<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): December 16, 1998
COMED FUNDING, LLC
(Exact name of registrant as specified in its charter)
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
Delaware 36-423-9488
Ten South Dearborn Street, 37th Floor, Chicago, Illinois 60603
(Address of principal executive offices)
Registrant's telephone number, including area code: 312-394-3149
<PAGE>
Item 5. Other Events.
Reference is made to Registrant's registration statement on
Form S-3, as amended (Registration No. 333-60907), filed with the Securities
and Exchange Commission under the Securities Act of 1933, as amended.
Pursuant to such registration statement $3,400,000,000 aggregate principal
amount of ComEd Transitional Funding Trust Notes were issued and sold by
ComEd Transitional Funding Trust (the "Trust"). The transaction was closed on
December 16, 1998.
In connection with this transaction Registrant and the Trust
entered into the material agreements attached hereto as Exhibits.
Item 7. Financial Statements and Exhibits.
A list of the Exhibits filed herewith is attached hereto.
Pursuant to the requirements of the Securities Exchange Act of
1934, as amended, the Registrant has duly caused this report to be signed on
its behalf and on behalf of the Trust by the undersigned hereunto duly
authorized.
COMED FUNDING, LLC
By /S/ Ruth Ann M. Gillis
-------------------------------------
Ruth Ann M. Gillis, Manager
- 2 -
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT DESCRIPTION
- ------- -------------------
<S> <C>
4.3 Indenture, dated as of December 16, 1998, between ComEd Transitional Funding
Trust, as Note Issuer, and Harris Trust and Savings Bank, as Indenture Trustee
10.1 Intangible Transition Property Sale Agreement dated as of December 16, 1998
between ComEd Funding, LLC, a Delaware limited liability company, as Grantee, and
ComEd Transitional Funding Trust, a Delaware business trust, as Note Issuer
10.2 Agreement Relating to Grant of Intangible Transition Property, dated as of
December 16, 1998, between Commonwealth Edison Company, an Illinois corporation,
and ComEd Funding, LLC, a Delaware limited liability company
10.3 Intangible Transition Property Servicing Agreement, dated as of December 16, 1998,
between ComEd Funding, LLC, a Delaware limited liability company, as Grantee, and
Commonwealth Edison Company, an Illinois corporation, as Servicer
10.4 Administration Agreement, dated as of December 16, 1998, among Commonwealth Edison
Company, an Illinois corporation ("ComEd" or the "Administrator"), ComEd
Funding, LLC, a Delaware limited liability company ("CE Funding"), and ComEd
Transitional Funding Trust, a Delaware business trust ("Note Issuer")
10.5 Remediation Agreement, dated as of December 16, 1998, by Commonwealth Edison Company,
an Illinois corporation, and Harris Trust and Savings Bank, an Illinois banking
corporation, not in its individual capacity but solely in its capacity as Indenture
Trustee
</TABLE>
<PAGE>
EXHIBIT 4.3
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
COMED TRANSITIONAL FUNDING TRUST,
Note Issuer,
and
HARRIS TRUST AND SAVINGS BANK,
Indenture Trustee
______________________________
INDENTURE
Dated as of December 16, 1998
______________________________
Issuable in Series
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
ARTICLE I
Definitions and Incorporation by Reference. . . . . . . . . . . . . . . . 3
SECTION 1.01. Definitions. . . . . . . . . . . . . . . . . . . . . . . . 3
SECTION 1.02. Incorporation by Reference of Trust Indenture Act. . . . . 3
SECTION 1.03. Rules of Construction. . . . . . . . . . . . . . . . . . . 3
ARTICLE II
The Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
SECTION 2.01. Form . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
SECTION 2.02. Denominations; Notes Issuable in Series. . . . . . . . . . 4
SECTION 2.03. Execution, Authentication and Delivery . . . . . . . . . . 6
SECTION 2.04. Temporary Notes. . . . . . . . . . . . . . . . . . . . . . 6
SECTION 2.05. Registration; Registration of Transfer and
Exchange of Notes. . . . . . . . . . . . . . . . . . . . . 7
SECTION 2.06. Mutilated, Destroyed, Lost or Stolen Notes . . . . . . . . 8
SECTION 2.07. Persons Deemed Owner . . . . . . . . . . . . . . . . . . . 9
SECTION 2.08. Payment of Principal, Premium, if any, and Interest;
Interest on Overdue Principal; Principal, Premium,
if any, and Interest Rights Preserved. . . . . . . . . . . 9
SECTION 2.09. Cancellation . . . . . . . . . . . . . . . . . . . . . . .10
SECTION 2.10. Outstanding Amount; Authentication and Delivery of
Notes. . . . . . . . . . . . . . . . . . . . . . . . . . .10
SECTION 2.11. Book-Entry Notes . . . . . . . . . . . . . . . . . . . . .17
SECTION 2.12. Notices to Clearing Agency . . . . . . . . . . . . . . . .18
SECTION 2.13. Definitive Notes . . . . . . . . . . . . . . . . . . . . .18
SECTION 2.14. CUSIP Number . . . . . . . . . . . . . . . . . . . . . . .19
SECTION 2.15. Letter of Representations. . . . . . . . . . . . . . . . .19
SECTION 2.16. Release of Note Collateral . . . . . . . . . . . . . . . .19
SECTION 2.17. Special Terms Applicable to Subsequent Transfers of
Certain Notes. . . . . . . . . . . . . . . . . . . . . . .19
SECTION 2.18. Tax Treatment. . . . . . . . . . . . . . . . . . . . . . .20
SECTION 2.19. State Pledge . . . . . . . . . . . . . . . . . . . . . . .20
ARTICLE III
Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .21
SECTION 3.01. Payment of Principal, Premium, if any, and Interest. . . .21
SECTION 3.02. Maintenance of Office or Agency. . . . . . . . . . . . . .21
SECTION 3.03. Money for Payments To Be Held in Trust . . . . . . . . . .22
SECTION 3.04. Existence. . . . . . . . . . . . . . . . . . . . . . . . .23
SECTION 3.05. Protection of Note Collateral. . . . . . . . . . . . . . .23
SECTION 3.06. Opinions as to Note Collateral . . . . . . . . . . . . . .24
SECTION 3.07. Performance of Obligations; Servicing; SEC Filings . . . .25
SECTION 3.08. Certain Negative Covenants . . . . . . . . . . . . . . . .27
SECTION 3.09. Annual Statement as to Compliance. . . . . . . . . . . . .27
<PAGE>
SECTION 3.10. Note Issuer May Consolidate, etc., Only on Certain Terms .28
SECTION 3.11. Successor or Transferee. . . . . . . . . . . . . . . . . .30
SECTION 3.12. No Other Business. . . . . . . . . . . . . . . . . . . . .30
SECTION 3.13. No Borrowing . . . . . . . . . . . . . . . . . . . . . . .30
SECTION 3.14. Servicer's Obligations . . . . . . . . . . . . . . . . . .30
SECTION 3.15. Guarantees, Loans, Advances and Other Liabilities. . . . .30
SECTION 3.16. Capital Expenditures . . . . . . . . . . . . . . . . . . .31
SECTION 3.17. Restricted Payments. . . . . . . . . . . . . . . . . . . .31
SECTION 3.18. Notice of Events of Default. . . . . . . . . . . . . . . .31
SECTION 3.19. Further Instruments and Acts . . . . . . . . . . . . . . .31
SECTION 3.20. Purchase of Subsequent Transition Property . . . . . . . .31
ARTICLE IV
Satisfaction and Discharge; Defeasance. . . . . . . . . . . . . . . . . .33
SECTION 4.01. Satisfaction and Discharge of Indenture; Defeasance. . . .33
SECTION 4.02. Conditions to Defeasance . . . . . . . . . . . . . . . . .35
SECTION 4.03. Application of Trust Money . . . . . . . . . . . . . . . .36
SECTION 4.04. Repayment of Moneys Held by Paying Agent . . . . . . . . .36
ARTICLE V
Remedies. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .36
SECTION 5.01. Events of Default. . . . . . . . . . . . . . . . . . . . .36
SECTION 5.02. Acceleration of Maturity; Rescission and Annulment . . . .38
SECTION 5.03. Collection of Indebtedness and Suits for Enforcement
by Indenture Trustee . . . . . . . . . . . . . . . . . . .39
SECTION 5.04. Remedies; Priorities . . . . . . . . . . . . . . . . . . .41
SECTION 5.05. Optional Preservation of the Note Collateral . . . . . . .42
SECTION 5.06. Limitation of Suits. . . . . . . . . . . . . . . . . . . .42
SECTION 5.07. Unconditional Rights of Holders To Receive Principal,
Premium, if any, and Interest. . . . . . . . . . . . . . .43
SECTION 5.08. Restoration of Rights and Remedies . . . . . . . . . . . .43
SECTION 5.09. Rights and Remedies Cumulative . . . . . . . . . . . . . .43
SECTION 5.10. Delay or Omission Not a Waiver . . . . . . . . . . . . . .44
SECTION 5.11. Control by Holders . . . . . . . . . . . . . . . . . . . .44
SECTION 5.12. Waiver of Past Defaults. . . . . . . . . . . . . . . . . .44
SECTION 5.13. Undertaking for Costs. . . . . . . . . . . . . . . . . . .45
SECTION 5.14. Waiver of Stay or Extension Laws . . . . . . . . . . . . .45
SECTION 5.15. Action on Notes. . . . . . . . . . . . . . . . . . . . . .45
SECTION 5.16. Performance and Enforcement of Certain Obligations . . . .46
ARTICLE VI
The Indenture Trustee . . . . . . . . . . . . . . . . . . . . . . . . . .46
SECTION 6.01. Duties of Indenture Trustee. . . . . . . . . . . . . . . .46
SECTION 6.02. Rights of Indenture Trustee. . . . . . . . . . . . . . . .48
SECTION 6.03. Individual Rights of Indenture Trustee . . . . . . . . . .48
ii
<PAGE>
SECTION 6.04. Indenture Trustee's Disclaimer . . . . . . . . . . . . . .49
SECTION 6.05. Notice of Defaults . . . . . . . . . . . . . . . . . . . .49
SECTION 6.06. Reports by Indenture Trustee to Holders. . . . . . . . . .49
SECTION 6.07. Compensation and Indemnity . . . . . . . . . . . . . . . .50
SECTION 6.08. Replacement of Indenture Trustee . . . . . . . . . . . . .50
SECTION 6.09. Successor Indenture Trustee by Merger. . . . . . . . . . .51
SECTION 6.10. Appointment of Co-Trustee or Separate Trustee. . . . . . .52
SECTION 6.11. Eligibility; Disqualification. . . . . . . . . . . . . . .53
SECTION 6.12. Preferential Collection of Claims Against Note Issuer. . .53
SECTION 6.13. Representations and Warranties of Indenture Trustee. . . .53
ARTICLE VII
Holders' Lists and Reports. . . . . . . . . . . . . . . . . . . . . . . .54
SECTION 7.01. Note Issuer To Furnish Indenture Trustee Names and
Addresses of Holders . . . . . . . . . . . . . . . . . . .54
SECTION 7.02. Preservation of Information; Communications to Holders. .54
SECTION 7.03. Reports by Note Issuer . . . . . . . . . . . . . . . . . .54
SECTION 7.04. Reports by Indenture Trustee . . . . . . . . . . . . . . .55
ARTICLE VIII
Accounts, Disbursements and Releases. . . . . . . . . . . . . . . . . . .55
SECTION 8.01. Collection of Money. . . . . . . . . . . . . . . . . . . .55
SECTION 8.02. Collection Account . . . . . . . . . . . . . . . . . . . .55
SECTION 8.03. General Provisions Regarding the Collection Account. . . .58
SECTION 8.04. Release of Note Collateral . . . . . . . . . . . . . . . .59
SECTION 8.05. Opinion of Counsel . . . . . . . . . . . . . . . . . . . .59
SECTION 8.06. Reports by Independent Accountants . . . . . . . . . . . .60
ARTICLE IX
Supplemental Indentures . . . . . . . . . . . . . . . . . . . . . . . . .60
SECTION 9.01. Supplemental Indentures Without Consent of Holders . . . .60
SECTION 9.02. Supplemental Indentures with Consent of Holders. . . . . .62
SECTION 9.03. Execution of Supplemental Indentures . . . . . . . . . . .63
SECTION 9.04. Effect of Supplemental Indenture . . . . . . . . . . . . .64
SECTION 9.05. Conformity with Trust Indenture Act. . . . . . . . . . . .64
SECTION 9.06. Reference in Notes to Supplemental Indentures. . . . . . .64
ARTICLE X
Redemption of Notes . . . . . . . . . . . . . . . . . . . . . . . . . . .64
SECTION 10.01. Optional Redemption by Note Issuer. . . . . . . . . . . .64
SECTION 10.02. Form of Optional Redemption Notice. . . . . . . . . . . .65
SECTION 10.03. Notes Payable on Optional Redemption Date . . . . . . . .65
ARTICLE XI
Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .66
iii
<PAGE>
SECTION 11.01. Compliance Certificates and Opinions, etc.. . . . . . . .66
SECTION 11.02. Form of Documents Delivered to Indenture Trustee. . . . .67
SECTION 11.03. Acts of Holders . . . . . . . . . . . . . . . . . . . . .68
SECTION 11.04. Notices, etc., to Indenture Trustee, Note Issuer and
Rating Agencies . . . . . . . . . . . . . . . . . . . . .69
SECTION 11.05. Notices to Holders; Waiver. . . . . . . . . . . . . . . .69
SECTION 11.06. Conflict with Trust Indenture Act . . . . . . . . . . . .70
SECTION 11.07. Effect of Headings and Table of Contents. . . . . . . . .70
SECTION 11.08. Successors and Assigns. . . . . . . . . . . . . . . . . .70
SECTION 11.09. Separability. . . . . . . . . . . . . . . . . . . . . . .70
SECTION 11.10. Benefits of Indenture . . . . . . . . . . . . . . . . . .70
SECTION 11.11. Legal Holidays. . . . . . . . . . . . . . . . . . . . . .71
SECTION 11.12. GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . .71
SECTION 11.13. Counterparts. . . . . . . . . . . . . . . . . . . . . . .71
SECTION 11.14. Recording of Indenture. . . . . . . . . . . . . . . . . .71
SECTION 11.15. Trust Obligation. . . . . . . . . . . . . . . . . . . . .71
SECTION 11.16. No Recourse to Note Issuer. . . . . . . . . . . . . . . .71
SECTION 11.17. Inspection. . . . . . . . . . . . . . . . . . . . . . . .72
SECTION 11.18 No Petition. . . . . . . . . . . . . . . . . . . . . . . .72
EXHIBIT A -- Form of Notes
EXHIBIT B -- Form of Trustee's Issuance Certificate
EXHIBIT C -- Form of Series Supplement
</TABLE>
iv
<PAGE>
<TABLE>
<CAPTION>
CROSS REFERENCE TABLE
- --------------------------------------------------------------------------------
TIA Section INDENTURE SECTION
----------- -----------------
<S> <C> <C>
310 (a)(1) 6.11
(a)(2) 6.11
(a)(3) 6.10
(a)(4) N.A.
(a)(5) 6.11
(b) 6.11
(c) N.A.
311 (a) 6.12
(b) 6.12
(c) N.A.
312 (a) 7.01, 7.02
(b) 7.02
(c) 7.02
313 (a) 7.04
(b)(1) 7.04
(b)(2) 7.04
(c) 7.04
(d) 7.04
314 (a) 7.03(a), 3.09
(b) 3.06
(c)(1) 2.10,4.01,11.01(a)
(c)(2) 2.10,4.01,11.01(a)
(c)(3) 2.10,4.01,11.01(a)
(d) 2.10, 11.01(b)
(e) 11.01(a)
(f) 11.01(a)
315 (a) 6.01(b)
(b) 6.05
(c) 6.01 (a)
(d) 6.02, 6.01(c)
(e) 5.13
316 (a)last
sentence Appendix A "Outstanding"
(a)(1)(A) 5.11
(a)(1)(B) 5.12
(a)(2) Omitted
(b) 5.07
(c) Appendix A "Record Date"
317 (a)(1) 5.03(b)
(a)(2) 5.03(c)
(b) 3.03
318 (a) 11.07
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</TABLE>
N.A. means Not Applicable.
Note: This cross reference table shall not, for any purpose, be deemed to be
part of this Indenture.
- --------------------------------------------------------------------------------
<PAGE>
INDENTURE dated as of December 16, 1998, between COMED TRANSITIONAL
FUNDING TRUST, a Delaware business trust (the "Note Issuer"), and Harris
Trust and Savings Bank, a banking corporation organized under the laws of
the State of Illinois, as trustee (the "Indenture Trustee").
In consideration of the mutual agreements herein contained, each party
agrees as follows for the benefit of the other and each of the Holders:
RECITALS OF THE NOTE ISSUER
The Note Issuer has duly authorized the execution and delivery of this
Indenture and the creation and issuance of Notes issuable in Series hereunder,
each Series to be of substantially the tenor set forth herein and in the
respective Trustee's Issuance Certificate or Series Supplement, if any, relating
to each such Series of Notes.
The Notes shall be non-recourse obligations and shall be secured by
and payable solely out of the proceeds of the Intangible Transition Property and
the other Note Collateral. If and to the extent that such proceeds of
Intangible Transition Property and the other Note Collateral are insufficient to
pay all amounts owing with respect to the Notes, then, except as otherwise
expressly provided hereunder, the Holders of the Notes shall have no Claim in
respect of such insufficiency against the Note Issuer, and the Holders, by their
acceptance of the Notes, waive any such Claim.
All things necessary to (a) make the Notes, when executed by the Note
Issuer and authenticated and delivered by the Indenture Trustee hereunder and
duly issued by the Note Issuer, valid obligations, and (b) make this Note
Indenture a valid agreement of the Note Issuer, in each case, in accordance with
their respective terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
That the Note Issuer, in consideration of the premises herein
contained and of the purchase of the Notes by the Holders and of other good and
lawful consideration, the receipt and sufficiency of which are hereby
acknowledged, and to secure, equally and ratably without prejudice, priority or
distinction, except as specifically otherwise set forth in this Indenture, the
payment of the Notes, the payment of all other amounts due under or in
connection with this Indenture and the performance and observance of all of the
covenants and conditions contained herein or in such Notes, has hereby executed
and delivered this Indenture and by these presents does hereby convey, grant and
assign, transfer and pledge, in each case, in and unto the Indenture Trustee,
its successors and assigns forever, for the benefit of the Holders, all and
singular the property hereinafter described (hereinafter referred to as the
"NOTE COLLATERAL"), to wit:
1
<PAGE>
GRANTING CLAUSE
The Note Issuer hereby Grants to the Indenture Trustee at the Closing
Date, as Indenture Trustee for the benefit of the Holders of the Notes from time
to time issued and outstanding, all of the Note Issuer's right, title and
interest in and to (a) the Intangible Transition Property created under and
pursuant to the 1998 Funding Order, and transferred by the Grantee to the Note
Issuer pursuant to the Sale Agreement (including, to the fullest extent
permitted by law, all revenues, collections, claims, rights, payments, money or
proceeds of or arising from the IFCs authorized in the 1998 Funding Order and
any Tariffs filed pursuant thereto and any contractual rights to collect IFCs
from Customers and Allocable IFC Revenue Amounts), (b) all Intangible Transition
Property created under and pursuant to any Subsequent Funding Order, and
transferred by the Grantee to the Note Issuer pursuant to a Subsequent Sale
Agreement (including, to the fullest extent permitted by law, all revenues,
collections, claims, rights, payments, money or proceeds of or arising from the
IFCs authorized in such Subsequent Funding Order and any Subsequent Tariffs
filed pursuant thereto and any contractual rights to collect IFCs from Customers
and Allocable IFC Revenue Amounts), (c) the Grant Agreement, the Sale Agreement
and all property and interests in property transferred under the Sale Agreement,
(d) each Subsequent Grant Agreement, Subsequent Sale Agreement and all property
and interests in property transferred under any Subsequent Sale Agreement, (e)
the Servicing Agreement, (f) the Collection Account, all subaccounts thereof and
all amounts of cash or investment property on deposit therein or credited
thereto from time to time, (g) any interest rate exchange agreement which is
executed in connection with the issuance of Floating Rate Notes, if any, (h) all
rights to compel the Servicer to file for and obtain adjustments to the IFCs in
accordance with Section 18-104(d) of the Funding Law, the 1998 Funding Order or
any Subsequent Funding Order or any Tariff or Subsequent Tariff filed in
connection therewith, (i) all present and future claims, demands, causes and
choses in action in respect of any or all of the foregoing, and (j) all payments
on or under, and all proceeds in respect of, any or all of the foregoing; IT
BEING UNDERSTOOD THAT THE FOLLOWING DO NOT CONSTITUTE NOTE COLLATERAL: (i) cash
that has been released pursuant to Section 8.02(d) (xiii) following retirement
of all Outstanding Series of Notes, (ii) net investment earnings which have been
released to the Note Issuer pursuant to Section 8.02(d), and (iii) amounts
deposited with the Note Issuer on any Series Issuance Date, including the
Closing Date, for payment of costs of issuance with respect to the related
Series (together with any interest earnings thereon), it being understood that
such amounts described in clauses (i) and (iii) above shall not be subject to
Section 3.17.
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 Notes equally and ratably without prejudice, priority or
distinction, except as expressly provided in this Indenture, and to secure
compliance with the provisions of this Indenture with respect to the Notes, all
as provided in this Indenture. This Indenture constitutes a security agreement
within the meaning of the UCC to the extent that, under Illinois law, the
provisions of the UCC are applicable hereto.
2
<PAGE>
The Indenture Trustee, as trustee on behalf of the Holders,
acknowledges such Grant and accepts the trusts under this Indenture in
accordance with the provisions of this Indenture.
AND IT IS HEREBY COVENANTED, DECLARED AND AGREED between the parties
hereto that all Notes are to be issued, countersigned and delivered and that all
of the Note Collateral is to be held and applied, subject to the further
covenants, conditions, releases, uses and trusts hereinafter set forth, and the
Note Issuer, for itself and any successor, does hereby covenant and agree to and
with the Indenture Trustee and its successors in said trust, for the benefit of
the Holders, as follows:
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. DEFINITIONS. Except as otherwise specified herein or
as the context may otherwise require, the capitalized terms used herein shall
have the respective meanings set forth in Appendix A attached hereto and made a
part hereof for all purposes of this Indenture.
SECTION 1.02. INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT.
Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture. The following
TIA terms used in this Indenture have the following meanings:
"indenture securities" means the Notes.
"indenture security holder" means a Holder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Indenture
Trustee.
"obligor" on the indenture securities means the Note Issuer and any
other obligor on the indenture securities.
All other TIA terms used in this Indenture that are defined by the
TIA, defined by TIA reference to another statute or defined by SEC rule have the
meanings assigned to them by such definitions.
SECTION 1.03. RULES OF CONSTRUCTION. Unless the context otherwise
requires:
(i) a term has the meaning assigned to it;
3
<PAGE>
(ii) an accounting term not otherwise defined has the meaning
assigned to it in accordance with generally accepted accounting principles
as in effect from time to time;
(iii) "or" is not exclusive;
(iv) "including" means including without limitation;
(v) words in the singular include the plural and words in the
plural include the singular; and
(vi) the words "herein," "hereof," "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision.
ARTICLE II
THE NOTES
SECTION 2.01. FORM. The Notes and the Indenture Trustee's
certificate of authentication shall be in substantially the forms set forth in
Exhibit B, with such appropriate insertions, omissions, substitutions and other
variations as are required or permitted by this Indenture or by the related
Trustee's Issuance Certificate or Series Supplement, if any, and may have such
letters, numbers or other marks of identification and such legends or
endorsements placed thereon as may, consistently herewith, be determined by the
officers executing such Notes, as evidenced by their execution of such Notes.
Any portion of the text of any Note may be set forth on the reverse thereof,
with an appropriate reference thereto on the face of the Note.
The Notes shall be typewritten, printed, lithographed or engraved or
produced by any combination of these methods (with or without steel engraved
borders), all as determined by the officers executing such Notes, as evidenced
by their execution of such Notes.
Each Note shall be dated the date of its authentication. The terms of
the Notes set forth in Exhibit B are part of the terms of this Indenture.
SECTION 2.02. DENOMINATIONS; NOTES ISSUABLE IN SERIES. The Notes
shall be issuable in the Minimum Denomination specified in the applicable
Trustee's Issuance Certificate or Series Supplement, if any, and, except as
otherwise provided in such Trustee's Issuance Certificate or Series Supplement,
if any, in integral multiples thereof.
The Notes may, at the election of and as authorized by a Responsible
Officer of the Note Issuer, be issued in one or more Series (each comprised of
one or more Classes), and shall be designated generally as the "Transitional
Funding Trust Notes" of the Note Issuer, with such further particular
designations added or incorporated in such title for the Notes of any particular
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Series or Class as a Responsible Officer of the Note Issuer may determine. Each
Note shall bear upon its face the designation so selected for the Series or
Class to which it belongs. All Notes of the same Series shall be identical in
all respects except for the denominations thereof, unless such Series is
comprised of one or more Classes, in which case all Notes of the same Class
shall be identical in all respects except for the denominations thereof. All
Notes of a particular Series or, if such Series is comprised of one or more
Classes, all Notes of a particular Class thereof, in each case issued under this
Indenture, shall be in all respects equally and ratably entitled to the benefits
hereof without preference, priority, or distinction on account of the actual
time or times of authentication and delivery, all in accordance with the terms
and provisions of this Indenture.
Each Series of Notes shall be created by a Trustee's Issuance
Certificate or Series Supplement, as the case may be, authorized by a
Responsible Officer of the Note Issuer and establishing the terms and provisions
of such Series. The several Series and Classes thereof may differ as between
Series and Classes, in respect of any of the following matters:
(1) designation of the Series and, if applicable, the Classes
thereof;
(2) the principal amount;
(3) the Note Interest Rate;
(4) the Payment Dates;
(5) the Scheduled Maturity Date;
(6) the Final Maturity Date;
(7) the Series Issuance Date;
(8) the place or places for the payment of interest, principal and
premium, if any;
(9) the Minimum Denominations;
(10) the Expected Amortization Schedule;
(11) provisions with respect to the definitions set forth in
Appendix A hereto;
(12) whether or not the Notes of such Series are to be Book-Entry
Notes and the extent to which Section 2.11 should apply;
(13) any redemption provisions applicable to the Notes of such
Series and the price or prices at which and the terms and conditions upon
which Notes of such Series shall be redeemed or purchased;
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(14) to the extent applicable, the extent to which payments on the
Notes of the related Series are subordinate to or PARI PASSU in right of
payment of principal and interest to other Notes; and
(15) any other provisions expressing or referring to the terms and
conditions upon which the Notes of the applicable Series or Class are to be
issued under this Indenture that are not in conflict with the provisions of
this Indenture and as to which the Rating Agency Condition is satisfied.
SECTION 2.03. EXECUTION, AUTHENTICATION AND DELIVERY. The Notes
shall be executed on behalf of the Note Issuer by any of its Responsible
Officers. The signature of any such Responsible Officer on the Notes may be
manual or facsimile.
Notes bearing the manual or facsimile signature of individuals who
were at any time Responsible Officers of the Note Issuer shall bind the Note
Issuer, notwithstanding that such individuals or any of them have ceased to hold
such offices prior to the authentication and delivery of such Notes or did not
hold such offices at the date of such Notes.
At any time and from time to time after the execution and delivery of
this Indenture, the Note Issuer may deliver Notes executed by the Note Issuer to
the Indenture Trustee pursuant to an Issuer Order for authentication; and the
Indenture Trustee shall authenticate and deliver such Notes as in this Indenture
provided and not otherwise.
No Note shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose, unless there appears on such Note a
certificate of authentication substantially in the form provided for therein
executed by the Indenture Trustee by the manual signature of one of its
authorized signatories, and such certificate upon any Note shall be conclusive
evidence, and the only evidence, that such Note has been duly authenticated and
delivered hereunder.
SECTION 2.04. TEMPORARY NOTES. Pending the preparation of Definitive
Notes, the Note Issuer may execute, and upon receipt of an Issuer Order the
Indenture Trustee shall authenticate and deliver, Temporary Notes which are
printed, lithographed, typewritten, mimeographed or otherwise produced, of the
tenor of the Definitive Notes in lieu of which they are issued and with such
variations not inconsistent with the terms of this Indenture as the officers
executing such Notes may determine, as evidenced by their execution of such
Notes.
If Temporary Notes are issued, the Note Issuer will cause Definitive
Notes to be prepared without unreasonable delay. After the preparation of
Definitive Notes, the temporary Notes shall be exchangeable for Definitive Notes
upon surrender of the Temporary Notes at the office or agency of the Note Issuer
to be maintained as provided in Section 3.02, without charge to the Holder.
Upon surrender for cancellation of any one or more Temporary Notes, the Note
Issuer shall execute and the Indenture Trustee shall authenticate and deliver in
exchange therefor
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a like principal amount of Definitive Notes of authorized denominations. Until
so delivered in exchange, the Temporary Notes shall in all respects be entitled
to the same benefits under this Indenture as Definitive Notes.
SECTION 2.05. REGISTRATION; REGISTRATION OF TRANSFER AND EXCHANGE OF
NOTES. The Note Issuer shall cause to be kept a register (the "Note Register")
in which, subject to such reasonable regulations as it may prescribe, the Note
Issuer shall provide for the registration of Notes and the registration of
transfers of Notes. The Indenture Trustee shall be "Note Registrar" for the
purpose of registering Notes and transfers of Notes as herein provided. Upon
any resignation of any Note Registrar, the Note Issuer shall promptly appoint a
successor or, if it elects not to make such an appointment, assume the duties of
Note Registrar.
If a Person other than the Indenture Trustee is appointed by the Note
Issuer as Note Registrar, the Note Issuer will give the Indenture Trustee prompt
written notice of the appointment of such Note Registrar and of the location,
and any change in the location, of the Note Register, and the Indenture Trustee
shall have the right to inspect the Note Register at all reasonable times and to
obtain copies thereof, and the Indenture Trustee shall have the right to rely
conclusively upon a certificate executed on behalf of the Note Registrar by a
Responsible Officer thereof as to the names and addresses of the Holders of the
Notes and the principal amounts and number of such Notes.
Upon surrender for registration of transfer of any Note at the office
or agency of the Note Issuer to be maintained as provided in Section 3.02, the
Note Issuer shall execute, and the Indenture Trustee shall authenticate and the
Holder shall obtain from the Indenture Trustee, in the name of the designated
transferee or transferees, one or more new Notes in any Minimum Denominations,
of the same Series (and, if applicable, Class) and aggregate principal amount.
At the option of the Holder, Notes may be exchanged for other Notes in
any Minimum Denominations, of the same Series (and, if applicable, Class) and
aggregate principal amount, upon surrender of the Notes to be exchanged at such
office or agency. Whenever any Notes are so surrendered for exchange, the Note
Issuer shall execute, and the Indenture Trustee shall authenticate and the
Holder shall obtain from the Indenture Trustee, the Notes which the Holder
making the exchange is entitled to receive.
All Notes issued upon any registration of transfer or exchange of
other Notes shall be the valid obligations of the Note Issuer, evidencing the
same debt, and entitled to the same benefits under this Indenture, as the Notes
surrendered upon such registration of transfer or exchange.
Every Note presented or surrendered for registration of transfer or
exchange shall be duly endorsed by, or be accompanied by (a) a written
instrument of transfer in form satisfactory to the Indenture Trustee duly
executed by the Holder thereof or such Holder's attorney duly authorized in
writing, with such signature guaranteed by an institution which is a
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member of one of the following recognized Signature Guaranty Programs: (i) The
Securities Transfer Agent Medallion Program (STAMP); (ii) The New York Stock
Exchange Medallion Program (MSP); (iii) The Stock Exchange Medallion Program
(SEMP); or (iv) such other guarantee program acceptable to the Indenture
Trustee, and (b) such other documents as the Indenture Trustee may require.
No service charge shall be made to a Holder for any registration of
transfer or exchange of Notes, but the Note Issuer or Indenture Trustee may
require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any registration of transfer or
exchange of Notes, other than exchanges pursuant to Section 2.04 or 9.06 not
involving any transfer.
The preceding provisions of this Section notwithstanding, the Note
Issuer shall not be required to make, and the Note Registrar need not register
transfers or exchanges (i) of Notes that have been selected for redemption
pursuant to Article X, (ii) of any Note that has been submitted within 15 days
preceding the due date for any payment with respect to such Note or (iii) of
Unregistered Notes unless Section 2.17 has been complied with in connection with
such transfer or exchange.
SECTION 2.06. MUTILATED, DESTROYED, LOST OR STOLEN NOTES. If (i) any
mutilated Note is surrendered to the Indenture Trustee, or the Indenture Trustee
receives evidence to its satisfaction of the destruction, loss or theft of any
Note, and (ii) there is delivered to the Indenture Trustee such security or
indemnity as may be required by it to hold the Note Issuer and the Indenture
Trustee harmless, then the Note Issuer shall execute and, upon its written
request, the Indenture Trustee shall authenticate and deliver, in exchange for
or in lieu of any such mutilated, destroyed, lost or stolen Note, a replacement
Note of like Series (and, if applicable, Class), tenor and principal amount,
bearing a number not contemporaneously outstanding; PROVIDED, HOWEVER, that if
any such destroyed, lost or stolen Note, but not a mutilated Note, shall have
become or within seven days shall be due and payable, or shall have been called
for redemption, instead of issuing a replacement Note, the Note Issuer may pay
such destroyed, lost or stolen Note when so due or payable or upon the Optional
Redemption Date without surrender thereof. If, after the delivery of such
replacement Note or payment of a destroyed, lost or stolen Note pursuant to the
proviso to the preceding sentence, a purchaser of the original Note in lieu of
which such replacement Note was issued presents for payment such original Note,
the Note Issuer and the Indenture Trustee shall be entitled to recover such
replacement Note (or such payment) from the Person to whom it was delivered or
any Person taking such replacement Note from such Person to whom such
replacement Note was delivered or any assignee of such Person and shall be
entitled to recover upon the security or indemnity provided therefor to the
extent of any loss, damage, cost or expense incurred by the Note Issuer or the
Indenture Trustee in connection therewith.
Upon the issuance of any replacement Note under this Section, the Note
Issuer and/or the Indenture Trustee may require the payment by the Holder of
such Note of a sum
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sufficient to cover any tax or other governmental charge that may be imposed
in relation thereto and any other reasonable expenses (including the fees and
expenses of the Indenture Trustee) connected therewith.
Every replacement Note issued pursuant to this Section in replacement
of any mutilated, destroyed, lost or stolen Note shall constitute an original
additional contractual obligation of the Note Issuer, whether or not the
mutilated, destroyed, lost or stolen Note shall be found at any time or enforced
by any Person, and shall be entitled to all the benefits of this Indenture
equally and proportionately with any and all other Notes duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Notes.
SECTION 2.07. PERSONS DEEMED OWNER. Prior to due presentment for
registration of transfer of any Note, the Note Issuer, the Indenture Trustee and
any agent of the Note Issuer or the Indenture Trustee may treat the Person in
whose name any Note is registered (as of the day of determination) as the owner
of such Note for the purpose of receiving payments of principal of and premium,
if any, and interest on such Note and for all other purposes whatsoever, whether
or not such Note be overdue, and neither the Note Issuer, the Indenture Trustee
nor any agent of the Note Issuer or the Indenture Trustee shall be affected by
notice to the contrary.
SECTION 2.08. PAYMENT OF PRINCIPAL, PREMIUM, IF ANY, AND INTEREST;
INTEREST ON OVERDUE PRINCIPAL; PRINCIPAL, PREMIUM, IF ANY, AND INTEREST RIGHTS
PRESERVED. (a) The Notes shall accrue interest as provided in the related
Trustee's Issuance Certificate or Series Supplement, if any, at the applicable
Note Interest Rate specified therein, and such interest shall be payable on each
Payment Date as specified therein. Any installment of interest, principal or
premium, if any, payable on any Note which is punctually paid or duly provided
for on the applicable Payment Date shall be paid to the Person in whose name
such Note (or one or more Predecessor Notes) is registered on the Record Date
for such Payment Date, by check mailed first-class, postage prepaid to such
Person's address as it appears on the Note Register on such Record Date or in
such other manner as may be provided in the related Trustee's Issuance
Certificate or Series Supplement, if any, except that (i) upon application to
the Indenture Trustee by any Holder owning Notes of any Class in the principal
amount of $10,000,000 or more not later than the applicable Record Date payment
will be made by wire transfer to an account maintained by such Holder and (ii)
with respect to Book Entry Notes payments will be made by wire transfer in
immediately available funds to the account designated by the Holder of the
applicable Global Note unless and until such Global Note is exchanged for
Definitive Notes (in which event payments shall be made as provided above) and
except for the final installment of principal and premium, if any, payable with
respect to such Note on a Payment Date which shall be payable as provided below.
The funds represented by any such checks returned undelivered shall be held in
accordance with Section 3.03 hereof.
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(b) The principal of each Note of each Series (and, if applicable,
Class) shall be paid, to the extent funds are available therefor in the
Collection Account, in installments on each Payment Date specified in the
related Trustee's Issuance Certificate or Series Supplement, if any.
Notwithstanding the foregoing, the entire unpaid principal amount of the Notes
of a Series shall be due and payable, if not previously paid, on the date on
which an Event of Default shall have occurred and be continuing with respect to
such Series, if the Indenture Trustee or the Holders of the Notes representing
not less than a majority of the Outstanding Amount of the Notes of all Series
have declared the Notes to be immediately due and payable in the manner provided
in Section 5.02. All payments of principal and premium, if any, on the Notes of
any Series shall be made pro rata to the Holders entitled thereto unless
otherwise provided in the related Trustee's Issuance Certificate or Series
Supplement, if any, with respect to any Class of Notes included in such Series.
The Indenture Trustee shall notify the Person in whose name a Note is registered
at the close of business on the Record Date preceding the Payment Date on which
the Note Issuer expects that the final installment of principal of and premium,
if any, and interest on such Note will be paid. Such notice shall be mailed no
later than five days prior to such final Payment Date and shall specify that
such final installment will be payable only upon presentation and surrender of
such Note and shall specify the place where such Note may be presented and
surrendered for payment of such installment. Notices in connection with
redemptions of Notes shall be mailed to Holders as provided in Section 10.02.
(c) If interest on the Notes of any Series is not paid when due, such
defaulted interest shall be paid (plus interest on such defaulted interest at
the applicable Note Interest Rate to the extent lawful) to the Persons who are
Holders on a subsequent Special Record Date, which date shall be at least five
Business Days prior to the Special Payment Date. The Note Issuer shall fix or
cause to be fixed any such Special Record Date and Special Payment Date, and, at
least 20 days before any such Special Record Date, the Note Issuer shall mail to
each affected Holder a notice that states the Special Record Date, the Special
Payment Date and the amount of defaulted interest (plus interest on such
defaulted interest) to be paid.
SECTION 2.09. CANCELLATION. All Notes surrendered for payment,
registration of transfer, exchange or redemption shall, if surrendered to any
Person other than the Indenture Trustee, be delivered to the Indenture Trustee
and shall be promptly canceled by the Indenture Trustee. The Note Issuer may at
any time deliver to the Indenture Trustee for cancellation any Notes previously
authenticated and delivered hereunder which the Note Issuer may have acquired in
any manner whatsoever, and all Notes so delivered shall be promptly canceled by
the Indenture Trustee. No Notes shall be authenticated in lieu of or in
exchange for any Notes canceled as provided in this Section, except as expressly
permitted by this Indenture. All canceled Notes may be held or disposed of by
the Indenture Trustee in accordance with its standard retention or disposal
policy as in effect at the time.
SECTION 2.10. OUTSTANDING AMOUNT; AUTHENTICATION AND DELIVERY OF
NOTES. The aggregate Outstanding Amount of Notes that may be authenticated and
delivered under this Indenture shall be limited as provided in Section 3.08
hereof.
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Notes of each Series created and established by a Trustee's Issuance
Certificate or Series Supplement, if any, may from time to time be executed by
the Note Issuer and delivered to the Indenture Trustee for authentication and
thereupon the same shall be authenticated and delivered by the Indenture Trustee
upon Issuer Request and upon delivery by the Note Issuer to the Indenture
Trustee, and receipt by the Indenture Trustee, or the causing to occur by the
Note Issuer, of the following; PROVIDED, HOWEVER, that compliance with such
conditions and delivery of such documents shall only be required in connection
with the original issuance of a Note or Notes of such Series:
(1) NOTE ISSUER ACTION. An Issuer Order authorizing and directing
the execution, authentication and delivery of the Notes by the Indenture
Trustee and specifying the principal amount of Notes to be authenticated.
(2) AUTHORIZATIONS. A Funding Order related to such Series which
shall be in full force and effect and be Final.
(3) OPINIONS. (a) An Opinion of Counsel that the applicable Funding
Order is in full force and effect and Final and that no other
authorization, approval or consent of any governmental body or bodies at
the time having jurisdiction in the premises is required for the valid
issuance, authentication and delivery of such Notes, except for such
registrations as are required under the Blue Sky and securities laws of any
State or such authorizations, approvals or consents of governmental bodies
that have been obtained and copies of which have been delivered with such
Opinion of Counsel.
(b) An Opinion of Counsel that no authorization, approval or consent
of any governmental body or bodies at the time having jurisdiction in the
premises is required for the valid execution and delivery by the Note
Issuer of each of the Basic Documents to which the Note Issuer is a party,
except for such authorizations, approvals or consents of governmental
bodies that have been obtained and copies of which have been delivered with
such Opinion of Counsel.
(4) AUTHORIZING CERTIFICATE. An Officer's Certificate, dated the
Series Issuance Date, of the Note Issuer certifying that (i) the Note
Issuer has duly authorized the execution and delivery of this Indenture and
the related Trustee's Issuance Certificate or Series Supplement, as the
case may be, and the execution and delivery of the Notes of such Series and
(ii) that the Trustee's Issuance Certificate or Series Supplement, as the
case may be, for such Series of Notes is in the form attached thereto,
which Trustee's Issuance Certificate or Series Supplement, as the case may
be, shall comply with the requirements of Section 2.02 hereof.
(5) THE NOTE COLLATERAL. The Note Issuer shall have made or caused
to be made all filings with the ICC pursuant to the Funding Order and the
Funding Law and all other
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filings necessary to perfect the Grant of the Note Collateral to the
Indenture Trustee and the lien of this Indenture.
(6) CERTIFICATES OF THE NOTE ISSUER AND THE GRANTEE. (a) An Officer's
Certificate from the Note Issuer, dated as of the Series Issuance Date:
(i) to the effect that (A) the Note Issuer is not in Default
under this Indenture and that the issuance of the Notes applied for
will not result in any Default or in any breach of any of the terms,
conditions or provisions of or constitute a default under the Funding
Order or any indenture, mortgage, deed of trust or other agreement or
instrument to which the Note Issuer is a party or by which it or its
property is bound or any order of any court or administrative agency
entered in any Proceeding to which the Note Issuer is a party or by
which it or its property may be bound or to which it or its property
may be subject and (B) that all conditions precedent provided in this
Indenture relating to the execution, authentication and delivery of
the Notes applied for have been complied with;
(ii) to the effect that the Note Issuer has not assigned any
interest or participation in the Note Collateral except for the Grant
contained in this Indenture; the Note Issuer has the power and right
to Grant the Note Collateral to the Indenture Trustee as security
hereunder; and the Note Issuer, subject to the terms of this
Indenture, has Granted to the Indenture Trustee all of its right,
title and interest in and to such Note Collateral free and clear of
any lien, mortgage, pledge, charge, security interest, adverse claim
or other encumbrance arising as a result of actions of the Note Issuer
or through the Note Issuer, except the lien of this Indenture;
(iii) to the effect that the Note Issuer has appointed the firm
of Independent certified public accountants as contemplated in Section
8.06 hereof;
(iv) to the effect that attached thereto are duly executed, true
and complete copies of the Grant Agreement and the Sale Agreement or
Subsequent Grant Agreement and Subsequent Sale Agreement, as
applicable, and the Servicing Agreement; and
(v) stating that all filings with the ICC pursuant to the
Funding Law and the Funding Order and all UCC financing statements
with respect to the Note Collateral which are required to be filed by
the terms of the Funding Order, the Funding Law, the Grant Agreement
and the Sale Agreement or Subsequent Grant Agreement and Subsequent
Sale Agreement, as applicable, the Servicing Agreement and this
Indenture have been filed as required.
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(b) An Officer's Certificate from the Grantee, dated as of the Series
Issuance Date, to the effect that, in the case of the Intangible Transition
Property, immediately prior to the conveyance thereof to the Note Issuer
pursuant to the Sale Agreement or the Subsequent Sale Agreement, as
applicable:
(i) the Grantee was the owner of such Intangible Transition
Property, free and clear of any Lien; the Grantee had not assigned any
interest or participation in such Intangible Transition Property and
the proceeds thereof other than to the Note Issuer pursuant to the
Sale Agreement or Subsequent Sale Agreement, as applicable; the
Grantee has the power and right to convey such Intangible Transition
Property and the proceeds thereof to the Note Issuer; and the Grantee,
subject to the terms of the Sale Agreement or the Subsequent Sale
Agreement, as applicable, has validly conveyed to the Note Issuer all
of its right, title and interest in and to such Intangible Transition
Property and the proceeds thereof, free and clear of any lien,
mortgage, pledge, charge, security interest, adverse claim or other
encumbrance; and
(ii) the attached copy of the Funding Order creating such
Intangible Transition Property is true and correct.
(7) OPINION OF TAX COUNSEL. ComEd shall have delivered to the
Grantee, the Note Issuer, the Delaware Trustee and the Indenture Trustee an
opinion of independent tax counsel and/or a ruling from the Internal
Revenue Service (as selected by, and in form and substance reasonably
satisfactory to, ComEd) to the effect that, for federal income tax
purposes, (i) such issuance of Notes, and transfer of the Note proceeds to
ComEd, will not result in gross income to the Grantee, the Note Issuer or
ComEd and (ii) such issuance will not materially adversely affect the
characterization of any then Outstanding Notes as obligations of ComEd.
(8) OPINION OF COUNSEL. Unless otherwise specified in a Trustee's
Issuance Certificate or Series Supplement, if any, an Opinion of Counsel,
portions of which may be delivered by counsel for the Note Issuer, portions
of which may be delivered by counsel for the Grantee and the Servicer, and
portions of which may be delivered by counsel for the Indenture Trustee,
dated the Series Issuance Date, in each case subject to the customary
exceptions, qualifications and assumptions contained therein, to the
collective effect that:
(a) the Indenture has been duly qualified under the Trust
Indenture Act and either the related Trustee's Issuance Certificate
or Series Supplement, if any, has been duly qualified under the Trust
Indenture Act or no such qualification of the Trustee's Issuance
Certificate or Series Supplement is necessary;
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(b) all instruments furnished to the Indenture Trustee pursuant
to this Indenture conform to the requirements set forth in this
Indenture and constitute all of the documents required to be delivered
hereunder for the Indenture Trustee to authenticate and deliver the
Notes applied for, and all conditions precedent provided for in this
Indenture relating to the authentication and delivery of the Notes
have been complied with;
(c) the Note Issuer has the power and authority to execute and
deliver the Trustee's Issuance Certificate, the Series Supplement, if
any, and this Indenture and to issue the Notes, and each of the
Trustee's Issuance Certificate, the Series Supplement, if any, this
Indenture, and the Notes have been duly authorized and the Note Issuer
is duly formed and is validly existing in good standing under the laws
of the jurisdiction of its organization;
(d) the Trustee's Issuance Certificate, the Series Supplement,
if any, and the Indenture have been duly executed and delivered by the
Note Issuer;
(e) the Notes applied for have been duly authorized and executed
and, when authenticated in accordance with the provisions of the
Indenture and delivered against payment of the purchase price
therefor, will constitute valid and binding obligations of the Note
Issuer (subject to bankruptcy, insolvency, reorganization and other
similar laws affecting the rights of creditors generally and general
principles of equity), entitled to the benefits of the Indenture and
any related Trustee's Issuance Certificate or Series Supplement;
(f) this Indenture, the Grant Agreement or the Subsequent Grant
Agreement as applicable, the Sale Agreement or the Subsequent Sale
Agreement as applicable, the Servicing Agreement and the related
Trustee's Issuance Certificate or Series Supplement, if any, are valid
and binding agreements of the Note Issuer, enforceable in accordance
with their respective terms, except as such enforceability may be
subject to bankruptcy, insolvency, reorganization and other similar
laws affecting the rights of creditors generally and general
principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law);
(g) in accordance with the Funding Law, the Funding Order (A)
creates Intangible Transition Property in an amount not less than the
amount, if any, specified in the Trustee's Issuance Certificate or
Series Supplement, if any, which was vested by the Funding Order in
the Grantee; (B) approves and authorizes the sale, transfer and
assignment by the Grantee of such Intangible Transition Property to
the Note Issuer; (C) approves the issuance and sale by the Note Issuer
of the Notes to be issued on such Series Issuance Date in an aggregate
principal amount which equals or exceeds the initial Outstanding
Amount of the Notes referred to in
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(1) above; and (D) declares and establishes that such Notes are
Transitional Funding Instruments within the meaning of Section 18-102
of the Funding Law;
(h) (A) at the time of the issuance of such Notes the lien of
this Indenture in favor of the Holders in the Intangible Transition
Property attaches automatically; (B) such lien has been perfected in
accordance with Section 18-107(c) of the Funding Law and in accordance
with the Funding Order; (C) such lien is valid and enforceable against
ComEd, the Servicer, the Grantee, the Note Issuer, and all third
parties, including judgment lien creditors; and (D) such lien ranks
prior to any other lien which subsequently attaches to the Intangible
Transition Property;
(i) with respect to the Note Collateral other than the
Intangible Transition Property, upon the giving of value by the
Indenture Trustee to the Note Issuer with respect to such Note
Collateral, (A) this Indenture, together with any related Trustee's
Issuance Certificate or Series Supplement, creates in favor of the
Indenture Trustee a security interest in the rights of the Note Issuer
in such Note Collateral, and such security interest is enforceable
against ComEd, the Servicer, the Grantee, the Note Issuer and all
third parties, (B) such security interest is perfected, and (C) such
perfected security interest is of first priority;
(j) either (A) the Registration Statement covering the Notes is
effective under the Securities Act and, to such counsel's knowledge,
no stop order suspending the effectiveness of such Registration
Statement has been issued under the Securities Act and no proceedings
for that purpose have been initiated or are pending or threatened by
the SEC or (B) the Notes are exempt from the registration requirements
under the Securities Act;
(k) the Note Issuer is not now and, assuming that the Note
Issuer uses the proceeds of the sale of the Notes for the purpose of
acquiring Intangible Transition Property in accordance with the terms
of the Sale Agreement or the Subsequent Sale Agreement, as applicable,
following the sale of the Notes to the underwriter, underwriters,
placement agent or agents or similar Person, neither the Note Issuer
nor the Grantee will be required to be registered under the Investment
Company Act of 1940, as amended;
(l) the Grant Agreement or Subsequent Grant Agreement, as
applicable, is a valid and binding agreement of ComEd enforceable
against ComEd in accordance with its terms and the Sale Agreement or
Subsequent Sale Agreement as applicable, is a valid and binding
agreement of the Grantee enforceable against the Grantee in
accordance with its terms, except in each case as such enforceability
may be subject to bankruptcy, insolvency, reorganization and other
similar laws affecting the rights of creditors generally and general
principles of
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equity (regardless of whether such enforcement is considered in a
proceeding in equity or at law);
(m) the Servicing Agreement is a valid and binding agreement of
the Servicer enforceable against the Servicer in accordance with its
terms except as such enforceability may be subject to bankruptcy,
insolvency, reorganization and other similar laws affecting the rights
of creditors generally and general principles of equity (regardless of
whether such enforcement is considered in a proceeding in equity or at
law);
(n) pursuant to the Funding Order and upon the delivery of the
fully executed Sale Agreement or Subsequent Sale Agreement, as
applicable, to the Note Issuer and the payment of the purchase price
of the Intangible Transition Property by the Note Issuer to the
Grantee pursuant to the Sale Agreement or Subsequent Sale Agreement,
as applicable, (i) the transfer of the Intangible Transition Property
by the Grantee to the Note Issuer conveys the Grantee's right, title
and interest in the Intangible Transition Property to the Note Issuer
and will be treated under Illinois state law as an absolute transfer
of all of the Grantee's right, title, and interest in the Intangible
Transition Property, other than for federal and state income and
franchise tax purposes, (ii) such transfer of the Intangible
Transition Property is perfected, (iii) such transfer has priority
over any other assignment of the Intangible Transition Property and
(iv) the Intangible Transition Property is free and clear of all liens
created prior to its transfer to the Note Issuer pursuant to the Sale
Agreement; and
(o) such other matters as the Indenture Trustee may reasonably
require.
(9) ACCOUNTANT'S CERTIFICATE OR OPINION. Unless otherwise specified
in a Trustee's Issuance Certificate or a Series Supplement, if any, a
certificate or opinion, addressed to the Note Issuer and the Indenture
Trustee complying with the requirements of Section 11.01(a) hereof, of a
firm of Independent certified public accountants of recognized national
reputation to the effect that (a) such accountants are Independent with
respect to the Note Issuer within the meaning of this Indenture, and are
independent public accountants within the meaning of the standards of The
American Institute of Certified Public Accountants, and (b) with respect to
the Note Collateral, they have made such calculations as they deemed
necessary for the purpose and determined that, based on the assumptions
used in calculating the initial IFCs or, if applicable, the most recent
revised IFCs, as of the Series Issuance Date for such Series (after giving
effect to the issuance of such Series and the application of the proceeds
therefrom) such IFCs are sufficient to pay (a) Operating Expenses when
incurred, plus (b) the Overcollateralization Amount, plus (c) interest on
each Series of Notes at their respective Note Interest Rates when due, plus
(d) principal of each Series of Notes in accordance with the Expected
Amortization Schedule.
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(10) RATING AGENCY CONDITION. The Indenture Trustee shall receive
evidence reasonably satisfactory to it that the Rating Agency Condition
will be satisfied with respect to the issuance of such new Series.
(11) REQUIREMENTS OF TRUSTEE'S ISSUANCE CERTIFICATE OR SERIES
SUPPLEMENT. Such other funds, accounts, documents certificates,
agreements, instruments or opinions as may be required by the terms of the
Trustee's Issuance Certificate or Series Supplement, if any, creating such
Series.
(12) OTHER REQUIREMENTS. Such other documents, certificates,
agreements, instruments or opinions as the Indenture Trustee may reasonably
require.
SECTION 2.11. BOOK-ENTRY NOTES. Unless the applicable Trustee's
Issuance Certificate or Series Supplement, if any, provides otherwise, all of
the related Series of Notes shall be issued in Book-Entry Form, and the Note
Issuer shall execute and the Indenture Trustee shall, in accordance with this
Section and the Issuer Order with respect to such Series, authenticate and
deliver one or more Global Notes, evidencing the Notes of such Series which (i)
shall be an aggregate original principal amount equal to the aggregate original
principal amount of such Notes to be issued pursuant to the applicable Issuer
Order, (ii) shall be registered in the name of the Clearing Agency therefor or
its nominee, which shall initially be Cede & Co., as nominee for The Depository
Trust Company, the initial Clearing Agency, (iii) shall be delivered by the
Indenture Trustee to such Clearing Agency's or such nominee's instructions, and
(iv) shall bear a legend substantially to the following effect: "Transfers of
this Global Note shall be limited to transfers in the Clearing Agency or to a
successor thereof or such successor's nominee and transfers of portions of this
Global Note shall be limited to transfers made in accordance with the
restrictions set forth in the Indenture."
Each Clearing Agency designated pursuant to this Section 2.11 must, at
the time of its designation and at all times while it serves as Clearing Agency
hereunder, be a "clearing agency" registered under the Exchange Act and any
other applicable statute or regulation.
No Holder of any such Series of Notes issued in Book-Entry Form shall
receive a Definitive Note representing such Holder's interest in any such Notes,
except as provided in Section 2.13 or in the applicable Trustee's Issuance
Certificate or Series Supplement, if any, relating to such Notes. Unless (and
until) certificated, fully registered Notes of any Series (the "Definitive
Notes") have been issued to the Holders of such Series pursuant to Section 2.13
or pursuant to any applicable Trustee's Issuance Certificate or Series
Supplement, if any, relating thereto:
(a) the provisions of this Section 2.11 shall be in full force
and effect;
(b) the Note Issuer, the Servicer, the Paying Agent, the Note
Registrar and the Indenture Trustee may deal with the Clearing Agency
for all purposes
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(including the making of distributions on the Notes of such Series) as
the authorized representatives of the Holders of such Series;
(c) to the extent that the provisions of this Section 2.11
conflict with any other provisions of this Indenture, the provisions
of this Section 2.11 shall control; and
(d) the rights of Holders of such Series shall be exercised only
through the Clearing Agency and the Clearing Agency Participants and
shall be limited to those established by law and agreements between
such Holders and the Clearing Agency and/or the Clearing Agency
Participants. Unless and until Definitive Notes are issued pursuant
to Section 2.13, the initial Clearing Agency will make book-entry
transfers among the Clearing Agency Participants and receive and
transmit distributions of principal and interest on the Book-Entry
Notes to such Clearing Agency Participants.
SECTION 2.12. NOTICES TO CLEARING AGENCY. Unless and until
Definitive Notes shall have been issued to Holders of such Series pursuant to
Section 2.13 or the applicable Trustee's Issuance Certificate or Series
Supplement, if any, relating to such Notes, whenever notice, payment, or other
communication to the holders of Book-Entry Notes of any Series is required under
this Indenture, the Indenture Trustee, the Servicer and the Paying Agent shall
give all such notices and communications specified herein to be given to Holders
of such Series to the Clearing Agency.
SECTION 2.13. DEFINITIVE NOTES. If (i)(A) the Administrator advises
the Indenture Trustee in writing that the Clearing Agency is no longer willing
or able to properly discharge its responsibilities under any Letter of
Representations and (B) the Administrator is unable to locate a qualified
successor Clearing Agency, (ii) the Administrator, at its option, advises the
Indenture Trustee in writing that, with respect to any Series, it elects to
terminate the book-entry system through the Clearing Agency or (iii) after the
occurrence of a Servicer Default, Holders holding Notes aggregating not less
than 50% of the aggregate Outstanding Amount of any Series of Notes maintained
as Book-Entry Notes advise the Indenture Trustee, the Administrator, the Note
Issuer and the Clearing Agency (through the Clearing Agency Participants) in
writing that the continuation of a book-entry system through the Clearing Agency
is no longer in the best interests of the Holders of such Series, the
Administrator shall notify the Clearing Agency, the Indenture Trustee and all
such Holders of such Series in writing of the occurrence of any such event and
of the availability of Definitive Notes of such Series to the Holders of such
Series requesting the same. Upon surrender to the Indenture Trustee of the
Global Notes of such Series by the Clearing Agency accompanied by registration
instructions from such Clearing Agency for registration, the Indenture Trustee
shall authenticate and deliver Definitive Notes of such Series. None of the
Note Issuer, the Note Registrar, or the Indenture Trustee shall be liable for
any delay in delivery of such instructions and may conclusively rely on, and
shall be fully protected in relying on, such instructions. Upon the issuance of
Definitive Notes
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of any Series, all references herein to obligations with respect to such Series
imposed upon or to be performed by the Clearing Agency shall be deemed to be
imposed upon and performed by the Indenture Trustee, to the extent applicable
with respect to such Definitive Notes and the Indenture Trustee shall recognize
the Holders of the Definitive Notes as Holders hereunder.
SECTION 2.14. CUSIP NUMBER. The Note Issuer in issuing any Note or
Series of Notes may use a "CUSIP" number and, if so used, the Indenture Trustee
shall use the CUSIP number in any notices to the Holders thereof as a
convenience to such Holders; PROVIDED, that any such notice may state that no
representation is made as to the correctness or accuracy of the CUSIP number
printed in the notice or on the Notes and that reliance may be placed only on
the other identification numbers printed on the Notes. The Note Issuer shall
promptly notify the Indenture Trustee in writing of any change in the CUSIP
number with respect to any Note.
SECTION 2.15. LETTER OF REPRESENTATIONS. Notwithstanding anything to
the contrary in this Indenture or any Series Supplement or any Trustee's
Issuance Certificate, the parties hereto shall comply with the terms of each
Letter of Representations.
SECTION 2.16. RELEASE OF NOTE COLLATERAL. Subject to Section 11.01,
the Indenture Trustee shall release property from the lien of this Indenture
only as specified in Section 8.02(d) or upon receipt of an Issuer Request
accompanied by an Officer's Certificate, an Opinion of Counsel and Independent
Certificates in accordance with TIA Sections 314(c) and 314(d)(1) or an Opinion
of Counsel in lieu of such Independent Certificates to the effect that the TIA
does not require any such Independent Certificates.
SECTION 2.17. SPECIAL TERMS APPLICABLE TO SUBSEQUENT TRANSFERS OF
CERTAIN NOTES.
(a) Certain Series of Notes may not be registered under the
Securities Act, or the securities laws of any other jurisdiction.
Consequently, such Unregistered Notes shall not be transferable other than
pursuant to an exemption from the registration requirements of the Securities
Act and satisfaction of certain other provisions specified herein or in the
related Trustee's Issuance Certificate or Series Supplement, if any. Unless
otherwise provided in the related Trustee's Issuance Certificate or Series
Supplement, if any, no sale, pledge or other transfer of any Unregistered
Note (or interest therein) may be made by any Person unless either (i) such
sale, pledge or other transfer is made to a "qualified institutional buyer"
(as defined under Rule 144A under the Securities Act) or to an "institutional
accredited investor" (as described in Rule 501(a)(1), (2), (3) or (7) under
the Securities Act) and, if so requested by the Grantee or the Indenture
Trustee, such proposed transferee executes and delivers a certificate to such
effect in form and substance satisfactory to the Indenture Trustee and the
Note Issuer, or (ii) such sale, pledge or other transfer is otherwise made in
a transaction exempt from the registration requirements of the Securities
Act, in which case (A) the Indenture Trustee shall require that both the
prospective transferor and the prospective transferee certify to the
Indenture Trustee and the
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Note Issuer in writing the facts surrounding such transfer, which
certification shall be in form and substance satisfactory to the Indenture
Trustee and the Note Issuer, and (B) the Indenture Trustee shall require a
written opinion of counsel (which shall not be at the expense of the Note
Issuer, the Servicer or the Indenture Trustee) satisfactory to the Note
Issuer and the Indenture Trustee to the effect that such transfer will not
violate the Securities Act. Neither the Grantee, the Note Issuer, nor the
Indenture Trustee nor the Servicer shall be obligated to register any
Unregistered Notes under the Securities Act, qualify any Unregistered Notes
under the securities laws of any state or provide registration rights to any
purchaser or holder thereof.
(b) Unless otherwise provided in the related Trustee's Issuance
Certificate or Series Supplement, the Unregistered Notes may not be acquired by
or for the account of a Benefit Plan and, by accepting and holding an
Unregistered Note, the Holder thereof shall be deemed to have represented and
warranted that it is not a Benefit Plan and, if requested to do so by the Note
Issuer or the Indenture Trustee, the Holder of an Unregistered Note shall
execute and deliver to the Indenture Trustee a certificate to such effect in
form and substance satisfactory to the Indenture Trustee and the Note Issuer.
(c) Unless otherwise provided in the related Trustee's Issuance
Certificate or Series Supplement, Unregistered Notes shall be issued in the form
of Definitive Notes, shall be in fully registered form and Sections 2.11 and
2.12 of this Indenture shall not apply thereto.
(d) Each Unregistered Note shall bear legends to the effect set forth
in subsections (a) and (b) (if subsection (b) is applicable) above.
SECTION 2.18. TAX TREATMENT. The Note Issuer and the Indenture
Trustee, by entering into this Indenture, and the Holders and any Persons
holding a beneficial interest in any Note, by acquiring any Note or interest
therein, (i) express their intention that the Notes qualify under applicable tax
law as indebtedness of ComEd secured by the Note Collateral and (ii) agree to
treat the Notes as indebtedness of ComEd secured by the Note Collateral for the
purpose of federal income, state and local income and franchise taxes, and any
other taxes imposed upon, measured by or based upon gross or net income, unless
otherwise required by appropriate taxing authorities.
SECTION 2.19. STATE PLEDGE. At the Closing Date, under the laws of
the State of Illinois and the United States in effect on the Closing Date, the
State of Illinois has agreed with the Holders, pursuant to Section 18-105(b) of
the Funding Law, as follows:
"(b) The State pledges to and agrees with the holders of any transitional
funding instruments who may enter into contracts with an electric utility,
grantee, assignee or issuer pursuant to this Article XVIII that the State
will not in any way limit, alter, impair or reduce the value of intangible
transition property created by, or instrument funding charges approved by,
a transitional funding order so as to impair the terms of any contract made
by such electric utility, grantee, assignee or issuer with such holders or
in any way impair the rights and remedies of such holders until the
pertinent grantee instruments or, if
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the related transitional funding order does not provide for the issuance of
grantee instruments, the transitional funding instruments and interest,
premium and other fees, costs and charges related thereto, as the case may
be, are fully paid and discharged. Electric utilities, grantees and
issuers are authorized to include these pledges and agreements of the State
in any contract with the holders of transitional funding instruments or
with any assignees pursuant to this Article XVIII and any assignees are
similarly authorized to include these pledges and agreements of the State
in any contract with any issuer, holder or any other assignee. Nothing in
this Article XVIII shall preclude the State of Illinois from requiring
adjustments as may otherwise be allowed by law to the electric utility's
base rates, transition charges, delivery services charges, or other charges
for tariffed services, so long as any such adjustment does not directly
affect or impair any instrument funding charges previously authorized by a
transitional funding order issued by the [ICC]."
As a result of the foregoing pledge, the State of Illinois may not, except as
provided in the succeeding sentence, in any way limit, alter, impair or reduce
the value of the ITP or the IFCs in a manner substantially impairing this
Indenture or the rights and remedies of the Holders (and, consequently, may not
revoke, reduce, postpone or terminate any Funding Order or the rights of the
Holders to receive IFC Payments and all other proceeds of the 1998 Transition
Property), until the Notes, together with interest thereon, are fully paid and
discharged. Notwithstanding the immediately preceding sentence, the State of
Illinois 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.
ARTICLE III
COVENANTS
SECTION 3.01. PAYMENT OF PRINCIPAL, PREMIUM, IF ANY, AND INTEREST.
The principal of and premium, if any, and interest on the Notes will be duly and
punctually paid in accordance with the terms of the Notes and this Indenture.
Amounts properly withheld under the Code or other tax laws by any Person from a
payment to any Holder of interest or principal or premium, if any, shall be
considered as having been paid by the Note Issuer to such Holder for all
purposes of this Indenture.
SECTION 3.02. MAINTENANCE OF OFFICE OR AGENCY. The Note Issuer will
maintain in the Borough of Manhattan, the City of New York, an office or agency
at 88 Pine Street, Wall Street Plaza, 19th Floor, New York, New York 10005 where
Notes may be surrendered for registration of transfer or exchange. The Note
Issuer hereby initially appoints the Indenture Trustee to serve as its agent for
the foregoing purposes. The Note Issuer will give prompt written notice to the
Indenture Trustee of the location, and of any change in the location, of any
such office or agency. If at any time the Note Issuer shall fail to maintain
any such office or agency or shall fail to furnish the Indenture Trustee with
the address thereof, such surrenders may be made
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at the Corporate Trust Office of the Indenture Trustee, and the Note Issuer
hereby appoints the Indenture Trustee as its agent to receive all such
surrenders.
SECTION 3.03. MONEY FOR PAYMENTS TO BE HELD IN TRUST. As provided in
Section 8.02(a), all payments of amounts due and payable with respect to any
Notes that are to be made from amounts withdrawn from the Collection Account
pursuant to Section 8.02(d) shall be made on behalf of the Note Issuer by the
Indenture Trustee or by another Paying Agent, and no amounts so withdrawn from
the Collection Account for payments with respect to any Notes shall be paid over
to the Note Issuer except as provided in this Section and Section 8.02.
