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EXHIBIT 10.1
FORM OF SALE AGREEMENT
INTANGIBLE TRANSITION PROPERTY SALE AGREEMENT
between
COMED FUNDING, LLC
Grantee
and
COMED TRANSITIONAL FUNDING TRUST
Note Issuer
Dated as of [_____________], 1998
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TABLE OF CONTENTS
ARTICLE I
DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.01. DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.02. OTHER DEFINITIONAL PROVISIONS. . . . . . . . . . . . . . . 2
ARTICLE II
CONVEYANCE OF 1998 TRANSITION PROPERTY AND RELATED ASSETS . . . . . . . . 3
SECTION 2.01. CONVEYANCE OF 1998 TRANSITION PROPERTY AND
RELATED ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
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. . . . . . . . . . . . . . . . . . . . . . . . .10
SECTION 4.01. CORPORATE EXISTENCE. . . . . . . . . . . . . . . . . . . .10
SECTION 4.02. NO LIENS . . . . . . . . . . . . . . . . . . . . . . . . .11
SECTION 4.03. DELIVERY OF COLLECTIONS. . . . . . . . . . . . . . . . . .11
SECTION 4.04. NOTICE OF LIENS. . . . . . . . . . . . . . . . . . . . . .11
SECTION 4.05. COMPLIANCE WITH LAW. . . . . . . . . . . . . . . . . . . .11
SECTION 4.06. COVENANTS RELATED TO 1998 TRANSITION PROPERTY
AND RELATED ASSETS . . . . . . . . . . . . . . . . . . . . . . . . .12
SECTION 4.07. PROTECTION OF TITLE. . . . . . . . . . . . . . . . . . . .12
SECTION 4.08. NONPETITION COVENANTS. . . . . . . . . . . . . . . . . . .13
SECTION 4.09. TAXES. . . . . . . . . . . . . . . . . . . . . . . . . . .14
SECTION 4.10. PERFORMANCE OF OBLIGATIONS; SERVICING. . . . . . . . . . .14
SECTION 4.11. NEGATIVE COVENANTS . . . . . . . . . . . . . . . . . . . .15
SECTION 4.12. NO OTHER BUSINESS. . . . . . . . . . . . . . . . . . . . .16
SECTION 4.13. NO BORROWING . . . . . . . . . . . . . . . . . . . . . . .16
SECTION 4.14. GUARANTEES, LOANS, ADVANCES AND OTHER LIABILITIES. . . . .16
SECTION 4.15. CAPITAL EXPENDITURES . . . . . . . . . . . . . . . . . . .17
SECTION 4.16. NOTICE OF DEFAULTS . . . . . . . . . . . . . . . . . . . .17
SECTION 4.17. SEPARATE EXISTENCE.. . . . . . . . . . . . . . . . . . . .17
SECTION 4.18. FURTHER INSTRUMENTS AND ACTS . . . . . . . . . . . . . . .19
SECTION 4.19. SUBSEQUENT TRANSITION PROPERTY . . . . . . . . . . . . . .19
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ARTICLE V
THE GRANTEE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .21
SECTION 5.01. LIABILITY OF GRANTEE; INDEMNITIES. . . . . . . . . . . . .21
SECTION 5.02. MERGER OR CONSOLIDATION OF, OR ASSUMPTION OF
THE OBLIGATIONS OF, GRANTEE. . . . . . . . . . . . . . . . . . . . .24
SECTION 5.03. LIMITATION ON LIABILITY OF GRANTEE AND OTHERS. . . . . . .25
ARTICLE VI
MISCELLANEOUS PROVISIONS. . . . . . . . . . . . . . . . . . . . . . . . .25
SECTION 6.01. AMENDMENT. . . . . . . . . . . . . . . . . . . . . . . . .25
SECTION 6.02. NOTICES. . . . . . . . . . . . . . . . . . . . . . . . . .27
SECTION 6.03. ASSIGNMENT . . . . . . . . . . . . . . . . . . . . . . . .27
SECTION 6.04. LIMITATIONS ON RIGHTS OF OTHERS. . . . . . . . . . . . . .28
SECTION 6.05. SEVERABILITY . . . . . . . . . . . . . . . . . . . . . . .28
SECTION 6.06. SEPARATE COUNTERPARTS. . . . . . . . . . . . . . . . . . .28
SECTION 6.07. HEADINGS . . . . . . . . . . . . . . . . . . . . . . . . .28
SECTION 6.08. GOVERNING LAW. . . . . . . . . . . . . . . . . . . . . . .28
SECTION 6.09. ASSIGNMENT TO INDENTURE TRUSTEE. . . . . . . . . . . . . .28
SECTION 6.10. LIMITATION OF LIABILITY. . . . . . . . . . . . . . . . . .29
SCHEDULE 3.06. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .31
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INTANGIBLE TRANSITION PROPERTY SALE AGREEMENT dated as of [ ], 1998
between COMED FUNDING, LLC, a Delaware limited liability company (the
"Grantee"), and COMED TRANSITIONAL FUNDING TRUST, a Delaware business trust (the
"Note Issuer").
