EXHIBIT 10.5
REMEDIATION AGREEMENT
REMEDIATION AGREEMENT, dated as of December ____, 1998 (as amended,
restated, supplemented or otherwise modified from time to time, this
"AGREEMENT") is made by Commonwealth Edison Company, an Illinois corporation
("COMED") in favor of the "Holders" (as defined below) and Xxxxxx Trust and
Savings Bank, an Illinois banking corporation, not in its individual capacity
but solely in its capacity as Indenture Trustee (the "INDENTURE TRUSTEE") under
the Indenture (as defined below).
WITNESSETH
WHEREAS, pursuant to that certain Indenture dated as of the date
hereof, between ComEd Transitional Funding Trust (the "NOTE ISSUER") and the
Indenture Trustee (as the same may be amended, restated, supplemented or
otherwise modified from time to time, the "INDENTURE"), the Note Issuer will be
issuing certain Notes, to be supported by certain assets vested in ComEd
Funding, LLC (the "GRANTEE") and assigned by the Grantee to the Note Issuer, all
as more particularly described in that certain Agreement Relating to Grant of
Intangible Transition Property (as the same may be amended, restated,
supplemented or otherwise modified from time to time, the "GRANT AGREEMENT") by
and between ComEd and the Grantee dated as of December ___, 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 ___, 1998; and
WHEREAS, the proceeds of the Notes are being paid to ComEd in
connection with certain transactions contemplated by Article XVIII of the Public
Utilities Act and the issuance of the Notes is therefore of direct and tangible
benefit to ComEd;
NOW, THEREFORE, in order to induce the Holders to purchase the Notes,
and to provide further assurance to such Holders that all proceeds of the assets
which are intended to be vested in the Grantee and assigned to the Note Issuer
to support the payment of the Notes will in fact be paid to the Indenture
Trustee to pay the Notes, ComEd hereby agrees, for the direct benefit of the
Holders, and not by way of assignment of any rights under the Grant Agreement,
as follows:
SECTION 1. DEFINED TERMS. (a) Capitalized terms used herein and not
otherwise defined herein have the meanings assigned to them in the Indenture.
1
(b) Non-capitalized terms used herein which are defined in the Public
Utilities Act shall, as the context requires, have the meanings assigned to such
terms in the Public Utilities Act, but without giving effect to amendments to
the Public Utilities Act after the date hereof which have a material adverse
effect on the Indenture Trustee or the Holders.
(c) All terms defined in this Agreement shall have the defined
meaning when used in any certificate or other document made or delivered
pursuant hereto unless otherwise defined therein.
(d) The words "hereof," "herein," "hereunder" and words of similar
import, when used in this Agreement, shall refer to this Agreement as a whole
and not to any particular provision of this Agreement; and the term "including"
shall mean "including without limitation".
(e) The definitions contained in this Agreement are applicable to the
singular as well as the plural forms of such terms and to the masculine as well
as to the feminine and neuter forms of such terms.
SECTION 2. REPRESENTATIONS AND WARRANTIES OF COMED.
(a) ComEd is duly organized and validly existing as a corporation in
good standing under the laws of the State of Illinois, with the power and
authority to own its properties and to conduct its business as such properties
are currently owned and such business is presently conducted and to enter into
this Agreement.
(b) ComEd has the requisite power and authority to execute and
deliver this Agreement and to carry out its terms and the execution, delivery
and performance of this Agreement have been duly authorized by ComEd by all
necessary corporate action.
(c) This Agreement constitutes a legal, valid and binding obligation
of ComEd enforceable against ComEd in accordance with its terms, subject to
applicable insolvency, reorganization, moratorium, fraudulent transfer and other
similar laws relating to or affecting creditors' rights generally from time to
time in effect and to general principles of equity (including, without
limitation, concepts of materiality, reasonableness, good faith and fair
dealing), regardless of whether considered in a proceeding in equity or at law.
(d) The consummation of the transactions contemplated by this
Agreement and the fulfillment of the terms hereof do not (i) conflict with,
result in any breach of any of the terms and provisions of, or constitute (with
or without notice or lapse of time) a default under, the Articles of
Incorporation or by-laws of ComEd, or any indenture, agreement or other
instrument to which ComEd is a party or by which it is bound; (ii) result in the
creation or imposition of any Lien upon any of its properties pursuant to the
terms of any such indenture, agreement or other instrument; or (iii) violate any
law or any order, rule or regulation applicable to ComEd of any
2
court or of any Federal or state regulatory body, administrative agency or
other governmental instrumentality having jurisdiction over ComEd or its
properties.