The Note Issuer will cause each Paying Agent other than the Indenture
Trustee to execute and deliver to the Indenture Trustee an instrument in which
such Paying Agent shall agree with the Indenture Trustee (and if the Indenture
Trustee acts as Paying Agent, it hereby so agrees), subject to the provisions of
this Section, that such Paying Agent will:
(i) hold all sums held by it for the payment of amounts due with
respect to the Notes in trust for the benefit of the Persons entitled
thereto until such sums shall be paid to such Persons or otherwise disposed
of as herein provided and pay such sums to such Persons as herein provided;
(ii) give the Indenture Trustee written notice of any default by the
Note Issuer of which it has actual knowledge in the making of any payment
required to be made with respect to the Notes;
(iii) at any time during the continuance of any such default, upon
the written request of the Indenture Trustee, forthwith pay to the
Indenture Trustee all sums so held in trust by such Paying Agent;
(iv) immediately resign as a Paying Agent and forthwith pay to the
Indenture Trustee all sums held by it in trust for the payment of Notes if
at any time it determines that it has ceased to meet the standards required
to be met by a Paying Agent at the time of such determination; and
(v) comply with all requirements of the Code and other tax laws with
respect to the withholding from any payments made by it on any Notes of any
applicable withholding taxes imposed thereon and with respect to any
applicable reporting requirements in connection therewith.
The Note Issuer may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, by Issuer
Order direct any Paying Agent to pay to the Indenture Trustee all sums held in
trust by such Paying Agent, such sums to be held by the Indenture Trustee upon
the same trusts as those upon which the sums were held by such
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Paying Agent; and upon such payment by any Paying Agent to the Indenture
Trustee, such Paying Agent shall be released from all further liability with
respect to such money.
Subject to applicable laws with respect to escheat of funds, any money
held by the Indenture Trustee or any Paying Agent in trust for the payment of
any amount due with respect to any Note and remaining unclaimed for two years
after such amount has become due and payable shall be discharged from such trust
and be paid to the Note Issuer on an Issuer Request; and, subject to Section
11.16, the Holder of such Note shall thereafter, as an unsecured general
creditor, look only to the Note Issuer for payment thereof (but only to the
extent of the amounts so paid to the Note Issuer), and all liability of the
Indenture Trustee or such Paying Agent with respect to such trust money shall
thereupon cease; PROVIDED, HOWEVER, that the Indenture Trustee or such Paying
Agent, before being required to make any such repayment, may at the expense of
the Note Issuer, cause to be published once, in a newspaper published in the
English language, customarily published on each Business Day and of general
circulation in the City of Chicago, notice that such money remains unclaimed and
that, after a date specified therein, which shall not be less than 30 days from
the date of such publication, any unclaimed balance of such money then remaining
will be repaid to the Note Issuer. The Indenture Trustee may also adopt and
employ, at the expense of the Note Issuer, any other reasonable means of
notification of such repayment (including, but not limited to, mailing notice of
such repayment to Holders whose Notes have been called but have not been
surrendered for redemption or whose right to or interest in moneys due and
payable but not claimed is determinable from the records of the Indenture
Trustee or of any Paying Agent, at the last address of record for each such
Holder).
SECTION 3.04. EXISTENCE. The Note Issuer will keep in full effect
its existence, rights and franchises as a business trust under the laws of the
State of Delaware (unless it becomes, or any successor Note Issuer hereunder is
or becomes, organized under the laws of any other State or of the United States
of America, in which case the Note Issuer will keep in full effect its
existence, rights and franchises under the laws of such other jurisdiction) and
will obtain and preserve its qualification to do business in each jurisdiction
in which such qualification is or shall be necessary to protect the validity and
enforceability of this Indenture, the Notes, the Note Collateral and each other
instrument or agreement included in the Note Collateral.
SECTION 3.05. PROTECTION OF NOTE COLLATERAL The Note Issuer will
from time to time execute and deliver all such supplements and amendments hereto
and all filings with the ICC pursuant to the Funding Order or to the Funding Law
and all financing statements, continuation statements, instruments of further
assurance and other instruments, and will take such other action necessary or
advisable to:
(i) maintain or preserve the lien and security interest (and the
priority thereof) of this Indenture or carry out more effectively the
purposes hereof;
(ii) perfect, publish notice of or protect the validity of any Grant
made or to be made by this Indenture;
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(iii) enforce any of the Note Collateral;
(iv) preserve and defend title to the Note Collateral and the rights
of the Indenture Trustee and the Holders in such Note Collateral against
the Claims of all Persons and parties, including the challenge by any party
to the validity or enforceability of any Funding Order, any Tariff, the
Intangible Transition Property or any proceeding relating thereto and
institute any action or proceeding necessary to compel performance by the
ICC or the State of Illinois of any of its obligations or duties under the
Funding Law, the State Pledge, or any Funding Order; or
(v) pay any and all taxes levied or assessed upon all or any part of
the Note Collateral.
The Note Issuer hereby designates the Indenture Trustee its agent and
attorney-in-fact to execute any filings with the ICC, financing statements,
continuation statements or other instrument required by the Indenture Trustee
pursuant to this Section, it being understood that the Indenture Trustee shall
have no such obligation or any duty to prepare such documents.
SECTION 3.06. OPINIONS AS TO NOTE COLLATERAL. (a) On the Series
Issuance Date for each Series (including the Closing Date), the Note Issuer
shall furnish to the Indenture Trustee an Opinion of Counsel either stating
that, in the opinion of such counsel, such action has been taken with respect to
the recording and filing of this Indenture, any indentures supplemental hereto,
and any other requisite documents, and with respect to the execution and filing
of any filings with the ICC pursuant to the Funding Law and the applicable
Funding Order and any financing statements and continuation statements, as are
necessary to perfect and make effective the lien and security interest of this
Indenture and reciting the details of such action, or stating that, in the
opinion of such counsel, no such action is necessary to make such lien and
security interest effective.
(b) On or before September 30 in each calendar year, while any Series
is outstanding, beginning on September 30, 1999, the Note Issuer shall furnish
to the Indenture Trustee an Opinion of Counsel either stating that, in the
opinion of such counsel, such action has been taken with respect to the
recording, filing, re-recording and refiling of this Indenture, any indentures
supplemental hereto and any other requisite documents and with respect to the
execution and filing of any filings with the ICC pursuant to the Funding Law
and the Funding Order and any financing statements and continuation statements
as is necessary to maintain the lien and security interest created by this
Indenture and reciting the details of such action or stating that in the opinion
of such counsel no such action is necessary to maintain such lien and security
interest. Such Opinion of Counsel shall also describe the recording, filing,
re-recording and refiling of this Indenture, any indentures supplemental hereto
and any other requisite documents and the execution and filing of any filings
with the ICC, financing statements and continuation statements that will, in the
opinion of such counsel, be required to maintain the lien and security interest
created by this Indenture until September 30 in the following calendar year.
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(c) Prior to the effectiveness of any Subsequent Sale Agreement or
any amendment to any Sale Agreement, the Note Issuer shall furnish to the
Indenture Trustee an Opinion of Counsel either (A) stating that, in the opinion
of such counsel, all filings, including filings with the ICC pursuant to the
Funding Law, or the Funding Order, have been executed and filed that are
necessary fully to preserve and protect the interest of the Note Issuer and the
Indenture Trustee in the Intangible Transition Property and the proceeds
thereof, and reciting the details of such filings or referring to prior Opinions
of Counsel in which such details are given, or (B) stating that, in the opinion
of such counsel, no such action shall be necessary to preserve and protect such
interest.
SECTION 3.07. PERFORMANCE OF OBLIGATIONS; SERVICING; SEC FILINGS. (a)
The Note Issuer (i) will diligently pursue any and all actions to enforce its
rights under each instrument or agreement included in the Note Collateral and
(ii) will not take any action and will use its best efforts not to permit any
action to be taken by others that would release any Person from any of such
Person's covenants or obligations under any such instrument or agreement or that
would result in the amendment, hypothecation, subordination, termination or
discharge of, or impair the validity or effectiveness of, any such instrument or
agreement, except, in each case, as expressly provided in this Indenture, any
Trustee's Issuance Certificate, any Series Supplement, the Sale Agreement, any
Subsequent Sale Agreement related to the applicable Note Collateral, the
Servicing Agreement, the Administration Agreement or such other instrument or
agreement. The Note Issuer shall not terminate the Administration Agreement
prior to the repayment in full of all Notes and, if any of the Notes are not
repaid in full prior to June 30, 2009, the Note Issuer shall exercise its option
under Section 7 of the Administration Agreement to renew the Administration
Agreement until all such Notes are repaid in full.
(b) The Note Issuer may contract with other Persons to assist it in
performing its duties under this Indenture, and any performance of such duties
by a Person identified to the Indenture Trustee herein or in an Officer's
Certificate of the Note Issuer shall be deemed to be action taken by the Note
Issuer. Initially, the Note Issuer has contracted with the Administrator to
assist the Note Issuer in performing its duties under this Indenture.
(c) The Note Issuer will punctually perform and observe all of its
obligations and agreements contained in this Indenture, the Basic Documents and
in the instruments and agreements included in the Note Collateral, including,
but not limited to, filing or causing to be filed all filings with the ICC
pursuant to the Funding Law or the Funding Order, all UCC financing statements
and continuation statements required to be filed by it by the terms of this
Indenture, the Sale Agreement, any Subsequent Sale Agreement and the Servicing
Agreement in accordance with and within the time periods provided for herein and
therein.
(d) If the Note Issuer shall have knowledge of the occurrence of a
Servicer Default under the Servicing Agreement, the Note Issuer shall promptly
give written notice thereof to the Indenture Trustee and the Rating Agencies,
and shall specify in such notice the response or action, if any, the Note Issuer
has taken or is taking with respect of such default. If a Servicer
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Default shall arise from the failure of the Servicer to perform any of its
duties or obligations under the Servicing Agreement with respect to the
Intangible Transition Property or the IFCs, the Note Issuer shall take all
reasonable steps available to it to remedy such failure.
(e) As promptly as possible after the giving of notice of termination
to the Servicer and the Rating Agencies of the Servicer's rights and powers
pursuant to Section 7.01 of the Servicing Agreement, the Note Issuer shall
appoint a successor Servicer (the "Successor Servicer") with the Grantee's prior
written consent thereto (which consent shall not be unreasonably withheld), and
such Successor Servicer shall accept its appointment by a written assumption in
a form acceptable to the Grantee, the Note Issuer and the Indenture Trustee. A
Person shall qualify as a Successor Servicer only if such Person satisfies the
requirements of the Servicing Agreement. If within 30 days after the delivery
of the notice referred to above, the Note Issuer shall not have obtained such a
Successor Servicer, the Indenture Trustee may petition the ICC or a court of
competent jurisdiction to appoint a Successor Servicer. In connection with any
such appointment, the Grantee may make such arrangements for the compensation of
such Successor Servicer as it and such successor shall agree, subject to the
limitations set forth below and in the Servicing Agreement.
(f) Upon any termination of the Servicer's rights and powers pursuant
to the Servicing Agreement, the Indenture Trustee shall promptly notify the Note
Issuer, the Holders and the Rating Agencies. As soon as a Successor Servicer is
appointed, the Indenture Trustee shall notify the Grantee, the Note Issuer, the
Holders and the Rating Agencies of such appointment, specifying in such notice
the name and address of such Successor Servicer.
(g) Without derogating from the absolute nature of the assignment
Granted to the Indenture Trustee under this Indenture or the rights of the
Indenture Trustee hereunder, the Note Issuer agrees that it will not, without
the prior written consent of the Indenture Trustee or the Holders of at least a
majority in Outstanding Amount of the Notes of all Series, amend, modify, waive,
supplement, terminate or surrender, or agree to any amendment, modification,
supplement, termination, waiver or surrender of, the terms of any Note
Collateral or the Basic Documents, or waive timely performance or observance by
ComEd, the Grantee or the Servicer under the Grant Agreement, any Subsequent
Grant Agreement, the Sale Agreement any Subsequent Sale Agreement or the
Servicing Agreement, respectively; PROVIDED, that no such consent shall be
required if (i) the Indenture Trustee shall have received an Officer's
Certificate stating that such waiver, amendment, modification, supplement or
termination shall not adversely affect in any material respect the interests of
the Holders and (ii) the Rating Agency Condition shall have been satisfied with
respect thereto. If any such amendment, modification, supplement or waiver
shall be so consented to by the Indenture Trustee or such Holders, the Note
Issuer agrees to execute and deliver, in its own name and at its own expense,
such agreements, instruments, consents and other documents as shall be necessary
or appropriate in the circumstances. The Note Issuer agrees that no such
amendment, modification, supplement or waiver shall adversely affect the rights
of the Holders of the Notes outstanding at the time of any such amendment,
modification, supplement or waiver.
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(h) The Note Issuer shall, or shall cause the Administrator to, file
with the SEC such periodic reports, if any, as are required from time to time
under Section 13 of the Exchange Act.
(i) The Note Issuer shall make all filings required under the Funding
Law relating to the transfer of the ownership or security interest in the
Intangible Transition Property other than those required to be made by the
Grantee pursuant to the Basic Documents.
SECTION 3.08. CERTAIN NEGATIVE COVENANTS.
(a) The Note Issuer shall not issue Notes in an aggregate initial
Outstanding Amount (i) during the twelve-month period beginning on August 1,
1998 in excess of $3,400,000,000; and (ii) on any date from and after July 31,
1999, in excess of $6,800,000,000, less the aggregate initial Outstanding Amount
of any Notes issued on or prior to July 31, 1999.
(b) So long as any Notes are Outstanding, the Note Issuer shall not:
(i) except as expressly permitted by this Indenture, sell, transfer,
exchange or otherwise dispose of any of the properties or assets of the
Note Issuer, including those included in the Note Collateral, unless
directed to do so by the Indenture Trustee in accordance with Article V;
(ii) claim any credit on, or make any deduction from the principal or
premium, if any, or interest payable in respect of, the Notes (other than
amounts properly withheld from such payments under the Code or other tax
laws) or assert any claim against any present or former Holder by reason of
the payment of the taxes levied or assessed upon any part of the Note
Collateral;
(iii) terminate its existence or dissolve or liquidate in whole or in
part; or
(iv) (A) permit the validity or effectiveness of this Indenture to be
impaired, or permit the lien of this Indenture to be amended, hypothecated,
subordinated, terminated or discharged, or permit any Person to be released
from any covenants or obligations with respect to the Notes under this
Indenture except as may be expressly permitted hereby, (B) permit any lien,
charge, excise, claim, security interest, mortgage or other encumbrance
(other than the lien of this Indenture), to be created on or extend to or
otherwise arise upon or burden the Note Collateral or any part thereof or
any interest therein or the proceeds thereof (other than tax liens arising
by operation of law with respect to amounts not yet due) or (C) permit the
lien of this Indenture not to constitute a valid first priority security
interest in the Note Collateral; or
(v) elect to be classified as an association taxable as a corporation
for federal income tax purposes.
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SECTION 3.09. ANNUAL STATEMENT AS TO COMPLIANCE. The Note Issuer
will deliver to the Indenture Trustee and the Rating Agencies not later than
September 30 of each year (commencing with September 30, 1999), an Officer's
Certificate stating, as to the Responsible Officer signing such Officer's
Certificate, that
(i) a review of the activities of the Note Issuer during the
preceding twelve months ended June 30 (or, in the case of the first such
certificate, since the Series Issuance Date) and of performance under this
Indenture has been made under such Responsible Officer's supervision; and
(ii) to the best of such Responsible Officer's knowledge, based on
such review, the Note Issuer has in all material respects complied with all
conditions and covenants under this Indenture throughout such twelve month
period, or, if there has been a default in the compliance of any such
condition or covenant, specifying each such default known to such
Responsible Officer and the nature and status thereof.
SECTION 3.10. NOTE ISSUER MAY CONSOLIDATE, ETC., ONLY ON CERTAIN
TERMS. (a) The Note Issuer shall not consolidate or merge with or into any
other Person, unless
(i) the Person (if other than the Note Issuer) formed by or surviving
such consolidation or merger shall be a Person organized and existing under
the laws of the United States of America or any State and shall expressly
assume, by an indenture supplemental hereto, executed and delivered to the
Indenture Trustee, in form and substance satisfactory to the Indenture
Trustee, the performance or observance of every agreement and covenant of
this Indenture on the part of the Note Issuer to be performed or observed,
all as provided herein and in the applicable Trustee's Issuance
Certificates and Series Supplements, if any;
(ii) immediately after giving effect to such merger or consolidation,
no Default or Event of Default shall have occurred and be continuing;
(iii) the Rating Agency Condition shall have been satisfied with
respect to such merger or consolidation;
(iv) ComEd shall have delivered to the Grantee, the Note Issuer, the
Delaware Trustee and the Indenture Trustee an opinion of independent tax
counsel (as selected by, and in form and substance reasonably satisfactory
to, ComEd, and which may be based on a ruling from the Internal Revenue
Service) to the effect that such consolidation or merger will not result in
a material adverse federal income tax consequence to ComEd, the Grantee,
the Note Issuer, the Delaware Trustee, the Indenture Trustee or the then
existing Holders;
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(v) any action as is necessary to maintain the lien and security
interest created by this Indenture shall have been taken; and
(vi) the Note Issuer shall have delivered to the Indenture Trustee an
Officer's Certificate and an Opinion of Counsel each stating that such
consolidation or merger and such supplemental indenture comply with this
Section 3.10(a) and that all conditions precedent herein provided for in
this Section 3.10(a) with respect to such transaction have been complied
with (including any filing required by the Exchange Act).
(b) Except as specifically provided herein, the Note Issuer shall not
sell, convey, exchange, transfer or otherwise dispose of any of its properties
or assets included in the Note Collateral, to any Person, unless
(i) the Person that acquires the properties and assets of the Note
Issuer, the conveyance or transfer of which is hereby restricted shall (A)
be a United States citizen or a Person organized and existing under the
laws of the United States of America or any State, (B) expressly assumes,
by an indenture supplemental hereto, executed and delivered to the
Indenture Trustee, in form and substance satisfactory to the Indenture
Trustee, the performance or observance of every agreement and covenant of
this Indenture on the part of the Note Issuer to be performed or observed,
all as provided herein and in the applicable Trustee's Issuance
Certificates or Series Supplements, if any, (C) expressly agrees by means
of such supplemental indenture that all right, title and interest so sold,
conveyed, exchanged, transferred or otherwise disposed of shall be subject
and subordinate to the rights of Holders of the Notes, (D) unless otherwise
provided in the supplemental indenture referred to in clause (B) above,
expressly agrees to indemnify, defend and hold harmless the Note Issuer
against and from any loss, liability or expense arising under or related to
this Indenture and the Notes and (E) expressly agrees by means of such
supplemental indenture that such Person (or if a group of Persons, then one
specified Person) shall make all filings with the SEC (and any other
appropriate Person) required by the Exchange Act in connection with the
Notes;
(ii) immediately after giving effect to such transaction, no Default
or Event of Default shall have occurred and be continuing;
(iii) the Rating Agency Condition shall have been satisfied with
respect to such transaction;
(iv) ComEd shall have delivered to the Grantee, the Note Issuer, the
Delaware Trustee and the Indenture Trustee an opinion of independent tax
counsel (as selected by, and in form and substance reasonably satisfactory
to, ComEd, and which may be based on a ruling from the Internal Revenue
Service) to the effect that such transaction will not result in a material
adverse federal income tax consequence to ComEd, the Grantee, the Note
Issuer, the Delaware Trustee, the Indenture Trustee or the then existing
Holders;
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(v) any action as is necessary to maintain the lien and security
interest created by this Indenture pursuant to the Funding Order or the
Funding Law shall have been taken; and
(vi) the Note Issuer shall have delivered to the Indenture Trustee an
Officer's Certificate and an Opinion of Counsel each stating that such
sale, conveyance, exchange, transfer or other disposition and such
supplemental indenture comply with this Section 3.10(b) and that all
conditions precedent herein provided for in this Section 3.10(b) with
respect to such transaction have been complied with (including any filing
required by the Exchange Act).
SECTION 3.11. SUCCESSOR OR TRANSFEREE. (a) Upon any consolidation or
merger of the Note Issuer in accordance with Section 3.10(a), the Person formed
by or surviving such consolidation or merger (if other than the Note Issuer)
shall succeed to, and be substituted for, and may exercise every right and power
of, the Note Issuer under this Indenture with the same effect as if such Person
had been named as the Note Issuer herein.
(b) Except as set forth in Section 6.07, upon a sale, conveyance,
exchange, transfer or other disposition of all the assets and properties of the
Note Issuer pursuant to Section 3.10(b), the Note Issuer and the Grantee will be
released from every covenant and agreement of this Indenture and the other Basic
Documents to be observed or performed on the part of the Note Issuer and the
Grantee with respect to the Notes and the Intangible Transition Property
immediately upon the delivery of written notice to the Indenture Trustee from
the Person acquiring such assets and properties stating that the Note Issuer and
the Grantee are to be so released.
SECTION 3.12. NO OTHER BUSINESS. The Note Issuer shall not engage in
any business other than financing, purchasing, owning and managing the
Intangible Transition Property and the other Note Collateral and the issuance of
the Notes in the manner contemplated by the Funding Order and this Indenture and
the Basic Documents and activities incidental thereto.
SECTION 3.13. NO BORROWING. The Note Issuer shall not issue, incur,
assume, guarantee or otherwise become liable, directly or indirectly, for any
indebtedness except for the Notes.
SECTION 3.14. SERVICER'S OBLIGATIONS. The Note Issuer shall enforce
the Servicer's compliance with all of the Servicer's material obligations under
the Servicing Agreement.
SECTION 3.15. GUARANTEES, LOANS, ADVANCES AND OTHER LIABILITIES.
Except as otherwise contemplated by the Sale Agreement, any Subsequent Sale
Agreement, the Servicing Agreement or this Indenture, the Note Issuer shall not
make any loan or advance or credit to, or
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guarantee (directly or indirectly or by an instrument having the effect of
assuring another's payment or performance on any obligation or capability of so
doing or otherwise), endorse or otherwise become contingently liable, directly
or indirectly, in connection with the obligations, stocks or dividends of, or
own, purchase, repurchase or acquire (or agree contingently to do so) any stock,
obligations, assets or securities of, or any other interest in, or make any
capital contribution to, any other Person.
SECTION 3.16. CAPITAL EXPENDITURES. Other than the purchase of
Intangible Transition Property from the Grantee on each Series Issuance Date and
other than expenditures made out of available funds in an aggregate amount not
to exceed $25,000 in any calendar year, the Note Issuer shall not make any
expenditure (by long-term or operating lease or otherwise)for capital assets
(either realty or personalty).
SECTION 3.17. RESTRICTED PAYMENTS. The Note Issuer shall not,
directly or indirectly, (i) pay any dividend or make any distribution (by
reduction of capital or otherwise), whether in cash, property, securities or a
combination thereof, to any owner of a beneficial interest in the Note Issuer or
otherwise with respect to any ownership or equity interest or similar security
in or of the Note Issuer, (ii) redeem, purchase, retire or otherwise acquire for
value any such ownership or equity interest or similar security or (iii) set
aside or otherwise segregate any amounts for any such purpose; PROVIDED,
HOWEVER, that, if no Event of Default shall have occurred and be continuing, the
Note Issuer may make, or cause to be made, any such distributions to any owner
of a beneficial interest in the Note Issuer or otherwise with respect to any
ownership or equity interest or similar security in or of the Note Issuer using
funds distributed to the Note Issuer pursuant to Section 8.02(d) to the extent
that such distributions would not cause the book value of the remaining equity
in the Note Issuer to decline below 0.5 percent of the original principal amount
of all Series of Notes which remain outstanding. The Note Issuer will not,
directly or indirectly, make payments to or distributions from the Collection
Account except in accordance with this Indenture and the Basic Documents.
SECTION 3.18. NOTICE OF EVENTS OF DEFAULT. The Note Issuer agrees to
give the Indenture Trustee and the Rating Agencies prompt written notice of each
Event of Default hereunder and each default on the part of the Grantee or the
Servicer of its obligations under the Sale Agreement, any Subsequent Sale
Agreement or the Servicing Agreement, respectively.
SECTION 3.19. FURTHER INSTRUMENTS AND ACTS. Upon request of the
Indenture Trustee, the Note Issuer will execute and deliver such further
instruments and do such further acts as may be reasonably necessary or proper to
carry out more effectively the purpose of this Indenture.
SECTION 3.20. PURCHASE OF SUBSEQUENT TRANSITION PROPERTY. (a) The
Note Issuer may from time to time purchase Subsequent Transition Property from
the Grantee pursuant to a Subsequent Sale Agreement, subject to the conditions
specified in paragraph (b) below.
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(b) The Note Issuer shall be permitted to purchase from the Grantee
Subsequent Transition Property and the proceeds thereof only upon the
satisfaction of each of the following conditions on or prior to the related
Subsequent Sale Date:
(i) the Grantee shall have provided the Note Issuer, the Indenture
Trustee and the Rating Agencies with written notice, which shall be given
not later than 10 days prior to the related Subsequent Sale Date,
specifying the Subsequent Sale Date for such Subsequent Transition Property
and the aggregate amount of the IFCs related to such Subsequent Transition
Property, and shall have provided any information reasonably requested by
any of the foregoing Persons with respect to the Subsequent Transition
Property then being conveyed to the Note Issuer;
(ii) ComEd, the Grantee and the Note Issuer shall have delivered to
the Indenture Trustee a duly executed Subsequent Grant Agreement in
substantially the form of the Grant Agreement and a duly executed
Subsequent Sale Agreement in substantially the form of the Sale Agreement
and a filing shall have been made pursuant to Section 18-107 of the Funding
Law;
(iii) as of such Subsequent Sale Date, the Grantee was not insolvent
and will not have been made insolvent by such transfer and the Grantee is
not aware of any pending insolvency with respect to itself;
(iv) the Rating Agency Condition shall have been satisfied with
respect to such conveyance;
(v) ComEd shall have delivered to the Grantee, the Note Issuer, the
Delaware Trustee and the Indenture Trustee an opinion of independent tax
counsel and/or a ruling from the Internal Revenue Service (as selected by,
and in form and substance reasonably satisfactory to, ComEd) to the effect
that, for federal income tax purposes (i) the ICC's issuance of the
Subsequent Funding Order creating and establishing the Subsequent
Transition Property in the Grantee, and the assignment pursuant to such
Subsequent Sale Agreement of such Subsequent Transition Property, will not
result in gross income to the Grantee, the Note Issuer or ComEd, and the
future revenues relating to the Subsequent Transition Property and the
assessment of the IFCs authorized in such Subsequent Funding Order (except
for revenue related to certain lump-sum payments) will be included in
ComEd's gross income in the year in which the related electrical service is
provided to Customers, and (ii) the assignment pursuant to such Subsequent
Sale Agreement will not adversely affect the characterization of the then
Outstanding Notes as obligations of ComEd;
(vi) as of such Subsequent Sale Date, no breach by ComEd of its
representations, warranties or covenants in the related Subsequent Grant
Agreement and no breach by the
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Grantee of its representations, warranties or covenants in the related
Subsequent Sale Agreement and no Servicer Default shall exist;
(vii) as of such Subsequent Sale Date, the Note Issuer shall have
sufficient funds available to pay the purchase price for the Subsequent
Transition Property to be conveyed on such date and all conditions to the
issuance of one or more Series of Notes intended to provide such funds set
forth in Section 2.10 of this Indenture shall have been satisfied;
(viii) the Note Issuer shall have delivered to the Indenture Trustee
an Officer's Certificate confirming the satisfaction of each condition
precedent specified in this paragraph (b);
(ix) (A) the Note Issuer shall have delivered to the Rating Agencies
any Opinions of Counsel requested by the Rating Agencies and (B) the Note
Issuer shall have delivered to the Indenture Trustee the Opinion of Counsel
required by Section 3.06(c) of this Indenture; and
(x) the Grantee and the Note Issuer shall have taken any action
required to maintain the first perfected ownership interest of the Note
Issuer in the Subsequent Transition Property and the proceeds thereof, and
the Note Issuer shall have taken any action required to maintain the first
perfected security interest of the Indenture Trustee in the Subsequent
Transition Property and the proceeds thereof.
ARTICLE IV
SATISFACTION AND DISCHARGE; DEFEASANCE
SECTION 4.01. SATISFACTION AND DISCHARGE OF INDENTURE; DEFEASANCE.
(a) This Indenture shall cease to be of further effect with respect to the Notes
of any Series and the Indenture Trustee, on reasonable demand of and at the
expense of the Note Issuer, shall execute proper instruments acknowledging
satisfaction and discharge of this Indenture with respect to the Notes of such
Series, when
(A) either
(1) all Notes of such Series theretofore authenticated and
delivered (other than (i) Notes that have been destroyed, lost or
stolen and that have been replaced or paid as provided in Section 2.06
and (ii) Notes for whose payment money has theretofore been deposited
in trust or segregated and held in trust by the Note Issuer and
thereafter repaid to the Note Issuer or discharged from such trust, as
provided in Section 3.03) have been delivered to the Indenture Trustee
for cancellation; or
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(2) either (x) the Scheduled Maturity Date has occurred with
respect to all Notes of such Series not theretofore delivered to the
Indenture Trustee for cancellation, (y) such Notes will be due and
payable on their respective Scheduled Maturity Dates within one year,
or (z) such Notes are to be called for redemption within one year in
accordance with the provisions of the applicable Trustee's Issuance
Certificate or Series Supplement, if any, and in any such case, the
Note Issuer has irrevocably deposited or caused to be irrevocably
deposited with the Indenture Trustee cash, in trust for such purpose,
in an amount sufficient to pay and discharge the entire indebtedness
on such Notes not theretofore delivered to the Indenture Trustee for
cancellation when due;
(B) the Note Issuer has paid or caused to be paid all other sums
payable hereunder by the Note Issuer with respect to such Series; and
(C) the Note Issuer has delivered to the Indenture Trustee an
Officer's Certificate, an Opinion of Counsel and (if required by the TIA or
the Indenture Trustee) an Independent Certificate from a firm of certified
public accountants, each meeting the applicable requirements of Section
11.01(a) and each stating that all conditions precedent herein provided for
relating to the satisfaction and discharge of this Indenture with respect
to Notes of such Series have been complied with.
(b) Subject to Sections 4.01(c) and 4.02, the Note Issuer at any time
may terminate (i) all its obligations under this Indenture with respect to the
Notes of any Series ("Legal Defeasance Option") or (ii) its obligations under
Sections 3.04, 3.05, 3.06, 3.07, 3.08, 3.09, 3.10, 3.12, 3.13, 3.14, 3.15, 3.16,
3.17, 3.18 and 3.19 and the operation of Section 5.01(iv) ("Covenant Defeasance
Option") with respect to any Series of Notes. The Note Issuer may exercise the
Legal Defeasance Option with respect to any Series of Notes notwithstanding its
prior exercise of the Covenant Defeasance Option with respect to such Series.
If the Note Issuer exercises the Legal Defeasance Option with respect
to any Series, the maturity of the Notes of such Series may not be accelerated
because of an Event of Default. If the Note Issuer exercises the Covenant
Defeasance Option with respect to any Series, the maturity of the Notes of such
Series may not be accelerated because of an Event of Default specified in
Section 5.01(iv).
Upon satisfaction of the conditions set forth herein to the exercise
of the Legal Defeasance Option or the Covenant Defeasance Option with respect to
any Series of Notes, the Indenture Trustee, on reasonable demand of and at the
expense of the Note Issuer, shall execute proper instruments acknowledging
satisfaction and discharge of the obligations that are terminated pursuant to
such exercise.
(c) Notwithstanding Sections 4.01(a) and 4.01(b) above, (i) rights of
registration of transfer and exchange, (ii) substitution of mutilated,
destroyed, lost or stolen Notes, (iii) rights
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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 Notes of the Series as to which this Indenture or
certain obligations hereunder have be 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 with respect to such Series shall survive.
SECTION 4.02. CONDITIONS TO DEFEASANCE. The Note Issuer may
exercise the Legal Defeasance Option or the Covenant Defeasance Option with
respect to any Series of Notes only if:
(a) the Note Issuer irrevocably deposits or causes to be deposited in
trust with the Indenture Trustee cash or U.S. Government Obligations for
the payment of principal of and premium, if any, and interest on such Notes
to the Scheduled Maturity Dates or Optional Redemption Date therefor, as
applicable;
(b) the Note Issuer delivers to the Indenture Trustee a certificate
from a nationally recognized firm of Independent accountants expressing its
opinion that the payments of principal and interest when due and without
reinvestment 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
Notes of such Series (i) subject to clause (ii), principal in accordance
with the Expected Amortization Schedule therefor, (ii) if such Series is to
be redeemed, the Optional Redemption Price therefor on the Optional
Redemption Date and (iii) interest when due;
(c) in the case of the Legal Defeasance Option, 91 days pass after
the deposit is made and during the 91-day period no Default specified in
Section 5.01(v) or (vi) occurs which is continuing at the end of the
period;
(d) no Default has occurred and is continuing on the day of such
deposit and after giving effect thereto;
(e) in the case of an exercise of the Legal Defeasance Option, the
Note Issuer shall have delivered to the Indenture Trustee an Opinion of
Counsel stating that (i) the Note Issuer has received from, or there has
been published by, the Internal Revenue Service a ruling, or (ii) since the
date of execution of this Indenture, there has been a change in the
applicable Federal income tax law, in either case to the effect that, and
based thereon such opinion shall confirm that, the Holders of the Notes of
such Series will not recognize income, gain or loss for Federal income tax
purposes as a result of such legal defeasance and will be subject to
Federal income tax on the same amounts, in the same
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manner and at the same times as would have been the case if such legal
defeasance had not occurred;
(f) in the case of an exercise of the Covenant Defeasance Option, the
Note Issuer shall have delivered to the Indenture Trustee an Opinion of
Counsel to the effect that the Holders of the Notes of such Series 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 Note 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 Notes of such Series to
the extent contemplated by this Article IV have been complied with; and
(h) the Rating Agency Condition shall have been satisfied with
respect to the exercise of any Legal Defeasance Option or Covenant
Defeasance Option.
Before or after a deposit pursuant to this Section 4.02 with respect
to any Series of Notes, the Note Issuer may make arrangements satisfactory to
the Indenture Trustee for the redemption of such Notes at a future date in
accordance with Article X.
SECTION 4.03. APPLICATION OF TRUST MONEY. All moneys or U.S.
Government Obligations deposited with the Indenture Trustee pursuant to Section
4.01 or 4.02 hereof shall be held in trust and applied by it, in accordance with
the provisions of the Notes and this Indenture, to the payment, either directly
or through any Paying Agent, as the Indenture Trustee may determine, to the
Holders of the particular Notes for the payment or redemption 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.
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 Notes of any
Series, all moneys then held by any Paying Agent other than the Indenture
Trustee under the provisions of this Indenture with respect to such Notes shall,
upon demand of the Note 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.
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ARTICLE V
REMEDIES
SECTION 5.01. EVENTS OF DEFAULT. "Event of Default" with respect to any
Series, wherever used herein, means any one of the following events (whatever
the reason for such Event of Default and whether it shall be voluntary or
involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
(i) default in the payment of any interest on any Note when the same
becomes due and payable, and such default shall continue for a period of
five days; or
(ii) default in the payment of the then unpaid principal of any Note
of any Series on the Final Maturity Date for such Series; or
(iii) default in the payment of the Optional Redemption Price for any
Note on the Optional Redemption Date therefor; or
(iv) default in the observance or performance in any material respect
of any covenant or agreement of the Note Issuer made in this Indenture
(other than defaults specified in clauses (i), (ii) or (iii) above), or any
representation or warranty of the Note 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 such default shall continue or
not be cured, or the circumstance or condition in respect of which such
misrepresentation or warranty was incorrect shall not have been eliminated
or otherwise cured, for a period of 30 days after there shall have been
given, by registered or certified mail, to the Note Issuer by the Indenture
Trustee or to the Note Issuer and the Indenture Trustee by the Holders of
at least 25 percent of the Outstanding Amount of the Notes of such Series,
a written notice specifying such default or incorrect representation or
warranty and requiring it to be remedied and stating that such notice is a
"Notice of Default" hereunder; or
(v) the filing of a decree or order for relief by a court having
jurisdiction in the premises in respect of the Note Issuer or any
substantial part of the Note Collateral in an involuntary case under any
applicable Federal or state bankruptcy, insolvency or other similar law now
or hereafter in effect, or appointing a receiver, liquidator, assignee,
custodian, trustee, sequestrator or similar official of the Note Issuer or
for any substantial part of the Note Collateral, or ordering the winding-up
or liquidation of the Note Issuer's affairs, and such decree or order shall
remain unstayed and in effect for a period of 60 consecutive days; or
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(vi) the commencement by the Note Issuer of a voluntary case under
any applicable Federal or state bankruptcy, insolvency or other similar law
now or hereafter in effect, or the consent by the Note Issuer to the entry
of an order for relief in an involuntary case under any such law, or the
consent by the Note Issuer to the appointment or taking possession by a
receiver, liquidator, assignee, custodian, trustee, sequestrator or similar
official of the Note Issuer or for any substantial part of the Note
Collateral, or the making by the Note Issuer of any general assignment for
the benefit of creditors, or the failure by the Note Issuer generally to
pay its debts as such debts become due, or the taking of action by the Note
Issuer in furtherance of any of the foregoing; or
(vii) any act or failure to act by the State of Illinois or any of
its agencies (including the ICC), officers or employees which violates or
is not in accordance with the State Pledge; or
(viii) any other event designated as such in a Trustee's Issuance
Certificate or Series Supplement, if any.
The Note Issuer shall deliver to a Responsible Officer of the
Indenture Trustee and the Rating Agencies, within five days after a Responsible
Officer of the Note 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 clause (vii) or (ii) which with the giving of notice and
the lapse of time would become an Event of Default under clause (iv), including,
in each case, the status of such Event of Default and what action the Note
Issuer is taking or proposes to take with respect thereto.
SECTION 5.02. ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT. If
an Event of Default (other than an Event of Default under clause (vii) of
Section 5.01) should occur and be continuing with respect to any Series, then
and in every such case the Indenture Trustee or the Holders of Notes
representing not less than a majority of the Outstanding Amount of the Notes of
all Series may declare all the Notes to be immediately due and payable, by a
notice in writing to the Note Issuer (and to the Indenture Trustee if given by
Holders), and upon any such declaration the unpaid principal amount of the Notes
of all Series, together with accrued and unpaid interest thereon through the
date of acceleration, shall become immediately due and payable.
At any time after such declaration of acceleration of maturity has
been made and before a judgment or decree for payment of the money due has been
obtained by the Indenture Trustee as hereinafter in this Article V provided, the
Holders of Notes representing a majority of the Outstanding Amount of the Notes
of all Series, by written notice to the Note Issuer and the Indenture Trustee,
may rescind and annul such declaration and its consequences if:
(i) the Note Issuer has paid or deposited with the Indenture Trustee
a sum sufficient to pay:
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(A) all payments of principal of and premium, if any, and
interest on all Notes of all Series and all other amounts that would
then be due hereunder or upon such Notes if the Event of Default
giving rise to such acceleration had not occurred; and
(B) all sums paid or advanced by the Indenture Trustee hereunder
and the reasonable compensation, expenses, disbursements and advances
of the Indenture Trustee and its agents and counsel; and
(ii) all Events of Default with respect to all Series, other than the
nonpayment of the principal of the Notes of all Series that has become due
solely by such acceleration, have been cured or waived as provided in
Section 5.12.
No such rescission shall affect any subsequent default or impair any
right consequent thereto.
SECTION 5.03. COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY
INDENTURE TRUSTEE. (a) If an Event of Default under Section 5.01(i), (ii) or
(iii) has occurred and is continuing with respect to any Series, subject to
Section 11.18, 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
and collect in the manner provided by law out of the Note Collateral and the
proceeds thereof, the whole amount then due and payable on the Notes of such
Series for principal, premium, if any, and interest, with interest upon the
overdue principal and premium, if any, and, to the extent payment at such rate
of interest shall be legally enforceable, upon overdue installments of interest,
at the respective rate borne by the Notes of such Series or the applicable Class
of such Series 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 with respect to any Series, the
Indenture Trustee may, as more particularly provided in Section 5.04, in its
discretion, proceed to protect and enforce its rights and the rights of the
Holders of such Series, by such appropriate Proceedings as the Indenture Trustee
shall deem most effective to protect and enforce any such rights, whether for
the specific enforcement of any covenant or agreement in this Indenture or in
aid of the exercise of any power granted herein, or to enforce any other proper
remedy or legal or equitable right vested in the Indenture Trustee by this
Indenture or by law.
(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 Notes of any Series shall then be due and payable as therein expressed or
by declaration or otherwise and irrespective
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of whether the Indenture Trustee shall have made any demand pursuant to the
provisions of this Section, 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
Notes and to file such other papers or documents as may be necessary or
advisable in order to have the claims of the Indenture Trustee (including
any claim for reasonable compensation to the Indenture Trustee and each
predecessor Indenture Trustee, and their respective agents, attorneys and
counsel, and for reimbursement of all expenses and liabilities incurred,
and all advances made, by the Indenture Trustee and each predecessor
Indenture Trustee, except as a result of negligence or bad faith) and of
the Holders allowed in such Proceedings;
(ii) unless prohibited by applicable law and regulations, to vote on
behalf of the Holders of Notes in any election of a trustee in bankruptcy,
a standby trustee or Person performing similar functions in any such
Proceedings; and
(iii) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute all amounts received with
respect to the claims of the Holders and of the Indenture Trustee on their
behalf;
and any trustee, receiver, liquidator, custodian or other similar official in
any such Proceeding is hereby authorized by each of such 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 Notes 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 Notes of any Series, may be enforced by the
Indenture Trustee without the possession of any of the Notes of such Series or
the production thereof in any trial or other Proceedings relative thereto, and
any such action or proceedings instituted by the Indenture Trustee shall be
brought in its own name as trustee of an express trust, and any recovery of
judgment, subject to the payment of the expenses, disbursements and compensation
of the Indenture Trustee, each predecessor
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Indenture Trustee and their respective agents and attorneys, shall be for the
ratable benefit of the Holders of the Notes of such Series.
(f) In any Proceedings brought by the Indenture Trustee (and also any
Proceedings involving the interpretation of any provision of this Indenture to
which the Indenture Trustee shall be a party), the Indenture Trustee shall be
held to represent all the Holders of the Notes, and it shall not be necessary to
make any Holder a party to any such Proceedings.
SECTION 5.04. REMEDIES; PRIORITIES. (a) If an Event of Default
(other than an Event of Default under clause (vii) of Section 5.01) shall have
occurred and be continuing with respect to a Series, the Indenture Trustee may
do one or more of the following (subject to Section 5.05):
(i) institute Proceedings in its own name and as trustee of an
express trust for the collection of all amounts then payable on the Notes
of such Series or under this Indenture with respect thereto, whether by
declaration of acceleration or otherwise, and, subject to the limitations
on recovery set forth herein, enforce any judgment obtained, and collect
moneys adjudged due upon such Notes;
(ii) institute Proceedings from time to time for the complete or
partial foreclosure of this Indenture with respect to the Note Collateral;
(iii) exercise any remedies of a secured party under the UCC or the
Funding Law and take any other appropriate action to protect and enforce
the rights and remedies of the Indenture Trustee and the Holders of the
Notes of such Series; and
(iv) sell the Note Collateral or any portion thereof or rights or
interest therein, at one or more public or private sales called and
conducted in any manner permitted by law;
PROVIDED, HOWEVER, that the Indenture Trustee may not sell or otherwise
liquidate any portion of the Note Collateral following such an Event of Default,
other than an Event of Default described in Section 5.01(i), (ii) or (iii), with
respect to any Series unless (A) the Holders of 100 percent of the Outstanding
Amount of the Notes of all Series consent thereto, (B) the proceeds of such sale
or liquidation distributable to the Holders of all Series are sufficient to
discharge in full all amounts then due and unpaid upon such Notes for principal,
premium, if any, and interest after taking into account payment of all amounts
due prior thereto pursuant to the priorities set forth in Section 8.02(d) or (C)
the Indenture Trustee determines that the Note Collateral will not continue to
provide sufficient funds for all payments on the Notes of all Series as they
would have become due if the Notes had not been declared due and payable, and
the Indenture Trustee obtains the consent of Holders of 66-2/3 percent of the
Outstanding Amount of the Notes of all Series. 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
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investment banking or accounting firm of national reputation as to the
feasibility of such proposed action and as to the sufficiency of the Note
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
Holders, shall be entitled and empowered to the extent permitted by applicable
law, to institute or participate in Proceedings reasonably 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.
(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(d).
SECTION 5.05. OPTIONAL PRESERVATION OF THE NOTE COLLATERAL. If the
Notes of all Series 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 Note 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 Notes, and the
Indenture Trustee shall take such desire into account when determining whether
or not to maintain possession of the Note Collateral. In determining whether to
maintain possession of the Note Collateral, 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 Note Collateral for such
purpose.
SECTION 5.06. LIMITATION OF SUITS. No Holder of any Note of any
Series shall have any right to institute any Proceeding, judicial or otherwise,
with respect to this Indenture, or for the appointment of a receiver or trustee,
or for any other remedy hereunder, unless:
(i) such Holder previously has given written notice to the Indenture
Trustee of a continuing Event of Default with respect to such Series;
(ii) the Holders of not less than 25 percent of the Outstanding
Amount of the Notes of all Series have made written request to the
Indenture Trustee to institute such Proceeding in respect of such Event of
Default in its own name as Indenture Trustee hereunder;
(iii) such Holder or Holders have offered to the Indenture Trustee
indemnity satisfactory to it against the costs, expenses and liabilities to
be incurred in complying with such request;
(iv) the Indenture Trustee for 60 days after its receipt of such
notice, request and offer of indemnity has failed to institute such
Proceedings; and
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(v) no direction inconsistent with such written request has been
given to the Indenture Trustee during such 60-day period by the Holders of
a majority of the Outstanding Amount of the Notes of all Series;
it being understood and intended that no one or more Holders of Notes shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other
Holders of Notes or to obtain or to seek to obtain priority or preference over
any other Holders or to enforce any right under this 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 of Notes,
each representing less than a majority of the Outstanding Amount of the Notes of
all Series, the Indenture Trustee in its sole discretion may determine what
action, if any, shall be taken, notwithstanding any other provisions of this
Indenture.
SECTION 5.07. UNCONDITIONAL RIGHTS OF HOLDERS TO RECEIVE PRINCIPAL,
PREMIUM, IF ANY, AND INTEREST. Notwithstanding any other provisions in this
Indenture, the Holder of any Note shall have the right, which is absolute and
unconditional, (a) to receive payment of (i) the interest, if any, on such Note
on the due dates thereof expressed in such Note or in this Indenture, (ii) the
unpaid principal, if any, of such Notes on the Final Maturity Date therefor or
(iii) in the case of redemption, receive payment of the unpaid principal and
premium, if any, and interest, if any, on such Note on the Optional Redemption
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 Note 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.
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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 a majority of the
Outstanding Amount of the Notes of all Series (or, if less than all Series or
Classes are affected, the affected Series or Class or Classes) shall have the
right to direct the time, method and place of conducting any Proceeding for any
remedy available to the Indenture Trustee with respect to the Notes of such
Series or Class or Classes or exercising any trust or power conferred on the
Indenture Trustee with respect to such Series or Class or Classes; PROVIDED that
(i) such direction shall not be in conflict with any rule of law or
with this Indenture;
(ii) subject to the express terms of Section 5.04, any direction to
the Indenture Trustee to sell or liquidate the Note Collateral shall be by
the Holders of Notes representing not less than 100 percent of the
Outstanding Amount of the Notes of all Series;
(iii) if the conditions set forth in Section 5.05 have been satisfied
and the Indenture Trustee elects to retain the Note Collateral pursuant to
such Section, then any direction to the Indenture Trustee by Holders of
Notes representing less than 100 percent of the Outstanding Amount of the
Notes of all Series to sell or liquidate the Note 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.
SECTION 5.12. WAIVER OF PAST DEFAULTS. Prior to the declaration of
the acceleration of the maturity of the Notes of all Series as provided in
Section 5.02, the Holders of Notes representing not less than a majority of the
Outstanding Amount of the Notes of all Series 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 Notes or (b) in
respect of a covenant or provision hereof which cannot be modified or amended
without the consent of the Holder of each Note of all Series or Classes
affected. In the case of any such waiver, the Note Issuer, the Indenture
Trustee and the Holders of the Notes shall be restored to their former
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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 Note by such Holder's acceptance thereof shall be
deemed to have agreed, that any court may in its discretion require, in any suit
for the enforcement of any right or remedy under this 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 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 10 percent of the Outstanding
Amount of the Notes of a Series or (c) any suit instituted by any Holder for the
enforcement of the payment of (i) interest on any Note on or after the due dates
expressed in such Note and in this Indenture, (ii) the unpaid principal, if any,
of any Note on or after the Final Maturity Date therefor or (iii) in the case of
redemption, the unpaid principal of and premium, if any, and interest on any
Note on or after the Optional Redemption Date therefor.
SECTION 5.14. WAIVER OF STAY OR EXTENSION LAWS. The Note Issuer
covenants (to the extent that it may lawfully do so) that it will not at any
time insist upon, or plead or in any manner whatsoever, claim or take the
benefit or advantage of, any stay or extension law wherever enacted, now or at
any time hereafter in force, that may affect the covenants or the performance of
this Indenture; and the Note Issuer (to the extent that it may lawfully do so)
hereby expressly waives all benefit or advantage of any such law, and covenants
that it will not hinder, delay or impede the execution of any power herein
granted to the 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 NOTES. The Indenture Trustee's right to seek
and recover judgment on the Notes 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 Note Issuer or by
the levy of any execution under such judgment upon any portion of the Note
Collateral or any other assets of the Note Issuer.
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SECTION 5.16. PERFORMANCE AND ENFORCEMENT OF CERTAIN OBLIGATIONS.
(a) Promptly following a request from the Indenture Trustee to do so and at the
Note Issuer's expense, the Note Issuer agrees to take all such lawful action as
the Indenture Trustee may request to compel or secure the performance and
observance by ComEd, the Grantee and the Servicer, as applicable, of each of
their obligations to the Note Issuer under or in connection with the Grant
Agreement or any Subsequent Grant Agreement, the Sale Agreement, or any
Subsequent Sale Agreement and the Servicing Agreement, respectively, in
accordance with the terms thereof, and to exercise any and all rights, remedies,
powers and privileges lawfully available to the Note Issuer under or in
connection with any such agreements, respectively, to the extent and in the
manner directed by the Indenture Trustee, including the transmission of notices
of default on the part of ComEd, the Grantee or the Servicer thereunder and the
institution of legal or administrative actions or proceedings to compel or
secure performance by ComEd, the Grantee or the Servicer of each of their
respective obligations under the Grant Agreement, any Subsequent Grant
Agreement, the Sale Agreement, any Subsequent Sale Agreement and the Servicing
Agreement, respectively.
(b) If an Event of Default has occurred and is continuing, the
Indenture Trustee may, and, at the direction (which direction shall be in
writing or by telephone (confirmed in writing promptly thereafter)) of the
Holders of 66-2/3 percent of the Outstanding Amount of the Notes of all Series
shall, subject to Article VI, exercise all rights, remedies, powers, privileges
and claims of the Note Issuer against the Grantee or the Servicer under or in
connection with the Sale Agreement, any Subsequent Sale Agreement and the
Servicing Agreement, respectively, including the right or power to take any
action to compel or secure performance or observance by the Grantee or the
Servicer of each of their obligations to the Note Issuer thereunder and to give
any consent, request, notice, direction, approval, extension or waiver under the
Sale Agreement, any Subsequent Sale Agreement or the Servicing Agreement,
respectively, and any right of the Note Issuer to take such action shall be
suspended.
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
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(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; however, the Indenture Trustee shall
examine the certificates and opinions to determine whether or not they
conform to the requirements of this Indenture.
(c) The Indenture Trustee may not be relieved from liability for its
own negligent action, its own negligent failure to act or its own wilful
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 pursuant to Section 5.11.
(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.
(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 Note Issuer.
(f) Money held in trust by the Indenture Trustee need not be
segregated from other funds except to the extent required by law or the terms of
this Indenture, the Sale Agreement, any Subsequent Sale Agreement and the
Servicing 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 and to the provisions of the
TIA.
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(i) In the event that the Indenture Trustee is also acting as Paying
Agent or Note Registrar hereunder, the protections of this Article VI shall also
be afforded to the Indenture Trustee in its capacity as Paying Agent or Note
Registrar.
(j) Except as expressly set forth in the Basic Documents, the
Indenture Trustee shall have no obligation to administer, service or collect
Intangible Transition Property or to maintain, monitor or otherwise supervise
the administration, servicing or collection of the Intangible Transition
Property.
SECTION 6.02. RIGHTS OF INDENTURE TRUSTEE. (a) 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 the document.
(b) Before the Indenture Trustee acts or refrains from acting, it may
require and shall be entitled to receive an Officer's Certificate or an Opinion
of Counsel that such action is required or permitted hereunder. The Indenture
Trustee shall not be liable for any action it takes or omits to take in good
faith in reliance on such Officer's Certificate or Opinion of Counsel.
(c) The Indenture Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents or attorneys or a custodian or nominee, and the Indenture Trustee shall
not be responsible for any misconduct or negligence on the part of, or for the
supervision of, any such agent, attorney, custodian or nominee appointed with
due care by it hereunder.
(d) The Indenture Trustee shall not be liable for any action it takes
or omits to take in good faith which it believes to be authorized or within its
rights or powers; PROVIDED, HOWEVER, that the Indenture Trustee's conduct does
not constitute willful misconduct, negligence or bad faith.
(e) The Indenture Trustee may consult with counsel, and the advice or
opinion of counsel with respect to legal matters relating to this Indenture and
the Notes shall be full and complete authorization and protection from liability
in respect to any action taken, omitted or suffered by it hereunder in good
faith and in accordance with the advice or opinion of such counsel.
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 Notes and may otherwise deal with the Note Issuer or its affiliates with the
same rights it would have if it were not Indenture Trustee. Any Paying Agent,
Note Registrar, co-registrar or co-paying agent may do the same with like
rights. However, the Indenture Trustee must comply with Sections 6.11 and 6.12.
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SECTION 6.04. INDENTURE TRUSTEE'S DISCLAIMER. The Indenture Trustee
shall not be responsible for and makes no representation as to the validity or
adequacy of this Indenture or the Notes, it shall not be accountable for the
Note Issuer's use of the proceeds from the Notes, and it shall not be
responsible for any statement of the Note Issuer in the Indenture or in any
document issued in connection with the sale of the Notes or in the Notes other
than the Indenture Trustee's certificate of authentication.
SECTION 6.05. NOTICE OF DEFAULTS. If a Default occurs and is
continuing with respect to any Series and if it is actually known to a
Responsible Officer of the Indenture Trustee, the Indenture Trustee shall mail
to each Holder of Notes of all Series notice of the Default within 90 days after
it occurs. Except in the case of a Default in payment of principal of and
premium, if any, or interest on any Note, 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
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.
SECTION 6.06. REPORTS BY INDENTURE TRUSTEE TO HOLDERS.
(a) So long as Notes are Outstanding and the Indenture Trustee is the
Note Registrar and Paying Agent, 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 and state income tax
returns.
(b) With respect to each Series of Notes, on or prior to each Payment
Date or Special Payment Date therefor, the Indenture Trustee will deliver to
each Holder of such Notes on such Payment Date or Special Payment Date a
statement as provided and prepared by the Servicer which will include (to the
extent applicable) the following information (and any other information so
specified in the applicable Trustee's Issuance Certificate or Series Supplement,
if any,) as to the Notes of such Series with respect to such Payment Date or
Special Payment Date or the period since the previous Payment Date, as
applicable:
(i) the amount of the payment to Holders allocable to principal, if
any;
(ii) the amount of the payment to Holders allocable to interest;
(iii) the aggregate Outstanding Amount of such Notes, after giving
effect to any payments allocated to principal reported under (i) above; and
(iv) the difference, if any, between the amount specified in
subsection (iii) above and the Outstanding Amount specified in the related
Expected Amortization Schedule.
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(c) The Note 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.
SECTION 6.07. COMPENSATION AND INDEMNITY. The Note 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 Note 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 Note Issuer shall indemnify the
Indenture Trustee and its officers, directors, employees and agents against any
and all loss, liability or expense (including attorneys' fees and expenses)
incurred by it in connection with the administration of this trust and the
performance of its duties hereunder. The Indenture Trustee shall notify the
Note 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 Note Issuer
shall not relieve the Note Issuer of its obligations hereunder. The Note Issuer
shall defend the claim and the Indenture Trustee may have separate counsel and
the Note Issuer shall pay the fees and expenses of such counsel. The Note
Issuer need not reimburse any expense or indemnify against any loss, liability
or expense incurred by the Indenture Trustee through the Indenture Trustee's own
wilful misconduct, negligence or bad faith.
The payment obligations to the Indenture Trustee pursuant to this
Section shall survive the discharge of this Indenture 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 Note Issuer, the expenses are intended to constitute expenses of
administration under Title 11 of the United States Code or any other applicable
Federal or state bankruptcy, insolvency or similar law.
SECTION 6.08. REPLACEMENT OF INDENTURE TRUSTEE. The Indenture
Trustee may resign at any time by so notifying the Note Issuer, provided that no
such resignation shall be effective until either (a) the Note Collateral has
been completely liquidated and the proceeds of the liquidation distributed to
the Holders or (b) a successor trustee having the qualifications set forth in
Section 6.11 has been designated and has accepted such trusteeship. The Holders
of a majority in Outstanding Amount of the Notes of all Series may remove the
Indenture Trustee by so notifying the Indenture Trustee and may appoint a
successor Indenture Trustee. The Note 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;
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(iii) a receiver or other public officer takes charge of the
Indenture Trustee or its property; or
(iv) the Indenture Trustee otherwise becomes incapable of acting.
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 Note Issuer shall promptly appoint a successor Indenture
Trustee.
A successor Indenture Trustee shall deliver a written acceptance of
its appointment to the retiring Indenture Trustee and to the Note 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 under this Indenture. 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.
If a successor Indenture Trustee does not take office within 60 days
after the retiring Indenture Trustee resigns or is removed, the retiring
Indenture Trustee, the Note Issuer or the Holders of a majority in Outstanding
Amount of the Notes of all Series may petition any court of competent
jurisdiction for the appointment of a successor Indenture Trustee.
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.
Notwithstanding the replacement of the Indenture Trustee pursuant to
this Section, the Note 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 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.
In case at the time such successor or successors by merger, conversion
or consolidation to the Indenture Trustee shall succeed to the trusts created by
this Indenture any of the Notes 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 Notes so
authenticated; and in case at that time any of the Notes shall not have been
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authenticated, any successor to the Indenture Trustee may authenticate such
Notes 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 Notes or in this Indenture
provided that the certificate of the Indenture Trustee shall have.
SECTION 6.10. APPOINTMENT OF CO-TRUSTEE OR SEPARATE TRUSTEE. (a)
Notwithstanding any other provisions of this Indenture, at any time, for the
purpose of meeting any legal requirement of any jurisdiction in which any part
of the trust created by this Indenture or the Note 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 Note Collateral, and to vest in such
Person or Persons, in such capacity and for the benefit of the Holders, such
title to the Note Collateral, or any part hereof, and, subject to the other
provisions of this Section, 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 hereof.
(b) Every separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following provisions and
conditions:
(i) all rights, powers, duties and obligations conferred or imposed
upon the 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 Note 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,
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upon its acceptance of the trusts conferred, shall be vested with the estates or
property specified in its instrument of appointment, either jointly with the
Indenture Trustee or separately, as may be provided therein, subject to all the
provisions of this Indenture, specifically including every provision of this
Indenture relating to the conduct of, affecting the liability of, or affording
protection to, the Indenture Trustee. Every such instrument shall be filed with
the Indenture Trustee.
(d) Any separate trustee or co-trustee may at any time constitute the
Indenture Trustee, its agent or attorney-in-fact with full power and authority,
to the extent not prohibited by law, to do any lawful act under or in respect of
this Indenture on its behalf and in its name. If any separate trustee or
co-trustee shall die, become incapable of acting, resign or be removed, all of
its estates, properties, rights, remedies and trusts shall vest in and be
exercised by the Indenture Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee.
SECTION 6.11. ELIGIBILITY; DISQUALIFICATION. The Indenture Trustee
shall at all times satisfy the requirements of TIA Section 310(a) and Section
26(a)(i) of the Investment Company Act of 1940. 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 A (or the equivalent thereof) or better by all of the Rating
Agencies from which a rating is available. The Indenture Trustee shall comply
with TIA Section 310(b), including the optional provision permitted by the
second sentence of TIA Section 310(b)(9); PROVIDED, HOWEVER, that there shall be
excluded from the operation of TIA Section 310(b)(1) any indenture or indentures
under which other securities of the Note Issuer are outstanding if the
requirements for such exclusion set forth in TIA Section 310(b)(1) are met.
SECTION 6.12. PREFERENTIAL COLLECTION OF CLAIMS AGAINST NOTE ISSUER,
The Indenture Trustee shall comply with TIA Section 311(a), excluding any
creditor relationship listed in TIA Section 311(b). An Indenture Trustee who
has resigned or been removed shall be subject to TIA Section 311(a) to the
extent indicated.
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 Illinois; 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.
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ARTICLE VII
HOLDERS' LISTS AND REPORTS
SECTION 7.01. NOTE ISSUER TO FURNISH INDENTURE TRUSTEE NAMES AND
ADDRESSES OF HOLDERS. The Note Issuer will furnish or cause to be furnished to
the Indenture Trustee (a) not more than five days after the earlier of (i) each
Record Date with respect to each Series and (ii) three months after the last
Record Date with respect to each Series, a list, in such form as the Indenture
Trustee may reasonably require, of the names and addresses of the Holders of
Notes of such Series as of such Record Date, (b) at such other times as the
Indenture Trustee may request in writing, within 30 days after receipt by the
Note Issuer of any such request, a list of similar form and content as of a date
not more than 10 days prior to the time such list is furnished; PROVIDED,
HOWEVER, that so long as the Indenture Trustee is the Note 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 of Notes
contained in the most recent list furnished to the Indenture Trustee as provided
in Section 7.01 and the names and addresses of Holders of Notes received by the
Indenture Trustee in its capacity as Note 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 Section 312(b) with
other Holders with respect to their rights under this Indenture or under the
Notes.
(c) The Note Issuer, the Indenture Trustee and the Note Registrar
shall have the protection of TIA Section 312(c).
SECTION 7.03. REPORTS BY NOTE ISSUER. (a) The Note Issuer shall:
(i) so long as the Note Issuer is required to file such documents
with the SEC, provide to the Indenture Trustee, within 15 days after the
Note 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 Note Issuer 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 Note Issuer with the conditions and covenants of this
Indenture as may be required from time to time by such rules and
regulations; and
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(iii) supply to the Indenture Trustee (and the Indenture Trustee
shall transmit by mail to all Holders described in TIA Section 313(c))
such summaries of any information, documents and reports required to be
filed by the Note Issuer pursuant to clauses (i) and (ii) of this Section
7.03(a) as may be required by rules and regulations prescribed from time to
time by the SEC.
(b) Unless the Note Issuer otherwise determines, the fiscal year of
the Note Issuer shall end on December 31 of each year.
SECTION 7.04. REPORTS BY INDENTURE TRUSTEE. If required by TIA
Section 313(a), within 60 days after September 30 of each year, commencing with
the year after the issuance of the Notes of any Series, the Indenture Trustee
shall mail to each Holder of Notes of such Series as required by TIA Section
313(c) a brief report dated as of such date that complies with TIA Section
313(a). The Indenture Trustee also shall comply with TIA Section 313(b);
PROVIDED, HOWEVER, that the initial report so issued shall be delivered not more
than 12 months after the initial issuance of each Series.
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
Notes are listed. The Note Issuer shall notify the Indenture Trustee in writing
if and when the Notes are listed on any stock exchange.
ARTICLE VIII
ACCOUNTS, DISBURSEMENTS AND RELEASES
SECTION 8.01. COLLECTION OF MONEY. Except as otherwise expressly
provided herein, the 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. 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 Note 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 Series Issuance
Date for the first Series of Notes issued hereunder, the Note Issuer shall open,
at the Indenture Trustee's Corporate Trust Office, or at another Eligible
Institution, one or more segregated trust accounts in the Indenture Trustee's
name for the deposit of Estimated IFC Collections (collectively, the
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"Collection Account"). The Collection Account will consist of four subaccounts:
a general subaccount (the "General Subaccount"), a reserve subaccount (the
"Reserve Subaccount"), a subaccount for the Overcollateralization Amount (the
"Overcollateralization Subaccount") and a capital subaccount (the "Capital
Subaccount"). All amounts in the Collection Account not allocated to any other
subaccount shall be allocated to the General Subaccount. Prior to the initial
Payment Date, all amounts in the Collection Account (other than funds deposited
into the Capital Subaccount, up to the Required Capital Level for any Series of
Notes) 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 Deposit Account 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
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
Note Collateral as herein provided.
(b) 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. The Indenture Trustee shall also pay
from the Collection Account any amounts requested to be paid by or to the
Servicer pursuant to Section 6.11(d)(ii) of the Servicing Agreement.
(c) IFC Collections 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(b) shall be made by the Indenture Trustee in accordance with the written
instructions provided by the Servicer in the Monthly Servicer's Certificate, the
Quarterly Servicer's Certificate or upon other written notice provided by the
Servicer pursuant to Section 6.11(d)(ii) of the Servicing Agreement, as
applicable.
(d) On each Payment Date for any Series of Notes, 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
Quarterly Servicer's Certificate, in the following priority:
(i) all amounts owed by the Note Issuer to the Indenture Trustee
(including legal fees and expenses) shall be paid to the Indenture Trustee
(subject to Section 6.07) and all amounts owed to the Delaware Trustee in
connection with its acting as trustee under the Trust Agreement shall be
paid to the Delaware Trustee, as appropriate;
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(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 Quarterly Administration Fee and all unpaid Quarterly
Administration Fees, if any, from prior Payment Dates shall be paid to the
Administrator;
(iv) so long as no Default or Event of Default shall have occurred
and be continuing or would result from such payment, all other Operating
Expenses shall be paid to the Persons entitled thereto or, if such have
been previously paid by the Note Issuer, to the Note Issuer in
reimbursement thereof; PROVIDED that the amount paid on each Payment Date
pursuant to this clause (iv) shall not exceed $100,000;
(v) any overdue Quarterly Interest (together with, to the extent
lawful, interest on such overdue Quarterly Interest at the applicable Note
Interest Rate) and then Quarterly Interest for such Payment Date with
respect to each Series of Notes shall be paid to the Holders of such Series
of Notes;
(vi) principal due and payable on the Notes of any Series as a result
of an Event of Default or on the Final Maturity Date of the Notes of such
Series, shall be paid to the Holders of such Series of Notes;
(vii) Quarterly Principal for such Payment Date with respect to each
Series of Notes shall be paid to the Holders of such Series of Notes;
(viii) unpaid Operating Expenses shall be paid to the Persons
entitled thereto or, if such have been previously paid by the Note Issuer,
to the Note Issuer or as it directs in reimbursement thereof;
(ix) the amount, if any, by which the Required Capital Level with
respect to all Outstanding Series of Notes exceeds the amount in the
Capital Subaccount as of such Payment Date shall be allocated to the
Capital Subaccount;
(x) the amount, if any, by which the Required Overcollateralization
Level with respect to all Outstanding Series of Notes exceeds the amount in
the Overcollateralization Subaccount as of such Payment Date shall be
allocated to the Overcollateralization Subaccount;
(xi) funds up to the amount of net earnings on amounts in the
Collection Account for the prior quarter without cumulation shall be paid
to the Note Issuer, free from the lien of this Indenture;
(xii) the balance, if any, shall be allocated to the Reserve
Subaccount for distribution on subsequent Payment Dates; and
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(xiii) after principal of and premium, if any, and interest on all
Notes of all Series, and all of the other foregoing amounts, have been paid
in full, the balance (including all amounts then held in the
Overcollateralization Subaccount, the Capital Subaccount and the Reserve
Subaccount), if any, shall be paid to the Note Issuer, free from the lien
of this Indenture.
