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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
-------------------------
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 22, 1998
Illinois Power Special Purpose Trust
(Issuer of Securities)
Illinois Power Securitization Limited Liability Company
(Depositor of the Trust)
(Exact Name of Registrant as Specified
in its Certificate of Formation)
Delaware 333-63537 37-1376566
(State or Other (Commission File Number -- (IRS Employer
Jurisdiction of Incorporation Registration No. under the Identification No.)
of Organization) Securities Act of 1933)
500 South 27th Street, Decatur, Illinois 62521
(Address of Principal Executive Offices of Registrant)
(217) 450-2435
(Registrant's Telephone Number, including area code)
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ITEM 5. OTHER EVENTS.
Registrant is filing certain exhibits identified below in
connection with the public offering and sale by Illinois Power Special
Purpose Trust (the "Note Issuer") of an aggregate principal amount of
$864,000,000 of Transitional Funding Trust Notes, Series 1998-1 (the "Notes")
under the Registration Statement on Form S-3, as amended (Registration No.
333-63537). The Securities and Exchange Commission declared the
Registration Statement effective on December 9, 1998, and the Registrant
filed a Prospectus Supplement dated December 10, 1998 to the Prospectus dated
December 9, 1998 with respect to the Notes on December 11, 1998. The closing
of this transaction occurred on December 22, 1998.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(c) Exhibits.
The following exhibits are filed with this Current Report on Form 8-K:
1.1 Underwriting Agreement by and among Illinois Power Company,
Illinois Power Securitization Limited Liability Company and
Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith
Incorporated, as Representative of the Underwriters named
therein, dated December 10, 1998.
4.3 Indenture between Illinois Power Special Purpose Trust, as Note
Issuer, and Harris Trust and Savings Bank, as Indenture Trustee,
dated as of December 1, 1998.
10.1 Intangible Transition Property Sale Agreement between Illinois
Power Securitization Limited Liability Company, as Grantee, and
Illinois Power Special Purpose Trust, as Note Issuer, dated as
of December 1, 1998.
10.2 Agreement Relating to Grant of Intangible Transition Property
between Illinois Power Company and Illinois Power Securitization
Limited Liability Company, dated as of December 1, 1998.
10.3 Intangible Transition Property Servicing Agreement between
Illinois Power Securitization Limited Liability Company, as
Grantee, and Illinois Power Company, as Servicer, dated as of
December 1, 1998.
10.5 Remediation Agreement between Illinois Power Company and Harris
Trust and Savings Bank, as Indenture Trustee, dated as of
December 1, 1998.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Registrant has caused this report to be signed on its behalf and
on behalf of the Note Issuer by the undersigned thereunto duly authorized.
ILLINOIS POWER SECURITIZATION
LIMITED LIABILITY COMPANY
By: /s/ ERIC B. WEEKES
-------------------------------
Name: Eric B. Weekes
Title: Manager
Dated: January 13, 1999
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EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NUMBER EXHIBIT DESCRIPTION
- -------------- -------------------
<C> <S>
1.1 Underwriting Agreement by and among Illinois Power Company, Illinois
Power Securitization Limited Liability Company and Merrill Lynch &
Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated, as
Representative of the Underwriters named therein, dated December 10,
1998.
4.3 Indenture between Illinois Power Special Purpose Trust, as Note
Issuer, and Harris Trust and Savings Bank, as Indenture Trustee,
dated as of December 1, 1998.
10.1 Intangible Transition Property Sale Agreement between Illinois Power
Securitization Limited Liability Company, as Grantee, and Illinois
Power Special Purpose Trust, as Note Issuer, dated as of December 1,
1998.
10.2 Agreement Relating to Grant of Intangible Transition Property between
Illinois Power Company and Illinois Power Securitization Limited
Liability Company, dated as of December 1, 1998.
10.3 Intangible Transition Property Servicing Agreement between Illinois
Power Securitization Limited Liability Company, as Grantee, and
Illinois Power Company, as Servicer, dated as of December 1, 1998.
10.5 Remediation Agreement between Illinois Power Company and Harris Trust
and Savings Bank, as Indenture Trustee, dated as of December 1, 1998.
</TABLE>
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ILLINOIS POWER SPECIAL PURPOSE TRUST
TRANSITIONAL FUNDING TRUST NOTES
ILLINOIS POWER SECURITIZATION LIMITED LIABILITY COMPANY
ILLINOIS POWER COMPANY
UNDERWRITING AGREEMENT
New York, New York
December 10, 1998
To the Representatives
named in Schedule I hereto
of the Underwriters named in
Schedule II hereto
Ladies and Gentlemen:
1. INTRODUCTION. Illinois Power Securitization Limited Liability Company,
a special purpose Delaware limited liability company (the "Grantee") proposes to
cause and be sold to the underwriters named in Schedule II hereto (the
"Underwriters"), for whom you are acting as representatives (the
"Representatives"), the principal amount of the notes identified in Schedule I
hereto (the "Notes") to be issued. If the firm or firms listed in Schedule II
hereto include only the firm or firms listed in Schedule I hereto, then the
terms "Underwriters" and "Representatives," as used herein, shall each be deemed
to refer to such firm or firms.
Illinois Power Special Purpose Trust, a Delaware business trust (the "Note
Issuer") was formed pursuant to a declaration of trust, dated as of December 1,
1998, by First Union Trust Company, National Association, a national banking
association, as Delaware Trustee (the "Delaware Trustee"), and Cynthia G.
Steward and Eric B. Weekes, each as a Beneficiary Trustee (the "Trust
Agreement"), and the Notes will be issued pursuant to an indenture, dated as of
December 1, 1998, as supplemented by a first supplemental indenture or Trust
Issuance Certificate (and as amended and supplemented from time to time, the
"Indenture"), by and between the Note Issuer and Harris Trust and Savings Bank,
a banking corporation organized under the laws of the State of Illinois, as
Indenture Trustee (the "Indenture Trustee"). The assets of the Note Issuer will
consist primarily of the Intangible Transition Property (whether created by the
Transitional Funding Order issued by the Illinois Commerce Commission (the
"ICC") on September 10, 1998 (the "1998 Funding Order") or any Subsequent
Funding Order) transferred
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to the Note Issuer pursuant to the Sale Agreement (as hereinafter defined).
Such Intangible Transition Property was, by virtue of the 1998 Funding Order,
granted to and vested in the Grantee, whose sole member is Illinois Power
Company (the "Company"). Pursuant to an agreement relating to the grant of
Intangible Transition Property, dated as of December 1, 1998 (the "Grant
Agreement"), by and between the Company and the Grantee, the Company has
confirmed the absolute nature of the ownership of the Intangible Transition
Property in the Grantee. The Intangible Transition Property will be
transferred to the Note Issuer by the Grantee pursuant to an Intangible
Transition Property sale agreement, dated as of December 1, 1998 (the "Sale
Agreement"), by and between the Grantee and the Note Issuer. Other
Intangible Transition Property may be granted to and vested in the Grantee
pursuant to Subsequent Financing Orders and confirmed by Subsequent Grant
Agreements and transferred to the Note Issuer by the Grantee pursuant to
Subsequent Sale Agreements. Pursuant to the Indenture, the Note Issuer has
granted to the Indenture Trustee, as trustee for the benefit of the holders
of the Notes, all of its right, title and interest in and to the Intangible
Transition Property as security for the Notes. The Intangible Transition
Property will be serviced pursuant to an Intangible Transition Property
servicing agreement, dated as of December 1, 1998 (as amended and
supplemented from time to time, the "Servicing Agreement"), by and between
the Company, as servicer, and the Grantee. All of the Grantee's right, title
and interest in and to the Grant Agreement, the Sale Agreement and the
Servicing Agreement, among other things, will be transferred to the Note
Issuer as Related Assets pursuant to the Sale Agreement.
Capitalized terms used and not otherwise defined herein shall have the
meanings given to them in the Indenture, including Appendix A thereto.
2. REPRESENTATIONS AND WARRANTIES. Each of the Company and the Grantee
represents and warrants to, and agrees with, each Underwriter as set forth below
in this Section 2. Certain terms used in this Section 2 are defined in
paragraph (c) hereof.
(a) If the offering of the Notes is a Delayed Offering (as
specified in Schedule I hereto), paragraph (i) below is applicable and, if
the offering of the Notes is a Non-Delayed Offering (as so specified),
paragraph (ii) below is applicable.
(i) The Grantee and the Notes meet the requirements for
the use of Form S-3 under the Securities Act of 1933 (the "Act"),
and the Grantee has filed with the Securities and Exchange
Commission (the "SEC") a registration statement (the file number of
which is set forth in Schedule I hereto) on such Form, including a
basic prospectus, for registration under the Act of the offering and
sale of the Notes. The Grantee may have filed one or more
amendments thereto, and may have used a Preliminary Final
Prospectus, each of which has previously been furnished to you.
Such registration statement, as so amended, has become effective.
The offering of the Notes is a Delayed Offering and, although the
Basic Prospectus may not include all the information with respect to
the Notes and the offering thereof required by the Act and the rules
thereunder to be included in the Final Prospectus, the Basic
Prospectus includes all such
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information required by the Act and the rules thereunder to be
included therein as of the Effective Date. The Grantee will next
file with the SEC pursuant to Rules 415 and 424(b)(2) or (5) a
final supplement to the form of prospectus included in such
registration statement relating to the Notes and the offering
thereof. As filed, such final prospectus supplement shall
include all required information with respect to the Notes and
the offering thereof and, except to the extent the
Representatives shall agree in writing to a modification, shall
be in all substantive respects in the form furnished to you prior
to the Execution Time or, to the extent not completed at the
Execution Time, shall contain only such specific additional
information and other changes (beyond that contained in the Basic
Prospectus and any Preliminary Final Prospectus) as the Grantee
has advised you, prior to the Execution Time, will be included or
made therein.
(ii) The Grantee and the Notes meet the requirements for
the use of Form S-3 under the Act and the Grantee has filed with
the SEC a registration statement (the file number of which is set
forth in Schedule I hereto) on such Form, including a basic
prospectus, for registration under the Act of the offering and
sale of the Notes. The Grantee may have filed one or more
amendments thereto, including a Preliminary Final Prospectus,
each of which has previously been furnished to you. The Note
Issuer will next file with the SEC either (x) a final prospectus
supplement relating to the Notes in accordance with Rules 430A
and 424(b)(1) or (4), or (y) prior to the effectiveness of such
registration statement, an amendment to such registration
statement, including the form of final prospectus supplement. In
the case of clause (x), the Grantee has included in such
registration statement, as amended at the Effective Date, all
information (other than Rule 430A Information) required by the
Act and the rules thereunder to be included in the Final
Prospectus with respect to the Notes and the offering thereof. As
filed, such final prospectus supplement or such amendment and
form of final prospectus supplement shall contain all Rule 430A
Information, together with all other such required information,
with respect to the Notes and the offering thereof and, except to
the extent the Representatives shall agree in writing to a
modification, shall be in all substantive respects in the form
furnished to you prior to the Execution Time or, to the extent
not completed at the Execution Time, shall contain only such
specific additional information and other changes (beyond that
contained in the Basic Prospectus and any Preliminary Final
Prospectus) as the Grantee has advised you, prior to the
Execution Time, will be included or made therein.
(b) On the Effective Date, the Registration Statement did or
will, and when the Final Prospectus is first filed (if required) in
accordance with Rule 424(b) and on the Closing Date, the Final Prospectus
(and any supplement thereto) will, comply in all material respects with the
applicable requirements of the Act, the Securities Exchange Act of 1934
(the "Exchange Act") and the Trust Indenture Act of 1939 (the "Trust
Indenture Act") and the respective rules thereunder; on the Effective Date,
the
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Registration Statement did not or will not contain any untrue statement
of a material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein not
misleading; on the Effective Date and on the Closing Date the Indenture did
or will comply in all material respects with the requirements of the Trust
Indenture Act and the rules thereunder; and, on the Effective Date, the
Final Prospectus, if not filed pursuant to Rule 424(b), did not or will
not, and on the date of any filing pursuant to Rule 424(b) and on the
Closing Date, the Final Prospectus (together with any supplement thereto)
will not, include any untrue statement of a material fact or omit to state
a material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
provided, however, that neither the Grantee nor the Company makes any
representations or warranties as to (i) that part of the Registration
Statement which shall constitute the Statements of Eligibility and
Qualification (Forms T-1) under the Trust Indenture Act of the Indenture
Trustee or (ii) the information contained in or omitted from the
Registration Statement or the Final Prospectus (or any supplement thereto)
in reliance upon and in conformity with information furnished in writing to
the Grantee by or on behalf of any Underwriter through the Representatives
specifically for inclusion in the Registration Statement or the Final
Prospectus (or any supplement thereto).
(c) The terms which follow, when used in this Agreement, shall
have the meanings indicated. The term "the Effective Date" shall mean each
date that the Registration Statement and any post-effective amendment or
amendments thereto became or become effective and each date after the date
hereof on which a document incorporated by reference in the Registration
Statement is filed. "Execution Time" shall mean the date and time that
this Agreement is executed and delivered by the parties hereto. "Basic
Prospectus" shall mean the prospectus referred to in paragraph (a) above
contained in the Registration Statement at the Effective Date including, in
the case of a Non-Delayed Offering, any Preliminary Final Prospectus.
"Preliminary Final Prospectus" shall mean any preliminary prospectus
supplement to the Basic Prospectus which describes the Notes and the
offering thereof and is used prior to filing of the Final Prospectus.
"Final Prospectus" shall mean the prospectus supplement relating to the
Notes that is first filed pursuant to Rule 424(b) after the Execution Time,
together with the Basic Prospectus or, if, in the case of a Non-Delayed
Offering, no filing pursuant to Rule 424(b) is required, shall mean the
form of final prospectus relating to the Notes, including the Basic
Prospectus, included in the Registration Statement at the Effective Date.
"Registration Statement" shall mean the registration statement referred to
in paragraph (a) above, including incorporated documents, exhibits and
financial statements, as amended at the Execution Time (or, if not
effective at the Execution Time, in the form in which it shall become
effective) and, in the event any post-effective amendment thereto becomes
effective prior to the Closing Date (as hereinafter defined), shall also
mean such registration statement as so amended. Such term shall include
any Rule 430A Information deemed to be included therein at the Effective
Date as provided by Rule 430A. "Rule 415," "Rule 424," "Rule 430A" and
"Regulation S-K" refer to such rules or regulation under the Act. "Rule
430A Information" means information with respect to
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the Notes and the offering thereof permitted to be omitted from the
Registration Statement when it becomes effective pursuant to Rule 430A.
Any reference herein to the Registration Statement, the Basic
Prospectus, any Preliminary Final Prospectus or the Final Prospectus
shall be deemed to refer to and include the documents incorporated by
reference therein pursuant to Item 12 of Form S-3 which were filed under
the Exchange Act on or before the Effective Date of the Registration
Statement or the issue date of the Basic Prospectus, any Preliminary
Final Prospectus or the Final Prospectus, as the case may be; and any
reference herein to the terms "amend," "amendment" or "supplement" with
respect to the Registration Statement, the Basic Prospectus, any
Preliminary Final Prospectus or the Final Prospectus shall be deemed to
refer to and include the filing of any document under the Exchange Act
after the Effective Date of the Registration Statement or the issue date
of the Basic Prospectus, any Preliminary Final Prospectus or the Final
Prospectus, as the case may be, deemed to be incorporated therein by
reference. A "Non-Delayed Offering" shall mean an offering of
securities which is intended to commence promptly after the effective
date of a registration statement, with the result that, pursuant to
Rules 415 and 430A, all information (other than Rule 430A Information)
with respect to the securities so offered must be included in such
registration statement at the effective date thereof. A "Delayed
Offering" shall mean an offering of securities pursuant to Rule 415
which does not commence promptly after the effective date of a
registration statement, with the result that only information required
pursuant to Rule 415 need be included in such registration statement at
the effective date thereof with respect to the securities so offered.
Whether the offering of the Notes is a Non-Delayed Offering or a Delayed
Offering shall be set forth in Schedule I hereto.
(d) PricewaterhouseCoopers LLP, the accountants who certified
certain financial statements of the Grantee and the Note Issuer included in
the Prospectus, are independent public accountants as required by the Act
and the rules and regulations of the SEC thereunder.
(e) The financial statements included or incorporated by
reference in the Prospectus present fairly the financial position and
results of operations of the Grantee and the Note Issuer, respectively, as
of the respective dates and for the respective periods specified and,
except as otherwise stated in the Prospectus, such financial statements
have been prepared in conformity with generally accepted accounting
principles applied on a consistent basis during the periods involved.
Neither the Grantee nor the Note Issuer has any material contingent
obligation which is not disclosed in the Prospectus.
(f) The Note Issuer has been duly formed and is validly existing
as a Delaware business trust and is in good standing under the laws of the
State of Delaware, with full power and authority to execute, deliver and
perform its obligations under this Agreement, the Sale Agreement, the
Indenture and the Notes.
(g) The Note Issuer is not in violation of the Trust Agreement,
or in default in the performance or observance of any material obligation,
agreement, covenant or
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condition contained in any material contract, lease, note or other
instrument to which it is a party or by which it may be bound, or
materially in violation of any law, administrative regulation or
administrative, arbitration or court order, except in each case to such
extent as may be set forth in the Prospectus; and the execution and
delivery of the Sale Agreement, and the Indenture and the Notes, the
incurrence of the obligations set forth therein and the consummation of
the transaction therein contemplated will not conflict with or
constitute a breach of, or default under, the Trust Agreement or any
mortgage, contract, lease, note or other instrument to which the Note
Issuer is a party or by which it may be bound, or any law,
administrative regulation or administrative, arbitration or court order.
(h) There is no pending or threatened suit or proceeding before
any court or governmental agency, authority or body or any arbitration
involving the Company or any of its significant subsidiaries or the Note
Issuer required to be disclosed in the Prospectus which is not adequately
disclosed in the Prospectus.
(i) The Indenture has been duly and validly authorized by the
necessary action and duly qualified under the Trust Indenture Act; and the
Indenture has been duly and validly executed and delivered and is a valid
and enforceable instrument in accordance with its terms (subject to
bankruptcy, reorganization, insolvency, moratorium or other similar laws or
equitable principles affecting the enforcement of creditors' rights from
time to time in effect).
(j) The issuance and sale of the Notes in accordance with the
terms of this Agreement have been duly and validly authorized by the
necessary action; the Notes, when duly executed, authenticated and
delivered against payment of the agreed consideration therefor, will be
valid and enforceable obligations in accordance with their terms, entitled
to the benefits provided by the Indenture, and the holders of the Notes
will be entitled to the payment of principal and interest as therein
provided; and the Notes and the Indenture conform to the descriptions
thereof contained in the Prospectus.
Any certificate signed by any officer of the Company or the Grantee and
delivered to you or to counsel for the Underwriters shall be deemed a
representation and warranty by the Company and the Grantee to each Underwriters
as to the matters covered thereby.
3. PURCHASE AND SALE. Subject to the terms and conditions and in reliance
upon the representations and warranties herein set forth, the Grantee will cause
to be sold to each Underwriter, and each Underwriter agrees, severally and not
jointly, to purchase from the Note Issuer, at the purchase price set forth in
Schedule I hereto the principal amount of the Notes set forth opposite such
Underwriter's name in Schedule II hereto.
4. DELIVERY AND PAYMENT. Delivery of and payment for the Notes shall be
made on the date and at the time specified in Schedule I hereto (or such later
date not later than five business days after such specified date as the
Representatives shall designate), which date and time may be postponed by
agreement between the Representatives and the Grantee or as provided in
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Section 9 hereof (such date and time of delivery and payment for the Notes
being herein called the "Closing Date"). Delivery of the Notes shall be made
to the Representatives for the respective accounts of the several
Underwriters against payment by the several Underwriters through the
Representatives of the purchase price thereof to the Note Issuer by wire
transfer of immediately available funds. Delivery of the Notes shall be made
at such location as the Representatives shall reasonably designate at least
one business day in advance of the Closing Date. The Notes to be so
delivered shall be initially represented by Notes registered in the name of
Cede & Co., as nominee of The Depository Trust Company ("DTC"). The
interests of beneficial owners of the Notes will be represented by book
entries on the records of DTC and participating members thereof. Definitive
Notes will be available only under limited circumstances.
The Grantee will cause the Note Issuer to have the Notes available for
inspection, checking and packaging by the Representatives in New York, New York,
not later than 1:00 PM Eastern Standard Time on the business day prior to the
Closing Date.
5. COVENANTS.
(a) COVENANTS OF THE GRANTEE. The Grantee covenants and agrees
with the several Underwriters that:
(i) The Grantee will use commercially reasonable efforts
to cause the Registration Statement, if not effective at the
Execution Time, and any amendment thereto, to become effective.
Prior to the termination of the offering of the Notes, the Grantee
will not file any amendment of the Registration Statement or
supplement (including the Final Prospectus or any Preliminary Final
Prospectus) to the Basic Prospectus unless the Grantee has furnished
you a copy for your review prior to filing and will not file any
such proposed amendment or supplement to which you reasonably
object. Subject to the foregoing sentence, the Grantee will cause
the Final Prospectus, properly completed, and any supplement thereto
to be filed with the SEC pursuant to the applicable paragraph of
Rule 424(b) within the time period prescribed and will provide
evidence satisfactory to the Representatives of such timely filing.