WHEREAS the Note Issuer desires to purchase the 1998 Transition Property
created pursuant to the Public Utilities Act and the 1998 Funding Order,
together with the Related Assets; and
WHEREAS the Grantee is willing to sell such 1998 Transition Property and
Related Assets to the Note Issuer.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein contained, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. DEFINITIONS. Capitalized terms used herein and not
otherwise defined herein have the meanings assigned to them in that certain
Indenture (including Appendix A thereto) dated as of the date hereof, between
the Note Issuer and Xxxxxx Trust and Savings Bank, as the Indenture Trustee, as
the same may be amended, supplemented or otherwise modified from time to time.
SECTION 1.02. OTHER DEFINITIONAL PROVISIONS.
(a) "AGREEMENT" means this Intangible Transition Property Sale Agreement,
as the same may be amended, supplemented or otherwise modified from time to
time.
(b) Non-capitalized terms used herein which are defined in the Public
Utilities Act shall, as the context requires, have the meanings assigned to such
terms in the Public Utilities Act, but 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 $[_________________] 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 and
to:
(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 Allocable IFC Revenue
Amounts; and
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(b) the Related Assets.
Such sale, transfer, assignment, set over and conveyance is expressly stated to
be a sale and absolute transfer, and pursuant to Section 18-108 of the Funding
Law, shall be treated as an absolute transfer (as in a true sale), and not as a
pledge or other financing, of the 1998 Transition Property. The previous
sentence is the express statement referred to in Section 18-108 of the Funding
Law. To the extent that, notwithstanding the Funding Law, the Application and
the 1998 Funding Order, the foregoing sale, transfer, assignment, set over and
conveyance is held not to be an absolute transfer (as in a true sale) as
contemplated under Section 18-108 of the Funding Law, then such sale, transfer,
assignment, set over and conveyance shall be treated as a pledge of the 1998
Transition Property and the Grantee shall be deemed to have granted a security
interest to the Note Issuer in the 1998 Transition Property. The Grantee takes
the position that it has no rights in the 1998 Transition Property to which such
a security interest could attach because it has sold, transferred, assigned, set
over or otherwise conveyed all rights in, to and under the 1998 Transition
Property to the Note Issuer pursuant to Section 18-108 of the Funding Law.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF GRANTEE
The Grantee makes the following representations and warranties, as of the
Closing Date, on which the Note Issuer has relied in acquiring the 1998
Transition Property and Related Assets. These representations and warranties
shall survive the sale, transfer, assignment, set over and 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.
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
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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 foreign limited liability company in good standing, and has
obtained all necessary licenses and approvals, in all jurisdictions, including
Illinois, in which the ownership or lease of property or the conduct of its
business shall require such qualifications, licenses or approvals (except where
the failure to so qualify would not be reasonably likely to have a material
adverse effect on the Grantee's business, operations, assets, revenues or
properties).
SECTION 3.03. POWER AND AUTHORITY. The Grantee has the requisite power
and authority to execute and deliver this Agreement and to carry out its terms;
the Grantee has full power and authority to sell and assign the 1998 Transition
Property and Related Assets to be sold and assigned to the Note Issuer and the
Grantee has duly authorized such sale and assignment to the Note Issuer by all
necessary company action; and the execution, delivery and performance of this
Agreement have been duly authorized by the Grantee by all necessary company
action.