(e) Upon the effectiveness of the 1998 Initial Tariff: (i) all of the
1998 Transition Property constitutes a current property right vested in the
Grantee; (ii) the 1998 Transition Property includes, without limitation, (A) the
right, title and interest in the IFCs authorized under the 1998 Funding Order,
as adjusted from time to time, (B) the right, title and interest in all
revenues, collections, claims, payments, money or proceeds of or arising from
the IFCs set forth in the 1998 Initial Tariff, and (C) all rights to obtain
adjustments to the IFCs pursuant to the 1998 Funding Order; and (iii) the Note
Issuer is entitled to impose and collect the IFCs described in the 1998 Funding
Order and the 1998 Initial Tariff in an aggregate amount equal to the principal
amount of the Notes, all interest thereon, all amounts required to be deposited
in the Reserve Subaccount, the Overcollateralization Subaccount and (to the
extent payable from the proceeds of the IFCs) the Capital Subaccount, and all
related fees, costs and expenses in respect of the Notes until they have been
paid in full, subject only to the $6.323 billion limitation set forth in the
1998 Funding Order as to the maximum dollar amount of 1998 Transition Property
created thereunder.
(f) To the fullest extent permitted by the Funding Law and all other
applicable law, the 1998 Transition Property and the right to impose and collect
IFCs contemplated thereunder constitute current property rights of the Grantee
and its assigns, including the Note Issuer and its assigns (including the
Indenture Trustee on behalf of the Holders), which property has been placed
beyond the reach of ComEd and its creditors, as in a true sale, and which
property rights may not be limited, altered, impaired, reduced or otherwise
terminated by any subsequent actions of ComEd or any third party and which
shall, to the full extent permitted by law, be enforceable against ComEd, its
successors and assigns, and all other third parties (including judicial lien
creditors) claiming an interest therein by or through ComEd or its successors
and assigns.
SECTION 3. COVENANTS OF COMED. So long as any of the Notes are
outstanding, ComEd will take any and all actions reasonably necessary to
preserve the rights of Holders with respect to payments on the Notes out of the
amounts represented by IFCs or their equivalent, including, but not limited to,
(i) making appropriate filings with the State of Illinois, the ICC or other
regulatory bodies to defend, preserve and create on behalf of Holders the right
to receive payments as provided in the Notes, (ii) defending against or
instituting and pursuing legal actions and appearing or testifying at hearings
or similar proceedings, as may be necessary to block or overturn any attempts to
cause a repeal of, modification of or supplement to or judicial invalidation of
the Amendatory Act or any Funding Order or the rights of the Holders by
legislative enactment or otherwise that would be adverse to the Grantee, the
Note Issuer or any Holders, (iii) continuing to deduct and pay over to the
Indenture Trustee for the benefit of the Holders, all IFCs and IFC Payments or
equivalent revenues received by ComEd notwithstanding any declaration of
invalidity of the Amendatory Act, the Funding Law, the Funding Order and/or the
Grant Agreement, and (iv) making any and all payments required to be made by
ComEd under
3
the Basic Documents for the benefit of the Holders and the Indenture Trustee
notwithstanding any declaration of invalidity described above.
SECTION 4. NATURE OF REPRESENTATIONS AND WARRANTIES. The
representations and warranties set forth in SECTION 2 of this Agreement, insofar
as they involve conclusions of law, are made not on the basis that ComEd
purports to be a legal expert or to be rendering legal advice, but rather to
reflect the parties' good faith understanding of the legal basis on which the
parties are entering into this Agreement and the other Basic Documents and the
basis on which the Holders are purchasing the Notes, and to reflect the parties'
agreement that, if such understanding turns out to be incorrect or inaccurate,
ComEd will be obligated to indemnify the Holders on account of any such
inaccuracy.
SECTION 5. MERGER OR CONSOLIDATION OF, OR ASSUMPTION OF THE
OBLIGATIONS OF, COMED. Any Person (a) into which ComEd may be merged or
consolidated, (b) which may result from any merger or consolidation to which
ComEd shall be a party or (c) which may succeed to the properties and assets of
ComEd substantially as a whole, which Person in any of the foregoing cases
executes an agreement of assumption to perform every obligation of ComEd
hereunder, shall be the successor to ComEd under this Agreement without further
act on the part of any of the parties to this Agreement.