The Grantee will promptly advise the Representatives (i) when the
Registration Statement, if not effective at the Execution Time, and
any amendment thereto, shall have become effective, (ii) when the
Final Prospectus, and any supplement thereto, shall have been filed
with the SEC pursuant to Rule 424(b), (iii) when, prior to
termination of the offering of the Notes, any amendment to the
Registration Statement shall have been filed or become effective,
(iv) of any request by the SEC for any amendment of the Registration
Statement or supplement to the Final Prospectus or for any
additional information, (v) of the issuance by the SEC of any stop
order suspending the effectiveness of the Registration Statement or
the institution or threatening of any proceeding for that purpose
and (vi) of the receipt by the Grantee of any notification with
respect to the suspension of the qualification of
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the Notes for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose. The Grantee will
use commercially reasonable efforts to prevent the issuance of
any such stop order and, if issued, to obtain as soon as possible
the withdrawal thereof.
(ii) If, at any time when a prospectus relating to the
Notes is required to be delivered under the Act, any event occurs as
a result of which the Final Prospectus as then supplemented would
include any untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein in the light
of the circumstances under which they were made not misleading, or
if it shall be necessary to amend the Registration Statement or
supplement the Final Prospectus to comply with the Act or the
Exchange Act or the respective rules thereunder, the Grantee
promptly will (i) prepare and file with the SEC, subject to the
second sentence of paragraph (a) of this Section 5, an amendment or
supplement which will correct such statement or omission or effect
such compliance and (ii) supply any supplemented Prospectus to you
in such quantities as you may reasonably request.
(iii) As soon as practicable, the Grantee will cause Note
Issuer to make generally available to the Noteholders and to the
Representatives an earnings statement or statements of the Note
Issuer which will satisfy the provisions of Section 11(a) of the Act
and Rule 158 under the Act.
(iv) The Grantee will furnish to the Representatives and
counsel for the Underwriters, without charge, copies of the
Registration Statement (including exhibits thereto) and, so long as
delivery of a prospectus by an Underwriter or dealer may be required
by the Act, as many copies of any Preliminary Final Prospectus and
the Final Prospectus and any supplement thereto as the
Representatives may reasonably request. The Grantee shall furnish
or cause to be furnished to the Representatives copies of all
reports on Form SR required by Rule 463 under the Act. The Grantee
will pay the expenses of printing or other production of all
documents relating to the offering.
(v) The Grantee will arrange for the qualification of the
Notes for sale under the laws of such jurisdictions as the
Representatives may designate, will maintain such qualifications in
effect so long as required for the distribution of the Notes and
will arrange for the determination of the legality of the Notes for
purchase by institutional investors; provided that in no event shall
the Grantee be obligated to qualify to do business in any
jurisdiction where it is not now so qualified or to take any action
that would subject it to service of process in suits, other than
those arising out of the offering or sale of the Notes, in any
jurisdiction where it is not now so subject.
(vi) Until the business date set forth on Schedule I
hereto, the Grantee will not, without the consent of the
Representatives, offer, sell or contract to sell,
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or otherwise dispose of, directly or indirectly, or announce the
offering of, any asset-backed securities of a trust or other
special purpose vehicle (other than the Notes).
(vii) For a period from the date of this Agreement until the
retirement of the Notes, or until such time as the Underwriters
shall cease to maintain a secondary market in the Notes, whichever
occurs first, the Grantee will deliver to the Representatives the
annual statements of compliance and the annual independent auditor's
servicing reports furnished to the Grantee Trustee, the Note Issuer
or the Indenture Trustee pursuant to the Servicing Agreement or the
Indenture, as applicable, as soon as such statements and reports are
furnished to the Grantee, Note Issuer or the Indenture Trustee.
(viii) So long as any of the Notes are outstanding, the
Grantee will furnish to the Representatives, to the extent not
provided by the Company pursuant to clause (b)(iii) below, (i) as
soon as available, a copy of each report of the Grantee or the Note
Issuer filed with the SEC under the Exchange Act, or mailed to
Noteholders, (ii) a copy of any filings made by the Grantee or the
Note Issuer with the ICC pursuant to the 1998 Funding Order, and
(iii) from time to time, any information concerning the Company, the
Grantee, the Note Issuer, as the Representatives may reasonably
request.
(ix) To the extent, if any, that any rating necessary to
satisfy the condition set forth in Section 6(m) of this Agreement is
conditioned upon the furnishing of documents or the taking of other
actions by the Grantee on or after the Closing Date, the Grantee
shall furnish such documents and take such other actions.
(b) Covenants of the Company. The Company covenants and agrees
with the several Underwriters that, to the extent that the Note Issuer has
not already performed such act pursuant to Section 5(a):
(i) The Company will use commercially reasonable efforts
to cause the Registration Statement, if not effective at the
Execution Time, and any amendment thereto, to become effective. The
Company will use commercially reasonable efforts to prevent the
issuance by the SEC of any stop order suspending the effectiveness
of the Registration Statement and, if issued, to obtain as soon as
possible the withdrawal thereof.
(ii) The Company will apply the proceeds of the issuance
and sale of the Notes for the purposes described in the Prospectus.
(iii) Until the business date set forth on Schedule I
hereto, the Company will not, without the consent of the
Representatives, offer, sell or contract to sell, or otherwise
dispose of, directly or indirectly, or announce the offering of, any
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asset-backed securities of a trust or other special purpose vehicle
(other than the Notes).
(iv) So long as any of the Notes are outstanding and the
Company is the Servicer, the Company will furnish to the
Representatives (i) as soon as available, a copy of each report of
the Company, the Grantee or the Note Issuer filed with the SEC under
the Exchange Act, or mailed to Noteholders, (ii) a copy of any
filings with the ICC by the Company, the Grantee or the Note Issuer
pursuant to the 1998 Funding Order, and (iii) from time to time, any
information concerning the Company, the Grantee or the Note Issuer,
as the Representatives may reasonably request.
(v) To the extent, if any, that any rating necessary to
satisfy the condition set forth in Section 6(m) of this Agreement is
conditioned upon the furnishing of documents or the taking of other
actions by the Company on or after the Closing Date, the Company
shall furnish such documents and take such other actions.
(vi) The Company recognizes and agrees that a substantial
impairment of the rights of Holders with respect to the collection
of IFCs and payments on the Notes, arising from a declaration of
invalidity of the Amendatory Act and/or the Funding Law or for any
other reason, occurring after the Company and its affiliates
received the proceeds of such Notes, would not be equitable. The
Company agrees 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 and (ii) so long as the 1998
Funding Order remains in effect, 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 the Company
notwithstanding any declaration of invalidity of the Amendatory Act
and/or the Funding Law.
(vii) The Initial IFC Tariff will be calculated in
accordance with the 1998 Funding Order.
6. CONDITIONS TO THE OBLIGATIONS OF THE UNDERWRITERS. The obligations of
the Underwriters to purchase the Notes shall be subject to the accuracy of the
representations and warranties on the part of the Grantee and the Company
contained herein as of the Execution Time and the Closing Date, on the part of
the Grantee contained in Article III of the Sale Agreement and on the part of
the Company contained in Article III of the Grant Agreement and in Section 6.01
of the Servicing Agreement as of the Closing Date (which representations and
warranties are hereby incorporated herein as if set forth in full),to the
accuracy of the statements in the Notes pursuant to the provisions hereof, to
the performance by the Grantee, the Company
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and the Note Issuer of their obligations hereunder and to the following
additional conditions precedent:
(a) If the Registration Statement has not become effective prior
to the Execution Time, unless the Representatives agree in writing to a
later time, the Registration Statement will become effective not later than
(i) 6:00 PM Eastern Standard Time, on the date of determination of the
public offering price, if such determination occurred at or prior to 3:00
PM Eastern Standard Time on such date, or (ii) 12:00 Noon Eastern Standard
Time on the business day following the day on which the public offering
price was determined, if such determination occurred after 3:00 PM Eastern
Standard Time on such date; if filing of the Final Prospectus, or any
supplement thereto, is required pursuant to Rule 424(b), the Final
Prospectus, and any such supplement, shall have been filed in the manner
and within the time period required by Rule 424(b); and no stop order
suspending the effectiveness of the Registration Statement shall have been
issued and no proceedings for that purpose shall have been instituted or
threatened.
(b) The Representatives shall have received an opinion of Schiff
Hardin & Waite, counsel for the Company, the Grantee and the Note Issuer,
dated the Closing Date, substantially in the form of Exhibit A hereto.
(c) The Representatives shall have received an opinion letter of,
or a reliance letter thereon from, Schiff Hardin & Waite, counsel to the
Note Issuer, dated the Closing Date, in form and substance reasonably
satisfactory to the Representatives, required to be delivered by such
counsel pursuant to the requirements of clauses (3) and (8) of Section 2.10
of the Indenture.
(d) The Representatives shall have received (i) opinion letters
of, or a reliance letter or letters thereon from, Richards, Layton and
Finger, P.A., special Delaware counsel to the Grantee and the Note Issuer,
dated the Closing Date, in form and substance reasonably satisfactory to
the Representatives, as to matters relating to the Grantee and the Note
Issuer and the transactions contemplated hereby, respectively, and (ii) an
opinion of Richards, Layton & Finger, P.A., counsel to the Delaware
Trustee, dated the Closing Date, in form and substance reasonably
satisfactory to the Representatives, to the effect that:
(i) the Delaware Trustee is validly existing as a national
banking association in good standing under the laws of the State of
Delaware and of the federal laws of the United States of America,
with full corporate trust power and authority to enter into and
perform its obligations as Delaware Trustee under the Trust
Agreement, the Sale Agreement and the Indenture; and
(ii) the Trust Agreement has been duly authorized, executed
and delivered by the Delaware Trustee and constitutes a legal, valid
and binding agreement enforceable against the Delaware Trustee in
accordance with its terms (subject, as to enforcement of remedies,
to applicable bankruptcy, reorganization,
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insolvency, moratorium or other similar laws or equitable
principles affecting creditors' rights generally from time to
time in effect).
(e) The Representatives shall have received an opinion or
opinions of counsel to the Indenture Trustee, portions of which may be
delivered by Seward & Kissel, outside counsel to the Indenture Trustee, and
portions of which may be delivered by in-house counsel for the Indenture
Trustee, dated the Closing Date, in form and substance reasonably
satisfactory to the Representatives, to the effect that:
(i) the Indenture Trustee is validly existing as a banking
corporation in good standing under the laws of Illinois;
(ii) the Indenture has been duly authorized, executed and
delivered by the Indenture Trustee and constitutes the legal, valid
and binding agreement enforceable against the Indenture Trustee in
accordance with its terms (subject, as to enforcement of remedies,
to applicable bankruptcy, reorganization, insolvency, moratorium or
other similar laws or equitable principles affecting creditors'
rights generally from time to time in effect); and
(iii) the Indenture Trustee has duly executed and
authenticated the Notes issued on the Closing Date on behalf of the
Note Issuer.
(f) The Representatives shall have received from Brown & Wood
LLP, counsel for the Underwriters, such opinion or opinions, dated the
Closing Date, with respect to the issuance and sale of the Notes, the
Indenture, the Registration Statement, the Final Prospectus (together with
any supplement thereto) and other related matters as the Representatives
may reasonably require, and the Company, the Grantee and the Note Issuer
shall have furnished to such counsel such documents as they request for the
purpose of enabling them to pass upon such matters.
(g) The Representatives shall have received a certificate of the
Grantee, signed by the Sole Member or any Manager of the Grantee, including
the Independent Managers of the Grantee, dated the Closing Date, to the
effect that the signers of such certificate have carefully examined the
Registration Statement, the Final Prospectus, any supplement to the Final
Prospectus and this Agreement and that:
(i) the representations and warranties of the Grantee in
this Agreement and in the Sale Agreement are true and correct in all
material respects on and as of the Closing Date with the same effect
as if made on the Closing Date, and the Grantee and the Note Issuer
have complied with all the agreements and satisfied all the
conditions on each of their part to be performed or satisfied at or
prior to the Closing Date;
(ii) no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that
purpose have been
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instituted or, to the Grantee's knowledge, threatened; and
(iii) since the dates as of which information is given in
the Final Prospectus (exclusive of any supplement thereto), there
has been no material adverse change in (A) the condition (financial
or other), prospects, earnings, business or properties of the
Grantee or the Note Issuer, whether or not arising from transactions
contemplated by the Final Prospectus in the ordinary course of
business, or (B) the Intangible Transition Property or any right
related thereto under the Funding Law or the 1998 Funding Order,
except as set forth in or contemplated in the Final Prospectus
(exclusive of any supplement thereto).
(h) The Representatives shall have received a certificate of the
Company, signed by the Chief Executive Officer, the President or a
Vice-President and the principal financial or accounting officer of the
Company, dated the Closing Date, to the effect that the signers of such
certificate have carefully examined the Registration Statement, the Final
Prospectus, any supplement to the Final Prospectus and this Agreement and
that:
(i) the representations and warranties of the Company in
this Agreement, the Grant Agreement, the Servicing Agreement, the
Administration Agreement and the Remediation Agreement are true and
correct in all material respects on and as of the Closing Date with
the same effect as if made on the Closing Date, and the Company has
complied in all material respects with all the agreements and
satisfied all the conditions on its part to be performed or
satisfied at or prior to the Closing Date; provided, however, that
the execution of each certificate by any of said individuals on
behalf of the Company shall not be deemed to be the expression of
any legal opinion or opinions by any of said individuals;
(ii) no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that
purpose have been instituted or, to the Company's knowledge,
threatened; and
(iii) since the dates as of which information is given in
the Final Prospectus (exclusive of any supplement thereto), there
has been no material adverse change in (A) the condition (financial
or other), prospects, earnings, business or properties of the
Company and its subsidiaries taken as a whole, whether or not
arising from transactions contemplated by the Final Prospectus or in
the ordinary course of business, or (B) the Intangible Transition
Property, except as set forth in or contemplated in the Final
Prospectus (exclusive of any supplement thereto).
(i) At the Closing Date, PricewaterhouseCoopers LLP shall have
furnished to the Representatives (i) a letter or letters (which may refer
to letters previously delivered to one or more of the Representatives),
dated as of the Closing Date, in form and substance satisfactory to the
Representatives, confirming that they are independent
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accountants within the meaning of the Act and the Exchange Act and the
respective applicable published rules and regulations thereunder and
stating in effect that they have performed certain specified procedures
as a result of which they determined that certain information of an
accounting, financial or statistical nature (which is limited to
accounting, financial or statistical information derived from the
general accounting records of the Company and its subsidiaries) set
forth in the Registration Statement and the Final Prospectus, including
information specified by the Underwriters and set forth under the
captions "Prospectus Summary," "Description of the Intangible Transition
Property," "The Servicer" and "Description of the Notes" in the Final
Prospectus, agrees with the accounting records of the Company and its
subsidiaries, excluding any questions of legal interpretation, and (ii)
the opinion or certificate, dated as of the Closing Date, in form and
substance satisfactory to the Representatives, satisfying the
requirements of Section 2.10(9) of the Indenture.
References to the Final Prospectus in this paragraph (i) include any
supplement thereto at the date of the letter.
In addition, except as provided in Schedule I hereto, at the Execution
Time, PricewaterhouseCoopers LLP shall have furnished to the Representatives a
letter or letters, dated as of the Execution Time, in form and substance
satisfactory to the Representatives, to the effect set forth above.
(j) Subsequent to the Execution Time or, if earlier, the dates as
of which information is given in the Registration Statement (exclusive of
any amendment thereof) and the Final Prospectus (exclusive of any
supplement thereto), there shall not have been any change, or any
development involving a prospective change, in or affecting either (i) the
business, properties or financial condition of the Company, the Grantee or
the Note Issuer, or (ii) the Intangible Transition Property, the Notes, the
1998 Funding Order or the Funding Law, the effect of which is, in the case
of either (i) or (ii) above, in the judgment of the Representatives, so
material and adverse as to make it impractical or inadvisable to proceed
with the offering or delivery of the Notes as contemplated by the
Registration Statement (exclusive of any amendment thereof) and the Final
Prospectus (exclusive of any supplement thereto).
(k) The Representatives shall have received on the Closing Date
an opinion letter or letters, portions of which may be delivered by Schiff
Hardin & Waite, counsel to the Company, the Grantee and the Note Issuer,
and portions of which may be delivered by Richards, Layton & Finger, P.A.,
special Delaware counsel to the Grantee and the Note Issuer, dated the
Closing Date, in form and substance reasonably satisfactory to the
Representatives, but subject to the qualifications, limitations,
assumptions and analyses set forth therein (i) to the effect that a
bankruptcy court would conclude that, if the Company is deemed to have
received some interest in the Intangible Transition Property, that interest
was transferred by the Company to the Grantee as an absolute transfer (as
in a true sale), and no interest in or title to the Intangible Transition
Property shall be part of
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<PAGE>
the Company's estate in the event of a bankruptcy petition by or against
the Company under the Bankruptcy Code; (ii) to the effect that a court
would not order the substantive consolidation of the assets and
liabilities of the Grantee with those of the Company in the event of a
bankruptcy, reorganization or other insolvency proceeding involving the
Company; (iii) to the effect a federal bankruptcy court or another
federal court would hold that Delaware law (and not United States
federal law) governs the determination of whether a voluntary bankruptcy
petition filed on behalf of the Grantee has been duly authorized; (iv)
to the effect that if properly presented to a Delaware court, a Delaware
court applying Delaware law would conclude that (A) pursuant to Section
2.7(b) of the Operating Agreement of the Grantee, in order for a person
to initiate any Event of Bankruptcy (as defined in the Operating
Agreement) with respect to the Grantee or take any action in furtherance
of any such Event of Bankruptcy, the affirmative vote of all of the
Managers (including the Independent Managers (as defined in the
Operating Agreement)) is required, and (B) such provision, contained in
Section 2.7(b) of the Operating Agreement, that requires the affirmative
vote of all of the Managers (including the Independent Managers),
constitutes a legal, valid and binding agreement of the Sole Member and
is enforceable against the Sole Member, in accordance with its terms;
and (v) the Operating Agreement constitutes a legal, valid and binding
agreement of the Sole Member thereunder, and is enforceable against the
Sole Member in accordance with its terms.
(l) The Representatives shall have received on the Closing Date
an opinion letter or letters of Schiff Hardin & Waite, counsel to the
Company, the Grantee and the Note Issuer, dated the Closing Date, in form
and substance reasonably satisfactory to the Representatives, to the effect
that, but subject to the qualifications, limitations, assumptions and
analysis therein set forth, including the assumption that any Impairment
(as defined therein) would be substantial, a reviewing court, in a properly
prepared and presented case: (i) would conclude that, absent a
demonstration by the State of Illinois (the "State") that an Impairment is
necessary to further a significant and legitimate public purpose, the
Noteholders (or the Indenture Trustee acting on their behalf) could
challenge successfully under Article I, Section 10 of the United States
Constitution (the "Contract Clause") the constitutionality of any law
passed by the State legislature determined by such court to limit, alter,
impair or reduce the value of the Intangible Transition Property or the
Charges (as defined therein) so as to cause an Impairment prior to the time
that the Notes are fully paid and discharged; (ii) would conclude that any
attempt by citizens of the State to initiate changes to the Amendatory Act
determined by such court to limit, alter, impair or reduce the value of the
Intangible Transition Property or the Charges would be invalid; (iii) would
conclude that under the Funding Law the ICC would be prohibited from taking
any action subsequent to the 1998 Funding Order becoming final determined
by such court to reduce, postpone, impair or terminate the value of the
Intangible Transition Property or the Charges; (iv) should conclude that
permanent injunctive relief is available, pursuant to the Contract Clause,
to prevent implementation of legislation hereafter passed by the Illinois
legislature determined by such court to limit, alter, impair or reduce the
value of the Intangible Transition Property or the Charges so as
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<PAGE>
to cause an Impairment; and although sound and substantial arguments
support the granting of preliminary injunctive relief, the decision to
do so will be in the discretion of the court requested to take such
action, which will be exercised on the basis of the considerations
discussed in such opinion; (v) in the event that a provision of the
Amendatory Act were hereafter declared to be invalid by a court, a
reviewing court should hold that the Intangible Transition Property
would remain valid and vested in the Grantee or its assignees and the
Noteholders would continue to be secured thereby; (vi) if a reviewing
court were to determine, after such a declaration, that the Intangible
Transition Property would remain valid and so vested and that the
Noteholders would continue to be secured thereby, such court should also
determine, for the same reasons, that the substance of the State Pledge
would continue in effect for the benefit of the Noteholders; (vii) a
reviewing court which determines that the substance of the State Pledge
continues in effect for the benefit of the Noteholders should also
determine, for the same reasons, that the ICC could not take any action
determined by such court to limit, alter, impair or reduce materially
the value of the Intangible Transition Property or the Charges, except
for such actions, if any, which could be taken by the State without
violating the State Pledge; and (viii) notwithstanding a judicial
declaration of the invalidity of the Amendatory Act, the 1998 Funding
Order would remain in effect and the Intangible Transition Property
would continue to be valid and enforceable, at least against the Company
and its successors and assigns (including a trustee in bankruptcy),
unless and until the 1998 Funding Order were modified by the ICC or a
court in subsequent proceedings initiated to vacate, amend or otherwise
modify the 1998 Funding Order; however, notwithstanding such a
declaration, it would be possible to seek a stay of any decision which
vacates, amends or otherwise modifies the 1998 Funding Order in a manner
adversely affecting the payment of the Charges pending appellate review
of such decision; and while sound and substantial arguments support the
granting of such a stay, the decision to do so will be in the discretion
of the court requested to take such an action, which will be exercised
on the basis of the factors discussed in such opinion.
(m) The Notes shall have been rated in the highest long-term
rating category by each of the Rating Agencies and on or after the date
hereof (i) no downgrade shall have occurred in the rating accorded to the
debt securities of the Company by any Rating Agency, and (ii) no such
organization shall have publicly announced that it has under surveillance
or review, with possible negative implications, its rating of any of the
Company's debt securities.
(n) On or prior to the Closing Date, the Grantee shall have
delivered to the Representatives evidence, in form and substance reasonably
satisfactory to the Representatives, of compliance with Section 2.10 of the
Indenture, together with such reliance letters as the Representatives shall
request.
(o) On or prior to the Closing Date, the Grantee shall have
delivered to the Representatives evidence, in form and substance reasonably
satisfactory to the Representatives, that appropriate filings have been,
are being or will be made, as
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<PAGE>
applicable, pursuant to Section 3.08 of the Sale Agreement and in
accordance with the Funding Law and other applicable law reflecting the
Note Issuer's first priority perfected ownership interest in the
Intangible Transition Property.
(p) On or prior to the Closing Date, the Grantee shall have
delivered to the Representatives evidence, in form and substance reasonably
satisfactory to the Representatives, that appropriate filings have been,
are being or will be made, as applicable, pursuant to Section 18-104(h) of
the Funding Law.
(q) The Representatives shall have received an opinion, or
reliance letter thereon, from Mayer Brown & Platt, tax counsel to the Note
Issuer, substantially in the form of Exhibit 8.1 to the Registration
Statement.
(r) Prior to the Closing Date, the Company, the Grantee and the
Note Issuer shall have furnished to the Representatives such further
information, certificates, opinions and documents as the Representatives
may reasonably request.
If any of the conditions specified in this Section 6 shall not have been
fulfilled in all material respects when and as provided in this Agreement, or if
any of the opinions and certificates mentioned above or elsewhere in this
Agreement shall not be in all material respects reasonably satisfactory in form
and substance to the Representatives and counsel for the Underwriters, this
Agreement and all obligations of the Underwriters hereunder may be canceled at,
or at any time prior to, the Closing Date by the Representatives. Notice of
such cancellation shall be given to the Grantee and the Note Issuer in writing
or by telephone or telegraph confirmed in writing.
The documents required to be delivered by this Section 6 shall be delivered
at the offices of Schiff Hardin & Waite, 7200 Sears Tower, Chicago, Illinois, on
the Closing Date.
7. EXPENSES.
(a) The Company and the Grantee will pay, or cause to be paid,
all expenses incident to the performance of their respective obligations
and those of the Note Issuer under this Agreement, including without
limitation, (i) expenses incident to the word processing, printing,
reproduction and distribution of the registration statement as originally
filed with the SEC and each amendment thereto, Preliminary Final
Prospectuses and the Final Prospectus (including any amendments and
supplements thereto), (ii) the fees and disbursements of the Indenture
Trustee, the Delaware Trustee, the Beneficiary Trustees and their
respective counsel, (iii) the fees and disbursements of counsel to the
Company, the Grantee, the Note Issuer, and the independent public
accountants of the Company, the Grantee and the Note Issuer, (iv) the fees
charged by the Rating Agencies in connection with the rating of the Notes,
(v) the fees of DTC in connection with the book-entry registration of the
Notes, and (vi) expenses incurred in distributing Preliminary Final
Prospectuses and the Final Prospectus (including any amendments and
supplements thereto) by the Underwriters. The Company and the
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Grantee will also pay all reasonable fees and disbursements of
Underwriters' counsel, and will reimburse the Underwriters for any
expenses incurred by the Underwriters pursuant to Section 5(a)(v)
hereof in connection with the qualification of the Notes for sale under
the laws of such jurisdictions in the United States as the
Representatives may designate, together with costs and expenses in
connection with any filing with the National Association of Securities
Dealers with respect with the transactions contemplated hereby.
(b) If the sale of the Notes provided for herein is not
consummated because any condition to the obligations of the Underwriters
set forth in Section 6 hereof is not satisfied, because of any termination
pursuant to Section 10 hereof or because of any refusal, inability or
failure on the part of the Company, the Grantee or the Note Issuer to
perform any agreement herein or comply with any provision hereof other than
by reason of a default (including under Section 9) by any of the
Underwriters, the Company and the Grantee will, jointly and severally,
reimburse the Underwriters upon demand for all out-of-pocket expenses
(including reasonable fees and disbursements of counsel) that shall have
been incurred by them in connection with the proposed purchase and sale of
the Notes.
8. INDEMNIFICATION AND CONTRIBUTION.
(a) The Company and the Grantee will, jointly and severally,
indemnify and hold harmless each Underwriter, the directors, officers,
members, employees and agents of each Underwriter, and each person who
controls any Underwriter within the meaning of either the Act or the
Exchange Act against any and all losses, claims, damages or liabilities,
joint or several, to which they or any of them may become subject under the
Funding Law, the Act, the Exchange Act or other federal or state statutory
law or regulation, at common law or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out
of, directly or indirectly, (i) the complete or partial judicial
invalidation of the Amendatory Act and/or the Funding Law, or (ii) arise
out of or are based upon any untrue statement or alleged untrue statement
of a material fact contained in the registration statement for the
registration of the Notes as originally filed or in any amendment thereof,
or in the Basic Prospectus, any Preliminary Final Prospectus or the Final
Prospectus, or in any amendment thereof or supplement thereto, or arise out
of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were
made, not misleading, and will reimburse each such indemnified party, as
incurred, for any legal or other expenses reasonably incurred by them in
connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that neither the Company nor the
Grantee will be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon any such untrue
statement or alleged untrue statement or omission or alleged omission made
therein in reliance upon and in conformity with written information
furnished to the Grantee or the Company by or on behalf of any Underwriter
through the Representatives specifically for inclusion therein;
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provided further, that, in the case of any indemnification under clause
(ii) above, with respect to any untrue statement or omission of material
fact made in any Preliminary Final Prospectus, the indemnity agreement
contained in this Section 8(a) shall not inure to the benefit of any
Underwriter or any person controlling such Underwriter from whom the
person asserting any such loss, claim, damage or liability purchased the
Notes that are the subject thereof, to the extent that any such loss,
claim, damage or liability of such Underwriter occurs under the
circumstance where it shall have been determined by a court of competent
jurisdiction by final and nonappealable judgment that (A) the Company or
the Grantee had previously furnished copies of the Final Prospectus to
the Representatives, (B) delivery of the Final Prospectus was required
by the Act to be made to such person, (C) the untrue statement or
omission of a material fact contained in the Preliminary Final
Prospectus was corrected in the Final Prospectus and (D) there was not
sent or given to such person, at or prior to the written confirmation of
the sale of such Notes to such person, a copy of the Final Prospectus.
This indemnity agreement will be in addition to any liability which the
Company and the Grantee may otherwise have.
(b) Each Underwriter severally agrees to indemnify and hold
harmless the Company and the Grantee, each of their directors, each of
their officers who signs the Registration Statement, and each person who
controls the Company or the Grantee within the meaning of either the Act or
the Exchange Act, to the same extent as the foregoing indemnity from the
Company and the Grantee to each Underwriter, but only with reference to
written information relating to such Underwriter furnished to the Grantee
or the Company by or on behalf of such Underwriter through the
Representatives specifically for inclusion in the documents referred to in
the foregoing indemnity. This indemnity agreement will be in addition to
any liability which any Underwriter may otherwise have. The Grantee and
the Company acknowledge that the statements set forth in the last paragraph
of the cover page, under the heading "Underwriting" or "Plan of
Distribution" in any Preliminary Final Prospectus or the Final Prospectus
constitute the only information furnished in writing by or on behalf of the
several Underwriters for inclusion in the documents referred to in the
foregoing indemnity, and you, as the Representatives, confirm that such
statements are correct.
(c) Promptly after receipt by an indemnified party under this
Section 8 of notice of the commencement of any action, such indemnified
party will, if a claim in respect thereof is to be made against the
indemnifying party under this Section 8, notify the indemnifying party in
writing of the commencement thereof; but the failure so to notify the
indemnifying party (i) will not relieve it from liability under paragraph
(a) or (b) above unless and to the extent it did not otherwise learn of
such action and such failure results in the forfeiture by the indemnifying
party of substantial rights and defenses and (ii) will not, in any event,
relieve the indemnifying party from any obligations to any indemnified
party other than the indemnification obligation provided in paragraph (a)
or (b) above. The indemnifying party shall be entitled to appoint counsel
of the indemnifying party's choice at the indemnifying party's expense to
represent the indemnified party in any action for which indemnification is
sought (in which case the
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indemnifying party shall not thereafter be responsible for the fees and
expenses of any separate counsel retained by the indemnified party or
parties except as set forth below); provided, however, that such counsel
shall be reasonably satisfactory to the indemnified party.
Notwithstanding the indemnifying party's election to appoint counsel to
represent the indemnified party in an action, the indemnified party
shall have the right to employ separate counsel (including local
counsel), and the indemnifying party shall bear the reasonable fees,
costs and expenses of such separate counsel if (i) the use of counsel
chosen by the indemnifying party to represent the indemnified party
would present such counsel with a conflict of interest, (ii) the actual
or potential defendants in, or targets of, any such action include both
the indemnified party and the indemnifying party and the indemnified
party shall have reasonably concluded that there may be legal defenses
available to it and/or other indemnified partes which are different from
or additional to those available to the indemnifying party, (iii) the
indemnifying party shall not have employed counsel reasonably
satisfactory to the indemnified party to represent the indemnified party
within a reasonable time after notice of the institution of such action
or (iv) the indemnifying party shall authorize the indemnified party to
employ separate counsel at the expense of the indemnifying party. It is
understood that the indemnifying party shall not, in connection with any
proceeding or related proceedings in the same jurisdiction, be liable
for the reasonable fees and expenses of more than one separate firm for
all such indemnified parties. An indemnifying party will not, without
the prior written consent of the indemnified parties, settle or
compromise or consent to the entry of any judgment with respect to any
pending or threatened claim, action, suit or proceeding in respect of
which indemnification or contribution may be sought hereunder (whether
or not the indemnified parties are actual or potential parties to such
claim or action) unless such settlement, compromise or consent (i)
includes an unconditional release of each indemnified party from all
liability arising out of such claim, action, suit or proceeding and (ii)
does not include a statement as to or an admission of fault, culpability
or failure to act, by or on behalf of any indemnified party. The
indemnifying party shall not be liable for any settlement of any
proceeding effected without its written consent, which consent shall not
be unreasonably withheld.
(d) In the event that the indemnity provided in paragraph (a) or
(b) of this Section 8 is unavailable to or insufficient to hold harmless an
indemnified party for any reason, the Company, the Grantee and the
Underwriters agree to contribute to the aggregate losses, claims, damages
and liabilities (including legal or other expenses reasonably incurred in
connection with investigating or defending same) (collectively "Losses") to
which the Grantee and one or more of the Underwriters may be subject in
such proportion as is appropriate to reflect the relative benefits received
by the Grantee and by the Underwriters from the offering of the Notes;
provided, however, that in no case shall any Underwriter (except as may be
provided in any agreement among underwriters relating to the offering of
the Notes) be responsible for any amount in excess of the underwriting
discount or commission applicable to the Notes purchased by such
Underwriter hereunder. If the allocation provided by the immediately
preceding sentence is unavailable for any reason, the Company, the Grantee
and the Underwriters shall
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contribute in such proportion as is appropriate to reflect not only such
relative benefits but also the relative fault of the Company, the
Grantee and the Underwriters respectively in connection with the
statements or omissions which resulted in such Losses as well as any
other relevant equitable considerations. Benefits received by the
Grantee shall be deemed to be equal to the total net proceeds from the
offering (before deducting expenses) of the Notes (which shall be equal
to the net proceeds from the sale of the Notes to the Note Issuer
(before deducting expenses)), and benefits received by the Underwriters
shall be deemed to be equal to the total underwriting discounts and
commissions, in each case as set forth on the cover page of the Final
Prospectus. Relative fault shall be determined by reference to whether
any alleged untrue statement or omission relates to information provided
by the Company or the Grantee, or the Underwriters, as the case may be.
The Company, the Grantee and the Underwriters agree that it would not be
just and equitable if contribution were determined by pro rata
allocation or any other method of allocation which does not take account
of the equitable considerations referred to above. Notwithstanding the
provisions of this paragraph (d), no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall
be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. For purposes of this Section 8, each
person who controls an Underwriter within the meaning of either the Act
or the Exchange Act and each director, officer, employee and agent of an
Underwriter shall have the same rights to contribution as such
Underwriter, and each person who controls the Grantee or the Company
within the meaning of either the Act or the Exchange Act, each officer
of the Grantee or the Company who shall have signed the Registration
Statement and each director of the Grantee or the Company shall have the
same rights to contribution as the Grantee or the Company, subject in
each case to the applicable terms and conditions of this paragraph (d).
The Underwriters' obligations in this paragraph (d) to contribute are
several in proportion to their respective underwriting obligations and
not joint.
9. DEFAULT BY AN UNDERWRITER. If any one or more Underwriters shall fail
to purchase and pay for any of the Notes agreed to be purchased by such
Underwriter or Underwriters hereunder and such failure to purchase shall
constitute a default in the performance of its or their obligations under this
Agreement, the nondefaulting Underwriters shall be obligated severally to take
up and pay for (in the respective proportions which the amount of Notes set
forth opposite their names in Schedule II hereto bears to the aggregate amount
of Notes set forth opposite the names of all the remaining Underwriters) the
Notes which the defaulting Underwriter or Underwriters agreed but failed to
purchase; provided, however, that in the event that the aggregate amount of
Notes which the defaulting Underwriter or Underwriters agreed but failed to
purchase shall exceed 10% of the aggregate amount of Notes set forth in Schedule
II hereto, the nondefaulting Underwriters shall have the right to purchase all,
but shall not be under any obligation to purchase any, of the Notes, and if such
nondefaulting Underwriters do not purchase all the Notes, this Agreement will
terminate without liability to any nondefaulting Underwriter, the Grantee or the
Company. In the event of a default by any Underwriter as set forth in this
Section 9, the Closing Date shall be postponed for such period, not exceeding
seven days, as the Representatives shall determine in order that the required
changes in the Registration Statement
21
<PAGE>
and the Final Prospectus or in any other documents or arrangements may be
effected. Nothing contained in this Agreement shall relieve any defaulting
Underwriter of its liability, if any, to the Grantee and the Company and any
nondefaulting Underwriter for damages occasioned by its default hereunder.
10. TERMINATION. This Agreement shall be subject to termination in the
absolute discretion of the Representatives, by notice given to the Company and
the Grantee prior to delivery of and payment for the Notes, if prior to such
time (i) there shall have occurred any change, or any development involving a
prospective change, in or affecting either (A) the business, properties or
financial condition of the Grantee or the Company or (B) the Intangible
Transition Property, the Notes, the 1998 Funding Order or the Funding Law, the
effect of which, in the judgment of the Representatives, materially impairs the
investment quality of the Notes or makes it impractical or inadvisable to market
the Notes, (ii) trading in the Company's Common Stock shall have been suspended
by the SEC or the New York Stock Exchange or trading in securities generally on
the New York Stock Exchange shall have been suspended or limited or minimum
prices shall have been established on such Exchange, (iii) a banking moratorium
shall have been declared either by federal, New York State or Illinois State
authorities or (iv) there shall have occurred any outbreak or escalation of
hostilities, declaration by the United States of a national emergency or war or
other calamity or crisis the effect of which on financial markets is such as to
make it, in the judgment of the Representatives, impracticable or inadvisable to
proceed with the offering or delivery of the Notes as contemplated by the Final
Prospectus (exclusive of any supplement thereto).
11. REPRESENTATIONS AND INDEMNITIES TO SURVIVE. The respective agreements,
representations, warranties, indemnities and other statements of the Company or
its officers, the Grantee or its officers, the Note Issuer or its officers and
of the Underwriters set forth in or made pursuant to this Agreement will remain
in full force and effect, regardless of any investigation made by or on behalf
of any Underwriter or of the Company, the Grantee, the Note Issuer or any of the
officers, directors or controlling persons referred to in Section 8 hereof, and
will survive delivery of and payment for the Notes. The provisions of Sections
7 and 8 hereof shall survive the termination or cancellation of this Agreement
and the complete or partial judicial invalidation of the Amendatory Act and/or
the Funding Law.
12. NOTICES. All communications hereunder will be in writing and may be
given by United States mail, courier service, telegram, telex, telemessage,
telecopy, telefax, cable or facsimile (confirmed by telephone or in writing in
the case of notice by telegram, telex, telemessage, telecopy, telefax, cable or
facsimile) or any other customary means of communication, and any such
communication shall be effective when delivered, or if mailed, three days after
deposit in the United States mail with proper postage for ordinary mail prepaid,
and if sent to the Representatives, to them at the address specified in Schedule
I hereto; and if sent to the Company, to it at Illinois Power Company, the sole
member of Illinois Power Securitization Limited Liability Company, 500 South
27th Street, Decatur, IL 62521, Attention: Robert A. Schultz; and if sent to the
Grantee, to it at Illinois Power Securitization Limited Liability Company, 500
South 27th Street, Decatur, IL 62521, Attention: Eric B. Weekes. The
22
<PAGE>
parties hereto, by notice to the others, may designate additional or
different addresses for subsequent communications.
13. SUCCESSORS. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the officers
and directors and controlling persons referred to in Section 8 hereof, and no
other person will have any right or obligation hereunder.
14. APPLICABLE LAW. This Agreement will be governed by and construed in
accordance with the laws of the State of New York.
15. COUNTERPARTS. This Agreement may be signed in any number of
counterparts, each of which shall be deemed an original, which taken together
shall constitute one and the same instrument.
23
<PAGE>
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to us the enclosed duplicate hereof, whereupon this
letter and your acceptance shall represent a binding agreement among the
Company, the Grantee and the several Underwriters.
Very truly yours,
ILLINOIS POWER COMPANY,
By: /s/ Robert A. Schultz
Name: Robert A. Schultz
Title: Vice President-Finance
ILLINOIS POWER SECURITIZATION LIMITED
LIABILITY COMPANY,
By: /s/ Cynthia G. Steward
Name: Cynthia G. Steward
Title: Manager
The foregoing Underwriting Agreement is hereby confirmed and accepted as of the
date specified in Schedule I hereto.
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
By: /s/ Geoffrey R. Witt
Name: Geoffrey R. Witt
Title: Managing Director
For itself and the other several Underwriters, if any, named in Schedule II to
the foregoing Agreement.
<PAGE>
SCHEDULE I
Underwriting Agreement dated December 10, 1998
Registration Statement No. 333-63537
Representative(s):
Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
World Financial Center
North Tower
New York, New York 10281
Title, Purchase Price and Description of Notes:
Title: $864,000,000 Illinois Power Special Purpose Trust
Transitional Funding Trust Notes, Series 1998-1
Principal amount, Price to Public, Underwriting Discounts and Commissions and
Proceeds to Trust:
<TABLE>
<CAPTION>
Underwriting
Total Principal Discounts and
Amount of Class Price to Public Commissions Proceeds to Trust
--------------- --------------- ----------- -----------------
<S> <C> <C> <C> <C>
Per Class A-1 Note $110,000,000 99.99903% .28% 99.71903%
Per Class A-2 Note 100,000,000 99.99636% .35% 99.64636%
Per Class A-3 Note 80,000,000 99.99912% .40% 99.59912%
Per Class A-4 Note 85,000,000 99.99460% .45% 99.54460%
Per Class A-5 Note 175,000,000 99.99166% .50% 99.49166%
Per Class A-6 Note 175,000,000 99.99465% .55% 99.44465%
Per Class A-7 Note 139,000,000 99.96472% .65% 99.31472%
----------- --------- ------ ---------
Total $864,000,000 $863,917,002 $4,101,500 $859,815,502
----------- ----------- --------- -----------
----------- ----------- --------- -----------
</TABLE>
2
<PAGE>
Original Issue Discount (if any): $82,997.70
Redemption provisions: Optional Redemption as set forth in Article X
of the Indenture
Other provisions:
Closing Date, Time and Location: December 22, 1998, 8:00 AM,
Central Standard Time,
Chicago, IL
Type of Offering: Delayed Offering
Date referred to in Section 5(a)(vi) and 5(b)(iii) after which the Company and
the Note Issuer may offer or sell asset-backed securities in a trust or special
purpose vehicle without the consent of the Representative(s): December 31, 1998
3
<PAGE>
SCHEDULE II
<TABLE>
<CAPTION>
Class A-4 Class A-4 Class A-4 Class A-4 Class A-5 Class A-6 Class A-7
Underwriters Notes Notes Notes Notes Notes Notes Notes Total
- ------------ ----- ----- ----- ----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Merrill Lynch,
Pierce,
Fenner & Smith
Incorporated $60,500,000 $55,000,000 $44,000,000 $46,750,000 $96,250,000 $96,250,000 $76,450,000 $475,200,000
Salomon Smith Barney
Inc. 19,800,000 18,000,000 14,400,000 15,300,000 31,500,000 31,500,000 25,020,000 155,520,000
Chase Securities Inc. 6,600,000 6,000,000 4,800,000 5,100,000 10,500,000 10,500,000 8,340,000 51,840,000
Donaldson, Lufkin &
Jenrette Securities
Corporation 6,600,000 6,000,000 4,800,000 5,100,000 10,500,000 10,500,000 8,340,000 51,840,000
First Chicago Capital
Markets, Inc. 4,400,000 4,000,000 3,200,000 3,400,000 7,000,000 7,000,000 5,560,000 34,560,000
NationsBanc
Montgomery Securities
LLC 4,400,000 4,000,000 3,200,000 3,400,000 7,000,000 7,000,000 5,560,000 34,560,000
ABN AMRO Incorporated 2,200,000 2,000,000 1,600,000 1,700,000 3,500,000 3,500,000 2,780,000 17,280,000
A.G. Edwards &
Sons, Inc. 2,200,000 2,000,000 1,600,000 1,700,000 3,500,000 3,500,000 2,780,000 17,280,000
J.P. Morgan
Securities Inc. 2,200,000 2,000,000 1,600,000 1,700,000 3,500,000 3,500,000 2,780,000 17,280,000
Loop Capital
Markets, LLC 1,100,000 1,000,000 800,000 850,000 1,750,000 1,750,000 1,390,000 8,640,000
----------- ----------- ----------- ---------- ---------- ----------- ---------- -----------
Total $110,000,000 $100,000,000 $80,000,000 $85,000,000 $175,000,00 $175,000,000 $139,000,00 $864,000,000
----------- ----------- ----------- ---------- ---------- ----------- ---------- -----------
----------- ----------- ----------- ---------- ---------- ----------- ---------- -----------
</TABLE>
28
<PAGE>
EXHIBIT A
FORM OF SCHIFF HARDIN & WAITE OPINION
[SCHIFF HARDIN & WAITE LETTERHEAD]
December 22, 1998
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith, Incorporated,
as Representative of the Underwriters
New York, New York
Ladies and Gentlemen:
We address this letter to you individually and as Representatives
of the Underwriters (the "Underwriters") named in Schedule II to the
Underwriting Agreement dated December 10, 1998 (the "Underwriting Agreement")
among you, Illinois Power Company, an Illinois corporation ("Illinois
Power"), and Illinois Power Securitization Limited Liability Company, a
Delaware limited liability company (the "Grantee"). The Underwriting
Agreement provides for the sale on the date hereof by Illinois Power Special
Purpose Trust, a Delaware business trust (the "Note Issuer"), to the
Underwriters of $864,000,000 aggregate principal amount of Illinois Power
Transitional Funding Trust Notes, Series 1998-1 (the "Notes"). This letter
is delivered pursuant to Section 6(b) of the Underwriting Agreement.
Capitalized terms not defined herein have the meanings specified in the
Underwriting Agreement.
We have acted as special counsel to Illinois Power, the Grantee and
the Note Issuer (Illinois Power, the Note Issuer and the Grantee are referred
to collectively as the "Companies") in connection with the issuance and sale
of the Notes and the following related matters: (a) the 1998 Funding Order
issued by the Illinois Commerce Commission (the "ICC") dated September 10,
1998 in Docket No. 98-0488 creating the Intangible Transition Property and
granting the same to the Grantee; (b) the Agreement Relating to Grant of
Intangible Transition Property dated as of December 1, 1998 between Illinois
Power and the Grantee (the "Grant Agreement"); (c) the Intangible Transition
Property Sale Agreement dated as of December 1, 1998 (the "Sale Agreement")
between the Note Issuer and the Grantee; (d) the Indenture dated as of
December 1, 1998 (the "Indenture") between the Note Issuer and Harris Trust
and Savings Bank, a banking corporation organized under the laws of the State
of Illinois, as indenture trustee (the "Indenture Trustee"); (e) the Trust
Issuance Certificate dated as of
A-1
<PAGE>
December 1, 1998 (the "Certificate") specifying the terms of the Notes;
(f) the Administration Agreement dated as of December 1, 1998 (the
"Administration Agreement") among Illinois Power, as Administrator and the
Grantee; (g) the Intangible Transition Property Servicing Agreement dated as
of December 1, 1998 (the "Servicing Agreement") between the Grantee and
Illinois Power, as Servicer, and (h) the Remediation Agreement dated as of
December 1, 1998, by and between Illinois Power and the Indenture Trustee
(the "Reconciliation Agreement"). The Grant Agreement, the Sale Agreement,
the Indenture, the Certificate, the Remediation Agreement, the Administration
Agreement and the Servicing Agreement are sometimes collectively referred to
herein as the "Relevant Documents."
We have also participated with officers and representatives of
Illinois Power, the Grantee and the Note Issuer, including independent public
accountants, other counsel and representatives of the Underwriters in the
preparation of the Registration Statement on Form S-3 (Registration No.
333-63537) and Amendments Nos. 1, 2 and 3 thereto, filed on October 27, 1998,
December 4, 1998 and December 9, 1998, respectively, with the Securities and
Exchange Commission (the "Commission") under the Securities Act of 1933, as
amended (the "Securities Act"), which registration statement, as so amended,
became effective on December 10, 1998. Such registration statement, as so
amended, at the time it became effective (including the documents then
incorporated by reference therein) is hereinafter referred to as the
"Registration Statement". The prospectus forming a part of the Registration
Statement (including the documents incorporated by reference therein) is
hereinafter referred to as the "Basic Prospectus". The Basic Prospectus, as the
same was supplemented to reflect the terms of the offering and sale of the Notes
by a prospectus supplement dated December 10, 1998 filed with the Commission on
December 11, 1998 pursuant to Rule 424(b) under the Securities Act (including
all documents incorporated by reference therein at the date hereof) is
hereinafter referred to as the "Final Prospectus."
For the purposes of rendering the opinions expressed below we have
relied, as to questions of fact material such opinions, upon the
representations made in the Underwriting Agreement and Relevant Documents.
In addition, we have examined and relied upon the originals, or copies
certified or otherwise identified to our satisfaction, of such instruments
and other certificates of public officials, officers and representatives of
the Companies and such other persons, and we have made such investigations of
law, as we have deemed appropriate as a basis for such opinions. In our
examination, we have assumed, without independent investigation, (i) the
genuineness of the signatures of and legal capacity of all persons signing
all such instruments and certificates, (ii) the authority of all persons
signing on behalf of the parties thereto, (iii) the due organization, valid
existence, good standing and authority of all entities signing all such
instruments and certificates (other than the Companies), (iv) the due
authorization, execution and delivery of all instruments and certificates by
all the parties thereto (other than the Companies), (v) the authenticity of
all documents submitted to us as originals, and (vi) the conformity to
original documents of all documents submitted to us as certified, conformed,
or photostatic copies.
A-2
<PAGE>
Subject to the foregoing and to the limitations, qualifications and
assumptions hereinafter set forth below, this will advise you that, in the
opinion of the undersigned:
(a) (i) Illinois Power (A) has been duly incorporated and is
validly existing as a corporation in good standing under the laws of
the State of Illinois; (B) has all requisite corporate power and
authority to own its properties and conduct its business as
presently conducted, as described in the prospectus, and to execute,
deliver and perform its obligations under the Underwriting
Agreement, the Grant Agreement, the Servicing Agreement, the
Remediation Agreement and the Administration Agreement; and (C) is
duly qualified to do business in all jurisdictions (and is in good
standing under the laws of all such jurisdictions) to the extent
that such qualification and good standing is or shall be necessary
to protect the validity and enforceability of the Underwriting
Agreement, the Grant Agreement, the Servicing Agreement, the
Remediation Agreement and the Administration Agreement and each
other instrument or agreement to which Illinois Power is a party
necessary or appropriate to consummate the transactions contemplated
by the Underwriting Agreement;
(ii) the Grant Agreement, the Servicing Agreement, the
Administration Agreement and the Remediation Agreement have been
duly authorized, executed and delivered by Illinois Power and
constitute legal, valid and binding instruments enforceable against
Illinois Power in accordance with their respective terms, except to
the extent enforceability may be limited by bankruptcy,
reorganization, insolvency, moratorium, fraudulent transfer and
other similar laws of general applicability relating to or affecting
the enforcement of creditors' rights and by the effect of general
principles of equity (regardless of whether enforceability is
considered in a proceeding in equity or at law);
(iii) to our knowledge, there is no pending or threatened
action, suit or proceeding before any court or governmental agency,
authority or body or any arbitrator involving Illinois Power or any
of its Significant Subsidiaries of a character required to be
disclosed in the Registration Statement which is not adequately
disclosed in the Final Prospectus, and there is no franchise,
contract or other document of a character required to be described
in the Registration Statement or Final Prospectus, or to be filed as
an exhibit to the Registration Statement, which is not described or
filed as required;
(iv) the Underwriting Agreement has been duly authorized,
executed and delivered by Illinois Power;
(v) no consent, approval, authorization or order of any
court or
A-3
<PAGE>
governmental agency or body is required for the consummation of
the transactions contemplated by the Underwriting Agreement or
the Relevant Documents, except such as have been obtained under
the Securities Act, the Funding Law and the Public Utilities Act
and such as may be required under the blue sky laws of any
jurisdiction in connection with the purchase and distribution of
the Notes by the Underwriters; and
(vi) neither the execution and delivery by Illinois Power of
the Underwriting Agreement, the Grant Agreement, the Servicing
Agreement, the Remediation Agreement, the Administration Agreement
nor the consummation by Illinois Power of the transactions
contemplated by the Underwriting Agreement, the Grant Agreement, the
Servicing Agreement, the Administration Agreement, and the
Remediation Agreement, nor the fulfillment by Illinois Power of the
terms of the Underwriting Agreement, the Grant Agreement, the
Servicing Agreement, the Administration Agreement or the Remediation
Agreement will: (A) contravene with, result in any breach of any of
the terms or provisions of, or constitute (with or without notice or
lapse of time) a default under the Articles of Incorporation or
Bylaws of Illinois Power, or, to our knowledge, contravene or breach
any of the terms or provisions of, or constitute (with or without
notice or lapse of time) a default under, any indenture, material
agreement or other material instrument to which Illinois Power is a
party or by which Illinois Power is bound; (B) result in the
creation or imposition of any lien upon any properties of Illinois
Power pursuant to the terms of any such indenture, agreement or
other instrument (other than as contemplated by the Relevant
Documents and Section 18-107 of the Funding Law); or (C) violate any
law or any order, rule or regulation applicable to Illinois Power of
any court or of any federal or state regulatory body, administrative
agency or other governmental instrumentality having jurisdiction
over Illinois Power, or any of its properties.
(b) (i) the Grantee has been duly formed and is validly existing
as a single member limited liability company and is in good standing
under the laws of the State of Delaware, with full power and
authority to execute, deliver and perform its obligations under the
Grant Agreement, the Sale Agreement, the Servicing Agreement and the
Administration Agreement;
(ii) the Grant Agreement, the Sale Agreement, the Servicing
Agreement and the Administration Agreement have been duly
authorized, executed and delivered by the Grantee and constitute
legal, valid and binding instruments enforceable against the Grantee
in accordance with their respective terms, except to the extent
enforceability may be limited by bankruptcy, reorganization,
insolvency, moratorium, fraudulent conveyance and other similar laws
of general applicability relating to or
A-4
<PAGE>
affecting the enforceability of creditors' rights and by the effect
of general principles of equity (regardless of whether enforceability
is considered in a proceeding in equity or at law);
(iii) the Grant Agreement, the Sale Agreement, the Servicing
Agreement, the Administration Agreement, the Remediation Agreement,
the Indenture and the Notes conform in all material respects to the
descriptions thereof contained in the Final Prospectus;
(iv) neither the execution and delivery by the Grantee of
the Grant Agreement, the Sale Agreement, the Servicing Agreement,
the Underwriting Agreement or the Administration Agreement, or the
consummation by the Grantee of the transactions contemplated
thereby, nor the fulfillment of the terms thereof by the Grantee,
will (A) contravene, result in any breach of any of the terms or
provisions of, or constitute (with or without notice or lapse of
time) a default under the Certificate of Formation or the Operating
Agreement of the Grantee or contravene or breach any of the material
terms or provisions of, or constitute (with or without notice or
lapse of time) a default under, any indenture, agreement or other
instrument known to us to which the Grantee is a party or by which
the Grantee is bound; (B) result in the creation or imposition of
any lien upon any properties of the Grantee pursuant to the terms of
any such indenture, agreement or other instrument (other than as
contemplated by the Relevant Documents and Section 18-107 of the
Funding Law); or (C) 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
any of its properties;
(v) to our knowledge, there is no pending or threatened
action, suit or proceeding before any court or governmental agency,
authority or body or any arbitrator challenging the validity or
enforceability of the Grant Agreement, the Sale Agreement, the
Servicing Agreement or the Administration Agreement of a character
required to be disclosed in the Final Prospectus which is not
adequately disclosed in the Final Prospectus;
(vi) upon the execution and delivery of the fully executed
Sale Agreement by the Note Issuer and the Grantee and the payment of
the purchase price of the Intangible Transition Property and related
assets by the Note Issuer to the Grantee pursuant to the Sale
Agreement: (A) the transfer of the Intangible Transition Property by
the Grantee to the Note Issuer pursuant to the Sale Agreement will
convey all of the Grantee's right, title and interest in the
Intangible Transition Property to the Note Issuer and will constitute
an absolute transfer of all of the Grantee's right,
A-5
<PAGE>
title and interest in the Intangible Transition Property, other
than for federal and state income and franchise tax purposes (and
we express no opinion as to the proper accounting treatment of such
transfer); (B) such transfer of the Intangible Transition Property
is perfected; (C) such transfer has first priority over any other
assignment of the Intangible Transition Property; and (D) 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
(vii) the Grantee is not an "investment company" or under
the "control" of an "investment company" as such terms are defined
under the Investment Company Act of 1940, as amended.
(ix) the Underwriting Agreement has been duly authorized,
executed and delivered by the Grantee;
(c) (i) the Notes have been duly authorized by the Note Issuer
and, when duly executed by the Note Issuer and duly authenticated by
the Indenture Trustee in accordance with the provisions of the
Indenture and delivered to and paid for by the Underwriters in
accordance with the terms of the Underwriting Agreement, will be
duly issued and valid and legally binding obligations enforceable in
accordance with their respective terms, except to the extent
enforceability may be limited by bankruptcy, reorganization,
insolvency, moratorium, fraudulent conveyance or other similar laws
of general applicability relating to or affecting the enforceability
of creditors' rights and by the effect of general principles of
equity (regardless of whether enforceability is considered in a
proceeding in equity or at law) and entitled to the benefits of the
Indenture and the Certificate; and the Notes and the Indenture
conform in all material respects to the descriptions thereof in the
Final Prospectus;
(ii) the Indenture, the Certificate and the Sale Agreement
have each been duly authorized, executed and delivered by the Note
Issuer and constitute legal, valid and binding instruments
enforceable against the Note Issuer in accordance with their
respective terms, except to the extent enforceability may be limited
by bankruptcy, reorganization, insolvency, moratorium, fraudulent
conveyance and other similar laws of general applicability relating
to or affecting the enforceability of creditors' rights and by the
effect of general principles of equity (regardless of whether
enforceability is considered in a proceeding in equity or at law);
(iii) the Indenture has been duly qualified under the Trust
Indenture Act;
(iv) to our knowledge, there is no pending or threatened
action,
A-6
<PAGE>
suit or proceeding before any court or governmental agency,
authority or body or any arbitrator challenging the validity or
enforceability of the Notes or the Indenture, or relating to the
1998 Funding Order or the collection of the IFC Charges, of a
character required to be disclosed in the Registration Statement
which is not adequately disclosed in the Final Prospectus, and there
is no franchise, contract or other document relating to the Notes or
the Indenture, or relating to the 1998 Funding Order or the
collection of the IFC Charges, of a character required to be
described in the Registration Statement or Final Prospectus, or to
be filed as an exhibit to the Registration Statement, which is not
described or filed as required; and the statements included or
incorporated by reference in the Final Prospectus under the headings
"Electric Industry Restructuring in Illinois" (to the extent the
Amendatory Act is described) "Description of the Intangible
Transition Property" "Description of the Notes," "The Trust," "The
Grantee, " "Servicing," "Security for the Notes," "Material United
States Federal Tax Consequences" and "ERISA Considerations", in each
case to the extent that such statements constitute descriptions of
Illinois, Delaware or federal law or legal conclusions with respect
thereto, provide a fair and accurate summary of such law or
conclusions;
(v) the Registration Statement has become effective under
the Act; any required filing of the Basic Prospectus, any
Preliminary Final Prospectus and the Final Prospectus, and any
supplements thereto, pursuant to Rule 424(b) under the Securities
Act has been made in the manner and within the time period required
by Rule 424(b); to our knowledge, no stop order suspending the
effectiveness of the Registration Statement has been issued, and no
proceedings for that purpose have been instituted or threatened and
the Registration Statement and the Final Prospectus (other than
operating statistics, the financial statements and other financial
and statistical information contained therein and the Form T-1 as to
which we express no opinion) comply as to form in all material
respects with the applicable requirements of the Act, the Exchange
Act and the Trust Indenture Act and the respective rules thereunder;
(vi) neither the execution and delivery of the Underwriting
Agreement or the Indenture, the issue and sale of the Notes, or the
consummation of the transactions contemplated by the Underwriting
Agreement and the Indenture, nor the fulfillment by the Note Issuer
of the terms of the Underwriting Agreement and the Indenture will:
(A) contravene, result in any breach of any of the terms or
provisions of, or constitute (with or without notice or lapse of
time) a default under the Trust Agreement, or contravene or breach
any of the material terms or provisions of, or constitute (with or
without notice or lapse of time) a default under, any indenture,
agreement or other instrument known to us to which the Note Issuer
is a party or by which the Note Issuer is bound; (B)
A-7
<PAGE>
result in the creation or imposition of any lien upon any properties
of the Note Issuer pursuant to the terms of any such indenture,
agreement or other instrument other than the lien created by the
Indenture on the Note Collateral; (C) require the consent or approval
of, the giving of notice to, the registration with, or the taking of
any other action with respect to, any court, governmental or
regulatory authority or agency, except such as have been obtained
under the Securities Act, the Funding Law and the Public Utilities
Act and such as may be required under the blue sky laws of any
jurisdiction in connection with the purchase and distribution of the
Notes by the Underwriters; or (D) violate any law or any order, rule
or regulation applicable to the Note Issuer of any court or of any
federal or state regulatory body, administrative agency or other
governmental instrumentality having jurisdiction over the Note
Issuer or any of its properties;
(vii) (A) the lien of the Indenture in favor of the Holders
of the Notes 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 1998
Funding Order; (C) under the terms of the Funding Law, such lien is
valid and enforceable against Illinois Power, the Grantee, the Note
Issuer and all third persons, including judgment lien creditors;
(D) such lien ranks prior to any other lien which subsequently
attaches to the Intangible Transition Property; and (E) there are no
other liens on the Intangible Transition Property which have
attached prior to such lien; and
(viii) Neither Illinois Power nor the Note Issuer is an
"investment company" or under the "control" of an "investment
company" as such terms are defined under the Investment Company Act
of 1940, as amended.
In the course of the preparation of the Registration Statement and
the Final Prospectus we have considered the information set forth therein in the
light of the matters required to be set forth therein, and, as noted above, we
have participated in discussions with your representatives and officers and
representatives of the Companies, including independent public accountants and
other counsel, during the course of which the contents of the Registration
Statement, the Final Prospectus, the documents incorporated by reference in the
Final Prospectus and related matters were discussed. We have not independently
checked the accuracy or completeness of, or otherwise verified, and accordingly
are not passing upon, and do not assume any responsibility for, the accuracy,
completeness or fairness of the statements contained in the Registration
Statement or the Final Prospectus (except to the extent stated in paragraphs
(b)(iii) and the last clause of (c)(i) and (c)(iv) above); and we have relied as
to materially (with respect to non-legal matters), to a large extent, upon the
judgement of officers and representatives of the Companies. However, as a
result of such consideration and participation, nothing has
A-8
<PAGE>
come to our attention that causes us to believe that the Registration
Statement (except for the financial statements and other financial or
statistical data included or incorporated by reference therein and the Form
T-1, as to which we have not been asked to comment), at the effective date
thereof, contained any untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading, or that the Final Prospectus (except for
the operating statistics, financial statements and other financial or
statistical data contained or incorporated by reference therein and the Form
T-1, as to which we have not been asked to comment) as of its date contained,
or as of the date hereof contains, any untrue statement of a material fact or
omitted or omits to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.
The foregoing opinions are limited to the laws of Illinois and New
York, the Delaware Limited Liability Company Act and, to the extent specifically
referred to herein, the federal laws of the United States of America. We have,
with your consent, assumed the validity and continued effectiveness of the
Amendatory Act (including, without limitation, the Funding Law and the 1998
Funding Order); provided, however, that our opinion with respect to the
enforceability of the Remediation Agreement against Illinois Power is not so
qualified. In that regard we refer you to our opinion of even date herewith
delivered pursuant to Section 6(l) of the Underwriting Agreement. Further, we
have relied, with your consent, on the opinion dated today of Richards, Layton &
Finger delivered pursuant to Section 6(d) of the Underwriting Agreement and on
the opinion of Mayer, Brown & Platt delivered in the form of Exhibit 8.1 to the
Registration Statement. We express no opinion as to the enforceability of any
provisions of the Grant Agreement or the Servicing Agreement pursuant to which
Illinois Power, the Grantee or the Servicer covenant to continue to deduct and
collect amounts equal to the IFC Charges and equivalent amounts, and to remit
those amounts to the Servicer or the Note Issuer, as the case may be, if the
Funding Order were no longer in effect. The opinion expressed in this letter
with respect to the enforceability of indemnification provisions are limited by
principles of public policy limiting their enforceability. Such principles as
applied by a court might include a requirement that a creditor act reasonably
and in good faith. In addition, certain remedial provisions of the Relevant
Documents may be unenforceable in whole or in part under the laws of the State
of Illinois, but the inclusion of such provisions does not affect the validity
of any Relevant Document taken as a whole, and the Relevant Documents, taken as
a whole, contain adequate provisions for the practical realization of the rights
and benefits intended to be afforded thereby.
Any opinion or statement herein which is expressed to be "to our
knowledge" or is otherwise qualified by words of like import means that the
lawyers currently practicing law with this Firm who have had an active
involvement in advising Illinois Power, the Grantee or the Note Issuer with
regard to the authorization issuance and sale of the Notes have no current
conscious awareness of any facts or information contrary to such opinion or
statement; and, except as described above, we have undertaken no independent
investigation with respect to such facts or information.
A-9
<PAGE>
We consent to the reliance on the opinions expressed herein by the
Rating Agencies, the Delaware Trustee and Note Issuer and, with respect to the
opinions set forth in (c) above, by Illinois Power, the Grantee and the
Indenture Trustee. Except as set forth in the preceding sentence, this letter
is being delivered solely to you for your benefit in connection with the closing
under the Underwriting Agreement and may not be delivered to, or relied upon by,
or otherwise circulated to or utilized by, any other party or for any other
purpose without our prior written consent.
The opinions and statements expressed in this letter speak as of
today, and we assume no obligation to supplement such opinions or statements if
any applicable laws change after the date hereof or if we become aware of any
facts which might change such opinions or statements after today.
Very truly yours,
SCHIFF HARDIN & WAITE
By:
---------------------------------------
Bruce P. Weisenthal
A-10
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
ILLINOIS POWER SPECIAL PURPOSE TRUST,
Note Issuer
and
HARRIS TRUST AND SAVINGS BANK,
Indenture Trustee
---------------------------------------------
INDENTURE
Dated as of December 1, 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. . . . . . . . . . . . . . . . . . . . .11
SECTION 2.11. Book-Entry Notes . . . . . . . . . . . . . . . . . . . . .18
SECTION 2.12. Notices to Clearing Agency . . . . . . . . . . . . . . . .19
SECTION 2.13. Definitive Notes . . . . . . . . . . . . . . . . . . . . .19
SECTION 2.14. CUSIP Number . . . . . . . . . . . . . . . . . . . . . . .20
SECTION 2.15. Letter of Representations. . . . . . . . . . . . . . . . .20
SECTION 2.16. Release of Note Collateral . . . . . . . . . . . . . . . .20
SECTION 2.17. Special Terms Applicable to Subsequent
Transfers of Certain Notes . . . . . . . . . . . . . . . .20
SECTION 2.18. Tax Treatment. . . . . . . . . . . . . . . . . . . . . . .21
SECTION 2.19. State Pledge . . . . . . . . . . . . . . . . . . . . . . .22
ARTICLE III
COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .23
SECTION 3.01. Payment of Principal, Premium, if any,
and Interest . . . . . . . . . . . . . . . . . . . . . . .23
SECTION 3.02. Maintenance of Office or Agency. . . . . . . . . . . . . .23
SECTION 3.03. Money for Payments To Be Held in Trust . . . . . . . . . .23
SECTION 3.04. Existence. . . . . . . . . . . . . . . . . . . . . . . . .24
SECTION 3.05. Protection of Note Collateral. . . . . . . . . . . . . . .25
SECTION 3.06. Opinions as to Note Collateral . . . . . . . . . . . . . .25
(i)
<PAGE>
SECTION 3.07. Performance of Obligations; Servicing
SEC Filings. . . . . . . . . . . . . . . . . . . . . . . .26
SECTION 3.08. Certain Negative Covenants . . . . . . . . . . . . . . . .28
SECTION 3.09. Annual Statement as to Compliance. . . . . . . . . . . . .29
SECTION 3.10. Note Issuer May Consolidate, etc.,
Only on Certain Terms. . . . . . . . . . . . . . . . . . .30
SECTION 3.11. Successor or Transferee. . . . . . . . . . . . . . . . . .32
SECTION 3.12. No Other Business. . . . . . . . . . . . . . . . . . . . .32
SECTION 3.13. No Borrowing . . . . . . . . . . . . . . . . . . . . . . .32
SECTION 3.14. Servicer's Obligations . . . . . . . . . . . . . . . . . .32
SECTION 3.15. Guarantees Loans Advances and Other Liabilities. . . . . .32
SECTION 3.16. Capital Expenditures.. . . . . . . . . . . . . . . . . . .32
SECTION 3.17. Restricted Payments. . . . . . . . . . . . . . . . . . . .33
SECTION 3.18. Notice of Events of Default. . . . . . . . . . . . . . . .33
SECTION 3.19. Further Instruments and Acts . . . . . . . . . . . . . . .33
SECTION 3.20. Purchase of Subsequent Transition Property . . . . . . . .33
ARTICLE IV
SATISFACTION AND DISCHARGE; DEFEASANCE. . . . . . . . . . . . . . . . . .35
SECTION 4.01. Satisfaction and Discharge of
Indenture Defeasance . . . . . . . . . . . . . . . . . . .35
SECTION 4.02. Conditions to Defeasance . . . . . . . . . . . . . . . . .37
SECTION 4.03. Application of Trust Money . . . . . . . . . . . . . . . .38
SECTION 4.04. Repayment of Moneys Held by Paying Agent . . . . . . . . .38
ARTICLE V
REMEDIES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .38
SECTION 5.01. Events of Default. . . . . . . . . . . . . . . . . . . . .38
SECTION 5.02. Acceleration of Maturity; Rescission
and Annulment. . . . . . . . . . . . . . . . . . . . . . .40
SECTION 5.03. Collection of Indebtedness and Suits
for Enforcement by Indenture Trustee . . . . . . . . . . .41
SECTION 5.04. Remedies; Priorities . . . . . . . . . . . . . . . . . . .43
SECTION 5.05. Optional Preservation of the Note Collateral . . . . . . .44
SECTION 5.06. Limitation of Suits. . . . . . . . . . . . . . . . . . . .44
SECTION 5.07. Unconditional Rights of Holders To
Receive Principal, Premium, if any, and Interest . . . . .45
SECTION 5.08. Restoration of Rights and Remedies . . . . . . . . . . . .45
SECTION 5.09. Rights and Remedies Cumulative . . . . . . . . . . . . . .46
SECTION 5.10. Delay or Omission Not a Waiver . . . . . . . . . . . . . .46
SECTION 5.11. Control by Holders . . . . . . . . . . . . . . . . . . . .46
SECTION 5.12. Waiver of Past Defaults. . . . . . . . . . . . . . . . . .47
SECTION 5.13. Undertaking for Costs. . . . . . . . . . . . . . . . . . .47
SECTION 5.14. Waiver of Stay or Extension Laws . . . . . . . . . . . . .47
SECTION 5.15. Action on Notes. . . . . . . . . . . . . . . . . . . . . .48
SECTION 5.16. Performance and Enforcement of
Certain Obligations. . . . . . . . . . . . . . . . . . . .48
(ii)
<PAGE>
ARTICLE VI
THE INDENTURE TRUSTEE . . . . . . . . . . . . . . . . . . . . . . . . . .49
SECTION 6.01. Duties of Indenture Trustee. . . . . . . . . . . . . . . .49
SECTION 6.02. Rights of Indenture Trustee. . . . . . . . . . . . . . . .50
SECTION 6.03. Individual Rights of Indenture Trustee . . . . . . . . . .51
SECTION 6.04. Indenture Trustee's Disclaimer . . . . . . . . . . . . . .51
SECTION 6.05. Notice of Defaults . . . . . . . . . . . . . . . . . . . .51
SECTION 6.06. Reports by Indenture Trustee to Holders. . . . . . . . . .51
SECTION 6.07. Compensation and Indemnity . . . . . . . . . . . . . . . .52
SECTION 6.08. Replacement of Indenture Trustee . . . . . . . . . . . . .53
SECTION 6.09. Successor Indenture Trustee by Merger. . . . . . . . . . .54
SECTION 6.10. Appointment of Co-Trustee or Separate Trustee. . . . . . .54
SECTION 6.11. Eligibility; Disqualification. . . . . . . . . . . . . . .55
SECTION 6.12. Preferential Collection of Claims
Against Note Issuer. . . . . . . . . . . . . . . . . . . .56
SECTION 6.13. Representations and Warranties of
Indenture Trustee. . . . . . . . . . . . . . . . . . . . .56
ARTICLE VII
HOLDERS' LISTS AND REPORTS. . . . . . . . . . . . . . . . . . . . . . . .56
SECTION 7.01. Note Issuer To Furnish Indenture Trustee
Names and Addresses of Holders . . . . . . . . . . . . . .56
SECTION 7.02. Preservation of Information; Communications
to Holders . . . . . . . . . . . . . . . . . . . . . . . .56
SECTION 7.03. Reports by Note Issuer . . . . . . . . . . . . . . . . . .57
SECTION 7.04. Reports by Indenture Trustee . . . . . . . . . . . . . . .57
ARTICLE VIII
ACCOUNTS, DISBURSEMENTS AND RELEASES. . . . . . . . . . . . . . . . . . .58
SECTION 8.01. Collection of Money. . . . . . . . . . . . . . . . . . . .58
SECTION 8.02. Collection Account . . . . . . . . . . . . . . . . . . . .58
SECTION 8.03. General Provisions Regarding the
Collection Account . . . . . . . . . . . . . . . . . . . .61
SECTION 8.04. Release of Note Collateral . . . . . . . . . . . . . . . .62
SECTION 8.05. Opinion of Counsel . . . . . . . . . . . . . . . . . . . .62
SECTION 8.06. Reports by Independent Accountants . . . . . . . . . . . .62
ARTICLE IX
SUPPLEMENTAL INDENTURES . . . . . . . . . . . . . . . . . . . . . . . . .63
SECTION 9.01. Supplemental Indentures Without
Consent of Holders . . . . . . . . . . . . . . . . . . . .63
SECTION 9.02. Supplemental Indentures with Consent
of Holders . . . . . . . . . . . . . . . . . . . . . . . .65
SECTION 9.03. Execution of Supplemental Indentures.. . . . . . . . . . .66
SECTION 9.04. Effect of Supplemental Indenture . . . . . . . . . . . . .66
SECTION 9.05. Conformity with Trust Indenture Act. . . . . . . . . . . .67
SECTION 9.06. Reference in Notes to Supplemental Indentures. . . . . . .67
(iii)
<PAGE>
ARTICLE X
REDEMPTION OF NOTES . . . . . . . . . . . . . . . . . . . . . . . . . . .67
SECTION 10.01. Optional Redemption by Note Issuer . . . . . . . . . . . .67
SECTION 10.02. Form of Optional Redemption Notice . . . . . . . . . . . .68
SECTION 10.03. Notes Payable on Optional Redemption Date. . . . . . . . .68
ARTICLE XI
MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .69
SECTION 11.01. COMPLIANCE CERTIFICATES AND OPINIONS, ETC. . . . . . . . .69
SECTION 11.02. Form of Documents Delivered to Indenture Trustee . . . . .70
SECTION 11.03. Acts of Holders. . . . . . . . . . . . . . . . . . . . . .71
SECTION 11.04. Notices, etc. to Indenture Trustee, Note Issuer and
Rating Agencies. . . . . . . . . . . . . . . . . . . . . .72
SECTION 11.05. Notices to Holders Waiver. . . . . . . . . . . . . . . . .72
SECTION 11.06. Conflict with Trust Indenture Act. . . . . . . . . . . . .73
SECTION 11.07. Effect of Headings and Table of Contents . . . . . . . . .73
SECTION 11.08. Successors and Assigns . . . . . . . . . . . . . . . . . .73
SECTION 11.09. Separability . . . . . . . . . . . . . . . . . . . . . . .74
SECTION 11.10. Benefits of Indenture. . . . . . . . . . . . . . . . . . .74
SECTION 11.11. Legal Holidays . . . . . . . . . . . . . . . . . . . . . .74
SECTION 11.12. Governing Law. . . . . . . . . . . . . . . . . . . . . . .74
SECTION 11.13. Counterparts . . . . . . . . . . . . . . . . . . . . . . .74
SECTION 11.14. Recording of Indenture . . . . . . . . . . . . . . . . . .74
SECTION 11.15. Trust Obligation . . . . . . . . . . . . . . . . . . . . .74
SECTION 11.16. No Recourse to Note Issuer . . . . . . . . . . . . . . . .75
SECTION 11.17. Inspection . . . . . . . . . . . . . . . . . . . . . . . .75
SECTION 11.18. No Petition. . . . . . . . . . . . . . . . . . . . . . . .75
EXHIBIT A-- Form of Notes
EXHIBIT B-- Form of Trust Issuance Certificate
EXHIBIT C-- Form of Series Supplement
APPENDIX A
</TABLE>
(iv)
<PAGE>
CROSS REFERENCE TABLE
<TABLE>
<CAPTION>
TIA SECTION INDENTURE SECTION
----------- -----------------
<S> <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(a)
(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
</TABLE>
<PAGE>
- ------------------------------------------------------------------------------
N.A. means Not Applicable.
Note: This cross reference table shall not, for any purpose, be deemed
to be part of this Indenture.
- ------------------------------------------------------------------------------
vi
<PAGE>
INDENTURE dated as of December 1, 1998, between ILLINOIS POWER
SPECIAL PURPOSE 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 Trust 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:
<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, (j)
all general intangibles, chattel paper and accounts of the Note Issuer, and
(k) 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.
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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;
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(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 Trust 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
Trust Issuance Certificate or Series Supplement, if any, in either case
executed on behalf of the Trust by an Authorized Officer of the Delaware
Trustee and, except as otherwise provided in such Trust 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
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further particular designations added or incorporated in such title for the
Notes of any particular 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 Trust 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;
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(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;
(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
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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 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.
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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 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
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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 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
Trust 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 Trust
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
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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
(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 Trust 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 Trust 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
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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.
Notes of each Series created and established by a Trust 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.
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(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 Trust 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 Trust Issuance Certificate or Series Supplement, as
the case may be, for such Series of Notes is in the form
attached thereto, which Trust 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 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
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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.
(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
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(ii) the attached copy of the Funding Order creating
such Intangible Transition Property is true and
correct.
(7) OPINION OF TAX COUNSEL. Illinois Power 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, Illinois Power) to the effect that, for
federal income tax purposes, (i) such issuance of Notes, and
transfer of the Note Proceeds to Illinois Power, will not
result in gross income to the Grantee, the Note Issuer or
Illinois Power and (ii) such issuance will not materially
adversely affect the characterization of any then Outstanding
Notes as obligations of Illinois Power.
(8) OPINION OF COUNSEL. Unless otherwise specified in a Trust
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 Trust Issuance
Certificate or Series Supplement, if any, has been
duly qualified under the Trust Indenture Act or no
such qualification of the Trust Issuance Certificate
or Series Supplement is necessary;
(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 Trust Issuance Certificate, the Series
Supplement, if any, and this Indenture and to issue
the Notes, and each of the Trust Issuance Certificate,
the Series Supplement, if any, this Indenture, and the
Notes have been duly authorized and the Note Issuer is
duly formed
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and is validly existing in good standing under the
laws of the jurisdiction of its organization;
(d) the Trust 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 Trust 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 Trust 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 Trust 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 (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;
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(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 Illinois Power, 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 Trust 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 Illinois
Power, 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
Illinois Power enforceable against Illinois Power 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
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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 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 Trust 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
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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.)
(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 TRUST ISSUANCE CERTIFICATE OR SERIES
SUPPLEMENT. Such other funds, accounts, documents
certificates, agreements, instruments or opinions as may be
required by the terms of the Trust 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 Trust
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.
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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 Trust 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 Trust 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 (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 Trust 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,
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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 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 Trust 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)(l)
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
Trust Issuance Certificate or Series Supplement, if any. Unless otherwise
provided in the related Trust
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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)(l), (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 to the Indenture Trustee and the 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, 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 Trust 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 Trust 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 Illinois Power secured by the Note Collateral and
(ii) agree to treat the Notes as indebtedness of Illinois Power 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 other required by appropriate taxing authorities.
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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 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.
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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 Chicago, Illinois, an office or agency, Harris Trust and Savings
Bank, as Indenture Trustee, Corporate Trust Office, 311 West Monroe Street, 12th
Floor, Chicago, Illinois 60606, 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 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;
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(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 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
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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;
(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
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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 to the Note Collateral 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
to the Note Collateral 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 to the Note Collateral
until September 30 in the following calendar year.
(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 the other Note Collateral, 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 Trust Issuance Certificate, any Series Supplement, the Sale
Agreement, any Subsequent Sale Agreement related to the applicable
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Note Collateral, the Servicing Agreement, the Administration Agreement or
such other instrument or agreement.
(b) The Note Issuer may contract with other Persons to assist it
in performing its duties under this 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.
(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 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 Note Issuer 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 Note Issuer 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.
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(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
Illinois Power, 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.
(h) The Note Issuer shall 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 $864,000,000; and (ii) on any date from and after July 31,
1999, in excess of $1,728,000,000, 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;
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(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.
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
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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 Trust 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) Illinois Power 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, Illinois Power, 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 Illinois Power, the Grantee, the Note
Issuer, the Delaware Trustee, the Indenture Trustee or the then
existing Holders;
(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
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(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 Trust 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) Illinois Power shall have delivered an opinion of
independent tax counsel (as selected by, and in form and substance
reasonably satisfactory to, Illinois Power, 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 Illinois Power, the Grantee, the Note Issuer, the
Delaware Trustee, the Indenture Trustee or the then existing Holders;
(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).
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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 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
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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.
(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
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Sale Date for such Subsequent Transition Property and the aggregate amount
of the IFC's 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) Illinois Power, 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) Illinois Power 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, Illinois Power) 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 Illinois Power, 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 Illinois Power'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 Illinois Power;
(vi) as of such Subsequent Sale Date, no breach by Illinois
Power of its representations, warranties or covenants in the related
Subsequent Grant Agreement and no breach by the 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
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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
and the other Note Collateral.
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
(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
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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 Trust 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 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
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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 been satisfied and discharged pursuant to Section 4.01(a) or
4.01(b) have been paid in full. Thereafter the obligations in Sections 6.07
and 4.04 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 manner and at the same times as would have
been the case if such legal defeasance had not occurred;
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(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.
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
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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
(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
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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 Trust 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 actual 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.
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(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 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
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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 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
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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 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;
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(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
(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.
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SECTION 5.09. RIGHTS AND REMEDIES CUMULATIVE. No right or remedy
herein conferred upon or reserved to the Indenture Trustee or to the Holders is
intended to be exclusive of any other right or remedy, and every right and
remedy shall, to the extent permitted by law, be cumulative and in addition to
every other right and remedy given hereunder or now or hereafter existing at law
or in equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
SECTION 5.10. DELAY OR OMISSION NOT A WAIVER. No delay or
omission of the Indenture Trustee or any Holder to exercise any right or
remedy accruing upon any Default or Event of Default shall impair any such
right or remedy or constitute a waiver of any such Default or Event of
Default or an acquiescence therein. Every right and remedy given by this
Article V or by law to the Indenture Trustee or to the Holders may be
exercised from time to time, and as often as may be deemed expedient, by the
Indenture Trustee or by the Holders, as the case may be.
SECTION 5.11. CONTROL BY HOLDERS. The Holders of 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.
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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 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.
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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.
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 Illinois Power, 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 Illinois Power, the Grantee or the Servicer
thereunder and the institution of legal or administrative actions or proceedings
to compel or secure performance by Illinois Power, 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.
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ARTICLE VI
THE INDENTURE TRUSTEE
SECTION 6.01. DUTIES OF INDENTURE TRUSTEE.
(a) If an Event of Default has occurred and is continuing, the
Indenture Trustee shall exercise the rights and powers vested in it by this
Indenture and use the same degree of care and skill in their exercise as a
prudent person would exercise or use under the circumstances in the conduct of
such person's own affairs.
(b) Except during the continuance of an Event of Default:
(i) the Indenture Trustee undertakes to perform such duties
and only such duties as are specifically set forth in this Indenture
and no implied covenants or obligations shall be read into this
Indenture against the Indenture Trustee; and
(ii) in the absence of bad faith on its part, the Indenture
Trustee may conclusively rely, as to the truth of the statements and
the correctness of the opinions expressed therein, upon certificates
or opinions furnished to the Indenture Trustee and conforming to the
requirements of this Indenture; 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.
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(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.
(i) In the event that the Indenture Trustee is also acting as
Paying Agent or Note Registrar hereunder, the rights and 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,
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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.
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
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Servicer which will include (to the extent applicable) the following
information (and any other information so specified in the applicable Trust
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.
(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
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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;
(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.
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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
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
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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, 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.
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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.
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.
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(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
(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.
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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 Actual IFC Collections (collectively, the "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.
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(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 6.06 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 shall be made by the Indenture
Trustee in accordance with the written instructions provided by the Servicer
in the Quarterly Servicer's Certificate.
(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;
(ii) the Servicing Fee for such Payment Date and all unpaid
Servicing Fees for prior Payment Dates shall be paid to the Servicer;
(iii) the Administration Fee and all unpaid 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 accrued and 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 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;
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(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
(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 Trust 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)
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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
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
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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, direct the investment (including
investment in Eligible Investments) of moneys in the Collection Account 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 3 14(d)(1) meeting the applicable requirements
of Section 11.01.
