, MERGES OR CONVERTS INTO, OR TRANSFERS ALL OR SUBSTANTIALLY ALL ITS CORPORATE TRUST BUSINESS OR ASSETS TO, ANOTHER CORPORATION OR BANKING ASSOCIATION, THE RESULTING, SURVIVING OR TRANSFEREE CORPORATION OR BANKING ASSOCIATION WITHOUT ANY FURTHER ACT SHALL BE THE SUCCESSOR INDENTURE TRUSTEE; PROVIDED, HOWEVER, THAT IF SUCH SUCCESSOR INDENTURE TRUSTEE IS NOT ELIGIBLE UNDER SECTION 6.11, THEN THE SUCCESSOR INDENTURE TRUSTEE SHALL BE REPLACED IN ACCORDANCE WITH SECTION 6.08.  NOTICE OF ANY SUCH EVENT SHALL BE PROMPTLY GIVEN TO EACH RATING AGENCY BY THE SUCCESSOR INDENTURE T RUSTEE AND ANY AGENT IN IRELAND APPOINTED PURSUANT TO SECTION 3.02.

 

In case at the time such successor or successors by merger, conversion, consolidation or transfer shall succeed to the trusts created by this Indenture any of the Storm Recovery Bonds shall have been authenticated but not delivered, any such successor to the Indenture Trustee may adopt the certificate of authentication of any predecessor trustee, and deliver such Storm Recovery Bonds so authenticated; and in case at that time any of the Storm Recovery Bonds shall not have been authenticated, any successor to the Indenture Trustee may authenticate such Storm Recovery Bonds either in the name of any predecessor hereunder or in the name of the successor to the Indenture Trustee; and in all such cases such certificates shall have the full force which it is anywhere in the Storm Recovery Bonds or in this Indenture provided that the certific ate of the Indenture Trustee shall have.

 

SECTION 6.10. Appointment of Co-Trustee or Separate Trustee.

 

(a) Notwithstanding any other provisions of this Indenture, at any time, for the purpose of meeting any legal requirement of any jurisdiction in which any part of the trust created by this Indenture or the Storm Recovery Bond Collateral may at the time be located, the Indenture Trustee shall have the power and may execute and deliver all instruments to appoint one or more Persons to act as a co-trustee or co-trustees, or separate trustee or separate trustees, of all or any part of the trust created by this Indenture or the Storm Recovery Bond Collateral, and to vest in such Person or Persons, in such capacity and for the benefit of the Secured Parties, such title to the Storm Recovery Bond Collateral, or any part hereof, and, subject to the other provisions of this Section 6.10, such powers, duties, obligations, rights and trusts as the Indenture Trustee may consider necessary or desirable.  No co-trustee or separate trustee hereunder shall be required to meet the terms of eligibility as a successor trustee under Section 6.11 and no notice to Holders of the appointment of any co-trustee or separate trustee shall be required under Section 6.08.

 

(b) Every separate trustee and co-trustee shall, to the extent permitted by law, be appointed and act subject to the following provisions and conditions:

 

(i) all rights, powers, duties and obligations conferred or imposed upon the Indenture Trustee shall be conferred or imposed upon and exercised or performed by the Indenture Trustee and such separate trustee or co-trustee jointly (it being understood that such separate trustee or co-trustee is not authorized to act separately without the Indenture Trustee joining in such act), except to the extent that under any law of any jurisdiction in which any particular act or acts are to be performed the Indenture Trustee shall be incompetent or unqualified to perform such act or acts, in which event such rights, powers, duties and obligations (including the holding of title to the Storm Recove ry Bond Collateral or any portion thereof in any such jurisdiction) shall be exercised and performed singly by such separate trustee or co-trustee, but solely at the direction of the Indenture Trustee;

 

(ii) no trustee hereunder shall be personally liable by reason of any act or omission of any other trustee hereunder; and

 

(iii) the Indenture Trustee may at any time accept the resignation of or remove any separate trustee or co-trustee.

 

(c) Any notice, request or other writing given to the Indenture Trustee shall be deemed to have been given to each of the then separate trustees and co-trustees, as effectively as if given to each of them.  Every instrument appointing any separate trustee or co-trustee shall refer to this Indenture and the conditions of this Article VI.  Each separate trustee and co-trustee, upon its acceptance of the trusts conferred, shall be vested with the estates or property specified in its instrument of appointment, either jointly with the Indenture Trustee or separately, as may be provided therein, subject to all the provisions of this Indenture, specifi cally including every provision of this Indenture relating to the conduct of, affecting the liability of, or affording protection to, the Indenture Trustee.  Every such instrument shall be filed with the Indenture Trustee.

 

(d) Any separate trustee or co-trustee may at any time constitute the Indenture Trustee, its agent or attorney-in-fact with full power and authority, to the extent not prohibited by law, to do any lawful act under or in respect of this Indenture on its behalf and in its name.  If any separate trustee or co-trustee shall die, become incapable of acting, resign or be removed, all of its estates, properties, rights, remedies and trusts shall vest in and be exercised by the Indenture Trustee, to the extent permitted by law, without the appointment of a new or successor trustee.

 

SECTION 6.11. Eligibility; Disqualification

 

.  THE INDENTURE TRUSTEE SHALL AT ALL TIMES SATISFY THE REQUIREMENTS OF TIA § 310(A)(1) AND § 310(A)(5) AND SECTION 26(A)(1) OF THE INVESTMENT COMPANY ACT.  THE INDENTURE TRUSTEE SHALL HAVE A COMBINED CAPITAL AND SURPLUS OF AT LEAST $50,000,000 AS SET FORTH IN ITS MOST RECENT PUBLISHED ANNUAL REPORT OF CONDITION AND IT SHALL HAVE A LONG TERM DEBT RATING OF “BAA3” OR BETTER BY MOODY’S “BBB-” OR BETTER BY STANDARD & POOR’S AND, IF FITCH PROVIDES A RATING THEREON, “BBB-” OR BETTER BY FITCH.  THE INDENTURE TRUSTEE SHALL COMPLY WITH TIA § 310(B), INCLUDING THE OPTIONAL PROVISION PERMITTED BY THE SECOND SENTENCE OF TIA § 310(B)(9); PROVIDED, HOWEVER, THAT THERE SHALL BE EXCLUDED FROM THE OPERATION OF TIA § 310(B)(1) ANY INDENTURE OR INDENTURES UNDER WHICH OTHER SECURITIES OF THE ISSUER ARE OUTSTANDING IF THE REQUIREMENTS FOR SUCH EXCLUSION SET FORTH IN TIA § 310(B)(1) ARE MET.

 

SECTION 6.12. Preferential Collection of Claims Against Issuer

 

.  THE INDENTURE TRUSTEE SHALL COMPLY WITH TIA § 311(A), EXCLUDING ANY CREDITOR RELATIONSHIP LISTED IN TIA § 311(B).  AN INDENTURE TRUSTEE WHO HAS RESIGNED OR BEEN REMOVED SHALL BE SUBJECT TO TIA § 311(A) TO THE EXTENT INDICATED THEREIN.

 

SECTION 6.13. Representations and Warranties of Indenture Trustee

 

.  THE INDENTURE TRUSTEE HEREBY REPRESENTS AND WARRANTS THAT:

 

(a) the Indenture Trustee is a banking corporation validly existing and in good standing under the laws of the State of New York; and

 

(b) the Indenture Trustee has full power, authority and legal right to execute, deliver and perform this Indenture and the Basic Documents to which the Indenture Trustee is a party and has taken all necessary action to authorize the execution, delivery, and performance by it of this Indenture and such Basic Documents.

 

SECTION 6.14. Annual Report by Independent Registered Public Accountants

 

.  IN THE EVENT THE FIRM OF INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS REQUIRES THE INDENTURE TRUSTEE TO AGREE OR CONSENT TO THE PROCEDURES PERFORMED BY SUCH FIRM PURSUANT TO SECTION 3.04 OF THE SERVICING AGREEMENT, THE INDENTURE TRUSTEE SHALL DELIVER SUCH LETTER OF AGREEMENT OR CONSENT IN CONCLUSIVE RELIANCE UPON THE DIRECTION OF THE ISSUER IN ACCORDANCE WITH SECTION 3.04 OF THE SERVICING AGREEMENT.  IN THE EVENT SUCH FIRM REQUIRES THE INDENTURE TRUSTEE TO AGREE TO THE PROCEDURES PERFORMED BY SUCH FIRM, THE ISSUER SHALL DIRECT THE INDENTURE TRUSTEE IN WRITING TO SO AGREE; IT BEING UNDERSTOOD AND AGREED THAT THE INDENTURE TRUSTEE WILL DELIVER SUCH LETTER OF AGREEMENT IN CONCLUSIVE RELIANCE UPON THE DIRECTION OF THE ISSUER, AND THE INDENTURE TRUSTEE MAKES NO INDEPENDENT INQUIRY OR INVESTIGATION TO, AND SHAL L HAVE NO OBLIGATION OR LIABILITY IN RESPECT OF, THE SUFFICIENCY, VALIDITY OR CORRECTNESS OF SUCH PROCEDURES.

 

SECTION 6.15. Custody of Storm Recovery Bond Collateral

 

.  THE INDENTURE TRUSTEE SHALL HOLD SUCH OF THE STORM RECOVERY BOND COLLATERAL (AND ANY OTHER COLLATERAL THAT MAY BE GRANTED TO THE INDENTURE TRUSTEE) AS CONSISTS OF INSTRUMENTS, DEPOSIT ACCOUNTS, NEGOTIABLE DOCUMENTS, MONEY, GOODS, LETTERS OF CREDIT, AND ADVICES OF CREDIT IN THE STATE OF NEW YORK.  THE INDENTURE TRUSTEE SHALL HOLD SUCH OF THE STORM RECOVERY BOND COLLATERAL AS CONSTITUTE INVESTMENT PROPERTY THROUGH THE SECURITIES INTERMEDIARY (WHICH, AS OF THE DATE HEREOF, IS THE BANK OF NEW YORK MELLON).  THE INITIAL SECURITIES INTERMEDIARY, HEREBY AGREES (AND EACH FUTURE SECURITIES INTERMEDIARY SHALL AGREE) WITH THE INDENTURE TRUSTEE THAT (A) SUCH INVESTMENT PROPERTY SHALL AT ALL TIMES BE CREDITED TO A SECURITIES ACCOUNT OF THE INDENTURE TRUSTEE, (B) THE SECURITIES INTERMEDIARY SHALL TREAT THE INDENTURE TRUSTEE AS ENTITLED TO EXERCISE THE RIGHTS THAT COMPRISE EACH FINANCIAL ASSET CREDITED TO SUCH SECURITIES ACCOUNT, (C) ALL PROPERTY CREDITED TO SUCH SECURITIES ACCOUNT SHALL BE TREATED AS A FINANCIAL ASSET, (D) THE SECURITIES INTERMEDIARY SHALL COMPLY WITH ENTITLEMENT ORDERS ORIGINATED BY THE INDENTURE TRUSTEE WITHOUT THE FURTHER CONSENT OF ANY OTHER PERSON OR ENTITY, (E) THE SECURITIES INTERMEDIARY WILL NOT AGREE WITH ANY PERSON OTHER THAN THE INDENTURE TRUSTEE TO COMPLY WITH ENTITLEMENT ORDERS ORIGINATED BY SUCH OTHER PERSON, (F) SUCH SECURITIES ACCOUNTS AND THE PROPERTY CREDITED THERETO SHALL NOT BE SUBJECT TO ANY LIEN, OR RIGHT OF SET-OFF IN FAVOR OF THE SECURITIES INTERMEDIARY OR ANYONE CLAIMING THROUGH IT (OTHER THAN THE INDENTURE TRUSTEE), AND (G) SUCH AGREEMENT SHALL BE GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK.  TERMS USED IN THE PRECEDING SENTENCE THAT ARE DEFINED IN THE UCC AND NOT OTHERWISE DEFINED HEREIN SHALL HAVE THE MEANING SET FORTH IN THE UCC.  EXCEPT AS PERMITTED BY THIS SECTION 6.15, OR ELSEWHERE IN THIS INDENTURE, THE INDENTURE TRUSTEE SHALL NOT HOLD STORM RECOVERY BOND COLLATERAL THROUGH AN AGENT OR A NOMINEE.

 

ARTICLE VII

 

HOLDERS’ LISTS AND REPORTS

 

SECTION 7.01. Issuer To Furnish Indenture Trustee Names and Addresses of Holders

 

.  THE ISSUER WILL FURNISH OR CAUSE TO BE FURNISHED TO THE INDENTURE TRUSTEE (A) NOT MORE THAN FIVE (5) DAYS AFTER THE EARLIER OF (I) EACH RECORD DATE AND (II) SIX (6) MONTHS AFTER THE LAST RECORD DATE, A LIST, IN SUCH FORM AS THE INDENTURE TRUSTEE MAY REASONABLY REQUIRE, OF THE NAMES AND ADDRESSES OF THE BONDHOLDERS AS OF SUCH RECORD DATE, (B) AT SUCH OTHER TIMES AS THE INDENTURE TRUSTEE MAY REQUEST IN WRITING, WITHIN THIRTY (30) DAYS AFTER RECEIPT BY THE ISSUER OF ANY SUCH REQUEST, A LIST OF SIMILAR FORM AND CONTENT AS OF A DATE NOT MORE THAN TEN (10) DAYS PRIOR TO THE TIME SUCH LIST IS FURNISHED; PROVIDED, HOWEVER, THAT SO LONG AS THE INDENTURE TRUSTEE IS THE STORM RECOVERY BOND REGISTRAR, NO SUCH LIST SHALL BE REQUIRED TO BE FURNISHED.

 

SECTION 7.02. Preservation of Information; Communications to Holders.

 

(a) The Indenture Trustee shall preserve, in as current a form as is reasonably practicable, the names and addresses of the Holders contained in the most recent list furnished to the Indenture Trustee as provided in Section 7.01 and the names and addresses of Holders received by the Indenture Trustee in its capacity as Storm Recovery Bond Registrar.  The Indenture Trustee may destroy any list furnished to it as provided in such Section 7.01 upon receipt of a new list so furnished.

 

(b) Holders may communicate pursuant to TIA § 312(b) with other Holders with respect to their rights under this Indenture or under the Storm Recovery Bonds.  In addition, upon the written request of any Holder or group of Holders of Storm Recovery Bonds evidencing not less than 10 percent of the Outstanding Amount of the Storm Recovery Bonds, the Indenture Trustee shall afford the Holder or Holders making such request a copy of a current list of Holders of the Storm Recovery Bonds for purposes of communicating with other Holders with respect to their rights hereunder.

 

(c) The Issuer, the Indenture Trustee and the Storm Recovery Bond Registrar shall have the protection of TIA § 312(c).

 

SECTION 7.03. Reports by Issuer.

 

(a) The Issuer shall so long as the Issuer or the Sponsor is required to file such documents with the SEC:

 

(i) provide to the Indenture Trustee, within fifteen (15) days after the Issuer is required to file the same with the SEC, copies of the annual reports and of the information, documents and other reports (or copies of such portions of any of the foregoing as the SEC may from time to time by rules and regulations prescribe) which the Issuer or the Sponsor may be required to file with the SEC pursuant to Section 13 or 15(d) of the Exchange Act;

 

(ii) provide to the Indenture Trustee and file with the SEC, in accordance with rules and regulations prescribed from time to time by the SEC such additional information, documents and reports with respect to compliance by the Issuer with the conditions and covenants of this Indenture as may be required from time to time by such rules and regulations; and

 

(iii) supply to the Indenture Trustee (and the Indenture Trustee shall transmit by mail to all Holders described in TIA § 313(c)), such summaries of any information, documents and reports required to be filed by the Issuer pursuant to clauses (i) and (ii) of this Section 7.03(a) as may be required by rules and regulations prescribed from time to time by the SEC.

 

(b) Unless the Issuer otherwise determines, the fiscal year of the Issuer shall end on December 31 of each year.

 

SECTION 7.04. Reports by Indenture Trustee

 

.  IF REQUIRED BY TIA § 313(A), WITHIN SIXTY (60) DAYS AFTER DECEMBER 31 OF EACH YEAR, COMMENCING WITH THE YEAR AFTER THE ISSUANCE OF THE STORM RECOVERY BONDS, THE INDENTURE TRUSTEE SHALL MAIL TO EACH BONDHOLDER AS REQUIRED BY TIA § 313(C) A BRIEF REPORT DATED AS OF SUCH DATE THAT COMPLIES WITH TIA § 313(A).  THE INDENTURE TRUSTEE ALSO SHALL COMPLY WITH TIA § 313(B); PROVIDED, HOWEVER, THAT THE INITIAL REPORT SO ISSUED SHALL BE DELIVERED NOT MORE THAN TWELVE (12) MONTHS AFTER THE CLOSING DATE.