All payments to the Holders of a Series pursuant to clauses (v), (vi) and (vii)
above or, in the case of clause (vi), if there is more than one Series of Notes
outstanding all payments to the Holders of all Series, shall be made to such
Holders pro rata based on the respective principal amounts of Notes of such
Series held by such Holders, unless, in the case of a Series comprised of two or
more Classes, the Trustee's Issuance Certificate or Series Supplement, if any,
for such Series provides otherwise. Payments in respect of principal of and
premium, if any, and interest on any Class of Notes will be made on a pro rata
basis among all the Holders of such Class.
(e) If on any Payment Date funds on deposit in the General Subaccount
are insufficient to make the payments contemplated by clauses (i) through (vii)
of Section 8.02(d) above, the Indenture Trustee shall (i) FIRST, draw from
amounts on deposit in the Reserve Subaccount, (ii) SECOND, draw from amounts on
deposit in the Overcollateralization Subaccount and (iii) THIRD, draw from
amounts on deposit in the Capital Subaccount, in each case, up to the amount of
such shortfall in order to make the payments contemplated by clauses (i) through
(vii) of Section 8.02(d). In addition, if on any Payment Date funds on deposit
in the General Subaccount are insufficient to make the allocations contemplated
by clauses (ix) and (x) above, the Indenture Trustee shall draw from amounts on
deposit in the Reserve Subaccount to make such allocations notwithstanding the
fact that on such Payment Date the allocation contemplated by clause (viii)
above may not have been fully satisfied.
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 later than the Business Day prior to the next Payment Date for the
related Series of Notes and (ii) such Eligible Investments shall not be sold,
liquidated or otherwise disposed of at a loss prior to the maturity 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 Note 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 Note Issuer shall deliver to the Indenture Trustee an
Opinion of Counsel, acceptable to the Indenture Trustee, to such effect. In no
event shall the Indenture Trustee be liable for the selection of Eligible
Investments or for investment losses incurred thereon. The Indenture Trustee
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shall have no liability in respect of losses incurred as a result of the
liquidation of any Eligible Investment prior to its stated maturity or the
failure of the Note Issuer 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 Note 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 Note 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 Notes of any Series but the Notes of such Series shall not have been
declared due and payable pursuant to Section 5.02, then the Indenture Trustee
shall, to the fullest extent practicable, invest and reinvest funds in the
Collection Account in one or more investments which qualify as investments in
money market funds described under paragraph (d) of the definition of Eligible
Investments.
(d) The parties hereto acknowledge that the Servicer may, pursuant to
the Servicing Agreement, select Eligible Investments on behalf of the Note
Issuer.
SECTION 8.04. RELEASE OF NOTE COLLATERAL. (a) 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.
(b) The Indenture Trustee shall, at such time as there are no Notes
Outstanding, release any remaining portion of the Note Collateral that secured
the Notes from the lien of this Indenture and release to the Note Issuer or any
other Person entitled thereto any funds then on deposit in the Collection
Account. The Indenture Trustee shall release property from the lien of this
Indenture pursuant to this Section 8.04(b) only upon receipt of an Issuer
Request accompanied by an Officer's Certificate, an Opinion of Counsel and (if
required by the TIA) Independent Certificates in accordance with TIA Sections
314(c) and 314(d)(1) meeting the applicable requirements of Section 11.01.
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SECTION 8.05. OPINION OF COUNSEL. The Indenture Trustee shall
receive at least seven days' notice when requested by the Note Issuer to take
any action pursuant to Section 8.04(a), accompanied by copies of any instruments
involved, and the Indenture Trustee shall also require, as a condition to such
action, an Opinion of Counsel, 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 Notes or the
rights of the Holders in contravention of the provisions of this Indenture;
PROVIDED, HOWEVER, that such Opinion of Counsel shall not be required to express
an opinion as to the fair value of the Note 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 ACCOUNTANTS. As of the Closing
Date, the Note Issuer shall appoint a firm of Independent certified public
accountants of recognized national reputation for purposes of preparing and
delivering the reports or certificates of such accountants required by this
Indenture and the related Trustee's Issuance Certificates or Series Supplements,
if any. In the event such firm requires the Indenture Trustee to agree to the
procedures performed by such firm, the Note 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 Note Issuer, and the Indenture Trustee makes no
independent inquiry or investigation to, and shall have no obligation or
liability in respect of, the sufficiency, validity or correctness of such
procedures. Upon any resignation by such firm the Note 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 certified public
accountants of recognized national reputation. If the Note Issuer shall fail to
appoint a successor to a firm of Independent certified public accountants that
has resigned within 15 days after such resignation, the Indenture Trustee shall
promptly notify the Note Issuer of such failure in writing. If the Note Issuer
shall not have appointed a successor within 10 days thereafter the Indenture
Trustee shall promptly appoint a successor firm of Independent certified public
accountants of recognized national reputation; PROVIDED that the Indenture
Trustee shall have no liability with respect to such appointment if the
Indenture Trustee acted with due care with respect thereto. The fees of such
Independent certified public accountants and its successor shall be payable by
the Note Issuer.
ARTICLE IX
SUPPLEMENTAL INDENTURES
SECTION 9.01. SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF HOLDERS.
(a) Without the consent of the Holders of any Notes but with prior notice to the
Rating Agencies, the Note 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
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the provisions of the Trust Indenture Act 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 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, or to subject to the lien of this
Indenture additional property;
(ii) to evidence the succession, in compliance with the applicable
provisions hereof, of another person to the Note Issuer, and the assumption
by any such successor of the covenants of the Note Issuer herein and in the
Notes contained;
(iii) to add to the covenants of the Note Issuer, for the benefit of
the Holders of the Notes, or to surrender any right or power herein
conferred upon the Note Issuer;
(iv) to convey, transfer, assign, mortgage or pledge any property to
or with the Indenture Trustee;
(v) to cure any ambiguity, to correct or supplement any provision
herein or in any supplemental indenture which may be inconsistent with any
other provision herein or in any supplemental indenture or to make any
other provisions with respect to matters or questions arising under this
Indenture or in any supplemental indenture; PROVIDED that such action shall
not, as evidenced by an Opinion of Counsel, adversely affect the interests
of the Holders of the Notes;
(vi) to evidence and provide for the acceptance of the appointment
hereunder by a successor trustee with respect to the Notes and to add to or
change any of the provisions of this 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 Federal statute hereafter
enacted and to add to this Indenture such other provisions as may be
expressly required by the TIA; or
(viii) to set forth the terms of any Series that has not theretofore
been authorized by a Trustee's Issuance Certificate or Series Supplement,
if any, or to provide for the execution and delivery of any Swap Agreement.
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.
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(b) The Note Issuer and the Indenture Trustee, when authorized by an
Issuer Order, may, also without the consent of any of the Holders of the Notes,
enter into an indenture or indentures supplemental hereto for the purpose of
adding any provisions to, or changing in any manner or eliminating any of the
provisions of, this Indenture or of modifying in any manner the rights of the
Holders of the Notes under this Indenture; PROVIDED, HOWEVER, that (i) such
action shall not, as evidenced by an Opinion of Counsel, 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
Note 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 Notes of
each Series or Class to be affected, by Act of such Holders delivered to the
Note 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 Notes under this
Indenture; PROVIDED, HOWEVER, that no such supplemental indenture shall, without
the consent of the Holder of each Outstanding Note of each Series or Class
affected thereby:
(i) change the date of payment of any installment of principal of or
premium, if any, or interest on any Note, or reduce the principal amount
thereof, the interest rate thereon or premium, if any, with respect
thereto, change any Optional Redemption Price, change the provisions of
this Indenture and the related applicable Trustee's Issuance Certificate or
Series Supplement, if any, relating to the application of collections on,
or the proceeds of the sale of, the Note Collateral to payment of principal
of or premium, if any, or interest on the Notes, or change any place of
payment where, or the coin or currency in which, any Note or the interest
thereon is payable, or impair the right to institute suit for the
enforcement of the provisions of this Indenture requiring the application
of funds available therefor, as provided in Article V, to the payment of
any such amount due on the Notes on or after the respective due dates
thereof (or, in the case of optional redemption, on or after the Optional
Redemption Date);
(ii) reduce the percentage of the Outstanding Amount of the Notes or
of a Series or Class thereof, the consent of the Holders of which is
required for any such supplemental indenture, or the consent of the Holders
of which is required for any waiver of compliance with certain provisions
of this Indenture or certain defaults hereunder and their consequences
provided for in this Indenture;
(iii) modify or alter the provisions of the proviso to the definition
of the term "Outstanding";
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(iv) reduce the percentage of the Outstanding Amount of the Notes
required to direct the Indenture Trustee to direct the Note Issuer to sell
or liquidate the Note Collateral pursuant to Section 5.04;
(v) modify any provision of this Section to decrease any minimum
percentage specified herein necessary to approve any amendments to any
provisions of this Indenture;
(vi) 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 Note on any Payment Date
(including the calculation of any of the individual components of such
calculation);
(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 Note
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 Note of the security provided by the
lien of this Indenture; or
(viii) cause any material adverse federal income tax consequence to
ComEd, the Grantee, the Note Issuer, the Delaware Trustee, the Indenture
Trustee or the then existing Holders.
The Indenture Trustee may in its discretion determine whether or not
any Notes of a Series or Class would be affected by any supplemental indenture
and any such determination shall be conclusive upon the Holders of all Notes of
such Series or Class, whether theretofore or thereafter authenticated and
delivered hereunder. The Indenture Trustee shall not be liable for any such
determination made in good faith.
It shall not be necessary for any Act of Holders under this Section 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 Note Issuer and the Indenture
Trustee of any supplemental indenture pursuant to this Section, the Note Issuer
shall mail to the Rating Agencies and the Holders of the Notes to which such
supplemental indenture relates a notice setting forth in general terms the
substance of such supplemental indenture. Any failure of the Indenture Trustee
to mail such notice, or any defect therein, shall not, however, in any way
impair or affect the validity of any such supplemental indenture.
SECTION 9.03. EXECUTION OF SUPPLEMENTAL INDENTURES. In executing, or
permitting the additional trusts created by, any supplemental indenture
permitted by this Article IX or the modifications thereby of the trusts created
by this Indenture, the Indenture Trustee shall be entitled to receive, and
subject to Sections 6.01 and 6.02, shall be fully protected in relying
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upon, an Opinion of Counsel stating that the execution of such supplemental
indenture is authorized or permitted by this Indenture. The Indenture Trustee
may, but shall not be obligated to, enter into any such supplemental indenture
that affects the Indenture Trustee's own rights, duties, liabilities or
immunities under this Indenture or otherwise.
SECTION 9.04. EFFECT OF SUPPLEMENTAL INDENTURE. Upon the execution
of any supplemental indenture pursuant to the provisions hereof, this Indenture
shall be and be deemed to be modified and amended in accordance therewith with
respect to each Series or Class of Notes affected thereby, and the respective
rights, limitations of rights, obligations, duties, liabilities and immunities
under this Indenture of the Indenture Trustee, the Note Issuer and the Holders
of the Notes shall thereafter be determined, exercised and enforced hereunder
subject in all respects to such modifications and amendments, and all the terms
and conditions of any such supplemental 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 Trust Indenture Act as then
in effect so long as this Indenture shall then be qualified under the Trust
Indenture Act.
SECTION 9.06. REFERENCE IN NOTES TO SUPPLEMENTAL INDENTURES. Notes
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 Note Issuer or the
Indenture Trustee shall so determine, new Notes so modified as to conform, in
the opinion of the Indenture Trustee and the Note Issuer, to any such
supplemental indenture may be prepared and executed by the Note Issuer and
authenticated and delivered by the Indenture Trustee in exchange for Outstanding
Notes.
ARTICLE X
REDEMPTION OF NOTES
SECTION 10.01. OPTIONAL REDEMPTION BY NOTE ISSUER. The Note Issuer
may, at its option, redeem all, but not less than all, of the Notes of a Series
(a) on any Payment Date if, after giving effect to payments that would otherwise
be made on such Payment Date, the Outstanding Amount of any such Series of Notes
has been reduced to less than five percent of the initial principal balance
thereof, or (b) if and to the extent specified in the related Trustee's Issuance
Certificate or Series Supplement, if any, on any Payment Date on or prior to
December 31, 2004, from the proceeds of the issuance and sale of the Notes of
any other Series. In addition, a Series of Notes shall be subject to redemption
if and to the extent provided in the related Trustee's Issuance Certificate or
Series Supplement, if any. In no event, however, shall any Notes be redeemable
unless the Rating Agency Condition shall be satisfied with respect to
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each Rating Agency other than Moody's, to which prior written notice of such
redemption shall have been given, with respect to any Notes which remain
Outstanding after such redemption. The redemption price in any case shall be
equal to the outstanding principal amount of the Notes to be redeemed plus
accrued and unpaid interest thereon at the Note Interest Rate to the Optional
Redemption Date (such price being called the "Optional Redemption Price"). If
the Note Issuer shall elect to redeem the Notes of a Series pursuant to this
Section 10.01, it shall furnish written notice (which notice shall state all
items listed in Section 10.02) of such election to the Indenture Trustee and the
Rating Agencies not more than 50 and not less than 25 days prior to the Optional
Redemption Date and shall deposit with the Indenture Trustee not later than one
Business Day prior to the Optional Redemption Date the Optional Redemption Price
of the Notes to be redeemed whereupon all such Notes shall be due and payable on
the Optional Redemption Date upon the furnishing of a notice complying with
Section 10.02 hereof to each Holder of the Notes of such Series pursuant to this
Section 10.01.
SECTION 10.02. FORM OF OPTIONAL REDEMPTION NOTICE. Unless otherwise
specified in the Trustee's Issuance Certificate or Series Supplement, if any,
relating to a Series of Notes, notice of redemption under Section 10.01 hereof
shall be given by the Indenture Trustee by first-class mail, postage prepaid,
mailed not less than five days nor more than 25 days prior to the applicable
Optional Redemption Date to each Holder of Notes to be redeemed, as of the close
of business on the Record Date preceding the applicable Optional Redemption Date
at such Holder's address appearing in the Note Register.
All notices of redemption shall state:
(1) the Optional Redemption Date;
(2) the Optional Redemption Price;
(3) the place where such Notes are to be surrendered for payment of
the Optional Redemption Price (which shall be the office or agency of the
Note Issuer to be maintained as provided in Section 3.02 hereof);
(4) the CUSIP number, if applicable; and
(5) the principal amount of Notes to be redeemed.
Notice of redemption of the Notes to be redeemed shall be given by the
Indenture Trustee in the name and at the expense of the Note Issuer. Failure to
give notice of redemption, or any defect therein, to any Holder of any Note
selected for redemption shall not impair or affect the validity of the
redemption of any other Note.
SECTION 10.03. NOTES PAYABLE ON OPTIONAL REDEMPTION DATE. Notice of
redemption having been given as provided in Section 10.02 hereof, the Notes to
be redeemed
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shall on the Optional Redemption Date become due and payable at the Optional
Redemption Price and (unless the Note Issuer shall default in the payment of the
Optional Redemption Price) no interest shall accrue on the Optional Redemption
Price for any period after the date to which accrued interest is calculated for
purposes of calculating the Optional Redemption Price.
ARTICLE XI
MISCELLANEOUS
SECTION 11.01. COMPLIANCE CERTIFICATES AND OPINIONS, ETC. (a) Upon
any application or request by the Note Issuer to the Indenture Trustee to take
any action under any provision of this Indenture, the Note 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 certified public accountants meeting the applicable requirements of
this Section, except that, in the case of any such application or request as to
which the furnishing of such documents is specifically required by any provision
of this 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 Note 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
Note Issuer shall, in addition to any obligation imposed in Section 11.01(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
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value (within 90 days of such deposit) to the Note Issuer of the Note Collateral
or other property or securities to be so deposited.
(ii) Whenever the Note 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 Note Issuer shall
also deliver to the Indenture Trustee an Independent Certificate as to the same
matters, if the fair value to the Note Issuer of the securities to be so
deposited and of all other such securities made the basis of any such withdrawal
or release since the commencement of the then-current fiscal year of the Note
Issuer, as set forth in the certificates delivered pursuant to clause (i) above
and this clause (ii), is ten percent or more of the Outstanding Amount of the
Notes of all Series, but such a certificate need not be furnished with respect
to any securities so deposited, if the fair value thereof to the Note 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 Notes of all Series.
(iii) Whenever any property or securities are to be released from the
lien of this Indenture other than pursuant to Section 8.02(d), the Note 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 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 Note 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 Note
Issuer shall also furnish to the Indenture Trustee an Independent Certificate as
to the same matters if the fair value of the property or securities and of all
other property with respect to such Series, or securities released from the lien
of this Indenture (other than pursuant to Section 8.02(d) hereof) since the
commencement of the then-current calendar year, as set forth in the certificates
required by clause (iii) above and this clause (iv), equals 10 percent or more
of the Outstanding Amount of the Notes of all Series, but such certificate need
not be furnished in the case of any release of property or securities if the
fair value thereof as set forth in the related Officer's Certificate is less
than the lesser of (A) $25,000 or (B) one percent of the then Outstanding Amount
of the Notes of all Series.
(v) Notwithstanding Section 2.16 or any other provision of this
Section 11.01, the Indenture Trustee may (A) collect, liquidate, sell or
otherwise dispose of the Intangible Transition Property and the other Note
Collateral as and to the extent permitted or required by the Basic Documents and
(B) make cash payments out of the Collection Account as and to the extent
permitted or required by the Basic Documents.
SECTION 11.02. FORM OF DOCUMENTS DELIVERED TO 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
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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 Note Issuer
may be based, insofar as it relates to legal matters, upon a certificate or
opinion of, or representations by, counsel, unless such officer knows, or in the
exercise of reasonable care should know, that the certificate or opinion or
representations with respect to the matters upon which his or her certificate or
opinion is based are erroneous. Any such certificate of 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, the Grantee, the Note Issuer or the Administrator, stating that
the information with respect to such factual matters is in the possession of the
Servicer, the Grantee, the Note Issuer or the Administrator, unless such
counsel knows, or in the exercise of reasonable care should know, that the
certificate or opinion or representations with respect to such matters are
erroneous.
Whenever in this Indenture, in connection with any application or
certificate or report to the Indenture Trustee, it is provided that the Note
Issuer shall deliver any document as a condition of the granting of such
application, or as evidence of the Note Issuer's compliance with any term
hereof, it is intended that the truth and accuracy, at the time of the granting
of such application or at the effective date of such certificate or report (as
the case may be), of the facts and opinions stated in such document shall in
such case be conditions precedent to the right of the Note Issuer to have such
application granted or to the sufficiency of such certificate or report. The
foregoing shall not, however, be construed to affect the Indenture Trustee's
right to rely upon the truth and accuracy of any statement or opinion contained
in any such document as provided in Article VI.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
SECTION 11.03. 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 Note 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
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favor of the Indenture Trustee and the Note Issuer, if made in the manner
provided in this Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved in any manner that the Indenture Trustee
deems sufficient.
(c) The ownership of Notes shall be proved by the Note Register.
(d) Any request, demand, authorization, direction, notice, consent,
waiver or other action by the Holder of any Notes shall bind the Holder of every
Note issued upon the registration thereof or in exchange therefor or in lieu
thereof, in respect of anything done, omitted or suffered to be done by the
Indenture Trustee or the Note Issuer in reliance thereon, whether or not
notation of such action is made upon such Note.
SECTION 11.04. NOTICES, ETC., TO INDENTURE TRUSTEE, NOTE 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 Note 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 its Corporate Trust
Office, or
(ii) the Note 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 Note Issuer addressed to: ComEd
Transitional Funding Trust, c/o First Union Trust Company, National
Association, One Rodney Square, 920 King Street, 1st Floor, Wilmington,
Delaware 19801, Attention: Corporate Trust Administration or at any other
address previously furnished in writing to the Indenture Trustee by the
Note Issuer. The Note Issuer shall promptly transmit any notice received
by it from the Holders to the Indenture Trustee.
(b) Notices required to be given to the Rating Agencies by the Note
Issuer or the Indenture Trustee shall be in writing, personally delivered or
mailed by certified mail, return receipt requested to (i) in the case of
Moody's, to: Moody's Investors Service, Inc., ABS Monitoring Department, 99
Church Street, New York, New York 10007, (ii) in the case of Standard & Poor's,
to: Standard & Poor's Corporation, 26 Broadway (10th Floor), New York, New York
10004, Attention of Asset Backed Surveillance Department, (iii) in the case of
Fitch IBCA, to Fitch IBCA, Inc., One State Street Plaza, New York, New York
10004, Attention ABS Surveillance, and (iv) in the case of Duff & Phelps, to
Duff & Phelps Credit Rating Co., 17 State Street, 12th Floor, New York, New York
10004, Attention: Asset-Backed Monitoring Group.
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SECTION 11.05. 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 Note Register, not later than the latest
date, and not earlier than the earliest date, prescribed for the giving of such
notice. In any case where notice to 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 11.06. CONFLICT WITH TRUST INDENTURE ACT. If any provision
hereof limits, qualifies or conflicts with another provision hereof that is
required to be included in this Indenture by any of the provisions of the Trust
Indenture Act, such required provision shall control.
The provisions of TIA Sections 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 11.07. EFFECT OF HEADINGS AND TABLE OF CONTENTS. The Article
and Section headings herein and the Table of Contents are for convenience only
and shall not affect the construction hereof.
SECTION 11.08. SUCCESSORS AND ASSIGNS. All covenants and agreements
in this Indenture and the Notes by the Note 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.
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SECTION 11.09. SEPARABILITY. In case any provision in this Indenture
or in the Notes shall be invalid, illegal or unenforceable, the validity,
legality, and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.
SECTION 11.10. BENEFITS OF INDENTURE. Nothing in this Indenture or
in the Notes, 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 Note Collateral, any benefit or any legal or equitable right, remedy
or claim under this Indenture.
SECTION 11.11. LEGAL HOLIDAYS. In any case where the date on which
any payment is due shall not be a Business Day, then (notwithstanding any other
provision of the Notes or this Indenture) payment need not be made on such date,
but may be made on the next succeeding Business Day with the same force and
effect as if made on the date on which nominally due, and no interest shall
accrue for the period from and after any such nominal date.
SECTION 11.12. GOVERNING LAW. THIS INDENTURE SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF ILLINOIS, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
SECTION 11.13. 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 11.14. RECORDING OF INDENTURE. If this Indenture is subject
to recording in any appropriate public recording offices, such recording is to
be effected by the Note Issuer and at its expense accompanied by an Opinion of
Counsel (which may be counsel to the Indenture Trustee or any other counsel
reasonably acceptable to the Indenture Trustee) 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 11.15. TRUST OBLIGATION. No recourse may be taken, directly
or indirectly, with respect to the obligations of the Note Issuer or the
Indenture Trustee on the Notes or under this Indenture or any certificate or
other writing delivered in connection herewith or therewith, against (i) the
Indenture Trustee or the Delaware Trustee in its respective individual capacity,
(ii) any owner of a beneficial interest in the Note Issuer (including the
Grantee and ComEd) or (iii) any partner, owner, beneficiary, agent, officer, or
employee of the Indenture Trustee or the Delaware Trustee in its respective
individual capacity, any holder of a beneficial interest in the Indenture
Trustee 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
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understood that none of the Indenture Trustee, the Delaware Trustee, the Grantee
and ComEd has any such obligations in their respective individual or corporate
capacities).
SECTION 11.16. NO RECOURSE TO NOTE ISSUER. Notwithstanding any
provision of this Indenture or any Trustee's Issuance Certificate or any Series
Supplement to the contrary, Holders shall have no recourse against the Note
Issuer, but shall look only to the Note Collateral with respect to any amounts
due to the Holders hereunder and under the Notes.
SECTION 11.17. INSPECTION. The Note Issuer agrees that, on
reasonable prior notice, it will permit any representative of the Indenture
Trustee, during the Note Issuer's normal business hours, to examine all the
books of account, records, reports, and other papers of the Note Issuer, to make
copies and extracts therefrom, to cause such books to be audited by Independent
certified public accountants, and to discuss the Note Issuer's affairs, finances
and accounts with the Note Issuer's officers, employees, and Independent
certified public accountants, all at such reasonable times and as often as may
be reasonably requested. The Indenture Trustee shall and shall cause its
representatives to hold in confidence all such information except to the extent
disclosure may be required by law (and all reasonable applications for
confidential treatment are unavailing) and except to the extent that the
Indenture Trustee may reasonably determine that such disclosure is consistent
with its obligations hereunder. Notwithstanding anything herein to the
contrary, the foregoing shall not be construed to prohibit (i) disclosure of any
and all information that is or becomes publicly known, or information obtained
by the Indenture Trustee from sources other than the Note Issuer, provided such
parties are rightfully in possession of such information, (ii) disclosure of any
and all information (A) if required to do so by any applicable statute, law,
rule or regulation, (B) pursuant to any subpoena, civil investigative demand or
similar demand or request of any court or regulatory authority exercising its
proper jurisdiction, (C) in any preliminary or final offering circular,
registration statement or contract or other document pertaining to the
transactions contemplated by this Indenture or the Basic Documents approved in
advance by the Note Issuer or (D) to any affiliate, independent or internal
auditor, agent, employee or attorney of the Indenture Trustee having a need to
know the same, provided that such parties agree to be bound by the
confidentiality provisions contained in this Section 11.17, or (iii) any other
disclosure authorized by the Note Issuer.
SECTION 11.18 NO PETITION. The Indenture Trustee, by entering into
this Indenture, and each Holder, by accepting a Note (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 the Indenture,
acquiesce, petition or otherwise invoke or cause the Grantee, the Note Issuer or
the Delaware Trustee to invoke the process of any court or government authority
for the purpose of commencing or sustaining a case against the Grantee, the Note
Issuer or the Delaware Trustee under any insolvency law or appointing a
receiver, liquidator, assignee, trustee, custodian, sequestrator or other
similar official of the Grantee, the Note Issuer or the Delaware Trustee or any
substantial part of its respective property, or ordering the winding up or
liquidation of the affairs of the Grantee, the Note Issuer or the Delaware
Trustee .
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IN WITNESS WHEREOF, the Note Issuer and the Indenture Trustee have
caused this Indenture to be duly executed by their respective officers thereunto
duly authorized and duly attested, all as of the day and year first above
written.
COMED TRANSITIONAL FUNDING TRUST
By: FIRST UNION TRUST COMPANY, NATIONAL
ASSOCIATION, not in its individual capacity
but solely as Delaware Trustee
By: /s/ Edward L. Truitt, Jr.
-----------------------------------------
Name: Edward L. Truitt, Jr.
Title: Vice President
HARRIS TRUST AND SAVINGS BANK, not in its
individual capacity but solely as Indenture Trustee
By: /s/ Robert D. Foltz
-----------------------------------------
Name: Robert D. Foltz
Title: Vice President
SIGNATURE PAGE
TO INDENTURE
73
<PAGE>
STATE OF ILLINOIS, )
)ss:
COUNTY OF COOK )
On the 16th day of December, 1998, before me, Sally Jordan, a Notary
Public in and for said county and state, personally appeared Robert D. Foltz,
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 Harris Trust
and Savings Bank, a banking corporation organized under the laws of the State of
Illinois, and the entity upon whose behalf the person acted, executed this
instrument.
WITNESS my hand and official seal.
/s/ Sally Jordan
----------------------------------------
Notary Public
My commission expires: 03/24/01
74
<PAGE>
STATE OF ____________, )
)ss:
COUNTY OF ____________ )
On the 16th day of December, 1998, before me, Sally Jordan, a Notary
Public in and for said county and state, personally appeared Edward L. Truitt,
Jr., personally known to me (or proved to me on the basis of satisfactory
evidence) to be the person and officer whose name is subscribed to the within
instrument and acknowledged to me that he executed the same in his authorized
capacity, and that by his signature on the instrument COMED TRANSITIONAL FUNDING
TRUST, a Delaware business trust and the entity upon whose behalf the person
acted, executed this instrument.
WITNESS my hand and official seal.
/s/ Sally Jordan
----------------------------------------
Notary Public
My commission expires: 03/24/01
75
<PAGE>
EXHIBIT A
REGISTERED $________
No._______
SEE REVERSE FOR CERTAIN DEFINITIONS
CUSIP NO._____
THE PRINCIPAL OF THIS SERIES [ ], CLASS [__-__] ("THIS CLASS
[__-__ ] NOTE") WILL BE PAID IN INSTALLMENTS AS SET FORTH HEREIN. ACCORDINGLY,
THE OUTSTANDING PRINCIPAL AMOUNT OF THIS CLASS [__-__] NOTE AT ANY TIME MAY BE
LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF. THE HOLDER OF THIS NOTE HAS NO
RECOURSE TO THE ISSUER HEREOF AND AGREES TO LOOK ONLY TO THE NOTE COLLATERAL, AS
DESCRIBED IN THE INDENTURE AND ANY RELATED TRUSTEE'S ISSUANCE CERTIFICATE OR
SERIES SUPPLEMENT REFERRED TO ON THE REVERSE HEREOF, FOR PAYMENT OF ANY AMOUNTS
DUE HEREUNDER. ALL OBLIGATIONS OF THE ISSUER OF THIS CLASS [__-__] NOTE UNDER
THE TERMS OF THE INDENTURE WILL BE RELEASED AND DISCHARGED UPON PAYMENT IN FULL
HEREOF OR AS OTHERWISE PROVIDED IN SECTION 3.10(B) OR ARTICLE IV OF THE
INDENTURE. THE HOLDER OF THIS CLASS [__-__] NOTE HEREBY COVENANTS AND AGREES
THAT PRIOR TO THE DATE WHICH IS ONE (1) YEAR AND ONE (1) DAY AFTER THE PAYMENT
IN FULL OF THE SERIES [ ] CLASS [__-__] NOTES, 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.
A-1
<PAGE>
COMED TRANSITIONAL FUNDING TRUST NOTES,
SERIES [ ], Class [__-__].
INTEREST ORIGINAL PRINCIPAL FINAL MATURITY
RATE AMOUNT DATE
---- ------ ----
ComEd Transitional Funding Trust, a business trust organized and
existing under the laws of the State of Delaware (herein referred to as the
"Note Issuer"), for value received, hereby promises to pay to [ ], or
registered assigns, the Original Principal Amount shown above [in quarterly
installments] on the Payment Dates and in the amounts specified on the reverse
hereof or, if less, the amounts determined pursuant to Section 8.02 of the
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 [March 15, June 15,
September 15 and December 15] or if any such day is not a Business Day, the next
succeeding Business Day, commencing on [ ] and continuing until the earlier of
the payment in full of the principal hereof and the Final Maturity Date (each a
"Payment Date"), on the principal amount of this Series [ ], Class [__-__]
Note (hereinafter referred to as "this Class [__-__] Note"). Interest on this
Class [__-__] Note will accrue for each Payment Date from the most recent
Payment Date on which interest has been paid to but excluding such Payment Date
or, if no interest has yet been paid, from [ ]. Interest will be computed on
the basis of [specify method of computation]. Such principal of and interest on
this Class [__-__] Note shall be paid in the manner specified on the reverse
hereof.
The principal of and interest on this Class [__-__] Note are payable
in such coin or currency of the United States of America as at the time of
payment is legal tender for payment of public and private debts. All payments
made by the Note Issuer with respect to this Class [__-__] Note shall be applied
first to interest due and payable on this Class [__-__] Note as provided above
and then to the unpaid principal of and premium, if any, on this Class [__-__]
Note, all in the manner set forth in Section 8.02 of the Indenture.
Reference is made to the further provisions of this Class [__-__] Note
set forth on the reverse hereof, which shall have the same effect as though
fully set forth on the face of this Class [__-__] Note.
Unless the certificate of authentication hereon has been executed by
the Indenture Trustee whose name appears below by manual signature, this Class
[__-__] Note shall not be entitled to any benefit under the Indenture referred
to on the reverse hereof, or be valid or obligatory for any purpose.
A-2
<PAGE>
IN WITNESS WHEREOF, the Note Issuer has caused this instrument to be
signed, manually or in facsimile, by its Responsible Officer.
Date:
COMED TRANSITIONAL FUNDING TRUST
By: FIRST UNION TRUST COMPANY, NATIONAL
ASSOCIATION, not in its individual capacity
but solely as Delaware Trustee
By: _____________________________________
Name:
Title:
A-3
<PAGE>
INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
Dated:______, ______
This is one of the Series [ ], Class [__-__] Notes, designated
above and referred to in the within-mentioned Indenture.
HARRIS TRUST AND SAVINGS BANK, not in its
individual capacity but solely as Indenture
Trustee
By: _______________________________
Name: _____________________________
Title: ______________________________
A-4
<PAGE>
REVERSE OF NOTE (1)
This Series [ ], Class [__-__] Note is one of a duly authorized
issue of Notes of the Note Issuer (herein called the "Notes"), issued and to be
issued in one or more Series, which Series are issuable in one or more Classes,
and the Series [ ] Notes consists of [ ] Classes, including this Class
[__-__] Note (herein called the "Class [__-__] Notes"), all issued and to be
issued under an Indenture dated as of [ ], 1998, (the "Indenture"), between
the Note Issuer and Harris Trust and Savings Bank, as Indenture Trustee (the
"Indenture Trustee", which term includes any successor trustee 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 Note Issuer, the Indenture Trustee and the Holders of the
Notes. All terms used in this Class [__-__] Note that are defined in the
Indenture, as supplemented or amended, shall have the meanings assigned to them
in the Indenture.
The Class [__-__] Notes, the other Classes of Series [ ] Notes (all
of such Classes being referred to herein as "Series [ ] Notes") and any other
Series of Notes issued by the Note Issuer are and will be equally and ratably
secured by the Note Collateral pledged as security therefor as provided in the
Indenture.
The principal of this Class [__-__] Note shall be payable on each
Payment Date only to the extent that amounts in the Collection Account are
available therefor, and only until the outstanding principal balance thereof on
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
related Trustee's Issuance Certificate or Series Supplement, if any, as Schedule
A, unless payable earlier either because (x) an Event of Default shall have
occurred and be continuing and the Indenture Trustee or the Holders of Notes
representing not less than a majority of the Outstanding Amount of the Notes of
all Series have declared the Notes of all Series to be immediately due and
payable in accordance with Section 5.02 of the Indenture or (y) the Note Issuer,
at its option, shall have called for the redemption of the Series [ ] Notes
pursuant to Section 10.01 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 Class [__-__] Note shall be due and payable on the
earlier of the Final Maturity Date hereof and the Optional Redemption Date, if
any. Notwithstanding the foregoing, the entire unpaid principal amount of the
Notes shall be due and payable, if not then previously paid, on the date on
which an Event of Default shall have occurred and be continuing and the
Indenture Trustee or the Holders of the Notes representing not less than a
majority of the Outstanding Amount of the Notes of all Series have declared the
Notes of all Series to be immediately due and payable in the manner provided in
Section 5.02 of the Indenture. All principal payments on the Class [__-__]
Notes shall be made pro rata to the Class [__-__]
______________________
(1) The form of the reverse of a Note is substantially as follows, unless
otherwise specified in the related Trustee's Issuance Certificate or Series
Supplement.
A-5
<PAGE>
Holders entitled thereto based on the respective principal amounts of the Class
[__-__] Notes held by them.
Payments of interest on this Class [__-__] Note 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 Class [__-__] Note (or one
or more Predecessor Notes) on the Note Register as of the close of business on
the Record Date or in such other manner as may be provided in the related
Trustee's Issuance Certificate or Series Supplement, if any, except for the
final installment of principal and premium, if any, payable with respect to this
Class [__-__] Note on a Payment Date which shall be payable as provided below.
Such checks shall be mailed to the Person entitled thereto at the address of
such Person as it appears on the Note Register as of the applicable Record Date
without requiring that this Class [__-__] Note be submitted for notation of
payment. Any reduction in the principal amount of this Class [__-__] Note (or
any one or more Predecessor Notes) effected by any payments made on any Payment
Date shall be binding upon all future Holders of this Class [__-__] Note and of
any Note issued upon the registration of transfer hereof or in exchange hereof
or in lieu hereof, whether or not noted hereon. If funds are expected to be
available, as provided in the Indenture, for payment in full of the then
remaining unpaid principal amount of this Class [__-__] Note on a Payment Date,
then the Indenture Trustee, in the name of and on behalf of the Note Issuer,
will notify the Person who was the Registered Holder hereof as of the Record
Date preceding such Payment Date by notice mailed no later than five days prior
to such final Payment Date and shall specify that such final installment will be
payable only upon presentation and surrender of this Class [__-__] Note and
shall specify the place where this Class [__-__] Note may be presented and
surrendered for payment of such installment.
The Note Issuer shall pay interest on overdue installments of interest
at the Note Interest Rate to the extent lawful.
As provided in the Indenture, the Class [__-__] Notes may be redeemed,
in whole but not in part, at the option of the Note Issuer on any Payment Date
at the Optional Redemption Price if, after giving effect to payments that would
otherwise be made on such Payment Date, the Outstanding Amount of the Class
[__-__] Notes has been reduced to less than five percent of the initial
principal balance thereof.
This Note is a transitional funding instrument as such term is defined
in the Funding Law. Principal and interest due and payable on this Note are
payable from and secured primarily by intangible transition property created and
established by a transitional funding order obtained from the Illinois Commerce
Commission pursuant to the Funding Law. Intangible transition property consists
of the right to impose and collect certain charges (defined in the Funding Law
as "instrument funding charges") to be included in regular electric utility
bills of existing and future electric service customers of Commonwealth Edison
Company, an Illinois electric utility.
A-6
<PAGE>
The Funding Law provides that: "The State [of Illinois] pledges to
and agrees with the holders of any transitional funding instruments who may
enter into contracts with an electric utility, grantee, assignee or issuer
pursuant to this Article XVIII [of the Public Utility Act] that the State [of
Illinois] will not in any way limit, alter, impair or reduce the value of
intangible transition property created by, or instrument funding charges
approved by, a transitional funding order so as to impair the terms of any
contract made by such electric utility, grantee, assignee or issuer with such
holders or in any way impair the rights and remedies of such holders until the
pertinent grantee instruments or, if the related transitional funding order does
not provide for the issuance of grantee instruments, the pertinent transitional
funding instruments and interest, premium and other fees, costs and charges
related thereto, as the case may be, are fully paid and discharged. Electric
utilities, grantees and issuers are authorized to include these pledges and
agreements of the State [of Illinois] in any contract with the holders of
transitional funding instruments or with any assignees pursuant to this Article
XVIII [of the Public Utility Act] and any assignees are similarly authorized to
include these pledges and agreements of the State [of Illinois] in any contract
with any issuer, holder or any other assignee. Nothing in this Article XVIII
[of the Public Utility Act] shall preclude the State of Illinois from requiring
adjustments as may otherwise be allowed by law to the electric utility's base
rates, transition charges, delivery services charges, or other charges for
tariffed services, so long as any such adjustment does not directly affect or
impair any instrument funding charges previously authorized by a transitional
funding order issued by the [Illinois Commerce Commission]."
As a result of the foregoing pledge, the State of Illinois may not,
except as provided in the succeeding sentence, in any way limit, alter, impair
or reduce the value of such intangible transition property or such instrument
funding changes in a manner substantially impairing the Note Indenture or the
rights and remedies of the Holders, until the Notes, together with interest
thereon, are fully paid and discharged. Notwithstanding the immediately
preceding sentence, the State of Illinois 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.
As provided in the Indenture and subject to certain limitations set
forth therein, the transfer of this Class [__-__] Note may be registered on the
Note Register upon surrender of this Class [__-__] Note for registration of
transfer at the office or agency designated by the Note 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 his attorney duly authorized in writing, with such signature
guaranteed by an institution which is a member of one of the following
recognized Signature Guaranty Programs: (i) The Securities Transfer Agent
Medallion Program (STAMP); (ii)The New York Stock Exchange Medallion Program
(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
Class [__-__] Notes of Minimum Denominations and in the same aggregate principal
amount will be issued to the designated transferee or transferees. No service
charge will be charged for any registration of transfer or
A-7
<PAGE>
exchange of this Class [__-__] Note, but the transferor may be required to pay a
sum sufficient to cover any tax or other governmental charge that may be imposed
in connection with any such registration of transfer or exchange, other than
exchanges pursuant to Section 2.04 or 9.06 of the Indenture not involving any
transfer.
Each Note holder, by acceptance of a Note, covenants and agrees that
no recourse may be taken, directly or indirectly, with respect to the
obligations of the Note Issuer or the Indenture Trustee on the Notes or under
the Indenture or any certificate or other writing delivered in connection
therewith, against (i) the Indenture Trustee or the Delaware Trustee in its
respective individual capacity, (ii) any owner of a beneficial interest in the
Note Issuer (including the Grantee and ComEd) or (iii) any partner, owner,
beneficiary, agent, officer or employee of the Indenture Trustee or the Delaware
Trustee in its respective individual capacity, any holder of a beneficial
interest in the Indenture Trustee or of any successor or assign of any of them
in their individual or corporate capacities, except as any such Person may have
expressly agreed (it being understood that none of the Indenture Trustee, the
Delaware Trustee, the Grantee and ComEd has any such obligations in their
respective individual or corporate capacities).
Prior to the due presentment for registration of transfer of this
Class [__-__] Note, the Note Issuer, the Indenture Trustee and any agent of the
Note Issuer or the Indenture Trustee may treat the Person in whose name this
Class [__-__] Note 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 Class [__-__] Note and for all other purposes
whatsoever, whether or not this Class [__-__] Note be overdue, and neither the
Note 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
Note Issuer and the rights of the Holders of the Notes under the Indenture at
any time by the Note Issuer with the consent of the Holders of Notes
representing a majority of the Outstanding Amount of all Notes at the time
outstanding of each Series or Class to be affected. The Indenture also contains
provisions permitting the Holders of Notes representing specified percentages of
the Outstanding Amount of the Notes of all Series, on behalf of the Holders of
all the Notes, to waive compliance by the Note 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 Class [__-__]
Note (or any one of more Predecessor Notes) shall be conclusive and binding upon
such Holder and upon all future Holders of this Class [__-__] Note and of any
Note issued upon the registration of transfer hereof or in exchange hereof or in
lieu hereof whether or not notation of such consent or waiver is made upon this
Class [__-__] Note. 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 Notes issued thereunder.
The term "Note Issuer" as used in this Class [__-__] Note includes any
successor to the Note Issuer under the Indenture.
A-8
<PAGE>
The Note Issuer is permitted by the Indenture, under certain
circumstances, to merge or consolidate, subject to the rights of the Indenture
Trustee and the Holders of Notes under the Indenture.
The Class [__-__] Notes are issuable only in registered form in
denominations as provided in the Indenture and the related Trustee's Issuance
Certificate or Series Supplement, if any, subject to certain limitations therein
set forth.
This Class [__-__] Note, the Indenture and the related Trustee's
Issuance Certificate or Series Supplement, if any, shall be construed in
accordance with the laws of the State of Illinois, without reference to its
conflict of law provisions, and the obligations, rights and remedies of the
parties hereunder and thereunder shall be determined in accordance with such
laws.
No reference herein to the Indenture and no provision of this Class
[__-__] Note or of the Indenture shall alter or impair the obligation, which is
absolute and unconditional, to pay the principal of and interest on this Class
[__-__] Note at the times, place, and rate, and in the coin or currency herein
prescribed.
The Holder of this Class [__-__] Note by the acceptance hereof agrees
that, notwithstanding any provision of the Indenture or the related Trustee's
Issuance Certificate or Series Supplement, if any, to the contrary, the Holder
shall have no recourse against the Note Issuer, but shall look only to the Note
Collateral, with respect to any amounts due to the Holder under this Class
[__-__] Note.
The Note Issuer and the Indenture Trustee, by entering into the
Indenture, and the Holders and any Persons holding a beneficial interest in any
Class [__-__] Note, by acquiring any Class [__-__] Note or interest therein, (i)
express their intention that the Class [__-__] Notes qualify under applicable
tax law as indebtedness of ComEd secured by the Note Collateral and (ii) unless
otherwise required by appropriate taxing authorities, agree to treat the Class
[__-__] Notes as indebtedness of ComEd secured by the Note Collateral for the
purpose of federal income, state and local income and franchise taxes, and any
other taxes imposed upon, measured by or based upon gross or net income.
A-9
<PAGE>
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee
___________
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto _________________________________________________________________
(name and address of assignee)
the within Class [__-__] Note and all rights thereunder, and hereby irrevocably
constitutes and appoints ______________, attorney, to transfer said Class
[__-__] Note on the books kept for registration thereof, with full power of
substitution in the premises.
Dated: __________________ ________________________________
Signature Guaranteed:
________________________________
_____________
NOTE: The signature to this assignment must correspond with the name of the
registered owner as it appears on the face of the within Class [__-__] Note in
every particular, without alteration, enlargement or any change whatsoever.
A-10
<PAGE>
EXHIBIT B
TRUSTEE'S ISSUANCE CERTIFICATE dated as of ____, ____ (this
"Certificate"), executed and delivered by COMED TRANSITIONAL
FUNDING TRUST, a business trust created under the laws of the
State of Delaware (the "Note Issuer"), to Harris Trust and
Savings Bank, a banking corporation organized under the laws of
the State of Illinois (the "Indenture Trustee"), as Indenture
Trustee under the Indenture dated as of [ ], 1998, between
the Note Issuer and the Indenture Trustee (the "Indenture").
PRELIMINARY STATEMENT
Article II of the Indenture provides, among other things, that the
Note Issuer may at any time and from time to time execute and deliver to the
Indenture Trustee one or more Trustee's Issuance Certificates for the purposes
of authorizing the issuance by the Note Issuer of a Series of Notes and
specifying the terms thereof. The Note Issuer has duly authorized the creation
of a Series of Notes with an initial aggregate principal amount of $ [ ] to be
known as ComEd Transitional Funding Notes, Series [ ] (the "Series [ ]
Notes"), and the Note Issuer is executing and delivering this Certificate in
order to provide for the Series [ ] Notes.
All terms used in this Certificate 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
Certificate 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 Certificate shall govern.
SECTION 1. DESIGNATION. The Series [ ] Notes shall be designated
generally as ComEd Transitional Funding Notes, Series [ ] and further
denominated as Classes [ ] through [ ].
SECTION 2. INITIAL PRINCIPAL AMOUNT; NOTE INTEREST RATE; SCHEDULED
MATURITY DATE; FINAL MATURITY DATE. The Notes of each Class of the Series [
] shall have the initial principal amount, bear interest at the rates per annum
and shall have Scheduled Maturity Dates and Final Maturity Dates set forth
below:
B-1
<PAGE>
<TABLE>
<CAPTION>
Initial Note Scheduled Final
Principal Interest Maturity Maturity
Class Amount Rate Date Date
- ----- ------ ---- ---- ----
<S> <C> <C> <C> <C>
</TABLE>
The Note Interest Rate shall be computed on the basis of a 360-day year of
twelve 30-day months. [If the Notes of all or any Classes are to be Floating
Rate Notes, describe here the index or indexes to be used to determine the
applicable variable interest rate].
SECTION 3. AUTHENTICATION DATE; PAYMENT DATES; EXPECTED AMORTIZATION
SCHEDULE FOR PRINCIPAL; QUARTERLY INTEREST; REQUIRED OVERCOLLATERALIZATION
LEVEL; NO PREMIUM; OTHER TERMS. (a) AUTHENTICATION DATE. The Series [ ]
Notes that are authenticated and delivered by the Indenture Trustee to or upon
the order of the Note Issuer on [ ] (the "Series Issuance Date") shall have
as their date of authentication [ ].
(b) PAYMENT DATES. The Payment Dates for the Series [ ] Notes are
[March 15, June 15, September 15 and December 15] 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 Series [ ] Notes in
full and the Final Maturity Date for the Series [ ] Notes.
(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(d)(vii) of the Indenture as
principal, in the following order and priority: [(1) to the holders of the Class
A-1 Notes, until the Outstanding Amount of such Class of Notes thereof has been
reduced to zero; (2) to the holders of the Class A-2 Notes, until the
Outstanding Amount of such Class of Notes thereof has been reduced to zero; (3)
to the holders of the Class A-3 Notes, until the Outstanding Amount of such
Class of Notes thereof has been reduced to zero; (4) to the holders of the Class
A-4 Notes, until the Outstanding Amount of such Class of Notes thereof has been
reduced to zero; (5) to the holders of the Class A-5 Notes until the Outstanding
Amount of such Class of Notes thereof has been reduced to zero; (6) to the
holders of the Class A-6 Notes, until the Outstanding Amount of such Class of
Notes thereof has been reduced to zero; (7) to the holders of the Class A-7
Notes until the Outstanding Amount of such Class of Notes thereof has been
reduced to zero; and (8) to the holders of the Class A-8 Notes, until the
Outstanding Amount of such Class of Notes thereof has been reduced to zero;]
PROVIDED, HOWEVER, that in no event shall a principal payment pursuant to this
Section 3(c) on any Class on a Payment Date be greater than the amount necessary
to reduce the Outstanding Amount of such Class of Notes below the amount
specified in the Expected Amortization Schedule which is attached as Schedule A
hereto for such Class and Payment Date.
(d) QUARTERLY INTEREST. [Quarterly] Interest will be payable on each
Class of the Series [ ] Notes on each Payment Date in an equal amount to
[one-fourth] of the product of (i) the applicable Note Interest Rate and (ii)
the Outstanding Amount of the related Class of Notes as
B-2
<PAGE>
of the close of business on the preceding Payment Date after giving effect to
all payments of principal made to the holders of the related Class of Series [
] Notes on such preceding Payment Date; PROVIDED, HOWEVER, that with respect to
the initial Payment Date, or, if no payment has yet been made, interest on the
outstanding principal balance will accrue from and including the Series Issuance
Date to, but excluding, the following Payment Date.
(e) REQUIRED OVERCOLLATERALIZATION LEVEL. The Required
Overcollateralization Level for any Payment Date shall be as set forth in
Schedule B hereto.
[(f) NO PREMIUM. No premium will be payable in connection with any
optional redemption of the Series [ ] Notes.]
[(g) The Series [ ] Notes shall not be Book-Entry Notes and the
applicable provisions of Section 2.11 of the Indenture shall not apply to such
Notes.]
SECTION 4. MINIMUM DENOMINATIONS. The Series [ ] Notes 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 Notes of a particular Series, be as defined in Appendix A to
the Indenture. Additionally, Article II of the Indenture provides that with
respect to a particular Series of Notes, certain terms will have the meanings
specified in the related Certificate. With respect to the Series [ ] Notes,
the following definitions shall apply:
"MINIMUM DENOMINATION" shall mean $1,000.
"NOTE INTEREST RATE" has the meaning set forth in Section 2 of this
Certificate.
"PAYMENT DATE" has the meaning set forth in Section 3(b) of this
Certificate.
"QUARTERLY INTEREST" has the meaning set forth in Section 3(d) of
this Certificate.
"SERIES ISSUANCE DATE" has the meaning set forth in Section 3(a) of
this Certificate.
SECTION 6. DELIVERY AND PAYMENT FOR THE SERIES [ ] NOTES; FORM OF
THE SERIES [ ] NOTES. The Indenture Trustee shall deliver the Series [
] Notes to the Note Issuer when authenticated in accordance with Section 2.03 of
the Indenture. The Series [ ] Notes of each Class shall be in the form of
Exhibits [A-1 through A-_] hereto.
SECTION 7. RATIFICATION OF AGREEMENT. As supplemented by this
Certificate, the Indenture is in all respects ratified and confirmed and the
Indenture, as so supplemented by this Certificate, shall be read, taken, and
construed as one and the same instrument.
B-3
<PAGE>
SECTION 8. COUNTERPARTS. This Certificate 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 Certificate shall be construed in
accordance with the laws of the State of Illinois, without reference to its
conflict of law provisions, and the obligations, rights and remedies of the
parties hereunder shall be determined in accordance with such laws.
SECTION 10. TRUST OBLIGATION. No recourse may be taken directly or
indirectly, with respect to the obligations of the Note Issuer or the Indenture
Trustee on the Notes or under this Certificate or any certificate or other
writing delivered in connection herewith or therewith, against (i) the Indenture
Trustee or the Delaware Trustee in its individual capacity, (ii) any owner of a
beneficial interest in the Note Issuer (including the Grantee or ComEd) or (iii)
any partner, owner, beneficiary, agent, officer, director, employee or agent of
the Indenture Trustee or the Delaware Trustee in its individual capacity, any
holder of a beneficial interest in the Note Issuer or the Indenture Trustee 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 Delaware Trustee, the
Grantee and ComEd has any such obligations in their respective individual or
corporate capacities).
B-4
<PAGE>
IN WITNESS WHEREOF, the Note Issuer has caused this Certificate to be
duly executed by a Responsible Officer thereunto duly authorized as of the first
day of the month and year first above written.
COMED TRANSITIONAL FUNDING TRUST, as Note Issuer,
By: FIRST UNION TRUST COMPANY, NATIONAL
ASSOCIATION, not in its individual capacity but
solely as Delaware Trustee
By: _________________________________
Name: _______________________________
Title: ________________________________
RECEIVED, this ____ day
of ___________.
HARRIS TRUST AND SAVINGS BANK, not in its individual
capacity but solely as Indenture Trustee
By: _________________________________
Name: _______________________________
Title: ________________________________
B-5
<PAGE>
SCHEDULE A
EXPECTED AMORTIZATION SCHEDULE
OUTSTANDING PRINCIPAL BALANCE
<TABLE>
<CAPTION>
Date Class Class Class Class Class
- ---- ----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C>
Series Issuance $ $ $ $ $
Date
,199
,199
,199
,199
[Etc.]
</TABLE>
B-6
<PAGE>
SCHEDULE B
REQUIRED OVERCOLLATERALIZATION LEVEL SCHEDULE
<TABLE>
<CAPTION>
Required
Payment Date Overcollateralization Level
------------ ---------------------------
<S> <C>
,199 $
,199 $
,199 $
[Etc.] $
</TABLE>
B-7
<PAGE>
EXHIBIT C
SERIES SUPPLEMENT dated as of ____, 199 ____ (this "Supplement"),
by and between COMED TRANSITIONAL FUNDING TRUST, a business trust
created under the laws of the State of Delaware (the "Note
Issuer"), and, Harris Trust and Savings Bank, a banking
corporation organized under the laws of the State of Illinois
(the "Indenture Trustee"), as Indenture Trustee under the
Indenture dated as of [ ], 1998, between the Note Issuer and
the Indenture Trustee (the "Indenture").
PRELIMINARY STATEMENT
Section 9.01 of the Indenture provides, among other things, that the
Note Issuer and the Indenture Trustee may at any time and from time to time
enter into one or more indentures supplemental to the Indenture for the purposes
of authorizing the issuance by the Note Issuer of a Series of Notes and
specifying the terms thereof. The Note Issuer has duly authorized the creation
of a Series of Notes with an initial aggregate principal amount of $ [ ] to be
known as ComEd Transitional Funding Trust Notes, Series [ ] (the "Series
[ ] Notes"), and the Note Issuer and the Indenture Trustee are executing and
delivering this Supplement in order to provide for the Series [ ] Notes.
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.
SECTION 1. DESIGNATION. The Series [ ] Notes shall be designated
generally as the ComEd Transitional Funding Trust Notes, Series [ ] and
further denominated as Classes [ ] through [ ].
SECTION 2. INITIAL PRINCIPAL AMOUNT; NOTE INTEREST RATE; SCHEDULED
MATURITY DATE; FINAL MATURITY DATE. The Notes of each Class of the Series [ ]
shall have the initial principal amount, bear interest at the rates per annum
and shall have Scheduled Maturity Dates and Final Maturity Dates set forth
below:
C-1
<PAGE>
<TABLE>
<CAPTION>
Initial Note Scheduled Final
Principal Interest Maturity Maturity
Class Amount Rate Date Date
- ----- ------ ---- ---- ----
<S> <C> <C> <C> <C>
</TABLE>
The Note Interest Rate shall be computed on the basis of a 360-day year of
twelve 30-day months. [If the Notes of all or any Classes are to be Floating
Rate Notes, describe here the index or indexes to be used to determine the
applicable variable rate.]
SECTION 3. AUTHENTICATION DATE; PAYMENT DATES; EXPECTED AMORTIZATION
SCHEDULE FOR PRINCIPAL; QUARTERLY INTEREST; REQUIRED OVERCOLLATERALIZATION
LEVEL; NO PREMIUM. (a) AUTHENTICATION DATE. The Series [ ] Notes that are
authenticated and delivered by the Indenture Trustee to or upon the order of the
Note Issuer on [ ] (the "Series Issuance Date") shall have as their date of
authentication [ ].
(b) PAYMENT DATES. The Payment Dates for the Series [ ]Notes are
[March 15, June 15, September 15 and December 15] 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 Series [ ] Notes in full
and the Final Maturity Date for the Series [ ] Notes.
(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(d)(vii) of the Indenture as
principal, in the following order and priority: [(1) to the holders of the Class
A-1 Notes, until the Outstanding Amount of such Class of Notes thereof has been
reduced to zero; (2) to the holders of the Class A-2 Notes, until the
Outstanding Amount of such Class of Notes thereof has been reduced to zero; (3)
to the holders of the Class A-3 Notes, until the Outstanding Amount of such
Class of Notes thereof has been reduced to zero; (4) to the holders of the Class
A-4 Notes, until the Outstanding Amount of such Class of Notes thereof has been
reduced to zero; (5) to the holders of the Class A-5 Notes, until the
Outstanding Amount of such Class of Notes thereof has been reduced to zero; (6)
to the holders of the Class A-6 Notes, until the Outstanding Amount of such
Class of Notes thereof has been reduced to zero; (7) to the holders of the Class
A-7 Notes, until the Outstanding Amount of such Class of Notes thereof has been
reduced to zero; and (8) to the holders of the Class A-8 Notes, until the
Outstanding Amount of such Class of Notes thereof has been reduced to zero;]
PROVIDED, HOWEVER, that in no event shall a principal payment pursuant to this
Section 3(c) on any Class on a Payment Date be greater than the amount necessary
to reduce the Outstanding Amount of such Class of Notes below the amount
specified in the Expected Amortization Schedule which is attached as Schedule A
hereto for such Class and Payment Date.
(d) QUARTERLY INTEREST. [Quarterly] Interest will be payable on each
Class of the Series [ ]Notes on each Payment Date in an equal amount to
[one-fourth] of the product of (i) the applicable Note Interest Rate and (ii)
the Outstanding Amount of the related Class of Notes as
C-2
<PAGE>
of the close of business on the preceding Payment Date after giving effect to
all payments of principal made to the Holders of the related Class of Series
[ ] Notes on such preceding Payment Date; PROVIDED, HOWEVER, that with
respect to the Initial Payment Date, or, if no payment has yet been made,
interest on the outstanding principal balance will accrue from and including
the Series Issuance Date to, but excluding, the following Payment Date.
(e) REQUIRED OVERCOLLATERALIZATION LEVEL. The Required
Overcollateralization Level for any Payment Date shall be as set forth in
Schedule B hereto.
[(f) NO PREMIUM. No premium will be payable in connection with any
optional redemption of the Series [ ] Notes.]
[(g) The Series [ ] Notes shall not be Book-Entry Notes and the
applicable provisions of Section 2.11 of the Indenture shall not apply to such
Notes.]
SECTION 4. MINIMUM DENOMINATIONS. The Series [ ] Notes 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 Notes of a particular Series, be as defined in Appendix A to
the Indenture. Additionally, Article II of the Indenture provides that with
respect to a particular Series of Notes, certain terms will have the meanings
specified in the related Supplement. With respect to the Series [ ] Notes,
the following definitions shall apply:
"MINIMUM DENOMINATION" shall mean $1,000.
"NOTE INTEREST RATE" has the meaning set forth in Section 2 of this
Supplement.
"PAYMENT DATE" has the meaning set forth in Section 3(b) of this
Supplement.
"QUARTERLY INTEREST" has the meaning set forth in Section 3(d) of
this Supplement.
"SERIES ISSUANCE DATE" has the meaning set forth in Section 3(a) of
this Supplement.
SECTION 6. DELIVERY AND PAYMENT FOR THE SERIES [ ] NOTES; FORM OF
THE SERIES [ ] NOTES. The Indenture Trustee shall deliver the Series [ ]
Notes to the Note Issuer when authenticated in accordance with Section 2.03 of
the Indenture. The Series [ ] Notes of each Class shall be in the form of
Exhibits [A-1 through 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.
C-3
<PAGE>
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 construed in
accordance with the laws of the State of Illinois, without reference to its
conflict of law provisions, and the obligations, rights and remedies of the
parties hereunder shall be determined in accordance with such laws.
SECTION 10. TRUST OBLIGATION. No recourse may be taken directly or
indirectly, with respect to the obligations of the Note Issuer or the Indenture
Trustee on the Notes or under this Supplement or any certificate or other
writing delivered in connection herewith or therewith, against (i) the Indenture
Trustee or the Delaware Trustee in its individual capacity, (ii) any owner of a
beneficial interest in the Note Issuer (including the Grantee or ComEd) or (iii)
any partner, owner, beneficiary, agent, officer, director, employee or agent of
the Indenture Trustee or the Delaware Trustee in its individual capacity, any
holder of a beneficial interest in the Note Issuer or the Indenture Trustee 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 Delaware Trustee, the
Grantee and ComEd have any such obligations in their respective individual or
corporate capacities).
C-4
<PAGE>
IN WITNESS WHEREOF, the Note 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.
COMED TRANSITIONAL FUNDING TRUST, as Note Issuer,
By: FIRST UNION TRUST COMPANY, NATIONAL
ASSOCIATION, not in its individual capacity but
solely as Delaware Trustee
By: _________________________________
Name: ______________________________
Title: _______________________________
HARRIS TRUST AND SAVINGS BANK, not in its
individual capacity but solely as Indenture
Trustee
By: _________________________________
Name: ______________________________
Title: _______________________________
C-5
<PAGE>
SCHEDULE A
EXPECTED AMORTIZATION SCHEDULE
OUTSTANDING PRINCIPAL BALANCE
<TABLE>
<CAPTION>
Date Class Class Class Class Class
- ---- ----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C>
Series Issuance $ $ $ $ $
Date
,199
,199
,199
,199
[Etc.]
</TABLE>
C-6
<PAGE>
SCHEDULE B
REQUIRED OVERCOLLATERALIZATION LEVEL SCHEDULE
<TABLE>
<CAPTION>
Required
Payment Date Overcollateralization Level
<S> <C>
,199 $
,199 $
,199 $
[Etc.] $
</TABLE>
C-7
<PAGE>
EXHIBIT 4.3
APPENDIX A
DEFINITIONS
This is APPENDIX A to the Indenture.
A. DEFINED TERMS. As used in the Grant Agreement, the Sale
Agreement, the Indenture, the Trust Agreement, the Servicing Agreement,
Trustee's Issuance Certificate, 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:
"1998 FUNDING ORDER" means the Final Transitional Funding Order dated
July 21, 1998 issued by the ICC pursuant to the Funding Law, Docket No. 98-0319.
"1998 INITIAL TARIFF" means the initial Tariff filed with the ICC to
evidence the IFCs pursuant to the 1998 Funding Order.
"1998 TRANSITION PROPERTY" means all ITP created in favor of the
Grantee pursuant to the 1998 Funding Order.
"ACT" is defined in Section 11.03 of the Indenture.
"ACTUAL IFC COLLECTIONS" means, with respect to IFCs billed in any
Billing Period, the amount of such IFCs less Net IFC Write-Offs calculated for
the Billing Period which occurs six Collection Periods after the Billing Period
in which such IFCs were billed.
"ADJUSTMENTS" means a Reconciliation Adjustment or a True-Up
Adjustment, as the context may require.
"ADMINISTRATION AGREEMENT" means the Administration Agreement dated as
of December 16, 1998, among ComEd, the Grantee and the Note Issuer, as the same
may be amended, supplemented or otherwise modified from time to time.
"ADMINISTRATOR" means ComEd and any successor in interest to the
extent permitted under the Administration Agreement.
"AFFILIATE" means, with respect to any specified Person, any other
Person controlling or controlled by or under common control with such specified
Person. For the purposes of this definition, "control" when used with respect
to any specified Person means the power to direct the management and policies of
such Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
<PAGE>
"AGENCY OFFICE" means the office of the Note Issuer maintained
pursuant to Section 3.02 of the Indenture.
"AGGREGATE REMITTANCE AMOUNT" has the meaning set forth in ANNEX I to
the Servicing Agreement.
"ALLOCABLE IFC REVENUE AMOUNTS" means, (i) with respect to any
lump-sum payments of transition charges under Section 16-108(h) of the Public
Utilities Act or (ii) with respect to any revenues derived from condemnation
proceedings, or FERC stranded cost recoveries or any other amounts which reflect
compensation for lost revenues which would otherwise have been attributable to
Applicable Rates, the allocable amounts of such transition charges or other
revenues which are deemed to be proceeds of the IFCs in accordance with the
terms of the Funding Order and which are to be set aside for the benefit of the
Note Issuer, in each case as calculated pursuant to Section 6(f) of ANNEX I to
the Servicing Agreement.
"AMENDATORY ACT" means the Electric Service Customer Choice and Rate
Relief Law of 1997, 220 ILCS 5/16-101 ET SEQ., 220 ILCS 5/17-101 ET SEQ. and 220
ILCS 5/18-101 ET SEQ., as amended from time to time.
"AMENDATORY TARIFF" means a tariff or notice filing filed with the ICC
in respect of a Reconciliation Adjustment or a True-Up Adjustment, substantially
in the form of EXHIBIT C to the Servicing Agreement.
"ANNUAL ACCOUNTANT'S REPORT" is defined in Section 3.04 of the
Servicing Agreement.
"APPLICABLE ARES" means, with respect to each Customer taking service
from an ARES, the ARES, if any, providing consolidated billing to that Customer
which includes billing of IFCs.
"APPLICABLE RATES" means all of ComEd's tariffed charges including,
without limitation, charges for base rates and delivery services and transition
charges (including lump-sum payments of such charges); PROVIDED, however, that
Applicable Rates shall not include late charges or charges set forth in those
tariffs which are filed specifically and primarily to collect amounts related to
decommissioning expense, taxes, franchise fees or other franchise cost
additions, costs imposed by local governmental units which are allocated and
charged to customers within the boundaries of such governmental units'
jurisdiction, renewable energy resources and coal technology development
assistance charges, energy assistance charges for the Supplemental Low-Income
Energy Assistance Fund, reimbursement for the costs of optional or non-standard
facilities and reimbursement for the costs of optional or non-standard meters,
or monies that will be paid to third parties (after deduction of allowable
administrative, servicing or similar fees).
2
<PAGE>
"APPLICATION" means the Application for Transitional Funding Order and
Petition filed by ComEd with the ICC dated April 22, 1998 pursuant to Section
18-103 of the Funding Law.
"ARES" means an alternative retail electric supplier as defined in
Section 16-102 of the Amendatory Act.
"ARES SERVICE AGREEMENT" means an agreement between an ARES and ComEd
for the provision of consolidated billing by such ARES to customers in
accordance with ICC Regulations, the terms of any Tariffs and the terms of any
delivery service tariffs filed by ComEd under Section 16-118(b) of the Public
Utilities Act.
"BANKRUPTCY CODE" means Title 11 of the United States Code (11 U.S.C.
Section 101 ET SEQ.), as amended from time to time.
"BASIC DOCUMENTS" means each Grant Agreement, each Sale Agreement, the
Indenture, the Trust Agreement, the Servicing Agreement, each Series Supplement,
each Trustee's Issuance Certificate, the Administration Agreement, the
Remediation Agreement, each Letter of Representations, the Note Depository
Agreement, each Underwriting Agreement and all other documents and certificates
delivered in connection therewith.
"BENEFIT PLAN" means, with respect to any Person, any defined benefit
plan (as defined in Section 3(35) of ERISA) that (a) is or was at any time
during the past six years maintained by such Person or any ERISA Affiliate of
such person, or to which contributions by any such Person are or were at any
time during the past six 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.
"BILLING PERIOD" means the period created by dividing the calendar
year into twelve 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 or ARES by ComEd on its own
behalf and in its capacity as Servicer.
"BOOK-ENTRY FORM" means, with respect to any Note or Series of Notes,
that such Note or Series is not certificated and the ownership and transfers
thereof shall be made through the book entries by a Clearing Agency as described
in Section 2.11 of the Indenture and the applicable Trustee's Issuance
Certificate or Series Supplement, if any, pursuant to which such Note or Series
was issued.
"BOOK-ENTRY NOTES" means any Notes 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 Notes are to be
issued to the Holder of such Notes, such Notes shall no longer be "Book-Entry
Notes".
3
<PAGE>
"BUSINESS DAY" means any day other than a Saturday, a Sunday or a day
on which banking institutions or trust companies in Wilmington, Delaware,
Chicago, Illinois or New York, New York or the Depository Trust Company are
authorized or required by law, regulation or executive order to remain closed.
"BUSINESS TRUST ACT" means the Delaware Business Trust Act, 12 Del.
Code Section 3801 ET SEQ.
"CALCULATION PERIOD" means initially, the period commencing on the
Closing Date and ending on June 30, 1999 and, thereafter, each period of six
Collection Periods which ends on a Reconciliation Adjustment Date; PROVIDED,
that, if a True-Up Adjustment is required, then the Calculation Period for such
True-Up Adjustment shall mean the period of three Collection Periods commencing
with the period during which such True-Up Adjustment is implemented and ending
on the next Reconciliation Adjustment Date.
"CAPITAL CONTRIBUTION" means the amount of cash contributed to the
Note Issuer by the Grantee as specified in the Trust Agreement.
"CAPITAL SUBACCOUNT" is defined in Section 8.02(a) of the Indenture.
"CERTIFICATE OF COMPLIANCE" means the certificate referred to in
Section 3.03 of the Servicing Agreement and substantially in the form of EXHIBIT
B attached to the Servicing Agreement.
"CERTIFICATE OF FORMATION" means the Amended and Restated Certificate
of Formation of the Grantee filed as of October 21, 1998 pursuant to, and in
accordance with, the Delaware Limited Liability Company Act, 6 Del. Code Section
18-101 ET SEQ.
"CERTIFICATE OF TRUST" means the Certificate of Trust filed with the
Secretary of State pursuant to which the Trust was established, substantially in
the form of EXHIBIT A to the Trust Agreement.
"CLAIM" means a "claim" as defined in Section 101(5) of the Bankruptcy
Code.
"CLASS" means, with respect to any Series of Notes, any one of the
classes of Notes of that Series.
"CLEARING AGENCY" means an organization registered as a "clearing
agency" pursuant to Section 17A of the Exchange Act, as amended.
"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.
4
<PAGE>
"CLOSING DATE" means December 16, 1998.
"CODE" means the Internal Revenue Code of 1986, as amended from time
to time, and Treasury Regulations promulgated thereunder.
"COLLECTION ACCOUNT" means the account established and maintained by
the Indenture Trustee in accordance with Section 8.02(a) of the Indenture and
any subaccounts contained therein.
"COLLECTION PERIOD" means any period commencing on the first Servicer
Business Day of any calendar month and ending on the last Servicer Business Day
of such month.
"COMED" means Commonwealth Edison Company, an Illinois corporation,
and any successor in interest to the extent permitted under the Grant
Agreement.
"CONSOLIDATED ARES BILLING" has the meaning set forth in ANNEX I to
the Servicing Agreement.
"CORPORATE TRUST OFFICE" means with respect to the Indenture Trustee
or the Delaware Trustee, the principal office at which at any particular time
the corporate trust business of the Indenture Trustee or the Delaware Trustee,
respectively, shall be administered, which offices at the Closing Date are
located, in the case of the Indenture Trustee, at 311 West Monroe Street,
Chicago, Illinois, 60606, 12th Floor, Attention: Indenture Trust Administration,
and in the case of the Delaware Trustee, at First Union Trust Company, National
Association, One Rodney Square, 920 King Street, 1st Floor, Wilmington, Delaware
19801, Attention: Corporate Trust Administration or at such other address as the
Indenture Trustee or Delaware Trustee may designate from time to time by notice
to the Holders and the Note Issuer, or the principal corporate trust office of
any successor Indenture Trustee or Delaware Trustee (the addresses of which the
successor Indenture Trustee or Delaware Trustee will notify the Holders and the
Note Issuer).
"COVENANT DEFEASANCE OPTION" is defined in Section 4.01(b) of the
Indenture.
"CUSTOMERS" means all existing and future retail customers or classes
of retail customers of ComEd or other Persons or group of Persons obligated from
time to time to pay ComEd or any successor "Applicable Rates," and all other
Persons obligated to pay IFCs pursuant to the 1998 Funding Order or any
Subsequent Funding Order, as applicable, and, including, without limitation, any
Persons who enter into contracts with ComEd to take non-tariffed electrical
services but would otherwise have been obligated to pay Applicable Rates.
"DEBT SERVICE BILLING REQUIREMENT" means, for any Calculation Period,
the aggregate amount of IFCs calculated by the Servicer as necessary to be
billed during such period in order to collect the Required Debt Service on or
before the end of the Collection Period immediately preceding the next
Reconciliation Adjustment Date.
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"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 NOTES" means Notes issued in definitive form in accordance
with Section 2.13 of the Indenture.
"DELAWARE TRUSTEE" means the Person acting as Delaware Trustee under
the Trust Agreement.
"DTC" means the Depository Trust Company or any successor thereto.
"DUFF & PHELPS" means Duff & Phelps Credit Rating Co. or any successor
thereto.
"ELIGIBLE DEPOSIT ACCOUNT" means either (a) a segregated trust account
with an Eligible Institution or (b) a segregated trust account with the
corporate trust department of a depository institution organized under the laws
of the United States of America or any one of the states thereof or the District
of Columbia (or any domestic branch of a foreign bank), having corporate trust
powers and acting as trustee for funds deposited in such account, so long as any
of the securities of such depository institution shall have a credit rating from
each Rating Agency in one of its generic rating categories which signifies
investment grade.
"ELIGIBLE INSTITUTION" means (a) the corporate trust department of the
Indenture Trustee; PROVIDED that an account with the Indenture Trustee will only
be an Eligible Deposit Account if it is a segregated trust account or (b) a
depository institution organized under the laws of the United States of America
or any State (or any domestic branch of a foreign bank), which (i) has either
(A) a long-term unsecured debt rating of AAA by Standard & Poor's and Aaa by
Moody's, and if rated by Fitch IBCA, AAA by Fitch IBCA and if rated by Duff &
Phelps, AAA by Duff & Phelps or (B) a certificate of deposit rating of A-1+ by
Standard & Poor's and P-1 by Moody's, and if rated by Fitch IBCA, F1+ by Fitch
IBCA and if rated by Duff & Phelps, D-1+ by Duff & Phelps or any other
long-term, short-term or certificate of deposit rating acceptable to the Rating
Agencies and (ii) whose deposits are insured by the FDIC. If so qualified under
clause (b) above, the Indenture Trustee may be considered an Eligible
Institution for the purposes of clause (a) of this definition.
"ELIGIBLE INVESTMENTS" mean instruments or investment property which
evidence:
(a) direct obligations of, and obligations fully and
unconditionally guaranteed as to timely payment by, the United States
of America;
(b) demand deposits, time deposits, certificates of deposit or
bankers' acceptances of depository institutions meeting the
requirements of clause (b) of the definition of Eligible Institution;
(c) commercial paper (other than commercial paper of ComEd or any
of its Affiliates) having, at the time of the investment or
contractual commitment to
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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 from each
of the Rating Agencies from which a rating is available in the highest
investment category granted thereby (including funds for which the
Indenture Trustee or any of its Affiliates is investment manager or
advisor);
(e) repurchase obligations with respect to any security that is a
direct obligation of, or fully guaranteed by, the United States of
America or any agency or instrumentality thereof the obligations of
which are backed by the full faith and credit of the United States of
America, in either case entered into with depository institutions or
trust companies meeting the requirements of clause (b) of the
definition of Eligible Institutions; and
(f) 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. Notwithstanding the foregoing, (x) Eligible Investments in
the Collection Account may mature not later than the Business Day immediately
preceding the next Payment Date, and (y) subject to the conditions and
limitations set forth in Section 8.03 of the Indenture, funds in the Collection
Account may be invested in securities that will not mature prior to each Payment
Date; PROVIDED, HOWEVER, that any securities or investments which mature in 32
days or more shall not be an "Eligible Investment" unless the issuer thereof has
a long-term unsecured debt rating of at least A1 from Moody's and A+ from S&P.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"ESTIMATED IFC COLLECTIONS" means the sum of the amounts remitted with
respect to IFCs billed in any Billing Period during such Billing Period and the
four Collection Periods following such Billing Period based on the Collections
Curves.
"EVENT OF DEFAULT" is defined in Section 5.01 of the Indenture.
"EXCESS REMITTANCE" means the amount, if any, calculated for a
particular Monthly Remittance Date, by which all Estimated IFC Collections
remitted to the Collection Account on and prior to such Monthly Remittance Date
with respect to the IFCs billed to Customers during the sixth preceding Billing
Period exceed Actual IFC Collections received by the Servicer attributable to
such preceding Billing Period.
"EXPECTED AMORTIZATION SCHEDULE" means SCHEDULE 4.01(a) to the
Servicing Agreement, as the same may be amended from time to time.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
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"FDIC" means the Federal Deposit Insurance Corporation or any
successor thereto.
"FERC" means the Federal Energy Regulatory Commission or any successor
thereto.
"FINAL" means, with respect to any Funding Order, that such Funding
Order has become final and that the time for filing an appeal therefrom has
expired.
"FINAL MATURITY DATE" means, with respect to any Series or Class of
Notes, the Final Maturity Date therefor, as specified in the related Trustee's
Issuance Certificate or Series Supplement, if any.
"FITCH IBCA" means Fitch IBCA, Inc. or any successor thereto.
"FLOATING RATE NOTES" means any Series or Class of Notes that accrue
interest at a variable rate based on the index described in the related
Trustee's Issuance Certificate or Series Supplement, if any.
"FUNDING LAW" means the Electric Utility Transitional Funding Law of
1997, 220 ILCS 5/18-101 ET SEQ.
"FUNDING ORDER" means, as the context may require, (i) the 1998
Funding Order and/or (ii) any Subsequent Funding Order.
"GENERAL SUBACCOUNT" is defined in Section 8.02(a) of the Indenture.
"GLOBAL NOTE" means a Note evidencing all or any part of a Series of
Notes to be issued to the Holders thereof in Book-Entry Form, which Global Note
shall be issued to the Clearing Agency, or its nominee, for such Series, in
accordance with Section 2.11 of the Indenture and the applicable Trustee's
Issuance Certificate or Series Supplement, if any, pursuant to which the Note is
issued.
"GOVERNMENTAL AUTHORITY" means any nation or government, any federal,
state, local or other political subdivision thereof and any 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. A Grant of the Note 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 Note 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
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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.
"GRANT AGREEMENT" means that certain Agreement Relating to Grant of
Intangible Transition Property dated as of December 16, 1998 between ComEd and
the Grantee, as the same may be amended, supplemented or otherwise modified from
time to time.
"GRANTEE" means ComEd Funding, LLC, a Delaware limited liability
company, and any successor in interest to the extent permitted under the Sale
Agreement and the other Basic Documents.
"HOLDER" means the Person in whose name a Note is registered on the
Note Register.
"ICC" means the Illinois Commerce Commission, or any successor
thereto.
"ICC REGULATIONS" means the regulations, including proposed or
temporary regulations, promulgated under the Public Utilities Act.
"IFC" means the instrument funding charge as defined in Section 18-102
of the Funding Law (expressed in cents per kilowatt-hour) and as authorized by a
Funding Order, including, without limitation, each "IFC" or equivalent amount
which Customers agree to pay pursuant to any contract under which ComEd agrees
to provide non-tariffed electrical service and which are deemed to be proceeds
of the Intangible Transition Property in accordance with the terms of the
applicable Funding Order.
"IFC COLLECTIONS" means IFCs received by the Servicer which are
remitted to the Collection Account.
"IFC CUSTOMER CLASS" has the meaning set forth in Annex I of the
Servicing Agreement.
"IFC PAYMENTS" means the payments made by Customers based on the IFCs.
"INDENTURE" means the Indenture dated as of December 16, 1998 between
the Note Issuer and the Indenture Trustee as originally executed and, as from
time to time supplemented or amended by one or more Trustee's Issuance
Certificate or 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 Notes established thereunder.
"INDENTURE TRUSTEE" means Harris Trust and Savings Bank, an Illinois
banking corporation, as Indenture Trustee under the Indenture, or any successor
Indenture Trustee under the Indenture.
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"INDEPENDENT" means, when used with respect to any specified Person,
that the Person (a) is in fact independent of the Note Issuer, any other obligor
on the Notes, the Grantee, the Servicer and any Affiliate of any of the
foregoing Persons, (b) does not have any direct financial interest or any
material indirect financial interest in the Note Issuer, any such other obligor,
the Grantee, the Servicer or any Affiliate of any of the foregoing Persons and
(c) is not connected with the Note Issuer, any such other obligor, the Grantee,
the Servicer or any Affiliate of any of the foregoing Persons as an officer,
employee, promoter, underwriter, trustee, partner, director or person performing
similar functions.
"INDEPENDENT CERTIFICATE" means a certificate or opinion to be
delivered to the Indenture Trustee under the circumstances described in, and
otherwise complying with, the applicable requirements of Section 11.01 of the
Indenture, made by an Independent appraiser or other expert appointed by an
Issuer Order and consented to by the Indenture Trustee, and such opinion or
certificate shall state that the signer has read the definition of "Independent"
in the Indenture and that the signer is Independent within the meaning thereof.
"INDIRECT PARTICIPANT" means a securities broker, dealer, bank, trust
company or other Person that clears through or maintains a custodial
relationship with a Clearing Agency Participant, either directly or indirectly.
"INSOLVENCY EVENT" means, with respect to a specified Person, (a) the
filing of a decree or order for relief by a court having jurisdiction in the
premises in respect of such Person or any substantial part of its property in an
involuntary case under any applicable Federal or state bankruptcy, insolvency or
other similar law now or hereafter in effect, or appointing a receiver,
liquidator, assignee, custodian, trustee, sequestrator or similar official for
such Person or for any substantial part of its property, or ordering the
winding-up or liquidation of such Person's affairs, and such decree or order
shall remain unstayed and in effect for a period of 60 consecutive days; or (b)
the commencement by such Person of a voluntary case under any applicable Federal
or state bankruptcy, insolvency or other similar law now or hereafter in effect,
or the consent by such Person to the entry of an order for relief in an
involuntary case under any such law, or the consent by such Person to the
appointment of or taking possession by a receiver, liquidator, assignee,
custodian, trustee, sequestrator or similar official for such Person or for any
substantial part of its property, or the making by such Person of any general
assignment for the benefit of creditors, or the failure by such Person generally
to pay its debts as such debts become due, or the taking of action by such
Person in furtherance of any of the foregoing.
"INSOLVENCY LAW" means any applicable Federal or state bankruptcy,
insolvency or other similar law now or hereafter in effect.
"INTANGIBLE TRANSITION PROPERTY" or "ITP" means all intangible
transition property as defined in Section 18-102 of the Funding Law created in
favor of the Grantee pursuant to a Funding Order and assigned to the Note Issuer
pursuant to a Sale Agreement, including the 1998 Transition Property and any
Subsequent Transition Property, and, including, without limitation, all
Allocable IFC Revenue Amounts.
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"INVESTMENT EARNINGS" means investment earnings on funds deposited in
the Collection Account net of losses and investment expenses.
"ISSUER ORDER" and "ISSUER REQUEST" mean a written order or request
signed in the name of the Note Issuer by any one of its Responsible Officers and
delivered to the Indenture Trustee or Paying Agent, as applicable.
"LEGAL DEFEASANCE OPTION" is defined in Section 4.01(b) of the
Indenture.
"LETTER OF REPRESENTATIONS" means any applicable agreement among the
Note Issuer, the Indenture Trustee, the Administrator and the applicable
Clearing Agency, with respect to such Clearing Agency's rights and obligations
(in its capacity as a Clearing Agency) with respect to any Book-Entry Notes, as
the same may be amended, supplemented, restated or otherwise modified from time
to time.
"LIEN" means a security interest, lien, charge, pledge, equity or
encumbrance of any kind other than tax liens, mechanics' liens and any liens
that attach by operation of law.
"MINIMUM DENOMINATION" means, with respect to any Note, the minimum
denomination therefor specified in the applicable Trustee's Issuance Certificate
or Series Supplement, if any, which minimum denomination shall be not less than
$1,000 and, except as otherwise provided in such Trustee's Issuance Certificate
or Series Supplement, if any, integral multiples thereof.
"MONTHLY COLLECTIONS CURVES" has the meaning set forth in the
Servicing Agreement.
"MONTHLY REMITTANCE DATE" means the tenth day of each calendar month
or, if such day is not a Business Day, the next succeeding Business Day.
"MONTHLY SERVICER'S CERTIFICATE" means a certificate, substantially in
the form of EXHIBIT A to the Servicing Agreement, completed and executed by a
Responsible Officer of the Servicer pursuant to Section 3.01(b)(i) of the
Servicing Agreement.
"MOODY'S" means Moody's Investors Service Inc. or any successor
thereto.
"NET IFC WRITE-OFFS" is defined in ANNEX I to the Servicing Agreement.
"NOTE COLLATERAL" has the meaning specified in the Granting Clause of
the Indenture.
"NOTE DEPOSITORY" means the depositary from time to time selected by
the Indenture Trustee on behalf of the Note Issuer in whose name the Notes are
registered prior to the issuance of Definitive Notes. The initial Note
Depository shall be Cede & Co., the nominee of the initial Clearing Agency.
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"NOTE DEPOSITORY AGREEMENT" means the agreement, dated as of the
Closing Date, among the Note Issuer, the Indenture Trustee and the DTC, as the
initial Clearing Agency relating to the Notes, as the same may be amended
supplemented or otherwise modified from time to time.
"NOTE INTEREST RATE" means, with respect to any Series or Class of
Notes, the rate at which interest accrues on the Notes of such Series or Class,
as specified in the related Trustee's Issuance Certificate or Series Supplement,
if any.
"NOTE ISSUER" means ComEd Transitional Funding Trust, a Delaware
business trust named as such in the Indenture until a successor replaces it and,
thereafter, means the successor and, for purposes of any provision contained
herein and required by the TIA, each other obligor on the Notes.
"NOTE OWNER" means with respect to a Book-Entry Note, the Person who
is the beneficial owner of such Book-Entry Note, as reflected on the books of
the Clearing Agency, or on the books of a Person maintaining an account with
such Clearing Agency (directly as a Clearing Agency Participant or as an
Indirect Participant, in each case in accordance with the rules of such Clearing
Agency).
"NOTE REGISTER" means the register maintained pursuant to Section 2.05
of the Indenture, providing for the registration of the Notes and transfers and
exchanges thereof.
"NOTE REGISTRAR" means the registrar at any time of the Note Register,
appointed pursuant to Section 2.05 of the Indenture.
"NOTES" means one or more Series of Notes authorized by the 1998
Funding Order and any Subsequent Funding Order and issued under the Indenture.
"OFFICER'S CERTIFICATE" means a certificate signed by a Responsible
Officer of the Note Issuer under the circumstances described in, and otherwise
complying with, the applicable requirements of Section 11.01 of the Indenture,
and delivered to the Indenture Trustee. Unless otherwise specified, any
reference in the Indenture to an Officer's Certificate shall be to an Officer's
Certificate of any Responsible Officer of the party delivering such certificate.
"OPERATING AGREEMENT" means the Amended and Restated Limited Liability
Company Agreement of the Grantee dated as of October 21, 1998 executed by ComEd
as sole member of the Grantee.
"OPERATING EXPENSES" means all fees, costs and expenses of the Note
Issuer, including all amounts owed by the Note Issuer to the Indenture Trustee
and the Delaware Trustee, the Servicing Fee, the Quarterly Administration Fee,
any fees, costs and expenses payable or reimbursable by the Note Issuer to the
Administrator and legal and accounting fees, costs and expenses of the Note
Issuer and the Grantee.
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"OPINION OF COUNSEL" means one or more written opinions of counsel who
may, except as otherwise expressly provided in the Basic Documents, be employees
of or counsel to the party providing such opinion of counsel, which counsel
shall be acceptable to the party receiving such opinion of counsel, and shall be
in form and substance acceptable to such party.
"OPTIONAL REDEMPTION DATE" means, with respect to any Series of Notes,
the Payment Date specified for the redemption of the Notes of such Series
pursuant to Section 10.01 of the Indenture.
"OPTIONAL REDEMPTION PRICE" is defined in Section 10.01 of the
Indenture.
"OUTSTANDING" means, as of the date of determination, all Notes
theretofore authenticated and delivered under this Indenture except:
(a) Notes theretofore canceled by the Note Registrar or delivered to
the Note Registrar for cancellation;
(b) Notes or portions thereof the payment for which money in the
necessary amount has been theretofore deposited with the Indenture Trustee
or any Paying Agent in trust for the Holders of such Notes (PROVIDED,
HOWEVER, that if such Notes are to be redeemed, notice of such redemption
has been duly given pursuant to this Indenture or provision therefor,
satisfactory to the Indenture Trustee, made); and
(c) Notes in exchange for or in lieu of other Notes which have been
authenticated and delivered pursuant to this Indenture unless proof
satisfactory to the Indenture Trustee is presented that any such Notes are
held by a bona fide purchaser;
PROVIDED that in determining whether the Holders of the requisite Outstanding
Amount of the Notes or any Series or Class thereof have given any request,
demand, authorization, direction, notice, consent or waiver hereunder or under
any Basic Document, Notes owned by the Note Issuer, any other obligor upon the
Notes, the Grantee or any Affiliate of any of the foregoing Persons shall be
disregarded and deemed not to be outstanding, except that, in determining
whether the Indenture Trustee shall be protected in relying upon any such
request, demand, authorization, direction, notice, consent or waiver, only Notes
that the Indenture Trustee actually knows to be so owned shall be so
disregarded. Notes so owned that have been pledged in good faith may be
regarded as outstanding if the pledgee establishes to the satisfaction of the
Indenture Trustee the pledgee's right so to act with respect to such Notes and
that the pledgee is not the Note Issuer, any other obligor upon the Notes, the
Grantee or any Affiliate of any of the foregoing Persons.
"OUTSTANDING AMOUNT" means the aggregate principal amount of all Notes
or, if the context requires, all Notes of a Series or Class, Outstanding at the
date of determination.
"OVERCOLLATERALIZATION SUBACCOUNT" is defined in Section 8.02(a) of
the Indenture.
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"PAYING AGENT" means with respect to the Indenture, the Indenture
Trustee or any other Person that meets the eligibility standards for the
Indenture Trustee specified in Section 6.11 of the Indenture and is authorized
by the Note Issuer to direct the Servicer to make the payments to and
distributions from the Collection Account, including payment of principal of or
interest on the Notes on behalf of the Note Issuer.
"PAYMENT DATE" means, with respect to any Series or Class of Notes,
March 25, June 25, September 25 and December 25 of each year, PROVIDED that if
any such date is not a Business Day, the Payment Date shall be the Business Day
immediately succeeding such date, commencing June 25, 1999.
"PERSON" means any individual, corporation, limited liability company,
estate, partnership, joint venture, association, joint stock company, trust
(including any beneficiary thereof), unincorporated organization or government
or any agency or political subdivision thereof.
"PREDECESSOR NOTE" means, with respect to any particular Note, every
previous Note evidencing all or a portion of the same debt as that evidenced by
such particular Note, and, for the purpose of this definition, any Note
authenticated and delivered under Section 2.06 of the Indenture in lieu of a
mutilated, lost, destroyed or stolen Note shall be deemed to evidence the same
debt as the mutilated, lost, destroyed or stolen Note.
"PRINCIPAL BALANCE" means, as of any Payment Date, the sum of the
outstanding principal amount of each Series of Notes.
"PROCEEDING" means any suit in equity, action at law or other judicial
or administrative proceeding.
"PROJECTED PRINCIPAL BALANCE" means, as of any Payment Date, the sum
of the projected outstanding principal amount of each Series of Notes for such
Payment Date set forth in the Expected Amortization Schedule.
"PUBLIC UTILITIES ACT" means the Illinois Public Utilities Act, 220
ILCS 5/1-101 ET SEQ., as the same may be amended from time to time.
"QUARTERLY ADMINISTRATION FEE" means $25,000 per calendar quarter.
"QUARTERLY INTEREST" means, with respect to any Payment Date and any
Series of Notes, the quarterly interest for such Payment Date and Series as
specified in the related Trustee's Issuance Certificate or Series Supplement,
if any.
"QUARTERLY PRINCIPAL" means, with respect to any Payment Date and any
Series of Notes, the excess, if any, of the Outstanding Amount of such Series of
Notes over the outstanding principal balance specified for such Payment Date on
the applicable Expected Amortization Schedule.
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"QUARTERLY SERVICER'S CERTIFICATE" means a certificate, substantially
in the form of EXHIBIT D to the Servicing Agreement, completed and executed by a
Responsible Officer of the Servicer pursuant to Section 4.01(c)(ii) of the
Servicing Agreement.
"RATING AGENCY" means Moody's, Standard & Poor's, Duff & Phelps and
Fitch IBCA. If no such organization or successor is any longer in existence,
"Rating Agency" shall be a nationally recognized statistical rating organization
or other comparable Person designated by the Note Issuer, notice of which
designation shall be given to the Indenture Trustee and the Servicer.
"RATING AGENCY CONDITION" means, with respect to any action, that each
Rating Agency shall have been given ten days prior notice thereof and that each
of the Rating Agencies shall have notified the Servicer, the Note Issuer and the
Indenture Trustee in writing that such action will not result in a reduction or
withdrawal of the then current rating by such Rating Agency of either any Series
or Class of Notes.
"RECONCILIATION ADJUSTMENT" means each adjustment to the IFCs made
pursuant to the terms of any Funding Order in accordance with Section 4.01(b)(i)
of the Servicing Agreement.
"RECONCILIATION ADJUSTMENT DATE" shall mean June 30 and December 31 of
each year, commencing on June 30, 1999.
"RECORD DATE" means, with respect to a Payment Date or Redemption
Date, in the case of Definitive Notes, the close of business on the last day of
the calendar month preceding the calendar month in which such Payment Date or
Redemption Date occurs, and in the case of Book Entry Notes, one Business Day
prior to the applicable Payment Date or Redemption Date.
"REDEMPTION DATE" means, with respect to any Series or Class of Notes,
the Payment Date specified by the Note Issuer for the redemption of the Notes of
such Series or Class pursuant to Section 10.01 of the Indenture.
"REDEMPTION PAYMENT" means with respect to any Series or Class of
Notes, any payment of principal of and interest on the Notes of such Series or
Class due from the Note Issuer upon the early redemption of such Series or Class
of Notes, other than any such payment due by reason of the occurrence of an
Event of Default with respect to such Series or Class of Notes.
"REDEMPTION PRICE" means with respect to any Series or Class of Notes,
the unpaid principal amount of the Notes of such Series or Class redeemed, plus
accrued and unpaid interest thereon at the interest rate applicable to such
Series or Class to but excluding the Redemption Date.
"REGISTERED HOLDER" means the Person in whose name a Note is
registered on the Note Register on the applicable Record Date.
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"REGISTRATION STATEMENT" means the registration statement, Form S-3
Registration No. 333-60907, filed with the SEC for registration under the
Securities Act relating to the offering and sale of the Notes, and including all
supplements thereto.
"RELATED ASSETS" means all of Grantee's and/or the Note Issuer's
right, title and interest in and to the Grant Agreement, the Sale Agreement, the
Servicing Agreement and all present and future claims, demands, causes and
choses in action in respect of all of the foregoing and all payments on or under
and all proceeds of every kind and nature whatsoever in respect of any or all of
the foregoing, including all proceeds of the conversion, voluntary or
involuntary, into cash or other liquid property, all cash proceeds, accounts,
accounts receivable, notes, drafts, acceptances, chattel paper, checks, deposit
accounts, insurance proceeds, condemnation awards, rights to payment of any and
every kind, and other forms of obligations and receivables, instruments and
other property which in any time constitute all or part of or are included in
the proceeds of any of the foregoing.
"REMEDIATION AGREEMENT" means the Remediation Agreement dated as of
December 16, 1998 between ComEd and the Indenture Trustee, as the same may be
amended, supplemented or otherwise modified from time to time.
"REMITTANCE SHORTFALL" means the amount, if any, calculated for a
particular Monthly Remittance Date, by which Actual IFC Collections received by
the Servicer attributable to IFCs billed to Customers during the sixth preceding
billing Period exceed all Estimated IFC Collections remitted to the Collection
Account on and prior to such Monthly Remittance Date with respect to such
Billing Period.
"REQUIRED CAPITAL LEVEL" means, with respect to each Series of Notes,
an amount equal to 0.50% of the initial principal amount of such Series,
deposited into the Capital Subaccount by the Grantee prior to or upon the
issuance of such Series.
"REQUIRED DEBT SERVICE" for any Calculation Period means the total
dollar amount of IFC Collections reasonably calculated by the Servicer in
accordance with SECTION 4.01 of the Servicing Agreement as necessary to be
received during such period (after giving effect to the allocation and
distribution of amounts on deposit in the Reserve Subaccount at the time of
calculation and which are available for payments on the Notes and including any
shortfalls in Required Debt Service for any prior Calculation Period) in order
to ensure that, as of the last Payment Date occurring in such Calculation
Period, (1) all accrued and unpaid interest on the Notes then due shall have
been paid in full, (2) the Principal Balance of the Notes is equal to the
Projected Principal Balance, (3) the balance on deposit in the
Overcollateralization Subaccount equals the aggregate Required
Overcollateralization Level, (4) the balance on deposit in the Capital
Subaccount equals the aggregate Required Capital Level and (5) all other fees
and expenses due and owing and required or allowed to be paid under SECTION 8.02
of the Note Indenture as of such date shall have been paid in full; PROVIDED,
that, with respect to any Reconciliation Adjustment or True-Up Adjustment
occurring after the last Scheduled Maturity Date for any Notes, the Required
Debt Service shall be calculated to ensure that sufficient IFCs
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<PAGE>
will be collected to retire such Notes in full as of the earlier of (x) the
Payment Date preceding the next Reconciliation Adjustment Date and (y) the Final
Maturity Date for such Notes.
"REQUIRED OVERCOLLATERALIZATION LEVEL" means, as of any Payment Date
with respect to any Series, the amount required to be on deposit in the
Overcollateralization Subaccount as specified in the applicable Trustee's
Issuance Certificate or Series Supplement, if any, but not less than, as of the
Scheduled Maturity Date for such Series, 0.5% of the initial Outstanding amount
thereof.
"REQUIREMENT OF LAW" means any foreign, federal, state or local laws,
statutes, regulations, rules, codes or ordinances enacted, adopted, issued or
promulgated by any Governmental Authority or common law.
"RESERVE SUBACCOUNT" is defined in Section 8.02(a) of the Indenture.
"RESPONSIBLE OFFICER" means with respect to (a) the Note Issuer, any
officer within the Corporate Trust Office of the Delaware Trustee; (b) with
respect to the Indenture Trustee, the Delaware Trustee or other trustee, any
officer within the Corporate Trust office of such trustee (including, in the
case of (a) and (b) above, the President, any Vice President, Assistant Vice
President, Secretary or Assistant Treasurer or any other officer or assistant
officer of such Person customarily performing functions similar to those
performed by any of the chosen designated officers and also, with respect to a
particular matter, any other officer to whom such matter is referred to because
of such officer's knowledge and familiarity with the particular subject); (c)
any corporation, the Chief Executive Officer, the President, any Vice President,
the Chief Financial Officer or any other duly authorized officer of such Person
who has been authorized to act in the circumstances;(d) the Grantee, any Manager
or duly authorized officer who has been authorized to act in the circumstances;
(e) partnership, any general partner thereof; and (f) any other Person (other
than an individual), any duly authorized officer or member of such Person, as
the context may require, who is authorized to act in matters relating to such
Person.
"SALE AGREEMENT" means as the context may require, either (i) the
Intangible Transition Property Sale Agreement dated as of December 16, 1998
between the Grantee and the Note Issuer, as the same may be amended,
supplemented or otherwise modified from time to time or (ii) any Subsequent Sale
Agreement.
"SCHEDULED FINAL PAYMENT DATE" means, with respect to any Series or
Class of Notes, the Scheduled Maturity Date thereof.
"SCHEDULED MATURITY DATE" means, with respect to any Series or Class
of Notes, the Scheduled Maturity Date therefor, as specified in the related
Trustee's Issuance Certificate or Series Supplement, if any.
"SCHEDULED PAYMENT DATE" is defined in the applicable Trustee's
Issuance Certificate or Series Supplement, if any, with respect to each Series
or Class of Notes.
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"SEC" means the Securities and Exchange Commission.
"SECRETARY OF STATE" means the Secretary of State of the State of
Delaware or the Secretary of State of the State of Illinois, as the case may be,
or any Governmental Authority succeeding to the duties of such offices.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SERIES" means each series of Notes issued and authenticated pursuant
to the Indenture and a related Trustee's Issuance Certificate or Series
Supplement, if any.
"SERIES ISSUANCE DATE" means, with respect to any Series, the date on
which the Notes of such Series are to be originally issued in accordance with
Section 2.10 of the Indenture and the related Trustee's Issuance Certificate or
Series Supplement, if any.
"SERIES SUPPLEMENT" means an indenture supplemental to the Indenture
that authorizes the issuance of a particular Series of Notes.
"SERVICER" means ComEd, as Servicer under the Servicing Agreement, or
any successor Servicer to the extent permitted under the Servicing Agreement.
"SERVICER BUSINESS DAY" means any day other than a Saturday, Sunday or
holiday on which the Servicer maintains normal office hours and conducts
business.
"SERVICER DEFAULT" is defined in Section 7.01 of the Servicing
Agreement.
"SERVICER'S CERTIFICATE" means an Officer's Certificate of the
Servicer.
"SERVICING AGREEMENT" means the Intangible Transition Property
Servicing Agreement dated as of December 16, 1998, between the Grantee and ComEd
assigned to the Note Issuer, as the same may be amended, supplemented or
otherwise modified from time to time.
"SERVICING FEE" means the fee payable to the Servicer on each Payment
Date for services rendered during the period from, but not including, the
preceding Payment Date to and including the current Payment Date, determined
pursuant to Section 6.06 of the Servicing Agreement.
"SOLE MEMBER" means ComEd as sole member of the Grantee defined in the
Operating Agreement.
"SPECIAL PAYMENT" means with respect to any Series or Class of Notes,
any payment of principal of or interest on (including any interest accruing upon
default), or any other amount in respect of, the Notes of such Series or Class
(including, with respect to Floating Rate Notes only, a payment under any Swap)
that is not actually paid within five days of the Payment Date applicable
thereto.
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"SPECIAL PAYMENT DATE" means the date on which a Special Payment is to
be made by the Indenture Trustee to the Holders.
"SPECIAL RECORD DATE" means with respect to any Special Payment Date,
the close of business on the 15th day (whether or not a Business Day) preceding
such Special Payment Date.
"STANDARD & POOR'S" means Standard & Poor's Ratings Services, a
division of The McGraw-Hill Companies, Inc. or any successor thereto.
"STATE" means any one of the 50 states of the United States of America
or the District of Columbia.
"STATE PLEDGE" means the pledge of the State of Illinois as set forth
in Section 18-105(b) of the Funding Law.
"SUBSEQUENT CLOSING DATE" means any date (other than the Closing Date)
specified in a Trustee's Issuance Certificate or Series Supplement, if any,
under which Notes of any Series or Class are issued.
"SUBSEQUENT CREATION DATE" means any date on which Subsequent
Intangible Transition Property is created in favor of the Grantee pursuant to a
Subsequent Funding Order.
"SUBSEQUENT FUNDING ORDER" means a transitional funding order (other
than the 1998 Funding Order) issued hereafter by the ICC in favor of the Grantee
at the request of ComEd.
"SUBSEQUENT GRANT AGREEMENT" means an agreement substantially similar
to the Grant Agreement, relating to Subsequent Transition Property, as the same
may be amended, supplemented or otherwise modified from time to time.
"SUBSEQUENT RELATED ASSETS" means all of the Grantee's and/or the Note
Issuer's right, title and interest in and to any Subsequent Grant Agreement and
all present and future claims, demands, causes and choses in action in respect
of any or all of the foregoing and all payments on or under and all proceeds of
every kind and nature whatsoever in respect of any or all of the foregoing,
including all proceeds of the conversion, voluntary or involuntary, into cash or
other liquid property, all cash proceeds, accounts, accounts receivable, notes,
drafts, acceptances, chattel paper, checks, deposit accounts, insurance
proceeds, condemnation awards, rights to payment of any and every kind, and
other forms of obligations and receivables, instruments and other property which
in any time constitute all or part of or are included in the proceeds of any of
the foregoing.
"SUBSEQUENT SALE AGREEMENT" means an agreement substantially similar
to the initial Sale Agreement, relating to Subsequent Intangible Transition
Property, as the same may be amended, supplemented or otherwise modified from
time to time.
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"SUBSEQUENT SALE DATE" means any date on which Subsequent Intangible
Transition Property is to be sold to the Note Issuer pursuant to a Subsequent
Sale Agreement.
"SUBSEQUENT TARIFF" means a Tariff filed with the ICC in connection
with a Subsequent Funding Order.
"SUBSEQUENT TRANSITION PROPERTY" or "SUBSEQUENT ITP" means the
intangible transition property contemplated by, and specifically described in, a
Subsequent Funding Order.
"SUCCESSOR SERVICER" is defined in Section 3.07(e) of the Indenture.
"SWAP" means an interest rate swap, cap, floor, collar or other
hedging transaction that may be entered into by the Note Issuer for the purpose
of managing interest rate risk with respect to a specified Series or Class of
Floating Rate Notes that are being issued concurrently with the execution of the
Swap.
"SWAP AGREEMENT" means an Interest Rate and Currency Exchange
Agreement (including the Schedule and Confirmation thereto) entered into between
the Note Issuer and a swap provider.
"SWAP COUNTERPARTY" means the entity that is a party to a Swap with
the Note Issuer.
"SWAP PAYMENT" means the payments made by the Note Issuer to the Swap
Counterparty pursuant to any Swap, subject to any netting of payments provided
in the applicable Swap.
"SWAP REVENUES" means the payments paid by a Swap Counterparty to the
Note Issuer pursuant to any Swap, subject to any netting of payments provided in
the applicable Swap.
"TARIFF" means any rate tariff filed with the ICC pursuant to the
Funding Law to evidence any IFCs.
"TEMPORARY NOTES" means Notes executed, and upon the receipt of an
Issuer Order, authenticated and delivered by the Indenture Trustee pending the
preparation of Definitive Notes pursuant to Section 2.04 of the Indenture.
"TREASURY REGULATIONS" means the regulations, including proposed or
temporary regulations, promulgated under the Code. References herein to
specific provisions of proposed or temporary regulations shall include analogous
provisions of final Treasury Regulations or other successor Treasury
Regulations.
"TRUE-UP ADJUSTMENT" means each adjustment to the IFCs made pursuant
to the terms of the 1998 Transitional Funding Order and in accordance with
Section 4.01(b)(ii) of the Servicing Agreement.
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"TRUST AGREEMENT" means the Declaration of Trust by First Union Trust
Company, National Association as "Delaware Trustee", and Ruth Ann M. Gillis and
David R. Zahakaylo as "Beneficiary Trustees" dated as of October 28, 1998
acknowledged and agreed to by the Grantee, as the same may be amended,
supplemented or otherwise modified from time to time.
"TRUST ESTATE" means all right, title and interest of the Note Issuer
in, to and under the property and rights assigned to the Note Issuer pursuant to
the Sale Agreement, all funds on deposit from time to time in the Collection
Account and all other property of or interests of the Note Issuer from time to
time, including all rights, interests and claims of the Delaware Trustee and the
Note Issuer under or in connection with any Basic Documents.
"TRUST INDENTURE ACT" or "TIA" means the Trust Indenture Act of 1939,
as amended by the Trust Indenture Reform Act of 1990, as in force on the Closing
Date, unless otherwise specifically provided.
"TRUSTEE'S ISSUANCE CERTIFICATE" means a certificate executed by a
Authorized Officer of the Delaware Trustee in accordance with the terms of the
Sale Agreement or any Subsequent Sale Agreement and delivered to the Indenture
Trustee under Section 2.01 of the Indenture substantially in the form attached
as EXHIBIT C to the Indenture.
"UCC" means, unless the context otherwise requires, the Uniform
Commercial Code, as in effect in the relevant jurisdiction, as amended from time
to time.
"UNDERWRITERS" means the underwriters who purchase Notes of any Series
or Class from the Note Issuer and sell such Notes in a public offering.
"UNDERWRITING AGREEMENT" means the Underwriting Agreement, dated as of
December 4, 1998 among ComEd, the Underwriters party thereto, on their own
behalf and as representatives of the several underwriters named therein, and the
Note Issuer.
"UNREGISTERED NOTES" means any Notes not registered under the
Securities Act or the securities laws of any other jurisdiction.
"U.S. GOVERNMENT OBLIGATIONS" means direct obligations (or
certificates representing an ownership interest in such obligations) of the
United States of America (including any agency or instrumentality thereof) for
the payment of which the full faith and credit of the United States of America
is pledged and which are not callable at the Note Issuer's option.
B. OTHER TERMS. All accounting terms not specifically defined herein
shall be construed in accordance with United States generally accepted
accounting principles. To the extent that the definitions of accounting terms
in any Basic Document are inconsistent with the meanings of such terms under
generally accepted accounting principles or regulatory accounting principles,
the definitions contained in such Basic Document shall control. All terms used
in Article 9 of the UCC in the State of Illinois and not specifically defined
herein, are used herein as
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defined in such Article 9. As used in the Basic Documents, the term
"INCLUDING" means "including without limitation," and other forms of the verb
"to include" have correlative meanings. All references to any Person shall
include such Person's permitted successors.
C. COMPUTATION OF TIME PERIODS. Unless otherwise stated in any of
the Basic Documents, as the case may be, in the computation of a period of time
from a specified date to a later specified date, the word "from" means "from and
including" and the words "to" and "until" each means "to but excluding".
D. REFERENCE; CAPTIONS. The words "hereof", "herein" and "hereunder"
and words of similar import when used in any Transaction Document shall refer to
such Transaction Document as a whole and not to any particular provision of such
Transaction Document; and references to "SECTION", "SUBSECTION", "SCHEDULE" and
"EXHIBIT" in any Basic Document are references to Sections, subsections,
Schedules and Exhibits in or to such Transaction Document unless otherwise
specified in such Basic Document. The various captions (including the tables of
contents) in each Basic Document are provided solely for convenience of
reference and shall not affect the meaning or interpretation of any Basic
Document.
E. The definitions contained in this APPENDIX A are applicable to the
singular as well as the plural forms of such terms and to the masculine as well
as to the feminine and neuter forms of such terms.
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EXHIBIT 10.1
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
INTANGIBLE TRANSITION PROPERTY SALE AGREEMENT
between
COMED FUNDING, LLC
Grantee
and
COMED TRANSITIONAL FUNDING TRUST
Note Issuer
Dated as of December 16, 1998
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C>
ARTICLE I
DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.01. DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.02. OTHER DEFINITIONAL PROVISIONS. . . . . . . . . . . . . . . 1
ARTICLE II
CONVEYANCE OF 1998 TRANSITION PROPERTY AND RELATED ASSETS . . . . . . . . 2
SECTION 2.01. CONVEYANCE OF 1998 TRANSITION PROPERTY AND
RELATED ASSETS . . . . . . . . . . . . . . . . . . . . . 2
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF GRANTEE . . . . . . . . . . . . . . . . 3
SECTION 3.01. ORGANIZATION AND GOOD STANDING . . . . . . . . . . . . . . 4
SECTION 3.02. DUE QUALIFICATION. . . . . . . . . . . . . . . . . . . . . 4
SECTION 3.03. POWER AND AUTHORITY. . . . . . . . . . . . . . . . . . . . 4
SECTION 3.04. BINDING OBLIGATION . . . . . . . . . . . . . . . . . . . . 4
SECTION 3.05. NO VIOLATION . . . . . . . . . . . . . . . . . . . . . . . 5
SECTION 3.06. NO PROCEEDINGS . . . . . . . . . . . . . . . . . . . . . . 5
SECTION 3.07. APPROVALS. . . . . . . . . . . . . . . . . . . . . . . . . 5
SECTION 3.08. THE 1998 TRANSITION PROPERTY AND RELATED ASSETS. . . . . . 6
ARTICLE IV
COVENANTS OF THE GRANTEE. . . . . . . . . . . . . . . . . . . . . . . . .10
SECTION 4.01. CORPORATE EXISTENCE. . . . . . . . . . . . . . . . . . . .10
SECTION 4.02. NO LIENS . . . . . . . . . . . . . . . . . . . . . . . . .11
SECTION 4.03. DELIVERY OF COLLECTIONS. . . . . . . . . . . . . . . . . .11
SECTION 4.04. NOTICE OF LIENS. . . . . . . . . . . . . . . . . . . . . .11
SECTION 4.05. COMPLIANCE WITH LAW. . . . . . . . . . . . . . . . . . . .11
SECTION 4.06. COVENANTS RELATED TO THE 1998 TRANSITION PROPERTY,
RELATED ASSETS AND THE NOTES . . . . . . . . . . . . . .12
SECTION 4.07. PROTECTION OF TITLE. . . . . . . . . . . . . . . . . . . .13
SECTION 4.08. NONPETITION COVENANTS. . . . . . . . . . . . . . . . . . .13
SECTION 4.09. TAXES. . . . . . . . . . . . . . . . . . . . . . . . . . .14
SECTION 4.10. PERFORMANCE OF OBLIGATIONS; SERVICING. . . . . . . . . . .14
SECTION 4.11. ADDITIONAL NEGATIVE COVENANTS. . . . . . . . . . . . . . .16
SECTION 4.12. NO OTHER BUSINESS. . . . . . . . . . . . . . . . . . . . .16
SECTION 4.13. NO BORROWING . . . . . . . . . . . . . . . . . . . . . . .16
SECTION 4.14. GUARANTEES, LOANS, ADVANCES AND OTHER LIABILITIES. . . . .16
SECTION 4.15. CAPITAL EXPENDITURES . . . . . . . . . . . . . . . . . . .17
SECTION 4.16. NOTICE OF DEFAULTS . . . . . . . . . . . . . . . . . . . .17
SECTION 4.17. SEPARATE EXISTENCE.. . . . . . . . . . . . . . . . . . . .17
SECTION 4.18. FURTHER INSTRUMENTS AND ACTS . . . . . . . . . . . . . . .19
SECTION 4.19. SUBSEQUENT TRANSITION PROPERTY . . . . . . . . . . . . . .19
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ARTICLE V
THE GRANTEE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .21
SECTION 5.01. LIABILITY OF GRANTEE; INDEMNITIES. . . . . . . . . . . . .21
SECTION 5.02. MERGER OR CONSOLIDATION OF, OR ASSUMPTION OF THE
OBLIGATIONS OF, GRANTEE. . . . . . . . . . . . . . . .23
SECTION 5.03. LIMITATION ON LIABILITY OF GRANTEE AND OTHERS. . . . . . .24
ARTICLE VI
MISCELLANEOUS PROVISIONS. . . . . . . . . . . . . . . . . . . . . . . . .24
SECTION 6.01. AMENDMENT. . . . . . . . . . . . . . . . . . . . . . . . .24
SECTION 6.02. NOTICES. . . . . . . . . . . . . . . . . . . . . . . . . .26
SECTION 6.03. ASSIGNMENT . . . . . . . . . . . . . . . . . . . . . . . .26
SECTION 6.04. LIMITATIONS ON RIGHTS OF OTHERS. . . . . . . . . . . . . .27
SECTION 6.05. SEVERABILITY . . . . . . . . . . . . . . . . . . . . . . .27
SECTION 6.06. SEPARATE COUNTERPARTS. . . . . . . . . . . . . . . . . . .27
SECTION 6.07. HEADINGS . . . . . . . . . . . . . . . . . . . . . . . . .27
SECTION 6.08. GOVERNING LAW. . . . . . . . . . . . . . . . . . . . . . .27
SECTION 6.09. ASSIGNMENT TO INDENTURE TRUSTEE. . . . . . . . . . . . . .27
SECTION 6.10. LIMITATION OF LIABILITY. . . . . . . . . . . . . . . . . .28
SECTION 6.11. LIMITATION OF LIABILITY. . . . . . . . . . . . . . . . . .28
SECTION 6.12. HOLDERS AS THIRD PARTY BENEFICIARIES . . . . . . . . . . .29
SECTION 6.13. REPRESENTATIONS AND INDEMNITIES TO SURVIVE.. . . . . . . .29
</TABLE>
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<PAGE>
INTANGIBLE TRANSITION PROPERTY SALE AGREEMENT dated as of December 16, 1998
between COMED FUNDING, LLC, a Delaware limited liability company (the
"Grantee"), and COMED TRANSITIONAL FUNDING TRUST, a Delaware business trust (the
"Note Issuer").
WHEREAS the Note Issuer desires to purchase the 1998 Transition Property
created pursuant to the Public Utilities Act and the 1998 Funding Order,
together with the Related Assets; and
WHEREAS the Grantee is willing to sell such 1998 Transition Property and
Related Assets to the Note Issuer.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein contained, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. DEFINITIONS. Capitalized terms used herein and not
otherwise defined herein have the meanings assigned to them in that certain
Indenture (including APPENDIX A thereto) dated as of the date hereof, between
the Note Issuer and Harris Trust and Savings Bank, as the Indenture Trustee, as
the same may be amended, supplemented or otherwise modified from time to time.
SECTION 1.02. OTHER DEFINITIONAL PROVISIONS.
(a) "AGREEMENT" means this Intangible Transition Property Sale Agreement,
as the same may be amended, supplemented or otherwise modified from time to
time.
(b) Non-capitalized terms used herein which are defined in the Public
Utilities Act shall, as the context requires, have the meanings assigned to such
terms in the Public Utilities Act, but
<PAGE>
without giving effect to amendments to the Public Utilities Act after the date
hereof which have a material adverse effect on the Note Issuer or the Holders.
(c) All terms defined in this Agreement shall have the defined meaning when
used in any certificate or other document made or delivered pursuant hereto
unless otherwise defined therein.
(d) The words "hereof," "herein," "hereunder" and words of similar import,
when used in this Agreement, shall refer to this Agreement as a whole and not to
any particular provision of this Agreement; Section, Schedule and Exhibit
references contained in this Agreement are references to Sections, Schedules and
Exhibits in or to this Agreement unless otherwise specified; and the term
"including" shall mean "including without limitation".
(e) The definitions contained in this Agreement are applicable to the
singular as well as the plural forms of such terms and to the masculine as well
as to the feminine and neuter forms of such terms.
ARTICLE II
CONVEYANCE OF 1998 TRANSITION PROPERTY AND RELATED ASSETS
SECTION 2.01. CONVEYANCE OF 1998 TRANSITION PROPERTY AND RELATED ASSETS.
In consideration of the Note Issuer's delivery of $3,365,629,425.75 to or upon
the order of the Grantee, the Grantee irrevocably sells, transfers, assigns,
sets over and otherwise conveys to the Note Issuer, without recourse (subject to
the obligations herein), all of its right, title and interest in, to and under:
(a) the 1998 Transition Property (such sale, transfer,
assignment, set over and conveyance of the 1998 Transition Property
includes, to the fullest extent permitted by the Funding Law, the
assignment of all revenues, collections, claims, rights, payments,
money or proceeds of or arising from the IFCs pursuant to the
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<PAGE>
1998 Funding Order and the 1998 Initial Tariff), including, without
limitation, any contractual rights to collect IFCs from Customers and
Allocable IFC Revenue Amounts; and
(b) the Related Assets.
Such sale, transfer, assignment, set over and conveyance is expressly stated to
be a sale and absolute transfer, and pursuant to Section 18-108 of the Funding
Law, shall be treated as an absolute transfer (as in a true sale), and not as a
pledge or other financing, of the 1998 Transition Property. The previous
sentence is the express statement referred to in Section 18-108 of the Funding
Law. To the extent that, notwithstanding the Funding Law, the Application and
the 1998 Funding Order, the foregoing sale, transfer, assignment, set over and
conveyance is held not to be an absolute transfer (as in a true sale) as
contemplated under Section 18-108 of the Funding Law, then such sale, transfer,
assignment, set over and conveyance shall be treated as a pledge of the 1998
Transition Property and the Grantee shall be deemed to have granted a security
interest to the Note Issuer in the 1998 Transition Property. The Grantee takes
the position that it has no rights in the 1998 Transition Property to which such
a security interest could attach because it has sold, transferred, assigned, set
over or otherwise conveyed all rights in, to and under the 1998 Transition
Property to the Note Issuer pursuant to Section 18-108 of the Funding Law.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF GRANTEE
The Grantee makes the following representations and warranties, as of the
Closing Date, on which the Note Issuer has relied in acquiring the 1998
Transition Property and Related Assets. These representations and warranties
shall survive the sale, transfer, assignment, set over and
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<PAGE>
conveyance of the 1998 Transition Property and Related Assets to the Note
Issuer, the pledge thereof to the Indenture Trustee pursuant to the Indenture
and the issuance of the Notes.
SECTION 3.01. ORGANIZATION AND GOOD STANDING. The Grantee is duly
organized and validly existing as a limited liability company in good standing
under the laws of the State of Delaware, with the power and authority to own its
properties and to conduct its business as such properties are currently owned
and such business is presently conducted, and had at all relevant times, and
has, the requisite power, authority and legal right to own the 1998 Transition
Property and Related Assets.
SECTION 3.02. DUE QUALIFICATION. The Grantee is duly qualified to do
business as a limited liability company in good standing, and has obtained all
necessary licenses and approvals, in all jurisdictions in which the ownership or
lease of property or the conduct of its business shall require such
qualifications, licenses or approvals (except where the failure to so qualify
would not be reasonably likely to have a material adverse effect on the
Grantee's business, operations, assets, revenues or properties).
SECTION 3.03. POWER AND AUTHORITY. The Grantee has the requisite power
and authority to execute and deliver this Agreement and to carry out its terms;
the Grantee has full power and authority to sell and assign the 1998 Transition
Property and Related Assets to be sold and assigned to the Note Issuer and the
Grantee has duly authorized such sale and assignment to the Note Issuer by all
necessary company action; and the execution, delivery and performance of this
Agreement have been duly authorized by the Grantee by all necessary company
action.
SECTION 3.04. BINDING OBLIGATION. This Agreement constitutes a legal,
valid and binding obligation of the Grantee enforceable against the Grantee in
accordance with its terms, subject to applicable insolvency, reorganization,
moratorium, fraudulent transfer and other similar laws relating to or affecting
creditors' rights generally from time to time in effect and to general
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<PAGE>
principles of equity (including, without limitation, concepts of materiality,
reasonableness, good faith and fair dealing), regardless of whether considered
in a proceeding in equity or at law.
SECTION 3.05. NO VIOLATION. The consummation of the transactions
contemplated by this Agreement and the fulfillment of the terms hereof do not
(i) conflict with, result in any breach of any of the terms and provisions of,
or constitute (with or without notice or lapse of time) a default under, the
Operating Agreement or Certificate of Formation of the Grantee, or any
indenture, agreement or other instrument to which the Grantee is a party or by
which it shall be bound; (ii) result in the creation or imposition of any Lien
upon any of its properties pursuant to the terms of any such indenture,
agreement or other instrument; or (iii) violate any law or any order, rule or
regulation applicable to the Grantee of any court or of any Federal or state
regulatory body, administrative agency or other governmental instrumentality
having jurisdiction over the Grantee or its properties.
SECTION 3.06. NO PROCEEDINGS. There are no proceedings or investigations
pending or, to the Grantee's knowledge, threatened, before any court, Federal or
state regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over the Grantee or its properties involving
or relating to the Grantee or the Note Issuer or, to the Grantee's knowledge,
any other Person: (i) asserting the invalidity of the Funding Law, this
Agreement, any of the other Basic Documents or the Notes, (ii) seeking to
prevent the issuance of the Notes or the consummation of any of the transactions
contemplated by this Agreement or any of the other Basic Documents, (iii)
seeking any determination or ruling that could reasonably be expected to
materially and adversely affect the Grantee's performance of its obligations
under, or the validity or enforceability of, this Agreement, any of the other
Basic Documents or the Notes, or (iv) which could reasonably be expected to
adversely affect the Federal or state income tax attributes of the Notes.
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SECTION 3.07. APPROVALS. No approval, authorization, consent, order or
other action of, or filing with, any court, Federal or state regulatory body,
administrative agency or other governmental instrumentality is required in
connection with the Grantee's execution and delivery of this Agreement, the
Grantee's performance of the transactions contemplated hereby or the Grantee's
fulfillment of the terms hereof, except those that have been obtained or made.
SECTION 3.08. THE 1998 TRANSITION PROPERTY AND RELATED ASSETS.
(a) INFORMATION. At the Closing Date, all information provided by the
Grantee to the Note Issuer with respect to the 1998 Transition Property
(including the 1998 Funding Order and the 1998 Initial Tariff) and the Related
Assets is correct in all material respects.
(b) TITLE. It is the intention of the parties hereto that the transfer and
assignment herein contemplated constitute a sale and absolute transfer of the
1998 Transition Property and Related Assets from the Grantee to the Note Issuer
and that no beneficial interest in or title to the 1998 Transition Property and
Related Assets shall be part of the Grantee's estate in the event of the filing
of a bankruptcy petition by or against the Grantee under any bankruptcy law. No
portion of the 1998 Transition Property and Related Assets has been sold,
transferred, assigned, pledged or otherwise conveyed by the Grantee to any
Person other than the Note Issuer. At the Closing Date, immediately prior to
the sale hereunder, the Grantee owns the 1998 Transition Property and Related
Assets, free and clear of all Liens and rights of any other Person, and no
encumbrances, offsets, defenses or counterclaims exist or have been asserted
with respect thereto.
(c) TRANSFER FILINGS. At the Closing Date, the 1998 Transition Property
and Related Assets have been validly transferred, assigned and sold from the
Grantee to the Note Issuer, the Note Issuer owns all the 1998 Transition
Property and Related Assets, free and clear of all Liens and rights of any other
Person (other than Liens created pursuant to the Indenture), and all filings to
be made by the Grantee (including filings with the ICC under the Funding Law)
necessary in
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any jurisdiction to give the Note Issuer a first priority perfected ownership
interest in the 1998 Transition Property and Related Assets have been made. No
further action is required under Illinois law to maintain such first priority
perfected ownership interest in the 1998 Transition Property. No further
action, other than any filings or other steps required to be taken with respect
to proceeds or on account of events occurring after the date hereof by Sections
9-103, 9-304, 9-306, 9-402(7) or 9-403(2)-(3) of the UCC, is required to
maintain such first priority perfected ownership interest in the Related Assets.
(d) STATE PLEDGE. The State of Illinois has agreed with the Holders,
pursuant to Section 18-105(b) of the Funding Law, as follows:
"(b) The State pledges to and agrees with the holders of any
transitional funding instruments who may enter into contracts with an
electric utility, grantee, assignee or issuer pursuant to this Article
XVIII that the State will not in any way limit, alter, impair or
reduce the value of intangible transition property created by, or
instrument funding charges approved by, a transitional funding order
so as to impair the terms of any contract made by such electric
utility, grantee, assignee or issuer with such holders or in any way
impair the rights and remedies of such holders until the pertinent
grantee instruments or, if the related transitional funding order does
not provide for the issuance of grantee instruments, the pertinent
transitional funding instruments and interest, premium and other costs
and charges related thereto, as the case may be, are fully paid and
discharged. Electric utilities, grantees and issuers are authorized
to include these pledges and agreements of the State in any contract
with the holders of transitional funding instruments or with any
assignees pursuant to this Article XVIII and any assignees are
similarly authorized to include these pledges and agreements of the
State in any contract with any issuer, holder or any other assignee.
Nothing in this Article XVIII shall preclude the State of Illinois
from requiring adjustments as may otherwise be allowed by law to the
electric utility's base rates, transition charges, delivery services
charges, or other charges for tariffed services, so long as any such
adjustment does not directly affect or impair any instrument funding
charges previously authorized by a transitional funding order issued
by the [ICC]."
As a result of the foregoing pledge, the State of Illinois may not, except as
provided in the succeeding sentence, in any way limit, alter, impair or reduce
the value of the 1998 Transition Property in a manner substantially impairing
the Indenture or the rights and remedies of the
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Holders (and consequently, may not revoke, reduce, postpone or terminate the
1998 Funding Order or the rights of the Holders to receive IFC Payments and all
other proceeds of the 1998 Transition Property), until the Notes, together with
interest thereon, are fully paid and discharged. Notwithstanding the
immediately preceding sentence, the State would be allowed to effect a temporary
impairment of the Holders' rights if it could be shown that a temporary
impairment was necessary to advance a significant and legitimate public purpose.
(e) 1998 FUNDING ORDER AND TARIFFS; OTHER APPROVALS. (i) The 1998 Funding
Order pursuant to which the 1998 Transition Property has been created has been
duly entered by the ICC, is valid and binding, is Final and is in full force and
effect; (ii) the 1998 Initial Tariff is in full force and effect and is not
subject to modification by the ICC except as provided under the Funding Law;
(iii) as of the issuance of the Notes, the Notes are entitled to the protections
provided in Section 18-104(c) of the Funding Law and, accordingly, the 1998
Funding Order, the 1998 Transition Property and the IFCs are not revocable by
the ICC; (iv) the ICC may not reduce, postpone, impair or terminate the 1998
Transition Property, the 1998 Funding Order or the IFCs; (v) the process by
which the 1998 Funding Order was adopted and approved and the 1998 Initial
Tariff was filed, and the 1998 Funding Order and the 1998 Initial Tariff
themselves, comply with all applicable laws, rules and regulations and the ICC
may not revoke, amend or otherwise change the 1998 Initial Tariff in any manner
which would defeat the expectations of the Holders to receive IFC Payments on a
timely basis; and (vi) no other approval, authorization, consent, order or other
action of, or filing with, any court, Federal or state regulatory body,
administrative agency or other governmental instrumentality is required in
connection with the grant of the 1998 Transition Property, except those that
have been obtained or made.
(f) ASSUMPTIONS. At the Closing Date, the assumptions used in calculating
the IFCs are reasonable and made in good faith.
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(g) CREATION OF 1998 TRANSITION PROPERTY. Upon the effectiveness of the
1998 Initial Tariff: (i) all of the 1998 Transition Property constitutes a
current property right vested in the Grantee; (ii) the 1998 Transition Property
includes, without limitation, (A) the right, title and interest in and to the
IFCs authorized under the 1998 Funding Order, as adjusted from time to time, (B)
the right, title and interest in and to all revenues, collections, claims,
payments, money or proceeds of or arising from the IFCs set forth in the 1998
Initial Tariff, and (C) all rights to obtain adjustments to the IFCs pursuant to
the 1998 Funding Order; and (iii) the Grantee is entitled to impose and collect
the IFCs described in the 1998 Funding Order and the 1998 Initial Tariff in an
aggregate amount equal to the principal amount of the Notes, all interest
thereon, all amounts required to be deposited in the Reserve Subaccount, the
Overcollateralization Subaccount and (to the extent payable from the proceeds of
the IFCs) the Capital Subaccount, and all related fees, costs and expenses in
respect of the Notes until they have been paid in full, subject only to the
$6.323 billion limitation set forth in the 1998 Funding Order as the maximum
dollar amount of 1998 Transition Property created thereunder.
(h) PROPERTY OF GRANTEE. To the fullest extent permitted by the Funding
Law and all other applicable law, the 1998 Transition Property and the right to
impose and collect IFCs contemplated thereunder constitute property rights of
the Grantee and its assigns, including the Note Issuer and its assigns
(including the Indenture Trustee on behalf of the Holders), which property has
been placed beyond the reach of ComEd and its creditors, as in a true sale, and
which property rights may not be limited, altered, impaired, reduced or
otherwise terminated by any subsequent actions of ComEd or any third party and
which shall, to the full extent permitted by law, be enforceable against ComEd,
its successors and assigns, and all other third parties (including judicial lien
creditors) claiming an interest therein by or through ComEd or its successors
and assigns.
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(i) NATURE OF REPRESENTATIONS AND WARRANTIES. The representations and
warranties set forth in this SECTION 3.08, insofar as they involve conclusions
of law, are made not on the basis that the Grantee purports to be a legal expert
or to be rendering legal advice, but rather to reflect the parties' good faith
understanding of the legal basis on which the parties are entering into this
Agreement and the other Basic Documents and the basis on which the Holders are
purchasing the Notes, and to reflect the parties' agreement that, if such
understanding turns out to be incorrect or inaccurate, the Grantee will be
obligated to indemnify the Note Issuer and its permitted assigns, and that the
Note Issuer and its permitted assigns will be entitled to enforce any rights and
remedies under the documents, on account of such inaccuracy to the same extent
as if the Grantee had breached any other representations or warranties
hereunder.
ARTICLE IV
COVENANTS OF THE GRANTEE
SECTION 4.01. CORPORATE EXISTENCE. So long as any of the Notes are
outstanding, the Grantee (a) will keep in full force and effect its existence,
rights and franchises as a limited liability company under the laws of the State
of Delaware (unless it becomes, or any successor Grantee hereunder is or
becomes, organized under the laws of any other State or of the United States of
America, in which case the Grantee will keep in full effect its existence,
rights and franchises under the laws of such other jurisdiction), (b) will
obtain and preserve its qualification to do business, in each case to the extent
that in each such jurisdiction such existence or qualification is or shall be
necessary to protect the validity and enforceability of this Agreement, the
Basic Documents to which the Grantee is a party and each other instrument or
agreement necessary or appropriate to the proper administration of this
Agreement and the transactions contemplated hereby and (c) at all times
hereafter, the Grantee will not elect nor cause nor permit the Note
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Issuer to elect to be classified as an association taxable as a corporation for
federal income tax purposes.
SECTION 4.02. NO LIENS. Except for the conveyances hereunder, the Grantee
will not sell, pledge, assign or transfer to any other Person, or grant, create,
incur, assume, suffer to exist or otherwise assert any Lien on, any of the 1998
Transition Property or Related Assets, or any interest therein, and the Grantee
shall defend the right, title and interest of the Note Issuer and the Indenture
Trustee in, to and under the 1998 Transition Property and Related Assets,
against all claims of third parties claiming through or under the Grantee.
SECTION 4.03. DELIVERY OF COLLECTIONS. If the Grantee receives
collections in respect of the IFCs or the proceeds thereof, or in replacement
therefor, including, without limitation, any Allocable IFC Revenue Amounts, the
Grantee agrees to hold such payments in trust for the Servicer and to pay the
Servicer all payments received by the Grantee in respect thereof as soon as
practicable after receipt thereof by the Grantee, but in no event later than two
Business Days after such receipt.
SECTION 4.04. NOTICE OF LIENS. The Grantee shall notify the Note Issuer
and the Indenture Trustee in writing promptly after becoming aware of any Lien
on any of the 1998 Transition Property or Related Assets other than the
conveyances hereunder and under the Indenture.
SECTION 4.05. COMPLIANCE WITH LAW. The Grantee shall comply with its
organizational or governing documents and all laws, treaties, rules, regulations
and determinations of any governmental instrumentality applicable to it, to the
extent that failure to so comply would materially adversely affect the Note
Issuer's or the Indenture Trustee's interests in the 1998 Transition Property or
Related Assets or under any of the Basic Documents or the Grantee's
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performance of its obligations hereunder or under any of the other Basic
Documents to which it is party.
SECTION 4.06. COVENANTS RELATED TO THE 1998 TRANSITION PROPERTY, RELATED
ASSETS AND THE NOTES.
(a) So long as any of the Notes are outstanding, the Grantee shall indicate
in its financial statements that the Note Issuer and not the Grantee owns the
1998 Transition Property and the Related Assets.
(b) So long as any of the Notes are outstanding, the Grantee shall not own
or purchase any Notes.
(c) The Grantee agrees that upon its sale of the 1998 Transition Property
and Related Assets to the Note Issuer pursuant to this Agreement, (i) to the
fullest extent permitted by law, including applicable ICC Regulations, the Note
Issuer shall have all of the rights of the owner of the 1998 Transition Property
(including all of the rights originally held by the Grantee with respect to the
1998 Transition Property and Related Assets), including the right (subject to
the terms of the Servicing Agreement) to exercise any and all rights and
remedies to collect any amounts payable by any Customer or third party
collection agent, including any ARES, in respect of the 1998 Transition
Property, notwithstanding any objection or direction to the contrary by the
Grantee and (ii) any payment by any Customer or third party collection agent,
including any ARES, to the Note Issuer (or to the Servicer for the benefit of
the Note Issuer) shall discharge such Customer's or third party's obligations in
respect of the 1998 Transition Property to the extent of such payment,
notwithstanding any objection or direction to the contrary by the Grantee.
(d) So long as any of the Notes are outstanding, (i) except with respect to
federal and other applicable taxes, the Grantee shall not make any statement or
reference in respect of the
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1998 Transition Property or the Related Assets that is inconsistent with the
ownership interest of the Note Issuer therein, and (ii) the Grantee shall not
take any action in respect of the 1998 Transition Property or the Related Assets
except as otherwise contemplated by the Basic Documents.
SECTION 4.07. PROTECTION OF TITLE. The Grantee shall execute and file
such filings, including filings with the ICC pursuant to the Funding Law, and
cause to be executed and filed such filings, all in such manner and in such
places as may be required by law fully to preserve, maintain, and protect the
interests of the Note Issuer in the 1998 Transition Property and Related Assets,
including all filings required under the Funding Law relating to the transfer of
the ownership or security interest in the 1998 Transition Property by the
Grantee to the Note Issuer. The Grantee shall deliver (or cause to be
delivered) to the Note Issuer file-stamped copies of, or filing receipts for,
any document filed as provided above, promptly following such filing. The
Grantee shall institute any action or proceeding necessary to compel performance
by the ICC or the State of Illinois of any of their obligations or duties under
the Funding Law, the 1998 Funding Order, the 1998 Initial Tariff or any
amendatory tariff filed pursuant to Section 18-104(k) of the Funding Law, and
the Grantee agrees to take such legal or administrative actions, including
defending against or instituting and pursuing legal actions and appearing or
testifying at hearings or similar proceedings, as may be reasonably necessary to
protect the Note Issuer and the Holders from claims, state actions or other
actions or proceedings of third parties which, if successfully pursued, would
result in a breach of any representation set forth in Article III. The costs of
any such actions or proceedings will be payable by the Grantee. The Grantee
designates the Note Issuer as its agent and attorney-in-fact to execute any
filings with the ICC, financing statements, continuation statements or other
instruments required by the Note Issuer pursuant to this Section, it being
understood that the Note Issuer shall have no obligation to execute any such
instruments.
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SECTION 4.08. NONPETITION COVENANTS. Notwithstanding any prior
termination of this Agreement or the Indenture, but subject to the ICC's right
to order the sequestration and payment of revenues arising with respect to the
1998 Transition Property notwithstanding any bankruptcy, reorganization or other
insolvency proceedings with respect to ComEd, the Grantee, the Note Issuer or
any other grantee or assignee of the 1998 Transition Property pursuant to
Section 18-107(c)(4) of the Funding Law, the Grantee shall not, prior to the
date which is one year and one day after the termination of the Indenture,
acquiesce, petition or otherwise invoke or cause or join with any other Person
to invoke the process of any court or governmental authority for the purpose of
commencing or sustaining a case against the Note Issuer under any Federal or
state bankruptcy, insolvency or similar law or appointing a receiver,
liquidator, assignee, trustee, custodian, sequestrator or other similar official
of or for the Note Issuer or any substantial part of the property of the Note
Issuer, or ordering the winding up or liquidation of the affairs of the Note
Issuer.
SECTION 4.09. TAXES. So long as any of the Notes are outstanding, the
Grantee shall, and shall cause each of its subsidiaries to, pay all material
taxes, assessments and governmental charges imposed upon it or any of its
properties or assets or with respect to any of its franchises, business, income
or property before any penalty accrues thereon if the failure to pay any such
taxes, assessments and governmental charges would, after any applicable grace
periods, notices or other similar requirements, result in a lien on the 1998
Transition Property or Related Assets; provided that no such tax need be paid if
the Grantee or one of its subsidiaries is contesting the same in good faith by
appropriate proceedings promptly instituted and diligently conducted and if the
Grantee or such subsidiary has established appropriate reserves as shall be
required in conformity with generally accepted accounting principles.
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SECTION 4.10. PERFORMANCE OF OBLIGATIONS; SERVICING. (a) The Grantee may
contract with other Persons to assist it in performing its duties under this
Agreement, and any performance of such duties by a Person identified to the Note
Issuer in an Officer's Certificate of the Grantee shall be deemed to be action
taken by the Grantee.
(b) Except as otherwise expressly permitted therein, the Grantee shall not
waive, amend, modify, supplement or terminate any Basic Document or any
provision thereof without the written consent of the Note Issuer (which consent
shall not be withheld if the Indenture Trustee shall have consented thereto) and
prior written notice to the Rating Agencies. The Grantee shall not terminate
the Administration Agreement prior to the repayment in full of all Notes.
(c) Upon any termination of the Servicer's rights and powers pursuant to
the Servicing Agreement, the Note Issuer shall promptly notify the Grantee and
the Rating Agencies. As soon as a Successor Servicer is appointed, the Note
Issuer shall notify the Grantee and the Rating Agencies of such appointment,
specifying in such notice the name and address of such Successor Servicer.
(d) Without derogating from the absolute nature of the assignment granted
to the Note Issuer under this Agreement or the rights of the Note Issuer
hereunder, the Grantee will not, without the prior written consent of the Note
Issuer and prior written notice to the Rating Agencies, amend, modify, waive,
supplement, terminate or surrender, or agree to any amendment, modification,
supplement, termination, waiver or surrender of, the terms of any Note
Collateral or the Basic Documents, or waive timely performance or observance by
ComEd or the Servicer under the Grant Agreement or the Servicing Agreement,
respectively. If any such amendment, modification, supplement or waiver shall
be so consented to by the Note Issuer and the Note Issuer shall so request, the
Grantee shall execute and deliver, in its own name and at its own
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expense, such agreements, instruments, consents and other documents as shall be
necessary or appropriate in the circumstances.
(e) The Grantee shall make all filings required under the Funding Law
relating to the transfer of the ownership or security interest in the 1998
Transition Property other than those required to be made by ComEd pursuant to
the Basic Documents.
SECTION 4.11. ADDITIONAL NEGATIVE COVENANTS. So long as any Notes are
Outstanding, the Grantee shall not:
(i) except as permitted by Section 5.02, sell, transfer, exchange or
otherwise dispose of any of its properties or assets;
(ii) assert any claim against the Note Issuer by reason of the
payment of the taxes levied or assessed upon any part of the 1998
Transition Property or the Related Assets;
(iii) except as permitted by Section 5.02, terminate its existence or
dissolve or liquidate in whole or in part; or
(iv) take any action that would be inconsistent with the Note
Issuer's absolute and first priority ownership interest in the 1998
Transition Property and the Related Assets.
SECTION 4.12. NO OTHER BUSINESS. The Grantee shall not engage in any
business other than acquiring, owning, financing, transferring, assigning and
otherwise managing the 1998 Transition Property and Related Assets, and any
Subsequent Intangible Transition Property and Subsequent Related Assets, in the
manner contemplated by this Agreement and the Basic Documents (or in a similar
manner, in the case of Subsequent Transition Property and Subsequent Related
Assets) and activities incidental thereto.
SECTION 4.13. NO BORROWING. The Grantee shall not issue, incur, assume,
guarantee or otherwise become liable, directly or indirectly, for any
indebtedness.
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SECTION 4.14. GUARANTEES, LOANS, ADVANCES AND OTHER LIABILITIES. Except
as otherwise contemplated by the Grant Agreement, the Administration Agreement,
the Servicing Agreement or this Agreement, the Grantee shall not make any loan
or advance or credit to, or guarantee (directly or indirectly or by an
instrument having the effect of assuring another's payment or performance on any
obligation or capability of so doing or otherwise), endorse or otherwise become
contingently liable, directly or indirectly, in connection with the obligations,
stocks or dividends of, or own, purchase, repurchase or acquire (or agree
contingently to do so) any stock, obligations, assets or securities of, or any
other interest in, or make any capital contribution to, any other Person.
SECTION 4.15. CAPITAL EXPENDITURES. Other than expenditures made out of
available funds in an aggregate amount not to exceed $25,000 in any calendar
year, the Grantee shall not make any expenditure (by long-term or operating
lease or otherwise) for capital assets (either realty or personalty).
SECTION 4.16. NOTICE OF DEFAULTS. The Grantee shall promptly notify the
Note Issuer, in writing, of each default under the Indenture and each material
default on the part of ComEd or the Servicer of their respective obligations
under the Grant Agreement or the Servicing Agreement.
SECTION 4.17. SEPARATE EXISTENCE. The Grantee shall:
(i) Maintain with commercial banking institutions its own deposit
account or accounts separate from those of any Affiliate of the Grantee.
The Grantee's funds will not be diverted to any other Person or for other
than the Grantee's use, and, except as may be expressly permitted by this
Agreement or the Servicing Agreement, the funds of the Grantee shall not be
commingled with those of any Affiliate of the Grantee.
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(ii) Ensure that, to the extent that it shares the same officers or
other employees as any of its members or Affiliates, the salaries of and
the expenses related to providing benefits to such officers and other
employees shall be fairly allocated among such entities, and each such
entity shall bear its fair share of the salary and benefit costs associated
with all such common officers and employees.
(iii) Ensure that, to the extent that it jointly contracts with any of
its members or Affiliates to do business with vendors or service providers
or to share overhead expenses, the costs incurred in so doing shall be
allocated fairly among such entities, and each such entity shall bear its
fair share of such costs. To the extent that the Grantee contracts or does
business with vendors or service providers where the goods and services
provided are partially for the benefit of any other Person, the costs
incurred in so doing shall be fairly allocated to or among such entities
for whose benefit the goods and services are provided, and each such entity
shall bear its fair share of such costs. All material transactions between
the Grantee and any of its Affiliates shall be only on an arm's-length
basis.
(iv) Maintain a principal executive and administrative office through
which its business is conducted separate from those of its members and
Affiliates. To the extent that the Grantee and any of its members or
Affiliates have offices in contiguous space, there shall be fair and
appropriate allocation of overhead costs among them, and each such entity
shall bear its fair share of such expenses.
(v) Conduct its affairs strictly in accordance with its Operating
Agreement and observe all necessary, appropriate and customary formalities,
including, but not limited to, holding all regular and special members'
meetings, and meetings of the Grantee's management committee, appropriate
to authorize all action on behalf of the Grantee,
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keeping all resolutions or consents necessary to authorize actions taken or
to be taken, and maintaining accurate and separate books, records and
accounts, including, but not limited to, payroll and intercompany
transaction accounts.
(vi) Ensure that its management committee (a) shall not include any
Person who is also a member of the Board of Directors of any of the
Grantee's Affiliates and (b) shall at all times include at least two
Independent Managers (as such term is defined in the Grantee's Operating
Agreement).
(vii) Act solely in its own name and through its own authorized
managers and agents, and no Affiliate of the Grantee shall be appointed to
act as agent of the Grantee, except as expressly contemplated by this
Agreement or the Servicing Agreement.
(viii) Ensure that no Affiliate of the Grantee shall advance funds to
the Grantee, or otherwise guaranty debts of, the Grantee, except as
provided in the Grantee's Operating Agreement; PROVIDED, HOWEVER, that an
Affiliate of the Grantee may provide funds to the Grantee in connection
with capitalization of the Grantee.
(ix) Not enter into any guaranty, or otherwise become liable, with
respect to any obligation of any Affiliate of the Grantee.
SECTION 4.18. FURTHER INSTRUMENTS AND ACTS. Upon request of the Note
Issuer, the Grantee will execute and deliver such further instruments and do
such further acts as may be reasonably necessary or proper to carry out more
effectively the purposes of this Agreement.
SECTION 4.19. SUBSEQUENT TRANSITION PROPERTY. (a) Notwithstanding any
provision hereof to the contrary, the Grantee may from time to time accept
newly-created Subsequent Transition Property pursuant to a related Subsequent
Funding Order and a Subsequent Tariff, subject to the conditions specified in
paragraph (b) below.
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(b) The Grantee shall be permitted to accept Subsequent Transition Property
only upon the satisfaction of each of the following conditions on or prior to
the related Subsequent Creation Date:
(i) ComEd shall have provided the Grantee, the Subsequent Note
Issuer, the Indenture Trustee and the Rating Agencies with written
notice, which shall be given not later than 10 days prior to the related
Subsequent Creation Date, specifying the Subsequent Creation Date for
such Subsequent Transition Property and the aggregate amount of the IFCs
related to such Subsequent Transition Property, and shall have provided
any information reasonably requested by any of the foregoing Persons
with respect to the Subsequent Transition Property to be created in
favor of the Grantee;
(ii) ComEd and the Grantee shall have delivered to the Note Issuer a
duly executed Subsequent Grant Agreement, and the Grantee shall have
delivered to the Note Issuer a duly executed Subsequent Sale Agreement;
(iii) as of such Subsequent Creation Date, ComEd will not be
insolvent and will not have been made insolvent by such transfer and ComEd
will not be aware of any pending insolvency with respect to itself;
(iv) the Rating Agency Condition shall have been satisfied with
respect to such creation;
(v) ComEd shall have delivered to the Grantee, the Trust, the
Indenture Trustee and the Delaware Trustee an opinion of independent tax
counsel and/or a ruling from the IRS (as selected by, and in form and
substance reasonably satisfactory to, ComEd) to the effect that, for
federal income tax purposes, (i) the ICC's issuance of the Funding Order
creating and establishing the Subsequent Transition Property in the
Grantee, and the assignment of such Subsequent Transition Property, will
not result in gross income to the
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Grantee, the Note Issuer or ComEd, and the future revenues relating to the
Subsequent Transition Property and the assessment of the IFCs (except for
revenue related to certain lump-sum payments) will be included in ComEd's
gross income in the year in which the related electrical service is
provided to consumers and (ii) such conveyance will not adversely affect
the characterization of the then outstanding Notes as obligations of ComEd;
(vi) as of such Subsequent Creation Date, no breach by ComEd of its
representations, warranties or covenants in the Grant Agreement and no
Servicer Default shall exist;
(vii) as of such Subsequent Creation Date, the Grantee shall have
sufficient funds available to pay ComEd the consideration set forth in the
Subsequent Grant Agreement, and all conditions shall have been satisfied
for the issuance of one or more instruments under the Indenture in order to
provide such funds;
(viii) the Grantee shall have delivered to the Rating Agencies any
Opinions of Counsel requested by the Rating Agencies;
(ix) the Grantee and the Note Issuer shall have taken all actions
required to perfect the ownership interest or security interest (as the
case may be) of the Note Issuer in the Subsequent Transition Property and
Subsequent Related Assets and the proceeds thereof, free and clear of any
Liens; and
(x) the Grantee shall have delivered to the Note Issuer an
Officer's Certificate confirming the satisfaction of each condition
precedent specified in this paragraph (b).
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ARTICLE V
THE GRANTEE
SECTION 5.01. LIABILITY OF GRANTEE; INDEMNITIES.
(a) The Grantee shall be liable in accordance herewith only to the extent
of the obligations specifically undertaken by the Grantee under this Agreement.
(b) The Grantee shall indemnify the Note Issuer, the Indenture Trustee and
the Delaware Trustee, and each of their respective officers, directors,
employees and agents for, and defend and hold harmless each such Person from and
against, any and all taxes (i) that may at any time be imposed on or asserted
against any such Person as a result of the grant of the 1998 Transition Property
to the Grantee, or (ii) that may be imposed on or asserted against any such
Person under existing law as of the Closing Date as a result of the Grantee's
ownership and assignment of the 1998 Transition Property, the Note Issuer's
issuance and sale of the Notes, or the other transactions contemplated herein,
including, in each case, any sales, gross receipt, general corporation, tangible
personal property, privilege or license taxes, but excluding any taxes imposed
as a result of a failure of such Person to withhold or remit taxes imposed with
respect to payments on any Note.
(c) The Grantee shall indemnify the Note Issuer, the Indenture Trustee, the
Delaware Trustee and the Holders and each of their respective officers,
directors, employees and agents for, and defend and hold harmless each such
Person from and against, any and all amounts of principal and interest on the
Notes not paid when due in accordance with their terms and the amount of any
deposits to the Note Issuer required to have been made in accordance with the
terms of the Basic Documents which are not made when so required and any and all
liabilities, obligations, claims, actions, suits, or payments of any kind
whatsoever that may be imposed on or asserted against any such Person, together
with any reasonable costs and expenses incurred by such Person
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<PAGE>
(collectively, "LOSSES"), as a result of the Grantee's breach of any of its
representations, warranties or covenants contained in this Agreement.
(d) The Grantee shall pay any and all taxes levied or assessed upon all or
any part of the Note Issuer's property or assets based on existing law as of the
Closing Date.
(e) Indemnification under this Section 5.01 shall survive the resignation
or removal of the Indenture Trustee or the Delaware Trustee and the termination
of this Agreement and shall include reasonable fees and expenses of
investigation and litigation (including reasonable attorneys' fees and
expenses).
SECTION 5.02. MERGER OR CONSOLIDATION OF, OR ASSUMPTION OF THE OBLIGATIONS
OF, GRANTEE. Any Person (a) into which the Grantee may be merged or
consolidated, (b) which may result from any merger or consolidation to which the
Grantee shall be a party or (c) which may succeed to the properties and assets
of the Grantee substantially as a whole, which Person in any of the foregoing
cases executes an agreement of assumption to perform every obligation of the
Grantee hereunder, shall be the successor to the Grantee under this Agreement
without further act on the part of any of the parties to this Agreement;
PROVIDED, HOWEVER, that (i) immediately after giving effect to such transaction,
no representation or warranty made pursuant to Article III shall have been
breached, (ii) the Grantee shall have delivered to the Note Issuer and the
Indenture Trustee an Officers' Certificate and an Opinion of Counsel each
stating that such consolidation, merger or succession and such agreement of
assumption comply with this Section and that all conditions precedent, if any,
provided for in this Agreement relating to such transaction have been complied
with, (iii) the Grantee shall have delivered to the Note Issuer and the
Indenture Trustee an Opinion of Counsel either (A) stating that, in the opinion
of such counsel, all filings to be made by the Grantee, including filings with
the ICC pursuant to the Funding Law, have been executed and filed that are
necessary to fully preserve and protect the interest of the Note Issuer in the
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<PAGE>
1998 Transition Property and Related Assets and reciting the details of such
filings, or (B) stating that, in the opinion of such counsel, no such action
shall be necessary to preserve and protect such interests (iv) the Rating
Agencies shall have received prior written notice of such transaction and (v)
ComEd shall have delivered to the Grantee, the Note Issuer, the Delaware Trustee
and the Indenture Trustee an opinion of independent tax counsel (as selected by,
and in form and substance reasonably satisfactory to, ComEd, and which may be
based on a ruling form the Internal Revenue Service) to the effect that, for
federal income tax purposes, such consolidation or merger will not result in a
material adverse federal income tax consequence to ComEd, the Grantee, the Note
Issuer, the Delaware Trustee, the Indenture Trustee or the then existing
Holders. Notwithstanding anything herein to the contrary, the execution of the
foregoing agreement of assumption and compliance with clauses (i), (ii), (iii),
(iv) and (v) above shall be conditions to the consummation of any transaction
referred to in clauses (a), (b) or (c) above. When any Person acquires the
properties and assets of ComEd Funding, LLC substantially as a whole and becomes
the successor to ComEd Funding, LLC in accordance with the terms of this Section
5.02, then upon the satisfaction of all of the other conditions of this Section
5.02, ComEd Funding, LLC shall automatically and without further notice be
released from its obligations hereunder.
SECTION 5.03. LIMITATION ON LIABILITY OF GRANTEE AND OTHERS. The Grantee
and any director or officer or employee or agent of the Grantee may rely in good
faith on the advice of counsel or on any document of any kind, PRIMA FACIE
properly executed and submitted by any Person, respecting any matters arising
hereunder. Subject to Section 4.07, the Grantee shall not be under any
obligation to appear in, prosecute or defend any legal action that shall not be
incidental to its obligations under this Agreement, and that in its opinion may
involve it in any expense or liability.
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ARTICLE VI
MISCELLANEOUS PROVISIONS
SECTION 6.01. AMENDMENT. The Agreement may be amended by the Grantee and
the Note Issuer, with prior written notice given to the Rating Agencies and the
prior written consent of the Indenture Trustee, but without the consent of any
of the Holders, to cure any ambiguity, to correct or supplement any provisions
in this Agreement or for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions in this Agreement or of
modifying in any manner the rights of the Holders; PROVIDED, HOWEVER, that such
action shall not, as evidenced by an Officer's Certificate delivered to the Note
Issuer and the Indenture Trustee, adversely affect in any material respect the
interests of any Holder.
This Agreement may also be amended from time to time by the Grantee and the
Note Issuer, with prior written notice given to the Rating Agencies and the
prior written consent of the Indenture Trustee and Holders holding not less than
a majority of the Outstanding Amount of the Notes of all Series affected
thereby, for the purpose of adding any provisions to or changing in any manner
or eliminating any of the provisions of this Agreement or of modifying in any
manner the rights of the Holders; PROVIDED, HOWEVER, that no such amendment
shall (a) increase or reduce in any manner the amount of, or accelerate or delay
the timing of, IFC Collections or (b) reduce the aforesaid percentage of the
Outstanding Amount of the Notes, the Holders of which are required to consent to
any such amendment, without the consent of the Holders of all the outstanding
Notes.
Promptly after the execution of any such amendment or consent, the Note
Issuer shall furnish a copy of such amendment or consent to the Indenture
Trustee and each of the Rating Agencies.
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It shall not be necessary for the consent of Holders pursuant to this
Section to approve the particular form of any proposed amendment or consent, but
it shall be sufficient if such consent shall approve the substance thereof.
Prior to the execution of any amendment to this Agreement, the Indenture
Trustee shall be entitled to receive and rely upon an Opinion of Counsel stating
that the execution of such amendment is authorized or permitted by this
Agreement. The Indenture Trustee may, but shall not be obligated to, enter into
any such amendment which affects the Indenture Trustee's own rights, duties or
immunities under this Agreement or otherwise.
SECTION 6.02. NOTICES. All demands, notices and communications upon or to
the Grantee, the Note Issuer, the Indenture Trustee or the Rating Agencies under
this Agreement shall be in writing, personally delivered, mailed or sent by
telecopy or other similar form of rapid transmission, and shall be deemed to
have been duly given upon receipt (a) in the case of the Grantee, to ComEd
Funding, LLC, c/o Commonwealth Edison Company, 10 South Dearborn Street, 37th
Floor, Chicago, Illinois 60603, (b) in the case of the Note Issuer, to ComEd
Transitional Funding Trust, c/o First Union Trust Company, National Association,
One Rodney Square, 920 King Street, 1st Floor, Wilmington, Delaware 19801,
Attention: Corporate Trust Administration, with a copy to Richards, Layton &
Finger, Attention: Doneene Damon, (c) in the case of the Indenture Trustee, at
the Corporate Trust Office, (d) in the case of Moody's, to Moody's Investors
Service, Inc., ABS Monitoring Department, 99 Church Street, New York, New York
10007, (e) in the case of Standard & Poor's, to Standard & Poor's Corporation,
26 Broadway (10th Floor), New York, New York 10004, Attention of Asset Backed
Surveillance Department, (f) in the case of Fitch IBCA, to Fitch IBCA, Inc., One
State Street Plaza, New York, New York 10004, Attention of ABS Surveillance, or
(g) in the case of Duff & Phelps, to Duff & Phelps Rating Co., 17 State Street,
12th Floor, New York, New York 10004, Attention of
26
<PAGE>
Asset Backed Monitoring Group, or as to each of the foregoing, at such other
address as shall be designated by written notice to the other parties.
SECTION 6.03. ASSIGNMENT. Notwithstanding anything to the contrary
contained herein, except as provided in Section 5.02, this Agreement may not be
assigned by the Grantee.
SECTION 6.04. LIMITATIONS ON RIGHTS OF OTHERS. The provisions of this
Agreement are solely for the benefit of the Grantee, the Note Issuer, the
Indenture Trustee, the Delaware Trustee and the Holders, and nothing in this
Agreement, whether express or implied, shall be construed to give to any other
Person any legal or equitable right, remedy or claim in the 1998 Transition
Property or Related Assets or under or in respect of this Agreement or any
covenants, conditions or provisions contained herein.
SECTION 6.05. SEVERABILITY. Any provision of this Agreement 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 remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
SECTION 6.06. SEPARATE COUNTERPARTS. This Agreement may be executed by
the parties hereto in separate counterparts, each of which when so executed and
delivered shall be an original, but all such counterparts shall together
constitute but one and the same instrument.
SECTION 6.07. HEADINGS. The headings of the various Articles and Sections
herein are for convenience of reference only and shall not define or limit any
of the terms or provisions hereof.
SECTION 6.08. GOVERNING LAW. This Agreement shall be construed in
accordance with the laws of the State of Illinois, without reference to its
conflict of law provisions, and the
27
<PAGE>
obligations, rights and remedies of the parties hereunder shall be determined in
accordance with such laws.
SECTION 6.09. ASSIGNMENT TO INDENTURE TRUSTEE. The Grantee acknowledges
and consents to any transfer, pledge, assignment and grant of a security
interest by the Note Issuer to the Indenture Trustee pursuant to the Indenture
for the benefit of the Holders of all right, title and interest of the Note
Issuer in, to and under the 1998 Transition Property and Related Assets and the
proceeds thereof and the assignment of any or all of the Note Issuer's rights
and obligations hereunder to the Indenture Trustee.
SECTION 6.10. LIMITATION OF LIABILITY. It is expressly understood and
agreed by the parties hereto that (a) this Agreement is executed and delivered
by First Union Trust Company, National Association ("First Union") not
individually or personally but solely as Delaware Trustee on behalf of the Note
Issuer, in the exercise of the powers and authority conferred and vested in it,
(b) the representations, undertakings and agreements herein made by the Delaware
Trustee on behalf of the Note Issuer are made and intended not as personal
representations, undertakings and agreements by First Union are made and
intended for the purpose of binding only the Note Issuer, (c) nothing herein
contained shall be construed as creating any liability on First Union
individually or personally, to perform any covenant either expressed or implied
contained herein, except in its capacity as Delaware Trustee, all such
liability, if any, being expressly waived by the parties who are signatories to
this Agreement and by any Person claiming by, through or under such parties and
(d) under no circumstances shall First Union be personally liable for the
payment of any indebtedness or expense of the Note Issuer or be personally
liable for the breach or failure of any obligation, representation, warranty or
covenant made or undertaken by the Note Issuer under this Agreement; PROVIDED,
HOWEVER, that this provision shall not protect First Union against any
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<PAGE>
liability that would otherwise be imposed by reason of willful misconduct, bad
faith or gross negligence in the performance of its obligations and duties under
this Agreement.
SECTION 6.11. LIMITATION OF LIABILITY. It is expressly understood and
agreed by the parties hereto that (a) this Agreement is executed and delivered
by Harris Trust and Savings Bank, not individually or personally but solely as
Indenture Trustee, in the exercise of the powers and authority conferred and
vested in it, and (b) nothing herein contained shall be construed as creating
any liability on Harris Trust and Savings Bank, individually or personally, to
perform any covenant either expressed or implied contained herein, all such
liability, if any, being expressly waived by the parties who are signatories to
this Agreement and by any person claiming by, through or under such parties.
SECTION 6.12. HOLDERS AS THIRD PARTY BENEFICIARIES. The Grantee and the
Note Issuer agree that the Holders and the Indenture Trustee are express
third-party beneficiaries of the provisions of this Agreement and that the
Indenture Trustee, on behalf of the Holders, shall have the right to enforce the
terms hereof as provided in Section 6.09 hereof. The Grantee will take all
appropriate actions to perfect and maintain the perfection of the Grantee's and
the Note Issuer's ownership interest in any of the 1998 Transition Property and
to perfect and maintain the perfection of the Indenture Trustee's security
interest in such 1998 Transition Property and all other Note Collateral.
SECTION 6.13. REPRESENTATIONS AND INDEMNITIES TO SURVIVE. In addition to
the survival of representations and warranties as set forth in Article III, (a)
the agreements, representations, warranties, indemnities and other statements of
the Grantee set forth in or made pursuant to this Agreement will remain in full
force and effect and will survive the grant of the 1998 Transition Property and
the issuance and delivery of the Notes and (b) to the fullest extent permitted
by
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<PAGE>
applicable law, the provisions of Articles III, IV and V hereof shall survive
the termination and cancellation or invalidity of this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective officers as of the day and year first above
written.
COMED FUNDING LLC, Grantee
By: /s/ Ruth Ann M. Gillis
---------------------------------
Name: Ruth Ann M. Gillis
Title: Manager and President
COMED TRANSITIONAL FUNDING
TRUST, Note Issuer
By First Union Trust Company, National
Association, not in its individual
capacity but solely as Delaware Trustee
By: /s/ Edward L. Truitt, Jr.
---------------------------------
Name: Edward L. Truitt, Jr.
Title: Vice President
Acknowledged and accepted:
Harris Trust and Savings Bank, not in
its individual capacity but
solely as Indenture Trustee,
By: /s/ Robert D. Foltz
------------------------------
Name: Robert D. Foltz
Title: Vice President
SIGNATURE PAGE
TO SALE AGREEMENT
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<PAGE>
EXHIBIT 10.2
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
AGREEMENT RELATING TO GRANT OF
INTANGIBLE TRANSITION PROPERTY
between
COMMONWEALTH EDISON COMPANY
and
COMED FUNDING, LLC
Dated as of December 16, 1998
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C>
ARTICLE I
DEFINITIONS 2
SECTION 1.01. DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 1.02. OTHER DEFINITIONAL PROVISIONS. . . . . . . . . . . . . . . 2
ARTICLE II
GRANT OF TRANSITION PROPERTY. . . . . . . . . . . . . . . . . . . . . . . 3
SECTION 2.01. GRANT OF TRANSITION PROPERTY . . . . . . . . . . . . . . . 3
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF COMED . . . . . . . . . . . . . . . . . 4
SECTION 3.01. ORGANIZATION AND GOOD STANDING . . . . . . . . . . . . . . 4
SECTION 3.02. DUE QUALIFICATION. . . . . . . . . . . . . . . . . . . . . 5
SECTION 3.03. POWER AND AUTHORITY. . . . . . . . . . . . . . . . . . . . 5
SECTION 3.04. BINDING OBLIGATION . . . . . . . . . . . . . . . . . . . . 5
SECTION 3.05. NO VIOLATION . . . . . . . . . . . . . . . . . . . . . . . 5
SECTION 3.06. NO PROCEEDINGS . . . . . . . . . . . . . . . . . . . . . . 6
SECTION 3.07. APPROVALS. . . . . . . . . . . . . . . . . . . . . . . . . 6
SECTION 3.08. THE 1998 TRANSITION PROPERTY . . . . . . . . . . . . . . . 7
ARTICLE IV
COVENANTS OF COMED. . . . . . . . . . . . . . . . . . . . . . . . . . . .12
SECTION 4.01. CORPORATE EXISTENCE. . . . . . . . . . . . . . . . . . . .12
SECTION 4.02. NO LIENS . . . . . . . . . . . . . . . . . . . . . . . . .12
SECTION 4.03. DELIVERY OF COLLECTIONS. . . . . . . . . . . . . . . . . .13
SECTION 4.04. NOTICE OF LIENS. . . . . . . . . . . . . . . . . . . . . .13
SECTION 4.05. COMPLIANCE WITH LAW. . . . . . . . . . . . . . . . . . . .13
SECTION 4.06. COVENANTS RELATED TO THE 1998 TRANSITION PROPERTY
AND THE NOTES . . . . . . . . . . . . . . . . . . . .13
SECTION 4.07. PROTECTION OF TITLE. . . . . . . . . . . . . . . . . . . .15
SECTION 4.08. NONPETITION COVENANTS. . . . . . . . . . . . . . . . . . .16
SECTION 4.09. TAXES. . . . . . . . . . . . . . . . . . . . . . . . . . .16
SECTION 4.10. CONTRACTS FOR NON-TARIFFED SERVICES. . . . . . . . . . . .17
SECTION 4.11. PRESERVATION OF RIGHT OF NOTEHOLDERS TO RECEIVE PAYMENT. .17
ARTICLE V
COMED . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .18
SECTION 5.01. LIABILITY OF COMED; INDEMNITIES. . . . . . . . . . . . . .18
SECTION 5.02. MERGER OR CONSOLIDATION OF, OR ASSUMPTION OF THE
OBLIGATIONS OF, COMED . . . . . . . . . . . . . . . .19
SECTION 5.03. LIMITATION ON LIABILITY OF COMED AND OTHERS. . . . . . . .20
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<PAGE>
ARTICLE VI
MISCELLANEOUS PROVISIONS. . . . . . . . . . . . . . . . . . . . . . . . .21
SECTION 6.01. AMENDMENT. . . . . . . . . . . . . . . . . . . . . . . . .21
SECTION 6.02. NOTICES. . . . . . . . . . . . . . . . . . . . . . . . . .22
SECTION 6.03. ASSIGNMENT . . . . . . . . . . . . . . . . . . . . . . . .23
SECTION 6.04. LIMITATIONS ON RIGHTS OF OTHERS. . . . . . . . . . . . . .23
SECTION 6.05. SEVERABILITY . . . . . . . . . . . . . . . . . . . . . . .23
SECTION 6.06. SEPARATE COUNTERPARTS. . . . . . . . . . . . . . . . . . .23
SECTION 6.07. HEADINGS . . . . . . . . . . . . . . . . . . . . . . . . .23
SECTION 6.08. GOVERNING LAW. . . . . . . . . . . . . . . . . . . . . . .23
SECTION 6.09. ASSIGNMENTS TO NOTE ISSUER AND INDENTURE TRUSTEE . . . . .24
SECTION 6.10. HOLDERS AS THIRD PARTY BENEFICIARIES . . . . . . . . . . .24
</TABLE>
ii
<PAGE>
AGREEMENT RELATING TO GRANT OF INTANGIBLE TRANSITION PROPERTY (as the same
may be hereafter amended, supplemented or otherwise modified from time to time,
this "Agreement") dated as of December 16, 1998, between COMMONWEALTH EDISON
COMPANY, an Illinois corporation ("ComEd"), and COMED FUNDING, LLC, a Delaware
limited liability company (the "Grantee").
WHEREAS, ComEd filed the Application with the ICC pursuant to Section
18-103 of the Funding Law requesting the issuance of a transitional funding
order;
WHEREAS, ComEd requested in the Application that the transitional funding
order (i) establish, create and grant rights, in favor of the Grantee, in and to
"intangible transition property" (as defined in Section 18-102 of the Funding
Law) in the aggregate amount of $6,323,000,000; and (ii) establish and create
"instrument funding charges" as defined in Section 18-102 of the Funding Law,
granting the right to impose and receive certain non-bypassable charges
expressed in cents per kilowatt hour from and after the effective date of the
associated tariff;
WHEREAS, the ICC issued the 1998 Funding Order on July 21, 1998, which
created and established the intangible transition property requested by ComEd in
the Application;
WHEREAS, the 1998 Funding Order granted to and vested in the Grantee, as
current and original property rights, and not by assignment from ComEd, all
right, title and interest to impose and receive the IFCs authorized by and under
the 1998 Funding Order and all related revenues, collections, claims, payments,
money or proceeds thereof, including all right, title and interest of the
Grantee in, to and under the 1998 Funding Order; and
WHEREAS, the Grantee has agreed to (i) transfer the 1998 Transition
Property to the Note Issuer pursuant to the Sale Agreement, and (ii) pay ComEd
the net proceeds received by the Grantee from the Note Issuer in connection with
such transfer;
<PAGE>
NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein contained, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. DEFINITIONS. Capitalized terms used herein and not
otherwise defined herein have the meanings assigned to them in that certain
Indenture (including APPENDIX A thereto) dated as of the date hereof, between
ComEd Transitional Funding Trust, as the Note Issuer, and Harris Trust and
Savings Bank, as the Indenture Trustee, as the same may be amended, supplemented
or otherwise modified from time to time.
SECTION 1.02. OTHER DEFINITIONAL PROVISIONS.
(a) "AGREEMENT" shall have the meaning set forth in the preamble hereto.
(b) Non-capitalized terms used herein which are defined in the Public
Utilities Act shall, as the context requires, have the meanings assigned to such
terms in the Public Utilities Act, but without giving effect to amendments to
the Public Utilities Act after the date hereof which have a material adverse
effect on the Note Issuer or the Holders.
(c) All terms defined in this Agreement shall have the defined meaning when
used in any certificate or other document made or delivered pursuant hereto
unless otherwise defined therein.
(d) The words "hereof," "herein," "hereunder" and words of similar import,
when used in this Agreement, shall refer to this Agreement as a whole and not to
any particular provision of this Agreement; Section, Schedule and Exhibit
references contained in this Agreement are references to Sections, Schedules and
Exhibits in or to this Agreement unless otherwise specified; and the term
"including" shall mean "including without limitation".
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<PAGE>
(e) The definitions contained in this Agreement are applicable to the
singular as well as the plural forms of such terms and to the masculine as well
as to the feminine and neuter forms of such terms.
ARTICLE II
GRANT OF TRANSITION PROPERTY
SECTION 2.01. GRANT OF TRANSITION PROPERTY. In consideration of ComEd's
actions in requesting that the 1998 Transition Property be created and vested in
the Grantee, the Grantee agrees to remit to ComEd the net proceeds remitted to
it by the Note Issuer from the sale of the Notes. To the extent that,
notwithstanding the Funding Law, the Application and the 1998 Funding Order,
applicable law provides that ComEd has any interest in the 1998 Transition
Property or any part thereof, ComEd hereby, effective upon the effectiveness of
the 1998 Initial Tariff, sells, transfers, assigns, sets over and otherwise
conveys to the Grantee without recourse (subject to the obligations herein) all
of ComEd's right, title and interest, if any, in, to and under the 1998
Transition Property (such grant of the 1998 Transition Property, and such sale,
transfer, assignment, set over and conveyance, to include, to the fullest extent
permitted by the Funding Law, the assignment of all revenues, collections,
claims, rights, payments, money or proceeds of or arising from the IFCs pursuant
to the 1998 Funding Order and the 1998 Initial Tariff, including, without
limitation, any contractual rights to collect IFCs from Customers and Allocable
IFC Revenue Amounts). Such sale, transfer, assignment, set over and conveyance
by ComEd is expressly stated to be an absolute transfer, and pursuant to Section
18-108 of the Funding Law, shall be treated as an absolute transfer (as in a
true sale), and not as a pledge or other financing, of the 1998 Transition
Property. The previous sentence is the express statement referred to in Section
18-108 of the Funding Law. To the extent that, notwithstanding the Funding Law,
the
3
<PAGE>
Application and the 1998 Funding Order, ComEd is deemed to have any interest in
the 1998 Transition Property or any part thereof under applicable law, and if
the foregoing sale, transfer, assignment, set over and conveyance is held not to
be an absolute transfer (as in a true sale) as contemplated under Section 18-108
of the Funding Law, then such sale, transfer, assignment, set over and
conveyance shall be treated as a pledge of the 1998 Transition Property and
ComEd shall be deemed to have granted a security interest to the Grantee in the
1998 Transition Property. ComEd takes the position that it has no rights in the
1998 Transition Property to which such a security interest could attach.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF COMED
ComEd makes the following representations and warranties, as of the Closing
Date, on which the Grantee has relied in selling the 1998 Transition Property to
the Note Issuer. These representations and warranties shall survive (i) the
grant of the 1998 Transition Property to the Grantee pursuant to the 1998
Funding Order and the 1998 Initial Tariff, (ii) to the extent that ComEd has any
interest in the 1998 Transition Property or any part thereof, the sale,
transfer, assignment, set over and conveyance by ComEd contemplated hereby,
(iii) the sale, transfer, assignment, set over and conveyance of the 1998
Transition Property and Related Assets to the Note Issuer, (iv) the pledge
thereof to the Indenture Trustee pursuant to the Indenture and (v) the issuance
of the Notes.
SECTION 3.01. ORGANIZATION AND GOOD STANDING. ComEd is duly organized and
validly existing as a corporation in good standing under the laws of the State
of Illinois, with the power and authority to own its properties and to conduct
its business as such properties are currently owned and such business is
presently conducted, and had at all relevant times, and has the
4
<PAGE>
requisite power, authority and legal right to request that the ICC issue the
1998 Funding Order. ComEd is engaged in the generation, transmission,
distribution and sale of electricity to the public in Illinois, is a public
utility within the meaning of Section 3-105 of the Public Utilities Act and is
an electric utility within the meaning of the Funding Law and Article XVI of the
Public Utilities Act.
SECTION 3.02. DUE QUALIFICATION. ComEd is duly qualified to do business
as a corporation in good standing, and has obtained all necessary licenses and
approvals, in all jurisdictions in which the ownership or lease of property or
the conduct of its business shall require such qualifications, licenses or
approvals (except where the failure to so qualify would not be reasonably likely
to have a material adverse effect on ComEd's business, operations, assets,
revenues or properties).
SECTION 3.03. POWER AND AUTHORITY. ComEd has the requisite power and
authority to execute and deliver this Agreement and to carry out its terms; and
the execution, delivery and performance of this Agreement have been duly
authorized by ComEd by all necessary corporate action.
SECTION 3.04. BINDING OBLIGATION. This Agreement constitutes a legal,
valid and binding obligation of ComEd enforceable against ComEd in accordance
with its terms, subject to applicable insolvency, reorganization, moratorium,
fraudulent transfer and other similar laws relating to or affecting creditors'
rights generally from time to time in effect and to general principles of equity
(including, without limitation, concepts of materiality, reasonableness, good
faith and fair dealing), regardless of whether considered in a proceeding in
equity or at law.
SECTION 3.05. NO VIOLATION. The consummation of the transactions
contemplated by this Agreement and the fulfillment of the terms hereof do not
(i) conflict with, result in any breach of any of the terms and provisions of,
or constitute (with or without notice or lapse of time) a
5
<PAGE>
default under, the Articles of Incorporation or by-laws of ComEd, or any
indenture, agreement or other instrument to which ComEd is a party or by which
it shall be bound; (ii) result in the creation or imposition of any Lien upon
any of its properties pursuant to the terms of any such indenture, agreement or
other instrument; or (iii) violate any law or any order, rule or regulation
applicable to ComEd of any court or of any Federal or state regulatory body,
administrative agency or other governmental instrumentality having jurisdiction
over ComEd or its properties.
SECTION 3.06. NO PROCEEDINGS. There are no proceedings or investigations
pending or, to ComEd's knowledge, threatened, before any court, Federal or state
regulatory body, administrative agency or other governmental instrumentality
having jurisdiction over ComEd or its properties involving or relating to ComEd
or the Grantee or to ComEd's knowledge, any other Person: (i) asserting the
invalidity of the Funding Law, this Agreement, any of the other Basic Documents
or the Notes, (ii) seeking to prevent the grant of the 1998 Transition Property
to the Grantee or the consummation of any of the transactions contemplated by
this Agreement or any of the other Basic Documents, (iii) seeking any
determination or ruling that could reasonably be expected to materially and
adversely affect ComEd's performance of its obligations under, or the validity
or enforceability of, this Agreement, any of the other Basic Documents or the
Notes, or (iv) which could reasonably be expected to adversely affect the
Federal or state income tax attributes of the Notes.
SECTION 3.07. APPROVALS. No approval, authorization, consent, order or
other action of, or filing with, any court, Federal or state regulatory body,
administrative agency or other governmental instrumentality is required in
connection with ComEd's execution and delivery of this Agreement, ComEd's
performance of the transactions contemplated hereby or ComEd's fulfillment of
the terms hereof, except those that have been obtained or made (it being
understood that ComEd nonetheless has ongoing legal obligations to make future
filings with the ICC relating
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to ComEd's use of proceeds from the transactions contemplated hereby and the
final terms of each Series of Notes issued pursuant to the Indenture).
SECTION 3.08. THE 1998 TRANSITION PROPERTY.
(a) INFORMATION. All information provided by ComEd to the Grantee with
respect to the 1998 Transition Property (including the 1998 Funding Order and
the 1998 Initial Tariff) is correct in all material respects.
(b) TITLE. It is the intention of the parties hereto that the vesting of
the 1998 Transition Property in the Grantee as contemplated by the 1998 Funding
Order shall be irrevocable and enforceable against ComEd and its successors and
that no interest in or title to the 1998 Transition Property shall be part of
ComEd's estate in the event of the filing of a bankruptcy petition by or against
ComEd under any bankruptcy law. Accordingly, ComEd reaffirms that it has no
right, title or interest in and to the 1998 Transition Property and any sale,
transfer, assignment, set over and conveyance which may nonetheless be
contemplated by Section 2.01 hereof shall constitute an absolute transfer to the
Grantee, within the meaning of Section 18-108 of the Funding Law, of any right,
title and interest ComEd may otherwise have had in the 1998 Transition Property
(or any part thereof) created by, under and pursuant to the 1998 Funding Order,
such transfer is irrevocable and enforceable against ComEd and its successors,
and no interest in or title to the 1998 Transition Property shall be part of
ComEd's estate in the event of the filing of a bankruptcy petition by or against
ComEd under any bankruptcy law. No portion of the 1998 Transition Property has
been sold, transferred, assigned, pledged or otherwise conveyed by ComEd to any
Person other than the Grantee. Immediately prior to the transactions
contemplated hereunder, ComEd's right, title and interest in and to all of its
rights to payment under Applicable Rates is free and clear of all Liens and
rights of any other Person, and no offsets, defenses or counterclaims exist or
have been asserted with respect thereto.
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(c) TRANSFER FILINGS. The 1998 Transition Property has been validly granted
and vested in the Grantee pursuant to the 1998 Funding Order and, to the extent
applicable, this Agreement, the Grantee owns all right, title and interest to
the 1998 Transition Property, free and clear of all Liens and rights of any
other Person (other than Liens created pursuant to the Sale Agreement and the
Indenture), and all filings to be made by ComEd (including filings with the ICC
under the Funding Law) necessary in any jurisdiction to give the Grantee a first
priority perfected ownership interest in the 1998 Transition Property, free and
clear of all Liens, have been made. No further action is required under
Illinois law to maintain such ownership interest in the 1998 Transition
Property. No further action, other than any filings or other steps required to
be taken with respect to proceeds or on account of events occurring after the
date hereof by Sections 9-103, 9-304, 9-306, 9-402(7) or 9-403(2)-(3) of the
UCC, is required to maintain such first priority perfected ownership interest in
the Related Assets.
(d) STATE PLEDGE. The State of Illinois has agreed with the Holders,
pursuant to Section 18-105(b) of the Funding Law, as follows:
"(b) The State pledges to and agrees with the holders of any
transitional funding instruments who may enter into contracts with an
electric utility, grantee, assignee or issuer pursuant to this Article
XVIII that the State will not in any way limit, alter, impair or
reduce the value of intangible transition property created by, or
instrument funding charges approved by, a transitional funding order
so as to impair the terms of any contract made by such electric
utility, grantee, assignee or issuer with such holders or in any way
impair the rights and remedies of such holders until the pertinent
grantee instruments or, if the related transitional funding order does
not provide for the issuance of grantee instruments, the pertinent
transitional funding instruments and interest, premium and other fees,
costs and charges related thereto, as the case may be, are fully paid
and discharged. Electric utilities, grantees and issuers are
authorized to include these pledges and agreements of the State in any
contract with the holders of transitional funding instruments or with
any assignees pursuant to this Article XVIII and any assignees are
similarly authorized to include these pledges and agreements of the
State in any contract with any issuer, holder or any other assignee.
Nothing in this Article XVIII shall preclude the State of Illinois
from requiring adjustments as may otherwise be allowed by law to the
electric utility's base rates, transition charges, delivery services
charges, or other charges for tariffed services, so long as any such
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adjustment does not directly affect or impair any instrument funding
charges previously authorized by a transitional funding order issued by the
[ICC]."
As a result of the foregoing pledge, the State of Illinois may not, except as
provided in the succeeding sentence, in any way limit, alter, impair or reduce
the value of the 1998 Transition Property in a manner substantially impairing
the Indenture or the rights and remedies of the Holders (and consequently, may
not revoke, reduce, postpone or terminate the 1998 Funding Order or the rights
of the Holders to receive IFC Payments and all other proceeds of the 1998
Transition Property), until the Notes, together with interest thereon, are fully
paid and discharged. Notwithstanding the immediately preceding sentence, the
State would be allowed to effect a temporary impairment of the Holders' rights
if it could be shown that a temporary impairment was necessary to advance a
significant and legitimate public purpose.
(e) 1998 FUNDING ORDER AND TARIFFS; OTHER APPROVALS. (i) ComEd was
authorized to file the Application, (ii) ComEd filed the Application with the
ICC on April 22, 1998, in proper form, requesting the issuance of a transitional
funding order; (iii) the 1998 Funding Order and 1998 Initial Tariff
established, created and granted rights in and to intangible transition property
in an aggregate amount of $6.323 billion, and the 1998 Transition Property and
the right to impose and collect IFCs constitute current and original property
rights vested in the Grantee; (iv) the 1998 Funding Order has been duly entered
by the ICC, is valid and binding, is Final and is in full force and effect; (v)
the 1998 Initial Tariff is in full force and effect, is valid and binding, and
is not subject to modification by the ICC except as provided under the Funding
Law; (vi) as of the issuance of the Notes, the Notes are entitled to the
protections provided in Section 18-104(c) of the Funding Law and, accordingly,
the 1998 Funding Order, the 1998 Transition Property and the IFCs are not
revocable by the ICC; (vii) the ICC may not reduce, postpone, impair or
terminate the 1998 Transition Property, the 1998 Funding Order or the IFCs;
(viii) the process by which the
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1998 Funding Order was adopted and approved and the 1998 Initial Tariff was
filed, and the 1998 Funding Order and the 1998 Initial Tariff themselves, comply
with all applicable laws, rules and regulations and the ICC may not revoke,
amend or otherwise change the 1998 Initial Tariff in any manner which would
defeat the expectations of the Holders to receive IFC Payments on a timely
basis; and (ix) no other approval, authorization, consent, order or other action
of, or filing with, any court, Federal or state regulatory body, administrative
agency or other governmental instrumentality is required in connection with the
creation and grant of the 1998 Transition Property, except those that have been
obtained or made and those filings described in Section 3.07.
(f) ASSUMPTIONS. The assumptions used in calculating the IFCs are
reasonable and made in good faith.
(g) CREATION OF 1998 TRANSITION PROPERTY. Upon the effectiveness of the
1998 Initial Tariff: (i) all of the 1998 Transition Property constitutes a
current property right vested in the Grantee; (ii) the 1998 Transition Property
includes, without limitation, (A) the right, title and interest in the IFCs
authorized under the 1998 Funding Order, as adjusted from time to time, (B) the
right, title and interest in all revenues, collections, claims, payments, money
or proceeds of or arising from the IFCs set forth in the 1998 Initial Tariff,
and (C) all rights to obtain adjustments to the IFCs pursuant to the 1998
Funding Order; and (iii) the Grantee is entitled to impose and collect the IFCs
described in the 1998 Funding Order and the 1998 Initial Tariff in an aggregate
amount equal to the principal amount of the Notes, all interest thereon, all
amounts required to be deposited in the Reserve Subaccount, the
Overcollateralization Subaccount and (to the extent payable from the proceeds of
the IFCs) the Capital Subaccount, and all related fees, costs and expenses in
respect of the Notes until they have been paid in full, subject only to the
$6.323 billion
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limitation set forth in the 1998 Funding Order as to the maximum dollar amount
of 1998 Transition Property created thereunder.
(h) PROPERTY OF GRANTEE. To the fullest extent permitted by the Funding
Law and all other applicable law, the 1998 Transition Property and the right to
impose and collect IFCs contemplated thereunder constitute current property
rights of the Grantee and its assigns, including the Note Issuer and its assigns
(including the Indenture Trustee on behalf of the Holders), which property has
been placed beyond the reach of ComEd and its creditors, as in a true sale, and
which property rights may not be limited, altered, impaired, reduced or
otherwise terminated by any subsequent actions of ComEd or any third party and
which shall, to the full extent permitted by law, be enforceable against ComEd,
its successors and assigns, and all other third parties (including judicial lien
creditors) claiming an interest therein by or through ComEd or its successors
and assigns.
(i) NATURE OF REPRESENTATIONS AND WARRANTIES. The representations and
warranties set forth in this SECTION 3.08, insofar as they involve conclusions
of law, are made not on the basis that ComEd purports to be a legal expert or to
be rendering legal advice, but rather to reflect the parties' good faith
understanding of the legal basis on which the parties are entering into this
Agreement and the other Basic Documents and the basis on which the Holders are
purchasing the Notes, and to reflect the parties' agreement that, if such
understanding turns out to be incorrect or inaccurate, ComEd will be obligated
to indemnify the Grantee and its permitted assigns, and that the Grantee and its
permitted assigns will be entitled to enforce any rights and remedies under the
documents, on account of such inaccuracy to the same extent as if ComEd had
breached any other representations or warranties hereunder.
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ARTICLE IV
COVENANTS OF COMED
SECTION 4.01. CORPORATE EXISTENCE. So long as any of the Notes are
outstanding, ComEd (a) will keep in full force and effect its existence, rights
and franchises as a corporation under the laws of the State of Illinois (unless
it becomes, or any successor to ComEd hereunder is or becomes, organized under
the laws of any other State or of the United States of America, in which case
ComEd will keep in full effect its existence, rights and franchises under the
laws of such other jurisdiction), (b) will obtain and preserve its qualification
to do business, in each case to the extent that in each such jurisdiction such
existence or qualification is or shall be necessary to protect the validity and
enforceability of this Agreement and any of the other Basic Documents to which
ComEd is a party and each other instrument or agreement necessary or appropriate
to the proper administration of this Agreement and the transactions contemplated
hereby and (c) at all times hereafter, neither ComEd nor any successor will
cause or permit the Grantee or the Note Issuer to elect to be classified as an
association taxable as a corporation for federal income tax purposes.
SECTION 4.02. NO LIENS. Except for the conveyances hereunder, ComEd (i)
will not sell, pledge, assign or transfer to any other Person, or grant, create,
incur, assume, suffer to exist or otherwise assert any Lien on, any of the 1998
Transition Property or any interest therein, (ii) will not at any time assert
any Lien against or with respect to any of the 1998 Transition Property in its
capacity as Servicer or otherwise, (iii) will not seek to limit, alter, impair,
reduce or otherwise terminate the property rights of the Grantee or any assignee
of the Grantee, and (iv) shall defend the right, title and interest of the
Grantee or the Note Issuer in, to and under the 1998 Transition Property against
all claims of third parties claiming through or under ComEd.
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SECTION 4.03. DELIVERY OF COLLECTIONS. If ComEd receives collections in
respect of the IFCs or the proceeds thereof, or in replacement therefor,
including, without limitation, any Allocable IFC Revenue Amounts, ComEd agrees
to hold such payments in trust for the Servicer and to pay the Servicer all
payments received by ComEd in respect thereof as soon as practicable after
receipt thereof by ComEd, but in no event later than two Business Days after
such receipt.
SECTION 4.04. NOTICE OF LIENS. ComEd shall notify the Grantee, the Note
Issuer and the Indenture Trustee in writing promptly after becoming aware of any
Lien on any of the 1998 Transition Property other than the conveyances
hereunder, under the Sale Agreement and under the Indenture.
SECTION 4.05. COMPLIANCE WITH LAW. ComEd shall comply with its
organizational or governing documents and all laws, treaties, rules, regulations
and determinations of any governmental instrumentality applicable to it, to the
extent that failure to so comply would materially adversely affect the Note
Issuer's or the Indenture Trustee's interests in the 1998 Transition Property or
under any of the Basic Documents, or ComEd's performance of its obligations
hereunder or under any of the other Basic Documents to which it is party.
Without limiting the foregoing, ComEd shall comply with applicable laws and
regulations regarding its use of proceeds received hereunder, including all
applicable provisions of the Funding Law and the 1998 Funding Order.
SECTION 4.06. COVENANTS RELATED TO THE 1998 TRANSITION PROPERTY AND THE
NOTES.
(a) So long as any of the Notes are outstanding, ComEd shall indicate in
its financial statements that it is not the owner of the 1998 Transition
Property.
(b) So long as any of the Notes are outstanding, ComEd shall not own or
purchase any Notes.
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(c) ComEd agrees that upon the creation and grant of the 1998 Transition
Property to the Grantee pursuant to the 1998 Funding Order and, to the extent
applicable, this Agreement, (i) to the fullest extent permitted by law,
including applicable ICC Regulations, the Grantee shall have all of the rights
of the owner of the 1998 Transition Property (including all of the rights
originally held by ComEd, if any, with respect to the 1998 Transition Property),
including the right (subject to the terms of the Servicing Agreement) to
exercise any and all rights and remedies to collect any amounts payable by any
Customer or third party collection agent, including any ARES, in respect of the
1998 Transition Property, notwithstanding any objection or direction to the
contrary by ComEd and (ii) any payment by any Customer or third party collection
agent, including any ARES, to the Grantee (or to the Servicer for the benefit of
the Grantee) shall discharge such Customer's or third party's obligations in
respect of the 1998 Transition Property to the extent of such payment,
notwithstanding any objection or direction to the contrary by ComEd.
(d) So long as any of the Notes are outstanding, (i) except with respect to
federal and other applicable taxes, ComEd shall not make any statement or
reference in respect of the 1998 Transition Property that is inconsistent with
the ownership interest of the Grantee, and (ii) ComEd shall not take any action
in respect of the 1998 Transition Property except solely in its capacity as the
Servicer under the Servicing Agreement or as otherwise contemplated by the Basic
Documents.
(e) So long as any of the Notes are outstanding, ComEd shall not, except as
required by applicable law, initiate any material changes to its policies and
procedures pertaining to credit (including requirements for deposits from
Customers), billing, collections (including procedures for disconnection of
service for non-payment) and restoration of service after disconnection, and
shall not initiate any changes in any ICC tariffs relating to the foregoing
matters which are likely to adversely affect ComEd's ability to make timely
recovery of amounts billed to Customers.
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(f) If ComEd determines that aggregate dollar amount of IFCs to be imposed
and collected is reasonably likely to exceed the maximum dollar amount of
Intangible Transition Property authorized by the 1998 Funding Order and any
Subsequent Funding Orders and any Notes remain outstanding, ComEd shall make a
good faith effort to take any and all subsequent regulatory action with the ICC
reasonably necessary to obtain an order permitting the creation of additional
Intangible Transition Property in an amount sufficient to pay such Notes in
full.
SECTION 4.07. PROTECTION OF TITLE. ComEd shall execute and file such
filings, including filings with the ICC pursuant to the Funding Law, and cause
to be executed and filed such filings, all in such manner and in such places as
may be required by law fully to preserve, maintain, and protect the interests of
the Grantee or the Note Issuer in the 1998 Transition Property, including all
filings required under the Funding Law relating to the grant of the 1998
Transition Property to the Grantee. ComEd shall deliver (or cause to be
delivered) to the Grantee file-stamped copies of, or filing receipts for, any
document filed as provided above, promptly following such filing. ComEd shall
institute any action or proceeding necessary to compel performance by the ICC or
the State of Illinois of any of their obligations or duties under the Funding
Law, the 1998 Funding Order, the 1998 Initial Tariff or any amendatory tariff
filed pursuant to Section 18-104(k) of the Funding Law, and ComEd agrees to take
such legal or administrative actions, including defending against or instituting
and pursuing legal actions and appearing or testifying at hearings or similar
proceedings, as may be reasonably necessary to protect the Grantee or the Note
Issuer from claims, state actions or other actions or proceedings of third
parties which, if successfully pursued, would result in a breach of any
representation set forth in Article III hereof. The costs of any such actions
or proceedings will be payable by ComEd. ComEd designates the Grantee as its
agent and attorney-in-fact to execute any filings with the ICC or other
instruments required by
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the Grantee pursuant to this Section, it being understood that the Grantee shall
have no obligation to execute any such instruments.
SECTION 4.08. NONPETITION COVENANTS. Notwithstanding any prior
termination of this Agreement or the Indenture, but subject to the ICC's right
to order the sequestration and payment of revenues arising with respect to the
1998 Transition Property notwithstanding any bankruptcy, reorganization or other
insolvency proceedings with respect to ComEd, the Grantee or any other grantee
or assignee of the 1998 Transition Property pursuant to Section 18-107(c)(4) of
the Funding Law, ComEd shall not, prior to the date which is one year and one
day after the termination of the Indenture, acquiesce, petition or otherwise
invoke or cause or join with any other Person to invoke the process of any court
or governmental authority for the purpose of commencing or sustaining a case
against the Grantee or the Note Issuer under any Federal or state bankruptcy,
insolvency or similar law or appointing a receiver, liquidator, assignee,
trustee, custodian, sequestrator or other similar official of or for the Grantee
or the Note Issuer or any substantial part of the property of the Grantee or the
Note Issuer, or ordering the winding up or liquidation of the affairs of the
Grantee or the Note Issuer.
SECTION 4.09. TAXES. So long as any of the Notes are outstanding, ComEd
shall, and shall cause each of its subsidiaries to, pay all material taxes,
assessments and governmental charges imposed upon it or any of its properties or
assets or with respect to any of its franchises, business, income or property
before any penalty accrues thereon if the failure to pay any such taxes,
assessments and governmental charges would, after any applicable grace periods,
notices or other similar requirements, result in a lien on the 1998 Transition
Property; PROVIDED that no such tax need be paid if ComEd or one of its
subsidiaries is contesting the same in good faith by appropriate proceedings
promptly instituted and diligently conducted and if ComEd or such
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subsidiary has established appropriate reserves as shall be required in
conformity with generally accepted accounting principles.
SECTION 4.10. CONTRACTS FOR NON-TARIFFED SERVICES. Neither ComEd nor any
successor thereto shall enter into any contract with any Customer obligated (or
who would, but for such contract, be obligated) to pay IFCs if, as a result
thereof, such Customer would not receive tariffed services, unless the contract
provides that the Customer will pay an amount to the Grantee or its assigns, as
applicable, equal to the amount such Customer would pay in IFCs if the services
provided under such contract were tariffed services. Any revenues received by
ComEd or such successor from any such contract services shall, to the extent of
the authorized amount of the IFCs included therein (or deemed included therein
pursuant to the 1998 Funding Order and this Section), be deemed to be proceeds
of, and included in, the 1998 Transition Property.
SECTION 4.11. PRESERVATION OF RIGHT OF NOTEHOLDERS TO RECEIVE
PAYMENT. In addition to any obligations of ComEd under the Servicing Agreement,
ComEd recognizes and agrees that any impairment of the rights of Holders with
respect to the collection of IFCs and payments on the Notes, arising from a
repeal of, modification of or supplement to or declaration of invalidity of the
Amendatory Act and/or the Funding Law occurring after ComEd and its Affiliates
received the proceeds of such Notes, would not be equitable. ComEd agrees, in
consideration of the receipt of such proceeds, to take any and all actions
reasonably necessary to preserve the rights of Holders with respect to payments
on the Notes out of the amounts represented by IFCs or their equivalent,
including, but not limited to, (i) making appropriate filings with the State of
Illinois, the ICC or other regulatory bodies to defend, preserve and create on
behalf of Holders the right to receive payments as provided in the Notes, (ii)
defending against or instituting and pursuing legal actions and appearing or
testifying at hearings or similar proceedings, as may be necessary to block or
overturn any attempts to cause a repeal of,
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modification of or supplement to or judicial invalidation of the Amendatory Act
or any Funding Order or the rights of holders of Intangible Transition Property
by legislative enactment or otherwise that would be adverse to the Grantee, the
Note Issuer or any Holders, and (iii) unless otherwise expressly prohibited by
applicable law or regulatory order in effect at such time, continuing to deduct
and pay over to the Servicer for the benefit of the Note Issuer all IFCs and IFC
Payments or equivalent revenues received by ComEd notwithstanding any repeal of,
modification of or supplement to or declaration of invalidity of the Amendatory
Act, the Funding Law and/or the Funding Order.
ARTICLE V
COMED
SECTION 5.01. LIABILITY OF COMED; INDEMNITIES.
(a) ComEd shall indemnify the Grantee, the Note Issuer, the Indenture
Trustee and the Delaware Trustee and each of their respective officers,
directors, employees and agents for, and defend and hold harmless each such
Person from and against, any and all taxes (i) that may at any time be imposed
on or asserted against any such Person as a result of the grant of the 1998
Transition Property to the Grantee, or (ii) that may be imposed on or asserted
against any such Person under existing law as of the Closing Date as a result of
the Grantee's ownership and assignment of the 1998 Transition Property, the Note
Issuer's issuance and sale of the Notes, or the other transactions contemplated
herein, including, in each case, any sales, gross receipt, general corporation,
tangible personal property, privilege or license taxes (but excluding any taxes
imposed as a result of a failure of such Person to properly withhold or remit
taxes imposed with respect to payments on any Notes).
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(b) ComEd shall indemnify the Grantee, the Note Issuer, the Indenture
Trustee, the Delaware Trustee and the Holders and each of their respective
officers, directors, employees and agents for, and defend and hold harmless each
such Person from and against, any and all amounts of principal and interest on
the Notes not paid when due in accordance with their terms and the amount of any
deposits to the Note Issuer required to have been made in accordance with the
terms of the Basic Documents which are not made when so required and any and all
liabilities, obligations, claims, actions, suits, or payments of any kind
whatsoever that may be imposed on or asserted against any such Person, together
with any reasonable costs and expenses incurred by such Person (collectively,
"LOSSES"), as a result of ComEd's breach of any of its representations,
warranties or covenants contained in this Agreement.
(c) ComEd shall pay any and all taxes levied or assessed upon all or any
part of the Grantee's property or assets based on existing law as of the Closing
Date.
(d) Indemnification under Sections 5.01(a) through 5.01(c) shall survive
the termination of this Agreement and shall include reasonable fees and expenses
of investigation and litigation (including reasonable attorneys' fees and
expenses).
SECTION 5.02. MERGER OR CONSOLIDATION OF, OR ASSUMPTION OF THE OBLIGATIONS
OF, COMED. Any Person (a) into which ComEd may be merged or consolidated, (b)
which may result from any merger or consolidation to which ComEd shall be a
party or (c) which may succeed to the properties and assets of ComEd
substantially as a whole, which Person in any of the foregoing cases executes an
agreement of assumption to perform every obligation of ComEd hereunder, shall be
the successor to ComEd under this Agreement without further act on the part of
any of the parties to this Agreement; PROVIDED, HOWEVER, that (i) immediately
after giving effect to such transaction, no representation or warranty made
pursuant to Article III shall have been breached and (if ComEd is the Servicer)
no Servicer Default, and no event which, after notice or lapse of
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time, or both, would become a Servicer Default shall have occurred and be
continuing, (ii) ComEd shall have delivered to the Grantee, the Note Issuer and
the Indenture Trustee an Officers' Certificate and an Opinion of Counsel each
stating that such consolidation, merger or succession and such agreement of
assumption comply with this Section and that all conditions precedent, if any,
provided for in this Agreement relating to such transaction have been complied
with, (iii) ComEd shall have delivered to the Grantee, the Note Issuer and the
Indenture Trustee an Opinion of Counsel either (x) stating that, in the opinion
of such counsel, all filings to be made by ComEd, including filings with the ICC
pursuant to the Funding Law, have been executed and filed that are necessary to
fully preserve and protect the interest of the Grantee in the 1998 Transition
Property and reciting the details of such filings, or (y) stating that, in the
opinion of such counsel, no such action shall be necessary to preserve and
protect such interests, (iv) the Rating Agencies shall have received prior
written notice of such transaction and (v) ComEd shall have delivered to the
Grantee, the Note Issuer, the Delaware Trustee and the Indenture Trustee an
opinion of independent tax counsel (as selected by, and in form and substance
reasonably satisfactory to, ComEd and which may be based on a ruling from the
Internal Revenue Service) to the effect that such consolidation or merger will
not result in a material adverse federal income tax consequence to ComEd, the
Grantee, the Note Issuer, the Delaware Trustee, the Indenture Trustee or the
then existing Holders. Notwithstanding anything herein to the contrary, the
execution of the foregoing agreement of assumption and compliance with clauses
(i), (ii), (iii), (iv) and (v) above shall be conditions to the consummation of
any transaction referred to in clauses (a), (b) or (c) above. When any Person
acquires the properties and assets of ComEd substantially as a whole and becomes
the successor to ComEd in accordance with the terms of this Section 5.02, then
upon the satisfaction of all of the other conditions of this Section 5.02, ComEd
shall automatically and without further notice be released from its obligations
hereunder.