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 Trust Issuance Certificates or
Series
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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 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;
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(iii) to add to the covenants of the Note Issuer, for the
benefit of the Holders of the Notes, or to surrender any right or
power herein conferred upon the Note Issuer;
(iv) to convey, transfer, assign, mortgage or pledge any
property to or with the 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 Trust 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.
(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.
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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
Trust 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";
(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;
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(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
consequences to Illinois Power, 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 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
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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 Trust 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 Trust 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 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
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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 Trust 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 shall on the Optional Redemption Date become due and
payable at the Optional Redemption Price and (unless the Note Issuer shall
default in the payment of the Optional Redemption Price) no interest shall
accrue on the Optional Redemption Price for any period after the date to
which accrued interest is calculated for purposes of calculating the Optional
Redemption Price.
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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 value (within 90 days
of such deposit) to the Note Issuer of the Note Collateral or other property
or securities to be so deposited.
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(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 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
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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 favor of the Indenture Trustee and the Note Issuer, if
made in the manner provided in this Section.
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(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: Illinois Power Special Purpose Trust, Attention: Eric B.
Weekes 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.
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
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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 Illinois Power) 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
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agreed (it being understood that none of the Indenture Trustee, the Delaware
Trustee, the Grantee and Illinois Power have 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 Trust 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.
ILLINOIS POWER SPECIAL PURPOSE TRUST
BY: FIRST UNION TRUST COMPANY,
NATIONAL ASSOCIATION,
not in its individual capacity
but solely as Delaware Trustee
By: /s/ Doris J. Krick
-----------------------------------
Name: Doris J. Krick
---------------------------------
Title: Vice President
--------------------------------
HARRIS TRUST AND SAVINGS BANK, not in
its individual capacity but solely as
Indenture Trustee
By: /s/ E. Kay Liederman
-----------------------------------
Name: E. Kay Liederman
---------------------------------
Title: Vice President
--------------------------------
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STATE OF ILLINOIS, )
) SS:
COUNTY OF COOK )
On the 22nd day of December, 1998, before me, Mary A. Spengler,
a Notary Public in and for said county and state, personally appeared
Doris J. Krick, 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/ Mary A. Spengler
-----------------------------------
Notary Public
My commission expires: 08/19/01
(SEAL)
<PAGE>
STATE OF ILLINOIS, )
) SS:
COUNTY OF COOK )
On the 22nd day of December, 1998, before me, Mary A. Spengler,
a Notary Public in and for said county and state, personally appeared
E. Kay Liederman, 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 Illinois Power
Special Purpose Trust, a Delaware business trust and the entity upon whose
behalf the person acted, executed this instrument.
WITNESS my hand and official seal.
/s/ Mary A. Spengler
--------------------------------
Notary Public
My commission expires: 08/19/01
(SEAL)
<PAGE>
EXHIBIT A
FORM OF NOTE
REGISTERED $__________
NO. _________ CUSIP NO.__________
SEE REVERSE FOR CERTAIN DEFINITIONS
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 TRUST 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. 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.
A-1
<PAGE>
ILLINOIS POWER SPECIAL PURPOSE TRUST
TRANSITIONAL FUNDING TRUST NOTES, SERIES [ ], CLASS [ - ].
INTEREST ORIGINAL PRINCIPAL FINAL MATURITY
RATE AMOUNT DATE
-------- ------------------ --------------
Illinois Power Special Purchase 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 Cede & Co., 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 25, June 25,
September 25 and December 25] 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.
A-2
<PAGE>
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.
IN WITNESS WHEREOF, the Note Issuer has caused this instrument to be
signed, manually or in facsimile, by its Responsible Officer.
Dated: ILLINOIS POWER SPECIAL PURPOSE 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](*)
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 [seven] Classes, including this Class
[ - ] Note (herein called the "Class [ - ] Notes"), all issued and to be issued
under an Indenture dated as of December 1, 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 Trust 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
- ------------------------
(*)The form of the reverse of a Note is substantially as follows, unless
otherwise specified in the related Trust Issuance Certificate or Series
Supplement.
A-5
<PAGE>
principal payments on the Class [ - ] Notes shall be made pro rata to the Class
[ - ] 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 Trust
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 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
A-6
<PAGE>
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 Illinois Power Company, an Illinois electric
utility.
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
A-7
<PAGE>
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
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 Illinois Power) or (iii) any partner,
owner, beneficiary, agent, officer or employee of the Indenture Trustee or the
Delaware Trustee in its respective capacity, any holder of a beneficial interest
in the Delaware Trustee or the Indenture Trustee or of any successor or assign
of the Indenture Trustee or the Delaware Trustee in any of 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 Illinois Power has any such obligations in their respective
individual or corporate capacities).
Prior to the due presentment for registration of transfer of this
Class [ - ] 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
A-8
<PAGE>
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.
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 Trust Issuance
Certificate or Series Supplement, if any, subject to certain limitations therein
set forth.
This Class [ - ] Note, the Indenture and the related Trust 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 of the Note
Issuer, 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 Trust
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 this
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 Illinois Power secured by the Note Collateral and (ii)
unless otherwise required by appropriate taxing authorities, agree to treat the
Class [ - ] Notes as indebtedness of Illinois Power 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
TRUST ISSUANCE CERTIFICATE dated as of __________, ____ (this
"Certificate"), executed and delivered by Illinois Power Special
Purpose 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 December 1, 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 Trust 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 Illinois Power Special Purpose Trust Transitional Funding Trust 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 Illinois Power Special Purpose Trust Transitional
Funding Trust Notes, Series [ ] and further denominated as Classes [ ]
through [ ].
SECTION 2. INITIAL PRINCIPAL AMOUNT; NOTE INTEREST RATE; EXPECTED
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 Expected Maturity Dates and Final Maturity Dates set forth below:
B-1
<PAGE>
INITIAL EXPECTED FINAL NOTE
PRINCIPAL MATURITY MATURITY INTEREST
CLASS AMOUNT DATE DATE RATE
----- ------ ---- ---- ----
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 25, June 25, September 25 and December 25] 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 and the Series [ ]
Notes have been declared due and payable 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 [ ]
Notes, until the Class Principal Balance for such Class of Notes thereof has
been reduced to zero; (2) to the holders of the Class [ ] Notes, until the
Class Principal Balance for such Class of Notes thereof has been reduced to
zero; (3) to the holders of the Class [ ] Notes, until the Class Principal
Balance for such Class of Notes thereof has been reduced to zero; (4) to the
holders of the Class [ ] Notes, until the Class Principal Balance for such
Class of Notes thereof has been reduced to zero; (5) to the holders of the Class
[ ] Notes until the Class Principal Balance for such Class of Notes thereof
has been reduced to zero; (6) to the holders of the Class [ ] Notes, until
the Class Principal Balance for such Class of Notes thereof has been reduced to
zero; and (7) to the holders of the Class [ ] Notes until the Class Principal
Balance for 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 Scheduled Payment for
such Class of Notes and Payment Date. The Expected Amortization Schedule for
the scheduled outstanding Class Principal Balance for each Class [ ] Notes
and Payment Date is attached as Schedule A.
B-2
<PAGE>
(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 Class Principal Balance for the related Class of Notes as of the close of
business on the preceding Payment Date after giving effect to all payments of
principal made to the holders of the related Class of 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 One 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 Two 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 or upon order of 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 [ ] through [ ] hereto.
B-3
<PAGE>
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.
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
Illinois Power) 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 the Indenture Trustee, the
Delaware Trustee, the Grantee and Illinois Power have any such obligations in
their respective individual or corporate capacities).
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.
ILLINOIS POWER SPECIAL PURPOSE
TRUST, as Note Issuer,
BY: FIRST UNION TRUST COMPANY,
NATIONAL ASSOCIATION, not in its
individual capacity but solely
as Delaware Trustee
By:___________________________________
Name:_________________________________
Title:________________________________
B-4
<PAGE>
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
PAYMENT DATE CLASS[ ] CLASS [ ] CLASS [ ] CLASS [ ] CLASS [ ] SERIES[ ]
<PAGE>
SCHEDULE B
REQUIRED OVERCOLLATERALIZATION LEVEL SCHEDULE
REQUIRED
PAYMENT DATE OVERCOLLATERALIZATION LEVEL
<PAGE>
EXHIBIT C
SERIES SUPPLEMENT dated as of __________, 199_ (this "Supplement"), by
and between ILLINOIS POWER SPECIAL PURPOSE 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 December 1, 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 indenture 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 Illinois Power Transitional Funding Trust Notes, Series [ ]
(the "Series [ ] Notes"), and the Note Issuer and the Indenture Trustee are
executing an 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 in the Indenture, the terms and provisions of this
Supplement shall govern.
SECTION 1. DESIGNATION. The Series [ ] Notes shall be
designated generally as Illinois Power Transitional Funding Notes, Series [
] and further denominated as Classes
[ ] through [ ].
SECTION 2. INITIAL PRINCIPAL AMOUNT; NOTE INTEREST RATE; EXPECTED
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 Expected Maturity Dates and Final Maturity Dates set forth below:
C-1
<PAGE>
INITIAL EXPECTED FINAL NOTE
PRINCIPAL MATURITY MATURITY INTEREST
CLASS AMOUNT DATE DATE RATE
----- ------ ---- ---- ----
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.
(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 25, June 25, September 25 and December 25] 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 and the Series [ ]
Notes have been declared due and payable 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 [ ]
Notes, until the Class Principal Balance for such Class of Notes thereof has
been reduced to zero; (2) to the holders of the Class [ ] Notes, until the
Class Principal Balance for such Class of Notes thereof has been reduced to
zero; (3) to the holders of the Class [ ] Notes, until the Class Principal
Balance for such Class of Notes thereof has been reduced to zero; (4) to the
holders of the Class [ ] Notes, until the Class Principal Balance for such
Class of Notes thereof has been reduced to zero; (5) to the holders of the Class
[ ] Notes until the Class Principal Balance for such Class of Notes thereof
has been reduced to zero; (6) to the holders of the Class [ ] Notes, until the
Class Principal Balance for such Class of Notes thereof has been reduced to
zero; and (7) to the holders of the Class [ ] Notes until the Class Principal
Balance for 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 Scheduled Payment for
such Class of Notes and Payment Date. The Expected Amortization Schedule for
the scheduled outstanding Class Principal Balance for each Class [ ] Notes and
Payment Date is attached as Schedule A.
C-2
<PAGE>
(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 Class Principal Balance for the related Class of Notes as of the close of
business on the preceding Payment Date after giving effect to all payments of
principal made to the holders of the related Class of 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 One 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 Two 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 or upon order of 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 [ ] through [ ] hereto.
C-3
<PAGE>
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 Supplement, shall be read, taken, and
construed as one and the same instrument.
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
Illinois Power) 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 the Indenture Trustee, the
Delaware Trustee, the Grantee and Illinois Power 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.
ILLINOIS POWER SPECIAL PURPOSE
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
PAYMENT DATE CLASS [ ] CLASS [ ] CLASS [ ] CLASS [ ] CLASS [ ] SERIES [ ]
<PAGE>
SCHEDULE B
REQUIRED OVERCOLLATERALIZATION LEVEL SCHEDULE
REQUIRED
PAYMENT DATE OVERCOLLATERALIZATION LEVEL
<PAGE>
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, Trust
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
September 10, 1998 issued by the ICC pursuant to the Funding Law, Docket No.
98-0488.
"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 any Collection Period,
IFC Collections actually received by the Servicer with respect to such
Collection Period.
"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.
"ADJUSTMENT DATE" means January 1 and July 1 of each year, commencing
July 1, 1999.
"ADMINISTRATION AGREEMENT" means the Administration Agreement dated as
of December 1, 1998, between Illinois Power and the Grantee as the same may be
amended, supplemented or otherwise modified from time to time.
"ADMINISTRATION FEE" means those amounts invoiced by Illinois Power to
Grantee for services and facilities provided by Illinois Power, as
Administrator, to Grantee in accordance with the Administration Agreement.
1
<PAGE>
"ADMINISTRATOR" means Illinois Power 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.
"AGENCY OFFICE" means the office of the Note Issuer maintained
pursuant to Section 3.02 of the Indenture.
"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 Illinois Public Act 90-561, effective
December 16, 1997, including without limitation, 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 an 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 PERIOD" means the period commencing on an Adjustment Date
and ending on the day immediately preceding the next Adjustment Date.
"APPLICABLE RATES" means all of Illinois Power's tariffed charges
including, without limitation, charges for base rates, delivery services or
transition
2
<PAGE>
charges (including lump-sum payments for such charges) or other rates for
tariffed services; 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, municipal infrastructure maintenance fees, 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), and
PROVIDED FURTHER that to the extent any rate reflects compensation for power
or energy supplied to customers by a person or entity other than the
Servicer, the IFC will be deducted and stated separately from such rate
without giving effect to such compensation.
"APPLICATION" means the Application for Transitional Funding Order and
Petition filed by Illinois Power 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
Illinois Power 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 Illinois Power 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 Trust 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
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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 each, and represents the period during which the
Servicer typically renders a bill for electric service to each of its
customers.
"BILLS" means each of the regular monthly bills, summary bills,
opening bills and closing bills issued to Customers or ARES by Illinois Power
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 Trust 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."
"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.
"CAPITAL CONTRIBUTION" means the amount of cash retained by the Note
Issuer from proceeds of issuance of the Notes, 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 Certificate of Formation of the
Grantee filed as of September 10, 1998 pursuant to, and in accordance with, the
Delaware Limited Liability Company Act, 6 Del. Code Section 18-101 ET SEQ.
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"CERTIFICATE OF TRUST" means the Certificate of Trust filed with the
Secretary of State of the State of Delaware 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.
"CLOSING DATE" means December 22, 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 Billing Period and ending on the last Servicer Business Day
of such Billing Period.
"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, St. Floor, Wilmington, Delaware
19801, Attention: Corporate Trust Administration or at such other address as the
Indenture Trustee or
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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 Illinois Power or other persons or group of Persons
obligated from time to time to pay Illinois Power 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 obligated (or who would but for the contract described
herein, be obligated) to pay Applicable Rates who enters into a contract with
Illinois Power which provides that such person will pay an amount each Billing
Period to the Grantee or its assigns (including the Note Issuer), or to Illinois
Power as Servicer, as applicable, equal to the amount of IFCs that would have
been billed if the services provided under such contract were subject to
Applicable Rates.
"DEBT SERVICE BILLING REQUIREMENT" means, for any Applicable 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 Applicable Period.
"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
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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 A-2 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 Illinois Power
or any of its Affiliates) having, at the time of the investment or
contractual commitment to invest therein, a rating from each of the
Rating Agencies from which a rating is available in the highest
investment category granted thereby;
(d) investments in money market funds having a rating 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 the Delaware Trustee or any of their Affiliates is
investment manager or advisor);
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(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.
"EVENT OF DEFAULT" is defined in Section 5.01 of the Indenture.
"EXPECTED AMORTIZATION SCHEDULE" means SCHEDULE 4.01(a) to the
Servicing Agreement, as the same may be amended from time to time.
"EXPECTED FINAL PAYMENT DATE" means, with respect to any Series or
Class of Notes, the Expected Maturity Date thereof.
"EXPECTED MATURITY DATE" means, with respect to any Series or Class of
Notes, the Expected Maturity Date therefor, as specified in the related Trust
Issuance Certificate or Series Supplement, if any.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"FDIC" means the Federal Deposit Insurance Corporation or any
successor thereto.
"FERC" means the Federal Energy Regulatory Commission or any successor
thereto.
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"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 Trust
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 Trust
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 Trust 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
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.
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"GRANT AGREEMENT" means that certain Agreement Relating to Grant of
Intangible Transition Property dated as of December 1, 1998 between Illinois
Power and the Grantee, as the same may be amended, supplemented or otherwise
modified from time to time.
"GRANTEE" means Illinois Power Securitization Limited Liability
Company, 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, emergency
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 Illinois Power
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 1, 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 Trust Issuance Certificates
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.
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"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.
"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.
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"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.
"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
(or, for purposes of Section 8.03, a Responsible Officer of the Servicer) 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 Trust Issuance Certificate or
Series Supplement, if any, which minimum denomination shall be not less than
$1,000 and, except as otherwise provided in such Trust Issuance Certificate or
Series Supplement, if any, integral multiples thereof.
"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.
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"MOODY'S" means Moody's Investors Service Inc. or any successor
thereto.
"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.
"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 Trust Issuance Certificate or Series Supplement, if
any.
"NOTE ISSUER" means Illinois Power Special Purpose 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
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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 December 2, 1998 executed by
Illinois Power 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 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.
"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;
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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.
"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.
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"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 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 Trust 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.
"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 PERIOD" means (i) the period commencing on the Closing
Date and ending on May 31, 1999, and (ii) thereafter, as applicable, either
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<PAGE>
(A) the period commencing on June 1 and ending November 30 or (B) the period
commencing on December 1 and ending May 31.
"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.
"REGISTRATION STATEMENT" means the registration statement, Form S-3
Registration No. 333-63537, 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.
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"REMEDIATION AGREEMENT" means the Remediation Agreement dated as of
December 1, 1998 between Illinois Power and the Indenture Trustee, as the same
may be amended, supplemented or otherwise modified from time to time.
"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, less $100,000 in the aggregate from all Series of
Notes.
"REQUIRED DEBT SERVICE" for any Applicable 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 Applicable Period) in order to
ensure that, as of the last Payment Date occurring in such Applicable 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 Adjustment
occurring after the last Expected Maturity Date for any Notes, the Required Debt
Service shall be calculated to ensure that sufficient IFCs will be collected to
retire such Notes in full as of the earlier of (x) the Payment Date preceding
the next Adjustment Date and (y) the Final Maturity Date for such Notes.
"REQUIRED DEPOSIT RATING" means a rating on short-term unsecured debt
obligations of P-1 by Moody's, A-1+ by S&P, and, if rated by Fitch IBCA, F-1+ by
Fitch IBCA and if rated by Duff & Phelps, D-1+ by Duff & Phelps. Any
requirement that short-term unsecured debt obligations have the "Required
Deposit Rating" shall mean that such short-term unsecured debt obligations have
the foregoing required ratings from each of such rating agencies.
"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 Trust 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.
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"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) 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 (including
the Servicer), the Chief Executive Officer, the President, any Senior Vice
President or Vice President, the Chief Financial Officer, Treasurer 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 1, 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 PAYMENT DATE" is defined in the applicable Trust Issuance
Certificate or Series Supplement, if any, with respect to each Series or Class
of Notes.
"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.
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<PAGE>
"SERIES" means each series of Notes issued and authenticated pursuant
to the Indenture and a related Trust 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 Trust 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 Illinois Power, 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 1, 1998, between the Grantee and
Illinois Power 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 Illinois Power 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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<PAGE>
"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 Trust 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 Illinois Power.
"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.
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<PAGE>
"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.
"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.
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"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.
"TRUST AGREEMENT" means the Declaration of Trust by First Union Trust
Company, National Association as "Delaware Trustee", and Cynthia G. Steward and
Eric B. Weekes as "Beneficiary Trustees" dated as of December 1, 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.
"TRUST ISSUANCE CERTIFICATE" means a certificate executed by an
Authorized Officer of the Delaware Trustee on behalf of the Trust 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 10, 1998 among Illinois Power, the Underwriters party thereto, on their
own behalf and as representatives of the several underwriters named therein,
Illinois Power and the Grantee.
"UNREGISTERED NOTES" means any Notes not registered under the
Securities Act or the securities laws of any other jurisdiction.
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"U.S. GOVERNMENT OBLIGATIONS" means direct obligations (or
certificates representing an ownership interest in such obligations) of the
United States of America (including any agency or instrumentality thereof) for
the payment of which the full faith and credit of the United States of America
is pledged 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 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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- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
INTANGIBLE TRANSITION PROPERTY SALE AGREEMENT
between
ILLINOIS POWER SECURITIZATION LIMITED LIABILITY COMPANY
Grantee
and
ILLINOIS POWER SPECIAL PURPOSE TRUST
Note Issuer
Dated as of December 1, 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 . . . . . . . . . . . . . . . . 4
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 . . . . . . . . . . . . . . . 5
SECTION 3.05. No Violation . . . . . . . . . . . . . . . . . . 5
SECTION 3.06. No Proceedings . . . . . . . . . . . . . . . . . 5
SECTION 3.07. Approvals. . . . . . . . . . . . . . . . . . . . 6
SECTION 3.08. The 1998 Transition Property and Related
Assets . . . . . . . . . . . . . . . . . . . . . 6
ARTICLE IV
COVENANTS OF THE GRANTEE. . . . . . . . . . . . . . . . . . . . . . . . .11
SECTION 4.01. Corporate Existence. . . . . . . . . . . . . . .11
SECTION 4.02. No Liens . . . . . . . . . . . . . . . . . . . .11
SECTION 4.03. Delivery of Collections. . . . . . . . . . . . .12
SECTION 4.04. Notice of Liens. . . . . . . . . . . . . . . . .12
SECTION 4.05. Compliance with Law. . . . . . . . . . . . . . .12
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. . . . . . . . . . . . . .14
SECTION 4.09. Taxes. . . . . . . . . . . . . . . . . . . . . .15
SECTION 4.10. Performance of Obligations; Servicing. . . . . .15
SECTION 4.11. Additional Negative Covenants. . . . . . . . . .17
SECTION 4.12. No Other Business. . . . . . . . . . . . . . . .17
SECTION 4.13. No Borrowing . . . . . . . . . . . . . . . . . .17
SECTION 4.14. Guarantees Loans, Advances and Other
Liabilities. . . . . . . . . . . . . . . . . . .18
SECTION 4.15. Capital Expenditures . . . . . . . . . . . . . .18
SECTION 4.16. Notice of Defaults . . . . . . . . . . . . . . .18
SECTION 4.17. Separate Existence . . . . . . . . . . . . . . .18
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SECTION 4.18. Further Instruments and Acts . . . . . . . . . .21
SECTION 4.19. Subsequent Transition Property . . . . . . . . .21
ARTICLE V
THE GRANTEE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .23
SECTION 5.01. Liability of Grantee; Indemnities. . . . . . . .23
SECTION 5.02. Merger or Consolidation of, or
Assumption of the Obligations of,
Grantee. . . . . . . . . . . . . . . . . . . . .24
SECTION 5.03. Limitation on Liability of Grantee
and Others . . . . . . . . . . . . . . . . . . .26
ARTICLE VI
MISCELLANEOUS PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . .26
SECTION 6.01. Amendment . . . . . . . . . . . . . . . . . . . . . .26
SECTION 6.02. Notices . . . . . . . . . . . . . . . . . . . . . . .28
SECTION 6.03. Assignment. . . . . . . . . . . . . . . . . . . . . .28
SECTION 6.04. Limitations on Rights of OTHERS . . . . . . . . . . .28
SECTION 6.05. Severability. . . . . . . . . . . . . . . . . . . . .29
SECTION 6.06. Separate Counterparts . . . . . . . . . . . . . . . .29
SECTION 6.07. Headings. . . . . . . . . . . . . . . . . . . . . . .29
SECTION 6.08. Governing Law . . . . . . . . . . . . . . . . . . . .29
SECTION 6.09. Assignment to Indenture Trustee . . . . . . . . . . .29
SECTION 6.10. Limitation of Liability . . . . . . . . . . . . . . .30
SECTION 6.11. Limitation of Liability . . . . . . . . . . . . . . .30
SECTION 6.12. Holders as Third-Party Beneficiaries. . . . . . . . .31
SECTION 6.13. Representations and Indemnities to Survive. . . . . .31
</TABLE>
ii
<PAGE>
INTANGIBLE TRANSITION PROPERTY SALE AGREEMENT dated as of December 1,
1998 between ILLINOIS POWER SECURITIZATION LIMITED LIABILITY COMPANY, a
Delaware limited liability company (the "Grantee"), and ILLINOIS POWER
SPECIAL PURPOSE 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.
<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 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 $864,000,000 (less
underwriting discounts and original issue discount) 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:
2
<PAGE>
(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 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.
3
<PAGE>
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 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
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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 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
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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.
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
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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 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
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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 reduce, postpone, impair or
terminate 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) 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
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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.
(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 compel Illinois
Power, as Servicer (or any successor), to file for and 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,
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the Overcollateralization Subaccount and 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 $1.634 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 Illinois Power 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 Illinois Power or any third party and which shall, to the full extent
permitted by law, be enforceable against Illinois Power, its successors and
assigns, and all other third parties (including judicial lien creditors)
claiming an interest therein by or through Illinois Power 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 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
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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 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
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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 not 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 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.
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(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 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,
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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.
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 Illinois
Power, the Grantee, the Note Issuer or any other grantee or assignee of the
1998 Transition Property pursuant to Section 18-
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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.
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. In
addition, the Grantee agrees to perform, and shall be responsible and liable
for, the duties and obligations of the Note Issuer under Sections 3.02, 3.04,
3.05, 3.06, 3.07, 3.09, 3.14, 3.18, 3.19, 6.06(c), 6.07, 7.01,
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7.03, 8.03 (regarding the direction of investment in Eligible Investments in
the Collection Account), and 8.06 of the Indenture, PROVIDED, HOWEVER, that
the Grantee may engage the Administrator to perform such duties and
obligations pursuant to the terms of the Administration Agreement.
(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 Illinois Power 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 expense, such agreements, instruments, consents and other
documents as shall be necessary or appropriate in the circumstances.
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(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 Illinois Power
pursuant to the Basic Documents.
SECTION 4.11. ADDITIONAL NEGATIVE COVENANTS. So long as any Notes are
Outstanding, the Grantee shall not:
(a) except as permitted by Section 5.02, sell, transfer, exchange or
otherwise dispose of any of its properties or assets;
(b) 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;
(c) except as permitted by Section 5.02, terminate its existence or
dissolve or liquidate in whole or in part; or
(d) 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.
SECTION 4.14. GUARANTEES LOANS, ADVANCES AND OTHER LIABILITIES. Except
as otherwise contemplated by the Grant Agreement, the Administration
Agreement, the Servicing
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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 Illinois Power 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.
(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
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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, keeping all resolutions or consents necessary to
authorize actions taken or to be taken, and
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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) Illinois Power 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) Illinois Power 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, Illinois Power will
not be insolvent and will not have been made insolvent by such
transfer and Illinois Power 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) Illinois Power shall have delivered to the Grantee, the
Note Issuer, 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 Illinois
Power) to the effect that for federal income tax purposes (i) the
issuance of the Transitional Funding Order authorizing the collection
of the Instrument Funding Charges
21
<PAGE>
does not result in gross income to Illinois Power, the Grantee or the
Note Issuer, (ii) the assignment of the Intangible Transition Property
to the Note Issuer and the issuance of the Notes does not result in
gross income to Illinois Power, the Grantee or the Note Issuer, and
(iii) the Notes will be obligations of Illinois Power for federal
income tax purposes;
(vi) as of such Subsequent Creation Date, no breach by
Illinois Power 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 Illinois Power 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).
22
<PAGE>
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 (collectively,
23
<PAGE>
"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
24
<PAGE>
that are necessary to fully preserve and protect the interest of the Note
Issuer in the 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) Illinois Power 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, Illinois Power, and which may be based on a ruling from 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 Illinois Power, 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 Illinois Power Securitization Limited
Liability Company, substantially as a whole and becomes the successor to
Illinois Power Securitization Limited Liability Company 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, Illinois Power Securitization Limited
Liability Company 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
25
<PAGE>
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 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 the timing of adjustments to IFCs 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.
26
<PAGE>
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.
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, Illinois Power Securitization Limited Liability Company, c/o
Illinois Power Company, 500 South 27th Street, Decatur, Illinois 62525; (b)
in the case of the Note Issuer, to Illinois Power Special Purpose 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:
Doreene 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:
ABS Surveillance; (f) in the case of Fitch IBCA,
27
<PAGE>
to Fitch IBCA, Inc., One State Street Plaza, New York, New York 10004,
Attention: 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 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.
28
<PAGE>
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 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, 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
29
<PAGE>
personally liable for the breach or failure of any obligation,
representation, warranty or covenant made or undertaken by the Note Issuer
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
30
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applicable law, the provisions of Articles III, IV and V hereof shall survive
the termination and cancellation or invalidity of this Agreement.
7
<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.
ILLINOIS POWER SECURITIZATION
LIMITED LIABILITY COMPANY, Grantee
By: Eric B. Weekes
-----------------------------
Name: Eric B. Weekes
Title: Manager
ILLINOIS POWER SPECIAL PURPOSE
TRUST, Note Issuer
By: FIRST UNION TRUST
COMPANY, NATIONAL ASSOCIATION,
not in its individual capacity
but solely as Delaware Trustee
By: /s/ Doris J. Krick
----------------------------
Name: Doris J. Krick
----------------------------
Title: Vice President
----------------------------
Acknowledged and accepted:
HARRIS TRUST AND SAVINGS BANK,
not in its individual capacity
but solely as Indenture
Trustee
By: /s/ E. Kay Liederman
-----------------------------
Name: E. Kay Liederman
-----------------------------
Title: Vice President
-----------------------------
31
<PAGE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
AGREEMENT RELATING TO GRANT OF INTANGIBLE TRANSITION PROPERTY
between
ILLINOIS POWER COMPANY
and
ILLINOIS POWER SECURITIZATION LIMITED LIABILITY COMPANY
Dated as of December 1, 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 ILLINOIS POWER. . . . . . . . . . . . . 4
SECTION 3.01. ORGANIZATION AND GOOD STANDING. . . . . . . . . . . . 5
SECTION 3.02. DUE QUALIFICATION . . . . . . . . . . . . . . . . . . 5
SECTION 3.03. POWER AND AUTHORITY . . . . . . . . . . . . . . . . . 5
SECTION 3.04. BINDING OBLIGATION. . . . . . . . . . . . . . . . . . 5
SECTION 3.05. NO VIOLATION. . . . . . . . . . . . . . . . . . . . . 6
SECTION 3.06. NO PROCEEDINGS. . . . . . . . . . . . . . . . . . . . 6
SECTION 3.07. APPROVALS . . . . . . . . . . . . . . . . . . . . . . 7
SECTION 3.08. THE 1998 TRANSITION PROPERTY. . . . . . . . . . . . . 7
ARTICLE IV
COVENANTS OF ILLINOIS POWER . . . . . . . . . . . . . . . . . . . . . . .12
SECTION 4.01. CORPORATE EXISTENCE . . . . . . . . . . . . . . . . .12
SECTION 4.02. NO LIENS. . . . . . . . . . . . . . . . . . . . . . .13
SECTION 4.03. DELIVERY OF COLLECTIONS . . . . . . . . . . . . . . .13
SECTION 4.04. NOTICE OF LIENS . . . . . . . . . . . . . . . . . . .14
SECTION 4.05. COMPLIANCE WITH LAW . . . . . . . . . . . . . . . . .14
SECTION 4.06. COVENANTS RELATED TO THE 1998
TRANSITION PROPERTY AND THE NOTES . . . . . . . . . .14
SECTION 4.07. PROTECTION OF TITLE . . . . . . . . . . . . . . . . .16
SECTION 4.08. NONPETITION COVENANTS . . . . . . . . . . . . . . . .17
SECTION 4.09. TAXES . . . . . . . . . . . . . . . . . . . . . . . .17
SECTION 4.10. CONTRACTS FOR NON-TARIFFED SERVICES . . . . . . . . .18
SECTION 4.11. PRESERVATION OF RIGHT OF NOTEHOLDERS
TO RECEIVE PAYMENT. . . . . . . . . . . . . . . . . .18
ARTICLE V
ILLINOIS POWER. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .19
SECTION 5.01. LIABILITY OF ILLINOIS POWER; INDEMNITIES. . . . . . .19
SECTION 5.02. MERGER OR CONSOLIDATION OF OR ASSUMPTION OF THE
OBLIGATIONS OF ILLINOIS POWER . . . . . . . . . . . .21
i
<PAGE>
SECTION 5.03. LIMITATION ON LIABILITY OF ILLINOIS
POWER AND OTHERS. . . . . . . . . . . . . . . . . . .22
ARTICLE VI
MISCELLANEOUS PROVISIONS. . . . . . . . . . . . . . . . . . . . . . . . .23
SECTION 6.01. AMENDMENT . . . . . . . . . . . . . . . . . . . . . .23
SECTION 6.02. NOTICES.. . . . . . . . . . . . . . . . . . . . . . .24
SECTION 6.03. ASSIGNMENT. . . . . . . . . . . . . . . . . . . . . .25
SECTION 6.04. LIMITATIONS ON RIGHTS OF OTHERS . . . . . . . . . . .25
SECTION 6.05. SEVERABILITY. . . . . . . . . . . . . . . . . . . . .25
SECTION 6.06. SEPARATE COUNTERPARTS . . . . . . . . . . . . . . . .25
SECTION 6.07. HEADINGS. . . . . . . . . . . . . . . . . . . . . . .25
SECTION 6.08. GOVERNING LAW . . . . . . . . . . . . . . . . . . . .26
SECTION 6.09. ASSIGNMENTS TO NOTE ISSUER AND
INDENTURE TRUSTEE . . . . . . . . . . . . . . . . . .26
SECTION 6.10. HOLDERS AS THIRD-PARTY BENEFICIARIES. . . . . . . . .26
SECTION 6.11. REPRESENTATIONS AND INDEMNITIES TO SURVIVE. . . . . .27
</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 1, 1998, between ILLINOIS
POWER COMPANY, an Illinois corporation ("Illinois Power"), and ILLINOIS POWER
SECURITIZATION LIMITED LIABILITY COMPANY, a Delaware limited liability
company (the "Grantee").
WHEREAS, Illinois Power filed the Application with the ICC pursuant to
Section 18-103 of the Funding Law requesting the issuance of a transitional
funding order;
WHEREAS, Illinois Power 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 $1,634,000,000;
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 September 10, 1998,
which created and established the intangible transition property requested by
Illinois Power 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 Illinois
Power, 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 (i) to transfer the 1998 Transition
Property to the Note Issuer pursuant to the Sale Agreement, and (ii) to pay
Illinois Power 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
Illinois Power Special Purpose 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
2
<PAGE>
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
GRANT OF TRANSITION PROPERTY
SECTION 2.01. GRANT OF TRANSITION PROPERTY. In consideration of
Illinois Power's actions in requesting that the 1998 Transition Property be
created and vested in the Grantee, the Grantee agrees to remit to Illinois
Power 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 Illinois Power has
any interest in the 1998 Transition Property or any part thereof, Illinois
Power 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 Illinois Power's
right, title and interest, if any, in, to and under the 1998 Transition
Property, whether such 1998 Transition Property is fixed, contingent,
liquidated, unliquidated, material or immaterial and such sale, transfer,
assignment, set over and conveyance shall 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
3
<PAGE>
Amounts). Such sale, transfer, assignment, set over and conveyance by
Illinois Power is expressly stated to be a present absolute transfer, and
pursuant to Section 18-108 of the Funding Law, shall be treated as a present
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, Illinois Power 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
Illinois Power shall be deemed to have granted a security interest to the
Grantee in the 1998 Transition Property and the proceeds thereof.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF ILLINOIS POWER
Illinois Power 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 Illinois Power has any interest in the 1998 Transition Property
or any part thereof, the sale, transfer, assignment, set over and conveyance
by Illinois Power contemplated hereby, (iii) the sale, transfer, assignment,
set over and conveyance of the 1998 Transition Property and Related Assets to
the Note
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Issuer and (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. Illinois Power 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 requisite power, authority and legal right to request that the ICC
issue the 1998 Funding Order. Illinois Power 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. Illinois Power 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 Illinois Power's
business, operations, assets, revenues or properties).
SECTION 3.03. POWER AND AUTHORITY. Illinois Power 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 Illinois Power by all necessary corporate action.
SECTION 3.04. BINDING OBLIGATION. This Agreement constitutes a legal,
valid and binding obligation of Illinois Power enforceable against Illinois
Power in accordance with its terms,
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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 default under,
the Articles of Incorporation or by-laws of Illinois Power, or any indenture,
agreement or other instrument to which Illinois Power 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 Illinois Power of any court or of any Federal or
state regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over Illinois Power or its properties.
SECTION 3.06. NO PROCEEDINGS. There are no proceedings or
investigations pending or, to Illinois Power's knowledge, threatened, before
any court, Federal or state regulatory body, administrative agency or other
governmental instrumentality having jurisdiction over Illinois Power or its
properties involving or relating to Illinois Power or the Grantee or to
Illinois Power'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
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reasonably be expected to materially and adversely affect Illinois Power'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 Illinois Power's execution and delivery of this Agreement,
Illinois Power's performance of the transactions contemplated hereby or
Illinois Power's fulfillment of the terms hereof, except those that have been
obtained or made (it being understood that Illinois Power nonetheless has
ongoing legal obligations to make future filings with the ICC relating to
Illinois Power'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 Illinois Power 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 Illinois
Power and its successors and that no interest in or title to the 1998
Transition Property shall be part of Illinois Power's estate in the event of
the filing of a bankruptcy petition by or against Illinois Power under any
bankruptcy law. Accordingly, Illinois Power reaffirms that it has no right,
title or interest in and to the 1998 Transition Property and any sale,
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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 Illinois Power 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
Illinois Power and its successors, and no interest in or title to the 1998
Transition Property shall be part of Illinois Power's estate in the event of
the filing of a bankruptcy petition by or against Illinois Power under any
bankruptcy law. No portion of the 1998 Transition Property has been sold,
transferred, assigned, pledged or otherwise conveyed by Illinois Power to any
Person other than the Grantee. Immediately prior to the transactions
contemplated hereunder, Illinois Power'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.
(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, and 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 Illinois Power
(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,
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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 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 reduce, postpone, impair or
terminate 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
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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) Illinois
Power was authorized to file the Application, (ii) Illinois Power filed the
Application with the ICC on June 24, 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 $1.634 billion, and
the 1998 Transition Property and the right to impose and collect IFCs
constitute current and original property rights vested in the Grantee to the
fullest extent permitted by law; (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 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
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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 compel Illinois Power, as Servicer (or
any successor), to file for and 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 Over-collateralization Subaccount and 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 $1.634 billion 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
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placed beyond the reach of Illinois Power 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 Illinois Power
or any third party and which shall, to the full extent permitted by law, be
enforceable against Illinois Power, its successors and assigns, and all other
third parties (including judicial lien creditors) claiming an interest
therein by or through Illinois Power 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 Illinois Power 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, Illinois Power 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 Illinois Power had breached any
other representations or warranties hereunder.
ARTICLE IV
COVENANTS OF ILLINOIS POWER
SECTION 4.01. CORPORATE EXISTENCE. So long as any of the Notes are
outstanding, Illinois Power (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 Illinois
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Power hereunder is or becomes, organized under the laws of any other State or
of the United States of America, in which case Illinois Power 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 Illinois Power 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
Illinois Power 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, Illinois
Power (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 Illinois Power.
SECTION 4.03. DELIVERY OF COLLECTIONS. If Illinois Power receives
collections in respect of the IFCs or the proceeds thereof, or in replacement
therefor, including, without limitation, any Allocable IFC Revenue Amounts,
Illinois Power agrees to hold such payments in trust for the Servicer and to
pay the Servicer all payments received by Illinois Power in respect thereof
as soon
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as practicable after receipt thereof by Illinois Power, but in no event later
than two Business Days after such receipt.
SECTION 4.04. NOTICE OF LIENS. Illinois Power 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. Illinois Power 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 Illinois Power's
performance of its obligations hereunder or under any of the other Basic
Documents to which it is party. Without limiting the foregoing, Illinois
Power 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, Illinois Power 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, Illinois Power shall
not own or purchase any Notes.
(c) Illinois Power 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)
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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 Illinois Power, 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
Illinois Power 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 Illinois Power.
(d) So long as any of the Notes are outstanding, (i) except with
respect to federal and other applicable taxes, Illinois Power 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) Illinois
Power 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, Illinois Power 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
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which are likely to materially and adversely affect Illinois Power's ability
to make timely recovery of amounts billed to Customers.
(f) If Illinois Power determines that the 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, Illinois Power 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. Illinois Power 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.
Illinois Power 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. Illinois Power 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
Illinois Power 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
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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
Illinois Power. Illinois Power designates the Grantee as its agent and
attorney-in-fact to execute any filings with the ICC or other instruments
required by 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 Illinois
Power, the Grantee or any other grantee or assignee of the 1998 Transition
Property pursuant to Section 18-107(c)(4) of the Funding Law, Illinois Power
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,
Illinois Power 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
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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 Illinois
Power or one of its subsidiaries is contesting the same in good faith by
appropriate proceedings promptly instituted and diligently conducted and if
Illinois Power or such 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 Illinois
Power 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 or to Illinois Power, as Servicer, as
applicable, equal to the amount such Customer would pay in IFCs if the
services provided under such contract were tariffed services, and that the
Grantee, or if Notes have been issued pursuant to the 1998 Funding Order, the
Note Issuer, shall be a third-party beneficiary of such provision of such
contract. Any revenues received by Illinois Power 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 Illinois Power under the Servicing
Agreement, Illinois Power 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 Illinois Power and its
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Affiliates received the proceeds of such Notes, would not be equitable.
Illinois Power 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 payments 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
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
judicial 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 Illinois Power 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
ILLINOIS POWER
SECTION 5.01. LIABILITY OF ILLINOIS POWER; INDEMNITIES.
(a) Illinois Power 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
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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
Series Issuance 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).
(b) Illinois Power 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 Illinois
Power's breach of any of its representations, warranties or covenants
contained in this Agreement.
(c) Illinois Power 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.
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(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 ILLINOIS POWER. Any Person (a) into which Illinois Power may
be merged or consolidated, (b) which may result from any merger or
consolidation to which Illinois Power shall be a party or (c) which may
succeed to the properties and assets of Illinois Power substantially as a
whole, which Person in any of the foregoing cases executes an agreement of
assumption to perform every obligation of Illinois Power hereunder, shall be
the successor to Illinois Power 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
Illinois Power is the Servicer) 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) Illinois Power shall have delivered to
the Grantee, the Note Issuer, the Delaware Trustee 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)
Illinois Power 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 Illinois Power, 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)
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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) Illinois
Power 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, Illinois
Power 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 Illinois Power, 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 Illinois Power substantially as a whole
and becomes the successor to Illinois Power 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, Illinois Power shall automatically and without further
notice be released from its obligations hereunder.
SECTION 5.03. LIMITATION ON LIABILITY OF ILLINOIS POWER AND OTHERS.
Illinois Power and any director or officer or employee or agent of Illinois
Power 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,
Illinois Power 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 Illinois Power
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 Illinois Power
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 Illinois Power
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 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.