 

A copy of each report at the time of its mailing to Holders shall be filed by the Servicer with the SEC and each stock exchange, if any, on which the Storm Recovery Bonds are listed.  The Issuer shall notify the Indenture Trustee in writing if and when the Storm Recovery Bonds are listed on any stock exchange.

 

ARTICLE VIII

 

ACCOUNTS, DISBURSEMENTS AND RELEASES

 

SECTION 8.01. Collection of Money

 

.  EXCEPT AS OTHERWISE EXPRESSLY PROVIDED HEREIN, THE INDENTURE TRUSTEE MAY DEMAND PAYMENT OR DELIVERY OF, AND SHALL RECEIVE AND COLLECT, DIRECTLY AND WITHOUT INTERVENTION OR ASSISTANCE OF ANY FISCAL AGENT OR OTHER INTERMEDIARY, ALL MONEY AND OTHER PROPERTY PAYABLE TO OR RECEIVABLE BY THE INDENTURE TRUSTEE PURSUANT TO THIS INDENTURE AND THE OTHER BASIC DOCUMENTS.  THE INDENTURE TRUSTEE SHALL APPLY ALL SUCH MONEY RECEIVED BY IT AS PROVIDED IN THIS INDENTURE.  EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN THIS INDENTURE, IF ANY DEFAULT OCCURS IN THE MAKING OF ANY PAYMENT OR PERFORMANCE UNDER ANY AGREEMENT OR INSTRUMENT THAT IS PART OF THE STORM RECOVERY BOND COLLATERAL, THE INDENTURE TRUSTEE MAY TAKE SUCH ACTION AS MAY BE APPROPRIATE TO ENFORCE SUCH PAYMENT OR PERFORMANCE, SUBJECT TO ARTICLE VI, INCLUDING THE INSTITUTION AND PROSECUTION OF APPROPRIATE PROCEEDINGS.  ANY SUCH ACTION SHALL BE WITHOUT PREJUDICE TO ANY RIGHT TO CLAIM A DEFAULT OR EVENT OF DEFAULT UNDER THIS INDENTURE AND ANY RIGHT TO PROCEED THEREAFTER AS PROVIDED IN ARTICLE V.

 

SECTION 8.02. Collection Account.

 

(a) Prior to the Closing Date, the Issuer shall open or cause to be opened, at the Indenture Trustee’s office located at the Corporate Trust Office, or at another Eligible Institution, a segregated trust account in the Indenture Trustee’s name for the deposit of SRC Remittances and all other amounts received with respect to the Storm Recovery Bond Collateral (the “Collection Account”).  The Collection Account will consist of three subaccounts:  a general subaccount (the “General Subaccount”), an excess funds subaccount (the “Excess Funds Subaccount”) and a capital subaccount (the “Capital Subaccount” and, together with the General Subaccount and the Excess Funds Subaccount, the “Subaccounts”); provided that the Series Supplement may provide for the establishment of a cost of issuance subaccount to provide for the application of Storm Recovery Bond proceeds to the payment of the costs of issuing the Storm Recovery Bonds.  For administrative purposes, the Subaccounts may, but need not, be established by the Indenture Trustee as separate accounts.  Such separate accounts will be recognized individually as a Subaccount and collectively as the “Collection Account.”  Prior to or concurrently with the issuance of the Storm Recovery Bonds, the Member shall deposit into the Capital Subaccount an amount equal to the Required Capital Level for the Storm Recovery Bonds.  All amounts in the Collection Account not allocated to any other subaccount shall be allocated to the General Subaccount.  Prior to the initial Payment Date, all amounts in the Collection Account (other than funds deposited into the Capital Subaccount, up to the Required Capital Level for the Storm Recovery Bonds) shall be allocated to the General Subaccount.  All references to the Collection Account shall be deemed to include reference to all subaccounts contained therein.  Withdrawals from and deposits to each of the foregoing subaccounts of the Collection Account shall be made as set forth in Section 8.02(d) and (e).  The Collection Account shall at all times be maintained in an Eligible Account, will be under the sole dominion and exclusive control of the Indenture Trustee, and only the Indenture Trustee shall have access to the Collection Account for the purpose of making deposits in and withdrawals from the Collection Account in accordance with this Indenture.  Funds in the Collection Account shall not be commingled with any other moneys.  All moneys deposited from time to time in the Collection Account, all deposits therein pursuant to this Indenture, and all investments made in Eligible Investments as directed in writing by the Issuer with such moneys, including all income or other gain from such investments, shall be held by the Indenture Trustee in the Collection Account as part of the Storm Recovery Bond Collateral as herein provided.  The Indenture Trustee shall have no liability in respect of losses incurred as a result of the liquidation of any Eligible Investment prior to its stated maturity or its date of redemption or the failure of the Issuer or the Servicer to provide timely written investment direction.

 

(b) The Securities Intermediary hereby confirms that (i) the Collection Account is, or at inception will be established as, a “securities account” as such term is defined in Section 8-501(a) of the UCC, (ii) it is a “securities intermediary” (as such term is defined in Section 8-102(a) (14) of the UCC) and is acting in such capacity with respect to such accounts, and (iii) the Indenture Trustee for the benefit of the Secured Parties is the sole “entitlement holder” (as such term is defined in Section 8-102(a)(7) of the UCC) with respect to such accounts and no other Person shall have the right to give “entitlement orders” (as such term is defined in Section  8-102(a)(8)) with respect to such accounts.  The Securities Intermediary hereby further agrees that each item of property (whether investment property, financial asset, security, instrument or cash) received by it will be credited to the Collection Account and shall be treated by it as a “financial asset” within the meaning of Section 8-102(a)(9) of the UCC.  Notwithstanding anything to the contrary, New York State shall be deemed to be the location and jurisdiction of the Securities Intermediary for purposes of Section 8-110 of the UCC, and the Collection Account (as well as the securities entitlements related thereto) shall be governed by the laws of the State of New York.

 

(c) The Indenture Trustee shall have sole dominion and exclusive control over all moneys in the Collection Account and shall apply such amounts therein as provided in this Section 8.02.

 

(d) SRC Remittances shall be deposited in the General Subaccount as provided in Section 6.11 of the Servicing Agreement.  All deposits to and withdrawals from the Collection Account, all allocations to the subaccounts of the Collection Account and any amounts to be paid to the Servicer under Section 8.02(c) shall be made by the Indenture Trustee in accordance with the written instructions provided by the Servicer in the Semi-Annual Servicer’s Certificate.

 

(e) On each Payment Date for the Storm Recovery Bonds, the Indenture Trustee shall apply all amounts on deposit in the Collection Account, including all net earnings thereon, to pay the following amounts, in accordance with the Semi-Annual Servicer’s Certificate, in the following priority:

 

(i) all amounts owed by the Issuer to the Indenture Trustee (including legal fees and expenses) shall be paid to the Indenture Trustee (subject to Section 6.07) in an amount not to exceed annually the amount set forth in the Series Supplement;

 

(ii) the Servicing Fee for such Payment Date and all unpaid Servicing Fees for prior Payment Dates shall be paid to the Servicer;

 

(iii) the Administration Fee for such Payment Date shall be paid to the Administrator and the Independent Manager Fee for such Payment Date shall be paid to the Independent Manager;

 

(iv) all other Operating Expenses for such Payment Date not described above shall be paid to the parties to which such Operating Expenses are owed;

 

(v) Periodic Interest for such Payment Date, including any overdue Periodic Interest (together with, to the extent lawful, interest on such overdue Periodic Interest at the applicable Storm Recovery Bond Interest Rate), with respect to the Storm Recovery Bonds shall be paid to the Holders of the Storm Recovery Bonds;

 

(vi) principal due and payable on the Storm Recovery Bonds as a result of an Event of Default or on the Final Maturity Date of the Storm Recovery Bonds shall be paid to the Holders of the Storm Recovery Bonds;

 

(vii) Periodic Principal for such Payment Date, including any overdue Periodic Principal, with respect to the Storm Recovery Bonds shall be paid to the Holders of the Storm Recovery Bonds in the order provided in the Series Supplement;

 

(viii) any other unpaid Operating Expenses, fees, expenses and indemnity amounts owed to the Indenture Trustee;

 

(ix) the amount, if any, by which the Required Capital Level with respect to the Storm Recovery Bonds exceeds the amount in the Capital Subaccount as of such Payment Date shall be allocated to the Capital Subaccount;

 

(x) if there is a positive balance after making the foregoing allocations, provided that no Event of Default has occurred or is continuing, an amount not to exceed the lesser of such balance and the investment earnings on the Capital Subaccount shall be paid to the Issuer;

 

(xi) the balance, if any, shall be allocated to the Excess Funds Subaccount for distribution on subsequent Payment Dates; and

 

(xii) after principal of and premium, if any, and interest on all Storm Recovery Bonds, and all of the other foregoing amounts, have been paid in full, including, without limitation, amounts due and payable to the Indenture Trustee under Section 6.07 or otherwise, the balance (including all amounts then held in the Capital Subaccount and the Excess Funds Subaccount), if any, shall be paid to the Issuer, free from the Lien of this Indenture and the Series Supplement.

 

All payments to the Holders pursuant to clauses (v), (vi) and (vii) above shall be made to such Holders pro rata based on the respective amounts of interest and/or principal owed.  Payments in respect of principal of and premium, if any, and interest on the Storm Recovery Bonds will be made on a pro rata basis among all the Holders.  In the case of an Event of Default, then, in accordance with Section 5.04(c), moneys will be applied pursuant to clauses (v) and (vi), in such order, on a pro rata basis, based upon the interest or the principal owed.

 

The amounts paid during any calendar year pursuant to clauses (i) and (iv) may not exceed the amounts set forth in the Series Supplement.

 

(f) If on any Payment Date funds on deposit in the General Subaccount are insufficient to make the payments contemplated by clauses (i) through (viii) of Section 8.02(e), the Indenture Trustee shall (i) first, draw from amounts on deposit in the Excess Funds Subaccount and (ii) second, draw from amounts on deposit in the Capital Subaccount, in each case, up to the amount of such shortfall in ord er to make the payments contemplated by clauses (i) through (viii) of Section 8.02(e).  In addition, if on any Payment Date funds on deposit in the General Subaccount are insufficient to make the allocations contemplated by clause (ix) above, the Indenture Trustee shall draw from amounts on deposit in the Excess Funds Subaccount to make such allocations.

 

SECTION 8.03. General Provisions Regarding the Collection Account.

 

(a) So long as no Default or Event of Default shall have occurred and be continuing, all or a portion of the funds in the Collection Account shall be invested in Eligible Investments and reinvested by the Indenture Trustee upon Issuer Order; provided, however, that (i) such Eligible Investments shall not mature or be redeemed later than the Business Day prior to the next Payment Date or Special Payment Date, if applicable, for the Storm Recovery Bonds and (ii) such Eligible Investments shall not be sold, liquidated or otherwise disposed of at a loss prior to the maturity or the date of redemption thereof.  All income or other gain from investments of moneys deposited in the Collection Account shall be deposited by the Indenture Trustee in the Collection Account, and any loss resulting from such investments shall be charged to the Collection Account.  The Issuer will not direct the Indenture Trustee to make any investment of any funds or to sell any investment held in the Collection Account unless the security interest Granted and perfected in such account will continue to be perfected in such investment or the proceeds of such sale, in either case without any further action by any Person, and, in connection with any direction to the Indenture Trustee to make any such investment or sale, if requested by the Indenture Trustee, the Issuer shall deliver to the Indenture Trustee an Opinion of Counsel of Independent counsel of the Issuer (at the Issuer’s cost and expense) to such effect.  In no event shall the Indenture Trustee be liable for the selection of Eligible In vestments or for investment losses incurred thereon.  The Indenture Trustee shall have no liability in respect of losses incurred as a result of the liquidation of any Eligible Investment prior to its stated maturity or its date of redemption or the failure of the Issuer or the Servicer to provide timely written investment direction.  The Indenture Trustee shall have no obligation to invest or reinvest any amounts held hereunder in the absence of written investment direction pursuant to an Issuer Order.

 

(b) Subject to Section 6.01(c), the Indenture Trustee shall not in any way be held liable by reason of any insufficiency in the Collection Account resulting from any loss on any Eligible Investment included therein except for losses attributable to the Indenture Trustee’s failure to make payments on such Eligible Investments issued by the Indenture Trustee, in its commercial capacity as principal obligor and not as trustee, in accordance with their terms.

 

(c) If (i) the Issuer shall have failed to give written investment directions for any funds on deposit in the Collection Account to the Indenture Trustee by 11:00 a.m. Eastern Time (or such other time as may be agreed by the Issuer and Indenture Trustee) on any Business Day; or (ii) a Default or Event of Default shall have occurred and be continuing with respect to the Storm Recovery Bonds but the Storm Recovery Bonds shall not have been declared due and payable pursuant to Section 5.02, then the Indenture Trustee shall, to the fullest extent practicable, invest and reinvest funds in the Collection Account in one or more money market funds described under clause (d) of the definition of “Eligible Investments” pursuant to the most recent written investment directions delivered by the Issuer to the Indenture Trustee with respect to such type of Eligible Investments; provided that if the Issuer has never delivered written investment directions to the Indenture Trustee, the Indenture Trustee shall not invest or reinvest such funds in any investments.

 

(d) The parties hereto acknowledge that the Servicer may, pursuant to the Servicing Agreement, select Eligible Investments on behalf of the Issuer.

 

SECTION 8.04. Release of Storm Recovery Bond Collateral.

 

(a) So long as the Issuer is not in default hereunder and no Default hereunder would occur as a result of such action, the Issuer, through the Servicer, may collect, sell or otherwise dispose of written-off receivables, at any time and from time to time in the ordinary course of business, without any notice to, or release or consent by, the Indenture Trustee, but only as and to the extent permitted by the Basic Documents; provided, however, that any and all proceeds of such dispositions shall become Storm Recovery Bond Collateral and be deposited to the General Subaccount immediately upon receipt thereof b y the Issuer or any other Person, including the Servicer.  Without limiting the foregoing, the Servicer, may, at any time and from time to time without any notice to, or release or consent by, the Indenture Trustee, sell or otherwise dispose of any Storm Recovery Bond Collateral which is part of a Bill previously written-off as a defaulted or uncollectible account in accordance with the terms of the Servicing Agreement and the requirements of the proviso in the immediately preceding sentence.

 

(b) The Indenture Trustee may, and when required by the provisions of this Indenture shall, execute instruments to release property from the Lien of this Indenture, or convey the Indenture Trustee’s interest in the same, in a manner and under circumstances that are not inconsistent with the provisions of this Indenture.  No party relying upon an instrument executed by the Indenture Trustee as provided in this Article VIII shall be bound to ascertain the Indenture Trustee’s authority, inquire into the satisfaction of any conditions precedent or see to the application of any moneys.  The Indenture Trustee shall release property from th e Lien of this Indenture pursuant to this Section 8.04(b) only upon receipt of an Issuer Request accompanied by an Officer’s Certificate, an Opinion of Counsel of Independent counsel of the Issuer (at the Issuer’s cost and expense) and (if required by the TIA) Independent Certificates in accordance with TIA §§ 314(c) and 314(d)(1) meeting the applicable requirements of Section 10.01.

 

(c) The Indenture Trustee shall, at such time as there are no Storm Recovery Bonds Outstanding and all sums payable to the Indenture Trustee pursuant to Section 6.07 or otherwise have been paid, release any remaining portion of the Storm Recovery Bond Collateral that secured the Storm Recovery Bonds from the Lien of this Indenture, release to the Issuer or any other Person entitled thereto any funds or investments then on deposit in or credit to the Collection Account in accordance with Section 8.02.

 

SECTION 8.05. Opinion of Counsel

 

.  THE INDENTURE TRUSTEE SHALL RECEIVE AT LEAST SEVEN (7) DAYS’ NOTICE WHEN REQUESTED BY THE ISSUER TO TAKE ANY ACTION PURSUANT TO SECTION 8.04, ACCOMPANIED BY COPIES OF ANY INSTRUMENTS INVOLVED, AND THE INDENTURE TRUSTEE SHALL ALSO REQUIRE, AS A CONDITION TO SUCH ACTION, AN OPINION OF COUNSEL OF INDEPENDENT COUNSEL OF THE ISSUER, IN FORM AND SUBSTANCE SATISFACTORY TO THE INDENTURE TRUSTEE, STATING THE LEGAL EFFECT OF ANY SUCH ACTION, OUTLINING THE STEPS REQUIRED TO COMPLETE THE SAME, AND CONCLUDING THAT ALL CONDITIONS PRECEDENT TO THE TAKING OF SUCH ACTION HAVE BEEN COMPLIED WITH AND SUCH ACTION WILL NOT MATERIALLY AND ADVERSELY IMPAIR THE SECURITY FOR THE STORM RECOVERY BONDS OR THE RIGHTS OF THE HOLDERS IN CONTRAVENTION OF THE PROVISIONS OF T HIS INDENTURE AND THE SERIES SUPPLEMENT; PROVIDED, HOWEVER, THAT SUCH OPINION OF COUNSEL SHALL NOT BE REQUIRED TO EXPRESS AN OPINION AS TO THE FAIR VALUE OF THE STORM RECOVERY BOND COLLATERAL.  COUNSEL RENDERING ANY SUCH OPINION MAY RELY, WITHOUT INDEPENDENT INVESTIGATION, ON THE ACCURACY AND VALIDITY OF ANY CERTIFICATE OR OTHER INSTRUMENT DELIVERED TO THE INDENTURE TRUSTEE IN CONNECTION WITH ANY SUCH ACTION.

 

SECTION 8.06. Reports by Independent Registered Public Accountants

 

.  AS OF THE CLOSING DATE, THE ISSUER SHALL APPOINT A FIRM OF INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS OF RECOGNIZED NATIONAL REPUTATION FOR PURPOSES OF PREPARING AND DELIVERING THE REPORTS OR CERTIFICATES OF SUCH ACCOUNTANTS REQUIRED BY THIS INDENTURE AND THE SERIES SUPPLEMENT.  IN THE EVENT SUCH FIRM REQUIRES THE INDENTURE TRUSTEE TO AGREE TO THE PROCEDURES PERFORMED BY SUCH FIRM, THE ISSUER SHALL DIRECT THE INDENTURE TRUSTEE IN WRITING TO SO AGREE; IT BEING UNDERSTOOD AND AGREED THAT THE INDENTURE TRUSTEE WILL DELIVER SUCH LETTER OF AGREEMENT IN CONCLUSIVE RELIANCE UPON THE DIRECTION OF THE ISSUER, AND THE INDENTURE TRUSTEE MAKES NO INDEPENDENT INQUIRY OR INVESTIGATION TO, AND SHALL HAVE NO OBLIGATION OR LIABILITY IN RESPECT OF, THE SUFFICIENCY, VALIDITY OR CORRECTNESS OF SUCH PROCEDURES.  UPON ANY RE SIGNATION BY, OR TERMINATION BY THE ISSUER OF, SUCH FIRM THE ISSUER SHALL PROVIDE WRITTEN NOTICE THEREOF TO THE INDENTURE TRUSTEE AND SHALL PROMPTLY APPOINT A SUCCESSOR THERETO THAT SHALL ALSO BE A FIRM OF INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS OF RECOGNIZED NATIONAL REPUTATION.  IF THE ISSUER SHALL FAIL TO APPOINT A SUCCESSOR TO A FIRM OF INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS THAT HAS RESIGNED OR BEEN TERMINATED WITHIN FIFTEEN (15) DAYS AFTER SUCH RESIGNATION OR TERMINATION, THE INDENTURE TRUSTEE SHALL PROMPTLY NOTIFY THE ISSUER OF SUCH FAILURE IN WRITING.  IF THE ISSUER SHALL NOT HAVE APPOINTED A SUCCESSOR WITHIN TEN (10) DAYS THEREAFTER THE INDENTURE TRUSTEE SHALL PROMPTLY APPOINT A SUCCESSOR FIRM OF INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS OF RECOGNIZED NATIONAL REPUTATION; PROVIDED THAT THE INDENTURE TRUSTEE SHALL HAVE NO LIABILITY WITH RESPECT TO SUCH APPOINTMENT.  THE FEES OF SUCH INDEPENDE NT REGISTERED PUBLIC ACCOUNTANTS AND ITS SUCCESSOR SHALL BE PAYABLE BY THE ISSUER.

 

ARTICLE IX

 

Supplemental Indentures

 

SECTION 9.01. Supplemental Indentures Without Consent of Holders.

 

(a) Without the consent of the Holders of any Storm Recovery Bonds but with prior notice to the Rating Agencies, the Issuer and the Indenture Trustee, when authorized by an Issuer Order, at any time and from time to time, may enter into one or more indentures supplemental hereto (which shall conform to the provisions of the TIA as in force at the date of the execution thereof), in form satisfactory to the Indenture Trustee, for any of the following purposes:

 

(i) to correct or amplify the description of any property, including, without limitation, the Storm Recovery Bond Collateral, at any time subject to the Lien of this Indenture, or better to assure, convey and confirm unto the Indenture Trustee any property subject or required to be subjected to the Lien of this Indenture and the Series Supplement;

 

(ii) to evidence the succession, in compliance with the applicable provisions hereof, of another person to the Issuer, and the assumption by any such successor of the covenants of the Issuer herein and in the Storm Recovery Bonds;

 

(iii) to add to the covenants of the Issuer, for the benefit of the Secured Parties, or to surrender any right or power herein conferred upon the Issuer;

 

(iv) to convey, transfer, assign, mortgage or pledge any property to or with the Indenture Trustee;

 

(v) to cure any ambiguity, to correct or supplement any provision herein or in any supplemental indenture, including the Series Supplement, which may be inconsistent with any other provision herein or in any supplemental indenture, including the Series Supplement, or to make any other provisions with respect to matters or questions arising under this Indenture or in any supplemental indenture; provided that (i) such action shall not, as evidenced by an Opinion of Counsel of Independent counsel of the Issuer, adversely affect in any material respect the interests of the Holders of the Storm Recovery Bonds and (ii)
60;the Rating Agency Condition shall have been satisfied with respect thereto;

 

(vi) to evidence and provide for the acceptance of the appointment hereunder by a successor trustee with respect to the Storm Recovery Bonds and to add to or change any of the provisions of this Indenture as shall be necessary to facilitate the administration of the trusts hereunder by more than one trustee, pursuant to the requirements of Article VI;

 

(vii) to modify, eliminate or add to the provisions of this Indenture to such extent as shall be necessary to effect the qualification of this Indenture under the TIA or under any similar or successor federal statute hereafter enacted and to add to this Indenture such other provisions as may be expressly required by the TIA;

 

(viii) to set forth the terms of the Storm Recovery Bonds that has not theretofore been authorized by the Series Supplement;

 

(ix) to qualify the Storm Recovery Bonds for registration with a Clearing Agency; or

 

(x) to satisfy any Rating Agency requirements.

 

The Indenture Trustee is hereby authorized to join in the execution of any such supplemental indenture and to make any further appropriate agreements and stipulations that may be therein contained.

 

(b) The Issuer and the Indenture Trustee, when authorized by an Issuer Order, may, also without the consent of any of the Holders of the Storm Recovery Bonds, enter into an indenture or indentures supplemental hereto for the purpose of adding any provisions to, or changing in any manner or eliminating any of the provisions of, this Indenture or of modifying in any manner the rights of the Holders of the Storm Recovery Bonds under this Indenture; provided, however, that (i) such action shall not, as evidenced by an Opinion of Counsel of nationally recognized counsel of the Issuer experienced in structu red finance transactions, adversely affect in any material respect the interests of the Holders and (ii) the Rating Agency Condition shall have been satisfied with respect thereto.

 

SECTION 9.02. Supplemental Indentures with Consent of Holders

 

.  THE ISSUER AND THE INDENTURE TRUSTEE, WHEN AUTHORIZED BY AN ISSUER ORDER, ALSO MAY, WITH PRIOR NOTICE TO THE RATING AGENCIES AND WITH THE CONSENT OF THE HOLDERS OF NOT LESS THAN A MAJORITY OF THE OUTSTANDING AMOUNT OF THE STORM RECOVERY BONDS, BY ACT OF SUCH HOLDERS DELIVERED TO THE ISSUER AND THE INDENTURE TRUSTEE, ENTER INTO AN INDENTURE OR INDENTURES SUPPLEMENTAL HERETO FOR THE PURPOSE OF ADDING ANY PROVISIONS TO, OR CHANGING IN ANY MANNER OR ELIMINATING ANY OF THE PROVISIONS OF, THIS INDENTURE OR OF MODIFYING IN ANY MANNER THE RIGHTS OF THE HOLDERS OF THE STORM RECOVERY BONDS UNDER THIS INDENTURE; PROVIDED, HOWEVER, THAT NO SUCH SUPPLEMENTAL INDENTURE SHALL, WITHOUT THE CONSENT OF THE HOLDE RS OF EACH OUTSTANDING STORM RECOVERY BOND AFFECTED THEREBY:

 

(i) change the date of payment of any installment of principal of or premium, if any, or interest on the Storm Recovery Bonds, or reduce the principal amount thereof, the interest rate thereon or premium, if any, with respect thereto, change the provisions of this Indenture and the Series Supplement relating to the application of collections on, or the proceeds of the sale of, the Storm Recovery Bond Collateral to payment of principal of or premium, if any, or interest on the Storm Recovery Bonds, or change any place of payment where, or the coin or currency in which, any Storm Recovery Bond or the interest thereon is payable, or impair the right to institute suit for the enforcement of the provisions of this Indenture requiring the application of funds available therefor, as provided in Article V, to the payment of any such amount due on the Storm Recovery Bonds on or after the respective due dates thereof;

 

(ii) reduce the percentage of the Outstanding Amount of the Storm Recovery Bonds, the consent of the Holders of which is required for any such supplemental indenture, or the consent of the Holders of which is required for any waiver of compliance with certain provisions of this Indenture or certain defaults hereunder and their consequences provided for in this Indenture;

 

(iii) reduce the percentage of the Outstanding Amount of the Storm Recovery Bonds required to direct the Indenture Trustee to direct the Issuer to sell or liquidate the Storm Recovery Bond Collateral pursuant to Section 5.04;

 

(iv) modify any provision of this Section 9.02 except to increase any percentage specified herein or to provide that those provisions of this Indenture referenced in this Section 9.02 cannot be modified or waived without the consent of the Holder of each Outstanding Storm Recovery Bond affected thereby;

 

(v) modify any of the provisions of this Indenture in such manner as to affect the calculation of the amount of any payment of interest, principal or premium, if any, due on any Storm Recovery Bond on any Payment Date (including the calculation of any of the individual components of such calculation) or change the Expected Amortization Schedules or Final Maturity Dates of the Storm Recovery Bonds;

 

(vi) decrease the Required Capital Level;

 

(vii) permit the creation of any Lien ranking prior to or on a parity with the Lien of this Indenture with respect to any part of the Storm Recovery Bond Collateral or, except as otherwise permitted or contemplated herein, terminate the Lien of this Indenture on any property at any time subject hereto or deprive the Holder of any Storm Recovery Bond of the security provided by the Lien of this Indenture; or

 

(viii) cause any material adverse federal income tax consequence to the Seller, the Issuer, the Managers, the Indenture Trustee or the then existing Holders.

 

It shall not be necessary for any Act of Holders under this Section 9.02 to approve the particular form of any proposed supplemental indenture, but it shall be sufficient if such Act shall approve the substance thereof.

 

Promptly after the execution by the Issuer and the Indenture Trustee of any supplemental indenture pursuant to this Section 9.02, the Issuer shall mail to the Rating Agencies and the Holders of the Storm Recovery Bonds to which such supplemental indenture relates a notice setting forth in general terms the substance of such supplemental indenture.  Any failure of the Issuer to mail such notice, or any defect therein, shall not, however, in any way impair or affect the validity of any such supplemental indenture.

 

SECTION 9.03. Execution of Supplemental Indentures

 

.  IN EXECUTING ANY SUPPLEMENTAL INDENTURE PERMITTED BY THIS ARTICLE IX OR THE MODIFICATIONS THEREBY OF THE TRUST CREATED BY THIS INDENTURE, THE INDENTURE TRUSTEE SHALL BE ENTITLED TO RECEIVE, AND SUBJECT TO SECTIONS 6.01 AND 6.02, SHALL BE FULLY PROTECTED IN RELYING UPON, AN OPINION OF COUNSEL STATING THAT THE EXECUTION OF SUCH SUPPLEMENTAL INDENTURE IS AUTHORIZED OR PERMITTED BY THIS INDENTURE.  THE INDENTURE TRUSTEE MAY, BUT SHALL NOT BE OBLIGATED TO, ENTER INTO ANY SUCH SUPPLEMENTAL INDENTURE THAT AFFECTS THE INDENTURE TRUSTEE’S OWN RIGHTS, DUTIES, LIABILITIES OR IMMUNITIES UNDER THIS INDENTURE OR OTHERW ISE.

 

SECTION 9.04. Effect of Supplemental Indenture

 

.  UPON THE EXECUTION OF ANY SUPPLEMENTAL INDENTURE PURSUANT TO THE PROVISIONS HEREOF, THIS INDENTURE SHALL BE AND BE DEEMED TO BE MODIFIED AND AMENDED IN ACCORDANCE THEREWITH WITH RESPECT TO THE STORM RECOVERY BONDS AFFECTED THEREBY, AND THE RESPECTIVE RIGHTS, LIMITATIONS OF RIGHTS, OBLIGATIONS, DUTIES, LIABILITIES AND IMMUNITIES UNDER THIS INDENTURE OF THE INDENTURE TRUSTEE, THE ISSUER AND THE HOLDERS SHALL THEREAFTER BE DETERMINED, EXERCISED AND ENFORCED HEREUNDER SUBJECT IN ALL RESPECTS TO SUCH MODIFICATIONS AND AMENDMENTS, AND ALL THE TERMS AND CONDITIONS OF ANY SUCH SUPPLEMENTAL INDENTURE SHALL BE AND BE DEEMED TO BE PART OF THE TERMS AND CONDITIONS OF THIS INDENTURE FOR ANY AND ALL PURPOSES.

 

SECTION 9.05. Conformity with Trust Indenture Act

 

.  EVERY AMENDMENT OF THIS INDENTURE AND EVERY SUPPLEMENTAL INDENTURE EXECUTED PURSUANT TO THIS ARTICLE IX SHALL CONFORM TO THE REQUIREMENTS OF THE TIA AS THEN IN EFFECT SO LONG AS THIS INDENTURE SHALL THEN BE QUALIFIED UNDER THE TIA.

 

SECTION 9.06. Reference in Storm Recovery Bonds to Supplemental Indentures

 

.  STORM RECOVERY BONDS AUTHENTICATED AND DELIVERED AFTER THE EXECUTION OF ANY SUPPLEMENTAL INDENTURE PURSUANT TO THIS ARTICLE IX MAY, AND IF REQUIRED BY THE INDENTURE TRUSTEE SHALL, BEAR A NOTATION IN FORM APPROVED BY THE INDENTURE TRUSTEE AS TO ANY MATTER PROVIDED FOR IN SUCH SUPPLEMENTAL INDENTURE.  IF THE ISSUER OR THE INDENTURE TRUSTEE SHALL SO DETERMINE, NEW STORM RECOVERY BONDS SO MODIFIED AS TO CONFORM, IN THE OPINION OF THE INDENTURE TRUSTEE AND THE ISSUER, TO ANY SUCH SUPPLEMENTAL INDENTURE MAY BE PREPARED AND EXECUTED BY THE ISSUER AND AUTHENTICATED AND DELIVERED BY THE INDENTURE TRUSTEE IN EXCHANGE FOR OUTSTANDING STORM RECOVERY BONDS.

 

ARTICLE X

 

Miscellaneous

 

SECTION 10.01. Compliance Certificates and Opinions, etc.

 

(a) Upon any application or request by the Issuer to the Indenture Trustee to take any action under any provision of this Indenture, the Issuer shall furnish to the Indenture Trustee (i) an Officer’s Certificate stating that all conditions precedent, if any, provided for in this Indenture relating to the proposed action have been complied with, (ii) an Opinion of Counsel stating that in the opinion of such counsel all such conditions precedent, if any, have been complied with and (iii) (if required by the TIA) an Independent Certificate from a firm of registered public accountants meeting the applicable requirements of this Section 10.01, except tha t, in the case of any such application or request as to which the furnishing of such documents is specifically required by any provision of this Indenture, no additional certificate or opinion need be furnished.

 

Every certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture shall include:

 

(i) a statement that each signatory of such certificate or opinion has read or has caused to be read such covenant or condition and the definitions herein relating thereto;

 

(ii) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based;

 

(iii) a statement that, in the opinion of each such signatory, such signatory has made such examination or investigation as is necessary to enable such signatory to express an informed opinion as to whether or not such covenant or condition has been complied with; and

 

(iv) a statement as to whether, in the opinion of each such signatory, such condition or covenant has been complied with.

 

(b) (i)  Prior to the deposit of any Storm Recovery Bond Collateral or other property or securities with the Indenture Trustee that is to be made the basis for the release of any property or securities subject to the Lien of this Indenture, the Issuer shall, in addition to any obligation imposed in Section 10.01(a) or elsewhere in this Indenture, furnish to the Indenture Trustee an Officer’s Certificate certifying or stating the opinion of each person signing such certificate as to the fair value (within ninety (90) days of such deposit) to the Issuer of the Storm Recovery Bond Collateral or other property or securities to be so deposited.

 

(ii) Whenever the Issuer is required to furnish to the Indenture Trustee an Officer’s Certificate certifying or stating the opinion of any signer thereof as to the matters described in clause (i) above, the Issuer shall also deliver to the Indenture Trustee an Independent Certificate as to the same matters, if the fair value to the Issuer of the securities to be so deposited and of all other such securities made the basis of any such withdrawal or release since the commencement of the then-current fiscal year of the Issuer, as set forth in the certificates delivered pursuant to clause (i) above and this clause (ii), is ten percent or more of the Outstanding Amount of the Storm Recovery Bonds, but such a certificate need not be furnished with respect to any securities so deposited, if the fair value thereof to the Issuer as set forth in the related Officer’s Certificate is less than the lesser of (A) $25,000 or (B) one percent of the Outstanding Amount of the Storm Recovery Bonds.

 

(iii) Whenever any property or securities are to be released from the Lien of this Indenture other than pursuant to Section 8.02(e), the Issuer shall also furnish to the Indenture Trustee an Officer’s Certificate certifying or stating the opinion of each person signing such certificate as to the fair value (within ninety (90) days of such release) of the property or securities proposed to be released and stating that in the opinion of such person the proposed release will not impair the security under this Indenture in contravention of the provisions hereof.

 

(iv) Whenever the Issuer is required to furnish to the Indenture Trustee an Officer’s Certificate certifying or stating the opinion of any signatory thereof as to the matters described in clause (iii) above, the Issuer shall also furnish to the Indenture Trustee an Independent Certificate as to the same matters if the fair value of the property or securities and of all other property with respect to the Storm Recovery Bonds, or securities released from the Lien of this Indenture (other than pursuant to Section 8.02(e)) since the commencement of the then-current calendar year, as set forth in the certificates required by clause (iii) above and this clause (iv), equals 10 percent or more of the Outstanding Amount of the Storm Recovery Bonds, but such certificate need not be furnished in the case of any release of property or securities if the fair value thereof as set forth in the related Officer’s Certificate is less than the lesser of (A) $25,000 or (B) one percent of the then Outstanding Amount of the Storm Recovery Bonds.

 

(v) Notwithstanding Section 2.16 or any other provision of this Section 10.01, the Indenture Trustee may (A) collect, liquidate, sell or otherwise dispose of the Storm Recovery Property and the other Storm Recovery Bond Collateral as and to the extent permitted or required by the Basic Documents and (B) make cash payments out of each Collection Account as and to the extent permitted or required by the Basic Documents.

 

SECTION 10.02. Form of Documents Delivered to Indenture Trustee

 

.  IN ANY CASE WHERE SEVERAL MATTERS ARE REQUIRED TO BE CERTIFIED BY, OR COVERED BY AN OPINION OF, ANY SPECIFIED PERSON, IT IS NOT NECESSARY THAT ALL SUCH MATTERS BE CERTIFIED BY, OR COVERED BY THE OPINION OF, ONLY ONE SUCH PERSON, OR THAT THEY BE SO CERTIFIED OR COVERED BY ONLY ONE DOCUMENT, BUT ONE SUCH PERSON MAY CERTIFY OR GIVE AN OPINION WITH RESPECT TO SOME MATTERS AND ONE OR MORE OTHER SUCH PERSONS AS TO OTHER MATTERS, AND ANY SUCH PERSON MAY CERTIFY OR GIVE AN OPINION AS TO SUCH MATTERS IN ONE OR SEVERAL DOCUMENTS.

 

Any certificate or opinion of a Responsible Officer of the Issuer may be based, insofar as it relates to legal matters, upon a certificate or opinion of, or representations by, counsel, unless such officer knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to the matters upon which his or her certificate or opinion is based are erroneous.  Any such certificate of a Responsible Officer or Opinion of Counsel may be based, insofar as it relates to factual matters, upon a certificate or opinion of, or representations by, an officer or officers of the Servicer or the Issuer stating that the information with respect to such factual matters is in the possession of the Servicer or the Issuer, unless such counsel knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to such matters are erroneous.

 

Whenever in this Indenture, in connection with any application or certificate or report to the Indenture Trustee, it is provided that the Issuer shall deliver any document as a condition of the granting of such application, or as evidence of the Issuer’s compliance with any term hereof, it is intended that the truth and accuracy, at the time of the granting of such application or at the effective date of such certificate or report (as the case may be), of the facts and opinions stated in such document shall in such case be conditions precedent to the right of the Issuer to have such application granted or to the sufficiency of such certificate or report.  The foregoing shall not, however, be construed to affect the Indenture Trustee’s right to rely conclusively upon the truth and accuracy of any statement or opini on contained in any such document as provided in Article VI.

 

Where any Person is required to make, give or execute two or more applications, requests, consents, certificates, statements, opinions or other instruments under this Indenture, they may, but need not, be consolidated and form one instrument.

 

SECTION 10.03. Acts of Holders.

 

(a) Any request, demand, authorization, direction, notice, consent, waiver or other action provided by this Indenture to be given or taken by Holders may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such Holders in person or by agents duly appointed in writing; and except as herein otherwise expressly provided such action shall become effective when such instrument or instruments are delivered to the Indenture Trustee, and, where it is hereby expressly required, to the Issuer.  Such instrument or instruments (and the action embodied therein and evidenced thereby) are herein sometimes referred to as the “Act” of the Holders signing such instrument or instruments.  Proof of execution of any such instrument or of a writing appointing any such agent shall be sufficient for any purpose of this Indenture and (subject to Section 6.01) conclusive in favor of the Indenture Trustee and the Issuer, if made in the manner provided in this Section 10.03.

 

(b) The fact and date of the execution by any Person of any such instrument or writing may be proved in any manner that the Indenture Trustee deems sufficient.

 

(c) The ownership of Storm Recovery Bonds shall be proved by the Storm Recovery Bond Register.

 

(d) Any request, demand, authorization, direction, notice, consent, waiver or other action by the Holder of any Storm Recovery Bonds shall bind the Holder of every Storm Recovery Bond issued upon the registration thereof or in exchange therefor or in lieu thereof, in respect of anything done, omitted or suffered to be done by the Indenture Trustee or the Issuer in reliance thereon, whether or not notation of such action is made upon such Storm Recovery Bond.

 

SECTION 10.04. Notices, etc., to Indenture Trustee, Issuer and Rating Agencies.

 

(a) Any request, demand, authorization, direction, notice, consent, waiver or Act of Holders or other documents provided or permitted by this Indenture to be made upon, given or furnished to or filed with:

 

(i) the Indenture Trustee by any Holder or by the Issuer shall be sufficient for every purpose hereunder if made, given, furnished or filed in writing by facsimile transmission, first-class mail or overnight delivery service to or with the Indenture Trustee at the Corporate Trust Office,

 

(ii) the Issuer by the Indenture Trustee or by any Holder shall be sufficient for every purpose hereunder if in writing and mailed, first-class, postage prepaid, to the Issuer addressed to: Entergy Arkansas Restoration Funding, LLC at 425 West Capitol Avenue, Little Rock, Arkansas 72201, Attention:  Manager, Telephone:  (501) 377 – 5886, Facsimile: (501)  ###-###-#### or at any other address previously furnished in writing to the Indenture Trustee by the Issuer.  The Issuer shall promptly transmit any notice received by it from the Holders to the Indenture Trustee, or

 

(iii) the APSC by the Seller, the Issuer or the Indenture Trustee shall be sufficient for every purpose hereunder if in writing and mailed, first-class, postage prepaid, to the APSC addressed to:  Arkansas Public Service Commission, 1000 Center Street, Little Rock, Arkansas 72201, Attention of Executive Director, telephone: (501) 682-2051, facsimile:   ###-###-#### and General Counsel, telephone: (501) 682-2047, Facsimile: (501) 682-5864.

 

(b) Notices required to be given to the Rating Agencies by the Issuer or the Indenture Trustee shall be in writing, facsimile, personally delivered or mailed by certified mail, or email in the case of Standard & Poor’s, return receipt requested to:

 

(i) in the case of Moody’s, to:  Moody’s Investors Service, Inc., ABS Monitoring Department, 7 World Trade Center at 250 Greenwich Street, New York, New York 10007, Telephone:  (212)  ###-###-####, Facsimile (212)  ###-###-####,

 

(ii) in the case of Standard & Poor’s, to:  Standard & Poor’s Ratings Services, a Standard & Poor’s Financial Services LLC business, 55 Water Street, 41st Floor, New York, New York 10041, Attention:  Structured Credit Surveillance Group, 41st Floor, Telephone:  (212)  ###-###-####, Facsimile:  (212)  ###-###-####; monthly reports should be sent to ***@***,

 

(iii) in the case of Fitch, to Fitch Ratings, One State Street Plaza, New York, New York 10004, Attention:  ABS Surveillance, Telephone:  (212)  ###-###-####, Facsimile:  (212)  ###-###-####, and via email to ***@***, and

 

(iv) as to each of the foregoing, at such other address as shall be designated by written notice to the other parties.

 

SECTION 10.05. Notices to Holders; Waiver

 

.  WHERE THIS INDENTURE PROVIDES FOR NOTICE TO HOLDERS OF ANY EVENT, SUCH NOTICE SHALL BE SUFFICIENTLY GIVEN (UNLESS OTHERWISE HEREIN EXPRESSLY PROVIDED) IF IN WRITING AND MAILED, FIRST-CLASS, POSTAGE PREPAID TO EACH HOLDER AFFECTED BY SUCH EVENT, AT SUCH HOLDER’S ADDRESS AS IT APPEARS ON THE STORM RECOVERY BOND REGISTER, NOT LATER THAN THE LATEST DATE, AND NOT EARLIER THAN THE EARLIEST DATE, PRESCRIBED FOR THE GIVING OF SUCH NOTICE.  IN ANY CASE WHERE NOTICE TO HOLDERS IS GIVEN BY MAIL, NEITHER THE FAILURE TO MAIL SUCH NOTICE NOR ANY DEFECT IN ANY NOTICE SO MAILED TO ANY PARTICULAR HOLDER SHALL AFFECT THE SUFFICIENCY OF SUCH NOTICE WITH RESPECT TO OTHER HOLDERS, AND ANY NOTICE THAT IS MAILED IN THE MANNER HEREIN PROVIDED SHALL CONCLUSIVELY BE PRESUMED TO HAVE BEEN DULY GIVEN.

 

Where this Indenture provides for notice in any manner, such notice may be waived in writing by any Person entitled to receive such notice, either before or after the event, and such waiver shall be the equivalent of such notice.  Waivers of notice by Holders shall be filed with the Indenture Trustee but such filing shall not be a condition precedent to the validity of any action taken in reliance upon such a waiver.

 

In case, by reason of the suspension of regular mail service as a result of a strike, work stoppage or similar activity, it shall be impractical to mail notice of any event of Holders when such notice is required to be given pursuant to any provision of this Indenture, then any manner of giving such notice as shall be satisfactory to the Indenture Trustee shall be deemed to be a sufficient giving of such notice.

 

Where this Indenture provides for notice to the Rating Agencies, failure to give such notice shall not affect any other rights or obligations created hereunder, and shall not under any circumstance constitute a Default or Event of Default.

 

SECTION 10.06. Conflict with Trust Indenture Act

 

.  IF ANY PROVISION HEREOF LIMITS, QUALIFIES OR CONFLICTS WITH ANOTHER PROVISION HEREOF THAT IS REQUIRED TO BE INCLUDED IN THIS INDENTURE BY ANY OF THE PROVISIONS OF THE TIA, SUCH REQUIRED PROVISION SHALL CONTROL.

 

The provisions of TIA §§ 310 through 317 that impose duties on any person (including the provisions automatically deemed included herein unless expressly excluded by this Indenture) are a part of and govern this Indenture, whether or not physically contained herein.

 

SECTION 10.07. Effect of Headings and Table of Contents

 

.  THE ARTICLE AND SECTION HEADINGS HEREIN AND THE TABLE OF CONTENTS ARE FOR CONVENIENCE ONLY AND SHALL NOT AFFECT THE CONSTRUCTION HEREOF.

 

SECTION 10.08. Successors and Assigns

 

.  ALL COVENANTS AND AGREEMENTS IN THIS INDENTURE AND THE STORM RECOVERY BONDS BY THE ISSUER SHALL BIND ITS SUCCESSORS AND ASSIGNS, WHETHER SO EXPRESSED OR NOT.  ALL AGREEMENTS OF THE INDENTURE TRUSTEE IN THIS INDENTURE SHALL BIND ITS SUCCESSORS.

 

SECTION 10.09. Severability

 

.  ANY PROVISION IN THIS INDENTURE OR IN THE STORM RECOVERY BONDS THAT IS PROHIBITED OR UNENFORCEABLE IN ANY JURISDICTION SHALL, AS TO SUCH JURISDICTION, BE INEFFECTIVE TO THE EXTENT OF SUCH PROHIBITION OR UNENFORCEABILITY WITHOUT INVALIDATING THE REMAINDER OF SUCH PROVISION (IF ANY) OR THE REMAINING PROVISIONS HEREOF (UNLESS SUCH CONSTRUCTION SHALL BE UNREASONABLE), AND ANY SUCH PROHIBITION OR UNENFORCEABILITY IN ANY JURISDICTION SHALL NOT INVALIDATE OR RENDER UNENFORCEABLE SUCH PROVISION IN ANY OTHER JURISDICTION.

 

SECTION 10.10. Benefits of Indenture

 

.  NOTHING IN THIS INDENTURE OR IN THE STORM RECOVERY BONDS, EXPRESS OR IMPLIED, SHALL GIVE TO ANY PERSON, OTHER THAN THE PARTIES HERETO AND THEIR SUCCESSORS HEREUNDER, AND THE HOLDERS, AND ANY OTHER PARTY SECURED HEREUNDER, AND ANY OTHER PERSON WITH AN OWNERSHIP INTEREST IN ANY PART OF THE STORM RECOVERY BOND COLLATERAL, ANY BENEFIT OR ANY LEGAL OR EQUITABLE RIGHT, REMEDY OR CLAIM UNDER THIS INDENTURE.

 

SECTION 10.11. Legal Holidays

 

.  IN ANY CASE WHERE THE DATE ON WHICH ANY PAYMENT IS DUE SHALL NOT BE A BUSINESS DAY, THEN (NOTWITHSTANDING ANY OTHER PROVISION OF THE STORM RECOVERY BONDS OR THIS INDENTURE) PAYMENT NEED NOT BE MADE ON SUCH DATE, BUT MAY BE MADE ON THE NEXT SUCCEEDING BUSINESS DAY WITH THE SAME FORCE AND EFFECT AS IF MADE ON THE DATE ON WHICH NOMINALLY DUE, AND NO INTEREST SHALL ACCRUE FOR THE PERIOD FROM AND AFTER ANY SUCH NOMINAL DATE.

 

SECTION 10.12. GOVERNING LAW

 

.  THIS INDENTURE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS (OTHER THAN SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW AND SECTIONS 9-301 THROUGH 9-306 OF THE NY UCC), AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS; PROVIDED THAT THE CREATION, ATTACHMENT AND PERFECTION OF ANY LIENS CREATED HEREUNDER IN STORM RECOVERY PROPERTY, AND ALL RIGHTS AND REMEDIES OF THE INDENTURE TRUSTEE AND THE HOLDERS WITH RESPECT TO SUCH STORM RECOVERY PROPERTY, SHALL BE GOVERNED BY THE LAWS OF THE STATE OF ARKANSAS.

 

SECTION 10.13. Counterparts

 

.  THIS INDENTURE MAY BE EXECUTED IN ANY NUMBER OF COUNTERPARTS, EACH OF WHICH SO EXECUTED SHALL BE DEEMED TO BE AN ORIGINAL, BUT ALL SUCH COUNTERPARTS SHALL TOGETHER CONSTITUTE BUT ONE AND THE SAME INSTRUMENT.

 

SECTION 10.14. Recording of Indenture

 

.  IF THIS INDENTURE IS SUBJECT TO RECORDING IN ANY APPROPRIATE PUBLIC RECORDING OFFICES, SUCH RECORDING IS TO BE EFFECTED BY THE ISSUER AND AT ITS EXPENSE ACCOMPANIED BY AN OPINION OF COUNSEL AT THE ISSUER’S COST AND EXPENSE (WHICH MAY BE COUNSEL TO THE INDENTURE TRUSTEE OR ANY OTHER COUNSEL REASONABLY ACCEPTABLE TO THE INDENTURE TRUSTEE OR, IF REQUESTED BY THE INDENTURE TRUSTEE, INDEPENDENT COUNSEL OF THE ISSUER) TO THE EFFECT THAT SUCH RECORDING IS NECESSARY EITHER FOR THE PROTECTION OF THE HOLDERS OR ANY OTHER PERSON SECURED HEREUNDER OR FOR THE ENFORCEMENT OF ANY RIGHT OR REMEDY GRANTED TO THE INDENTURE TRUSTEE UNDER THIS INDENTURE.

 

SECTION 10.15. Issuer Obligation

 

.  NO RECOURSE MAY BE TAKEN, DIRECTLY OR INDIRECTLY, WITH RESPECT TO THE OBLIGATIONS OF THE ISSUER OR THE INDENTURE TRUSTEE ON THE STORM RECOVERY BONDS OR UNDER THIS INDENTURE OR ANY CERTIFICATE OR OTHER WRITING DELIVERED IN CONNECTION HEREWITH OR THEREWITH, AGAINST (I) THE INDENTURE TRUSTEE OR THE MANAGERS IN THEIR RESPECTIVE INDIVIDUAL CAPACITIES, (II) ANY OWNER OF A MEMBERSHIP INTEREST IN THE ISSUER (INCLUDING EAI) OR (III) ANY SHAREHOLDER, PARTNER, OWNER, BENEFICIARY, AGENT, OFFICER, OR EMPLOYEE OF THE INDENTURE TRUSTEE, THE MANAGERS OR ANY OWNER OF A MEMBERSHIP INTEREST IN THE ISSUER (INCLUDING EAI) IN ITS RESPECTIVE INDIVIDUAL CAPACITY, OR OF ANY SUCCESSOR OR ASSIGN OF ANY OF THEM IN THEIR RESPECTIVE INDIVIDUAL OR CORPORATE CAPACITIES, EXCEPT AS ANY SUCH PERSON MAY HAVE EXPRESSLY AGREED IN WRITING (IT BE ING UNDERSTOOD THAT NONE OF THE INDENTURE TRUSTEE, THE MANAGERS OR EAI HAS ANY SUCH OBLIGATIONS IN THEIR RESPECTIVE INDIVIDUAL OR CORPORATE CAPACITIES).

 

SECTION 10.16. No Recourse to Issuer

 

.  NOTWITHSTANDING ANY PROVISION OF THIS INDENTURE OR THE SERIES SUPPLEMENT TO THE CONTRARY, HOLDERS SHALL HAVE NO RECOURSE AGAINST THE ISSUER, BUT SHALL LOOK ONLY TO THE STORM RECOVERY BOND COLLATERAL WITH RESPECT TO ANY AMOUNTS DUE TO THE HOLDERS HEREUNDER AND UNDER THE STORM RECOVERY BONDS.

 

SECTION 10.17. Basic Documents

 

.  THE INDENTURE TRUSTEE IS HEREBY AUTHORIZED TO EXECUTE AND DELIVER THE SERVICING AGREEMENT AND TO EXECUTE AND DELIVER ANY OTHER BASIC DOCUMENT WHICH IT IS REQUESTED TO ACKNOWLEDGE.

 

SECTION 10.18. No Petition

 

.  THE INDENTURE TRUSTEE, BY ENTERING INTO THIS INDENTURE, EACH HOLDER, BY ACCEPTING A STORM RECOVERY BOND (OR INTEREST THEREIN) ISSUED HEREUNDER, HEREBY COVENANT AND AGREE THAT THEY SHALL NOT, PRIOR TO THE DATE WHICH IS ONE YEAR AND ONE DAY AFTER THE TERMINATION OF THIS INDENTURE, ACQUIESCE, PETITION OR OTHERWISE INVOKE OR CAUSE THE ISSUER OR ANY MANAGER TO INVOKE THE PROCESS OF ANY COURT OR GOVERNMENT AUTHORITY FOR THE PURPOSE OF COMMENCING OR SUSTAINING A CASE AGAINST THE ISSUER UNDER ANY INSOLVENCY LAW OR APPOINTING A RECEIVER, LIQUIDATOR, ASSIGNEE, TRUSTEE, CUSTODIAN, SEQUESTRATOR OR OTHER SIMILAR OFFICIAL OF THE ISSUER OR ANY SUBSTANTIAL PART OF ITS RESPECTIVE PROPERTY, OR ORDERING THE DISSOLUTION, WINDING UP OR LIQUIDATION OF THE AFFAIRS OF THE ISSUER.  NOTHING IN THIS PARAGRAPH SHALL PRECLUDE, OR BE DEEMED TO ESTOP, SUCH HOLDER OR THE INDENTURE TRUSTEE (A) FROM TAKING OR OMITTING TO TAKE ANY ACTION PRIOR TO SUCH DATE IN (I) ANY CASE OR PROCEEDING VOLUNTARILY FILED OR COMMENCED BY OR ON BEHALF OF THE ISSUER UNDER OR PURSUANT TO ANY SUCH LAW OR (II) ANY INVOLUNTARY CASE OR PROCEEDING PERTAINING TO THE ISSUER WHICH IS FILED OR COMMENCED BY OR ON BEHALF OF A PERSON OTHER THAN SUCH HOLDER AND IS NOT JOINED IN BY SUCH HOLDER (OR ANY PERSON TO WHICH SUCH HOLDER SHALL HAVE ASSIGNED, TRANSFERRED OR OTHERWISE CONVEYED ANY PART OF THE OBLIGATIONS OF THE ISSUER HEREUNDER) UNDER OR PURSUANT TO ANY SUCH LAW, OR (B) FROM COMMENCING OR PROSECUTING ANY LEGAL ACTION WHICH IS NOT AN INVOLUNTARY CASE OR PROCEEDING UNDER OR PURSUANT TO ANY SUCH LAW AGAINST THE ISSUER OR ANY OF ITS PROPERTIES.

 

SECTION 10.19. Securities Intermediary

 

.  THE SECURITIES INTERMEDIARY, IN ACTING UNDER THIS INDENTURE, IS ENTITLED TO ALL RIGHTS, BENEFITS, PROTECTIONS, IMMUNITIES AND INDEMNITIES ACCORDED THE BANK OF NEW YORK MELLON, A NEW YORK BANKING CORPORATION, IN ITS CAPACITY AS INDENTURE TRUSTEE UNDER THIS INDENTURE.

 

[SIGNATURE PAGE FOLLOWS]

IN WITNESS WHEREOF, the Issuer, the Indenture Trustee and Securities Intermediary have caused this Indenture to be duly executed by their respective officers thereunto duly authorized and duly attested, all as of the day and year first above written.

 

	ENTERGY ARKANSAS RESTORATION FUNDING, LLC, as Issuer
	By:  /s/ Steven C. McNeal Name:  Steven C. McNeal Title:  Vice President and Treasurer
	THE BANK OF NEW YORK MELLON, a New York banking corporation, as Indenture Trustee and as Securities Intermediary
	By:  /s/ Esther D. Antoine Name:  Esther D. Antoine Title:  Senior Associate

STATE OF NY                                           )

     ) ss:

COUNTY OF NY                                       )

 

On the 13 day of August, 2010, before me, Jonathan Kaplan, a Notary Public in and for said county and state, personally appeared Esther Antoine, personally known to me (or proved to me on the basis of satisfactory evidence) to be the person and officer whose name is subscribed to the within instrument and acknowledged to me that such person executed the same in such person’s authorized capacity, and that by the signature on the instrument The Bank of New York Mellon, a New York banking association, and the entity upon whose behalf the person acted, executed this instrument.

 

WITNESS my hand and official seal.

 

 

Notary Public

My commission expires:  12/7/11

Jonathan Kaplan

Notary Public-State of New York

No. 01KA6178956

Qualified in New York County

My Commission Expires December 17, 2011

STATE OF LOUISIANA                       )

                  ) ss:

PARISH OF ORLEANS                         )

 

On the 13th day of August, 2010, before me, Mark Grafton Otts, a Notary Public in and for said county and state, personally appeared Steven C. McNeal, personally known to me (or proved to me on the basis of satisfactory evidence) to be the person whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his capacity as the Vice President and Treasurer of Entergy Arkansas Restoration Funding, LLC, and that by his signature on the instrument Entergy Arkansas Restoration Funding, LLC, a Delaware limited liability company and the entity upon whose behalf such person acted, executed this instrument.

 

WITNESS my hand and official seal.

 

 

Mark Grafton Otts

                         Notary Public No. 4430

                         State of Louisiana

                         My commission expires at my death.

 

 

 

EXHIBIT A

 

 

UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES IN DEFINITIVE REGISTERED FORM, THIS SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO THE NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY.  UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OT HER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

 

REGISTERED No. _____ $________

 

SEE REVERSE FOR CERTAIN DEFINITIONS

 

CUSIP NO.

 

THE PRINCIPAL OF THIS TRANCHE [ - ] STORM RECOVERY BOND (THIS “TRANCHE [ - ] STORM RECOVERY BOND”) WILL BE PAID IN INSTALLMENTS AS SET FORTH HEREIN.  ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS TRANCHE [ - ] STORM RECOVERY BOND AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.  THE HOLDER OF THIS STORM RECOVERY BOND HAS NO RECOURSE TO THE ISSUER HEREOF AND AGREES TO LOOK ONLY TO THE STORM RECOVERY BOND COLLATERAL, AS DESCRIBED IN THE INDENTURE AND THE SERIES SUPPLEMENT REFERRED TO ON THE REVERSE HEREOF, FOR PAYMENT OF ANY AMOUNTS DUE HEREUNDER.  ALL OBLIGATIONS OF THE ISSUER OF THIS TRANCHE [ - ] STORM RECOVERY BOND UNDER THE TERMS OF THE INDENTURE WILL BE RELEASED AND DISCHARGED UPON PAYMENT IN FULL HEREOF OR AS OTHERWISE PROVIDED IN ARTICLE IV OF THE INDENTURE.  THE HOLDER OF THIS TRANCHE [ - ] STORM RECOVERY BOND HEREBY COVENANTS AND AGREES THAT PRIOR TO THE DATE WHICH IS ONE (1) YEAR AND ONE (1) 0;DAY AFTER THE PAYMENT IN FULL OF THE TRANCHE [ - ] STORM RECOVERY BONDS, IT WILL NOT INSTITUTE AGAINST, OR JOIN ANY OTHER PERSON IN INSTITUTING AGAINST, THE ISSUER ANY BANKRUPTCY, REORGANIZATION, ARRANGEMENT, INSOLVENCY OR LIQUIDATION PROCEEDINGS OR OTHER SIMILAR PROCEEDING UNDER THE LAWS OF THE UNITED STATES OR ANY STATE OF THE UNITED STATES.  NOTHING IN THIS PARAGRAPH SHALL PRECLUDE, OR BE DEEMED TO ESTOP, SUCH HOLDER (A) FROM TAKING OR OMITTING TO TAKE ANY ACTION PRIOR TO SUCH DATE IN (I) ANY CASE OR PROCEEDING VOLUNTARILY FILED OR COMMENCED BY OR ON BEHALF OF THE ISSUER UNDER OR PURSUANT TO ANY SUCH LAW OR (II) ANY INVOLUNTARY CASE OR PROCEEDING PERTAINING TO THE ISSUER WHICH IS FILED OR COMMENCED BY OR ON BEHALF OF A PERSON OTHER THAN SUCH HOLDER AND IS NOT JOINED IN BY SUCH HOLDER (OR ANY PERSON TO WHICH SUCH HOLDER SHALL HAVE ASSIGNED, TRANSFERRED OR OTHERWISE CONVEYED ANY PART OF THE OBLIGATIONS OF THE ISSUER HEREUNDER) UNDER OR PURSUANT TO ANY SUCH LAW, OR (B) FROM COMMENCING OR PROSECUTING ANY LEGAL ACTION WHICH IS NOT AN INVOLUNTARY CASE OR PROCEEDING UNDER OR PURSUANT TO ANY SUCH LAW AGAINST THE ISSUER OR ANY OF ITS PROPERTIES.

 

ENTERGY ARKANSAS RESTORATION FUNDING, LLC STORM RECOVERY BONDS,

 

Tranche [ - ].

 

INTEREST RATE	ORIGINAL PRINCIPAL AMOUNT	FINAL MATURITY DATE

Entergy Arkansas Restoration Funding, LLC, a limited liability company created under the laws of the State of Delaware (herein referred to as the “Issuer”), for value received, hereby promises to pay to [  ], or registered assigns, the Original Principal Amount shown above in semi-annual installments on the Payment Dates and in the amounts specified on the reverse hereof or, if less, the amounts determined pursuant to Section 8.02 of the Indenture, in each year, commencing on the date determined as provided on the reverse hereof and ending on or before the Final Maturity Date shown above and to pay interest, at the Interest Rate shown above, on each __________ and __________ or if any such day is not a Business Day, the next succeeding Business Day, commencing on [ ] and continuing until the earlier of the payment in full of the principal hereof and the Final Maturity Date (each a “Payment Date”), on the principal amount of this Tranche [ - ] Storm Recovery Bond (hereinafter referred to as this “Tranche [ - ] Storm Recovery Bond”).  Interest on this Tranche [ - ] Storm Recovery Bond will accrue for each Payment Date from the most recent Payment Date on which interest has been paid to but excluding such Payment Date or, if no interest has yet been paid, from the date of issuance.  Interest will be computed on the basis of [specify method of computation].  Such principal of and interest on this Tranche [ - ] Storm Recovery Bond shall be paid in the manner specified on the reverse hereof.

 

The principal of and interest on this Tranche [ - ] Storm Recovery Bond are payable in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts.  All payments made by the Issuer with respect to this Tranche [ - ] Storm Recovery Bond shall be applied first to interest due and payable on this Tranche [ - ] Storm Recovery Bond as provided above and then to the unpaid principal of and premium, if any, on this Tranche [ - ] Storm Recovery Bond, all in the manner set forth in the Indenture.

 

Neither the full faith and credit nor the taxing power of the state of Arkansas is pledged to the payment of the principal of, or interest on, this bond.

 

Reference is made to the further provisions of this Tranche [ - ] Storm Recovery Bond set forth on the reverse hereof, which shall have the same effect as though fully set forth on the face of this Tranche [ - ] Storm Recovery Bond.

 

Unless the certificate of authentication hereon has been executed by the Indenture Trustee whose name appears below by manual signature, this Tranche [ - ] Storm Recovery Bond shall not be entitled to any benefit under the Indenture referred to on the reverse hereof, or be valid or obligatory for any purpose.

 

IN WITNESS WHEREOF, the Issuer has caused this instrument to be signed, manually or in facsimile, by its Responsible Officer.

 

 

Date:	ENTERGY ARKANSAS RESTORATION FUNDING, LLC
	By:  _________________________________ Name: Title:

 

 

 

INDENTURE TRUSTEE’S CERTIFICATE OF AUTHENTICATION

 

Dated:  [___________, _____]

 

This is one of the Tranche [ - ] Storm Recovery Bonds, designated above and referred to in the within-mentioned Indenture.

 

	THE BANK OF NEW YORK MELLON, as Indenture Trustee
	By:  _________________________________ Name: Title:

REVERSE OF STORM RECOVERY BOND* 1

 

This Tranche [ - ] Storm Recovery Bond is one of a duly authorized issue of Storm Recovery Bonds of the Issuer (herein called the “Storm Recovery Bonds”), issued or which are issuable in one Tranche (herein called the “Tranche [ - ] Storm Recovery Bonds” or “Storm Recovery Bonds”), all issued and to be issued under that certain Indenture dated as of, August 18, 2010 (as supplemented by the Series Supplement (as defined below), the “Indenture”), between the Issuer and The Bank of New York Mellon, a New York banking corporation, in its capacity as indenture trustee (the “Indenture Trustee”, which term includes any successor indenture trustee under the Indenture) and in its separate capacity as securities intermediary (the “Securities Intermediary”, which term includes any successor securities intermediary under the Indenture), to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights and obligations thereunder of the Issuer, the Indenture Trustee and the Holders of the Storm Recovery Bonds.& #160; For purposes herein, “Series Supplement” means that certain Series Supplement dated as of August 18, 2010 between the Issuer and the Indenture Trustee.  All terms used in this Tranche [ - ] Storm Recovery Bond that are defined in the Indenture, as amended, restated, supplemented or otherwise modified from time to time, shall have the meanings assigned to such terms in the Indenture.

 

The Tranche [ - ] Storm Recovery Bonds are and will be equally and ratably secured by the Storm Recovery Bond Collateral pledged as security therefor as provided in the Indenture.

 

The principal of this Tranche [ - ] Storm Recovery Bond shall be payable on each Payment Date only to the extent that amounts in the Collection Account are available therefor, and only until the outstanding principal balance thereof on the preceding Payment Date (after giving effect to all payments of principal, if any, made on the preceding Payment Date) has been reduced to the principal balance specified in the Expected Amortization Schedule which is attached to the Series Supplement as Schedule A, unless payable earlier because an Event of Default shall have occurred and be continuing and the Indenture Trustee or the Bondholders representing not less than a majority of the Outstanding Amount of the Storm Recovery Bonds ha ve declared such Storm Recovery Bonds to be immediately due and payable in accordance with Section 5.02 of the Indenture (unless such declaration shall have been rescinded and annulled in accordance with Section 5.02 of the Indenture).  However, actual principal payments may be made in lesser than expected amounts and at later than expected times as determined pursuant to Section 8.02 of the Indenture.  The entire unpaid principal amount of this Tranche [ - ] Storm Recovery Bond shall be due and payable on the Final Maturity Date hereof.  Notwithstanding the foregoing, the entire unpaid principal amount of the Storm Recovery Bonds shall be due and payable, if not the n previously paid, on the date on which an Event of Default shall have occurred and be continuing and the Indenture Trustee or the Holders of the Storm Recovery Bonds representing not less than a majority of the Outstanding Amount of the Storm Recovery Bonds have declared the Storm Recovery Bonds to be immediately due and payable in the manner provided in Section 5.02 of the Indenture (unless such declaration shall have been rescinded and annulled in accordance with Section 5.02 of the Indenture).  All principal payments on the Tranche [ - ] Storm Recovery Bonds shall be made pro rata to the Tranche [ - ] Holders entitled thereto based on the r espective principal amounts of the Tranche [ - ] Storm Recovery Bonds held by them.

 

Payments of interest on this Tranche [ - ] Storm Recovery Bond due and payable on each Payment Date, together with the installment of principal or premium, if any, shall be made by check mailed first-class, postage prepaid, to the Person whose name appears as the Registered Holder of this Tranche [ - ] Storm Recovery Bond (or one or more Predecessor Storm Recovery Bonds) on the Storm Recovery Bond Register as of the close of business on the Record Date or in such other manner as may be provided in the Indenture or the Series Supplement, except that (i) upon application to the Indenture Trustee by any Holder owning a Gl obal Storm Recovery Bond evidencing this Tranche [ - ] Storm Recovery Bond in the principal amount of $10,000,000 or more not later than the applicable Record Date payment will be made by wire transfer to an account maintained by such Holder and (ii) if this Tranche [ - ] Storm Recovery Bond is held in Book-Entry Form, payments will be made by wire transfer in immediately available funds to the account designated by the Holder of the applicable Global Storm Recovery Bond evidencing this Tranche [ - ] Storm Recovery Bond unless and until such Global Storm Recovery Bond is exchanged for Definitive Storm Recovery Bonds (in which event payments shall be made as provided above) and except f or the final installment of principal and premium, if any, payable with respect to this Tranche [ - ] Storm Recovery Bond on a Payment Date which shall be payable as provided below.  Such checks shall be mailed to the Person entitled thereto at the address of such Person as it appears on the Storm Recovery Bond Register as of the applicable Record Date without requiring that this Tranche [ - ] Storm Recovery Bond be submitted for notation of payment.  Any reduction in the principal amount of this Tranche [ - ] Storm Recovery Bond (or any one or more Predecessor Storm Recovery Bonds) effected by any payments made on any Payment Date shall be binding upon all future Holder s of this Tranche [ - ] Storm Recovery Bond and of any Storm Recovery Bond issued upon the registration of transfer hereof or in exchange hereof or in lieu hereof, whether or not noted hereon.  If funds are expected to be available, as provided in the Indenture, for payment in full of the then remaining unpaid principal amount of this Tranche [ - ] Storm Recovery Bond on a Payment Date, then the Indenture Trustee, in the name of and on behalf of the Issuer, will notify the Person who was the Registered Holder hereof as of the Record Date preceding such Payment Date by notice mailed no later than five (5) days prior to such final Payment Date and shall specify that such final installment will be payable only upon presentation and surrender of this Tranche [ - ] Storm Recovery Bond and shall specify the place where this Tranche [ - ] Storm Recovery Bond may be presented and surrendered for payment of such installment.

 

The Issuer shall pay interest on overdue installments of interest at the Storm Recovery Bond Interest Rate to the extent lawful.

 

This Storm Recovery Bond is a “storm recovery bond” as such term is defined in the Securitization Act.  Principal and interest due and payable on this Storm Recovery Bond are payable from and secured primarily by Storm Recovery Property created and established by a Financing Order obtained from the Arkansas Public Service Commission pursuant to the Securitization Act.  Storm Recovery Property consists of the rights and interests of the Seller in the Financing Order, including the right to impose, collect and recover certain charges (defined in the Securitization Act as “Storm Recovery Charges”) to be included in regular electric utility bills of existing and future electric service customers within the service territory of Enter gy Arkansas, Inc., an Arkansas electric utility, or its successors or assigns, as more fully described in the Financing Order.

 

The Securitization Act provides that:  “The state and its agencies, including the Arkansas Public Service Commission, pledge to and agree with bondholders, the owners of the storm recovery property, and other financing parties that the state will not (1) Alter the provisions of this section which make the storm recovery charges imposed by a financing order irrevocable, binding, and nonbypassable charges; (2) Take or permit any action that impairs or would impair the value of the storm recovery property; or (3) Except as allowed under this section, reduce, alter or impair storm recovery charges that are to be imposed, collected, and remitted for the benefit of the bondholders and other financing parties until any and all principal, interest, premium, financing costs, and other fees, expenses, or charges incurred, and any contracts to be performed in connection with the related storm recovery bonds have been paid and performed in full. Nothing in this paragraph shall preclude limitation or alteration if full compensation is made by law for the full protection of the storm recovery charges collected pursuant to a financing order and of the holders of storm recovery bonds and any assignee or financing party entering into a contract with the electric utility.  Any person or entity that issues  storm recovery bonds may include this pledge in the bonds and related documentation.”

 

As a result of the foregoing pledge, the State of Arkansas may not, except as provided in the succeeding sentence, in any way reduce, alter or impair the Storm Recovery Charges until the Storm Recovery Bonds, together with interest thereon, are fully paid and discharged.  Notwithstanding the immediately preceding sentence, the State of Arkansas would be allowed to effect a temporary impairment of the Holders’ rights if it could be shown that such impairment was necessary to advance a significant and legitimate public purpose.

 

The Issuer and EAI hereby acknowledge that the purchase of this Storm Recovery Bond by the Holder hereof or the purchase of any beneficial interest herein by any Person are made in reliance on the foregoing pledge.

 

As provided in the Indenture and subject to certain limitations set forth therein, the transfer of this Tranche [  -  ] Storm Recovery Bond may be registered on the Storm Recovery Bond Register upon surrender of this Tranche [  -  ] Storm Recovery Bond for registration of transfer at the office or agency designated by the Issuer pursuant to the Indenture, duly endorsed by, or accompanied by (a) a written instrument of transfer in form satisfactory to the Indenture Trustee duly executed by the Holder hereof or such Holder’s attorney duly authorized in writing, with such sign ature guaranteed by an institution which is a member of one of the following recognized Signature Guaranty Programs:  (i) The Securities Transfer Agent Medallion Program (STAMP); (ii)The New York Stock Exchange Medallion Program (MSP); (iii) The Stock Exchange Medallion Program (SEMP); or (iv) in such other guarantee program acceptable to the Indenture Trustee, and (b) such other documents as the Indenture Trustee may require, and thereupon one or more new Tranche [  -  ] Storm Recovery Bonds of Minimum Denominations and in the same aggregate principal amount will be issued to the designated transferee or transferees.  No service charge will be charged for any registration of transfer or exchange of this Tranche [  -  ] Storm Recovery Bond, but the transferor may be required to pay a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any such registration of transfer or exchange, other than exchanges pursuant to Sections 2.04 or 2.06 of the Indenture not involving any transfer.

 

Each Storm Recovery Bond holder, by acceptance of a Storm Recovery Bond, covenants and agrees that no recourse may be taken, directly or indirectly, with respect to the obligations of the Issuer or the Indenture Trustee on the Storm Recovery Bonds or under the Indenture or any certificate or other writing delivered in connection therewith, against (i) the Indenture Trustee or the Managers in their respective individual capacities, (ii) any owner of a membership interest in the Issuer (including EAI) or (iii) any shareholder, partner, owner, beneficiary, agent, officer or employee of the Indenture Trustee, the Managers or any owner of a membership interest in the Issuer (including EAI) in its respective individual or corporate capacities, or of any successor or assign of any of them in their individual or corporate capaci ties, except as any such Person may have expressly agreed in writing (it being understood that none of the Indenture Trustee, the Managers or EAI has any such obligations in their respective individual or corporate capacities).

 

Prior to the due presentment for registration of transfer of this Tranche [  -  ] Storm Recovery Bond, the Issuer, the Indenture Trustee and any agent of the Issuer or the Indenture Trustee may treat the Person in whose name this Tranche [  -  ] Storm Recovery Bond is registered (as of the day of determination) as the owner hereof for the purpose of receiving payments of principal of and premium, if any, and interest on this Tranche [  -  ] Storm Recovery Bon d and for all other purposes whatsoever, whether or not this Tranche [  -  ] Storm Recovery Bond be overdue, and neither the Issuer, the Indenture Trustee nor any such agent shall be affected by notice to the contrary.

 

The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Issuer and the rights of the Holders of the Storm Recovery Bonds under the Indenture at any time by the Issuer with the consent of the Bondholders representing not less than a majority of the Outstanding Amount of all Storm Recovery Bonds.  The Indenture also contains provisions permitting the Bondholders representing specified percentages of the Outstanding Amount of the Storm Recovery Bonds, on behalf of the Holders of all the Storm Recovery Bonds, to waive compliance by the Issuer with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences.  Any such consent or waiver by the Holder of this Tranche [ - ] Storm Recovery Bond (or any one of more Predecessor Storm Recovery Bonds) shall be conclusive and binding upon such Holder and upon all future Holders of this Tranche [ - ] Storm Recovery Bond and of any Storm Recovery Bond issued upon the registration of transfer hereof or in exchange hereof or in lieu hereof whether or not notation of such consent or waiver is made upon this Tranche [ - ] Storm Recovery Bond.  The Indenture also permits the Indenture Trustee to amend or waive certain terms and conditions set forth in the Indenture without the consent of Holders of the Storm Recovery Bonds issued thereunder.

 

The Indenture contains provisions for defeasance at any time of (a) the entire indebtedness of the Issuer on this Tranche [ - ] Storm Recovery Bond and (b) certain restrictive covenants and the related Events of Default, upon compliance by the Issuer with certain conditions set forth herein, which provisions apply to this Tranche [ - ] Storm Recovery Bond.

 

The term “Issuer” as used in this Tranche [ - ] Storm Recovery Bond includes any successor to the Issuer under the Indenture.

 

The Issuer is permitted by the Indenture, under certain circumstances, to merge or consolidate, subject to the rights of the Indenture Trustee and the Bondholders under the Indenture.

 

The Tranche [ - ] Storm Recovery Bonds are issuable only in registered form in denominations as provided in the Indenture and the Series Supplement subject to certain limitations therein set forth.

 

THIS TRANCHE [ - ] STORM RECOVERY BOND, THE INDENTURE AND THE SERIES SUPPLEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS (OTHER THAN SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW AND SECTIONS 9-301 THROUGH 9-306 OF THE NY UCC), AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS; PROVIDED THAT THE CREATION, ATTACHMENT AND PERFECTION OF ANY LIENS CREATED UNDER THE INDENTURE IN STORM RECOVERY PROPERTY, AND ALL RIGHTS AND REMEDIES OF THE INDENTURE TRUSTEE AND THE HOLDERS WITH RESPECT TO SUCH STOR M RECOVERY PROPERTY, SHALL BE GOVERNED BY THE LAWS OF THE STATE OF ARKANSAS.

 

No reference herein to the Indenture and no provision of this Tranche [ - ] Storm Recovery Bond or of the Indenture shall alter or impair the obligation, which is absolute and unconditional, to pay the principal of and interest on this Tranche [ - ] Storm Recovery Bond at the times, place, and rate, and in the coin or currency herein prescribed.

 

The Holder of this Tranche [ - ] Storm Recovery Bond by the acceptance hereof agrees that, notwithstanding any provision of the Indenture or the Series Supplement to the contrary, the Holder shall have no recourse against the Issuer, but shall look only to the Storm Recovery Bond Collateral, with respect to any amounts due to the Holder under this Tranche [ - ] Storm Recovery Bond.

 

The Issuer and the Indenture Trustee, by entering into the Indenture, and the Holders and any Persons holding a beneficial interest in any Tranche [ - ] Storm Recovery Bond, by acquiring any Tranche [ - ] Storm Recovery Bond or interest therein, (i) express their intention that, solely for the purpose of federal taxes and, to the extent consistent with applicable state, local and other tax law, solely for the purpose of state, local and other taxes, the Tranche [ - ] Storm Recovery Bonds qualify under applicable tax law as indebtedness of the sole owner of the Issuer secured by the Storm Recovery Bond Collateral and (ii) solely for purposes of federal taxes and, to the extent consistent with applicable state, local and other tax law, solely for purposes of state, local and other taxes, so long as any of the Tranche [ - ] Storm Recovery Bonds are outstanding, agree to treat the Tranche [ - ] Storm Recovery Bonds as indebtedness of the sole owner of the Issuer secured by the Storm Recovery Bond Collateral unless otherwise required by appropriate taxing authorities.

 

---

 

ABBREVIATIONS

 

The following abbreviations, when used in the inscription of the face of this Tranche [ - ] Storm Recovery Bond, shall be construed as though they were written out in full according to applicable laws or regulations.

 

TEN COM	as tenants in common
TEN ENT	as tenants by the entireties
JT TEN	as joint tenants with right of survivorship and not as tenants in common
UNIF GIFT MIN ACT	___________________ Custodian ______________________ (Custodian)                                                      (minor)
	Under Uniform Gifts to Minor Act (____________________) (State)

Additional abbreviations may also be used though not in the above list.

 

 

 

 

 

ASSIGNMENT

 

Social Security or taxpayer I.D.  or other identifying number of assignee ____________

 

FOR VALUE RECEIVED, the undersigned2 hereby sells, assigns and transfers unto

 

(name and address of assignee)

 

the within Tranche [ - ] Storm Recovery Bond and all rights thereunder, and hereby irrevocably constitutes and appoints ________________, attorney, to transfer said Tranche [ - ] Storm Recovery Bond on the books kept for registration thereof, with full power of substitution in the premises.

 

Dated:  [___________, _____]	______________________________________ Signature Guaranteed:
	______________________________________

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EXHIBIT B

 

 

This SERIES SUPPLEMENT dated as of [__________, 2010] (this “Supplement”), by and between ENTERGY ARKANSAS RESTORATION FUNDING, LLC, a limited liability company created under the laws of the State of Delaware (the “Issuer”), and THE BANK OF NEW YORK MELLON, a New York banking corporation (“BNYM”), in its capacity as indenture trustee (the “Indenture Trustee”) for the benefit of the Secured Parties under the Indenture dated as of __________, 2010 by and between the Issuer and BNYM, in its capacity as Indenture Trustee and in its separate capacity as securities intermediary (the “Indenture”).

 

PRELIMINARY STATEMENT

 

Section 9.01 of the Indenture provides, among other things, that the Issuer and the Indenture Trustee may at any time enter into an indenture supplemental to the Indenture for the purposes of authorizing the issuance by the Issuer of the Storm Recovery Bonds and specifying the terms thereof.  The Issuer has duly authorized the creation of the Storm Recovery Bonds with an initial aggregate principal amount of [$_____] to be known as Entergy Arkansas Restoration Funding, LLC Storm Recovery Bonds (the “Storm Recovery Bonds”), and the Issuer and the Indenture Trustee are executing and delivering this Supplement in order to provide for the Storm Recovery Bonds.

 

All terms used in this Supplement that are defined in the Indenture, either directly or by reference therein, have the meanings assigned to them therein, except to the extent such terms are defined or modified in this Supplement or the context clearly requires otherwise.  In the event that any term or provision contained herein shall conflict with or be inconsistent with any term or provision contained in the Indenture, the terms and provisions of this Supplement shall govern.

 

GRANTING CLAUSE

 

With respect to the Storm Recovery Bonds, the Issuer hereby Grants to the Indenture Trustee, as Indenture Trustee for the benefit of the Secured Parties of the Storm Recovery Bonds, all of the Issuer’s right, title and interest (whether now owned or hereafter acquired or arising) in and to (a) the Storm Recovery Property created under and pursuant to the Financing Order, and transferred by the Seller to the Issuer pursuant to the Sale Agreement (including, to the fullest extent permitted by law, the right to impose, bill, collect and receive Storm Recovery Charges, all revenues, collections, claims, rights, payments, money or proceeds of or arising from the Storm Recovery Charges authorized in the Financing Order and any Tariffs filed pursuant thereto and any contractual rights to collect such Storm Recovery Charges from Cus tomers), (b) all Storm Recovery Charges related to such Storm Recovery Property, (c) the Sale Agreement and each Bill of Sale executed in connection therewith and all property and interests in property transferred under the Sale Agreement and such Bills of Sale with respect to such Storm Recovery Property and the Storm Recovery Bonds, (d) the Servicing Agreement, the Administration Agreement and any subservicing, agency, intercreditor, administration or collection agreements executed in connection therewith, to the extent related to the foregoing Storm Recovery Property and the Storm Recovery Bonds, (e) the Collection Account, all subaccounts thereof and all amounts of cash, instruments, investment property or other assets on deposit therein or credited thereto from time to time and all financial assets and securities entitlements carried therein or credited thereto, (f) all rights to compel the Servicer to file for and obtain adjustments to the Storm Recovery Charges in accordance w ith Section 23-18-903(h) of the Securitization Act, the Financing Order or any Tariff filed in connection therewith, (g) all present and future claims, demands, causes and choses in action in respect of any or all of the foregoing, whether such claims, demands, causes and choses in action constitute Storm Recovery Property, accounts, general intangibles, instruments, contract rights, chattel paper or proceeds of such items or any other form of property, (h) all accounts, chattel paper, deposit accounts, documents, general intangibles, goods, instruments, investment property, letters of credit, letters-of-credit rights, money, commercial tort claims and supporting obligations related to the foregoing, and (i) all payments on or under, and all proceeds in respect of, any or all of the foregoing; it being understood that the following do not constitute Storm Recovery Bon d Collateral:  (i) cash that has been released pursuant to Section 8.02(e)(x) of the Indenture and, following retirement of all Outstanding Storm Recovery Bonds, cash that has been released pursuant to Section 8.02(e)(xii) of the Indenture and (ii) amounts deposited with the Issuer on the Closing Date, for payment of costs of issuance with respect to the Storm Recovery Bonds (together with any interest earnings thereon), it being understood that such amounts described in clauses (i) and (ii) above shall not be subject to Section 3.17 of the Indenture.

 

The foregoing Grant is made in trust to secure the payment of principal of and premium, if any, interest on, and any other amounts owing in respect of, the Storm Recovery Bonds and all fees, expenses, indemnity amounts, counsel fees and other amounts due and payable to the Indenture Trustee (collectively, the “Secured Obligations”) equally and ratably without prejudice, priority or distinction, except as expressly provided in the Indenture, to secure compliance with the provisions of the Indenture with respect to the Storm Recovery Bonds, all as provided in the Indenture and to secure the performance by the Issuer of all of its obligations under the Indenture.  The Indenture and this Series Supplement constitutes a security agreement within the meani ng of the Securitization Act and under the UCC to the extent that the provisions of the UCC are applicable hereto.

 

The Issuer hereby authorizes the Indenture Trustee to file one or more financing statements (including amendments of financing statements and continuation statements if applicable) with respect to the Storm Recovery Bond Collateral, including , without limitation, one or more financing statements describing the collateral covered thereby as “all assets or all personal property of the debtor” or words of similar effect.

 

The Indenture Trustee, as indenture trustee on behalf of the Secured Parties of the Storm Recovery Bonds, acknowledges such Grant and accepts the trusts under this Supplement and the Indenture in accordance with the provisions of this Supplement and the Indenture.

 

SECTION 1.  Designation.  The Storm Recovery Bonds shall be designated generally as the Storm Recovery Bonds and further denominated as Tranche [ ].

 

SECTION 2.  Initial Principal Amount; Storm Recovery Bond Interest Rate; Scheduled Payment Date; Final Maturity Date.  The Storm Recovery Bonds shall have the initial principal amount, bear interest at the rates per annum and shall have the Scheduled Payment Dates and the Final Maturity Date set forth below:

 

Tranche

Initial Principal Amount

Storm Recovery Bond Interest Rate

Scheduled Final Payment Date

Final Maturity Date

The Storm Recovery Bond Interest Rate shall be computed on the basis of a 360-day year of twelve 30-day months.

 

SECTION 3.  Authentication Date; Payment Dates; Expected Amortization Schedule for Principal; Periodic Interest; No Premium; Other Terms.

 

(a)           Authentication Date.  The Storm Recovery Bonds that are authenticated and delivered by the Indenture Trustee to or upon the order of the Issuer on [  ] (the “Closing Date”) shall have as their date of authentication [   ].

 

(b)           Payment Dates.  The Payment Dates for the Storm Recovery Bonds are __________ and __________ of each year or, if any such date is not a Business Day, the next succeeding Business Day, commencing on [  ] and continuing until the earlier of repayment of the Tranche [  ] Storm Recovery Bonds in full and the Final Maturity Date for the Tranche [  ] St orm Recovery Bonds.

 

(c)           Expected Amortization Schedule for Principal.  Unless an Event of Default shall have occurred and be continuing on each Payment Date, the Indenture Trustee shall distribute to the Holders of record as of the related Record Date amounts payable pursuant to Section 8.02(e) of the Indenture as principal, to the holders of the Tranche [  ] Storm Recovery Bonds, until the Outstanding Amount of the Storm Recovery Bonds has been reduced to zero; provided, however, that in no event shall a principal payment pursuant to this Section 3(c) on a Payment Date be greater than the amount necessary to reduce the Outstanding Amount of the Storm Recovery Bonds to the amount specified in the Expected Amortization Schedule which is attached as Schedule A  for such Payment Date.

 

(d)           Periodic Interest.  Periodic Interest will be payable on the Storm Recovery Bonds on each Payment Date in an amount equal to one-half of the product of (i) the applicable Storm Recovery Bond Interest Rate and (ii) the Outstanding Amount of the Storm Recovery Bonds as of the close of business on the preceding Payment Date after giving effect to all payments of principal made to the Holders of the Storm Recovery Bonds on such preceding Payment Date; provided, however, that with respect to the Initial Payment Date, or, if no payment has yet been made, interest on the outstanding principal balance will accrue from and including the Closing Date to, but excluding, the following Payment Date.

 

(e)           Book-Entry Storm Recovery Bonds.  The Storm Recovery Bonds shall [not] be Book-Entry Storm Recovery Bonds and the applicable provisions of Section 2.11 of the Indenture shall [not] apply to such Storm Recovery Bonds.

 

(f)           Waterfall Cap.  The amount payable with respect to the Storm Recovery Bonds pursuant to Section 8.02(e)(i) of the Indenture shall not exceed $1,000,000 annually.

 

SECTION 4.  Minimum Denominations.  The Storm Recovery Bonds shall be issuable in the Minimum Denomination and integral multiples thereof.

 

SECTION 5.  Certain Defined Terms.  Article I of the Indenture provides that the meanings of certain defined terms used in the Indenture shall, when applied to the Storm Recovery Bonds, be as defined in Appendix A to the Indenture.  Additionally, Article II of the Indenture provides that certain terms will have the meanings specified in this Supplement.  With respect to the Storm Recovery Bonds, the following definitions shall apply:

 

“Initial Payment Date” shall mean the first Payment Date for the Storm Recovery Bonds specified in the Expected Amortization Schedule which is attached as Schedule A hereto.

 

“Minimum Denomination” shall mean $100,000.

 

“Payment Date” has the meaning set forth in Section 3(b) of this Supplement.

 

“Periodic Interest” has the meaning set forth in Section 3(d) of this Supplement.

 

“Storm Recovery Bond Interest Rate” has the meaning set forth in Section 2 of this Supplement.

 

SECTION 6.  Delivery and Payment for the Storm Recovery Bonds; Form of the Storm Recovery Bonds.  The Indenture Trustee shall deliver the Storm Recovery Bonds to the Issuer when authenticated in accordance with Section 2.03 of the Indenture.  The Storm Recovery Bonds shall be in the form of Exhibit A hereto.

 

SECTION 7.  Ratification of Agreement.  As supplemented by this Supplement, the Indenture is in all respects ratified and confirmed and the Indenture, as so supplemented by this Supplement, shall be read, taken, and construed as one and the same instrument.  This Supplement amends, modifies and supplemented the Indenture only in so far as it relates to the Storm Recovery Bonds.

 

SECTION 8.  Counterparts.  This Supplement may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, but all of such counterparts shall together constitute but one and the same instrument.

 

SECTION 9.  GOVERNING LAW.  THIS SUPPLEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS (OTHER THAN SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW AND SECTIONS 9-301 THROUGH 9-306 OF THE NY UCC), AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS; PROVIDED THAT THE CREATION, ATTACHMENT AND PERFECTION OF ANY LIENS CREATED UNDER THE INDENTURE IN STORM RECOVERY PROPERTY, AND ALL RIGHTS AND REMEDIES OF THE INDENTURE TRUSTEE AND THE HOLDERS WITH RESP ECT TO SUCH STORM RECOVERY PROPERTY, SHALL BE GOVERNED BY THE LAWS OF THE STATE OF ARKANSAS.

 

SECTION 10.  Issuer Obligation.  No recourse may be taken directly or indirectly, by the Holders with respect to the obligations of the Issuer on the Storm Recovery Bonds, under the Indenture or under this Supplement or any certificate or other writing delivered in connection herewith or therewith, against (i) the Indenture Trustee or the Managers in their respective individual capacities, (ii) any owner of a beneficial interest in the Issuer (including EAI) or (iii) any shareholder, partner, owner, beneficiary, agent, officer, director, employee or agent of the Indenture Trustee, the Managers or any owner of a beneficial interest in the Issuer (including EAI) in its individual capacity, or of any successor or assign of any of them in their respective individual or corporate capacities, except as any such Person may have expressly agreed (it being understood that none of the Indenture Trustee, the Managers and EAI have any such obligations in their respective individual or corporate capacities).

 

SECTION 11.  Application of Storm Recovery Bond Proceeds; Costs of Issuance Account.  The proceeds of the Storm Recovery Bond Proceeds shall be applied to pay the costs of issuing the Storm Recovery Bonds and to purchase the Storm Recovery Property, as directed in an Officer’s Certificate.  The Indenture Trustee shall, pursuant to an Issuer Order, deposit the amounts directed to be applied to the payment of the costs of issuance into a segregated trust account (the “Costs of Issuance Account”).  Amounts in the Costs of Issuance Account shall be applied from time to time as directed by an Officer’s Certificate, to pay costs of issuing the Storm Recovery Bonds, and, upon payment of all such costs, for depo sit into the General Subaccount and applied as a credit against Storm Recovery Charges as required by the Financing Order.  Pending such application, amounts in the Costs of Issuance Account may be invested in the same manner and subject to the same restrictions as amounts in the General Subaccount, provided that any amount earned, or gains or losses, shall be credited to the Costs of Issuance Account.

 

IN WITNESS WHEREOF, the Issuer and the Indenture Trustee have caused this Supplement to be duly executed by their respective officers thereunto duly authorized as of the first day of the month and year first above written.

 

	ENTERGY ARKANSAS RESTORATION FUNDING, LLC, as Issuer
	By:  __________________________________ Name: Title:
	THE BANK OF NEW YORK MELLON, a New York banking corporation, as Indenture Trustee
	By:  __________________________________ Name: Title:

SCHEDULE A

 

EXPECTED AMORTIZATION SCHEDULE

 

 

OUTSTANDING PRINCIPAL BALANCE OF THE STORM RECOVERY BONDS

 

PAYMENT DATE	TRANCHE A
Closing Date	$
________ ___, 201_
________ ___, 201_
________ ___, 201_
________ ___, 201_

 

 

EXHIBIT C

 

Reg AB Reference	Servicing Criteria	Applicable Indenture Trustee Responsibility
	General Servicing Considerations
1122(d)(1)(i)	Policies and procedures are instituted to monitor any performance or other triggers and events of default in accordance with the transaction agreements.
1122(d)(1)(ii)	If any material servicing activities are outsourced to third parties, policies and procedures are instituted to monitor the third party’s performance and compliance with such servicing activities.
1122(d)(1)(iii)	Any requirements in the transaction agreements to maintain a back-up servicer for the pool assets are maintained.
1122(d)(1)(iv)	A fidelity bond and errors and omissions policy is in effect on the party participating in the servicing function throughout the reporting period in the amount of coverage required by and otherwise in accordance with the terms of the transaction agreements.
	Cash Collection and Administration
1122(d)(2)(i)	Payments on pool assets are deposited into the appropriate custodial bank accounts and related bank clearing accounts no more than two (2) business days following receipt, or such other number of days specified in the transaction agreements.	X
1122(d)(2)(ii)	Disbursements made via wire transfer on behalf of an obligor or to an investor are made only by authorized personnel.	X
1122(d)(2)(iii)	Advances of funds or guarantees regarding collections, cash flows or distributions, and any interest or other fees charged for such advances, are made, reviewed and approved as specified in the transaction agreements.
1122(d)(2)(iv)	The related accounts for the transaction, such as cash reserve accounts or accounts established as a form of overcollateralization, are separately maintained (e.g., with respect to commingling of cash) as set forth in the transaction agreements.	X
1122(d)(2)(v)	Each custodial account is maintained at a federally insured depository institution as set forth in the transaction agreements.  For purposes of this criterion, “federally insured depository institution” with respect to a foreign financial institution means a foreign financial institution that meets the requirements of Rule 13k-1(b)(1) of the Securities Exchange Act.
1122(d)(2)(vi)	Unissued checks are safeguarded so as to prevent unauthorized access.
1122(d)(2)(vii)	Reconciliations are prepared on a monthly basis for all asset-backed securities related bank accounts, including custodial accounts and related bank clearing accounts.  These reconciliations are (A) mathematically accurate; (B) prepared within thirty (30) calendar days after the bank statement cutoff date, or such other number of days specified in the transaction agreements; (C) reviewed and approved by someone other than the person who prepared the reconciliation; and (D) contain explanations for reconciling items.  These reconciling items are resolved within ninety (90) calendar days of their original identification, or such other number of days specified in the transaction agreements.
	Investor Remittances and Reporting
1122(d)(3)(i)	Reports to investors, including those to be filed with the SEC, are maintained in accordance with the transaction agreements and applicable SEC requirements.  Specifically, such reports (A) are prepared in accordance with timeframes and other terms set forth in the transaction agreements; (B) provide information calculated in accordance with the terms specified in the transaction agreements; (C) are filed with the SEC as required by its rules and regulations; and (D) agree with investors’ or the trustee’s records as to the total unpaid principal balance and number of pool assets serviced by the servicer.
1122(d)(3)(ii)	Amounts due to investors are allocated and remitted in accordance with timeframes, distribution priority and other terms set forth in the transaction agreements.	X
1122(d)(3)(iii)	Disbursements made to an investor are posted within two (2) business days to the servicer’s investor records, or such other number of days specified in the transaction agreements.	X
1122(d)(3)(iv)	Amounts remitted to investors per the investor reports agree with cancelled checks, or other form of payment, or custodial bank statements.	X
	Pool Asset Administration
1122(d)(4)(i)	Collateral or security on pool assets is maintained as required by the transaction agreements or related pool asset documents.	X*
1122(d)(4)(ii)	Pool assets and related documents are safeguarded as required by the transaction agreements.
1122(d)(4)(iii)	Any additions, removals or substitutions to the asset pool are made, reviewed and approved in accordance with any conditions or requirements in the transaction agreements.
1122(d)(4)(iv)	Payments on pool assets, including any payoffs, made in accordance with the related pool asset documents are posted to the servicer’s obligor records maintained no more than two (2) business days after receipt, or such other number of days specified in the transaction agreements, and allocated to principal, interest or other items (e.g., escrow) in accordance with the related pool asset documents.
1122(d)(4)(v)	The servicer’s records regarding the pool assets agree with the servicer’s records with respect to an obligor’s unpaid principal balance.
1122(d)(4)(vi)	Changes with respect to the terms or status of an obligor’s pool assets (e.g., loan modifications or re-agings) are made, reviewed and approved by authorized personnel in accordance with the transaction agreements and related pool asset documents.
1122(d)(4)(vii)	Loss mitigation or recovery actions (e.g., forbearance plans, modifications and deeds in lieu of foreclosure, foreclosures and repossessions, as applicable) are initiated, conducted and concluded in accordance with the timeframes or other requirements established by the transaction agreements.
1122(d)(4)(viii)	Records documenting collection efforts are maintained during the period a pool asset is delinquent in accordance with the transaction agreements.  Such records are maintained on at least a monthly basis, or such other period specified in the transaction agreements, and describe the entity’s activities in monitoring delinquent pool assets including, for example, phone calls, letters and payment rescheduling plans in cases where delinquency is deemed temporary (e.g., illness or unemployment).
1122(d)(4)(ix)	Adjustments to interest rates or rates of return for pool assets with variable rates are computed based on the related pool asset documents.
1122(d)(4)(x)	Regarding any funds held in trust for an obligor (such as escrow accounts):  (A) such funds are analyzed, in accordance with the obligor’s pool asset documents, on at least an annual basis, or such other period specified in the transaction agreements; (B) interest on such funds is paid, or credited, to obligors in accordance with applicable pool asset documents and state laws; and (C) such funds are returned to the obligor within thirty (30) calendar days of full repayment of the related pool assets, or such other number of days specified in the transaction agreements.
1122(d)(4)(xi)	Payments made on behalf of an obligor (such as tax or insurance payments) are made on or before the related penalty or expiration dates, as indicated on the appropriate bills or notices for such payments, provided that such support has been received by the servicer at least thirty (30) calendar days prior to these dates, or such other number of days specified in the transaction agreements.
1122(d)(4)(xii)	Any late payment penalties in connection with any payment to be made on behalf of an obligor are paid from the servicer’s funds and not charged to the obligor, unless the late payment was due to the obligor’s error or omission.
1122(d)(4)(xiii)	Disbursements made on behalf of an obligor are posted within two (2) business days to the obligor’s records maintained by the servicer, or such other number of days specified in the transaction agreements.
1122(d)(4)(xiv)	Delinquencies, charge-offs and uncollectible accounts are recognized and recorded in accordance with the transaction agreements.
1122(d)(4)(xv)	Any external enhancement or other support, identified in Item 1114(a)(1) through (3) or Item 1115 of Regulation AB, is maintained as set forth in the transaction agreements.

    *With respect to its custodial functions relating to the Collection Account.

 

 

This is Appendix A to the Indenture.

 

A.                           Defined Terms.  As used in the Indenture, the Sale Agreement, the LLC Agreement, the Servicing Agreement, the Series Supplement or any other Basic Document as hereinafter defined, as the case may be (unless the context requires a different meaning), the following terms have the following meanings:

 

“Act” is defined in Section 10.03(a) of the Indenture.

 

“Administration Agreement” means the Administration Agreement, dated as of August 18, 2010, by and between Entergy Arkansas and the Issuer, as the same may be amended, restated, supplemented or otherwise modified from time to time.

 

“Administration Fee” is defined in Section 2 of the Administration Agreement.

 

“Affiliate” means, with respect to any specified Person, any other Person controlling or controlled by or under common control with such specified Person.  For the purposes of this definition, “control” when used with respect to any specified Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms “controlling” and “controlled” have meanings correlative to the foregoing.

 

“Agency Office” means the office of the Issuer maintained pursuant to Section 3.02 of the Indenture.

 

“Amendatory Tariff” means a revision to service riders or any other notice filing filed with the APSC in respect of a Tariff pursuant to a True-Up Adjustment.

 

“Annual Accountant’s Report” is defined in Section 3.04(a) of the Servicing Agreement.

 

“Application” means the Application of EAI for a Financing Order to securitize storm recovery costs filed by Entergy Arkansas with the APSC on February 13, 2010 pursuant to the Securitization Act.

 

“Arkansas UCC” means the Uniform Commercial Code as in effect on the date hereof in the State of Arkansas.

 

“APSC” means the Arkansas Public Service Commission or any Governmental Authority succeeding to the duties of such agency.

 

“APSC Regulations” means the regulations, including proposed or temporary regulations, promulgated under the Arkansas public utilities law.

 

“Bankruptcy Code” means Title 11 of the United States Code (11 U.S.C. § 101 et seq.), as amended from time to time.

 

“Basic Documents” means the Indenture, the Administration Agreement, the Sale Agreement, the Certificate of Formation, the LLC Agreement, the Servicing Agreement, the Series Supplement, the Letter of Representations, the Underwriting Agreement and all other documents and certificates delivered in connection therewith.

 

“Benefit Plan” means, with respect to any Person, any defined benefit plan (as defined in Section 3(35) of ERISA) that (a) is or was at any time during the past six years maintained by such Person or any ERISA Affiliate of such person, or to which contributions by any such Person are or were at any time during the past six (6) years required to be made or under which such Person has or could have any liability or (b) is subject to the provisions of Title IV of ERISA.

 

“Bill of Sale” means a bill of sale substantially in the form of Exhibit A to the Sale Agreement.

 

“Billed SRCs” is defined in Annex I to the Servicing Agreement.

 

“Billing Month” means each period created by dividing the calendar year into twelve (12) consecutive periods of approximately twenty-one (21) Servicer Business Days.

 

“Bills” means each of the regular monthly bills, summary bills, opening bills and closing bills issued to Customers by EAI.

 

“Book-Entry Form” means, with respect to any Storm Recovery Bond that such Storm Recovery Bond is not certificated and the ownership and transfers thereof shall be made through book entries by a Clearing Agency as described in Section 2.11 of the Indenture and the Series Supplement pursuant to which such Storm Recovery Bond was issued.

 

“Book-Entry Storm Recovery Bonds” means any Storm Recovery Bonds issued in Book-Entry Form; provided, however, that after the occurrence of a condition whereupon book-entry registration and transfer are no longer permitted and Definitive Storm Recovery Bonds are to be issued to the Holder of such Storm Recovery Bonds, such Storm Recovery Bonds shall no longer be “Book-Entry Storm Recovery Bonds”.

 

“Business Day” means any day other than a Saturday, a Sunday or a day on which banking institutions in Little Rock, Arkansas or New York, New York are, or DTC is, authorized or obligated by law, regulation or executive order to remain closed.

 

“Capital Contribution” means the amount of cash contributed to the Issuer by EAI as specified in the LLC Agreement.

 

“Capital Subaccount” is defined in Section 8.02(a) of the Indenture.

 

“Certificate of Compliance” means the certificate referred to in Section 3.03(a) of the Servicing Agreement and substantially in the form of Exhibit C-1 and C-2 attached to the Servicing Agreement.

 

“Certificate of Formation” means the Certificate of Formation filed with the Secretary of State of the State of Delaware on June 17, 2010 pursuant to which the Issuer was formed.

 

“Claim” means a “claim” as defined in Section 101(5) of the Bankruptcy Code.

 

“Clearstream” means Clearstream Banking, Luxembourg, S.A.

 

“Clearing Agency” means an organization registered as a “clearing agency” pursuant to Section 17A of the Exchange Act.

 

“Clearing Agency Participant” means a securities broker, dealer, bank, trust company, clearing corporation or other financial institution or other Person for whom from time to time a Clearing Agency effects book entry transfers and pledges of securities deposited with the Clearing Agency.

 

“Closing Date” means August 18, 2010.

 

“Code” means the Internal Revenue Code of 1986, as amended.

 

“Collection Account” means the account established by the Issuer and maintained by the Indenture Trustee in accordance with Section 8.02(a) of the Indenture and any subaccounts contained therein.

 

“Corporate Trust Office” means the principal office of the Indenture Trustee at which, at any particular time, its corporate trust business shall be administered, which office as of the Closing Date is located at 101 Barclay Street, Floor 4W, New York, New York 10286, Attention: Corporate Trust - ABS Group, Telephone: (212) 815-8139, Facsimile: (212) 815-3883 or at such other address as the Indenture Trustee may designate from time to time by notice to the Holders of Storm Recovery Bonds and the Issuer, or the principal corporate trust office of any successor trustee by like notice.

 

“Covenant Defeasance Option” is defined in Section 4.01(b) of the Indenture.

 

“Customers” means all existing and future retail customers of EAI or any successor or assignee in the Service Area who are obligated to pay Storm Recovery Charges pursuant to the Financing Order or any Tariff.

 

“Daily Remittance” is defined in Section 6.11(a) of the Servicing Agreement.

 

“Default” means any occurrence that is, or with notice or the lapse of time or both would become, an Event of Default as defined in Section 5.01 of the Indenture.

 

“Definitive Storm Recovery Bonds” means Storm Recovery Bonds issued in definitive form in accordance with  Section 2.13 of the Indenture.

 

“Delaware Financing Statements” means one or more Uniform Commercial Code financing statements to be filed in the appropriate filing office in the State of Delaware.

 

“Delaware UCC” means the Uniform Commercial Code as in effect on the date hereof in the State of Delaware.

 

“DTC” means The Depository Trust Company or any successor thereto.

 

“Eligible Account” means a segregated non-interest-bearing trust account with either (a) an Eligible Institution or (b) the corporate trust department of a depository institution organized under the laws of the United States of America or any State (or any domestic branch of a foreign bank), having corporate trust powers and acting as trustee for funds deposited in such account, so long as any of the securities of such depository institution shall have a credit rating from each Rating Agency in one of its generic rating categories which such Rating Agency defines as investment grade from time to time.  At the Closing Date, the lowest investment-grade rating is BBB- from Fitch, Baa3 from Moody’s and BBB- from S&P.

 

“Eligible Institution” means:

 

(a)           the corporate trust department of the Indenture Trustee or a subsidiary thereof, so long as the Indenture Trustee or a subsidiary thereof have a credit rating from each Rating Agency in one of its generic rating categories which signifies investment grade; or

 

(b)           a depository institution organized under the laws of the United States of America or any State (or any domestic branch of a foreign bank), which (i) has either (A) a short-term issuer rating of AAA by S&P and A2 by Moody’s, and, if rated by Fitch, AAA by Fitch or (B) a long-term issuer rating of A-1+ by S&P and P-1 by Moody’s or any other long-term or, short-term rating acceptable to the Rating Agencies and (ii) whose deposits are insured by the FDIC.

 

If so qualified under clause (b) above, the Indenture Trustee may be considered an Eligible Institution for the purposes of clause (a) of this definition.

 

“Eligible Investments” mean instruments or investment property, which shall not include any structured finance assets (including instruments commonly known as RMBS, CMBS or CDO’s), which evidence:

 

(a)                      direct obligations of, or obligations fully and unconditionally guaranteed as to timely payment by, the United States of America;

 

(b)                      time deposits and certificates of deposit of depository institutions meeting the requirements of clause (b) of the definition of Eligible Institution;

 

(c)                      commercial paper (other than commercial paper of EAI or any of its Affiliates) having, at the time of the investment or contractual commitment to invest therein, a rating from each of the Rating Agencies from which a rating is available in the highest investment category granted thereby;

 

(d)                      investments in money market funds having a rating in the highest investment category granted thereby (including funds for which the Indenture Trustee or any of its Affiliates is investment manager or advisor) from Moody’s, Standard & Poor’s and Fitch, if rated by Fitch; or

 

(e)                      any other investment permitted by each of the Rating Agencies;

 

in each case maturing not later than the Business Day immediately preceding the next Payment Date or Special Payment Date, if applicable (for the avoidance of doubt, investments in money market funds or similar instruments which are redeemable on demand shall be deemed to satisfy the foregoing requirement).  Notwithstanding the foregoing, any securities or investments which mature in 32 days or more shall not be “Eligible Investments” unless the issuer thereof has a short-term issuer rating of at least A1 from Moody’s and A-1+ from S&P, any securities or investments described in clauses (b) through (d) above which have maturities of less than or equal to 3 months shall not be “Eligible Investments” unless the issuer thereof has a short-term and long-term issuer debt rating of at least A1/P-1 from Moody’s and any securities or investments described in clauses (b) through (d) above which have maturities of more than 3 months shall not be an “Eligible Investment” unless the issuer thereof has a long-term and short-term issuer rating of at least Aa3/P-1 from Moody’s.

 

“Entergy Arkansas” or “EAI” means Entergy Arkansas, Inc. and its successors and assigns.

 

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

 

“ERISA Affiliate” means with respect to any Person at any time, each trade or business (whether or not incorporated) that would, at that time, be treated together with such Person as a single employer under Section 401 of ERISA or Section 414(b), (c), (m) or (o) of the Code.

 

“Euroclear” means the Euroclear System.

 

“Event of Default” is defined in Section 5.01 of the Indenture.

 

“Excess Funds Subaccount” is defined in Section 8.02(a) of the Indenture.

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

 

“Expected Amortization Schedule” means, the expected amortization schedule set forth in the Series Supplement.

 

“FDIC” means the Federal Deposit Insurance Corporation or any successor thereto.

 

“Federal Book-Entry Regulations” means 31 C.F.R. Part 357 et seq. (Department of Treasury).

 

“Federal Book-Entry Securities” means securities issued in book-entry form by the United States Treasury.

 

“Federal Funds Rate” means, for any period, a fluctuating interest rate per annum equal for each day during such period to the weighted average of the rates on overnight federal funds transactions with members of the Federal Reserve System arranged by federal funds brokers, as published for such day (or, if such day is not a Business Day, for the next preceding Business Day) by the Federal Reserve Bank of New York, or, if such rate is not so published for any day that is a Business Day, the average of the quotations for such day on such transactions received by the Servicer from three (3) federal funds brokers of recognized standing selected by it.

 

“FERC” means the Federal Energy Regulatory Commission or any successor thereto.

 

“Final” means, with respect to the Financing Order, that the Financing Order has become final, is not being appealed and that the time for filing an appeal therefrom has expired.

 

“Final Maturity Date” means the Final Maturity Date as specified in the Series Supplement.

 

“Financial Asset” means “financial asset” as set forth in Section 8-102(a)(9) of the NY UCC.

 

“Financing Order” means the Final Financing Order issued on June 16, 2010 by the APSC pursuant to the Securitization Act, Docket No. 10-008-U, authorizing, among other things, the creation of the Storm Recovery Property and the issuance of the Storm Recovery Bonds.

 

“Fitch” means Fitch, Inc. or any successor thereto.

 

“General Subaccount” is defined in Section 8.02(a) of the Indenture.

 

“Global Storm Recovery Bond” means a Storm Recovery Bond evidencing all or any part of the Storm Recovery Bonds to be issued to the Holders thereof in Book-Entry Form, which Global Storm Recovery Bond shall be issued to the Clearing Agency, or its nominee, in accordance with Section 2.11 of the Indenture and the Series Supplement pursuant to which the Storm Recovery Bond is issued.

 

“Governmental Authority” means any nation or government, any federal, state, local or other political subdivision thereof and any court, administrative agency or other instrumentality or entity exercising executive, legislative, judicial, regulatory or administrative function of government.

 

“Grant” means mortgage, pledge, bargain, sell, warrant, alienate, remise, release, convey, grant, transfer, create, and grant a lien upon and a security interest in and right of set-off against, deposit, set over and confirm pursuant to the Indenture and the Series Supplement.  A Grant of the Storm Recovery Bond Collateral or of any other agreement or instrument included therein shall include all rights, powers and options (but none of the obligations) of the Granting party thereunder, including the immediate and continuing right to claim for, collect, receive and give receipt for payments in respect of the Storm Recovery Bond Collateral and all other moneys payable thereunder, to give and receive notices and other communications, to make waivers or other agreements, to exercise all rights and options, to bring Proceedings in the name of the Granting party or otherwise and generally to do and receive anything that the Granting party is or may be entitled to do or receive thereunder or with respect thereto.

 

“Holder” or “Bondholder” means the Person in whose name a Storm Recovery Bond is registered on the Storm Recovery Bond Register.

 

“Indenture” means the Indenture, dated as of August 18, 2010, by and between the Issuer and the Indenture Trustee as originally executed and, as from time to time supplemented or amended by the Series Supplement or one or more indentures supplemental thereto entered into pursuant to the applicable provisions of the Indenture, as so supplemented or amended, or both, and shall include the forms and terms of the Storm Recovery Bonds established thereunder.

 

“Indenture Trustee” means The Bank of New York Mellon, a New York banking corporation, as indenture trustee for the benefit of the Secured Parties, or any successor indenture trustee under the Indenture.

 

“Independent” means, when used with respect to any specified Person, that the Person (a) is in fact independent of the Issuer, any other obligor on the Storm Recovery Bonds, the Seller, the Servicer and any Affiliate of any of the foregoing Persons, (b) does not have any direct financial interest or any material indirect financial interest in the Issuer, any such other obligor, the Seller, the Servicer or any Affiliate of any of the foregoing Persons and (c) is not connected with the Issuer, any such other obligor, the Seller, the Servicer or any Affiliate of any of the foregoing Persons as an officer, employee, promoter, underwriter, trustee, partner, director (other than as an independent director or manager) or person performing similar functions.