SECTION 3.04. BINDING OBLIGATION. This Agreement constitutes a legal,
valid and binding obligation of the Grantee enforceable against the Grantee in
accordance with its terms, subject to applicable insolvency, reorganization,
moratorium, fraudulent transfer and other similar laws relating to or affecting
creditors' rights generally from time to time in effect and to general
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
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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. [Except as set forth on Schedule 3.06],
there are no proceedings or investigations pending or, to the Grantee's
knowledge, threatened, before any court, Federal or state regulatory body,
administrative agency or other governmental instrumentality having jurisdiction
over the Grantee or its properties involving or relating to the Grantee or the
Note Issuer or, to the Grantee's knowledge, any other Person: (i) asserting the
invalidity of the Funding Law, this Agreement, any of the other Basic Documents
or the Notes, (ii) seeking to prevent the issuance of the Notes or the
consummation of any of the transactions contemplated by this Agreement or any of
the other Basic Documents, (iii) seeking any determination or ruling that could
reasonably be expected to materially and adversely affect the Grantee's
performance of its obligations under, or the validity or enforceability of, this
Agreement, any of the other Basic Documents or the Notes, or (iv) which could
reasonably be expected to adversely affect the Federal or state income tax
attributes of the Notes.
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
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Grantee's fulfillment of the terms hereof, except (i) those that have been
obtained or made and (ii) filings to be made by ComEd with the ICC pursuant to
the 1998 Funding Order and the Funding Law relating to ComEd's use of proceeds
from the transactions contemplated hereby and the final terms of each Series of
Notes issued pursuant to the Indenture.
SECTION 3.08. THE 1998 TRANSITION PROPERTY AND RELATED ASSETS.
(a) INFORMATION. At the Closing Date, all information provided by the
Grantee to the Note Issuer with respect to the 1998 Transition Property
(including the 1998 Funding Order and the 1998 Initial Tariff) and the Related
Assets is correct in all material respects.
(b) TITLE. It is the intention of the parties hereto that the transfer and
assignment herein contemplated constitute a sale and absolute transfer of the
1998 Transition Property and Related Assets from the Grantee to the Note Issuer
and that no beneficial interest in or title to the 1998 Transition Property and
Related Assets shall be part of the Grantee's estate in the event of the filing
of a bankruptcy petition by or against the Grantee under any bankruptcy law. No
portion of the 1998 Transition Property and Related Assets has been sold,
transferred, assigned, pledged or otherwise conveyed by the Grantee to any
Person other than the Note Issuer. At the Closing Date, immediately prior to
the sale hereunder, the Grantee owns the 1998 Transition Property and Related
Assets, free and clear of all Liens and rights of any other Person, and no
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 and sold 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
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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. 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 pertinent transitional funding instruments and interest,
premium and other s, costs and charges related thereto, as the case may be,
are fully paid and discharged. Electric utilities, grantees and issuers
are authorized to include these pledges and agreements of the State in any
contract with the holders of transitional funding instruments or with any
assignees pursuant to this Article XVIII and any assignees are similarly
authorized to include these pledges and agreements of the State in any
contract with any issuer, holder or any other assignee. Nothing in this
Article XVIII shall preclude the State of Illinois from requiring
adjustments as may otherwise be allowed by law to the electric utility's
base rates, transition charges, delivery services charges, or other charges
for tariffed services, so long as any such adjustment does not directly
affect or impair any instrument funding charges previously authorized by a
transitional funding order issued by the [ICC]."
As a result of the foregoing pledge, the State of Illinois may not, except as
provided in the succeeding sentence, in any way limit, alter, impair or reduce
the value of the 1998 Transition Property or the IFCs in a manner substantially
impairing the Indenture or the rights and remedies
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of the Holders, 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 such impairment was necessary to advance a significant and
legitimate public purpose.
(e) 1998 FUNDING ORDER AND TARIFFS; OTHER APPROVALS. At the Closing Date,
under the laws of the State of Illinois and the United States in effect on the
Closing Date, (i) the 1998 Funding Order pursuant to which the 1998 Transition
Property has been created has been duly entered by the ICC, 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 is not revocable by the ICC; (iv) neither the State of Illinois
nor the ICC may reduce, postpone, impair or terminate the 1998 Transition
Property or the 1998 Funding Order; (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 (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 and those filings
described in Section 3.07.
(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
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interest in and to the IFCs authorized under the 1998 Funding Order, as adjusted
from time to time, (B) the right, title and interest in and to all revenues,
collections, claims, payments, money or proceeds of or arising from the IFCs set
forth in the 1998 Initial Tariff, and (C) all rights to obtain adjustments to
the IFCs pursuant to the 1998 Funding Order; and (iii) the Grantee is entitled
to impose and collect the IFCs described in the 1998 Funding Order and the 1998
Initial Tariff in an aggregate amount equal to the principal amount of the
Notes, all interest thereon, all amounts required to be deposited in the Reserve
Subaccount, the Overcollateralization Subaccount and (to the extent payable from
the proceeds of the IFCs) the Capital Subaccount, and all related fees, costs
and expenses in respect of the Notes until they have been paid in full, subject
only to the $6.323 billion limitation set forth in the 1998 Funding Order as the
maximum dollar amount of 1998 Transition Property created thereunder.
(h) PROPERTY OF GRANTEE. To the fullest extent permitted by the Funding
Law and all other applicable law, the 1998 Transition Property and the right to
impose and collect IFCs contemplated thereunder constitute property rights of
the Grantee and its assigns, including the Note Issuer and its assigns
(including the Indenture Trustee on behalf of the Holders), which property has
been placed beyond the reach of ComEd and its creditors, as in a true sale, and
which property rights may not be limited, altered, impaired, reduced or
otherwise terminated by any subsequent actions of ComEd or any third party and
which shall, to the full extent permitted by law, be enforceable against ComEd,
its successors and assigns, and all other third parties (including judicial lien
creditors) claiming an interest therein by or through ComEd or its successors
and assigns.
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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 or suffer to exist any Lien on, any of the 1998 Transition
Property or Related Assets, or any interest therein, and the Grantee shall
defend the right, title and interest of the Note Issuer and the Indenture
Trustee in, to and under the 1998 Transition Property and Related Assets,
against all claims of third parties claiming through or under the Grantee.
SECTION 4.03. DELIVERY OF COLLECTIONS. If the Grantee receives
collections in respect of the IFCs or the proceeds thereof, or in replacement
therefor, including, without limitation, any Allocable IFC Revenue Amounts, the
Grantee agrees to hold such payments in trust for the
10
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 [ ] Business Days after such receipt.
SECTION 4.04. NOTICE OF LIENS. The Grantee shall notify the Note Issuer
and the Indenture Trustee 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, except
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.
(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
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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 appropriate 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, 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
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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 ComEd, the Grantee, the Note Issuer or
any other grantee or assignee of the 1998 Transition Property pursuant to
Section 18-107(c)(4) of the Funding Law, the Grantee shall not, prior to the
date which is one year and one day after the termination of the Indenture,
acquiesce, petition or otherwise invoke or cause or join with any other Person
to invoke the process of any court or governmental authority for the purpose of
commencing or sustaining a case against the Note Issuer under any Federal or
state bankruptcy, insolvency or similar law or appointing a receiver,
liquidator, assignee, trustee, custodian, sequestrator or other similar official
of or for the Note Issuer or any substantial part of
13
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.
(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).
(c) Upon any termination of the Servicer's rights and powers pursuant to
the Servicing Agreement, the Note Issuer shall promptly notify the Grantee. As
soon as a Successor Servicer is appointed, the Note Issuer shall notify the
Grantee of such appointment, specifying in such notice the name and address of
such Successor Servicer.
14
(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, amend, modify, waive, supplement, terminate or surrender, or agree to
any amendment, modification, supplement, termination, waiver or surrender of,
the terms of any Note Collateral or the Basic Documents, or waive timely
performance or observance by ComEd or the Servicer under the Grant Agreement or
the Servicing Agreement, respectively. If any such amendment, modification,
supplement or waiver shall be so consented to by the Note Issuer and the Note
Issuer shall so request, the Grantee shall execute and deliver, in its own name
and at its own expense, such agreements, instruments, consents and other
documents as shall be necessary or appropriate in the circumstances.
(e) The Grantee shall make all filings required under the Funding Law
relating to the transfer of the ownership or security interest in the 1998
Transition Property other than those required to be made by ComEd pursuant to
the Basic Documents.
SECTION 4.11. ADDITIONAL NEGATIVE COVENANTS. So long as any Notes are
Outstanding, the Grantee shall not:
(i) except as permitted by Section 5.02, sell, transfer, exchange or
otherwise dispose of any of its properties or assets;
(ii) assert any claim against the Note Issuer by reason of the
payment of the taxes levied or assessed upon any part of the 1998
Transition Property or the Related Assets;
(iii) except as permitted by Section 5.02, terminate its existence or
dissolve or liquidate in whole or in part; or
(iv) take any action that would be inconsistent with the Note Issuer's
absolute and first priority ownership interest in the 1998 Transition
Property and the Related Assets.
15
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 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 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 hereunder and each default on the part
of ComEd or the Servicer of their respective obligations under the Grant
Agreement or the Servicing Agreement.
SECTION 4.17. SEPARATE EXISTENCE. The Grantee shall:
16
(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 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,
17
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 Certificate of Formation 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 maintaining accurate and
separate books, records and accounts, including, but not limited to,
payroll and intercompany transaction accounts. [The Grantee shall hold
members' and management committee meetings at least annually.]
(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 one
Independent Manager (as such term is defined in the Grantee's Certificate
of Formation).
(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 or Certificate of Formation;
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.
18
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.
(b) The Grantee shall be permitted to accept Subsequent Transition Property
only upon the satisfaction of each of the following conditions on or prior to
the related Subsequent Creation Date:
(i) ComEd shall have provided the Grantee, the Subsequent Note
Issuer, the Indenture Trustee and the Rating Agencies with written notice,
which shall be given not later than 10 days prior to the related Subsequent
Creation Date, specifying the Subsequent Creation Date for such Subsequent
Transition Property and the aggregate amount of the IFCs related to such
Subsequent Transition Property, and shall have provided any information
reasonably requested by any of the foregoing Persons with respect to the
Subsequent Transition Property to be created in favor of the Grantee.
(ii) ComEd and the Grantee shall have delivered to the Note Issuer a
duly executed Subsequent Grant Agreement, and the Grantee shall have
delivered to the Note Issuer a duly executed Subsequent Sale Agreement;
(iii) as of such Subsequent Creation Date, ComEd will not be
insolvent and will not have been made insolvent by such transfer and ComEd
will not be aware of any pending insolvency with respect to itself;
19
(iv) the Rating Agency Condition shall have been satisfied with
respect to such creation;
(v) ComEd shall have delivered to the Grantee, the Trust, the
Indenture Trustee and the Delaware Trustee an opinion of independent tax
counsel and/or a ruling from the IRS (as selected by, and in form and
substance reasonably satisfactory to, ComEd) to the effect that, for
federal income tax purposes (i) the ICC's issuance of the Funding Order
creating and establishing the Subsequent Transition Property in the
Grantee, and the assignment of such Subsequent Transition Property, will
not result in gross income to the Grantee, the Note Issuer or ComEd, and
the future revenues relating to the Subsequent Transition Property and the
assessment of the IFCs (except for revenue related to certain lump-sum
payments) will be included in ComEd's gross income in the year in which the
related electrical service is provided to consumers and (ii) such
conveyance will not adversely affect the characterization of the then
outstanding Notes as obligations of ComEd;
(vi) as of such Subsequent Creation Date, no breach by ComEd of its
representations, warranties or covenants in the Grant Agreement and no
Servicer Default shall exist;
(vii) as of such Subsequent Creation Date, the Grantee shall have
sufficient funds available to pay ComEd the consideration set forth in the
Subsequent Grant Agreement, and all conditions shall have been satisfied
for the issuance of one or more instruments under the Indenture in order to
provide such funds;
(viii) the Grantee shall have delivered to the Rating Agencies any
Opinions of Counsel requested by the Rating Agencies;
20
(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).
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 Notes.
21
(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 liabilities, obligations, losses, claims,
actions, suits, damages, payments, 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 a result of (i) the Grantee's willful
misconduct, bad faith or gross negligence in the performance of its duties or
observance of its covenants under this Agreement, or the Grantee's reckless
disregard of its obligation and duties under this Agreement, or (ii) the
Grantee's breach of any of its representations or warranties 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 Sections 5.01(b) through 5.01(e) 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
22
Trustee an Officers' Certificate and an Opinion of Counsel each stating that
such consolidation, merger or succession and such agreement of assumption comply
with this Section and that all conditions precedent, if any, provided for in
this Agreement relating to such transaction have been complied with, (iii) the
Grantee shall have delivered to the Note Issuer and the Indenture Trustee an
Opinion of Counsel either (A) stating that, in the opinion of such counsel, all
filings to be made by the Grantee, including filings with the ICC pursuant to
the Funding Law, have been executed and filed that are necessary to fully
preserve and protect the interest of the Note Issuer in the 1998 Transition
Property and Related Assets and reciting the details of such filings, or (B)
stating that, in the opinion of such counsel, no such action shall be necessary
to preserve and protect such interests (iv) the Rating Agencies shall have
received prior written notice of such transaction and (v) ComEd shall have
delivered to the Grantee, the Note Issuer, the Delaware Trustee and the
Indenture Trustee an opinion of independent tax counsel (as selected by, and in
form and substance reasonably satisfactory to, ComEd, and which may be based on
a ruling form the Internal Revenue Service) to the effect that such
consolidation or merger will not result in a material adverse federal income tax
consequence to ComEd, the Grantee, the Note Issuer, the Delaware Trustee, the
Indenture Trustee or the then existing Holders. Notwithstanding anything herein
to the contrary, the execution of the foregoing agreement of assumption and
compliance with clauses (i), (ii), (iii) and (iv) above shall be conditions to
the consummation of any transaction referred to in clauses (a), (b) or (c)
above. When any Person acquires the properties and assets of ComEd Funding, LLC
substantially as a whole and becomes the successor to ComEd Funding, LLC in
accordance with the terms of this Section 5.02, then upon the satisfaction of
all of the other conditions of this Section 5.02, ComEd Funding, LLC shall
automatically and without further notice be released from its obligations
hereunder.
23
SECTION 5.03. LIMITATION ON LIABILITY OF GRANTEE AND OTHERS. The Grantee
and any director or officer or employee or agent of the Grantee may rely in good
faith on the advice of counsel or on any document of any kind, PRIMA FACIE
properly executed and submitted by any Person, respecting any matters arising
hereunder. Subject to Section 4.07, the Grantee shall not be under any
obligation to appear in, prosecute or defend any legal action that shall not be
incidental to its obligations under this Agreement, and that in its opinion may
involve it in any expense or liability.
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
24
in any manner the amount of, or accelerate or delay the timing of, IFC
Collections or (b) reduce the aforesaid percentage of the Outstanding Amount of
the Notes, the Holders of which are required to consent to any such amendment,
without the consent of the Holders of all the outstanding Notes.
Promptly after the execution of any such amendment or consent, the Note
Issuer shall furnish a copy of such amendment or consent to the Indenture
Trustee and each of the Rating Agencies.
It shall not be necessary for the consent of Holders pursuant to this
Section to approve the particular form of any proposed amendment or consent, but
it shall be sufficient if such consent shall approve the substance thereof.
Prior to the execution of any amendment to this Agreement, the Indenture
Trustee shall be entitled to receive and rely upon an Opinion of Counsel stating
that the execution of such amendment is authorized or permitted by this
Agreement. The Indenture Trustee may, but shall not be obligated to, enter into
any such amendment which affects the Indenture Trustee's own rights, duties or
immunities under this Agreement or otherwise.
SECTION 6.02. NOTICES. All demands, notices and communications upon or to
the Grantee, the Note Issuer, the Indenture Trustee or the Rating Agencies under
this Agreement shall be in writing, personally delivered, mailed or sent by
telecopy or other similar form of rapid transmission, and shall be deemed to
have been duly given upon receipt (a) in the case of the Grantee, to ComEd
Funding, LLC, c/o Commonwealth Edison Company, 00 Xxxxx Xxxxxxxx Xxxxxx, 00xx
Xxxxx, Xxxxxxx, Xxxxxxxx 00000, (b) in the case of the Note Issuer, to [ ], (c)
in the case of the Indenture Trustee, at the Corporate Trust Office, (d) in the
case of Moody's, to Xxxxx'x Investors Service, Inc., ABS Monitoring Department,
00 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, (e) in the case of Standard &
Poor's, to Standard & Poor's Corporation, 26
00
Xxxxxxxx (00xx Xxxxx), Xxx Xxxx, Xxx Xxxx 00000, Attention of Asset Backed
Surveillance Department, (f) in the case of Fitch, to Fitch Investors Service,
L.P., Xxx Xxxxx Xxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention of Commercial
Asset-Backed Securities, or (g) in the case of Duff & Xxxxxx, to Xxxx & Xxxxxx
Rating Co., 00 Xxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, 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.
26
SECTION 6.07. HEADINGS. The headings of the various Articles and Sections
herein are for convenience of reference only and shall not define or limit any
of the terms or provisions hereof.
SECTION 6.08. GOVERNING LAW. This Agreement shall be construed in
accordance with the laws of the State of Illinois, without reference to its
conflict of law provisions, and the obligations, rights and remedies of the
parties hereunder shall be determined in accordance with such laws.
SECTION 6.09. ASSIGNMENT TO INDENTURE TRUSTEE. The Grantee acknowledges
and consents to any transfer, pledge, assignment and grant of a security
interest by the Note Issuer to the Indenture Trustee pursuant to the Indenture
for the benefit of the Holders of all right, title and interest of the Note
Issuer in, to and under the 1998 Transition Property and Related Assets and the
proceeds thereof and the assignment of any or all of the Note Issuer's rights
and obligations hereunder to the Indenture Trustee.
SECTION 6.10. LIMITATION OF LIABILITY. It is expressly understood and
agreed by the parties hereto that (a) this Agreement is executed and delivered
by First Union Trust Company, National Association ("FIRST UNION") not
individually or personally but solely as Delaware Trustee on behalf of the Note
Issuer, in the exercise of the powers and authority conferred and vested in it,
(b) the representations, undertakings and agreements herein made by the Delaware
Trustee on behalf of the Note Issuer are made and intended not as personal
representations, undertakings and agreements by First Union are made and
intended for the purpose of binding only the Note Issuer, (c) nothing herein
contained shall be construed as creating any liability on First Union
individually or personally, to perform any covenant either expressed or implied
contained herein, except in its capacity as Delaware Trustee, all such
liability, if any, being expressly waived by the parties who are signatories to
this Agreement and by any Person claiming by, through or under such parties
27
and (d) under no circumstances shall First Union be personally liable for the
payment of any indebtedness or expense of the Note Issuer or be personally
liable for the breach or failure of any obligation, representation, warranty or
covenant made or undertaken by the Note Issuer under this Agreement; PROVIDED,
HOWEVER, that this provision shall not protect First Union against any liability
that would otherwise be imposed by reason of willful misconduct, bad faith or
gross negligence in the performance of its obligations and duties under this
Agreement.
28
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective officers as of the day and year first above
written.
COMED FUNDING LLC, Grantee
By:
---------------------------
Name:
Title:
COMED TRANSITIONAL FUNDING
TRUST, Note Issuer
By First Union Trust Company,
National Association, not in its
individual capacity but solely as
Delaware Trustee
By:
---------------------------
Name:
Title:
Acknowledged and accepted:
Xxxxxx Trust and Savings Bank, not in
its individual capacity but
solely as Indenture Trustee,
By:
--------------------
Name:
Title:
29
SCHEDULE 3.06
PROCEEDINGS
None, except:
[insert any applicable proceedings]
30