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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 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 Illinois
Power, to Illinois Power Company, 500 South 27th Street, Decatur, Illinois
62525; (b) in the case of the Grantee, to Illinois Power Securitization
Limited Liability Company, c/o Illinois Power Company, 500 South 27th Street,
Decatur, Illinois 62525; (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,
Attention: 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: Asset
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Backed Surveillance Department; (g) in the case of Fitch IBCA, to Fitch IBCA,
Inc., One State Street Plaza, New York, New York 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, New York 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 6.03. ASSIGNMENT. Notwithstanding anything to the contrary
contained herein, except as provided in Section 5.02, this Agreement may not
be assigned by Illinois Power.
SECTION 6.04. LIMITATIONS ON RIGHTS OF OTHERS. The provisions of this
Agreement are solely for the benefit of Illinois Power, 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.
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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 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.
Illinois Power 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.
Illinois Power 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 Illinois Power
herein.
SECTION 6.10. HOLDERS AS THIRD-PARTY BENEFICIARIES. Illinois Power 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. Illinois Power will
take all
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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, including the filing of protective UCC financing statements
reflecting a first perfected security interest in the 1998 Transition
Property and 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 Illinois Power 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.
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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.
ILLINOIS POWER COMPANY
By: /s/ Robert A. Schultz
---------------------------------------
Name: Robert A. Schultz
Title: Vice President - Finance
ILLINOIS POWER SECURITIZATION LIMITED
LIABILITY COMPANY, Grantee
By: /s/ Eric B. Weekes
---------------------------------------
Name: Eric B. Weekes
Title: Manager
<PAGE>
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
INTANGIBLE TRANSITION PROPERTY SERVICING AGREEMENT
between
ILLINOIS POWER SECURITIZATION LIMITED LIABILITY COMPANY,
Grantee
and
ILLINOIS POWER COMPANY,
Servicer
Dated as of December 1, 1998
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C>
ARTICLE I
Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 1.01. Definitions . . . . . . . . . . . . . . . . . . . . . 2
SECTION 1.02. Other Definitional Provisions . . . . . . . . . . . . 4
ARTICLE II
Appointment and Authorization. . . . . . . . . . . . . . . . . . . . . . . 5
SECTION 2.01. Appointment of Servicer; Acceptance of
Appointment. . . . . . . . . . . . . . . . . . . 5
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. . . . . . . . . . . . . . . . . . .11
SECTION 3.05. Obligations . . . . . . . . . . . . . . . . . . . . .12
ARTICLE IV
Services Related to Adjustments and Monitoring of Third-Party Collectors .12
SECTION 4.01. Adjustments . . . . . . . . . . . . . . . . . . . . .12
SECTION 4.02. Limitation of Liability . . . . . . . . . . . . . . .16
SECTION 4.03. Monitoring of Third-Party Collectors. . . . . . . . .17
ARTICLE V
The Intangible Transition Property . . . . . . . . . . . . . . . . . . . .22
SECTION 5.01. Custody of Intangible Transition
Property Records . . . . . . . . . . . . . . . .22
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. . . . . . . . . . .26
SECTION 5.06. General Indemnification of Indenture
Trustee and Delaware Trustee . . . . . . . . . .27
ARTICLE VI
The Servicer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .27
SECTION 6.01. Representations and Warranties of Servicer. . . . . .27
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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. Illinois Power Not to Resign. . . . . . . . . . . . .33
SECTION 6.06. Servicing Compensation. . . . . . . . . . . . . . . .34
SECTION 6.07. Compliance with Applicable Law. . . . . . . . . . . .35
SECTION 6.08. Access to Certain Records and Information
Regarding Intangible Transition Property . . . .36
SECTION 6.09. Appointments. . . . . . . . . . . . . . . . . . . . .36
SECTION 6.10. No Servicer Advances. . . . . . . . . . . . . . . . .37
SECTION 6.11. Remittances . . . . . . . . . . . . . . . . . . . . .37
SECTION 6.12. Compliance with Servicing Standard;
Changes in ICC Tariffs 38 . . . . . . . . . . . .
ARTICLE VII
Default. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .39
SECTION 7.01. Servicer Default. . . . . . . . . . . . . . . . . . .39
SECTION 7.02. Appointment of Successor. . . . . . . . . . . . . . .41
SECTION 7.03. Waiver of Past Defaults . . . . . . . . . . . . . . .42
SECTION 7.04. Notice of Servicer Default. . . . . . . . . . . . . .43
ARTICLE VIII
Miscellaneous Provisions . . . . . . . . . . . . . . . . . . . . . . . . .43
SECTION 8.01. Amendment . . . . . . . . . . . . . . . . . . . . . .43
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. . . . . . . . . . . . . . . . . . . . .46
SECTION 8.07. Separate Counterparts . . . . . . . . . . . . . . . .46
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 . . . . . . . . . . . . . . . .47
SECTION 8.12. Limitation of Liability . . . . . . . . . . . . . . .48
SECTION 8.13. Final Termination . . . . . . . . . . . . . . . . . .49
ii
</TABLE>
<PAGE>
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
Schedule 6.01(f) No Proceedings
ANNEXES
Annex I Servicing Procedures
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INTANGIBLE TRANSITION PROPERTY SERVICING AGREEMENT dated as of December 1,
1998, between ILLINOIS POWER SECURITIZATION LIMITED LIABILITY COMPANY, a
Delaware limited liability company (the "Grantee"), and ILLINOIS POWER 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
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:
<PAGE>
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, 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.
"DAILY REMITTANCE" has the meaning set forth in Section 6.11(a).
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"FIFTEEN-DAY REMITTANCE OPTION" means, with respect to any Third-Party
Collector, the option set forth in the 1998 Initial Tariff to remit IFCs
(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.
"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 to remit IFC Payments
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 Illinois Power, is obligated to remit IFCs or IFC Payments to
Illinois Power.
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.
4
<PAGE>
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 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
5
<PAGE>
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.
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 Law 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 of 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;
6
<PAGE>
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 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, 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 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.
7
<PAGE>
(b) REPORTING FUNCTIONS.
(i) MONTHLY SERVICER'S CERTIFICATE. On or before the
tenth calendar day of each month (or, if such date is not a Servicer
Business Day, on the next Servicer Business Day), the Servicer shall
prepare and deliver to the Grantee, the Note Issuer, the Indenture
Trustee and the Rating Agencies a written 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 immediately preceding Billing Period.
(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
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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 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, (v) make all
required submissions and provide all required notifications to the ICC with
respect to any Adjustments, and (vi) maintain facilities sufficient to enable
the Servicer to post IFC Payments to customer accounts within two Servicer
Business Days of receipt of payment by the Servicer, in accordance with Annex I
hereto. The Servicer shall be responsible for the imposition, collection and
remittance of IFCs in accordance with Annex I hereto,
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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, where such contract provides that the Customer will pay an
amount each billing period to the Grantee or the Note Issuer, or to the
Servicer, equal to the amount of IFCs that would have been billed if the
services provided under such contract were subject to 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 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 Closing Date until June 30,
1999) and
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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 Closing Date 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 Illinois Power) 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 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 September 30, 1999, the period of time from the Closing Date 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
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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 not limited to its obligation to remit IFCs and equivalent amounts
for the benefit of the Holders, on account of any legal inability stemming from
such breach of the State Pledge or invalidation.
ARTICLE IV
SERVICES RELATED TO ADJUSTMENTS AND MONITORING OF THIRD-PARTY COLLECTORS
SECTION 4.01. ADJUSTMENTS. From time to time, until the Retirement of the
Notes, the Servicer shall identify the need for Adjustments and shall take all
reasonable action to obtain and implement such Adjustments, all in accordance
with the following:
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(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 Trust 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 copy of such revised
Expected Amortization Schedule to the Grantee, the Note Issuer, the Indenture
Trustee and the Rating Agencies promptly thereafter.
(b) ADJUSTMENTS
(i) ADJUSTMENTS AND FILINGS. Within the month following
the end of each Reconciliation Period, the Servicer shall: (A)
update the data and assumptions underlying the calculation of the
IFCs, including revenue from Applicable Rates for each class of
Customers, projected electricity usage during the next Applicable
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, and the rate of delinquencies and write-offs;
(B) determine the Required Debt Service and Debt
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Service Billing Requirement for the next Applicable Period based
on such updated data and assumptions; (C) determine the IFCs to
be allocated to each class of Customers during the next
Applicable 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 any customer class are projected to be less then the IFCs
allocated to that class, the deficiency will be ratably allocated
to other 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 to effect such Adjustment and to
enforce the provisions of the Funding Law which limit the ICC's
authority to review any such Amendatory Tariff.
(ii) In the case of any Adjustment, the Servicer shall
implement the revised IFCs, if any, as of the next Adjustment Date.
(c) REPORTS.
(i) NOTIFICATION OF AMENDATORY TARIFF FILINGS AND
ADJUSTMENTS. Whenever the Servicer files an Amendatory Tariff with
the ICC or implements revised IFCs with notice to the ICC but
without filing an Amendatory Tariff or revisions to a Tariff as
contemplated by any applicable Funding Order, the Servicer
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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, revised Tariff or notice) to the Grantee, the
Note Issuer, the Indenture Trustee and the Rating Agencies
concurrently therewith.
(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 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 Illinois Power. 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
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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.
(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 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
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duties under this Agreement), by the ICC in any way related to
the Intangible Transition Property or in connection with any
Adjustment, the subject of any filings under Section 4.01, any
proposed 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 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 IFC Payments
are properly enforced in accordance with the terms and provisions of the
Tariffs. Such procedures and policies shall include the following:
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(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;
(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 IFC Payments whether
or not actually collected from end-user Customers (and, where the
IFC payment obligations of any 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,
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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.
(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 IFC Payments whether or not 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 Service shall monitor payment compliance for each Third-Party
Collector which has elected the Fifteen-Day Remittance Option or is
otherwise obligated to remit IFC Payments whether or not 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 make IFC Payments only to the extent of collections
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:
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(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;
(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 is obligated
to pay IFCs on behalf of end-user Customers for all IFCs owed by
such end-user Customers served thereby in accordance with the
billing cycle otherwise applicable to such end-user Customers.
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(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 makes 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 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, taking such steps as it is
permitted to take under applicable law to terminate 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
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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 Illinois Power's
Customers for services provided by such ARES or other utility
and services provided by Illinois Power. 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 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 Adjustment (collectively, the
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"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 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
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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.
(b) MAINTENANCE OF AND ACCESS TO RECORDS. The Servicer shall maintain
the Intangible Transition Property Records at 500 South 27th Street, Decatur,
Illinois 62525, 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).
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(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 reasonably necessary to block or
overturn any attempts to cause a repeal of, modification of or supplement to or
judicial invalidation of, the Amendatory Act, the Funding Law or any Funding
Order or the rights of holders of Intangible Transition Property, or the
promulgation of any ICC Regulations, by legislative action or otherwise, 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 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 Illinois Power's
Applicable Rates and other charges in accordance with the Basic Documents
continuing until the Retirement of the Notes, in each such case unless otherwise
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).
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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 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
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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 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
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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 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.
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(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 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. Except as set forth on Schedule 6.01(f), 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
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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) CALCULATIONS AND ASSUMPTIONS. The calculations and assumptions used
by the Servicer in calculating the IFCs in effect from time to time are
reasonable and made in good faith.
(i) 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 and other pertinent information.
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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 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 Illinois Power (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 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 incurred by any
indemnified party).
(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 costs incurred pursuant to
Section 5.02(c) and the payment of the consideration
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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 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 and (iii) the
Servicer shall have delivered to the Grantee, the Note Issuer, the Indenture
Trustee and the Rating Agencies an Opinion
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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 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. ILLINOIS POWER NOT TO RESIGN. Subject to the provisions of
Sections 6.03, Illinois Power shall not resign from the obligations and duties
hereby imposed on it as Servicer
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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 Illinois
Power'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 Illinois Power's responsibilities and obligations
in accordance with Section 7.02. Illinois Power 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 (i) equal to $540,000 for so long as IFCs are
billed concurrently with charges or otherwise billed to Customers or (ii) not to
exceed $3,240,000 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
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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
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
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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 Illinova 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 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
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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 collected by the Servicer from or on behalf of Customers on
the second preceding Servicer Business Days (the "Daily Remittance"), which
Daily Remittance shall be determined according to the procedures set forth in
Annex I. Prior to or accompanying 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 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
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transfer of immediately available funds equal to the Aggregate Remittance
Amount for the applicable Billing Period to the General Subaccount of the
Collection Account.
(c) The Servicer agrees and acknowledges that it holds all IFC Payments
collected by it for the benefit of the Grantee or the Note Issuer, as
applicable, 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 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 for late fees permitted by
Section 6.06.
(d) Unless otherwise instructed in writing by the Note Issuer, the
Servicer, on behalf of the Note Issuer, 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 which are reasonably likely to materially and
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
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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 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 Illinois Power, as the
case may be, duly to observe or to perform in any material respect any other
covenant or agreement of the Servicer or Illinois Power (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 Illinois Power (as the
case may be) by the Grantee or the Note Issuer or (B) to the Servicer or
Illinois Power (as the case may be) by the Indenture Trustee or by the Holders
of Notes
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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 Grantee, the Note Issuer or the Holders and which material
adverse effect continues unremedied for a period of 60 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 Illinois
Power; 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) pledges 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,
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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 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
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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 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 and 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
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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).
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
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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 the timing of
adjustments to IFCs, 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 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
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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; 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.
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 Illinois Power Company, 500 South 27th Street,
Decatur, Illinois 62525; (b) in the case of the Grantee, to Illinois Power
Securitization Limited Liability Company, c/o Illinois Power Company, 500 South
27th Street, Decatur, Illinois 62525; (c) in the case of the Note Issuer, to
Illinois Power Special Purpose Trust, c/o First Union Trust Company, National
Association, as Delaware Trustee, One Rodney Square, 920 King Street, 1st Floor,
Wilmington, Delaware 19801, Attention: 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
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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 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.
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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, 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
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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.
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
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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.
SECTION 8.13. FINAL TERMINATION. Except for those obligations which are
expressly provided herein to survive the termination of this Agreement, and
unless this Agreement is previously terminated in accordance with Section 7.01,
the obligations of the Servicer and of the Grantee shall terminate upon the
payment to the Indenture Trustee, and corresponding distribution to the Holders,
of all amounts required to be paid or distributed to them pursuant to this
Agreement, the Notes and the Indenture.
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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.
ILLINOIS POWER COMPANY
By: Robert A. Schultz
----------------------------
Name: Robert A. Schultz
Title: Vice President - Finance
ILLINOIS POWER SECURITIZATION
LIMITED LIABILITY COMPANY,
Grantee
By: /s/ Eric B. Weekes
----------------------------
Name: Eric B. Weekes
Title: Manager
Acknowledged and Accepted:
FIRST UNION TRUST COMPANY,
NATIONAL ASSOCIATION,
not in its individual capacity but solely as
Delaware Trustee
By: /s/ Doris J. Krick
---------------------------------------
Name Doris J. Krick
---------------------------------------
Title: Vice President
---------------------------------------
HARRIS TRUST AND SAVINGS BANK,
not in its individual capacity but solely as
Indenture Trustee
By: /s/ E. Kay Liederman
---------------------------------------
Name: E. Kay Liederman
---------------------------------------
Title: Vice President
---------------------------------------
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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 Servicing Agreement.
(b) Whenever used in this Annex I, the following words and phrases shall
have the following meanings:
"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.
"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.
"IFC CUSTOMER CLASS" means the separate classes of Customers for IFC
billing purposes set forth in any Tariffs.
"LEVELIZED PAYMENT PLAN" means a billing plan offered by the
Servicer which, if elected by a Customer, provides for monthly charges to such
Customer on its Bills which are calculated as 1/12th of the amount billed (or
which would have been billed to the Customer based on actual usage) during the
preceding twelve months, with the Customer being charged or credited (as the
case may be), at the time billing to the Customer under the Levelized Payment
Plan terminates, for the difference between the amounts billed to the Customer
pursuant to the Levelized Payment Plan and the amount that would have been
billed to the Customer based on actual usage.
"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.
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
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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 Customer's
individual IFCs to be included on such Customer's Bills based on billing factors
provided by the Servicer, and, in such 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 Adjustments.
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.
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(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 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 IFC 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.
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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:
(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 the
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
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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.
(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 (A) one Servicer Business Day after
receipt by the Servicer if payment is made directly to the Servicer by a
Customer, (B) two Servicer Business Days after receipt by a Thirty-Party
Collector (other than an ARES or another electric utility) acting as agent for
the Servicer, or (C) two Servicer Business Days after receipt by the Servicer
from an ARES or another electric utility.
(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 amount collected by the Servicer that represent partial
payments of the total Bill to a Customer or ARES shall be allocated to amounts
owed to the Note Issuer and Illinois Power, regardless of age, pro rata in
proportion to their respective percentages of the total amount of their combined
outstanding charges on such Bill.
(iv) The Servicer shall hold all over-payments for the benefit of
the Note Issuer and Illinois Power 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 Levelized Payment 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 Levelized Payment Plan;
partial payment of a Levelized Payment Plan payment shall be allocated according
to clause (iii) above and overpayment of a Levelized Payment 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
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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 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
(i) For purposes of Section 6.11 of the Agreement and Section
6(g) of this Annex, the IFC Payments collected by the Servicer on any Servicer
Business Day shall be the sum of (A) the IFC Payments posted to Customer
accounts of the Servicer on the second preceding Servicer Business Day in
accordance with Section 6(b) of this Annex and (B) any Allocable IFC Revenue
Amounts, determined in accordance with Section 6(f) of this Annex, received by
the Servicer on such second preceding Servicer Business Day.
(ii) All calculations of collections shall be made in good faith.
(f) ALLOCABLE IFC REVENUE AMOUNTS
(i) The Servicer shall monitor Illinois Power'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 Illinois Power'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
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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, and shall be remitted to the Indenture Trustee in
accordance with the other provisions of this Servicing Agreement and the
Indenture.
(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 Servicer shall make
remittances to the new account or institution only upon at least five Business
Days prior notice of such change from the Note Issuer.
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REMEDIATION AGREEMENT
REMEDIATION AGREEMENT, dated as of December 1, 1998 (as amended,
restated, supplemented or otherwise modified from time to time, this
"AGREEMENT") is made by ILLINOIS POWER COMPANY, an Illinois corporation
("ILLINOIS POWER") 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 Illinois Power Special Purpose 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
Illinois Power Securitization Limited Liability Company (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
Illinois Power and the Grantee dated as of December 1, 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 1,1998; and
WHEREAS, the proceeds of the Notes are being paid to Illinois Power
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 Illinois Power;
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, Illinois Power 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.
(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
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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 ILLINOIS POWER
(a) Illinois Power 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) Illinois Power 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 Illinois Power by all necessary corporate action.
(c) This Agreement constitutes a legal, valid and binding
obligation of Illinois Power enforceable against Illinois Power 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 Illinois Power, or any indenture, agreement or
other instrument to which Illinois Power 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;
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or (iii) violate any law or any order, rule or regulation applicable to
Illinois Power of any court or of any Federal or state regulatory body,
administrative agency or other governmental instrumentality having
jurisdiction over Illinois Power 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 $1.634 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 Illinois Power 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 Illinois Power
or any third party and which shall, to the full extent permitted by law, be
enforceable against Illinois Power, its successors and assigns, and all other
third parties (including judicial lien creditors) claiming an interest
therein by or through Illinois Power or its successors and assigns.
SECTION 3: COVENANTS OF ILLINOIS POWER. So long as any of the
Notes are outstanding, Illinois Power 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
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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 Illinois Power notwithstanding any repeal
of, modification of, supplement to or 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
Illinois Power under 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
Illinois Power 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, Illinois Power will be obligated to indemnify
the Holders in accordance with Section 5.01 of the Grant Agreement on account
of any such inaccuracy.
SECTION 5: MERGER OR CONSOLIDATION OF OR ASSUMPTION OF THE
OBLIGATIONS OF ILLINOIS POWER. Any Person (a) into which Illinois Power may
be merged or consolidated, (b) which may result from any merger or
consolidation to which Illinois Power shall be a party or (c) which may
succeed to the properties and assets of Illinois Power substantially as a
whole, which Person in any of the foregoing cases executes an agreement of
assumption to perform every obligation of Illinois Power hereunder, shall be
the successor to Illinois Power 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 Illinois Power 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, Illinois Power 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 Illinois Power or the Indenture Trustee shall be in writing, personally
delivered,
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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
Illinois Power, to Illinois Power Company, 500 South 27th Street, Decatur,
Illinois 62521 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 Illinois Power.
SECTION 9. LIMITATIONS ON RIGHTS OF OTHERS. The provisions of this
Agreement are solely for the benefit of the Indemnified Parties and nothing
in this Agreement, whether express or implied, shall be construed to give to
any other Person (including, without lmitation, 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 Illinois Power with respect to the subject matter hereof; and there are no
promises, undertakings, representations or warranties by Illinois Power
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.
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SECTION 15. HOLDERS AS THIRD PARTY BENEFICIARIES. Illinois Power
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 Illinois Power 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.
ILLINOIS POWER COMPANY
By: Robert A. Schultz
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Name: Robert A. Schultz
Title: Vice President - Finance
HARRIS TRUST AND SAVINGS BANK,
not in its individual capacity, but solely in its
capacity as INDENTURE TRUSTEE
under the Indenture
By: /s/ E. Kay Liederman
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Name: E. Kay Liederman
Title: Vice President
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