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SECTION 5.03. LIMITATION ON LIABILITY OF COMED AND OTHERS. ComEd and any
director or officer or employee or agent of ComEd may rely in good faith on the
advice of counsel or on any document of any kind, PRIMA FACIE properly executed
and submitted by any Person, respecting any matters arising hereunder. Subject
to Sections 4.07 and 4.11, ComEd shall not be under any obligation to appear in,
prosecute or defend any legal action that shall not be incidental to its
obligations under this Agreement, and that in its opinion may involve it in any
expense or liability.
ARTICLE VI
MISCELLANEOUS PROVISIONS
SECTION 6.01. AMENDMENT. The Agreement may be amended by ComEd and the
Grantee, with prior written notice given to the Rating Agencies and the prior
written consent of the Note Issuer, but without the consent of any of the
Holders, to cure any ambiguity, to correct or supplement any provisions in this
Agreement or for the purpose of adding any provisions to or changing in any
manner or eliminating any of the provisions in this Agreement or of modifying in
any manner the rights of the Holders; PROVIDED, HOWEVER, that such action shall
not, as evidenced by a ComEd Officer's Certificate delivered to the Note Issuer,
adversely affect in any material respect the interests of any Holder.
This Agreement may also be amended from time to time by ComEd and the
Grantee, with prior written notice given to the Rating Agencies and the prior
written consent of the Note Issuer, the Indenture Trustee and Holders holding
not less than a majority of the Outstanding Amount of the Notes of all Series
affected thereby, for the purpose of adding any provisions to or changing in any
manner or eliminating any of the provisions of this Agreement or of modifying in
any manner the rights of the Holders; PROVIDED, HOWEVER, that no such amendment
shall (a) increase or reduce in any manner the amount of, or accelerate or delay
the timing of, IFC Collections or (b) reduce
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the aforesaid percentage of the Outstanding Amount of the Notes, the Holders of
which are required to consent to any such amendment, without the consent of the
Holders of all the outstanding Notes.
Promptly after the execution of any such amendment or consent, the Grantee
shall furnish a copy of such amendment or consent to the Note Issuer, the
Indenture Trustee and each of the Rating Agencies.
It shall not be necessary for the consent of Holders pursuant to this
Section to approve the particular form of any proposed amendment or consent, but
it shall be sufficient if such consent shall approve the substance thereof.
SECTION 6.02. NOTICES. All demands, notices and communications upon or to
ComEd, the Grantee, the Note Issuer, the Indenture Trustee or the Rating
Agencies under this Agreement shall be in writing, personally delivered, mailed
or sent by telecopy or other similar form of rapid transmission, and shall be
deemed to have been duly given upon receipt (a) in the case of ComEd, to
Commonwealth Edison Company, 10 South Dearborn Street, 37th Floor, Chicago,
Illinois 60603, (b) in the case of the Grantee, to ComEd Funding, LLC, c/o
Commonwealth Edison Company, 10 South Dearborn Street, 37th Floor, Chicago,
Illinois 60603, (c) in the case of the Note Issuer, to Transitional Funding
Trust, c/o First Union Trust Company, National Association, One Rodney Square,
920 King Street 1st Floor, Wilmington, Delaware 19801, Attn: Corporate Trust
Administration, (d) in the case of the Indenture Trustee, at the Corporate Trust
Office, (e) in the case of Moody's, to Moody's Investors Service, Inc., ABS
Monitoring Department, 99 Church Street, New York, New York 10007, (f) in the
case of Standard & Poor's, to Standard & Poor's Corporation, 26 Broadway (10th
Floor), New York, New York 10004, Attention of Asset Backed Surveillance
Department, (g) in the case of Fitch IBCA, to Fitch IBCA, Inc. One State Street
Plaza, New York, New York 10004, Attention of ABS Surveillance, or (h) in the
case of
22
<PAGE>
Duff & Phelps, to Duff & Phelps Credit Rating Co., 17 State Street, 12th Floor,
New York, New York 10004, Attention of Asset Backed Monitoring Group, or as to
each of the foregoing, at such other address as shall be designated by written
notice to the other parties.
SECTION 6.03. ASSIGNMENT. Notwithstanding anything to the contrary
contained herein, except as provided in Section 5.02, this Agreement may not be
assigned by ComEd.
SECTION 6.04. LIMITATIONS ON RIGHTS OF OTHERS. The provisions of this
Agreement are solely for the benefit of ComEd, the Grantee, the Note Issuer, the
Indenture Trustee, the Delaware Trustee and the Holders, and nothing in this
Agreement, whether express or implied, shall be construed to give to any other
Person any legal or equitable right, remedy or claim in the 1998 Transition
Property or under or in respect of this Agreement or any covenants, conditions
or provisions contained herein.
SECTION 6.05. SEVERABILITY. Any provision of this Agreement 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 remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
SECTION 6.06. SEPARATE COUNTERPARTS. This Agreement may be executed by
the parties hereto in separate counterparts, each of which when so executed and
delivered shall be an original, but all such counterparts shall together
constitute but one and the same instrument.
SECTION 6.07. HEADINGS. The headings of the various Articles and Sections
herein are for convenience of reference only and shall not define or limit any
of the terms or provisions hereof.
SECTION 6.08. GOVERNING LAW. This Agreement shall be construed in
accordance with the laws of the State of Illinois, without reference to its
conflict of law provisions, and the
23
<PAGE>
obligations, rights and remedies of the parties hereunder shall be determined in
accordance with such laws.
SECTION 6.09. ASSIGNMENTS TO NOTE ISSUER AND INDENTURE TRUSTEE. ComEd
acknowledges and consents to any transfer, pledge, assignment or grant of a
security interest by the Grantee to the Note Issuer pursuant to the Sale
Agreement, and by the Note Issuer to the Indenture Trustee for the benefit of
the Holders pursuant to the Indenture, of all right, title and interest of the
Grantee in, to and under the 1998 Transition Property and the proceeds thereof,
and the assignment of any or all of the Grantee's rights and obligations
hereunder to the Note Issuer and the Indenture Trustee. ComEd agrees that the
Note Issuer and the Indenture Trustee, as assignees, shall, subject to the terms
of the Basic Documents, have the right to enforce this Agreement and to exercise
directly all of the Grantee's rights and remedies under this Agreement
(including without limitation, the right to give or withhold any consents or
approvals of the Grantee to be given or withheld hereunder), and acknowledges
that with respect to the sale, transfer, assignment, set over and conveyance of
the 1998 Transition Property and Related Assets to the Note Issuer and the
pledge thereof to the Indenture Trustee pursuant to the Indenture, the Note
Issuer and the Indenture Trustee have relied on the representations and
warranties made by ComEd herein.
SECTION 6.10. HOLDERS AS THIRD PARTY BENEFICIARIES. ComEd and the Grantee
agree that the Holders and the Indenture Trustee are express third-party
beneficiaries of the provisions of this Agreement and that the Indenture
Trustee, on behalf of the Holders, shall have the right to enforce the terms
hereof as provided in Section 6.09 hereof. ComEd will take all appropriate
actions to perfect and maintain the perfection of the Grantee's and the Note
Issuer's ownership interest in any of the 1998 Transition Property and to
perfect and maintain the perfection of the
24
<PAGE>
Indenture Trustee's security interest in such 1998 Transition Property and all
other Note Collateral.
SECTION 6.11. REPRESENTATIONS AND INDEMNITIES TO SURVIVE. In addition to
the survival of representations and warranties as set forth in Article III, (a)
the agreements, representations, warranties, indemnities and other statements of
ComEd or its officers set forth in or made pursuant to this Agreement will
remain in full force and effect and will survive the grant of the 1998
Transition Property and the issuance and delivery of the Notes and (b) to the
fullest extent permitted by applicable law, the provisions of Articles III, IV
and V hereof shall survive the termination, cancellation or invalidity of this
Agreement.
25
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective officers as of the day and year first above
written.
COMMONWEALTH EDISON
COMPANY
By: /s/ Ruth Ann M. Gillis
---------------------------------
Name: Ruth Ann M. Gillis
Title: Vice President and Treasurer
COMED FUNDING, LLC, Grantee
By: /s/ Ruth Ann M. Gillis
---------------------------------
Name: Ruth Ann M. Gillis
Title: Manager and President
SIGNATURE PAGE
TO GRANT AGREEMENT
<PAGE>
EXHIBIT 10.3
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
INTANGIBLE TRANSITION PROPERTY SERVICING AGREEMENT
between
COMED FUNDING, LLC
Grantee
and
COMMONWEALTH EDISON COMPANY,
Servicer
Dated as of December 16, 1998
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
ARTICLE I
DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.01. DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.02. OTHER DEFINITIONAL PROVISIONS. . . . . . . . . . . . . . . 4
ARTICLE II
APPOINTMENT AND AUTHORIZATION . . . . . . . . . . . . . . . . . . . . . . 4
SECTION 2.01. APPOINTMENT OF SERVICER; ACCEPTANCE OF APPOINTMENT . . . . 4
SECTION 2.02. AUTHORIZATION. . . . . . . . . . . . . . . . . . . . . . . 5
SECTION 2.03. DOMINION AND CONTROL OVER THE INTANGIBLE TRANSITION
PROPERTY. . . . . . . . . . . . . . . . . . . . . . . 5
ARTICLE III
BILLING SERVICES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
SECTION 3.01. DUTIES OF SERVICER.. . . . . . . . . . . . . . . . . . . . 6
SECTION 3.02. SERVICING AND MAINTENANCE STANDARDS. . . . . . . . . . . . 9
SECTION 3.03. CERTIFICATE OF COMPLIANCE. . . . . . . . . . . . . . . . .10
SECTION 3.04. ANNUAL REPORT BY INDEPENDENT PUBLIC ACCOUNTANTS. . . . . .10
ARTICLE IV
SERVICES RELATED TO RECONCILIATION ADJUSTMENTS AND TRUE-UP
ADJUSTMENTS AND MONITORING OF THIRD-PARTY COLLECTORS. . . . . . . .12
SECTION 4.01. RECONCILIATION ADJUSTMENTS AND TRUE-UP ADJUSTMENTS . . . .12
SECTION 4.02. LIMITATION OF LIABILITY. . . . . . . . . . . . . . . . . .17
SECTION 4.03 MONITORING OF THIRD-PARTY COLLECTORS . . . . . . . . . . .18
ARTICLE V
THE INTANGIBLE TRANSITION PROPERTY. . . . . . . . . . . . . . . . . . . .23
SECTION 5.01. CUSTODY OF INTANGIBLE TRANSITION PROPERTY RECORDS. . . . .23
SECTION 5.02. DUTIES OF SERVICER AS CUSTODIAN. . . . . . . . . . . . . .23
SECTION 5.03. INSTRUCTIONS; AUTHORITY TO ACT . . . . . . . . . . . . . .26
SECTION 5.04. CUSTODIAN'S INDEMNIFICATION. . . . . . . . . . . . . . . .26
SECTION 5.05. EFFECTIVE PERIOD AND TERMINATION . . . . . . . . . . . . .27
SECTION 5.06. GENERAL INDEMNIFICATION OF INDENTURE TRUSTEE AND
DELAWARE TRUSTEE. . . . . . . . . . . . . . . . . . .27
ARTICLE VI
THE SERVICER. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .28
SECTION 6.01. REPRESENTATIONS AND WARRANTIES OF SERVICER . . . . . . . .28
SECTION 6.02. INDEMNITIES OF SERVICER; RELEASE OF CLAIMS . . . . . . . .31
SECTION 6.03. MERGER OR CONSOLIDATION OF, OR ASSUMPTION OF THE
OBLIGATIONS OF, SERVICER. . . . . . . . . . . . . . . .32
SECTION 6.04. LIMITATION ON LIABILITY OF SERVICER AND OTHERS . . . . . .33
SECTION 6.05. COMED NOT TO RESIGN. . . . . . . . . . . . . . . . . . . .34
SECTION 6.06. SERVICING COMPENSATION . . . . . . . . . . . . . . . . . .35
SECTION 6.07. COMPLIANCE WITH APPLICABLE LAW . . . . . . . . . . . . . .36
SECTION 6.08. ACCESS TO CERTAIN RECORDS AND INFORMATION REGARDING
INTANGIBLE TRANSITION PROPERTY. . . . . . . . . . . . .36
SECTION 6.09. APPOINTMENTS . . . . . . . . . . . . . . . . . . . . . . .36
<PAGE>
SECTION 6.10. NO SERVICER ADVANCES . . . . . . . . . . . . . . . . . . .37
SECTION 6.11. REMITTANCES. . . . . . . . . . . . . . . . . . . . . . . .37
SECTION 6.12 COMPLIANCE WITH SERVICING STANDARD; CHANGES IN
ICC TARIFFS . . . . . . . . . . . . . . . . . . . . .39
ARTICLE VII
DEFAULT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .40
SECTION 7.01. SERVICER DEFAULT . . . . . . . . . . . . . . . . . . . . .40
SECTION 7.02. APPOINTMENT OF SUCCESSOR . . . . . . . . . . . . . . . . .42
SECTION 7.03. WAIVER OF PAST DEFAULTS. . . . . . . . . . . . . . . . . .43
SECTION 7.04. NOTICE OF SERVICER DEFAULT . . . . . . . . . . . . . . . .43
ARTICLE VIII
MISCELLANEOUS PROVISIONS. . . . . . . . . . . . . . . . . . . . . . . . .43
SECTION 8.01. AMENDMENT. . . . . . . . . . . . . . . . . . . . . . . . .44
SECTION 8.02. MAINTENANCE OF RECORDS . . . . . . . . . . . . . . . . . .45
SECTION 8.03. NOTICES. . . . . . . . . . . . . . . . . . . . . . . . . .45
SECTION 8.04. ASSIGNMENT . . . . . . . . . . . . . . . . . . . . . . . .46
SECTION 8.05. LIMITATIONS ON RIGHTS OF OTHERS. . . . . . . . . . . . . .46
SECTION 8.06. SEVERABILITY . . . . . . . . . . . . . . . . . . . . . . .47
SECTION 8.07. SEPARATE COUNTERPARTS. . . . . . . . . . . . . . . . . . .47
SECTION 8.08. HEADINGS . . . . . . . . . . . . . . . . . . . . . . . . .47
SECTION 8.09. GOVERNING LAW. . . . . . . . . . . . . . . . . . . . . . .47
SECTION 8.10. ASSIGNMENTS TO NOTE ISSUER AND INDENTURE TRUSTEE . . . . .47
SECTION 8.11. NONPETITION COVENANTS. . . . . . . . . . . . . . . . . . .48
SECTION 8.12. LIMITATION OF LIABILITY. . . . . . . . . . . . . . . . . .48
</TABLE>
Exhibits and Schedules
----------------------
Exhibit A Form of Monthly Servicer's Certificate
Exhibit B Form of Certificate of Compliance
Exhibit C Form of Amendatory Tariff
Exhibit D Form of Quarterly Servicer's Certificate
Schedule 4.01(a) Expected Amortization Schedule
Annexes
-------
Annex I Servicing Procedures
Schedule 6 to
Annex I Calculation of Aggregate Remittance Amount
ii
<PAGE>
INTANGIBLE TRANSITION PROPERTY SERVICING AGREEMENT dated as of December 16,
1998, between COMED FUNDING LLC, a Delaware limited liability company (the
"Grantee"), and COMMONWEALTH EDISON COMPANY, an Illinois corporation, as
Servicer (the "Servicer").
RECITALS
A. Pursuant to the Funding Law and the 1998 Transitional Funding Order,
the Grantee and the Note Issuer are concurrently entering into the Sale
Agreement, pursuant to which the Grantee is selling the 1998 Intangible
Transition Property to the Note Issuer, and the Grantee may sell Subsequent
Intangible Transition Property to the Note Issuer pursuant to Subsequent Sale
Agreements.
B. In connection with its ownership of the Intangible Transition Property
and in order to collect the IFCs, the Grantee desires to engage the Servicer to
carry out the functions described herein. The Servicer currently performs
similar functions for itself with respect to its own charges to its customers
and may in the future perform such functions for others. In addition, the
Grantee desires to engage the Servicer to act on its behalf in making
Reconciliation Adjustments and True-Up Adjustments. The Servicer desires to
perform all of these activities on behalf of the Grantee.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein contained, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. DEFINITIONS. (a) Capitalized terms used herein and not
otherwise defined herein have the meanings assigned to them in that certain
Indenture (including Appendix A thereto) dated as of the date hereof between the
Note Issuer and Harris Trust and Savings Bank,
<PAGE>
as the Indenture Trustee, as the same may be amended, supplemented or otherwise
modified from time to time (the "INDENTURE").
(b) Whenever used in this Agreement, the following words and phrases shall
have the following meanings:
"AGREEMENT" means this Intangible Transition Property Servicing Agreement,
together with all Exhibits, Schedules, Annexes and Attachments hereto, as the
same may be amended, supplemented and otherwise modified from time to time.
"ALTERNATIVE REMITTANCE REQUIREMENT" means, with respect to any Third-Party
Collector, that such Third-Party Collector is obligated to remit payments more
frequently than under the Fifteen-Day Remittance Option or the Seven-Day
Remittance Option.
"ANNUAL ACCOUNTANT'S REPORT" has the meaning set forth in Section 3.04.
"AMENDATORY TARIFF" means an amendment to any Tariff substantially in the
form of Exhibit C.
"CERTIFICATE OF COMPLIANCE" has the meaning set forth in Section 3.03.
"COLLECTIONS CURVES" means the Monthly Collections Curves.
"DAILY REMITTANCE" has the meaning set forth in Section 6.11(a).
"FIFTEEN-DAY REMITTANCE OPTION" means, with respect to any Third-Party
Collector, the option set forth in the 1998 Initial Tariff (or any similar
option set forth in any Subsequent Tariff) to remit IFCs to the Servicer
(whether or not collected from Customers) within fifteen days of billing by the
Servicer.
"IFC CUSTOMER CLASS" has the meaning set forth in Annex I.
"INTANGIBLE TRANSITION PROPERTY RECORDS" has the meaning assigned to that
term in Section 5.01.
"LOSSES" has the meaning assigned to that term in Section 5.04.
2
<PAGE>
"MONTHLY COLLECTIONS CURVES" means the models used by the Servicer to
calculate collection amounts for each Billing Period pursuant to SCHEDULE 6 to
Annex I hereto, as such models may be modified from time to time in accordance
with this Agreement.
"MONTHLY SERVICER'S CERTIFICATE" has the meaning assigned to that term in
Section 3.01(b)(i).
"OFFICER'S CERTIFICATE" means a certificate signed by a Responsible
Officer.
"RETIREMENT OF THE NOTES" means the day on which the final distribution is
made to the Indenture Trustee in respect of the last Outstanding Notes.
"SERVICER DEFAULT" has the meaning assigned to that term in Section 7.01.
"SERVICING STANDARD" means the obligation of the Servicer to calculate,
collect, apply, remit and reconcile proceeds of the Intangible Transition
Property, including IFC Payments, and all other Note Collateral for the benefit
of the Note Issuer and the Holders (i) with the same degree of care and
diligence as the Servicer applies with respect to payments owed to it for its
own account, (ii) in accordance with all applicable procedures and requirements
established by the ICC for collection of electric utility tariffs and (iii) in
accordance with the other terms of this Agreement.
"SEVEN-DAY REMITTANCE OPTION" means, with respect to any Third-Party
Collector, the option set forth in the 1998 Initial Tariff (or any similar
option set forth in any Subsequent Tariff) to remit IFC Payments to the Servicer
within seven days of such Third-Party Collector's receipt from Customers.
"TERMINATION NOTICE" has the meaning assigned to that term in Section 7.01.
3
<PAGE>
"THIRD-PARTY COLLECTOR" means each third-party, including each Applicable
ARES, which, pursuant to any Tariff, any other tariffs filed with the ICC, or
any agreement with ComEd, is obligated to remit IFCs or IFC Payments to the
Servicer.
SECTION 1.02. OTHER DEFINITIONAL PROVISIONS.
(a) Non-capitalized terms used herein which are defined in the Public
Utilities Act shall, as the context requires, have the meanings assigned to such
terms in the Public Utilities Act, but without giving effect to amendments to
the Public Utilities Act after the date hereof which have a material adverse
effect on the Note Issuer or the Holders.
(b) All terms defined in this Agreement shall have the defined meanings
when used in any certificate or other document made or delivered pursuant hereto
unless otherwise defined therein.
(c) The words "hereof," "herein," "hereunder" and words of similar import,
when used in this Agreement, shall refer to this Agreement as a whole and not to
any particular provision of this Agreement; Section, Schedule, Exhibit, Annex
and Attachment references contained in this Agreement are references to
Sections, Schedules, Exhibits, Annexes and Attachments in or to this Agreement
unless otherwise specified; and the term "including" shall mean "including
without limitation."
(d) The definitions contained in this Agreement are applicable to the
singular as well as the plural forms of such terms and to the masculine as well
as to the feminine and neuter forms of such terms.
ARTICLE II
APPOINTMENT AND AUTHORIZATION
SECTION 2.01. APPOINTMENT OF SERVICER; ACCEPTANCE OF APPOINTMENT. Subject
to Section 6.05 and Article 7, the Grantee appoints the Servicer, and the
Servicer accepts such
4
<PAGE>
appointment, to perform the Servicer's obligations pursuant to this Agreement on
behalf of and for the benefit of the Grantee or any assignee thereof in
accordance with the terms of this Agreement and applicable law. This
appointment and the Servicer's acceptance thereof may not be revoked except in
accordance with the express terms of this Agreement.
SECTION 2.02. AUTHORIZATION. With respect to all or any portion of the
Intangible Transition Property, the Servicer shall be and is authorized and
empowered by the Grantee to (a) execute and deliver, on behalf of itself and/or
the Grantee, as the case may be, any and all instruments, documents or notices,
and (b) on behalf of itself and/or the Grantee, as the case may be, make any
filing and participate in proceedings of any kind with any governmental
authorities, including with the ICC. The Grantee shall furnish the Servicer
with such documents as have been prepared by the Servicer for execution by the
Grantee, and with such other documents as may be in the Grantee's possession, as
necessary or appropriate to enable the Servicer to carry out its servicing and
administrative duties hereunder. Upon the Servicer's written request, the
Grantee shall furnish the Servicer with any powers of attorney or other
documents necessary or appropriate to enable the Servicer to carry out its
duties hereunder.
SECTION 2.03. DOMINION AND CONTROL OVER THE INTANGIBLE TRANSITION
PROPERTY. Notwithstanding any other provision herein, the Grantee shall have
dominion and control over the Intangible Transition Property, and the Servicer,
in accordance with the terms hereof, is acting solely as the servicing agent and
custodian for the Grantee with respect to the Intangible Transition Property and
the Intangible Transition Property Records. The Servicer shall not take any
action that is not authorized by this Agreement, that is not consistent with its
customary procedures and practices, or that shall impair the rights of the
Grantee in the Intangible Transition Property, in each case unless such action
is required by applicable law.
5
<PAGE>
ARTICLE III
BILLING SERVICES
SECTION 3.01. DUTIES OF SERVICER. The Servicer, as agent for the Grantee,
shall have the following duties:
(a) DUTIES OF SERVICER GENERALLY. The Servicer's duties in general
shall include management, servicing and administration of the Intangible
Transition Property (including maintaining records of the cumulative total
of IFCs and verifying that such amount has not exceeded the dollar amount
of Intangible Transition Property established by the ICC pursuant to a
Funding Order); on or before the date of issuance of any Series of Notes,
filing with the ICC the filing required by Section 18-107(c)(1) of the
Funding Laws to perfect the lien of the Indenture Trustee in the Intangible
Transition Property; making such filings and initiating such proceedings
with the ICC as may be required to ensure that the dollar amount of
Intangible Transition Property authorized by the Funding Orders is adequate
for the payment in full of all principal and interest on the Notes;
obtaining meter reads, calculating usage, billing, collections and posting
of all payments in respect of the Intangible Transition Property;
responding to inquiries by Customers, the ICC or any federal, local or
other state governmental authorities with respect to the Intangible
Transition Property; delivering Bills to Customers and ARES, investigating
and handling delinquencies, processing and depositing collections and
making periodic remittances; furnishing periodic reports to the Grantee,
the Note Issuer, the Indenture Trustee and the Rating Agencies; and taking
all necessary action in connection with Reconciliation Adjustments and
True-Up Adjustments as set forth herein. Certain of the duties set forth
above may be performed by ARES pursuant to ARES Service Agreements. The
Servicer shall be allowed to perform its duties hereunder either directly
or by or through agents,
6
<PAGE>
attorneys, custodians, nominees or (with prior written notice to the Rating
Agencies) by delegating all or a portion of its duties to any
third-parties; PROVIDED, however, that, notwithstanding any such delegation
of duties, the Servicer shall remain liable for the performance of all of
its duties and obligations pursuant to the terms of this Agreement and the
other Basic Documents and such delegation shall not relieve the Servicer of
its liability and responsibility with respect to such duties or
obligations. The fees and expenses of any such persons to whom the
Servicer may delegate duties shall be as agreed between the Servicer and
such third parties from time to time, and, except for such fees and
expenses which are expressly reimbursable hereunder, such third-party fees
and expenses shall be payable solely by the Servicer out of its Servicing
Fee and neither the Grantee nor any assignee thereof shall have any
responsibility therefor. Anything to the contrary notwithstanding, the
duties of the Servicer set forth in this Agreement shall be qualified in
their entirety by any ICC Regulations as in effect at the time such duties
are to be performed. Without limiting the generality of this Section
3.01(a), in furtherance of the foregoing, the Servicer shall also have, and
shall comply with, the duties and responsibilities relating to data
acquisition, usage and bill calculation, billing, customer service
functions, collections, payment processing and remittance set forth in
Annex I hereto, including without limitation payment of all Allocable IFC
Revenue Amounts described therein.
(b) REPORTING FUNCTIONS.
(i) MONTHLY SERVICER'S CERTIFICATE. On or before the 20th
calendar day of each month (or, if such date is not a Servicer
Business Day, the immediately preceding Servicer Business Day), the
Servicer shall prepare and deliver to the Grantee, the Note Issuer,
the Indenture Trustee and the Rating Agencies a written
7
<PAGE>
report substantially in the form of EXHIBIT A hereto (a "Monthly
Servicer's Certificate") setting forth certain information relating to
IFC Payments received by the Servicer during the Collection Period
immediately preceding such Monthly Remittance Date.
(ii) NOTIFICATION OF LAWS AND REGULATIONS. The Servicer shall
immediately notify the Grantee, the Note Issuer, the Indenture Trustee
and the Rating Agencies in writing of any laws or ICC Regulations
hereafter promulgated that have a material adverse effect on the
Servicer's ability to perform its duties under this Agreement.
(iii) OTHER INFORMATION. Upon the reasonable request of the
Grantee, the Note Issuer, the Indenture Trustee or any Rating Agency,
the Servicer shall provide to the Grantee, the Note Issuer, Indenture
Trustee or the Rating Agencies, as the case may be, any public
financial information in respect of the Servicer, or any material
information regarding the Intangible Transition Property to the extent
it is reasonably available to the Servicer, as may be reasonably
necessary and permitted by law, to enable the Grantee, the Note
Issuer, the Indenture Trustee or the Rating Agencies to monitor the
Servicer's performance hereunder. In addition, so long as any of the
Notes of any Series are outstanding, the Servicer shall provide the
Grantee, the Note Issuer and the Indenture Trustee, within a
reasonable time after written request therefor, any information
available to the Servicer or reasonably obtainable by it that is
necessary to calculate the IFCs applicable to each class of Customer.
(iv) PREPARATION OF REPORTS TO BE FILED WITH THE SEC. The
Servicer shall prepare any reports required to be filed by the Grantee
or the Note Issuer under
8
<PAGE>
the securities laws, including a copy of each Quarterly Servicer's
Certificate described in Section 4.01(c)(ii), the annual Certificate
of Compliance described in Section 3.03, and the Annual Accountant's
Report described in Section 3.04.
SECTION 3.02. SERVICING AND MAINTENANCE STANDARDS. On behalf of the
Grantee, the Servicer shall (i) manage, service, administer and make collections
in respect of the Intangible Transition Property with reasonable care and in
accordance with the Servicing Standard and applicable law, including all
applicable ICC Regulations and guidelines, using the same degree of care and
diligence that the Servicer exercises with respect to similar assets for its own
account and, if applicable, for others; (ii) follow customary standards,
policies and procedures for the industry in performing its duties as Servicer;
(iii) use all reasonable efforts, consistent with its customary servicing
procedures, to enforce, and maintain rights in respect of, the Intangible
Transition Property; (iv) comply with all laws and regulations applicable to and
binding on it relating to the Intangible Transition Property, and (v) make all
required submissions and provide all required notifications to the ICC with
respect to any Adjustments. The Servicer shall be responsible for the
imposition, collection and remittance of IFCs in accordance with Annex I hereto,
the inclusion of IFCs in all Bills, and the deduction of IFCs from tariffed
charges and all other charges from which the IFCs are to be deducted and stated
separately, including, without limitation, all charges under any contracts with
Customers who would, but for such contract, be paying Applicable Rates. The
Servicer shall follow such customary and usual practices and procedures as it
shall deem necessary or advisable in its servicing of all or any portion of the
Intangible Transition Property, which, in the Servicer's judgment, may include
the taking of legal action. Without limiting the foregoing, if the Servicer
determines at any time that the aggregate dollar amount of IFCs to be imposed is
reasonably likely to exceed the maximum dollar amount of Intangible Transition
Property authorized by the 1998 Transitional Funding Order and any
9
<PAGE>
Subsequent Funding Orders to be imposed and collected and any Notes remain
outstanding, the Servicer shall make a good faith effort to take any and all
subsequent regulatory action with the ICC to obtain an order expressly
authorizing a larger dollar amount of Intangible Transition Property in an
amount sufficient to pay such Notes in full.
SECTION 3.03. CERTIFICATE OF COMPLIANCE. The Servicer shall deliver to
the Grantee, the Note Issuer, the Indenture Trustee and the Rating Agencies on
or before September 30 of each year, commencing September 30, 1999 to and
including the September 30 succeeding the Retirement of the Notes, an Officer's
Certificate substantially in the form of EXHIBIT B hereto (a "Certificate of
Compliance"), stating that: (i) a review of the activities of the Servicer
during the twelve months ended the preceding June 30 (or, in the case of the
first Certificate of Compliance to be delivered on or before September 30, 1999,
the period of time from the date of this Agreement until June 30, 1999) and of
its performance under this Agreement has been made under such officer's
supervision, and (ii) to such officer's knowledge, based on such review, the
Servicer has fulfilled all of its obligations in all material respects under
this Agreement throughout such twelve months (or, in the case of the Certificate
of Compliance to be delivered on or before September 30, 1999 the period of time
from the date of this Agreement until June 30, 1999), or, if there has been a
default in the fulfillment of any such material obligation, specifying each such
material default known to such officer and the nature and status thereof.
SECTION 3.04. ANNUAL REPORT BY INDEPENDENT PUBLIC ACCOUNTANTS. (a) The
Servicer, at its own expense in consideration of the Servicing Fee paid to it,
shall cause a firm of independent certified public accountants (which may
provide other services to the Servicer or ComEd) to prepare, and the Servicer
shall deliver to the Grantee, the Note Issuer, the Indenture Trustee and the
Rating Agencies a report addressed to the Servicer (the "Annual Accountant's
Report"), which may be included as part of the Servicer's customary auditing
activities, for the information
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and use of the Grantee, the Note Issuer, the Indenture Trustee and the Rating
Agencies, on or before September 30 of each year, beginning September 30, 1999
to and including the September 30 succeeding the Retirement of the Notes, to the
effect that such firm has performed certain procedures in connection with the
Servicer's compliance with its obligations under this Agreement during the
preceding twelve months ended June 30 (or, in the case of the first Annual
Accountant's Report to be delivered on or before June 30, the period of time
from the date of this Agreement until June 30, 1999), identifying the results of
such procedures and including any exceptions noted. If such accounting firm
requires the Indenture Trustee to agree or consent to the procedures performed
by such firm, the Grantee shall direct the Note Issuer to direct the Indenture
Trustee in writing to so agree; it being understood and agreed that the
Indenture Trustee will deliver such letter of agreement or consent in conclusive
reliance upon the direction of the Note Issuer, and the Indenture Trustee will
not make any independent inquiry or investigation as to, and shall have no
obligation or liability in respect of the sufficiency, validity or correctness
of such procedures.
(b) The Annual Accountant's Report shall also indicate that the accounting
firm providing such report is independent of the Servicer within the meaning of
the Code of Professional Ethics of the American Institute of Certified Public
Accountants.
SECTION 3.05 OBLIGATIONS. The Servicer acknowledges and agrees that, to
the fullest extent permitted by applicable law, its obligations under this
Agreement shall remain in effect notwithstanding any breach of the State Pledge,
whether or not contested, or subsequent invalidation of the Funding Law or any
Funding Order and/or any tariff or tariffs filed in connection therewith, and
that no such breach of the State Pledge or invalidation shall act to excuse the
Servicer from liability for any failure to perform its covenants hereunder,
including but
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not limited to its obligations to remit IFCs and equivalent amounts for the
benefits of the Holders, on account of any legal inability stemming from such
breach of the State Pledge or invalidation.
ARTICLE IV
SERVICES RELATED TO RECONCILIATION ADJUSTMENTS AND TRUE-UP ADJUSTMENTS AND
MONITORING OF THIRD-PARTY COLLECTORS
SECTION 4.01. RECONCILIATION ADJUSTMENTS AND TRUE-UP ADJUSTMENTS. From
time to time, until the Retirement of the Notes, the Servicer shall identify the
need for Reconciliation Adjustments and True-Up Adjustments and shall take all
reasonable action to obtain and implement such Reconciliation Adjustments and
True-Up Adjustments, all in accordance with the following:
(a) EXPECTED AMORTIZATION SCHEDULE. The initial Expected Amortization
Schedule is attached hereto as SCHEDULE 4.01(a). In connection with the
Note Issuer's issuance of any additional Series of Notes after the Closing
Date, the Servicer, on or prior to the Series Issuance Date therefor, shall
revise the Expected Amortization Schedule to add the requisite information
for each new Series of Notes and set forth, as of each Payment Date through
the scheduled Retirement of the Notes, the aggregate principal amounts of
the Notes of all Series, including such additional Series, expected to be
outstanding on such Payment Date. The Servicer shall also, in accordance
with the requirements (if any) set forth in any Series Supplement or
Trustee's Issuance Certificate and otherwise in a manner reasonably
acceptable to the Grantee, revise the Expected Amortization Schedule to
reflect any required prepayments on account of the receipt of Allocable IFC
Revenue Amounts or any other required or permitted prepayments affecting
such schedule. If the Expected Amortization Schedule is revised as set
forth above, the Servicer shall send a
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copy of such revised Expected Amortization Schedule to the Grantee, the
Note Issuer, the Indenture Trustee and the Rating Agencies promptly
thereafter.
(b) RECONCILIATION AND TRUE-UP ADJUSTMENTS
(i) RECONCILIATION ADJUSTMENTS AND FILINGS. Each year within
the two-week period preceding each Reconciliation Adjustment Date,
the Servicer shall: (A) update the data and assumptions underlying the
calculation of the IFCs, including forecasted revenue from Applicable
Rates for each class of Customers, projected electricity usage during
the next Calculation Period for each such class and including interest
and estimated expenses and fees of the Grantee and the Note Issuer to
be paid during such period, the rate of delinquencies and write-offs,
and the Monthly Collections Curves; (B) determine the Required Debt
Service and Debt Service Billing Requirement for the next Calculation
Period based on such updated data and assumptions; (C) determine the
IFCs to be allocated to each class of Customers during the next
Calculation Period based on such Debt Service Billing Requirement and
the terms of the applicable Funding Orders and the Tariffs filed
pursuant thereto (including, without limitation, the terms requiring
that if the forecasted revenues from Applicable Rates for IFC Customer
Class are projected to be less than the IFCs allocated to that class,
the deficiency will be ratably allocated to other IFC Customer
Classes); (D) make all required notice and other filings with the ICC
to reflect the revised IFCs, including any Amendatory Tariffs required
under Section 18-104(k) of the Funding Law if the resulting IFCs for
any class of Customer will exceed an amount per kilowatt-hour greater
than the amount per kilowatt-hour authorized for such class of
Customer in the applicable Funding Order, and (E) take all reasonable
actions and make all reasonable efforts
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to effect such Reconciliation Adjustment and to enforce the provisions
of the Funding Law which limit the ICC's authority to suspend the
effectiveness of any such Amendatory Tariff.
(ii) TRUE-UP ADJUSTMENTS AND FILINGS. Each year immediately
before each March 31 and September 30, commencing September 30, 1999,
the Servicer shall compare the Principal Balance, as of the most
recent Payment Date and after giving effect to payments made on such
Payment Date, to the Projected Principal Balance as of such Payment
Date. If the Servicer determines that such Principal Balance equals
or exceeds 105% of such Projected Principal Balance, then the Servicer
shall: (A) update the data and assumptions underlying the calculation
of the IFCs, including forecasted revenue from Applicable Rates for
each class of Customers, projected electricity usage during the next
Calculation Period for each such class and including interest and
estimated expenses and fees of the Grantee and the Note Issuer to be
paid during such period, the rate of delinquencies and write-offs, and
the Monthly Collections Curves; (B) determine the Required Debt
Service and Debt Service Billing Requirement for the next Calculation
Period based on such updated data and assumptions; (C) determine the
IFCs to be allocated to each class of Customers during the next
Calculation Period based on such Debt Service Billing Requirement and
the terms of the applicable Funding Orders and the Tariffs filed
pursuant thereto (including, without limitation, the terms requiring
that if the forecasted revenues from Applicable Rates for IFC Customer
Class are projected to be less than the IFCs allocated to that class,
the deficiency will be ratably allocated to other IFC Customer
Classes); (D) make all required notice and other filings with the ICC
to reflect the revised IFCs, including
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any Amendatory Tariffs required under Section 18-104(k) of the Funding
Law if the resulting IFCs for any class of Customer will exceed an
amount per kilowatt-hour greater than the amount per kilowatt-hour
authorized for such class of Customer in the applicable Funding Order,
and (E) take all reasonable actions and make all reasonable efforts to
effect such True-Up Adjustment and to enforce the provisions of the
Funding Law which limit the ICC's authority to suspend the
effectiveness of any such Amendatory Tariff.
(iii) In the case of any Reconciliation Adjustment or True-Up
Adjustment, the Servicer shall implement the revised IFCs, if
any, as of the first Business Day of the following calendar month
(e.g., January 1 for a Reconciliation Adjustment determined in
December, July 1 for a Reconciliation Adjustment determined in June,
April 1 for a True-Up Adjustment determined in March and October 1 for
a True-Up Adjustment determined in September).
(c) REPORTS.
(i) NOTIFICATION OF AMENDATORY TARIFF FILINGS AND
RECONCILIATION AND TRUE-UP ADJUSTMENTS. Whenever the Servicer files
an Amendatory Tariff with the ICC or implements revised IFCs with
notice to the ICC but without filing a Amendatory Tariff as
contemplated by any applicable Funding Order, the Servicer shall send
a copy of such filing or notice (together with a copy of all notices
and documents which, in the Servicer's reasonable judgment, are
material to the adjustments effected by such Amendatory Tariff or
notice) to the Grantee, the Note Issuer, the Indenture Trustee and the
Rating Agencies concurrently therewith.
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(ii) QUARTERLY SERVICER'S CERTIFICATE. Not later than five
Servicer Business Days prior to each Payment Date, the Servicer shall
deliver a written report substantially in the form of EXHIBIT D hereto
(the "Quarterly Servicer's Certificate") to the Grantee, the Note
Issuer, the Indenture Trustee and the Rating Agencies.
(iii) REPORTS TO CUSTOMERS. (A) After each revised IFC has gone
into effect pursuant to a Reconciliation Adjustment or a True-Up
Adjustment, the Servicer shall, to the extent and in the manner and
time frame required by applicable ICC Regulations, if any, cause to be
prepared and delivered to Customers any required notices announcing
such revised IFCs.
(B) In addition, at least once each year, the Servicer shall
(to the extent that it does not include the notice described below in
the Bills regularly sent to Customers) cause to be prepared and
delivered to Customers a notice stating, in effect, that the IFCs are
owned by the Grantee or any assignee thereof and not ComEd. Such
notice shall be included either as an insert to or in the text of the
Bills delivered to such Customers or shall be delivered to Customers
by electronic means or such other means as the Servicer or the
Applicable ARES may from time to time use to communicate with their
respective customers.
(C) Except to the extent that applicable ICC Regulations make
the Applicable ARES responsible for such costs, or the Applicable ARES
has otherwise agreed to pay such costs, the Servicer shall pay from
its own funds all costs of preparation and delivery incurred in
connection with clauses (A) and (B) above, including but not limited
to printing and postage costs as the same may increase or decrease
from time to time.
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(iv) ARES REPORTS. The Servicer shall provide to the Rating
Agencies, upon request, any publicly available reports filed by the
Servicer with the ICC (or otherwise made publicly available by the
Servicer) relating to ARES and any other non-confidential and
non-proprietary information relating to ARES reasonably requested by
the Rating Agencies.
SECTION 4.02. LIMITATION OF LIABILITY. (a) The Grantee and the Servicer
expressly agree and acknowledge that:
(i) In connection with any Reconciliation Adjustment or True-Up
Adjustment, the Servicer is acting solely in its capacity as the servicing
agent hereunder.
(ii) Neither the Servicer nor the Grantee shall be responsible in
any manner for, and shall have no liability whatsoever as a result of, any
action, decision, ruling or other determination made or not made, or any
delay (other than any delay resulting from the Servicer's failure to file
the Amendatory Tariffs required by Section 4.01 in a timely and correct
manner or other breach by the Servicer of its duties under this Agreement),
by the ICC in any way related to the Intangible Transition Property or in
connection with any Reconciliation Adjustment or True-Up Adjustment, the
subject of any filings under Section 4.01, any proposed Reconciliation
Adjustment or True-Up Adjustment, or the approval of any revised IFCs.
(iii) The Servicer shall have no liability whatsoever relating to the
calculation of any revised IFCs, including as a result of any inaccuracy of
any of the assumptions made in such calculation regarding expected energy
usage volume and the rate of delinquencies and write-offs, so long as the
Servicer has acted in good faith and has not acted in a grossly negligent
manner in connection therewith, nor shall the Servicer have any liability
whatsoever as a result of any Person, including the Holders, not receiving
any
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payment, amount or return anticipated or expected or in respect of any Note
generally, except only to the extent that the same is caused by the
Servicer's gross negligence, willful misconduct, bad faith, or reckless
disregard of its obligations and duties under this Agreement.
(b) Notwithstanding the foregoing, this Section 4.02 shall not relieve the
Servicer of liability for any misrepresentation by the Servicer under Section
6.01 or for any breach by the Servicer of its other obligations under this
Agreement.
SECTION 4.03 MONITORING OF THIRD-PARTY COLLECTORS. From time to time,
until the Retirement of the Notes, the Servicer shall, in accordance with the
Servicing Standard, implement such procedures and policies as are necessary to
ensure that the obligations of all Third-Party Collectors to remit IFCs or IFC
Payments are properly enforced in accordance with the terms and provisions of
the Tariffs, and any other applicable ICC Regulations in effect from time to
time. Such procedures and policies shall include the following:
(a) MAINTENANCE OF RECORDS AND INFORMATION. In addition to any
actions required by ICC Regulations or other applicable law, the Servicer
shall:
(i) maintain adequate records for promptly identifying
and contacting each such Third-Party Collector (including any
ARES) and for monitoring whether such Third-Party Collector is
subject to the Seven-Day Remittance Option, the Fifteen-Day
Remittance Option, or the Alternative Remittance Requirement;
(ii) maintain records of end-user Customers which are
billed by Third-Party Collectors to permit prompt reversion to
dual-billing in the event of default by a Third-Party Collector;
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(iii) create and periodically update a record of the current
short-term and long-term unsecured debt ratings, if any, of each
Third-Party Collector which is responsible for billing IFCs directly
to end-user Customers and is obligated to remit IFCs whether or not
IFC Payments are actually collected from end-user Customers (and,
where the IFC payment obligations of any such Third-Party Collector
are guaranteed by another entity, the ratings of such other entity);
(iv) create and periodically update, for each Third-Party
Collector which is responsible for billing IFCs directly to
end-user Customers and has elected the Fifteen-Day Remittance
Option or is otherwise obligated to remit IFCs whether or not IFC
Payments are actually collected from end-user Customers,
estimates of one month's estimated IFC Collections and, in the
case of any such Third-Party Collector which does not have an
unsecured debt rating of at least BBB- or the equivalent,
maintain a deposit or comparable credit security equal to such
one month's estimated IFC Collections as provided in the Tariffs.
The Servicer shall update the records described in clauses (iii) and (iv)
above no less frequently than (A) monthly in the case of any such
Third-Party Collector with expected monthly IFC billings of greater than or
equal to $5,000,000 and (B) quarterly in each other case.
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(b) MONITORING OF PERFORMANCE AND PAYMENT. In addition to any actions
required by ICC Regulations or other applicable law, the Servicer shall
undertake to do the following:
(i) The Servicer shall require each Third-Party Collector
which has elected the Fifteen-Day Remittance Option or is
otherwise obligated to remit IFCs whether or not IFC Payments are
actually collected from end-user Customers to pay all undisputed
and disputed IFCs billed to such Third-Party Collector, in
accordance with the provisions of the 1998 Initial Tariff and
each Subsequent Tariff. The Servicer shall monitor payment
compliance for each Third-Party Collector which has elected the
Fifteen-Day Remittance Option or otherwise obligated to remit
IFCs whether or not IFC Payments are actually collected from
end-user Customers.
(ii) The Servicer shall, for each Third-Party Collector
which is responsible for billing IFCs directly to end-user
Customers and has elected the Seven-Day Remittance Option or is
otherwise liable to remit IFC Payments only to the extent
actually received from end-user Customers, compare (x) actual IFC
Collections from such Third-Party Collector to (y) estimated IFC
Collections therefrom. Such comparisons shall be made no less
frequently than:
(A) Every five Servicer Business Days, in the case
of any such Third-Party Collector with expected monthly IFC
billings of greater than or equal to $5,000,000;
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(B) Monthly in the case of any such Third-Party
Collector with expected monthly IFC billings of less than
$5,000,000 but greater than or equal to $1,000,000; and
(C) Quarterly in each other case.
If the discrepancy between actual IFC Collections and estimated IFC
Collections from any such Third-Party Collector, in the reasonable judgment
of the Servicer based upon historical experience and any other information
reasonably available thereto, indicates an actual or impending default in
such Third-Party Collector's remittance of IFC Collections, the Servicer
shall promptly notify such Third-Party Collector in an attempt to determine
the source of discrepancy. If, following such notice, the source of any
material discrepancy cannot be identified, the Servicer shall, in
accordance with ICC Regulations and other applicable law and the Servicing
Standard, take such steps as it reasonably determines are necessary to
verify whether or not the applicable Third-Party Collector is in default.
(iii) The Servicer shall, consistent with its customary
billing practices, bill each Third-Party Collector who provides
consolidated billing to end-user Customers for all IFCs owed by such
end-user Customers in accordance with the billing cycle otherwise
applicable to such end-user Customers.
(c) ENFORCEMENT. The Servicer shall, in accordance with the terms of
the 1998 Initial Tariff and each Subsequent Tariff, ensure that each
Third-Party Collector remits the undisputed portions of the IFCs or IFC
Payments which it is obligated to remit to the Servicer and remits payment
of the disputed amount under protest (or make some other suitable and
agreeable financial arrangements) pending a hearing on the matter. In the
event of any default by any Third-Party Collector, the Servicer shall
enforce all rights set
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forth in, and take all other steps permitted by, the 1998 Initial Tariff or any
Subsequent Tariff or other ICC Regulations as it determines, in accordance with
the Servicing Standard, are reasonably necessary to ensure the prompt payment of
IFCs by such Third-Party Collector and to preserve the rights of the Holders
with respect thereto, including, where appropriate, terminating the right of any
Third-Party Collector to bill and collect IFCs or petitioning the ICC to impose
such other remedies or penalties as may be available under the circumstances.
In the event any disputed IFCs billed are resolved in favor of a Third-Party
Collector and the Servicer becomes liable for the payment of interest in respect
of IFCs paid under protest or any other penalty, the Servicer agrees that it
will pay such interest or penalty from the Servicing Fee paid to it or its other
funds and shall not deduct such interest or penalty amounts from IFC
Collections.
(d) CREDIT AND COLLECTION POLICIES.
(i) The Servicer shall, to the full extent permitted under the
1998 Funding Order or any Subsequent Funding Order, as applicable,
impose such terms with respect to credit and collection policies
applicable to Third-Party Collectors as may be reasonably necessary to
prevent the then current rating of the Notes from being downgraded.
The Servicer shall, in accordance with and to the extent permitted by
Section 16-118(b) of the Public Utilities Act and the terms of the
1998 Funding Order and any Subsequent Funding Order, include and
impose the above-described terms in all tariffs filed under Section
16-118(b) of the Public Utilities Act which would allow ARES or other
utilities to issue single bills to ComEd's Customers for services
provided by such ARES or other utility and services provided by ComEd.
The Servicer shall periodically review the need for modified or
additional terms based upon, among other things, (i) the relative
amount of IFC Payments received
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through Third-Party Collectors relative to the Debt Service Billing
Requirement, (ii) the historical payment and default experience of
each ARES and (iii) such other credit and collection policies to which
the ARES are subject, and will set out any such modified or additional
terms in a supplemental tariff filed with the ICC.
ARTICLE V
THE INTANGIBLE TRANSITION PROPERTY
SECTION 5.01. CUSTODY OF INTANGIBLE TRANSITION PROPERTY RECORDS. To
assure uniform quality in servicing the Intangible Transition Property and to
reduce administrative costs, the Grantee revocably appoints the Servicer, and
the Servicer accepts such appointment, to act as the agent of the Grantee, the
Note Issuer and the Indenture Trustee as custodian of any and all documents and
records that the Grantee shall keep on file, in accordance with its customary
procedures, relating to the Intangible Transition Property, including copies of
each Funding Order and all Tariffs relating thereto, and all documents filed
with the ICC in connection with any Reconciliation Adjustment or True-Up
Adjustment (collectively, the "Intangible Transition Property Records"), which
are hereby constructively delivered to the Note Issuer, as transferee of the
Grantee (or, in the case of the Subsequent Intangible Transition Property, will
as of the applicable Subsequent Sale Date be constructively delivered to the
Note Issuer, as transferee of the Grantee) with respect to all Intangible
Transition Property.
SECTION 5.02. DUTIES OF SERVICER AS CUSTODIAN. (a) SAFEKEEPING. The
Servicer shall hold the Intangible Transition Property Records on behalf of the
Grantee, the Note Issuer and the Indenture Trustee, and maintain such accurate
and complete accounts, records and computer systems pertaining to the Intangible
Transition Property Records as shall enable the Grantee to comply with this
Agreement and the Sale Agreement, and as shall enable the Note Issuer to
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comply with the Sale Agreement and the Indenture. Except with respect to the
commingling of IFC Collections expressly permitted hereunder, the Servicer shall
keep all of the Intangible Transition Property separate and apart from its other
assets, and shall maintain records with respect to the Intangible Transition
Property (including all IFC Collections) in a manner that facilitates the
identification and segregation of such assets from those of the Servicer. The
Servicer shall, in accordance with the remittance procedures described in Annex
I hereto, maintain records sufficient to permit the IFC Collections to be
accounted for separately from the funds with which they may be commingled, so
that the dollar amounts of IFC Collections commingled with the Servicer's funds
may be properly identified and traced. In performing its duties as custodian
the Servicer shall act with reasonable care, using that degree of care and
diligence that the Servicer exercises with respect to comparable assets that the
Servicer services for itself or, if applicable, for others. The Servicer shall
promptly report to the Grantee, the Note Issuer, the Indenture Trustee and the
Rating Agencies any failure on its part to hold the Intangible Transition
Property Records and maintain its accounts, records and computer systems as
herein provided and promptly take appropriate action to remedy any such failure.
Nothing herein shall be deemed to require an initial review or any periodic
review by the Grantee, the Note Issuer or the Indenture Trustee of the
Intangible Transition Property Records. The Servicer's duties to hold the
Intangible Transition Property Records on behalf of the Grantee, the Note Issuer
and the Indenture Trustee set forth in this Section 5.02, to the extent such
Intangible Transition Property Records have not been previously transferred to a
successor Servicer pursuant to Article VII, shall terminate three years after
the earlier of the date on which (i) the Servicer is succeeded by a successor
Servicer in accordance with Article VII hereof and (ii) no Notes of any Series
are Outstanding.
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(b) MAINTENANCE OF AND ACCESS TO RECORDS. The Servicer shall maintain the
Intangible Transition Property Records at 10 South Dearborn Street, Chicago,
Illinois, 35th Floor or at such other office as shall be specified to the
Grantee, the Note Issuer and the Indenture Trustee by written notice at least 30
days prior to any change in location. The Servicer shall permit the Grantee,
the Note Issuer and the Indenture Trustee or their respective duly authorized
representatives, attorneys or auditors to inspect, audit and make copies of and
abstracts from the Servicer's records regarding the Intangible Transition
Property and the IFCs (including all the Intangible Transition Property
Records), at such times during normal business hours as the Grantee, the Note
Issuer or the Indenture Trustee shall reasonably request and which do not
unreasonably interfere with the Servicer's normal operations. Nothing in this
Section 5.02(b) shall affect the obligation of the Servicer to observe any
applicable law (including any ICC Regulations) prohibiting disclosure of
information regarding the Customers, and the failure of the Servicer to provide
access to such information as a result of such obligation shall not constitute a
breach of this Section 5.02(b).
(c) DEFENDING INTANGIBLE TRANSITION PROPERTY AGAINST CLAIMS. The Servicer
shall institute any action or proceeding necessary to compel performance by the
ICC or the State of Illinois of any of their obligations or duties under the
Funding Law, any Funding Order or any Tariff, and the Servicer agrees to take
such legal or administrative actions, including defending against or instituting
and pursuing legal actions and appearing or testifying at hearings or similar
proceedings, as may be necessary to block or overturn any attempts to cause a
repeal of, modification of or supplement to or judicial invalidation of the
Amendatory Act or any Funding Order or the rights of holders of Intangible
Transition Property that would be adverse to the Grantee, the Note Issuer or any
Holders. The Servicer shall continue to impose IFCs (or equivalent amounts),
collect IFCs (or equivalent amounts), and remit IFCs (or equivalent
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amounts), in accordance with this Agreement and to ensure that the IFCs (or
equivalent amounts) are calculated and adjusted in accordance with the
provisions hereof and that such amounts as so adjusted from time to time are
deducted from ComEd's Applicable Rates and other charges in accordance with the
Basic Documents continuing until the Retirement of the Notes, in each such case
unless expressly prohibited by law or by any court or regulatory order in effect
at such time. The Servicer shall advance its own funds in order to institute
any actions or proceedings described above, PROVIDED, however, that the costs of
any such action or proceeding shall be payable from IFC Collections as an
Operating Expense in accordance with the priorities set forth in Section 8.02(d)
of the Indenture. The Servicer's obligations pursuant to this Section 5.02
shall survive and continue notwithstanding the fact that the payment of
Operating Expenses pursuant to Section 8.02(d) of the Indenture may be delayed
(it being understood that the Servicer may be required to advance its own funds
to satisfy its obligations hereunder).
SECTION 5.03. INSTRUCTIONS; AUTHORITY TO ACT. For so long as any Notes
remain Outstanding, the Servicer shall be deemed to have received proper
instructions with respect to the Intangible Transition Property Records upon its
receipt of written instructions signed by a Responsible Officer of the Indenture
Trustee.
SECTION 5.04. CUSTODIAN'S INDEMNIFICATION. The Servicer as custodian
shall indemnify the Grantee, the Note Issuer, the Delaware Trustee, the
Indenture Trustee and the Holders and each of their respective officers,
directors, employees and agents for, and defend and hold harmless each such
Person from and against, any and all liabilities, obligations, losses, damages,
payments and claims, and reasonable costs or expenses, of any kind whatsoever
(collectively, "Losses") that may be imposed on, incurred by or asserted against
any such Person as the result of any improper act or omission in any way
relating to the maintenance and custody by the Servicer, as custodian, of the
Intangible Transition Property Records; PROVIDED, HOWEVER, that the Servicer
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shall not be liable for any portion of any such amount resulting from the
willful misconduct, bad faith or gross negligence of the Grantee, the Note
Issuer, the Delaware Trustee, the Indenture Trustee or any Holders.
Indemnification under this Section shall survive resignation or removal of
the Indenture Trustee or the Delaware Trustee and shall include reasonable
out-of-pocket fees and expenses of investigation and litigation.
SECTION 5.05. EFFECTIVE PERIOD AND TERMINATION. The Servicer's
appointment as custodian shall become effective as of the Closing Date and shall
continue in full force and effect until terminated pursuant to this Section. If
any Servicer shall resign as Servicer in accordance with the provisions of this
Agreement or if all of the rights and obligations of any Servicer shall have
been terminated under Section 7.01, the appointment of such Servicer as
custodian shall be terminated by the Indenture Trustee or by the Holders of
Notes evidencing not less than twenty-five percent (25%) of the Outstanding
Amount of the Notes of all Series in the same manner as the Indenture Trustee or
such Holders may terminate the rights and obligations of the Servicer under
Section 7.01.
SECTION 5.06. GENERAL INDEMNIFICATION OF INDENTURE TRUSTEE AND DELAWARE
TRUSTEE. The Servicer agrees to indemnify and hold harmless the Indenture
Trustee and the Delaware Trustee and their respective directors, officers,
employees and agents from and against any and all Losses incurred by or asserted
against any such Person as a result of or in connection with the transactions
contemplated by this Agreement or any other Basic Document, other than any Loss
incurred by reason or result of the gross negligence or willful misconduct of
the Indenture Trustee or the Delaware Trustee; PROVIDED, HOWEVER, that the
foregoing indemnity is extended to the Indenture Trustee and the Delaware
Trustee solely in their respective capacities as trustees and not for the
benefit of the Holders or any other Person. The obligations of the Servicer set
forth
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herein shall survive the termination of this Agreement or the earlier
resignation or removal of the Indenture Trustee under the Indenture or the
Delaware Trustee under the Trust Agreement.
ARTICLE VI
THE SERVICER
SECTION 6.01. REPRESENTATIONS AND WARRANTIES OF SERVICER. The Servicer
makes the following representations and warranties, as of the Closing Date, as
of each Subsequent Sale Date relating to the sale of Subsequent Intangible
Transition Property pursuant to a Subsequent Sale Agreement, and as of such
other dates as expressly provided in this Section 6.01, on which the Grantee is
deemed to have relied in entering into this Agreement. The representations and
warranties shall survive the execution and delivery of this Agreement, the
transfer of this Agreement to the Note Issuer pursuant to the Sale Agreement and
the pledge thereof to the Indenture Trustee pursuant to the Indenture.
(a) ORGANIZATION AND GOOD STANDING. The Servicer is duly organized
and validly existing as a corporation in good standing under the laws of
the state of its incorporation, with the power and authority to own its
properties and to conduct its business as such properties are currently
owned and such business is presently conducted, and had at all relevant
times, and has, the requisite power, authority and legal right to service
the Intangible Transition Property and to hold the Intangible Transition
Property Records as custodian.
(b) DUE QUALIFICATION. The Servicer is duly qualified to do business
as a foreign corporation in good standing, and has obtained all necessary
licenses and approvals, in all jurisdictions in which the ownership or
lease of property or the conduct of its business (including the servicing
of the Intangible Transition Property as required by
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this Agreement) shall require such qualifications, licenses or approvals
(except where the failure to so qualify would not be reasonably likely to
have a material adverse effect on the Servicer's business, operations,
assets, revenues or properties or adversely affect the servicing of the
Intangible Transition Property).
(c) POWER AND AUTHORITY. The Servicer has the requisite power and
authority to execute and deliver this Agreement and to carry out its terms;
and the execution, delivery and performance of this Agreement have been
duly authorized by the Servicer by all necessary corporate action.
(d) BINDING OBLIGATION. This Agreement constitutes a legal, valid
and binding obligation of the Servicer enforceable in accordance with its
terms, subject to applicable insolvency, reorganization, moratorium,
fraudulent transfer and other similar laws relating to or affecting
creditors' rights generally from time to time in effect and to general
principles of equity (including, without limitation, concepts of
materiality, reasonableness, good faith and fair dealing), regardless of
whether considered in a proceeding in equity or at law.
(e) NO VIOLATION. The consummation of the transactions contemplated
by this Agreement and the fulfillment of the terms hereof do not (i)
conflict with, result in any breach of any of the terms and provisions of,
or constitute (with or without notice or lapse of time) a default under,
the articles of incorporation or bylaws of the Servicer, or any indenture,
agreement or other instrument to which the Servicer is a party or by which
it shall be bound; (ii) result in the creation or imposition of any Lien
upon any of its properties pursuant to the terms of any such indenture,
agreement or other instrument; or (iii) violate any law or any order, rule
or regulation applicable to the Servicer of any court
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or of any Federal or state regulatory body, administrative agency or other
governmental instrumentality having jurisdiction over the Servicer or its
properties.
(f) NO PROCEEDINGS. There are no proceedings or investigations
pending or, to the Servicer's knowledge, threatened before any court,
Federal or state regulatory body, administrative agency or other
governmental instrumentality having jurisdiction over the Servicer or its
properties involving or relating to the Servicer or the Grantee or, to the
Servicer's knowledge, any other Person: (i) asserting the invalidity of
this Agreement, or any of the other Basic Documents or the Notes, (ii)
seeking to prevent the issuance of the Notes or the consummation of any of
the transactions contemplated by this Agreement or any of the other Basic
Documents, (iii) seeking any determination or ruling that could reasonably
be expected to materially and adversely affect the performance by the
Servicer of its obligations under, or the validity or enforceability of,
this Agreement, any of the other Basic Documents or the Notes, or (iv)
relating to the Servicer and which could reasonably be expected to
adversely affect the Federal or state income tax attributes of the Notes.
(g) APPROVALS. No approval, authorization, consent, order or other
action of, or filing with, any court, Federal or state regulatory body,
administrative agency or other governmental instrumentality is required in
connection with the Servicer's execution and delivery of this Agreement,
the Servicer's performance of the transactions contemplated hereby or the
Servicer's fulfillment of the terms hereof, except those that have been
obtained or made and those that the Servicer is required to make in the
future pursuant to Article IV hereof.
(h) MONTHLY COLLECTIONS CURVES. Each Monthly Collections Curve used
in connection with SCHEDULE 6 to Annex I hereto is accurate in all material
respects, and the
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future delivery of each revised Monthly Collections Curve shall constitute
a representation and warranty that each such revised Monthly Collections
Curve is accurate in all material respects.
(i) ASSUMPTIONS. The assumptions set forth in SCHEDULE 6 to Annex I
hereto are reasonable and made in good faith, and will be reasonable and
made in good faith as they change from time to time.
(j) REPORTS AND CERTIFICATES. Each report and certificate delivered
in connection with a Tariff will constitute a representation and warranty
by the Servicer that each such report or certificate, as the case may be,
is true and correct; PROVIDED, HOWEVER, that to the extent any such report
or certificate is based in part upon or contains assumptions, forecasts or
other predictions of future events, the representation and warranty of the
Servicer with respect thereto will be limited to the representation and
warranty that such assumptions, forecasts or other predictions of future
events are reasonable based upon historical performance.
SECTION 6.02. INDEMNITIES OF SERVICER; RELEASE OF CLAIMS. (a) The Servicer
shall be liable in accordance herewith only to the extent of the obligations
specifically undertaken by the Servicer under this Agreement.
(b) The Servicer shall indemnify the Grantee, the Note Issuer, the
Indenture Trustee, the Delaware Trustee and the Holders and each of their
respective officers, directors, employees and agents for, and defend and hold
harmless each such Person from and against, any and all Losses that may be
imposed on, incurred by or asserted against any such Person as a result of (i)
the Servicer's willful misconduct, bad faith or gross negligence in the
performance of its duties or observance of its covenants under this Agreement or
its reckless disregard of its obligations and
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duties under this Agreement, or (ii) the Servicer's breach of any of its
representations or warranties in this Agreement.
(c) For purposes of Section 6.02(b), in the event of the termination of
the rights and obligations of ComEd (or any successor thereto pursuant to
Section 6.03) as Servicer pursuant to Section 7.01, or a resignation by such
Servicer pursuant to this Agreement, such Servicer shall be deemed to be the
Servicer pending appointment of a successor Servicer pursuant to Section 7.02.
(d) Indemnification under this Section 6.02 shall survive any repeal of,
modification of, supplement to, or judicial invalidation of, the Funding Law or
any Funding Order, shall survive the resignation or removal of the Indenture
Trustee or the Delaware Trustee or the termination of this Agreement and shall
include reasonable out-of-pocket fees and expenses of investigation and
litigation (including reasonable attorneys' fees and expenses).
(e) Except to the extent expressly provided in this Agreement or the other
Basic Documents (including, without limitation, the Servicer's claims with
respect to the Servicing Fee, reimbursement for any Excess Remittance,
reimbursement for costs incurred pursuant to Section 5.12(d) and the payment of
the consideration for any grant of Intangible Transition Property to the
Grantee), the Servicer releases and discharges the Grantee, the Note Issuer, the
Delaware Trustee and the Indenture Trustee and each of their respective
officers, directors and agents (collectively, the "Released Parties") from any
and all actions, claims and demands whatsoever, whenever arising, which the
Servicer, in its capacity as Servicer or otherwise, shall or may have against
any such Person relating to the Intangible Transition Property or the Servicer's
activities with respect thereto other than any actions, claims and demands
arising out of the willful misconduct, bad faith or gross negligence of the
Released Parties.
SECTION 6.03. MERGER OR CONSOLIDATION OF, OR ASSUMPTION OF THE OBLIGATIONS
OF, SERVICER. Any Person (a) into which the Servicer may be merged or
consolidated, (b) which may
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result from any merger or consolidation to which the Servicer shall be a party
or (c) which may succeed to the properties and assets of the Servicer
substantially as a whole, or, with respect to its obligations as Servicer, which
Person in any of the foregoing cases executes an agreement of assumption to
perform every obligation of the Servicer hereunder, shall be the successor to
the Servicer under this Agreement without further act on the part of any of the
parties to this Agreement; PROVIDED, HOWEVER, that (i) immediately after giving
effect to such transaction, no Servicer Default and no event which, after notice
or lapse of time, or both, would become a Servicer Default shall have occurred
and be continuing, (ii) the Servicer shall have delivered to the Grantee, the
Note Issuer, the Indenture Trustee and the Rating Agencies an Officers'
Certificate and an Opinion of Counsel each stating that such consolidation,
merger or succession and such agreement of assumption complies with this Section
and that all conditions precedent provided for in this Agreement relating to
such transaction have been complied with, (iii) the Servicer shall have
delivered to the Grantee, the Note Issuer, the Indenture Trustee and the Rating
Agencies an Opinion of Counsel either (A) stating that, in the opinion of such
counsel, all filings to be made by the Servicer, including filings with the ICC
pursuant to the Funding Law, have been executed and filed that are necessary to
preserve and protect fully the interests of the Grantee in the Intangible
Transition Property and reciting the details of such filings or (B) stating
that, in the opinion of such counsel, no such action shall be necessary to
preserve and protect such interests and (iv) the Servicer shall have given the
Rating Agencies prior written notice of such merger or consolidation.
Notwithstanding anything herein to the contrary, the execution of the foregoing
agreement of assumption and compliance with clauses (i), (ii) and (iii) above
shall be conditions to the consummation of the transactions referred to in
clauses (a), (b) or (c) above.
SECTION 6.04. LIMITATION ON LIABILITY OF SERVICER AND OTHERS. Neither the
Servicer nor any of the directors or officers or employees or agents of the
Servicer shall be liable to the
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Grantee, the Note Issuer, the Indenture Trustee, the Delaware Trustee, the
Holders or any other Person, except as provided under this Agreement, for any
action taken or for refraining from the taking of any action pursuant to this
Agreement or for errors in judgment; PROVIDED, HOWEVER, that this provision
shall not protect the Servicer or any such person against any liability that
would otherwise be imposed by reason of willful misconduct, bad faith or gross
negligence in the performance of the Servicer's duties or by reason of reckless
disregard of the Servicer's obligations and duties. The Servicer and any
director or officer or employee or agent of the Servicer may rely in good faith
on the advice of counsel reasonably acceptable to the Indenture Trustee or on
any document of any kind, PRIMA FACIE properly executed and submitted by any
Person, respecting any matters arising under this Agreement.
SECTION 6.05. COMED NOT TO RESIGN. Subject to the provisions of Sections
6.03, ComEd shall not resign from the obligations and duties hereby imposed on
it as Servicer under this Agreement unless either (a) the Servicer determines
that the performance of its duties under this Agreement shall no longer be
permissible under applicable law (disregarding any breach of the State Pledge
that is being contested or subsequent invalidation of the Funding Law, any
Funding Order and/or any Tariff or Tariffs filed in connection therewith), or
(b) the Rating Agency Condition shall have been satisfied and, in either such
case, to the extent required under any Funding Order, the ICC shall have
approved such resignation. Notice of any such determination permitting ComEd's
resignation shall be given to the Grantee, the Note Issuer, the Indenture
Trustee and the Rating Agencies at the earliest practicable time (and, if such
communication is not in writing, shall be confirmed in writing at the earliest
practicable time) and any such determination shall be evidenced by an Opinion of
Counsel to such effect delivered to the Grantee, the Note Issuer and the
Indenture Trustee concurrently with or promptly after such notice. No such
resignation shall become effective until a successor Servicer shall have assumed
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ComEd's responsibilities and obligations in accordance with Section 7.02. ComEd
shall not terminate the Administration Agreement prior to the repayment in full
of all Notes.
SECTION 6.06. SERVICING COMPENSATION. (a) In consideration for its
services hereunder, until the Retirement of the Notes, the Servicer shall
receive a fee (the "Servicing Fee") quarterly on each Payment Date in an amount
equal to (i) $750,000 for so long as IFCs are billed concurrently with charges
otherwise billed to Customers or (ii) $5,000,000 if IFCs are not billed
concurrently with charges otherwise billed to Customers but, instead, are billed
separately to Customers. The Servicer shall also be entitled to retain as
additional compensation (i) any interest earnings on IFC Payments received by
the Servicer and invested by the Servicer pursuant to Section 6(d) of Annex I
hereto during each Collection Period prior to remittance to the Collection
Account and (ii) all late payment charges, if any, collected from Customers or
ARES. So long as the Servicer is billing Customers for charges for electric
service or any Applicable Rates, the Servicer will bill IFCs to such Customers
concurrently with such other charges and such Applicable Rates.
(b) The Servicer shall receive, in accordance with Section 8.02 of the
Indenture, the Servicing Fee set forth in Section 6.06(a) above on each Payment
Date in accordance with the priorities set forth in Section 8.02(d) of the
Indenture, by wire transfer of immediately-available funds from the Collection
Account to an account designated by the Servicer. Any portion of the Servicing
Fee not paid on such date shall be added to the Servicing Fee payable on the
subsequent Payment Date.
(c) Except as provided in Section 5.02(c), the Servicer shall be required
to pay from its own account all expenses incurred by it in connection with its
activities hereunder (including any fees to and disbursements by accountants,
counsel, or any other Person, any taxes imposed on the Servicer and any expenses
incurred in connection with reports to Holders) out of the
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compensation retained by or paid to it pursuant to this Section 6.06, and shall
not be entitled to any extra payment or reimbursement therefor.
SECTION 6.07. COMPLIANCE WITH APPLICABLE LAW. The Servicer covenants and
agrees, in servicing the Intangible Transition Property, to comply with all laws
applicable to, and binding upon, the Servicer and relating to such Intangible
Transition Property the noncompliance with which would have a material adverse
effect on the value of the Intangible Transition Property; PROVIDED, HOWEVER,
that the foregoing is not intended to, and shall not, impose any liability on
the Servicer for noncompliance with any law that the Servicer is contesting in
good faith in accordance with its customary standards and procedures.
SECTION 6.08. ACCESS TO CERTAIN RECORDS AND INFORMATION REGARDING
INTANGIBLE TRANSITION PROPERTY. The Servicer shall provide to the Grantee, the
Note Issuer, the Indenture Trustee and the Holders access to the Intangible
Transition Property Records in such cases where the Grantee, the Note Issuer,
the Indenture Trustee and the Holders shall be required by applicable law to be
provided access to such records. Access shall be afforded without charge, but
only upon reasonable request and during normal business hours at the offices of
the Servicer. Nothing in this Section shall affect the Servicer's obligation to
observe any applicable law (including any ICC Regulation) prohibiting disclosure
of information regarding the Customers, and the failure of the Servicer to
provide access to such information as a result of such obligation shall not
constitute a breach of this Section.
SECTION 6.09. APPOINTMENTS. The Servicer may at any time appoint any
Person to perform all or any portion of its obligations as Servicer hereunder;
PROVIDED, HOWEVER, that, unless such person is Unicom Corporation or a
wholly-owned subsidiary thereof, the Rating Agency Condition shall have been
satisfied in connection therewith; PROVIDED FURTHER that the Servicer shall
remain obligated and be liable to the Grantee, the Note Issuer, the Indenture
Trustee and the
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Holders for the servicing and administering of the Intangible Transition
Property in accordance with the provisions hereof without diminution of such
obligation and liability by virtue of the appointment of such Person and to the
same extent and under the same terms and conditions as if the Servicer alone
were servicing and administering the Intangible Transition Property; and
PROVIDED FURTHER, HOWEVER, that nothing herein (including, without limitation,
the Rating Agency Condition) shall preclude the execution by the Servicer of an
ARES Service Agreement with any ARES pursuant to applicable ICC Regulations.
The fees and expenses of such Person shall be as agreed between the Servicer and
such Person from time to time and none of the Grantee, the Note Issuer, the
Indenture Trustee, the Holders or any other Person shall have any responsibility
therefor or right or claim thereto. No such appointment shall constitute a
Servicer resignation under Section 6.05.
SECTION 6.10. NO SERVICER ADVANCES. The Servicer shall not make any
advances of interest or principal on the Notes.
SECTION 6.11. REMITTANCES. (a) Subject to clause (b) below, on each
Servicer Business Day, the Servicer shall remit to the General Subaccount of the
Collection Account the total IFC Payments estimated to have been received by the
Servicer from or on behalf of Customers on the second preceding Servicer
Business Day in respect of all previously Billed IFCs (the "Daily Remittance"),
which Daily Remittance may be calculated according to the procedures set forth
in Annex I. Prior to each remittance to the General Subaccount of the
Collection Account pursuant to this Section, the Servicer shall provide written
notice to the Indenture Trustee of each such remittance (including the exact
dollar amount to be remitted).
(b) Notwithstanding the foregoing clause (a), unless a Servicer Default
has occurred and is continuing or if the Rating Agency Condition is not
satisfied, during any period in which the Servicer maintains a short-term rating
of A-1 or better by Standard & Poor's, P-1 or better by
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Moody's, (if rated by Duff & Phelps) D-1 or better by Duff & Phelps and (if
rated by Fitch IBCA) F-1 or better by Fitch IBCA, the Servicer shall no longer
be required to make Daily Remittances and, in lieu thereof, the Servicer shall,
on each Monthly Remittance Date, cause to be made a wire transfer of
immediately-available funds equal to the Aggregate Remittance Amount for the
applicable Collection Period to the General Subaccount of the Collection
Account. On or before each Monthly Remittance Date, commencing with the Monthly
Remittance Date following the end of the seventh Billing Period after the
Closing Date, the Servicer shall calculate the amount of any Remittance
Shortfall or Excess Remittance attributable to the prior Collection Period and
(A) if a Remittance Shortfall exists, the Servicer shall make a supplemental
remittance to the General Subaccount of the Collection Account on such Monthly
Remittance Date in the amount of such Remittance Shortfall, or (B) if an Excess
Remittance exists, the Servicer shall be entitled to take the actions described
in clause (d) below.
(c) The Servicer agrees and acknowledges that it holds all IFC Payments
collected by it for the benefit of the Grantee and that all such amounts shall
be remitted by the Servicer in accordance with this Section without any
surcharge, fee, offset, charge or other deduction except (i) as set forth in
clause (b) above or clause (d) below and (ii) for late fees permitted by Section
6.06. The Servicer shall not make any claim to reduce its obligation to remit
all IFC Payments collected by it in accordance with this Agreement except (i) as
set forth in clause (b) above or clause (d) below and (ii) for late fees
permitted by Section 6.06.
(d) If there is an Excess Remittance, the Servicer shall be entitled
either (i) to reduce the amount of each Daily Remittance which the Servicer
remits to the General Subaccount of the Collection Account (beginning with the
Daily Remittance occurring on such Monthly Remittance Date) for application to
the amount of such Excess Remittance until the balance of such Excess Remittance
has been reduced to zero, the amount of such reduction becoming the property of
the
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Servicer or (ii) so long as such withdrawal would not cause the amounts on
deposit in the General Subaccount or the Reserve Subaccount to be insufficient
for the payment of the next installment of interest on the Notes, to be paid
immediately from the General Subaccount or the Reserve Subaccount the amount of
such Excess Remittance, such payment becoming the property of the Servicer. If
there is a Remittance Shortfall, the amount which the Servicer remits to the
General Subaccount of the Collection Account on such Monthly Remittance Date
shall be increased by the amount of such Remittance Shortfall, such increase
coming from the Servicer's own funds.
(e) Unless otherwise directed to do so by the Note Issuer, the Servicer
shall be responsible for selecting Eligible Investments in which the funds in
the Collection Account shall be invested pursuant to Section 8.03 of the
Indenture.
SECTION 6.12 COMPLIANCE WITH SERVICING STANDARD; CHANGES IN ICC TARIFFS.
The Servicer shall, with respect to its duties hereunder, comply at all times
with the Servicing Standard, and, so long as any of the Notes are outstanding,
shall not initiate any material changes with respect to its policies and
procedures pertaining to credit (including requirements for deposits from
Customers), billing, collections (including procedures for disconnection of
service for non-payment) and restoration of service after disconnection, and
shall not, except as required by applicable law, initiate any changes in any
ICC tariffs relating to the foregoing matters which are reasonably likely to
adversely affect the Servicer's ability to make timely recovery of amounts
billed to Customers. Notwithstanding the foregoing, the Servicer may, in its
own discretion, waive any late payment charge or any other fee or charge
relating to delinquent payments, if any, and may waive, vary or modify any terms
of payment of any amounts payable by a Customer, in each case, if such waiver or
action (a) would be in accordance with the Servicer's customary practices or
those of any successor Servicer with respect to comparable assets that it
services for itself, (b) would not materially adversely affect the Holders and
(c) would comply with applicable
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law. In addition, the Servicer may write off any amounts that it deems
uncollectible in accordance with its customary practices.
ARTICLE VII
DEFAULT
SECTION 7.01. SERVICER DEFAULT. If any one of the following events (a
"Servicer Default") shall occur and be continuing:
(a) any failure by the Servicer to deposit in the Collection Account
on behalf of the Grantee any required remittance that shall continue
unremedied for a period of three Business Days after written notice of such
failure is received by the Servicer from the Grantee, the Note Issuer or
the Indenture Trustee or after discovery of such failure by a Responsible
Officer of the Servicer; or
(b) any failure on the part of the Servicer or ComEd, as the case may
be, duly to observe or to perform in any material respect any other
covenants or agreements of the Servicer or ComEd (as the case may be) set
forth in this Agreement (including Section 4.01) or any other Basic
Document to which it is a party, which failure shall (i) materially and
adversely affect the rights of the Holders and (ii) continue unremedied for
a period of 30 days after the date on which written notice of such failure,
requiring the same to be remedied, shall have been given (A) to the
Servicer or ComEd (as the case may be) by the Grantee or the Note Issuer or
(B) to the Servicer or ComEd (as the case may be) by the Indenture Trustee
or by the Holders of Notes evidencing not less than twenty-five percent
(25%) of the Outstanding Amount of the Notes of all Series; or
(c) any representation or warranty made by the Servicer in this
Agreement shall prove to have been incorrect when made, which has a
material adverse effect on the
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Grantee, the Note Issuer or the Holders and which material adverse effect
continues unremedied for a period of 30 days after the date on which
written notice thereof, requiring the same to be remedied, shall have been
delivered to the Servicer by the Grantee, the Note Issuer or the Indenture
Trustee; or
(d) an Insolvency Event occurs with respect to the Servicer or ComEd;
then, and in each and every case, so long as the Servicer Default shall not have
been remedied, either the Indenture Trustee, or the Holders of Notes evidencing
not less than twenty-five percent (25%) of the Outstanding Amount of the Notes
of all Series, by notice (a "Termination Notice") then given in writing to the
Servicer and the Rating Agencies (and to the Indenture Trustee if given by the
Holders) may terminate all the rights and obligations (other than the
obligations set forth in Section 6.02 hereof) of the Servicer under this
Agreement. In addition, upon a Servicer Default described in Section 7.01(a),
each of the following shall be entitled to apply to the ICC for sequestration
and payment of revenues arising with respect to the Intangible Transition
Property: (1) the Holders and the Indenture Trustee as beneficiaries of the lien
provided under Section 18-107(c) of the Funding Law; (2) the Grantee or its
assignees; (3) the Note Issuer; or (4) pledgees or transferees of the Intangible
Transition Property. On or after the receipt by the Servicer of a Termination
Notice, all authority and power of the Servicer under this Agreement, whether
with respect to the Notes, the Intangible Transition Property, the IFCs or
otherwise, shall, without further action, pass to and be vested in such
successor Servicer as may be appointed under Section 7.02; and, without
limitation, the Indenture Trustee is authorized and empowered to execute and
deliver, on behalf of the predecessor Servicer, as attorney-in-fact or
otherwise, any and all documents and other instruments, and to do or accomplish
all other acts or things necessary or appropriate to effect the purposes of such
Termination Notice, whether to complete
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the transfer of the Intangible Transition Property Records and related
documents, or otherwise. The predecessor Servicer shall cooperate with the
successor Servicer, the Grantee, the Note Issuer and the Indenture Trustee in
effecting the termination of the responsibilities and rights of the predecessor
Servicer under this Agreement, including the transfer to the successor Servicer
for administration by it of (i) all cash amounts that shall at the time be held
by the predecessor Servicer for remittance, or shall thereafter be received by
it with respect to the Intangible Transition Property or the IFCs, and (ii) any
and all Intangible Transition Property Records. All reasonable out-of-pocket
costs and expenses (including attorneys' fees and expenses) incurred in
connection with transferring the Intangible Transition Property Records to the
successor Servicer and amending this Agreement to reflect such succession as
Servicer pursuant to this Section shall be paid by the predecessor Servicer upon
presentation of reasonable documentation of such costs and expenses.
SECTION 7.02. APPOINTMENT OF SUCCESSOR. (a) Upon the Servicer's receipt
of a Termination Notice pursuant to Section 7.01 or the Servicer's resignation
or removal in accordance with the terms of this Agreement, the predecessor
Servicer shall continue to perform its functions as Servicer under this
Agreement, and shall be entitled to receive the requisite Servicing Fee, until a
successor Servicer shall have assumed in writing the obligations of the Servicer
hereunder as described below. In the event of the Servicer's termination
hereunder, the Note Issuer shall appoint a successor Servicer with the Grantee's
prior written consent thereto (which consent shall not be unreasonably
withheld), and the successor Servicer shall accept its appointment by a written
assumption in form acceptable to the Grantee and the Note Issuer and provide
prompt notice of such assumption to the Indenture Trustee and the Rating
Agencies. If within 30 days after the delivery of the Termination Notice, the
Note Issuer shall not have obtained such a new Servicer, the Indenture Trustee
may petition the ICC or a court of competent
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jurisdiction to appoint a successor Servicer under this Agreement. A Person
shall qualify as a successor Servicer only if (i) such Person is permitted under
ICC Regulations to perform the duties of the Servicer, (ii) the Rating Agency
Condition shall have been satisfied and (iii) such Person enters into a
servicing agreement with the Grantee having substantially the same provisions as
this Agreement.
(b) Upon appointment, the successor Servicer shall be the successor in all
respects to the predecessor Servicer and shall be subject to all the
responsibilities, duties and liabilities arising thereafter relating thereto
placed on the predecessor Servicer and shall be entitled to the Servicing Fee
and all the rights granted to the predecessor Servicer by the terms and
provisions of this Agreement.
SECTION 7.03. WAIVER OF PAST DEFAULTS. The Holders of Notes evidencing
not less than a majority of the Outstanding Amount of the Notes of all Series
may, on behalf of all Holders, waive in writing any default by the Servicer in
the performance of its obligations hereunder and its consequences, except a
default in making any required deposits to the Collection Account in accordance
with this Agreement, which waiver shall require the consent of all Holders.
Upon any such waiver of a past default, such default shall cease to exist, and
any Servicer Default arising therefrom shall be deemed to have been remedied for
every purpose of this Agreement. No such waiver shall extend to any subsequent
or other default or impair any right consequent thereto.
SECTION 7.04. NOTICE OF SERVICER DEFAULT. The Servicer shall deliver to
the Grantee, the Note Issuer, the Indenture Trustee and the Rating Agencies,
promptly after having obtained knowledge thereof, but in no event later than
five Business Days thereafter, written notice in an Officer's Certificate of any
event which with the giving of notice or lapse of time, or both, would become a
Servicer Default under Section 7.01(a) or (b).
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ARTICLE VIII
MISCELLANEOUS PROVISIONS
SECTION 8.01. AMENDMENT. (a) This Agreement may be amended in writing by
the Servicer and the Grantee with five Business Days' prior written notice given
to the Rating Agencies and the prior written consent of the Indenture Trustee,
but without the consent of any of the Holders or Holders, to cure any ambiguity,
to correct or supplement any provisions in this Agreement or for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions in this Agreement or of modifying in any manner the rights of the
Holders; PROVIDED, HOWEVER, that such action shall not, as evidenced by an
Officer's Certificate delivered to the Grantee, the Note Issuer, the Delaware
Trustee and the Indenture Trustee, adversely affect in any material respect the
interests of any Holder.
This Agreement may also be amended in writing from time to time by the
Servicer and the Grantee with prior written notice given to the Rating Agencies
and the prior written consent of the Indenture Trustee and the prior written
consent of the Holders of Notes evidencing not less than a majority of the
Outstanding Amount of the Notes of all Series, for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
this Agreement or of modifying in any manner the rights of the Holders;
PROVIDED, HOWEVER, that no such amendment shall (a) increase or reduce in any
manner the amount of, or accelerate or delay the timing of, IFC Collections or
(b) reduce the aforesaid percentage of the Outstanding Amount of the Notes, the
Holders of which are required to consent to any such amendment, without the
consent of the Holders of all the outstanding Notes.
44
<PAGE>
Promptly after the execution of any such amendment and the requisite
consents, the Grantee shall furnish written notification of the substance of
such amendment to the Note Issuer, the Indenture Trustee and each of the Rating
Agencies.
It shall not be necessary for the consent of Holders pursuant to this
Section to approve the particular form of any proposed amendment or consent, but
it shall be sufficient if such consent shall approve the substance thereof.
Prior to its consent to any amendment to this Agreement, the Indenture
Trustee shall be entitled to receive and conclusively rely upon an Opinion of
Counsel stating that such amendment is authorized or permitted by this
Agreement. The Indenture Trustee may, but shall not be obligated to, enter into
any such amendment which affects the Indenture Trustee's own rights, duties,
indemnities or immunities under this Agreement or otherwise.
(b) Notwithstanding Section 8.01(a) or anything to the contrary in this
Agreement, the Servicer and the Grantee may amend Annex I to this Agreement in
writing with prior written notice given to the Indenture Trustee and the Rating
Agencies, but without the consent of the Indenture Trustee, any Rating Agency or
any Holder, solely to address changes to the Servicer's method of calculating
IFC Payments received as a result of changes to the Servicer's current
computerized customer information system, as contemplated by Schedule 6 to Annex
I hereto; PROVIDED that any such amendment shall not have a material adverse
effect on the Holders.
SECTION 8.02. MAINTENANCE OF RECORDS. The Servicer shall maintain
accounts and records as to the Intangible Transition Property accurately and in
accordance with its standard accounting procedures and in sufficient detail to
permit reconciliation between IFC Payments received by the Servicer and IFC
Collections from time to time deposited in the Collection Account.
45
<PAGE>
SECTION 8.03. NOTICES. All demands, notices and communications upon or to
the Servicer, the Grantee, the Note Issuer, the Indenture Trustee or the Rating
Agencies under this Agreement shall be in writing and personally delivered, sent
by overnight mail or sent by telecopy or other similar form of rapid
transmission, and shall be deemed to have been duly given upon receipt (a) in
the case of the Servicer, to Commonwealth Edison Company, 10 South Dearborn
Street, 37th Floor, Chicago, Illinois 60603; (b) in the case of the Grantee, to
ComEd Funding, LLC, c/o Commonwealth Edison Company, 10 South Dearborn Street,
37th Floor, Chicago, Illinois 60603, (c) in the case of the Note Issuer, to
ComEd Transitional Funding Trust, c/o First Union Trust Company, National
Association, as Delaware Trustee, One Rodney Square, 920 King Street, 1st Floor,
Wilmington, Delaware 19801, Attn: Corporate Trust Administration, (d) in the
case of the Indenture Trustee, at the Corporate Trust office, (e) in the case of
Moody's, to Moody's Investors Service, Inc., ABS Monitoring Department, 99
Church Street, New York, New York 10007, (f) in the case of Standard & Poor's,
to Standard & Poor's Corporation, 26 Broadway (10th Floor), New York, New York
10004, Attention of Asset Backed Surveillance Department, (g) in the case of
Fitch IBCA, to Fitch IBCA, Inc., One State Street Plaza, New York, NY 10004,
Attention ABS Surveillance, or (h) in the case of Duff & Phelps, to Duff &
Phelps Credit Rating Co., 17 State Street, 12th Floor, New York, NY 10004,
Attention: Asset-Backed Monitoring Group, or as to each of the foregoing, at
such other address as shall be designated by written notice to the other
parties.
SECTION 8.04. ASSIGNMENT. Notwithstanding anything to the contrary
contained herein, except as provided in Section 6.03 and as provided in the
provisions of this Agreement concerning the resignation of the Servicer, this
Agreement may not be assigned by the Servicer.
SECTION 8.05. LIMITATIONS ON RIGHTS OF OTHERS. The provisions of this
Agreement are solely for the benefit of the Servicer and the Grantee and, to the
extent provided herein or in the
46
<PAGE>
Basic Documents, the Note Issuer, the Indenture Trustee and the Holders, and
nothing in this Agreement, whether express or implied, shall be construed to
give to any other Person any legal or equitable right, remedy or claim in the
Intangible Transition Property or under or in respect of this Agreement or any
covenants, conditions or provisions contained herein.
SECTION 8.06. SEVERABILITY. Any provision of this Agreement 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 remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
SECTION 8.07. SEPARATE COUNTERPARTS. This Agreement may be executed by the
parties hereto in separate counterparts, each of which when so executed and
delivered shall be an original, but all such counterparts shall together
constitute but one and the same instrument.
SECTION 8.08. HEADINGS. The headings of the various Articles and Sections
herein are for convenience of reference only and shall not define or limit any
of the terms or provisions hereof.
SECTION 8.09. GOVERNING LAW. This Agreement shall be construed in
accordance with the laws of the State of Illinois, without reference to its
conflict of law provisions, and the obligations, rights and remedies of the
parties hereunder shall be determined in accordance with such laws.
SECTION 8.10. ASSIGNMENTS TO NOTE ISSUER AND INDENTURE TRUSTEE. The
Servicer acknowledges and consents to the assignment of any or all of the
Grantee's rights and obligations hereunder to the Note Issuer pursuant to the
Sale Agreement, and the collateral assignment of any or all of the Note Issuer's
rights and obligations hereunder to the Indenture Trustee pursuant to the
Indenture. The Servicer agrees that the Note Issuer and the Indenture Trustee,
as assignees,
47
<PAGE>
shall, subject to the terms of the Basic Documents, have the right to enforce
this Agreement on behalf of the Holders and to exercise directly all of the
Grantee's rights and remedies under this Agreement (including without
limitation, the right to give or withhold any consents or approvals of the
Grantee to be given or withheld hereunder). After the Grantee transfers its
rights and obligations hereunder to the Note Issuer pursuant to the Sale
Agreement, any duty the Servicer owes to the Grantee and the Note Issuer
hereunder shall be fully performed if such duty is performed for the benefit of
the Note Issuer alone. The Note Issuer and the Indenture Trustee on behalf of
the Holders shall all be expressly deemed third-party beneficiaries of this
Agreement.
SECTION 8.11. NONPETITION COVENANTS. Notwithstanding any prior termination
of this Agreement or the Indenture, but subject to the ICC's right to order the
sequestration and payment of revenues arising with respect to the Intangible
Transition Property notwithstanding any bankruptcy, reorganization or other
insolvency proceedings with respect to the debtor, pledgor or transferor of the
Intangible Transition Property pursuant to any applicable Funding Order or other
applicable law, the Servicer shall not, prior to the date which is one year and
one day after the termination of the Indenture, acquiesce, petition or otherwise
invoke or cause the Grantee, the Note Issuer or the Delaware Trustee to invoke
or join with them in provoking the process of any court or governmental
authority for the purpose of commencing or sustaining a case against the
Grantee, the Note Issuer or the Delaware Trustee under any Federal or state
bankruptcy, insolvency or similar law or appointing a receiver, liquidator,
assignee, trustee, custodian, sequestrator or other similar official of the
Grantee, the Note Issuer or the Delaware Trustee or any substantial part of the
property of the Grantee, the Note Issuer or the Delaware Trustee, or ordering
the winding up or liquidation of the affairs of the Grantee, the Note Issuer or
the Delaware Trustee.
48
<PAGE>
SECTION 8.12. LIMITATION OF LIABILITY. It is expressly understood and
agreed by the parties hereto that (a) this Agreement is acknowledged and
accepted by First Union Trust Company, National Association ("First Union"), not
individually or personally but solely as Delaware Trustee on behalf of the Note
Issuer, and by Harris Trust and Savings Bank ("Harris"), not individually or
personally but solely as Indenture Trustee on behalf of the Holders, in each
case in the exercise of the powers and authority conferred and vested in it, (b)
the representations, undertakings and agreements herein made by the Delaware
Trustee on behalf of the Note Issuer, and by the Indenture Trustee on behalf of
the Holders, are made and intended not as personal representations, undertakings
and agreements by First Union and Harris, respectively, but are made and
intended for the purpose of binding only the Note Issuer and the Holders,
respectively, (c) nothing herein contained shall be construed as creating any
liability on First Union or Harris, individually or personally, to perform any
covenant either expressed or implied contained herein, except in their
respective capacities as Delaware Trustee and Indenture Trustee, all such
liability, if any, being expressly waived by the parties who are signatories to
this Agreement and by any Person claiming by, through or under such parties and
(d) under no circumstances shall First Union or Harris, be personally liable for
the payment of any indebtedness or expenses of the Note Issuer or the Holders,
respectively, or be personally liable for the breach or failure of any
obligation, representation, warranty or covenant made or undertaken by the
Delaware Trustee or the Indenture Trustee, respectively, under this Agreement;
PROVIDED, HOWEVER, that this provision shall not protect First Union or Harris
against any liability that would otherwise be imposed by reason of willful
misconduct, bad faith or gross negligence in the performance of their respective
duties under this Agreement.
49
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective officers as of the day and year first above
written.
COMED FUNDING, LLC
By: /s/ Ruth Ann M. Gillis
------------------------
Name: Ruth Ann M. Gillis
Title: Manager and President
COMMONWEALTH EDISON COMPANY
By: /s/ Ruth Ann M. Gillis
------------------------
Name: Ruth Ann M. Gillis
Title: Vice President and Treasurer
Acknowledged and Accepted:
FIRST UNION TRUST COMPANY,
NATIONAL ASSOCIATION, not in
its individual capacity but solely as
Delaware Trustee on behalf of
ComEd Transitional Funding Trust
By: /s/ Edward L. Truitt, Jr.
------------------------
Name: Edward L. Truitt, Jr.
Title: Vice President
HARRIS TRUST AND SAVINGS BANK,
not in its individual capacity but solely as
Indenture Trustee
By: /s/ Robert D. Foltz
------------------------
Name: Robert D. Foltz
Title: Vice President
50
<PAGE>
EXHIBIT A
MONTHLY SERVICER'S CERTIFICATE
<PAGE>
Remittance Date: ________________
MONTHLY SERVICER'S CERTIFICATE
(to be delivered pursuant to Section 3.01(b)(i) of the Intangible Transition
Property Servicing Agreement on or before each Remittance Date)
Commonwealth Edison Company, as Servicer
- --------------------------------------------------------------------------------
COMED TRANSITIONAL FUNDING TRUST, 1998
- --------------------------------------------------------------------------------
Pursuant to the Intangible Transition Property Servicing Agreement dated as
of ________, 1998 (the "Intangible Transition Property Servicing Agreement")
between Commonwealth Edison Company, as Servicer, and ComEd Funding LLC, as
Grantee, the Servicer does hereby certify as follows:
Collection Period: __________________
Remittance Date: __________________
<TABLE>
<CAPTION>
b. Remittance c. Excess
a. IFC Payments Shortfall Remittance
estimated to have attributable to attributable to
been received by the the IFC Class the IFC Class
Servicer for this for this
attributable to the Collection Collection
IFC Class for this Period Period
IFC Class Collection Period
<S> <C> <C> <C>
Residential--No Space Heat
Residential--Space Heat
Standby Service
Interruptible Service
Street Lighting--Fixture Based
Rates
Street Lighting--Dusk
to Dawn and Traffic Signal
Railroads
Water-Supply and
Sewage Pumping Service
In Lieu of Demand
0 to and including
100 kW Demand
Over 100 to and
including 1,000 kW Demand
Over 1,000 to and
including 10,000 kW Demand
Over 10,000 kW Demand
Total
- ------------------------------------------------------------------------------------------
</TABLE>
d. The Aggregate Remittance Amount remitted by the Servicer ________________
to the Collection Account for this Collection Period is
(a + b - c):
e. Amounts previously remitted by the Servicer to the ________________
Collection Account in respect of this Collection Period:
f. If (d > e), (d - e) equals net amount remitted by the ________________
Servicer to the Collection Account:
g. If (e > d), (e - d) equals net amount remitted to the ________________
Servicer from the Collection Account:
Capitalized terms used in this Monthly Servicer's Certificate have their
respective meanings set forth in the Intangible Transition Property Servicing
Agreement.
In WITNESS HEREOF, the undersigned has duly executed and delivered this
Monthly Servicer's Certificate this __ day of _________, 199_.
COMMONWEALTH EDISON COMPANY, as Servicer
By________________________________
Title_______________________________
Remittance Date: ______________
<PAGE>
MONTHLY SERVICER'S CERTIFICATE
(to be delivered pursuant to Section 3.01(b)(i) of the Intangible Transition
Property Servicing Agreement on or before each Remittance Date)
Commonwealth Edison Company, as Servicer
- --------------------------------------------------------------------------------
COMED TRANSITIONAL FUNDING TRUST, 1998
- --------------------------------------------------------------------------------
Pursuant to the Intangible Transition Property Servicing Agreement dated as
of ___, 1998 (the "Intangible Transition Property Servicing Agreement") between
Commonwealth Edison Company, as Servicer, and ComEd Funding LLC, as Grantee, the
Servicer does hereby certify as follows:
Collection Period: _____________
IFC Class: RESIDENTIAL--NO SPACE HEAT
1.FOR THIS COLLECTION PERIOD:
a. Sales at the current IFC charge (kWh) ____________
b. Current IFC charge (CENTS/kWh) ____________
c. Sales at the previous IFC charge (kWh) ____________
d. Previous IFC charge (CENTS/kWh) ____________
e. Billed IFC not accounted for in prior periods ____________
f Billed IFC charges (a x b + c x d + e) ____________
g. Collection Curve
Month 1 Estimated Collections ____________
Month 2 Estimated Collections ____________
Month 3 Estimated Collections ____________
Month 4 Estimated Collections ____________
Month 5 Estimated Collections ____________
h. Total (sum of all g above) ____________
i. Estimated IFC Payments (f x h) ____________
2. AGGREGATE REMITTANCE AMOUNT FOR THIS COLLECTION PERIOD:
<TABLE>
<CAPTION>
Collection Collection Billed IFC Remittance
Period (A) Percent (B) Charges (C) Amounts (B x C)
------------ ------------- ------------- -----------------
<S> <C> <C> <C> <C>
Month 5 Estimated
Collections
Month 4 Estimated
Collections
Month 3 Estimated
Collections
Month 2 Estimated
Collections
Month 1 Estimated
Collections
</TABLE>
3. FOR THE _____ COLLECTION PERIOD:
a. Estimated IFC Payments ____________
b. Actual IFC Payments ____________
c. If (a>b), (a-b) equals Excess Remittance ____________
d. If (b>a), (b-a) equals Remittance Shortfall ____________
Page 2
<PAGE>
Remittance Date: ________________
MONTHLY SERVICER'S CERTIFICATE
(to be delivered pursuant to Section 3.01(b)(i) of the Intangible Transition
Property Servicing Agreement on or before each Remittance Date)
Commonwealth Edison Company, as Servicer
- --------------------------------------------------------------------------------
COMED TRANSITIONAL FUNDING TRUST, 1998
- --------------------------------------------------------------------------------
Pursuant to the Intangible Transition Property Servicing Agreement dated as
of ___, 1998 (the "Intangible Transition Property Servicing Agreement") between
Commonwealth Edison Company, as Servicer, and ComEd Funding LLC, as Grantee, the
Servicer does hereby certify as follows:
Collection Period: _____________
IFC Class: RESIDENTIAL--SPACE HEAT
1.FOR THIS COLLECTION PERIOD:
a. Sales at the current IFC charge (kWh) ____________
b. Current IFC charge (CENTS/kWh) ____________
c. Sales at the previous IFC charge (kWh) ____________
d. Previous IFC charge (CENTS/kWh) ____________
e. Billed IFC not accounted for in prior periods ____________
f. Billed IFC charges (a x b + c x d + e) ____________
g. Collection Curve
Month 1 Estimated Collections ____________
Month 2 Estimated Collections ____________
Month 3 Estimated Collections ____________
Month 4 Estimated Collections ____________
Month 5 Estimated Collections ____________
h. Total (sum of all g above) ____________
i. Estimated IFC Payments (f x h) ____________
2. AGGREGATE REMITTANCE AMOUNT FOR THIS COLLECTION PERIOD:
<TABLE>
<CAPTION>
Collection Period Collection Billed IFC Remittance
(A) Percent (B) Charges (C) Amounts (B x C)
----------------- ----------- ------------ ---------------
<S> <C> <C> <C> <C>
Month 5 Estimated
Collections
Month 4 Estimated
Collections
Month 3 Estimated
Collections
Month 2 Estimated
Collections
Month 1 Estimated
Collections
</TABLE>
3. FOR THE _____ COLLECTION PERIOD:
a. Estimated IFC Payments ____________
b. Actual IFC Payments ____________
c. If (a > b), (a-b) equals Excess Remittance ____________
d. If (b > a), (b-a) equals Remittance Shortfall ____________
Page 3
<PAGE>
Remittance Date: ________________
MONTHLY SERVICER'S CERTIFICATE
(to be delivered pursuant to Section 3.01(b)(i) of the Intangible Transition
Property Servicing Agreement on or before each Remittance Date)
Commonwealth Edison Company, as Servicer
- --------------------------------------------------------------------------------
COMED TRANSITIONAL FUNDING TRUST, 1998
- --------------------------------------------------------------------------------
Pursuant to the Intangible Transition Property Servicing Agreement dated as
of ___, 1998 (the "Intangible Transition Property Servicing Agreement") between
Commonwealth Edison Company, as Servicer, and ComEd Funding LLC, as Grantee, the
Servicer does hereby certify as follows:
Collection Period: _____________
IFC Class: STANDBY SERVICE
1.FOR THIS COLLECTION PERIOD:
a. Sales at the current IFC charge (kWh) ____________
b. Current IFC charge (CENTS/kWh) ____________
c. Sales at the previous IFC charge (kWh) ____________
d. Previous IFC charge (CENTS/kWh) ____________
e. Billed IFC not accounted for in prior periods ____________
f. Billed IFC charges (a x b + c x d + e) ____________
g. Collection Curve
Month 1 Estimated Collections ____________
Month 2 Estimated Collections ____________
Month 3 Estimated Collections ____________
Month 4 Estimated Collections ____________
Month 5 Estimated Collections ____________
h. Total (sum of all g above) ____________
i. Estimated IFC Payments (f x h) ____________
2. AGGREGATE REMITTANCE AMOUNT FOR THIS COLLECTION PERIOD:
<TABLE>
<CAPTION>
Collection Collection Billed IFC Remittance
Period (A) Percent (B) Charges (C) Amounts (B x C)
------------ ------------- ------------- -----------------
<S> <C> <C> <C> <C>
Month 5 Estimated
Collections
Month 4 Estimated
Collections
Month 3 Estimated
Collections
Month 2 Estimated
Collections
Month 1 Estimated
Collections
</TABLE>
3. FOR THE _____ COLLECTION PERIOD:
a. Estimated IFC Payments ____________
b. Actual IFC Payments ____________
c. If (a > b), (a-b) equals Excess Remittance ____________
d. If (b > a), (b-a) equals Remittance Shortfall ____________
Page 4
<PAGE>
Remittance Date: ________________
MONTHLY SERVICER'S CERTIFICATE
(to be delivered pursuant to Section 3.01(b)(i) of the Intangible Transition
Property Servicing Agreement on or before each Remittance Date)
Commonwealth Edison Company, as Servicer
- --------------------------------------------------------------------------------
COMED TRANSITIONAL FUNDING TRUST, 1998
- --------------------------------------------------------------------------------
Pursuant to the Intangible Transition Property Servicing Agreement dated as
of ___, 1998 (the "Intangible Transition Property Servicing Agreement") between
Commonwealth Edison Company, as Servicer, and ComEd Funding LLC, as Grantee, the
Servicer does hereby certify as follows:
Collection Period: _____________
IFC Class: INTERRUPTIBLE SERVICE
1.FOR THIS COLLECTION PERIOD:
a. Sales at the current IFC charge (kWh) ____________
b. Current IFC charge (CENTS/kWh) ____________
c. Sales at the previous IFC charge (kWh) ____________
d. Previous IFC charge (CENTS/kWh) ____________
e. Billed IFC not accounted for in prior periods ____________
f. Billed IFC charges (a x b + c x d + e) ____________
g. Collection Curve
Month 1 Estimated Collections ____________
Month 2 Estimated Collections ____________
Month 3 Estimated Collections ____________
Month 4 Estimated Collections ____________
Month 5 Estimated Collections ____________
h. Total (sum of all g above) ____________
i. Estimated IFC Payments (f x h) ____________
2. AGGREGATE REMITTANCE AMOUNT FOR THIS COLLECTION PERIOD:
<TABLE>
<CAPTION>
Collection Collection Billed IFC Remittance
Period (A) Percent (B) Charges (C) Amounts (B x C)
------------ ------------- ------------ ----------------
<S> <C> <C> <C> <C>
Month 5 Estimated
Collections
Month 4 Estimated
Collections
Month 3 Estimated
Collections
Month 2 Estimated
Collections
Month 1 Estimated
Collections
</TABLE>
3. FOR THE _____ COLLECTION PERIOD:
a. Estimated IFC Payments ____________
b. Actual IFC Payments ____________
c. If (a > b), (a-b) equals Excess Remittance ____________
d. If (b > a), (b-a) equals Remittance Shortfall ____________
Page 5
<PAGE>
Remittance Date: ________________
MONTHLY SERVICER'S CERTIFICATE
(to be delivered pursuant to Section 3.01(b)(i) of the Intangible Transition
Property Servicing Agreement on or before each Remittance Date)
Commonwealth Edison Company, as Servicer
- --------------------------------------------------------------------------------
COMED TRANSITIONAL FUNDING TRUST, 1998
- --------------------------------------------------------------------------------
Pursuant to the Intangible Transition Property Servicing Agreement dated as
of ___, 1998 (the "Intangible Transition Property Servicing Agreement") between
Commonwealth Edison Company, as Servicer, and ComEd Funding LLC, as Grantee, the
Servicer does hereby certify as follows:
Collection Period: _____________
IFC Class: STREET LIGHTING--FIXTURE BASED RATES
1.FOR THIS COLLECTION PERIOD:
a. Sales at the current IFC charge (kWh) ____________
b. Current IFC charge (CENTS/kWh) ____________
c. Sales at the previous IFC charge (kWh) ____________
d. Previous IFC charge (CENTS/kWh) ____________
e. Billed IFC not accounted for in prior periods ____________
f. Billed IFC charges (a x b + c x d + e) ____________
g. Collection Curve
Month 1 Estimated Collections ____________
Month 2 Estimated Collections ____________
Month 3 Estimated Collections ____________
Month 4 Estimated Collections ____________
Month 5 Estimated Collections ____________
h. Total (sum of all g above) ____________
i. Estimated IFC Payments (f x h) ____________
2. AGGREGATE REMITTANCE AMOUNT FOR THIS COLLECTION PERIOD:
<TABLE>
<CAPTION>
Collection Collection Billed IFC Remittance
Period (A) Percent (B) Charges (C) Amounts (B x C)
------------ ------------- ------------- -----------------
<S> <C> <C> <C> <C>
Month 5 Estimated
Collections
Month 4 Estimated
Collections
Month 3 Estimated
Collections
Month 2 Estimated
Collections
Month 1 Estimated
Collections
</TABLE>
3. FOR THE _____ COLLECTION PERIOD:
a. Estimated IFC Payments ____________
b. Actual IFC Payments ____________
c. If (a > b), (a-b) equals Excess Remittance ____________
d. If (b > a), (b-a) equals Remittance Shortfall ____________
Page 6
<PAGE>
Remittance Date: ________________
MONTHLY SERVICER'S CERTIFICATE
(to be delivered pursuant to Section 3.01(b)(i) of the Intangible Transition
Property Servicing Agreement on or before each Remittance Date)
Commonwealth Edison Company, as Servicer
- --------------------------------------------------------------------------------
COMED TRANSITIONAL FUNDING TRUST, 1998
- --------------------------------------------------------------------------------
Pursuant to the Intangible Transition Property Servicing Agreement dated as
of ___, 1998 (the "Intangible Transition Property Servicing Agreement") between
Commonwealth Edison Company, as Servicer, and ComEd Funding LLC, as Grantee, the
Servicer does hereby certify as follows:
Collection Period: _____________
IFC Class: STREET LIGHTING--DUSK TO DAWN AND TRAFFIC SIGNAL
1.FOR THIS COLLECTION PERIOD:
a. Sales at the current IFC charge (kWh) ____________
b. Current IFC charge (CENTS/kWh) ____________
c. Sales at the previous IFC charge (kWh) ____________
d. Previous IFC charge (CENTS/kWh) ____________
e. Billed IFC not accounted for in prior periods ____________
f. Billed IFC charges (a x b + c x d + e) ____________
g. Collection Curve
Month 1 Estimated Collections ____________
Month 2 Estimated Collections ____________
Month 3 Estimated Collections ____________
Month 4 Estimated Collections ____________
Month 5 Estimated Collections ____________
h. Total (sum of all g above) ____________
i. Estimated IFC Payments (f x h) ____________
2. AGGREGATE REMITTANCE AMOUNT FOR THIS COLLECTION PERIOD:
<TABLE>
<CAPTION>
Collection Collection Billed IFC Remittance
Period (A) Percent (B) Charges (C) Amounts (B x C)
------------ ------------- ------------- ----------------
<S> <C> <C> <C> <C>
Month 5 Estimated
Collections
Month 4 Estimated
Collections
Month 3 Estimated
Collections
Month 2 Estimated
Collections
Month 1 Estimated
Collections
</TABLE>
3. FOR THE _____ COLLECTION PERIOD:
a. Estimated IFC Payments ____________
b. Actual IFC Payments ____________
c. If (a > b), (a-b) equals Excess Remittance ____________
d. If (b > a), (b-a) equals Remittance Shortfall ____________
Page 7
<PAGE>
Remittance Date: ________________
MONTHLY SERVICER'S CERTIFICATE
(to be delivered pursuant to Section 3.01(b)(i) of the Intangible Transition
Property Servicing Agreement on or before each Remittance Date)
Commonwealth Edison Company, as Servicer
- --------------------------------------------------------------------------------
COMED TRANSITIONAL FUNDING TRUST, 1998
- --------------------------------------------------------------------------------
Pursuant to the Intangible Transition Property Servicing Agreement dated as
of ___, 1998 (the "Intangible Transition Property Servicing Agreement") between
Commonwealth Edison Company, as Servicer, and ComEd Funding LLC, as Grantee, the
Servicer does hereby certify as follows:
Collection Period: _____________
IFC Class: RAILROADS
1.FOR THIS COLLECTION PERIOD:
a. Sales at the current IFC charge (kWh) ____________
b. Current IFC charge (CENTS/kWh) ____________
c. Sales at the previous IFC charge (kWh) ____________
d. Previous IFC charge (CENTS/kWh) ____________
e. Billed IFC not accounted for in prior periods ____________
f. Billed IFC charges (a x b + c x d + e) ____________
g. Collection Curve
Month 1 Estimated Collections ____________
Month 2 Estimated Collections ____________
Month 3 Estimated Collections ____________
Month 4 Estimated Collections ____________
Month 5 Estimated Collections ____________
h. Total (sum of all g above) ____________
i. Estimated IFC Payments (f x h) ____________
2. AGGREGATE REMITTANCE AMOUNT FOR THIS COLLECTION PERIOD:
<TABLE>
<CAPTION>
Collection Collection Billed IFC Remittance
Period (A) Percent (B) Charges (C) Amounts (B x C)
------------ ------------- ------------- -----------------
<S> <C> <C> <C> <C>
Month 5 Estimated
Collections
Month 4 Estimated
Collections
Month 3 Estimated
Collections
Month 2 Estimated
Collections
Month 1 Estimated
Collections
</TABLE>
3. FOR THE _____ COLLECTION PERIOD:
a. Estimated IFC Payments ____________
b. Actual IFC Payments ____________
c. If (a > b), (a-b) equals Excess Remittance ____________
d. If (b > a), (b-a) equals Remittance Shortfall ____________
Page 8
<PAGE>
Remittance Date: ________________
MONTHLY SERVICER'S CERTIFICATE
(to be delivered pursuant to Section 3.01(b)(i) of the Intangible Transition
Property Servicing Agreement on or before each Remittance Date)
Commonwealth Edison Company, as Servicer
- --------------------------------------------------------------------------------
COMED TRANSITIONAL FUNDING TRUST, 1998
- --------------------------------------------------------------------------------
Pursuant to the Intangible Transition Property Servicing Agreement dated as
of ___, 1998 (the "Intangible Transition Property Servicing Agreement") between
Commonwealth Edison Company, as Servicer, and ComEd Funding LLC, as Grantee, the
Servicer does hereby certify as follows:
Collection Period: _____________
IFC Class: WATER-SUPPLY AND SEWAGE PUMPING SERVICE
1.FOR THIS COLLECTION PERIOD:
a. Sales at the current IFC charge (kWh) ____________
b. Current IFC charge (CENTS/kWh) ____________
c. Sales at the previous IFC charge (kWh) ____________
d. Previous IFC charge (CENTS/kWh) ____________
e. Billed IFC not accounted for in prior periods ____________
f. Billed IFC charges (a x b + c x d + e) ____________
g. Collection Curve
Month 1 Estimated Collections ____________
Month 2 Estimated Collections ____________
Month 3 Estimated Collections ____________
Month 4 Estimated Collections ____________
Month 5 Estimated Collections ____________
h. Total (sum of all g above) ____________
i. Estimated IFC Payments (f x h) ____________
2. AGGREGATE REMITTANCE AMOUNT FOR THIS COLLECTION PERIOD:
<TABLE>
<CAPTION>
Collection Collection Billed IFC Remittance
Period (A) Percent (B) Charges (C) Amounts (B x C)
------------ ------------- ------------- -----------------
<S> <C> <C> <C> <C>
Month 5 Estimated
Collections
Month 4 Estimated
Collections
Month 3 Estimated
Collections
Month 2 Estimated
Collections
Month 1 Estimated
Collections
</TABLE>
3. FOR THE _____ COLLECTION PERIOD:
a. Estimated IFC Payments ____________
b. Actual IFC Payments ____________
c. If (a > b), (a-b) equals Excess Remittance ____________
d. If (b > a), (b-a) equals Remittance Shortfall ____________
Page 9
<PAGE>
Remittance Date: ________________
MONTHLY SERVICER'S CERTIFICATE
(to be delivered pursuant to Section 3.01(b)(i) of the Intangible Transition
Property Servicing Agreement on or before each Remittance Date)
Commonwealth Edison Company, as Servicer
- --------------------------------------------------------------------------------
COMED TRANSITIONAL FUNDING TRUST, 1998
- --------------------------------------------------------------------------------
Pursuant to the Intangible Transition Property Servicing Agreement dated as
of ___, 1998 (the "Intangible Transition Property Servicing Agreement") between
Commonwealth Edison Company, as Servicer, and ComEd Funding LLC, as Grantee, the
Servicer does hereby certify as follows:
Collection Period: _____________
IFC Class: IN LIEU OF DEMAND
1.FOR THIS COLLECTION PERIOD:
a. Sales at the current IFC charge (kWh) ____________
b. Current IFC charge (CENTS/kWh) ____________
c. Sales at the previous IFC charge (kWh) ____________
d. Previous IFC charge (CENTS/kWh) ____________
e. Billed IFC not accounted for in prior periods ____________
f. Billed IFC charges (a x b + c x d + e) ____________
g. Collection Curve
Month 1 Estimated Collections ____________
Month 2 Estimated Collections ____________
Month 3 Estimated Collections ____________
Month 4 Estimated Collections ____________
Month 5 Estimated Collections ____________
h. Total (sum of all g above) ____________
i. Estimated IFC Payments (f x h) ____________
2. AGGREGATE REMITTANCE AMOUNT FOR THIS COLLECTION PERIOD:
<TABLE>
<CAPTION>
Collection Collection Billed IFC Remittance
Period (A) Percent (B) Charges (C) Amounts (B x C)
------------ ------------- ------------- -----------------
<S> <C> <C> <C> <C>
Month 5 Estimated
Collections
Month 4 Estimated
Collections
Month 3 Estimated
Collections
Month 2 Estimated
Collections
Month 1 Estimated
Collections
</TABLE>
3. FOR THE _____ COLLECTION PERIOD:
a. Estimated IFC Payments ____________
b. Actual IFC Payments ____________
c. If (a > b), (a-b) equals Excess Remittance ____________
d. If (b > a), (b-a) equals Remittance Shortfall ____________
Page 10
<PAGE>
Remittance Date: ________________
MONTHLY SERVICER'S CERTIFICATE
(to be delivered pursuant to Section 3.01(b)(i) of the Intangible Transition
Property Servicing Agreement on or before each Remittance Date)
Commonwealth Edison Company, as Servicer
- --------------------------------------------------------------------------------
COMED TRANSITIONAL FUNDING TRUST, 1998
- --------------------------------------------------------------------------------
Pursuant to the Intangible Transition Property Servicing Agreement dated as
of ___, 1998 (the "Intangible Transition Property Servicing Agreement") between
Commonwealth Edison Company, as Servicer, and ComEd Funding LLC, as Grantee, the
Servicer does hereby certify as follows:
Collection Period: _____________
IFC Class: 0 TO AND INCLUDING 100 kW DEMAND
1.FOR THIS COLLECTION PERIOD:
a. Sales at the current IFC charge (kWh) ____________
b. Current IFC charge (CENTS/kWh) ____________
c. Sales at the previous IFC charge (kWh) ____________
d. Previous IFC charge (CENTS/kWh) ____________
e. Billed IFC not accounted for in prior periods ____________
f. Billed IFC charges (a x b + c x d + e) ____________
g. Collection Curve
Month 1 Estimated Collections ____________
Month 2 Estimated Collections ____________
Month 3 Estimated Collections ____________
Month 4 Estimated Collections ____________
Month 5 Estimated Collections ____________
h. Total (sum of all g above) ____________
i. Estimated IFC Payments (f x h) ____________
2. AGGREGATE REMITTANCE AMOUNT FOR THIS COLLECTION PERIOD:
<TABLE>
<CAPTION>
Collection Collection Billed IFC Remittance
Period (A) Percent (B) Charges (C) Amounts (B x C)
------------ ------------- ------------- -----------------
<S> <C> <C> <C> <C>
Month 5 Estimated
Collections
Month 4 Estimated
Collections
Month 3 Estimated
Collections
Month 2 Estimated
Collections
Month 1 Estimated
Collections
</TABLE>
3. FOR THE _____ COLLECTION PERIOD:
a. Estimated IFC Payments ____________
b. Actual IFC Payments ____________
c. If (a > b), (a-b) equals Excess Remittance ____________
d. If (b > a), (b-a) equals Remittance Shortfall ____________
Page 11
<PAGE>
Remittance Date: ________________
MONTHLY SERVICER'S CERTIFICATE
(to be delivered pursuant to Section 3.01(b)(i) of the Intangible Transition
Property Servicing Agreement on or before each Remittance Date)
Commonwealth Edison Company, as Servicer
- --------------------------------------------------------------------------------
COMED TRANSITIONAL FUNDING TRUST, 1998
- --------------------------------------------------------------------------------
Pursuant to the Intangible Transition Property Servicing Agreement dated as
of ___, 1998 (the "Intangible Transition Property Servicing Agreement") between
Commonwealth Edison Company, as Servicer, and ComEd Funding LLC, as Grantee, the
Servicer does hereby certify as follows:
Collection Period: _____________
IFC Class: OVER 100 TO AND INCLUDING 1,000 kW DEMAND
1.FOR THIS COLLECTION PERIOD:
a. Sales at the current IFC charge (kWh) ____________
b. Current IFC charge (CENTS/kWh) ____________
c. Sales at the previous IFC charge (kWh) ____________
d. Previous IFC charge (CENTS/kWh) ____________
e. Billed IFC not accounted for in prior periods ____________
f. Billed IFC charges (a x b + c x d + e) ____________
g. Collection Curve
Month 1 Estimated Collections ____________
Month 2 Estimated Collections ____________
Month 3 Estimated Collections ____________
Month 4 Estimated Collections ____________
Month 5 Estimated Collections ____________
h. Total (sum of all g above) ____________
i. Estimated IFC Payments (f x h) ____________
2. AGGREGATE REMITTANCE AMOUNT FOR THIS COLLECTION PERIOD:
<TABLE>
<CAPTION>
Collection Collection Billed IFC Remittance
Period (A) Percent (B) Charges (C) Amounts (B x C)
------------ ------------- ------------- ----------------
<S> <C> <C> <C> <C>
Month 5 Estimated
Collections
Month 4 Estimated
Collections
Month 3 Estimated
Collections
Month 2 Estimated
Collections
Month 1 Estimated
Collections
</TABLE>
3. FOR THE _____ COLLECTION PERIOD:
a. Estimated IFC Payments ____________
b. Actual IFC Payments ____________
c. If (a > b), (a-b) equals Excess Remittance ____________
d. If (b > a), (b-a) equals Remittance Shortfall ____________
Page 12
<PAGE>
Remittance Date: ________________
MONTHLY SERVICER'S CERTIFICATE
(to be delivered pursuant to Section 3.01(b)(i) of the Intangible Transition
Property Servicing Agreement on or before each Remittance Date)
Commonwealth Edison Company, as Servicer
- --------------------------------------------------------------------------------
COMED TRANSITIONAL FUNDING TRUST, 1998
- --------------------------------------------------------------------------------
Pursuant to the Intangible Transition Property Servicing Agreement dated as
of ___, 1998 (the "Intangible Transition Property Servicing Agreement") between
Commonwealth Edison Company, as Servicer, and ComEd Funding LLC, as Grantee, the
Servicer does hereby certify as follows:
Collection Period: _____________
IFC Class: OVER 1,000 TO AND INCLUDING 10,000 KW DEMAND
1.FOR THIS COLLECTION PERIOD:
a. Sales at the current IFC charge (kWh) ____________
b. Current IFC charge (CENTS/kWh) ____________
c. Sales at the previous IFC charge (kWh) ____________
d. Previous IFC charge (CENTS/kWh) ____________
e. Billed IFC not accounted for in prior periods ____________
f. Billed IFC charges (a x b + c x d + e) ____________
g. Collection Curve
Month 1 Estimated Collections ____________
Month 2 Estimated Collections ____________
Month 3 Estimated Collections ____________
Month 4 Estimated Collections ____________
Month 5 Estimated Collections ____________
h. Total (sum of all g above) ____________
i. Estimated IFC Payments (f x h) ____________
2. AGGREGATE REMITTANCE AMOUNT FOR THIS COLLECTION PERIOD:
<TABLE>
<CAPTION>
Collection Collection Billed IFC Remittance
Period (A) Percent (B) Charges (C) Amounts (B x C)
------------ ------------- ------------ ----------------
<S> <C> <C> <C> <C>
Month 5 Estimated
Collections
Month 4 Estimated
Collections
Month 3 Estimated
Collections
Month 2 Estimated
Collections
Month 1 Estimated
Collections
</TABLE>
3. FOR THE _____ COLLECTION PERIOD:
a. Estimated IFC Payments ____________
b. Actual IFC Payments ____________
c. If (a > b), (a-b) equals Excess Remittance ____________
d. If (b > a), (b-a) equals Remittance Shortfall ____________
Page 13
<PAGE>
Remittance Date: ________________
MONTHLY SERVICER'S CERTIFICATE
(to be delivered pursuant to Section 3.01(b)(i) of the Intangible Transition
Property Servicing Agreement on or before each Remittance Date)
Commonwealth Edison Company, as Servicer
- --------------------------------------------------------------------------------
COMED TRANSITIONAL FUNDING TRUST, 1998
- --------------------------------------------------------------------------------
Pursuant to the Intangible Transition Property Servicing Agreement dated as
of ___, 1998 (the "Intangible Transition Property Servicing Agreement") between
Commonwealth Edison Company, as Servicer, and ComEd Funding LLC, as Grantee, the
Servicer does hereby certify as follows:
Collection Period: _____________
IFC Class: OVER 10,000 KW DEMAND
1.FOR THIS COLLECTION PERIOD:
a. Sales at the current IFC charge (kWh) ____________
b. Current IFC charge (CENTS/kWh) ____________
c. Sales at the previous IFC charge (kWh) ____________
d. Previous IFC charge (CENTS/kWh) ____________
e. Billed IFC not accounted for in prior periods ____________
f. Billed IFC charges (a x b + c x d + e) ____________
g. Collection Curve
Month 1 Estimated Collections ____________
Month 2 Estimated Collections ____________
Month 3 Estimated Collections ____________
Month 4 Estimated Collections ____________
Month 5 Estimated Collections ____________
h. Total (sum of all g above) ____________
i. Estimated IFC Payments (f x h) ____________
2. AGGREGATE REMITTANCE AMOUNT FOR THIS COLLECTION PERIOD:
<TABLE>
<CAPTION>
Collection Collection Billed IFC Remittance
Period (A) Percent (B) Charges (C) Amounts (B x C)
------------ ------------- ------------- -----------------
<S> <C> <C> <C> <C>
Month 5 Estimated
Collections
Month 4 Estimated
Collections
Month 3 Estimated
Collections
Month 2 Estimated
Collections
Month 1 Estimated
Collections
</TABLE>
3. FOR THE _____ COLLECTION PERIOD:
a. Estimated IFC Payments ____________
b. Actual IFC Payments ____________
c. If (a > b), (a-b) equals Excess Remittance ____________
d. If (b > a), (b-a) equals Remittance Shortfall ____________
Page 14
<PAGE>
EXHIBIT B
TO INTANGIBLE TRANSITION PROPERTY
SERVICING AGREEMENT
CERTIFICATE OF COMPLIANCE
The undersigned hereby certifies that he/she is the duly elected and
acting ______________________ of Commonwealth Edison Company, as servicer (the
"Servicer") under the Intangible Transition Property Servicing Agreement dated
as of December 16, 1998 (the "Servicing Agreement") between the Servicer and
ComEd Funding LLC (the "Grantee") and further that:
1. A review of the activities of the Servicer and of its performance
under the Servicing Agreement during the twelve months ended June 30, _______
has been made under the supervision of the undersigned pursuant to Section 3.03
of the Servicing Agreement; and
2. To the best of the undersigned's knowledge, based on such review,
the Servicer has fulfilled all of its material obligations in all material
respects under the Servicing Agreement throughout [the period from the initial
Closing Date through] [the twelve months ended] June 30, _____, except for those
material defaults in the fulfillment of material obligations listed on Annex A
hereto.
Executed as of this _______ day of __________, ____.
[NAME OF SERVICER]
By: ____________________________
Name:
Title:
<PAGE>
ANNEX A
TO
CERTIFICATE OF COMPLIANCE
LIST OF SERVICER DEFAULTS
The following material defaults known to the undersigned occurred during the
year ended June 30, ____:
Nature of Default Status
<PAGE>
EXHIBIT C
TO INTANGIBLE TRANSITION PROPERTY
SERVICING AGREEMENT
FORM OF AMENDATORY TARIFF
[ATTACHED]
<PAGE>
ILL. C.C. NO. 4
ORIGINAL SHEET NO. XXX
HYPOTHETICAL ORIGINAL TARIFF SHEET (PAGE 2)
CHARGES.
Charge per kilowatt-hour for all kilowatt-hours billed under the Applicable
Rates in the monthly billing period to:
<TABLE>
<S> <C>
RESIDENTIAL CUSTOMERS
(1) Non-Electric Space Heating 1.111 CENTS
(2) Electric Space Heating 1.111 CENTS
An Electric Space Heating customer is a residential customer that is (a)
billed under Rate 14 - Residential Service - Space Heating Customers or (b)
billed by the Company for delivery service pursuant to the terms of Article
16 of the Public Utilities Act, and determined by the Company to be
eligible for bundled service on Rate 14.
NONRESIDENTIAL CUSTOMERS
(1) For customers not defined in (2) below:
In Lieu of Demand 1.111 CENTS
If the highest Maximum Demand for the customer
over the previous billing year is in the following range:
0 to and including 100 kW 1.111 CENTS
Over 100 to and including 1,000 kW 1.111 CENTS
Over 1,000 to and including 10,000 kW 1.111 CENTS
Over 10,000 kW 1.111 CENTS
An In Lieu of Demand customer is a customer (a) billed under Rate
5 - General Service with in-lieu of demand charges or (b) billed
by the Company for delivery service pursuant to the terms of
Article 16 of the Public Utilities Act, and determined by the
Company to be eligible for bundled service on Rate 6 - General
Service with in-lieu of demand charges.
A customer's Maximum Demand shall have the same definition as
defined in the rate, rider, or contract under which the customer
receives electric or delivery service from the Company.
(2) For customers taking service under.
Standby Service 1.111 CENTS
Interruptible Service 1.111 CENTS
Street Lighting - Fixture Based Rates 1.111 CENTS
Street Lighting - Dusk to Dawn and Traffic Signal 1.111 CENTS
Railroads 1.111 CENTS
Water-Supply and Sewage Pumping Service 1.111 CENTS
</TABLE>
- --------------------------------------------------------------------------------
Filed with the Illinois Commerce Commission Date Effective: December ___,
1998
on December ___. 1998 Issued by P.B. Strobel, Senior Vice President
Issued Pursuant to Order of the Illinois Commerce Post Office Box 767, Chicago,
Illinois 60690
Commission entered July 21, 1998, in Docket
No. 98-0319 and 220 ILCS 5/18-104
<PAGE>
ILL. C.C. NO. 4
1ST REVISED SHEET NO. XXX
(CANCELING ORIGINAL SHEET NO. XXX)
HYPOTHETICAL AMENDED TARIFF SHEET (PAGE 2)
CHARGES.
Charge per kilowatt-hour for all kilowatt-hours billed under the Applicable
Rates in the monthly billing period to:
<TABLE>
<S> <C>
* RESIDENTIAL CUSTOMERS
(1) Non-Electric Space Heating 1.222 CENTS
(2) Electric Space Heating 1.222 CENTS
An Electric Space Heating customer is a residential customer that is (a)
billed under Rate 14 - Residential Service - Space Heating Customers or (b)
billed by the Company for delivery service pursuant to the terms of Article
16 of the Public Utilities Act, and determined by the Company to be
eligible for bundled service on Rate 14.
NONRESIDENTIAL CUSTOMERS
(1) For customers not defined in (2) below:
In Lieu of Demand 1.111 CENTS
If the highest Maximum Demand for the customer
over the previous billing year is in the following range:
0 to and including 100 kW 1.111 CENTS
Over 100 to and including 1,000 kW 1.111 CENTS
* Over 1,000 to and including 10,000 kW 1.222 CENTS
* Over 10,000 kW 1.222 CENTS
An In Lieu of Demand customer is a customer (a) billed under Rate
5 - General Service with in-lieu of demand charges or (b) billed
by the Company for delivery service pursuant to the terms of
Article 16 of the Public Utilities Act, and determined by the
Company to be eligible for bundled service on Rate 6 - General
Service with in-lieu of demand charges.
A customer's Maximum Demand shall have the same definition as
defined in the rate, rider, or contract under which the customer
receives electric or delivery service from the Company.
(2) For customers taking service under.
Standby Service 1.111 CENTS
Interruptible Service 1.111 CENTS
Street Lighting - Fixture Based Rates 1.111 CENTS
Street Lighting - Dusk to Dawn and Traffic Signal 1.111 CENTS
* Railroads 1.222 CENTS
Water-Supply and Sewage Pumping Service 1.111 CENTS
</TABLE>
- --------------------------------------------------------------------------------
Filed with the Illinois Commerce Commission Date Effective: [MONTH] [DAY]
[YEAR]
on [MONTH] [DAY] [YEAR] Issued by P.B. Strobel, Senior Vice President
Issued Pursuant to Order of the Illinois Commerce Post Office Box 767, Chicago,
Illinois 60690
Commission entered July 21, 1998, in Docket
No. 98-0319 and 220 ILCS 5/18-104
ASTERISK (*) INDICATES CHANGE
<PAGE>
Exhibit D of Servicing Agreement
- --------------------------------------------------------------------------------
QUARTERLY SERVICER'S CERTIFICATE
COMED TRANSITIONAL FUNDING TRUST
$3,400,000,000 TRANSITIONAL FUNDING TRUST NOTES
Pursuant to Section 4.01(d)(ii) of the Intangible Transition Property Servicing
Agreement dated as of December 16, 1998, (the "Agreement") between Commonwealth
Edison Company, as Servicer and ComEd Funding LLC, as Grantee, the Servicer does
hereby certify as follows:
Capitalized terms used in the Quarterly Servicer's Certificate have their
respective meanings as set forth in the Agreement. References herein to certain
sections and subsections are references to the respective sections of the
Agreement.
Collection Periods:
Payment Date:
- --------------------------------------------------------------------------------
1. COLLECTIONS ALLOCABLE AND AGGREGATE AMOUNTS AVAILABLE FOR THE CURRENT
PAYMENT DATE:
i. Remittances for the xxx Collection Period
ii. Remittances for the xxx Collection Period
iii. Remittances for the xxx Collection Period
iv. Remittances for the xxx Collection Period (for first Payment Date
only)
v. Remittances for the xxx Collection Period (for first Payment Date
only)
vi Remittances for the xxx Collection Period (for first Payment Date
only)
vii. Net Earnings on Collection Account
viii. GENERAL SUBACCOUNT BALANCE (SUM OF I THROUGH VII ABOVE)
ix. Reserve Subaccount Balance as of Prior Payment Date
x. Overcollateralization Subaccount Balance as of Prior Payment Date
xi. Capital Subaccount Balance as of Prior Payment Date
xii. COLLECTION ACCOUNT BALANCE (SUM OF VIII THROUGH XI ABOVE)
2. OUTSTANDING AMOUNTS AS OF PRIOR PAYMENT DATE:
SERIES 1998
i. Class A-1 Outstanding Amount
ii. Class A-2 Outstanding Amount
iii. Class A-3 Outstanding Amount
iv. Class A-4 Outstanding Amount
v. Class A-5 Outstanding Amount
vi. Class A-6 Outstanding Amount
vii. Class A-7 Outstanding Amount
IX. AGGREGATE OUTSTANDING AMOUNT OF ALL SERIES 1998 NOTES
[Add Other Series as applicable]
X. AGGREGATE OUTSTANDING AMOUNT OF ALL NOTES
Page 1 of 5
<PAGE>
Exhibit D of Servicing Agreement
3. REQUIRED FUNDING/PAYMENTS AS OF CURRENT PAYMENT DATE:
<TABLE>
<CAPTION>
Series 1998 Principal Projected Quarterly
--------------------- Principal Balance Principal Due
----------------- -------------
<S> <C> <C>
i. Class A-1
ii. Class A-2
iii. Class A-3
iv. Class A-4
v. Class A-5
vi. Class A-6
vii. Class A-7
VIII. FOR ALL SERIES 1998 NOTES
[Add Other Series as applicable]
<CAPTION>
Series 1998 Interest Days in
-------------------- Note Interest Rate Interest Period (1) Interest Due
------------------ ------------------- -------------
<S> <C> <C> <C>
ix. Class A-1
x. Class A-2
xi. Class A-3
xii. Class A-4
xiii. Class A-5
xiv. Class A-6
xv. Class A-7
[Add Other Series as applicable]
<CAPTION>
Required Level Funding Required
-------------- ----------------
xvi. Overcollateralization Subaccount
xvii Capital Subaccount
</TABLE>
- ----------------------
(1) On 30/360 Day Basis for initial Payment Date; otherwise use one-fourth of
annual rate.
Page 2 of 5
<PAGE>
Exhibit D of Servicing Agreement
4. ALLOCATION OF REMITTANCES AS OF CURRENT PAYMENT DATE PURSUANT TO 8.02(d) OF
INDENTURE:
i. Indenture Trustee and Delaware Trustee
ii. Quarterly Servicing Fee
iii. Quarterly Administration Fee
iv. Operating Expenses (subject to $100,000 cap and no default)
v. Quarterly Interest (including any past-due Quarterly Interest for
prior periods)
<TABLE>
<CAPTION>
Series 1998 Aggregate Per $1000 of Original
----------- --------- Principal Amount
----------------
<S> <C> <C>
1. Class A-1 Interest Payment
2. Class A-2 Interest Payment
3. Class A-3 Interest Payment
4. Class A-4 Interest Payment
5. Class A-5 Interest Payment
6. Class A-6 Interest Payment
7. Class A-7 Interest Payment
[Add Other Series as applicable]
</TABLE>
vi. Principal Due and Payable as a Result of Event of Default or on
Final Maturity Date
<TABLE>
<CAPTION>
Series 1998 Aggregate Per $1000 of Original
----------- --------- Principal Amount
----------------
<S> <C> <C>
1. Class A-1 Principal Payment
2. Class A-2 Principal Payment
3. Class A-3 Principal Payment
4. Class A-4 Principal Payment
5. Class A-5 Principal Payment
6. Class A-6 Principal Payment
7. Class A-7 Principal Payment
</TABLE>
[Add Other Series as Applicable]
vii. Quarterly Principal
<TABLE>
<CAPTION>
Series 1998 Aggregate Per $1000 of Original
----------- --------- Principal Amount
----------------
<S> <C> <C>
1. Class A-1 Principal Payment
2. Class A-2 Principal Payment
3. Class A-3 Principal Payment
4. Class A-4 Principal Payment
5. Class A-5 Principal Payment
6. Class A-6 Principal Payment
7. Class A-7 Principal Payment
</TABLE>
[Add Other Series as Applicable]
viii. Operating Expenses Not Paid under Clause (iv) above (e.g., in
excess of $100,000)
ix. Funding of Capital Subaccount (to required level)
x. Funding of Overcollateralization Subaccount (to required level)
xi. Net Earnings Released to Note Issuer
xii. Deposit to Reserve Subaccount
xiii. Released to Note Issuer upon Retirement of all Notes: Collection
Account.
Page 3 of 5
<PAGE>
Exhibit D of Servicing Agreement
5. OUTSTANDING AMOUNT AND COLLECTION ACCOUNT BALANCE AS OF CURRENT PAYMENT
DATE (AFTER GIVING EFFECT TO PAYMENTS TO BE MADE ON SUCH PAYMENT DATE):
SERIES 1998
i. Class A-1 Outstanding Amount
ii. Class A-2 Outstanding Amount
iii. Class A-3 Outstanding Amount
iv. Class A-4 Outstanding Amount
v. Class A-5 Outstanding Amount
vi. Class A-6 Outstanding Amount
vii. Class A-7 Outstanding Amount
ix. AGGREGATE OUTSTANDING AMOUNT OF ALL SERIES 1998 NOTES
[Add Other Series as applicable]
x. AGGREGATE OUTSTANDING AMOUNT OF ALL NOTES
xi. Reserve Subaccount Balance
xii. Overcollateralization Subaccount Balance
xiii. Capital Subaccount Balance
xiv. AGGREGATE COLLECTION ACCOUNT BALANCE
6. SUBACCOUNT WITHDRAWALS AS OF CURRENT PAYMENT DATE
(IF APPLICABLE, PURSUANT TO SECTION 8.02(e) OF INDENTURE):
i. Reserve Subaccount
ii. Overcollateralization Subaccount
iii. Capital Subaccount
iv. TOTAL WITHDRAWALS
7. SHORTFALLS IN INTEREST AND PRINCIPAL PAYMENTS AS OF CURRENT PAYMENT DATE:
i. QUARTERLY INTEREST
SERIES 1998
1. Class A-1 Interest Payment
2. Class A-2 Interest Payment
3. Class A-3 Interest Payment
4. Class A-4 Interest Payment
5. Class A-5 Interest Payment
6. Class A-6 Interest Payment
7. Class A-7 Interest Payment
[Add Other Series as Applicable]
ii. QUARTERLY PRINCIPAL
SERIES 1998
1. Class A-1 Principal Payment
2. Class A-2 Principal Payment
3. Class A-3 Principal Payment
4. Class A-4 Principal Payment
5. Class A-5 Principal Payment
6. Class A-6 Principal Payment
7. Class A-7 Principal Payment
Page 4 of 5
<PAGE>
Exhibit D of Servicing Agreement
[Add Other Series as Applicable]
8. SHORTFALLS IN REQUIRED SUBACCOUNT LEVELS AS OF CURRENT PAYMENT DATE:
i. Overcollateralization Subaccount
ii. Capital Subaccount
9. MISCELLANEOUS
Cumulative IFC Charges as of Prior Month End: $____________(2)
Notation Whether IFC Levels exceed Applicable Rates for any IFC Customer
Class
(If answer is yes, list affected classes and respective rate and IFC levels
for such classes).
IN WITNESS HEREOF, the undersigned has duly executed and delivered this
Quarterly Servicer's Certificate this _____ day of ______________, _____.
COMMONWEALTH EDISON COMPANY, as Servicer
by: ______________________
title: _____________________
- ------------------------
(2) For purposes of tracking the $6,323,000,000 Series 1998 Authorized ITP
Amount (as modified by any subsequent TFOs).
Page 5 of 5
<PAGE>
SCHEDULE 4.01(a)
EXPECTED AMORTIZATION SCHEDULE
OUTSTANDING PRINCIPAL BALANCE
<TABLE>
<CAPTION>
PAYMENT DATE CLASS A-1 CLASS A-2 CLASS A-3 CLASS A-4
- ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Series Issuance Date . . . . . $424,967,313 $425,032,687 $258,860,915 $421,139,085
June 25, 1999. . . . . . . . . 284,967,313 425,032,687 258,860,915 421,139,085
September 25, 1999 . . . . . . 187,921,918 425,032,687 258,860,915 421,139,085
December 25, 1999. . . . . . . 94,967,313 425,032,687 258,860,915 421,139,085
March 25, 2000 . . . . . . . . 0 425,032,687 258,860,915 421,139,085
June 25, 2000. . . . . . . . . 0 340,000,000 258,860,915 421,139,085
September 25, 2000 . . . . . . 0 254,541,398 258,860,915 421,139,085
December 25, 2000. . . . . . . 0 170,000,000 258,860,915 421,139,085
March 25, 2001 . . . . . . . . 0 81,515,431 258,860,915 421,139,085
June 25, 2001. . . . . . . . . 0 0 258,860,915 421,139,085
September 25, 2001 . . . . . . 0 0 174,657,533 421,139,085
December 25, 2001. . . . . . . 0 0 88,860,915 421,139,085
March 25, 2002 . . . . . . . . 0 0 0 421,139,085
June 25, 2002. . . . . . . . . 0 0 0 340,000,000
September 25, 2002 . . . . . . 0 0 0 255,965,598
December 25, 2002. . . . . . . 0 0 0 170,000,000
March 25, 2003 . . . . . . . . 0 0 0 81,204,132
June 25, 2003. . . . . . . . . 0 0 0 0
September 25, 2003 . . . . . . 0 0 0 0
December 25, 2003. . . . . . . 0 0 0 0
March 25, 2004 . . . . . . . . 0 0 0 0
June 25, 2004. . . . . . . . . 0 0 0 0
September 25, 2004 . . . . . . 0 0 0 0
December 25, 2004. . . . . . . 0 0 0 0
March 25, 2005 . . . . . . . . 0 0 0 0
June 25, 2005. . . . . . . . . 0 0 0 0
September 25, 2005 . . . . . . 0 0 0 0
December 25, 2005. . . . . . . 0 0 0 0
March 25, 2006 . . . . . . . . 0 0 0 0
June 25, 2006. . . . . . . . . 0 0 0 0
September 25, 2006 . . . . . . 0 0 0 0
December 25, 2006. . . . . . . 0 0 0 0
March 25, 2007 . . . . . . . . 0 0 0 0
June 25, 2007. . . . . . . . . 0 0 0 0
September 25, 2007 . . . . . . 0 0 0 0
December 25, 2007. . . . . . . 0 0 0 0
March 25, 2008 . . . . . . . . 0 0 0 0
June 25, 2008. . . . . . . . . 0 0 0 0
September 25, 2008 . . . . . . 0 0 0 0
December 25, 2008. . . . . . . 0 0 0 0
<CAPTION>
PAYMENT DATE CLASS A-5 CLASS A-6 CLASS A-7 SERIES 1998
- ------------ ------------ ------------ ------------ -------------
Series Issuance Date . . . . . $598,510,714 $761,489,286 $510,000,000 $3,400,000,000
June 25, 1999. . . . . . . . . 598,510,714 761,489,286 510,000,000 3,260,000,000
September 25, 1999 . . . . . . 598,510,714 761,489,286 510,000,000 3,162,954,605
December 25, 1999. . . . . . . 598,510,714 761,489,286 510,000,000 3,070,000,000
March 25, 2000 . . . . . . . . 598,510,714 761,489,286 510,000,000 2,975,032,687
June 25, 2000. . . . . . . . . 598,510,714 761,489,286 510,000,000 2,890,000,000
September 25, 2000 . . . . . . 598,510,714 761,489,286 510,000,000 2,804,541,398
December 25, 2000. . . . . . . 598,510,714 761,489,286 510,000,000 2,720,000,000
March 25, 2001 . . . . . . . . 598,510,714 761,489,286 510,000,000 2,631,515,431
June 25, 2001. . . . . . . . . 598,510,714 761,489,286 510,000,000 2,550,000,000
September 25, 2001 . . . . . . 598,510,714 761,489,286 510,000,000 2,465,796,618
December 25, 2001. . . . . . . 598,510,714 761,489,286 510,000,000 2,380,000,000
March 25, 2002 . . . . . . . . 598,510,714 761,489,286 510,000,000 2,291,139,085
June 25, 2002. . . . . . . . . 598,510,714 761,489,286 510,000,000 2,210,000,000
September 25, 2002 . . . . . . 598,510,714 761,489,286 510,000,000 2,125,965,598
December 25, 2002. . . . . . . 598,510,714 761,489,286 510,000,000 2,040,000,000
March 25, 2003 . . . . . . . . 598,510,714 761,489,286 510,000,000 1,951,204,132
June 25, 2003. . . . . . . . . 598,510,714 761,489,286 510,000,000 1,870,000,000
September 25, 2003 . . . . . . 514,475,567 761,489,286 510,000,000 1,785,964,853
December 25, 2003. . . . . . . 428,510,714 761,489,286 510,000,000 1,700,000,000
March 25, 2004 . . . . . . . . 339,850,103 761,489,286 510,000,000 1,611,339,389
June 25, 2004. . . . . . . . . 258,510,714 761,489,286 510,000,000 1,530,000,000
September 25, 2004 . . . . . . 174,439,914 761,489,286 510,000,000 1,445,929,200
December 25, 2004. . . . . . . 88,510,714 761,489,286 510,000,000 1,360,000,000
March 25, 2005 . . . . . . . . 0 761,489,286 510,000,000 1,271,489,286
June 25, 2005. . . . . . . . . 0 680,000,000 510,000,000 1,190,000,000
September 25, 2005 . . . . . . 0 595,890,076 510,000,000 1,105,890,076
December 25, 2005. . . . . . . 0 510,000,000 510,000,000 1,020,000,000
March 25, 2006 . . . . . . . . 0 421,643,811 510,000,000 931,643,811
June 25, 2006. . . . . . . . . 0 340,000,000 510,000,000 850,000,000
September 25, 2006 . . . . . . 0 255,850,516 510,000,000 765,850,516
December 25, 2006. . . . . . . 0 170,000,000 510,000,000 680,000,000
March 25, 2007 . . . . . . . . 0 81,803,853 510,000,000 591,803,853
June 25, 2007. . . . . . . . . 0 0 510,000,000 510,000,000
September 25, 2007 . . . . . . 0 0 425,816,557 425,816,557
December 25, 2007. . . . . . . 0 0 340,000,000 340,000,000
March 25, 2008 . . . . . . . . 0 0 251,959,273 251,959,273
June 25, 2008. . . . . . . . . 0 0 170,000,000 170,000,000
September 25, 2008 . . . . . . 0 0 85,769,907 85,769,907
December 25, 2008. . . . . . . 0 0 0 0
</TABLE>
<PAGE>
EXHIBIT 10.3
ANNEX I
TO
SERVICING AGREEMENT
The Servicer agrees to comply with the following servicing procedures:
SECTION 1. DEFINITIONS.
(a) Capitalized terms used herein and not otherwise defined shall have the
meanings set forth in the Agreement.
(b) Whenever used in this Annex I, the following words and phrases shall
have the following meanings:
"AGGREGATE REMITTANCE AMOUNT" has the meaning set forth in Section
6(e) of this Annex I.
"APPLICABLE MDMA" means with respect to each Customer, the meter data
management agent providing meter reading services for that Customer's account.
"BILLED IFCS" means the amounts of IFCs billed to Customers, whether
billed directly to such Customers by the Servicer or indirectly through an
Applicable ARES pursuant to Consolidated ARES Billing.
"BUDGET BILLING PLAN" means a levelized payment plan offered by the
Servicer which, if elected by a Customer, provides for level monthly charges to
such Customer on its Bills which are calculated by estimating, on an annual
basis, the amount that the Customer would pay during the next twelve months
(based on the Customer's actual usage during the prior twelve months) and then
charging the Customer 1/12th of that amount for each of the next twelve months,
with an annual reconciliation pursuant to which the payments made by such
Customer during the preceding twelve months are reconciled with the amount owed
by such Customer for actual usage during the same period, and the Customer is
given a credit or billed for the difference, as appropriate, based on such
reconciliation; PROVIDED, that, commencing in the first quarter of 1999, the
Budget Billing Plan will be modified to provide for level monthly charges to be
calculated by estimating, on a semi-annual or quarterly basis, the amount that
the Customer would pay during the next twelve months (based on the Customer's
actual usage during the prior twelve months) and then charging the Customer
1/12th of that amount for each month until the next such estimation, with an
annual reconciliation pursuant to which the payments made by such Customer
during the preceding twelve months are reconciled with the amount owed by such
Customer for actual usage during the same period, and the Customer is given a
credit or billed for the difference, as appropriate, based on such
reconciliation, subject to an option, on such terms as
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the Servicer may offer to Customers, to pay such bill or receive such credit
through an increase or reduction to the level monthly payments for the next
twelve months.
"CLOSING BILL" means the final bill issued to a Customer at the time
service is terminated.
"CONSOLIDATED ARES BILLING" means the billing option available to
Customers served by an ARES pursuant to which such ARES will be responsible for
billing and collecting all charges to Customers electing such billing option,
including the IFCs, all in accordance with applicable ICC Regulations.
"ESTIMATION TEMPLATE" means the template shown on SCHEDULE 6 to this
Annex I, which template is used to calculate the IFC Payments estimated to have
been received by the Servicer during any Collection Period.
"IFC CUSTOMER CLASS" means the separate classes of Customers for IFC
billing purposes set forth in any Tariffs.
"NET IFC WRITE-OFFS" means, for any Billing Period, an amount equal to
the product of (i) Net Write-Offs for such period times (ii) a fraction, the
numerator of which equals total billed IFCs attributable to the Billing Period
which occurred six Collection Periods prior to such Billing Period and the
denominator of which equals total billed revenues attributable to such sixth
preceding Billing Period.
"NET WRITE-OFF PERCENTAGE" for any Billing Period means the number
(expressed as a percent) equal to: (i) the amount of Net Write-Offs for such
Billing Period, divided by (ii) the total billed revenues attributable to the
Billing Period which occurred six Collection Periods prior to such Billing
Period.
"NET WRITE-OFFS" means, for any Billing Period, the amount of bills
that were written off the Servicer's books during such period as uncollectible
in accordance with its customary practices, net of recoveries received during
such Billing Period in respect of any bills written off during any previous
Billing Period.
"SERVICER POLICIES AND PRACTICES" means, with respect to the
Servicer's duties under this Annex I, the policies and practices of the Servicer
applicable to such duties that the Servicer follows with respect to comparable
assets that it services for itself.
"VARIABLES" means the following variables underlying the Monthly
Collections Curves, each of which may be calculated in accordance with
applicable Servicer Policies and Practices:
(i) Billed IFCs collected during the Billing Period of issuance;
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<PAGE>
(ii) Billed IFCs collected during the first Billing Period after
the Billing Period of issuance;
(iii) Billed IFCs collected during the second Billing Period after
the Billing Period of issuance;
(iv) Billed IFCs collected during the third Billing Period after
the Billing Period of issuance;
(v) Billed IFCs collected during the fourth Billing Period after
the Billing Period of issuance; and
(vi) the estimated Net Write-Off Percentage.
SECTION 2. DATA ACQUISITION.
(a) INSTALLATION AND MAINTENANCE OF METERS. Except to the extent that an
ARES is responsible for such services pursuant to an ARES Service Agreement, the
Servicer shall cause to be installed, replaced and maintained meters in such
places and in such condition as will enable the Servicer to obtain usage
measurements for each Customer at least once every Billing Period.
(b) METER READING. At least once each Billing Period, the Servicer shall
obtain usage measurements from the Applicable MDMA for each Customer; PROVIDED,
HOWEVER, that the Servicer may determine any Customer's usage on the basis of
estimates in accordance with applicable ICC Regulations.
(c) COST OF METERING. Neither the Grantee nor the Note Issuer shall be
obligated to pay any costs associated with the metering duties set forth in this
Section 2, including, but not limited to, the costs of installing, replacing and
maintaining meters, nor shall the Grantee or the Note Issuer be entitled to any
credit against the Servicing Fee for any cost savings realized by the Servicer
or any ARES as a result of new metering and/or billing technologies.
SECTION 3. USAGE AND BILL CALCULATION.
The Servicer shall obtain a calculation of each Customer's usage (which may
be based on data obtained from such Customer's meter read or on usage estimates
determined in accordance with applicable ICC Regulations) at least once each
Billing Period and shall determine therefrom each Customer's individual IFCs to
be included on such Customer's Bill; PROVIDED, HOWEVER, that in the case of
Customers served by an ARES under the Consolidated ARES Billing option, the
Applicable ARES, rather than the Servicer, may determine such Customers'
individual IFCs to be included on such Customer's Bills based on billing factors
provided by the Servicer, and, in such
I-3
<PAGE>
case, the Servicer shall deliver to the Applicable ARES such billing factors as
are necessary for the Applicable ARES to calculate such Customers' respective
IFCs as such charges may change from time to time pursuant to the Reconciliation
or True-Up Adjustments. To the extent that current billing information for any
IFC Customer Class is not available for the applicable Billing Period, the
Servicer shall estimate Billed IFCs for such Billing Period based on such IFC
Customer Class's usage in the same Billing Period of the preceding year
(adjusted for normal growth and unusual weather) and shall include such
estimated amounts in the Monthly Collections Curves for such Billing Period;
provided, however, that the Servicer shall use the actual Billed IFCs for the
relevant Billing Period in calculating any Remittance Shortfall or Excess
Remittance relating to such Billing Period, even though the actual Bills
reflecting such Billed IFCs may have been issued in a later Billing Period.
SECTION 4. BILLING.
The Servicer shall implement the IFCs as of the Closing Date and shall
thereafter bill each Customer or the Applicable ARES for the respective
Customer's outstanding current and past due IFCs accruing through December 31,
2008, or such longer period during which the Notes may remain outstanding, all
in accordance with the following:
(a) FREQUENCY OF BILLS; BILLING PRACTICES. In accordance with the
Servicer's then-existing Servicer Policies and Practices for its own charges, as
such Servicer Policies and Practices may be modified from time to time, the
Servicer shall generate and issue a Bill to each Customer, or, in the case of a
Customer who has elected Consolidated ARES Billing, to the Applicable ARES, for
such Customer's respective IFCs once every applicable Billing Period, at the
same time, with the same frequency and on the same Bill as that containing the
Servicer's own charges to such Customer or ARES, as the case may be. In the
event that the Servicer makes any material modification to these practices, it
shall notify the Grantee, the Note Issuer, the Indenture Trustee, and the Rating
Agencies prior to the effectiveness of any such modification; PROVIDED, HOWEVER,
that the Servicer may not make any modification that will materially adversely
affect the Holders.
(b) FORMAT.
(i) Each Bill to a Customer shall contain the charge corresponding
to the respective IFCs owed by such Customer for the applicable Billing Period.
The IFCs and related credits shall each appear as a separate line-item on each
Bill.
(ii) In the case of each Customer that has elected Consolidated
ARES Billing, the Servicer shall deliver to the Applicable ARES itemized charges
for such Customer setting forth such Customer's IFCs and related credits, each
as a separate line-item.
(iii) The Servicer shall conform to such requirements in respect of
the format, structure and text of Bills delivered to Customers and ARES as
applicable ICC Regulations shall
I-4
<PAGE>
from time to time prescribe. To the extent that Bill format, structure and
text are not prescribed by the Public Utilities Act or by applicable ICC
Regulations, the Servicer shall, subject to clauses (i) and (ii) above,
determine the format, structure and text of all Bills in accordance with its
reasonable business judgment, its Servicer Policies and Practices with
respect to its own charges and prevailing industry standards.
(c) ALLOCATIONS OF IFCS. IFCs and related credits shall be deducted from
all amounts constituting Applicable Rates and from all charges to Customers from
which IFCs must be deducted pursuant to the Funding Orders, whether or not such
Applicable Rates or charges are computed on a cents per kilowatt hours basis,
according to some other usage-based calculation, on a fixed basis, or in any
other fashion or by any combination of the foregoing. If the IFCs calculated
for any Customer for any Billing Period exceeds the amount of its otherwise
Applicable Rates, then the Bill to such Customer shall reflect an IFC and
related credit each equal to the total amount of such Applicable Rates.
(d) DELIVERY. The Servicer shall deliver all Bills to Customers (i) by
United States Mail in such class or classes as are consistent with the Servicer
Policies and Practices followed by the Servicer with respect to its own charges
to its customers or (ii) by any other means, whether electronic or otherwise,
that the Servicer may from time to time use to present its own charges to its
customers. In the case of Customers that have elected Consolidated ARES
Billing, the Servicer shall deliver all Bills to the Applicable ARES by such
means as are prescribed by applicable ICC Regulations, or if not prescribed by
applicable ICC Regulations, by such means as are mutually agreed upon by the
Servicer and the Applicable ARES and are consistent with ICC Regulations. The
Servicer or an ARES, as applicable, shall pay from its own funds all costs of
issuance and delivery of all Bills, including but not limited to printing and
postage costs as the same may increase or decrease from time to time.
SECTION 5. CUSTOMER SERVICE FUNCTIONS.
The Servicer shall handle all Customer inquiries and other Customer service
matters according to the same procedures it uses to service Customers with
respect to its own charges.
SECTION 6. COLLECTIONS; PAYMENT PROCESSING; REMITTANCE.
(a) COLLECTION EFFORTS, POLICIES, PROCEDURES.
(i) The Servicer shall use reasonable efforts to collect all
Billed IFCs from Customers and Third-Party Collectors (including ARES) as and
when the same become due and shall follow such collection procedures as it
follows with respect to comparable assets that it services for itself or others,
including with respect to the following:
I-5
<PAGE>
(A) The Servicer shall prepare and deliver overdue notices to
Customers and ARES in accordance with applicable ICC
Regulations and Servicer Policies and Practices.
(B) The Servicer shall apply late payment charges to outstanding
Customer and ARES balances in accordance with applicable ICC
Regulations. All late payment charges and interest collected
shall be payable to and retained by the Servicer as a
component of its compensation under the Agreement, and the
Note Issuer shall have no right to share in the same.
(C) The Servicer shall deliver verbal and written final notices of
delinquency and possible disconnection in accordance with
applicable ICC Regulations and Servicer Policies and
Practices.
(D) The Servicer shall adhere to and carry out disconnection
policies in accordance with the Public Utilities Act and
applicable ICC Regulations and Servicer Policies and
Practices.
(E) The Servicer may employ the assistance of collection agents to
collect any past-due IFCs in accordance with applicable ICC
Regulations and Servicer Policies and Practices and the
Tariffs.
(F) The Servicer shall apply Customer and ARES deposits to the
payment of delinquent accounts in accordance with applicable
ICC Regulations and Servicer Policies and Practices and
according to the priorities set forth in Section 6(b)(ii),
(iii) and (iv) of this Annex I.
(ii) The Servicer shall not waive any late payment charge or any
other fee or charge relating to delinquent payments, if any, or waive, vary or
modify any terms of payment of any amounts payable by a Customer, in each case
unless such waiver or action: (A) would be in accordance with the Servicer's
customary practices or those of any successor Servicer with respect to
comparable assets that it services for itself and for others; (B) would not
materially adversely affect the rights of the Holders; and (C) would comply with
applicable law; PROVIDED, HOWEVER, that notwithstanding anything in the
Agreement or this Annex I to the contrary, the Servicer is authorized to write
off any Billed IFCs, in accordance with its Servicer Policies and Practices,
that have remained outstanding for 180 days or more.
(iii) The Servicer shall accept payment from Customers and
Third-Party Collectors in respect of Billed IFCs in such forms and methods and
at such times and places as it accepts for payment of its own charges. The
Servicer shall accept payment from ARES in respect of Billed IFCs in such forms
and methods and at such times and places as the Servicer and each ARES shall
mutually agree in accordance with applicable ICC Regulations and the Servicer
shall give prompt written notice to the Rating Agencies of any such agreements.
I-6
<PAGE>
(b) PAYMENT PROCESSING; ALLOCATION; PRIORITY OF PAYMENTS.
(i) The Servicer shall post all payments received to Customer
accounts as promptly as practicable, and, in any event, substantially all
payments shall be posted no later than five Servicer Business Days after
receipt.
(ii) Subject to clause (iii) below, the Servicer shall apply
payments received to each Customer's or Applicable ARES' account in proportion
to the charges contained on the outstanding Bill to such Customer or Applicable
ARES.
(iii) Any amounts collected by the Servicer that represent partial
payments of the total Bill to a Customer or ARES shall be allocated as follows:
(A) first to amounts owed to the Note Issuer and ComEd (excluding any late fees
and interest charges), regardless of age, pro rata in proportion to their
respective percentages of the total amount of their combined outstanding charges
on such Bill; then (B) all late charges shall be allocated to ComEd.
(iv) The Servicer shall hold all over-payments for the benefit of
the Note Issuer and ComEd and shall apply such funds to future Bill charges in
accordance with clauses (ii) and (iii) above as such charges become due.
(v) For Customers on a Budget Billing Plan, the Servicer shall
treat IFC Payments received from such Customers as if such Customers had been
billed for their respective IFCs in the absence of the Budget Billing Plan;
partial payment of a Budget Billing Plan payment shall be allocated according to
clause (iii) above and overpayment of a Budget Billing Plan payment shall be
allocated according to clause (iv) above.
(c) ACCOUNTS; RECORDS.
The Servicer shall maintain accounts and records as to the Intangible
Transition Property accurately and in accordance with its standard accounting
procedures and in sufficient detail (i) to permit reconciliation between
payments or recoveries with respect to the Intangible Transition Property and
the amounts from time to time remitted to the Collection Account in respect of
the Intangible Transition Property and (ii) to permit the IFC Collections held
by the Servicer to be accounted for separately from the funds with which they
may be commingled, so that the dollar amounts of IFC Collections commingled with
the Servicer's funds may be properly identified and traced.
(d) INVESTMENT OF IFC PAYMENTS RECEIVED.
Prior to remittance on the applicable Monthly Remittance Date (or, to
the extent remittances are required more frequently under the Indenture, prior
to each Daily Remittance) the Servicer may invest IFC Payments received at its
own risk and for its own benefit, and such investments and, so long as the
Servicer complies with its obligations under the immediately
I-7
<PAGE>
preceding section (c), such funds shall not be required to be segregated from
the other investment and funds of the Servicer.
(e) CALCULATION OF COLLECTIONS; DETERMINATION OF AGGREGATE REMITTANCE
AMOUNT.
(i) On or before each Monthly Remittance Date, the Servicer shall
calculate, in accordance with SCHEDULE 6, the total IFC Payments estimated to
have been received by the Servicer from or on behalf of Customers during the
prior Collection Period in respect of all previously Billed IFCs, increased or
decreased, as applicable, from and after the end of the seventh Billing Period
before such Monthly Remittance Date, by (A) the amount of any Remittance
Shortfall calculated for such Monthly Remittance Date or (B) the amount of any
Excess Remittance calculated for such Monthly Remittance Date or (C) to the
extent not included in Billed IFCs described above, the amount of any Allocable
IFC Revenue Amounts (collectively, the "AGGREGATE REMITTANCE AMOUNT"); PROVIDED,
however, that, (i) to the extent Daily Remittances are required under the
Servicing Agreement, the Servicer (x) shall include in the Daily Remittance on
each Servicer Business Day an amount equal to the total IFC Payments estimated
to be received during the then current Collection Period based on the Monthly
Collections Curve divided by the number of Servicer Business Days in such
Collection Period, such Daily Remittance amount to be calculated no later than
five Servicer Business Days prior to the commencement of any such Collection
Period, and (y) any decreases under clause (A) above or increases under clause
(B) above shall be included only in the Aggregate Remittance Amount distributed
on any Monthly Remittance Date and (ii) no Excess Remittance shall be withdrawn
from the Collection Account if such withdrawal would cause the amounts on
deposit in the General Subaccount or the Reserve Subaccount to be insufficient
for the payment of the next installment of interest on the Notes.
(ii) On or before each Reconciliation Adjustment Date and on or
before the date of any required True-Up Adjustment, in accordance with Section
4.01(b) of the Agreement, the Servicer shall, in a timely manner so as to
perform all required calculations under such Section 4.01(b), update the
Variables underlying the Monthly Collections Curve in SCHEDULE 6 and shall
revise such curve to reflect the updated Variables.
(iii) The Servicer, the Grantee and the Note Issuer as its assignee
acknowledge that the Servicer has undertaken to make certain changes to its
current computerized customer information system, which changes, when
functional, would affect the Servicer's method of calculating the IFC Payments
estimated to have been received by the Servicer during each Collection Period as
set forth in Schedule 6 hereto. Should these changes to the computerized
customer information system become functional during the term of the Agreement,
the Servicer, the Grantee and the Note Issuer agree that they shall review the
procedures used to calculate the IFC Payments estimated to have been received,
as set forth on Schedule 6, in light of the capabilities of such new system and
shall amend this Annex I in writing to make such modifications and/or
substitutions to such procedures and to clause (ii) above as may be
I-8
<PAGE>
appropriate in the interests of efficiency, accuracy, cost and/or system
capabilities; provided, however, that the Servicer may not make any modification
or substitution that will materially adversely affect the Noteholders. As soon
as practicable, and in no event later than 60 Business Days after the date on
which all Customer accounts are being billed under such new system, the Servicer
shall notify the Grantee, the Note Issuer, the Indenture Trustee and the Rating
Agencies of the same.
(iv) All calculations of collections, each update of the Variables
and any changes in procedures used to calculate the IFC Payments pursuant to
this Section 6(e) shall be made in good faith, and in the case of any update
pursuant to clause (ii) or any change in procedures pursuant to clause (iii), in
a manner reasonably intended to provide estimates and calculations that are at
least as accurate as those that would be provided on the Closing Date utilizing
the initial Variables and procedures.
(f) ALLOCABLE IFC REVENUE AMOUNTS
(i) The Servicer shall monitor ComEd's receipt of any fixed payments
of transition charges under Section 16-108(h) of the Public Utilities Act, and
shall, concurrently with such receipt, set aside and allocate for the benefit of
the Grantee and the Note Issuer, as proceeds of the Intangible Transition
Property, an amount with respect to each Customer equal to the product of (a)
the IFC which is then in effect for such Customer at the time of receipt TIMES
(b) the total number of kilowatt hours utilized to compute the amount of such
fixed transition charges.
(ii) The Servicer shall monitor ComEd's receipt of any revenues
derived from condemnation proceedings or FERC stranded cost recoveries or any
other amounts which reflect compensation for lost revenues which would otherwise
have been attributable to Applicable Rates (collectively, "LOST REVENUE
RECOVERIES"), and shall, concurrently with the receipt thereof, set aside and
allocate for the benefit of the Grantee and the Note Issuer, as proceeds of the
Intangible Transition Property, an amount equal to (a) the total dollar amount
of such Lost Revenue Recoveries TIMES (b) a fraction, (1) the numerator of which
equals the weighted average of the IFCs applicable to all classes of Customers
the revenues from which are included in the calculation of such Lost Revenue
Recoveries and (2) the denominator of which equals the weighted average of the
Applicable Rates charged to such Customers, with such weighted averages to be in
each case calculated based on the respective IFCs and Applicable Rates
applicable to such classes for the most recent calendar year then ended.
(iii) All amounts set aside pursuant this Section 6(f) shall
constitute Allocable IFC Revenue Amounts, shall comprise part of the Intangible
Transition Property, shall be included in the Aggregate Remittance Amount and
shall be remitted to the Indenture Trustee in accordance with the other
provisions of this Servicing Agreement and the Indenture.
I-9
<PAGE>
(g) REMITTANCES.
(i) The Note Issuer shall cause to be established the Collection
Account in the name of the Indenture Trustee in accordance with the Indenture.
(ii) The Servicer shall make remittances to the Collection Account
in accordance with Section 6.11 of the Agreement.
(iii) In the event of any change of account or change of institution
affecting the Collection Account, the Note Issuer shall provide written notice
thereof to the Servicer by the earlier of: (A) five Business Days from the
effective date of such change, or (B) five Business Days prior to the next
Monthly Remittance Date.
I-10
<PAGE>
SCHEDULE 6
TO ANNEX I
COMPUTATION OF AGGREGATE REMITTANCE AMOUNT
Subject to Section 6(e)(iii), the following model shall be used to determine the
IFC Payments estimated to have been received by the Servicer during each
Collection Period.
I. ASSUMPTIONS
A. The IFCs implemented with respect to a given Series or Class of Notes shall
go into effect on the Series Issuance Date for such Series or Class of
Notes.
B. The IFCs (and corresponding credit) for each Series or Class of Notes will
be levied on all electricity usage recorded on Bills issued on or after the
applicable Series Issuance Date whether or not a portion of such
electricity usage was actually incurred prior to the Series Issuance Date
for such Series or Class of Notes, but excluding Bills issued in respect of
Billing Periods prior to the Billing Period in which such Series Issuance
Date occurs.
C. Customer billing occurs in cycles of approximately 21 Business Days, 12
times each year.
D. The pattern of collections has not varied materially over the last five
years.
E. The initial Monthly Collections Curve (i.e. collection amounts for each
month) for each of the 13 IFC Customer Classes is based on a statistically
valid sample of customer billing data from each of the 13 IFC Customer
Classes between July 1996 and June 1997.
F. Initially, each month has an estimated incremental collection percentage
shown in Figure 1 below.
G. The Variables underlying the Monthly Collections Curves will be reviewed
annually and revised as necessary to reflect updated data, including
changes in the degree to which Customers are billed indirectly by an
Applicable ARES and/or such Applicable ARES are obligated to pay directly
on behalf of end-user Customers.
H. The Monthly Collections Curves will be calculated on the assumption that
Bills not yet collected during the last Billing Period of calculation for
the curves have in fact been collected during such last Billing Period
except to the extent of Net Write Offs for such Billing Period.
I-6-1
<PAGE>
MONTHLY COLLECTIONS CURVE
The initial Monthly Collections Curve for each IFC Customer Class is shown below
in Figure 1.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------
IFC Customer Billing Collection Periods
Class Period After Billing Period
--------------------------
1 2 3 4
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Residential - No Space Heat A(1) B(1) C(1) D(1) E(1)
- -------------------------------------------------------------------------------------------------
Residential - Space Heat A(2) B(2) C(2) D(2) E(2)
- -------------------------------------------------------------------------------------------------
Standby Service A(3) B(3) C(3) D(3) E(3)
- -------------------------------------------------------------------------------------------------
Interruptible Service A(4) B(4) C(4) D(4) E(4)
- -------------------------------------------------------------------------------------------------
Street Lighting - Fixture Based Rates A(5) B(5) C(5) D(5) E(5)
- -------------------------------------------------------------------------------------------------
Street Lighting - Dusk to Dawn and Traffic Signal A(6) B(6) C(6) D(6) E(6)
- -------------------------------------------------------------------------------------------------
Railroads A(7) B(7) C(7) D(7) E(7)
- -------------------------------------------------------------------------------------------------
Water-Supply and Sewage Pumping Service A(8) B(8) C(8) D(8) E(8)
- -------------------------------------------------------------------------------------------------
In Lieu of Demand A(9) B(9) C(9) D(9) E(9)
- -------------------------------------------------------------------------------------------------
0 to and including 100 kWh Demand A(10) B(1)0 C(10) D(10) E(10)
- -------------------------------------------------------------------------------------------------
Over 100 to and including 1,000 kWh Demand A(11) B(11) C(11) D(11) E(11)
- -------------------------------------------------------------------------------------------------
Over 1,000 to and including 10,000 kWh Demand A(12) B(12) C(12) D(12 E(12)
- -------------------------------------------------------------------------------------------------
Over 10,000 kWh Demand A(13) B(13) C(13) D(13) E(13)
- -------------------------------------------------------------------------------------------------
</TABLE>
Figure 1
I-6-2
<PAGE>
ESTIMATION TEMPLATE
IFC PAYMENTS ESTIMATED TO HAVE BEEN RECEIVED
BY THE SERVICER DURING THE COLLECTION PERIOD OF M
Where:
M = the Collection Period corresponding to the current Billing
Period
X(n) = IFC Charges billed during the Billing Period n periods prior
to the current Billing Period
A = percentage collected during M of the total Billed IFCs
billed during the current Billing Period
B = percentage collected during M of the total Billed IFCs
billed during the Billing Period prior to the current
Billing Period
C = percentage collected during M of the total Billed IFCs
billed during the Billing Period two periods prior to the
current Billing Period
D = percentage collected during M of the total Billed IFCs
billed during the Billing Period three periods prior to the
current Billing Period
E = percentage collected during M of the total Billed IFCs
billed during the Billing Period four periods prior to the
current Billing Period
Then:
IFC Payments estimated to have been received during a Collection
Period (prior to any adjustments for a Remittance Shortfall or Excess
Remittance) equal Z, as shown in the Estimation Template below.
FOR EACH IFC CUSTOMER CLASS:
<TABLE>
<CAPTION>
COLLECTION BILLED IFC ESTIMATED
PERCENT CHARGES COLLECTIONS
(S) (T) (S x T)
- --------------------------------------------------------------------------------
<S> <C> <C>
E(i) X(4) (E)(X(4))
D(i) X(3) (D)(X(3))
C(i) X(2) (C)(X(2))
B(i) X(1) (B)(X(1))
A(i) X(0) (A)(X(0))
-------------------
TOTAL: Z(i)
-------------------
-------------------
</TABLE>
13
ESTIMATED IFC PAYMENTS = Z = Sigma Z(i)
i = 1
where "i" is the IFC Customer Class
I-6-3
<PAGE>
EXHIBIT 10.4
ADMINISTRATION AGREEMENT
THIS ADMINISTRATION AGREEMENT (this "Agreement"), dated as of
December 16, 1998, is entered into among Commonwealth Edison Company, an
Illinois corporation, ("ComEd" or the "Administrator"), ComEd Funding, LLC, a
Delaware limited liability company ("CE Funding") and ComEd Transitional Funding
Trust, a Delaware business trust (the "Note Issuer").
WHEREAS, pursuant to Article XVIII of the Illinois Public Utilities
Act (the "Act"), the Administrator has formed CE Funding as a Delaware limited
liability company of which the Administrator is the sole member in order for CE
Funding to become a "grantee" of "intangible transition property" in accordance
with the Act; and
WHEREAS, the Note Issuer has been created in order to accept the
assignment of all of CE Funding's right, title and interest in and to the
intangible transition property and certain other property so that the Note
Issuer shall be an "assignee" as defined in Article XVIII of the Act and will
issue "transitional funding instruments" (the "Notes"), the net proceeds of
which will be paid by the Note Issuer to CE Funding and by CE Funding to ComEd;
and
WHEREAS, CE Funding and the Note Issuer each require certain
facilities, including, without limitation, office space, office furniture and
equipment, computer equipment and communications equipment, to carry on their
respective business activities; and
WHEREAS, CE Funding and the Note Issuer each require certain services,
including, without limitation, administrative, personnel, purchasing and
operational services, in order to carry on their respective business
activities; and
WHEREAS, each of CE Funding and the Note Issuer desire to engage ComEd
as Administrator hereunder in order to provide such facilities and services to
CE Funding and the Note Issuer and to administer the day to day operations of CE
Funding and the Note Issuer; and
WHEREAS, ComEd is willing to provide such facilities and services and
to act as Administrator hereunder; and
WHEREAS, the parties hereto believe that the Administrator's provision
of such facilities and services will be efficient and cost-effective for all
parties involved; and
WHEREAS, the parties hereto wish to incorporate certain terms and
provisions of that certain Affiliated Interests Agreement (the "AIA") dated as
of December 4, 1995 among Unicom Corporation ("Unicom"), ComEd and certain other
entities, as amended, a copy of which agreement is attached hereto as EXHIBIT A;
NOW, THEREFORE, in consideration of the mutual promises set forth
below, the parties hereby agree as follows:
<PAGE>
1. DEFINITIONS. Capitalized terms used in this Agreement without
definition shall have the meaning set forth in the AIA. Non-capitalized terms
used herein which are defined in Article XVIII of the Act shall have the
meanings as so defined therein.
2. PROVISIONS OF FACILITIES AND SERVICES. During the term of this
Agreement, ComEd hereby agrees to act as Administrator hereunder on behalf of CE
Funding and on behalf of the Note Issuer. The Administrator shall make
available or provide to CE Funding and the Note Issuer upon their request, such
facilities (collectively, "FACILITIES") as are described in Section 2.1 of the
AIA and such services (collectively, "SERVICES") as are described in Section 2.2
of the AIA; PROVIDED that (i) the Administrator shall have no obligation to
provide any such Facilities or Services to the extent that ComEd, as a Provider
under the AIA, would not be obligated to provide such Facilities or Services
thereunder and (ii) such Services shall be administrative and ministerial in
nature and are not intended to provide the Administrator with the right to
manage and control CE Funding or the Note Issuer, it being understood that the
management and control of CE Funding and the Note Issuer shall be governed by
separate agreements relating to such matters, including without limitation CE
Funding's certificate of formation and limited liability company agreement and
the declaration of trust of the Note Issuer. The parties hereto further
acknowledge that CE Funding and the Note Issuer have been formed as special
purpose entities whose business activities will be limited to the perfection and
maintenance of rights in the intangible transition property created under an
order from the Illinois Commerce Commission and under the assignment
transactions contemplated thereby, the issuance of the Notes, the entry into
such documents as may be required to evidence and consummate the foregoing
transactions and any other matters relating or incidental thereto. Accordingly,
the Administrator shall have no obligation hereunder to provide or perform
Facilities or Services to CE Funding or the Note Issuer if such Services or
Facilities are not reasonably related to the business activities recited above.
Notwithstanding the foregoing, the Administrator shall provide all Facilities
and Services which CE Funding or the Note Issuer, as applicable, have reasonably
demonstrated are necessary for one or both of them to comply with the terms of,
and perform their obligations under, all documents, agreements or instruments
entered into in connection with the issuance of the Notes, including, without
limitation, all obligations of the Note Issuer under the indenture (the "Note
Indenture") governing the issuance of such Notes. All Facilities and Services
shall, except as otherwise specifically set forth in this Agreement, be provided
without warranty of any kind as provided in Section 6.1 of the AIA.
3. INSTRUCTIONS TO EMPLOYEES. The Administrator shall advise all of
its employees and all of any other Provider's employees requested to perform
Services that each of CE Funding and the Note Issuer is a separate legal entity
from ComEd, ComEd's subsidiaries and affiliates other than CE Funding, and shall
instruct such employees not to represent ComEd or its affiliates as having
agreed to pay or as being liable for the debts of CE Funding or the Note Issuer
and not to represent CE Funding or the Note Issuer as having agreed to pay or as
being liable for the debts of ComEd or ComEd's affiliates. The Administrator
further agrees to advise all employees performing Services on behalf of CE
Funding or the Note Issuer that, in performing such Services, such employees
must follow any directions given them by the officers
-2-
<PAGE>
of CE Funding or the designated representatives of the Note Issuer, as
applicable, and to act in the best interests of CE Funding and/or the Note
Issuer, as applicable.
4. EMPLOYEES. The Administrator shall at all times during the term
of this Agreement provide the following services to all of its personnel who
provide Services to CE Funding or the Note Issuer from time to time (such
personnel, the "Employees"), whether or not such Employees are also officers of
CE Funding or are authorized as officers of CE Funding to act on behalf of the
Note Issuer: (i) any and all compensation and benefits (including, but not
limited to, vacation, holiday and sick pay, life and health insurance, and
pension benefits) comparable to those maintained for the Administrator's
employees not engaged in rendering Services or as required by any applicable
employment practices, policies and contracts, and (ii) the payment of all
required federal, state, and local taxes, social security contributions and
federal and state unemployment compensation insurance taxes. The Administrator
shall also maintain workmen's compensation and liability insurance covering
Employees in compliance with applicable law on a basis comparable to such
insurance maintained for the Administrator's employees not engaged in rendering
Services.
5. CHARGES AND INVOICING. Charges for the use of Facilities and
Services shall be determined in accordance with Section 5.1(b) and other
applicable cost allocation provisions of the AIA and all invoicing and payment
for such Facilities and Services shall be in accordance with Section 4.3 of the
AIA; PROVIDED, however, that the Administrator acknowledges that payments owed
under this Agreement, to the extent paid out of collections of instrument
funding charges or other intangible transition property, shall be subject to the
priority of payment set forth in the Note Indenture. All charges owed hereunder
shall, unless otherwise expressly agreed by the parties, be deemed to be
operating expenses, and not fees, for purposes of the Note Indenture.
6. SERVICING AGREEMENT. Notwithstanding anything to the contrary in
this Agreement, so long as the Administrator is also acting as "Servicer" under
that certain Intangible Transition Property Servicing Agreement entered into as
of even date with the Note Indenture, the Administrator hereby acknowledges and
agrees that all out-of-pocket expenses and all other costs and expenses incurred
by the Administrator in performing its role as Servicer are being separately
compensated through payment of the "Servicing Fee" payable thereunder and shall
not constitute costs and expenses payable to the Administrator under this
Agreement.
7. TERM. The term of this Agreement shall begin as of the date of
issuance of the Notes, and, unless terminated earlier in accordance with the
provisions hereof, shall end on June 30, 2009; PROVIDED, that, if the Notes
issued by the Note Issuer have not been paid in full by such time, then the Note
Issuer shall have the option, by providing thirty days' prior written notice, to
renew this Agreement for successive one-year terms. Notwithstanding the
foregoing, any party hereunder may terminate this Agreement upon written notice
to the other parties hereto; PROVIDED that the Administrator shall not cease to
perform its obligations hereunder unless a successor administrator reasonably
acceptable to CE Funding and the Note Issuer shall have been appointed.
-3-
<PAGE>
8. INDEPENDENT CONTRACTOR. The relationship of the Administrator to
the other parties under this Agreement shall be solely that of an independent
contractor entering into a services agreement. No representations or assertions
shall be made or actions taken by either party which could imply or establish
any agency, joint venture, partnership, employment or trust relationship between
the parties with respect to the subject matter of this Agreement. The
Administrator shall have no authority or power whatsoever to enter into any
agreement, contract or commitment on behalf of the other parties hereto or
create any liability or obligation whatsoever on behalf of such other parties to
any person or entity. Conversely, neither CE Funding nor the Note Issuer shall
have any authority or power whatsoever to enter into any agreement, contract or
commitment on behalf of the Administrator or create any liability or obligation
whatsoever on behalf of the Administrator to any person or entity.
9. CONFIDENTIALITY. The parties hereto agree to abide by the
confidentiality provisions set forth in Article VIII of the AIA.
10. TAX MATTERS. Each of CE Funding and the Note Issuer has been
established so as not to be an association taxable as a corporation for federal
income tax purposes; accordingly, the parties hereto agree that the provisions
of the Tax Sharing Agreement do not apply to the parties hereto.
11. RECORDS. The Administrator shall maintain appropriate books of
account and records relating to services performed hereunder, which books of
account and records shall be accessible for inspection by the Note Issuer at any
time during normal business hours.
12. ADDITIONAL INFORMATION TO BE FURNISHED TO THE NOTE ISSUER. The
Administrator shall furnish to the Note Issuer from time to time such additional
information regarding the collateral for the Notes as the Note Issuer shall
reasonably request.
13. OTHER ACTIVITIES OF ADMINISTRATOR. Nothing herein shall prevent
the Administrator or its affiliates from engaging in other businesses or, in its
sole discretion, from acting in a similar capacity as an administrator for any
other person or entity even though such person or entity may engage in business
activities similar to those of the Note Issuer.
14. NOT APPLICABLE TO COMED IN OTHER CAPACITIES. Nothing in this
Agreement shall affect any obligation ComEd may have in any other capacity.
15. NO PETITION. Administrator hereby covenants and agrees that,
prior to the date which is one year and one day after the payment in full of all
Notes, it will not institute against, or join any other person in instituting
against, CE Funding or the Note 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.
16. MISCELLANEOUS.
-4-
<PAGE>
(a) All provisions of this Agreement shall be binding upon the
parties hereto, their respective successors, legal representatives and assigns.
Neither party shall have the right to assign all or any portion of its
obligations under or interest in this Agreement, except monies which may be due
pursuant hereto, without the prior written consent of the other party; PROVIDED,
HOWEVER, that Administrator may subcontract or assign all or any portion of its
obligations under or interest in this Agreement to any affiliate of
Administrator upon written notice to CE Funding and the Note Issuer so long as
any subcontracting will not relieve the Administrator from liability for its
duties hereunder.
(b) No waiver by any party hereto of any of its rights under this
Agreement shall be effective unless in writing and signed by an officer of
the party waiving such right. No waiver of any breach of this Agreement
shall constitute a waiver of any subsequent breach, whether or not of the
same nature. This Agreement may not be modified except by a writing signed by
officers or other duly authorized representatives of each of the parties
hereto.
(c) This Agreement constitutes the entire agreement of the parties
hereto with respect to the subject matter hereof, and cancels and supersedes any
and all prior written or oral contracts or negotiations between the parties
hereto with respect to the subject matter hereof. All exhibits referenced
herein are hereby incorporated into this Agreement and made an integral part
hereof.
(d) This Agreement and the rights and obligations of the parties
under this Agreement shall be governed by and construed and interpreted in
accordance with the laws of the State of Illinois.
(e) The descriptive headings of the several sections hereof are
inserted for convenience only and shall not control or affect the meaning or
construction of any of the provisions hereof.
(f) Wherever possible each provision of this Agreement shall be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement shall be prohibited by or invalid under
applicable law, such provision shall be ineffective to the extent of such
prohibition or invalidity, without invalidating the remainder of such provision
or the remaining provisions of this Agreement.
(g) In the event of any conflict between the terms of this Agreement
and the terms of the AIA, the terms of the AIA shall control.
-5-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed in their respective names by their duly authorized representatives
as of the day and year first above written.
COMMONWEALTH EDISON COMPANY
By: /s/ Ruth Ann M. Gillis
--------------------------------------
Title: Vice President and Treasurer
COMED FUNDING, LLC
By: /s/ Ruth Ann M. Gillis
--------------------------------------
Title: Manager and President
COMED TRANSITIONAL FUNDING TRUST
By: First Union Trust Company, National Association, as
Delaware Trustee and not in its individual or corporate
capacity
By: /s/ Edward L. Truitt, Jr.
--------------------------------------
Title: Vice President
-6-
<PAGE>
EXHIBIT A
TO ADMINISTRATION AGREEMENT
Affiliated Interests Agreement
<PAGE>
EXHIBIT 10.5
REMEDIATION AGREEMENT
REMEDIATION AGREEMENT, dated as of December 16, 1998 (as amended,
restated, supplemented or otherwise modified from time to time, this
"AGREEMENT") is made by Commonwealth Edison Company, an Illinois corporation
("COMED") in favor of the "Holders" (as defined below) and Harris Trust and
Savings Bank, an Illinois banking corporation, not in its individual capacity
but solely in its capacity as Indenture Trustee (the "INDENTURE TRUSTEE") under
the Indenture (as defined below).
WITNESSETH
WHEREAS, pursuant to that certain Indenture dated as of the date
hereof, between ComEd Transitional Funding Trust (the "NOTE ISSUER") and the
Indenture Trustee (as the same may be amended, restated, supplemented or
otherwise modified from time to time, the "INDENTURE"), the Note Issuer will be
issuing certain Notes, to be supported by certain assets vested in ComEd
Funding, LLC (the "GRANTEE") and assigned by the Grantee to the Note Issuer, all
as more particularly described in that certain Agreement Relating to Grant of
Intangible Transition Property (as the same may be amended, restated,
supplemented or otherwise modified from time to time, the "GRANT AGREEMENT") by
and between ComEd and the Grantee dated as of December 16, 1998 and that certain
Intangible Transition Property Sale Agreement (as the same may be amended,
restated, supplemented or otherwise modified from time to time, the "SALE
AGREEMENT") by and between the Grantee and the Note Issuer, dated as of December
16, 1998; and
WHEREAS, the proceeds of the Notes are being paid to ComEd in
connection with certain transactions contemplated by Article XVIII of the Public
Utilities Act and the issuance of the Notes is therefore of direct and tangible
benefit to ComEd;
NOW, THEREFORE, in order to induce the Holders to purchase the Notes,
and to provide further assurance to such Holders that all proceeds of the assets
which are intended to be vested in the Grantee and assigned to the Note Issuer
to support the payment of the Notes will in fact be paid to the Indenture
Trustee to pay the Notes, ComEd hereby agrees, for the direct benefit of the
Holders, and not by way of assignment of any rights under the Grant Agreement,
as follows:
SECTION 1. DEFINED TERMS. (a) Capitalized terms used herein and not
otherwise defined herein have the meanings assigned to them in the Indenture.
<PAGE>
(b) Non-capitalized terms used herein which are defined in the Public
Utilities Act shall, as the context requires, have the meanings assigned to such
terms in the Public Utilities Act, but without giving effect to amendments to
the Public Utilities Act after the date hereof which have a material adverse
effect on the Indenture Trustee or the Holders.
(c) All terms defined in this Agreement shall have the defined
meaning when used in any certificate or other document made or delivered
pursuant hereto unless otherwise defined therein.
(d) The words "hereof," "herein," "hereunder" and words of similar
import, when used in this Agreement, shall refer to this Agreement as a whole
and not to any particular provision of this Agreement; and the term "including"
shall mean "including without limitation".
(e) The definitions contained in this Agreement are applicable to the
singular as well as the plural forms of such terms and to the masculine as well
as to the feminine and neuter forms of such terms.
SECTION 2. REPRESENTATIONS AND WARRANTIES OF COMED.
(a) ComEd is duly organized and validly existing as a corporation in
good standing under the laws of the State of Illinois, with the power and
authority to own its properties and to conduct its business as such properties
are currently owned and such business is presently conducted and to enter into
this Agreement.
(b) ComEd has the requisite power and authority to execute and
deliver this Agreement and to carry out its terms and the execution, delivery
and performance of this Agreement have been duly authorized by ComEd by all
necessary corporate action.
(c) This Agreement constitutes a legal, valid and binding obligation
of ComEd enforceable against ComEd in accordance with its terms, subject to
applicable insolvency, reorganization, moratorium, fraudulent transfer and other
similar laws relating to or affecting creditors' rights generally from time to
time in effect and to general principles of equity (including, without
limitation, concepts of materiality, reasonableness, good faith and fair
dealing), regardless of whether considered in a proceeding in equity or at law.
(d) The consummation of the transactions contemplated by this
Agreement and the fulfillment of the terms hereof do not (i) conflict with,
result in any breach of any of the terms and provisions of, or constitute (with
or without notice or lapse of time) a default under, the Articles of
Incorporation or by-laws of ComEd, or any indenture, agreement or other
instrument to which ComEd is a party or by which it is bound; (ii) result in the
creation or imposition of any Lien upon any of its properties pursuant to the
terms of any such indenture, agreement or other instrument; or (iii) violate any
law or any order, rule or regulation applicable to ComEd of any
2
<PAGE>
court or of any Federal or state regulatory body, administrative agency or other
governmental instrumentality having jurisdiction over ComEd or its properties.
(e) Upon the effectiveness of the 1998 Initial Tariff: (i) all of the
1998 Transition Property constitutes a current property right vested in the
Grantee; (ii) the 1998 Transition Property includes, without limitation, (A) the
right, title and interest in the IFCs authorized under the 1998 Funding Order,
as adjusted from time to time, (B) the right, title and interest in all
revenues, collections, claims, payments, money or proceeds of or arising from
the IFCs set forth in the 1998 Initial Tariff, and (C) all rights to obtain
adjustments to the IFCs pursuant to the 1998 Funding Order; and (iii) the Note
Issuer is entitled to impose and collect the IFCs described in the 1998 Funding
Order and the 1998 Initial Tariff in an aggregate amount equal to the principal
amount of the Notes, all interest thereon, all amounts required to be deposited
in the Reserve Subaccount, the Overcollateralization Subaccount and (to the
extent payable from the proceeds of the IFCs) the Capital Subaccount, and all
related fees, costs and expenses in respect of the Notes until they have been
paid in full, subject only to the $6.323 billion limitation set forth in the
1998 Funding Order as to the maximum dollar amount of 1998 Transition Property
created thereunder.
(f) To the fullest extent permitted by the Funding Law and all other
applicable law, the 1998 Transition Property and the right to impose and collect
IFCs contemplated thereunder constitute current property rights of the Grantee
and its assigns, including the Note Issuer and its assigns (including the
Indenture Trustee on behalf of the Holders), which property has been placed
beyond the reach of ComEd and its creditors, as in a true sale, and which
property rights may not be limited, altered, impaired, reduced or otherwise
terminated by any subsequent actions of ComEd or any third party and which
shall, to the full extent permitted by law, be enforceable against ComEd, its
successors and assigns, and all other third parties (including judicial lien
creditors) claiming an interest therein by or through ComEd or its successors
and assigns.
SECTION 3. COVENANTS OF COMED. So long as any of the Notes are
outstanding, ComEd will take any and all actions reasonably necessary to
preserve the rights of Holders with respect to payments on the Notes out of the
amounts represented by IFCs or their equivalent, including, but not limited to,
(i) making appropriate filings with the State of Illinois, the ICC or other
regulatory bodies to defend, preserve and create on behalf of Holders the right
to receive payments as provided in the Notes, (ii) defending against or
instituting and pursuing legal actions and appearing or testifying at hearings
or similar proceedings, as may be necessary to block or overturn any attempts to
cause a repeal of, modification of or supplement to or judicial invalidation of
the Amendatory Act or any Funding Order or the rights of the Holders by
legislative enactment or otherwise that would be adverse to the Grantee, the
Note Issuer or any Holders, (iii) continuing to deduct and pay over to the
Indenture Trustee for the benefit of the Holders, all IFCs and IFC Payments or
equivalent revenues received by ComEd notwithstanding any declaration of
invalidity of the Amendatory Act, the Funding Law, the Funding Order and/or the
Grant Agreement, and (iv) making any and all payments required to be made by
ComEd under
3
<PAGE>
the Basic Documents for the benefit of the Holders and the Indenture Trustee
notwithstanding any declaration of invalidity described above.
SECTION 4. NATURE OF REPRESENTATIONS AND WARRANTIES. The
representations and warranties set forth in SECTION 2 of this Agreement, insofar
as they involve conclusions of law, are made not on the basis that ComEd
purports to be a legal expert or to be rendering legal advice, but rather to
reflect the parties' good faith understanding of the legal basis on which the
parties are entering into this Agreement and the other Basic Documents and the
basis on which the Holders are purchasing the Notes, and to reflect the parties'
agreement that, if such understanding turns out to be incorrect or inaccurate,
ComEd will be obligated to indemnify the Holders on account of any such
inaccuracy.
SECTION 5. MERGER OR CONSOLIDATION OF, OR ASSUMPTION OF THE
OBLIGATIONS OF, COMED. Any Person (a) into which ComEd may be merged or
consolidated, (b) which may result from any merger or consolidation to which
ComEd shall be a party or (c) which may succeed to the properties and assets of
ComEd substantially as a whole, which Person in any of the foregoing cases
executes an agreement of assumption to perform every obligation of ComEd
hereunder, shall be the successor to ComEd under this Agreement without further
act on the part of any of the parties to this Agreement.
SECTION 6. AMENDMENTS. This Agreement may, with the prior written
consent of the Rating Agencies and written notice to the Indenture Trustee, be
amended in writing from time to time by ComEd; PROVIDED that, unless the Rating
Agency Condition has been satisfied with respect to such amendment, this
Agreement may not be so amended except with the prior written consent of the
Indenture Trustee and Holders holding not less than a majority of the
Outstanding Amount of the Notes of all Series. Promptly after the execution of
any such amendment or consent, ComEd shall furnish a copy of such amendment or
consent to the Grantee, the Note Issuer and each of the Rating Agencies. It
shall not be necessary for the consent of the Rating Agencies or the Holders
pursuant to this Section to approve the particular form of any proposed
amendment or consent, but it shall be sufficient if such consent shall approve
the substance thereof.
SECTION 7. NOTICES. All demands, notices and communications upon or
to ComEd or the Indenture Trustee shall be in writing, personally delivered,
mailed or sent by facsimile or other similar form of rapid transmission, and
shall be deemed to have been duly given upon receipt (a) in the case of ComEd,
to Commonwealth Edison Company, 10 South Dearborn Street, 37th Floor, Chicago,
Illinois 60603 and (b) in the case of the Indenture Trustee, at the Corporate
Trust Office, or as to each of the foregoing, at such other address as shall be
designated by written notice to the other party.
SECTION 8. ASSIGNMENT. Notwithstanding anything to the contrary
contained herein, except as provided in Section 6, this Agreement may not be
assigned by ComEd.
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SECTION 9. LIMITATIONS ON RIGHTS OF OTHERS. The provisions of this
Agreement are solely for the benefit of the Indemnmified Parties and nothing in
this Agreement, whether express or implied, shall be construed to give to any
other Person (including, without limitation, the Grantee or the Note Issuer) any
legal or equitable right, remedy or claim under or in respect of this Agreement
or any covenants, conditions or provisions contained herein.
SECTION 10. SEVERABILITY. Any provision of this Agreement 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 remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
SECTION 11. SEPARATE COUNTERPARTS. This Agreement may be executed by
the parties hereto in separate counterparts, each of which when so executed and
delivered shall be an original, but all such counterparts shall together
constitute but one and the same instrument.
SECTION 12. HEADINGS. The headings of the various Sections herein
are for convenience of reference only and shall not define or limit any of the
terms or provisions hereof.
SECTION 13. INTEGRATION. This Agreement represents the agreement of
ComEd with respect to the subject matter hereof, and there are no promises,
undertakings, representations or warranties by ComEd relative to the subject
matter hereof not expressly set forth or referred to herein.
SECTION 14. GOVERNING LAW. This Agreement shall be construed in
accordance with the laws of the State of Illinois, without reference to its
conflict of law provisions, and the obligations, rights and remedies of the
parties hereunder shall be determined in accordance with such laws.
SECTION 15. HOLDERS AS THIRD PARTY BENEFICIARIES. ComEd and the
Indenture Trustee agree that (i) the Holders are direct and express third-party
beneficiaries of the provisions of this Agreement and (ii) the Indenture Trustee
is authorized to enforce the terms and provisions of this Agreement on behalf
of, and for the benefit of, the Holders.
SECTION 16. REPRESENTATIONS, WARRANTIES AND INDEMNITIES TO SURVIVE.
The agreements, representations, warranties, indemnities and other statements
of ComEd or its officers set forth in or made pursuant to this Agreement will
remain in full force and effect and will survive (a) the grant of the 1998
Transition Property and the issuance and delivery of the Notes and (b) the
termination, cancellation or invalidity of the Amendatory Act, the Funding Law,
any Funding Order or the Grant Agreement.
* * * * *
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their respective officers as of the day and year first above
written.
COMMONWEALTH EDISON
COMPANY
By: /S/ RUTH ANN M. GILLIS
------------------------------------
Name: Ruth Ann M. Gillis
Title: Vice President and Treasurer
HARRIS TRUST AND SAVINGS BANK,
not in its individual capacity, but
solely in its capacity as INDENTURE
TRUSTEE under the Indenture
By: /S/ ROBERT D. FOLTZ
------------------------------------
Name: Robert D. Foltz
Title: Vice President
SIGNATURE PAGE
TO REMEDIATION AGREEMENT