SECTION 6. AMENDMENTS. This Agreement may, with the prior written
consent of the Rating Agencies and written notice to the Indenture Trustee, be
amended in writing from time to time by ComEd; PROVIDED that, unless the Rating
Agency Condition has been satisfied with respect to such amendment, this
Agreement may not be so amended except with the prior written consent of the
Indenture Trustee and Holders holding not less than a majority of the
Outstanding Amount of the Notes of all Series. Promptly after the execution of
any such amendment or consent, ComEd shall furnish a copy of such amendment or
consent to the Grantee, the Note Issuer and each of the Rating Agencies. It
shall not be necessary for the consent of the Rating Agencies or the Holders
pursuant to this Section to approve the particular form of any proposed
amendment or consent, but it shall be sufficient if such consent shall approve
the substance thereof.
SECTION 7. NOTICES. All demands, notices and communications upon or
to ComEd or the Indenture Trustee shall be in writing, personally delivered,
mailed or sent by facsimile or other similar form of rapid transmission, and
shall be deemed to have been duly given upon receipt (a) in the case of ComEd,
to Commonwealth Edison Company, 00 Xxxxx Xxxxxxxx Xxxxxx, 00xx Xxxxx, Xxxxxxx,
Xxxxxxxx 00000 and (b) in the case of the Indenture Trustee, at the Corporate
Trust Office, or as to each of the foregoing, at such other address as shall be
designated by written notice to the other party.
SECTION 8. ASSIGNMENT. Notwithstanding anything to the contrary
contained herein, except as provided in Section 6, this Agreement may not be
assigned by ComEd.
4
SECTION 9. LIMITATIONS ON RIGHTS OF OTHERS. The provisions of this
Agreement are solely for the benefit of the Indemnmified Parties and nothing in
this Agreement, whether express or implied, shall be construed to give to any
other Person (including, without limitation, the Grantee or the Note Issuer) any
legal or equitable right, remedy or claim under or in respect of this Agreement
or any covenants, conditions or provisions contained herein.
SECTION 10. SEVERABILITY. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
SECTION 11. SEPARATE COUNTERPARTS. This Agreement may be executed by
the parties hereto in separate counterparts, each of which when so executed and
delivered shall be an original, but all such counterparts shall together
constitute but one and the same instrument.
SECTION 12. HEADINGS. The headings of the various Sections herein
are for convenience of reference only and shall not define or limit any of the
terms or provisions hereof.
SECTION 13. INTEGRATION. This Agreement represents the agreement of
ComEd with respect to the subject matter hereof, and there are no promises,
undertakings, representations or warranties by ComEd relative to the subject
matter hereof not expressly set forth or referred to herein.
SECTION 14. GOVERNING LAW. This Agreement shall be construed in
accordance with the laws of the State of Illinois, without reference to its
conflict of law provisions, and the obligations, rights and remedies of the
parties hereunder shall be determined in accordance with such laws.
SECTION 15. HOLDERS AS THIRD PARTY BENEFICIARIES. ComEd and the
Indenture Trustee agree that (i) the Holders are direct and express third-party
beneficiaries of the provisions of this Agreement and (ii) the Indenture Trustee
is authorized to enforce the terms and provisions of this Agreement on behalf
of, and for the benefit of, the Holders.
SECTION 16. REPRESENTATIONS, WARRANTIES AND INDEMNITIES TO SURVIVE.
The agreements, representations, warranties, indemnities and other statements
of ComEd or its officers set forth in or made pursuant to this Agreement will
remain in full force and effect and will survive (a) the grant of the 1998
Transition Property and the issuance and delivery of the Notes and (b) the
termination, cancellation or invalidity of the Amendatory Act, the Funding Law,
any Funding Order or the Grant Agreement.
* * * * *
5
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective officers as of the day and year first above
written.
COMMONWEALTH EDISON
COMPANY
By: ___________________________
Name:
Title:
XXXXXX TRUST AND SAVINGS BANK,
not in its individual capacity, but
solely in its capacity as INDENTURE
TRUSTEE under the Indenture
By: ____________________________
Name:
Title:
