EXHIBIT 10.1
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
INTANGIBLE TRANSITION PROPERTY SALE AGREEMENT
between
COMED FUNDING, LLC
Grantee
and
COMED TRANSITIONAL FUNDING TRUST
Note Issuer
Dated as of December 16, 1998
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.01. DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.02. OTHER DEFINITIONAL PROVISIONS. . . . . . . . . . . . . . . 1
ARTICLE II
CONVEYANCE OF 1998 TRANSITION PROPERTY AND RELATED ASSETS . . . . . . . . 2
SECTION 2.01. CONVEYANCE OF 1998 TRANSITION PROPERTY AND
RELATED ASSETS . . . . . . . . . . . . . . . . . . . . . 2
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF GRANTEE . . . . . . . . . . . . . . . . 3
SECTION 3.01. ORGANIZATION AND GOOD STANDING . . . . . . . . . . . . . . 4
SECTION 3.02. DUE QUALIFICATION. . . . . . . . . . . . . . . . . . . . . 4
SECTION 3.03. POWER AND AUTHORITY. . . . . . . . . . . . . . . . . . . . 4
SECTION 3.04. BINDING OBLIGATION . . . . . . . . . . . . . . . . . . . . 4
SECTION 3.05. NO VIOLATION . . . . . . . . . . . . . . . . . . . . . . . 5
SECTION 3.06. NO PROCEEDINGS . . . . . . . . . . . . . . . . . . . . . . 5
SECTION 3.07. APPROVALS. . . . . . . . . . . . . . . . . . . . . . . . . 5
SECTION 3.08. THE 1998 TRANSITION PROPERTY AND RELATED ASSETS. . . . . . 6
ARTICLE IV
COVENANTS OF THE GRANTEE. . . . . . . . . . . . . . . . . . . . . . . . .10
SECTION 4.01. CORPORATE EXISTENCE. . . . . . . . . . . . . . . . . . . .10
SECTION 4.02. NO LIENS . . . . . . . . . . . . . . . . . . . . . . . . .11
SECTION 4.03. DELIVERY OF COLLECTIONS. . . . . . . . . . . . . . . . . .11
SECTION 4.04. NOTICE OF LIENS. . . . . . . . . . . . . . . . . . . . . .11
SECTION 4.05. COMPLIANCE WITH LAW. . . . . . . . . . . . . . . . . . . .11
SECTION 4.06. COVENANTS RELATED TO THE 1998 TRANSITION PROPERTY,
RELATED ASSETS AND THE NOTES . . . . . . . . . . . . . .12
SECTION 4.07. PROTECTION OF TITLE. . . . . . . . . . . . . . . . . . . .13
SECTION 4.08. NONPETITION COVENANTS. . . . . . . . . . . . . . . . . . .13
SECTION 4.09. TAXES. . . . . . . . . . . . . . . . . . . . . . . . . . .14
SECTION 4.10. PERFORMANCE OF OBLIGATIONS; SERVICING. . . . . . . . . . .14
SECTION 4.11. ADDITIONAL NEGATIVE COVENANTS. . . . . . . . . . . . . . .16
SECTION 4.12. NO OTHER BUSINESS. . . . . . . . . . . . . . . . . . . . .16
SECTION 4.13. NO BORROWING . . . . . . . . . . . . . . . . . . . . . . .16
SECTION 4.14. GUARANTEES, LOANS, ADVANCES AND OTHER LIABILITIES. . . . .16
SECTION 4.15. CAPITAL EXPENDITURES . . . . . . . . . . . . . . . . . . .17
SECTION 4.16. NOTICE OF DEFAULTS . . . . . . . . . . . . . . . . . . . .17
SECTION 4.17. SEPARATE EXISTENCE.. . . . . . . . . . . . . . . . . . . .17
SECTION 4.18. FURTHER INSTRUMENTS AND ACTS . . . . . . . . . . . . . . .19
SECTION 4.19. SUBSEQUENT TRANSITION PROPERTY . . . . . . . . . . . . . .19
i
ARTICLE V
THE GRANTEE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .21
SECTION 5.01. LIABILITY OF GRANTEE; INDEMNITIES. . . . . . . . . . . . .21
SECTION 5.02. MERGER OR CONSOLIDATION OF, OR ASSUMPTION OF THE
OBLIGATIONS OF, GRANTEE. . . . . . . . . . . . . . . .23
SECTION 5.03. LIMITATION ON LIABILITY OF GRANTEE AND OTHERS. . . . . . .24
ARTICLE VI
MISCELLANEOUS PROVISIONS. . . . . . . . . . . . . . . . . . . . . . . . .24
SECTION 6.01. AMENDMENT. . . . . . . . . . . . . . . . . . . . . . . . .24
SECTION 6.02. NOTICES. . . . . . . . . . . . . . . . . . . . . . . . . .26
SECTION 6.03. ASSIGNMENT . . . . . . . . . . . . . . . . . . . . . . . .26
SECTION 6.04. LIMITATIONS ON RIGHTS OF OTHERS. . . . . . . . . . . . . .27
SECTION 6.05. SEVERABILITY . . . . . . . . . . . . . . . . . . . . . . .27
SECTION 6.06. SEPARATE COUNTERPARTS. . . . . . . . . . . . . . . . . . .27
SECTION 6.07. HEADINGS . . . . . . . . . . . . . . . . . . . . . . . . .27
SECTION 6.08. GOVERNING LAW. . . . . . . . . . . . . . . . . . . . . . .27
SECTION 6.09. ASSIGNMENT TO INDENTURE TRUSTEE. . . . . . . . . . . . . .27
SECTION 6.10. LIMITATION OF LIABILITY. . . . . . . . . . . . . . . . . .28
SECTION 6.11. LIMITATION OF LIABILITY. . . . . . . . . . . . . . . . . .28
SECTION 6.12. HOLDERS AS THIRD PARTY BENEFICIARIES . . . . . . . . . . .29
SECTION 6.13. REPRESENTATIONS AND INDEMNITIES TO SURVIVE.. . . . . . . .29
ii
INTANGIBLE TRANSITION PROPERTY SALE AGREEMENT dated as of December 16, 1998
between COMED FUNDING, LLC, a Delaware limited liability company (the
"Grantee"), and COMED TRANSITIONAL FUNDING TRUST, a Delaware business trust (the
"Note Issuer").
WHEREAS the Note Issuer desires to purchase the 1998 Transition Property
created pursuant to the Public Utilities Act and the 1998 Funding Order,
together with the Related Assets; and
WHEREAS the Grantee is willing to sell such 1998 Transition Property and
Related Assets to the Note Issuer.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein contained, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. DEFINITIONS. Capitalized terms used herein and not
otherwise defined herein have the meanings assigned to them in that certain
Indenture (including APPENDIX A thereto) dated as of the date hereof, between
the Note Issuer and 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 $3,365,629,425.75 to or upon
the order of the Grantee, the Grantee irrevocably sells, transfers, assigns,
sets over and otherwise conveys to the Note Issuer, without recourse (subject to
the obligations herein), all of its right, title and interest in, to and under:
(a) the 1998 Transition Property (such sale, transfer,
assignment, set over and conveyance of the 1998 Transition Property
includes, to the fullest extent permitted by the Funding Law, the
assignment of all revenues, collections, claims, rights, payments,
money or proceeds of or arising from the IFCs pursuant to the
2
1998 Funding Order and the 1998 Initial Tariff), including, without
limitation, any contractual rights to collect IFCs from Customers and
Allocable IFC Revenue Amounts; and
(b) the Related Assets.
Such sale, transfer, assignment, set over and conveyance is expressly stated to
be a sale and absolute transfer, and pursuant to Section 18-108 of the Funding
Law, shall be treated as an absolute transfer (as in a true sale), and not as a
pledge or other financing, of the 1998 Transition Property. The previous
sentence is the express statement referred to in Section 18-108 of the Funding
Law. To the extent that, notwithstanding the Funding Law, the Application and
the 1998 Funding Order, the foregoing sale, transfer, assignment, set over and
conveyance is held not to be an absolute transfer (as in a true sale) as
contemplated under Section 18-108 of the Funding Law, then such sale, transfer,
assignment, set over and conveyance shall be treated as a pledge of the 1998
Transition Property and the Grantee shall be deemed to have granted a security
interest to the Note Issuer in the 1998 Transition Property. The Grantee takes
the position that it has no rights in the 1998 Transition Property to which such
a security interest could attach because it has sold, transferred, assigned, set
over or otherwise conveyed all rights in, to and under the 1998 Transition
Property to the Note Issuer pursuant to Section 18-108 of the Funding Law.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF GRANTEE
The Grantee makes the following representations and warranties, as of the
Closing Date, on which the Note Issuer has relied in acquiring the 1998
Transition Property and Related Assets. These representations and warranties
shall survive the sale, transfer, assignment, set over and
3
conveyance of the 1998 Transition Property and Related Assets to the Note
Issuer, the pledge thereof to the Indenture Trustee pursuant to the Indenture
and the issuance of the Notes.
SECTION 3.01. ORGANIZATION AND GOOD STANDING. The Grantee is duly
organized and validly existing as a limited liability company in good standing
under the laws of the State of Delaware, with the power and authority to own its
properties and to conduct its business as such properties are currently owned
and such business is presently conducted, and had at all relevant times, and
has, the requisite power, authority and legal right to own the 1998 Transition
Property and Related Assets.
SECTION 3.02. DUE QUALIFICATION. The Grantee is duly qualified to do
business as a limited liability company in good standing, and has obtained all
necessary licenses and approvals, in all jurisdictions in which the ownership or
lease of property or the conduct of its business shall require such
qualifications, licenses or approvals (except where the failure to so qualify
would not be reasonably likely to have a material adverse effect on the
Grantee's business, operations, assets, revenues or properties).
SECTION 3.03. POWER AND AUTHORITY. The Grantee has the requisite power
and authority to execute and deliver this Agreement and to carry out its terms;
the Grantee has full power and authority to sell and assign the 1998 Transition
Property and Related Assets to be sold and assigned to the Note Issuer and the
Grantee has duly authorized such sale and assignment to the Note Issuer by all
necessary company action; and the execution, delivery and performance of this
Agreement have been duly authorized by the Grantee by all necessary company
action.
SECTION 3.04. BINDING OBLIGATION. This Agreement constitutes a legal,
valid and binding obligation of the Grantee enforceable against the Grantee in
accordance with its terms, subject to applicable insolvency, reorganization,
moratorium, fraudulent transfer and other similar laws relating to or affecting
creditors' rights generally from time to time in effect and to general
4
principles of equity (including, without limitation, concepts of materiality,
reasonableness, good faith and fair dealing), regardless of whether considered
in a proceeding in equity or at law.
SECTION 3.05. NO VIOLATION. The consummation of the transactions
contemplated by this Agreement and the fulfillment of the terms hereof do not
(i) conflict with, result in any breach of any of the terms and provisions of,
or constitute (with or without notice or lapse of time) a default under, the
Operating Agreement or Certificate of Formation of the Grantee, or any
indenture, agreement or other instrument to which the Grantee is a party or by
which it shall be bound; (ii) result in the creation or imposition of any Lien
upon any of its properties pursuant to the terms of any such indenture,
agreement or other instrument; or (iii) violate any law or any order, rule or
regulation applicable to the Grantee of any court or of any Federal or state
regulatory body, administrative agency or other governmental instrumentality
having jurisdiction over the Grantee or its properties.
SECTION 3.06. NO PROCEEDINGS. There are no proceedings or investigations
pending or, to the Grantee's knowledge, threatened, before any court, Federal or
state regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over the Grantee or its properties involving
or relating to the Grantee or the Note Issuer or, to the Grantee's knowledge,
any other Person: (i) asserting the invalidity of the Funding Law, this
Agreement, any of the other Basic Documents or the Notes, (ii) seeking to
prevent the issuance of the Notes or the consummation of any of the transactions
contemplated by this Agreement or any of the other Basic Documents, (iii)
seeking any determination or ruling that could reasonably be expected to
materially and adversely affect the Grantee's performance of its obligations
under, or the validity or enforceability of, this Agreement, any of the other
Basic Documents or the Notes, or (iv) which could reasonably be expected to
adversely affect the Federal or state income tax attributes of the Notes.
5
SECTION 3.07. APPROVALS. No approval, authorization, consent, order or
other action of, or filing with, any court, Federal or state regulatory body,
administrative agency or other governmental instrumentality is required in
connection with the Grantee's execution and delivery of this Agreement, the
Grantee's performance of the transactions contemplated hereby or the Grantee's
fulfillment of the terms hereof, except those that have been obtained or made.
SECTION 3.08. THE 1998 TRANSITION PROPERTY AND RELATED ASSETS.
(a) INFORMATION. At the Closing Date, all information provided by the
Grantee to the Note Issuer with respect to the 1998 Transition Property
(including the 1998 Funding Order and the 1998 Initial Tariff) and the Related
Assets is correct in all material respects.
(b) TITLE. It is the intention of the parties hereto that the transfer and
assignment herein contemplated constitute a sale and absolute transfer of the
1998 Transition Property and Related Assets from the Grantee to the Note Issuer
and that no beneficial interest in or title to the 1998 Transition Property and
Related Assets shall be part of the Grantee's estate in the event of the filing
of a bankruptcy petition by or against the Grantee under any bankruptcy law. No
portion of the 1998 Transition Property and Related Assets has been sold,
transferred, assigned, pledged or otherwise conveyed by the Grantee to any
Person other than the Note Issuer. At the Closing Date, immediately prior to
the sale hereunder, the Grantee owns the 1998 Transition Property and Related
Assets, free and clear of all Liens and rights of any other Person, and no
encumbrances, offsets, defenses or counterclaims exist or have been asserted
with respect thereto.
(c) TRANSFER FILINGS. At the Closing Date, the 1998 Transition Property
and Related Assets have been validly transferred, assigned and sold from the
Grantee to the Note Issuer, the Note Issuer owns all the 1998 Transition
Property and Related Assets, free and clear of all Liens and rights of any other
Person (other than Liens created pursuant to the Indenture), and all filings to
be made by the Grantee (including filings with the ICC under the Funding Law)
necessary in
6
any jurisdiction to give the Note Issuer a first priority perfected ownership
interest in the 1998 Transition Property and Related Assets have been made. No
further action is required under Illinois law to maintain such first priority
perfected ownership interest in the 1998 Transition Property. No further
action, other than any filings or other steps required to be taken with respect
to proceeds or on account of events occurring after the date hereof by Sections
9-103, 9-304, 9-306, 9-402(7) or 9-403(2)-(3) of the UCC, is required to
maintain such first priority perfected ownership interest in the Related Assets.
(d) STATE PLEDGE. The State of Illinois has agreed with the Holders,
pursuant to Section 18-105(b) of the Funding Law, as follows:
"(b) The State pledges to and agrees with the holders of any
transitional funding instruments who may enter into contracts with an
electric utility, grantee, assignee or issuer pursuant to this Article
XVIII that the State will not in any way limit, alter, impair or
reduce the value of intangible transition property created by, or
instrument funding charges approved by, a transitional funding order
so as to impair the terms of any contract made by such electric
utility, grantee, assignee or issuer with such holders or in any way
impair the rights and remedies of such holders until the pertinent
grantee instruments or, if the related transitional funding order does
not provide for the issuance of grantee instruments, the pertinent
transitional funding instruments and interest, premium and other costs
and charges related thereto, as the case may be, are fully paid and
discharged. Electric utilities, grantees and issuers are authorized
to include these pledges and agreements of the State in any contract
with the holders of transitional funding instruments or with any
assignees pursuant to this Article XVIII and any assignees are
similarly authorized to include these pledges and agreements of the
State in any contract with any issuer, holder or any other assignee.
Nothing in this Article XVIII shall preclude the State of Illinois
from requiring adjustments as may otherwise be allowed by law to the
electric utility's base rates, transition charges, delivery services
charges, or other charges for tariffed services, so long as any such
adjustment does not directly affect or impair any instrument funding
charges previously authorized by a transitional funding order issued
by the [ICC]."
As a result of the foregoing pledge, the State of Illinois may not, except as
provided in the succeeding sentence, in any way limit, alter, impair or reduce
the value of the 1998 Transition Property in a manner substantially impairing
the Indenture or the rights and remedies of the
7
Holders (and consequently, may not revoke, reduce, postpone or terminate the
1998 Funding Order or the rights of the Holders to receive IFC Payments and all
other proceeds of the 1998 Transition Property), until the Notes, together with
interest thereon, are fully paid and discharged. Notwithstanding the
immediately preceding sentence, the State would be allowed to effect a temporary
impairment of the Holders' rights if it could be shown that a temporary
impairment was necessary to advance a significant and legitimate public purpose.
(e) 1998 FUNDING ORDER AND TARIFFS; OTHER APPROVALS. (i) The 1998 Funding
Order pursuant to which the 1998 Transition Property has been created has been
duly entered by the ICC, is valid and binding, is Final and is in full force and
effect; (ii) the 1998 Initial Tariff is in full force and effect and is not
subject to modification by the ICC except as provided under the Funding Law;
(iii) as of the issuance of the Notes, the Notes are entitled to the protections
provided in Section 18-104(c) of the Funding Law and, accordingly, the 1998
Funding Order, the 1998 Transition Property and the IFCs are not revocable by
the ICC; (iv) the ICC may not reduce, postpone, impair or terminate the 1998
Transition Property, the 1998 Funding Order or the IFCs; (v) the process by
which the 1998 Funding Order was adopted and approved and the 1998 Initial
Tariff was filed, and the 1998 Funding Order and the 1998 Initial Tariff
themselves, comply with all applicable laws, rules and regulations and the ICC
may not revoke, amend or otherwise change the 1998 Initial Tariff in any manner
which would defeat the expectations of the Holders to receive IFC Payments on a
timely basis; and (vi) no other approval, authorization, consent, order or other
action of, or filing with, any court, Federal or state regulatory body,
administrative agency or other governmental instrumentality is required in
connection with the grant of the 1998 Transition Property, except those that
have been obtained or made.
(f) ASSUMPTIONS. At the Closing Date, the assumptions used in calculating
the IFCs are reasonable and made in good faith.
8
(g) CREATION OF 1998 TRANSITION PROPERTY. Upon the effectiveness of the
1998 Initial Tariff: (i) all of the 1998 Transition Property constitutes a
current property right vested in the Grantee; (ii) the 1998 Transition Property
includes, without limitation, (A) the right, title and interest in and to the
IFCs authorized under the 1998 Funding Order, as adjusted from time to time, (B)
the right, title and interest in and to all revenues, collections, claims,
payments, money or proceeds of or arising from the IFCs set forth in the 1998
Initial Tariff, and (C) all rights to obtain adjustments to the IFCs pursuant to
the 1998 Funding Order; and (iii) the Grantee is entitled to impose and collect
the IFCs described in the 1998 Funding Order and the 1998 Initial Tariff in an
aggregate amount equal to the principal amount of the Notes, all interest
thereon, all amounts required to be deposited in the Reserve Subaccount, the
Overcollateralization Subaccount and (to the extent payable from the proceeds of
the IFCs) the Capital Subaccount, and all related fees, costs and expenses in
respect of the Notes until they have been paid in full, subject only to the
$6.323 billion limitation set forth in the 1998 Funding Order as the maximum
dollar amount of 1998 Transition Property created thereunder.
(h) PROPERTY OF GRANTEE. To the fullest extent permitted by the Funding
Law and all other applicable law, the 1998 Transition Property and the right to
impose and collect IFCs contemplated thereunder constitute property rights of
the Grantee and its assigns, including the Note Issuer and its assigns
(including the Indenture Trustee on behalf of the Holders), which property has
been placed beyond the reach of ComEd and its creditors, as in a true sale, and
which property rights may not be limited, altered, impaired, reduced or
otherwise terminated by any subsequent actions of ComEd or any third party and
which shall, to the full extent permitted by law, be enforceable against ComEd,
its successors and assigns, and all other third parties (including judicial lien
creditors) claiming an interest therein by or through ComEd or its successors
and assigns.
9
(i) NATURE OF REPRESENTATIONS AND WARRANTIES. The representations and
warranties set forth in this SECTION 3.08, insofar as they involve conclusions
of law, are made not on the basis that the Grantee purports to be a legal expert
or to be rendering legal advice, but rather to reflect the parties' good faith
understanding of the legal basis on which the parties are entering into this
Agreement and the other Basic Documents and the basis on which the Holders are
purchasing the Notes, and to reflect the parties' agreement that, if such
understanding turns out to be incorrect or inaccurate, the Grantee will be
obligated to indemnify the Note Issuer and its permitted assigns, and that the
Note Issuer and its permitted assigns will be entitled to enforce any rights and
remedies under the documents, on account of such inaccuracy to the same extent
as if the Grantee had breached any other representations or warranties
hereunder.
ARTICLE IV
COVENANTS OF THE GRANTEE
SECTION 4.01. CORPORATE EXISTENCE. So long as any of the Notes are
outstanding, the Grantee (a) will keep in full force and effect its existence,
rights and franchises as a limited liability company under the laws of the State
of Delaware (unless it becomes, or any successor Grantee hereunder is or
becomes, organized under the laws of any other State or of the United States of
America, in which case the Grantee will keep in full effect its existence,
rights and franchises under the laws of such other jurisdiction), (b) will
obtain and preserve its qualification to do business, in each case to the extent
that in each such jurisdiction such existence or qualification is or shall be
necessary to protect the validity and enforceability of this Agreement, the
Basic Documents to which the Grantee is a party and each other instrument or
agreement necessary or appropriate to the proper administration of this
Agreement and the transactions contemplated hereby and (c) at all times
hereafter, the Grantee will not elect nor cause nor permit the Note
10
Issuer to elect to be classified as an association taxable as a corporation for
federal income tax purposes.
SECTION 4.02. NO LIENS. Except for the conveyances hereunder, the Grantee
will not sell, pledge, assign or transfer to any other Person, or grant, create,
incur, assume, suffer to exist or otherwise assert any Lien on, any of the 1998
Transition Property or Related Assets, or any interest therein, and the Grantee
shall defend the right, title and interest of the Note Issuer and the Indenture
Trustee in, to and under the 1998 Transition Property and Related Assets,
against all claims of third parties claiming through or under the Grantee.
SECTION 4.03. DELIVERY OF COLLECTIONS. If the Grantee receives
collections in respect of the IFCs or the proceeds thereof, or in replacement
therefor, including, without limitation, any Allocable IFC Revenue Amounts, the
Grantee agrees to hold such payments in trust for the Servicer and to pay the
Servicer all payments received by the Grantee in respect thereof as soon as
practicable after receipt thereof by the Grantee, but in no event later than two
Business Days after such receipt.
SECTION 4.04. NOTICE OF LIENS. The Grantee shall notify the Note Issuer
and the Indenture Trustee in writing promptly after becoming aware of any Lien
on any of the 1998 Transition Property or Related Assets other than the
conveyances hereunder and under the Indenture.
SECTION 4.05. COMPLIANCE WITH LAW. The Grantee shall comply with its
organizational or governing documents and all laws, treaties, rules, regulations
and determinations of any governmental instrumentality applicable to it, to the
extent that failure to so comply would materially adversely affect the Note
Issuer's or the Indenture Trustee's interests in the 1998 Transition Property or
Related Assets or under any of the Basic Documents or the Grantee's
11
performance of its obligations hereunder or under any of the other Basic
Documents to which it is party.
SECTION 4.06. COVENANTS RELATED TO THE 1998 TRANSITION PROPERTY, RELATED
ASSETS AND THE NOTES.
(a) So long as any of the Notes are outstanding, the Grantee shall indicate
in its financial statements that the Note Issuer and not the Grantee owns the
1998 Transition Property and the Related Assets.
(b) So long as any of the Notes are outstanding, the Grantee shall not own
or purchase any Notes.
(c) The Grantee agrees that upon its sale of the 1998 Transition Property
and Related Assets to the Note Issuer pursuant to this Agreement, (i) to the
fullest extent permitted by law, including applicable ICC Regulations, the Note
Issuer shall have all of the rights of the owner of the 1998 Transition Property
(including all of the rights originally held by the Grantee with respect to the
1998 Transition Property and Related Assets), including the right (subject to
the terms of the Servicing Agreement) to exercise any and all rights and
remedies to collect any amounts payable by any Customer or third party
collection agent, including any ARES, in respect of the 1998 Transition
Property, notwithstanding any objection or direction to the contrary by the
Grantee and (ii) any payment by any Customer or third party collection agent,
including any ARES, to the Note Issuer (or to the Servicer for the benefit of
the Note Issuer) shall discharge such Customer's or third party's obligations in
respect of the 1998 Transition Property to the extent of such payment,
notwithstanding any objection or direction to the contrary by the Grantee.
(d) So long as any of the Notes are outstanding, (i) except with respect to
federal and other applicable taxes, the Grantee shall not make any statement or
reference in respect of the
12
1998 Transition Property or the Related Assets that is inconsistent with the
ownership interest of the Note Issuer therein, and (ii) the Grantee shall not
take any action in respect of the 1998 Transition Property or the Related Assets
except as otherwise contemplated by the Basic Documents.
SECTION 4.07. PROTECTION OF TITLE. The Grantee shall execute and file
such filings, including filings with the ICC pursuant to the Funding Law, and
cause to be executed and filed such filings, all in such manner and in such
places as may be required by law fully to preserve, maintain, and protect the
interests of the Note Issuer in the 1998 Transition Property and Related Assets,
including all filings required under the Funding Law relating to the transfer of
the ownership or security interest in the 1998 Transition Property by the
Grantee to the Note Issuer. The Grantee shall deliver (or cause to be
delivered) to the Note Issuer file-stamped copies of, or filing receipts for,
any document filed as provided above, promptly following such filing. The
Grantee shall institute any action or proceeding necessary to compel performance
by the ICC or the State of Illinois of any of their obligations or duties under
the Funding Law, the 1998 Funding Order, the 1998 Initial Tariff or any
amendatory tariff filed pursuant to Section 18-104(k) of the Funding Law, and
the Grantee agrees to take such legal or administrative actions, including
defending against or instituting and pursuing legal actions and appearing or
testifying at hearings or similar proceedings, as may be reasonably necessary to
protect the Note Issuer and the Holders from claims, state actions or other
actions or proceedings of third parties which, if successfully pursued, would
result in a breach of any representation set forth in Article III. The costs of
any such actions or proceedings will be payable by the Grantee. The Grantee
designates the Note Issuer as its agent and attorney-in-fact to execute any
filings with the ICC, financing statements, continuation statements or other
instruments required by the Note Issuer pursuant to this Section, it being
understood that the Note Issuer shall have no obligation to execute any such
instruments.
13
SECTION 4.08. NONPETITION COVENANTS. Notwithstanding any prior
termination of this Agreement or the Indenture, but subject to the ICC's right
to order the sequestration and payment of revenues arising with respect to the
1998 Transition Property notwithstanding any bankruptcy, reorganization or other
insolvency proceedings with respect to ComEd, the Grantee, the Note Issuer or
any other grantee or assignee of the 1998 Transition Property pursuant to
Section 18-107(c)(4) of the Funding Law, the Grantee shall not, prior to the
date which is one year and one day after the termination of the Indenture,
acquiesce, petition or otherwise invoke or cause or join with any other Person
to invoke the process of any court or governmental authority for the purpose of
commencing or sustaining a case against the Note Issuer under any Federal or
state bankruptcy, insolvency or similar law or appointing a receiver,
liquidator, assignee, trustee, custodian, sequestrator or other similar official
of or for the Note Issuer or any substantial part of the property of the Note
Issuer, or ordering the winding up or liquidation of the affairs of the Note
Issuer.
SECTION 4.09. TAXES. So long as any of the Notes are outstanding, the
Grantee shall, and shall cause each of its subsidiaries to, pay all material
taxes, assessments and governmental charges imposed upon it or any of its
properties or assets or with respect to any of its franchises, business, income
or property before any penalty accrues thereon if the failure to pay any such
taxes, assessments and governmental charges would, after any applicable grace
periods, notices or other similar requirements, result in a lien on the 1998
Transition Property or Related Assets; provided that no such tax need be paid if
the Grantee or one of its subsidiaries is contesting the same in good faith by
appropriate proceedings promptly instituted and diligently conducted and if the
Grantee or such subsidiary has established appropriate reserves as shall be
required in conformity with generally accepted accounting principles.
14
SECTION 4.10. PERFORMANCE OF OBLIGATIONS; SERVICING. (a) The Grantee may
contract with other Persons to assist it in performing its duties under this
Agreement, and any performance of such duties by a Person identified to the Note
Issuer in an Officer's Certificate of the Grantee shall be deemed to be action
taken by the Grantee.
(b) Except as otherwise expressly permitted therein, the Grantee shall not
waive, amend, modify, supplement or terminate any Basic Document or any
provision thereof without the written consent of the Note Issuer (which consent
shall not be withheld if the Indenture Trustee shall have consented thereto) and
prior written notice to the Rating Agencies. The Grantee shall not terminate
the Administration Agreement prior to the repayment in full of all Notes.
(c) Upon any termination of the Servicer's rights and powers pursuant to
the Servicing Agreement, the Note Issuer shall promptly notify the Grantee and
the Rating Agencies. As soon as a Successor Servicer is appointed, the Note
Issuer shall notify the Grantee and the Rating Agencies of such appointment,
specifying in such notice the name and address of such Successor Servicer.
(d) Without derogating from the absolute nature of the assignment granted
to the Note Issuer under this Agreement or the rights of the Note Issuer
hereunder, the Grantee will not, without the prior written consent of the Note
Issuer and prior written notice to the Rating Agencies, amend, modify, waive,
supplement, terminate or surrender, or agree to any amendment, modification,
supplement, termination, waiver or surrender of, the terms of any Note
Collateral or the Basic Documents, or waive timely performance or observance by
ComEd or the Servicer under the Grant Agreement or the Servicing Agreement,
respectively. If any such amendment, modification, supplement or waiver shall
be so consented to by the Note Issuer and the Note Issuer shall so request, the
Grantee shall execute and deliver, in its own name and at its own
15
expense, such agreements, instruments, consents and other documents as shall be
necessary or appropriate in the circumstances.
(e) The Grantee shall make all filings required under the Funding Law
relating to the transfer of the ownership or security interest in the 1998
Transition Property other than those required to be made by ComEd pursuant to
the Basic Documents.
SECTION 4.11. ADDITIONAL NEGATIVE COVENANTS. So long as any Notes are
Outstanding, the Grantee shall not:
(i) except as permitted by Section 5.02, sell, transfer, exchange or
otherwise dispose of any of its properties or assets;
(ii) assert any claim against the Note Issuer by reason of the
payment of the taxes levied or assessed upon any part of the 1998
Transition Property or the Related Assets;
(iii) except as permitted by Section 5.02, terminate its existence or
dissolve or liquidate in whole or in part; or
(iv) take any action that would be inconsistent with the Note
Issuer's absolute and first priority ownership interest in the 1998
Transition Property and the Related Assets.
SECTION 4.12. NO OTHER BUSINESS. The Grantee shall not engage in any
business other than acquiring, owning, financing, transferring, assigning and
otherwise managing the 1998 Transition Property and Related Assets, and any
Subsequent Intangible Transition Property and Subsequent Related Assets, in the
manner contemplated by this Agreement and the Basic Documents (or in a similar
manner, in the case of Subsequent Transition Property and Subsequent Related
Assets) and activities incidental thereto.
SECTION 4.13. NO BORROWING. The Grantee shall not issue, incur, assume,
guarantee or otherwise become liable, directly or indirectly, for any
indebtedness.
16
SECTION 4.14. GUARANTEES, LOANS, ADVANCES AND OTHER LIABILITIES. Except
as otherwise contemplated by the Grant Agreement, the Administration Agreement,
the Servicing Agreement or this Agreement, the Grantee shall not make any loan
or advance or credit to, or guarantee (directly or indirectly or by an
instrument having the effect of assuring another's payment or performance on any
obligation or capability of so doing or otherwise), endorse or otherwise become
contingently liable, directly or indirectly, in connection with the obligations,
stocks or dividends of, or own, purchase, repurchase or acquire (or agree
contingently to do so) any stock, obligations, assets or securities of, or any
other interest in, or make any capital contribution to, any other Person.
SECTION 4.15. CAPITAL EXPENDITURES. Other than expenditures made out of
available funds in an aggregate amount not to exceed $25,000 in any calendar
year, the Grantee shall not make any expenditure (by long-term or operating
lease or otherwise) for capital assets (either realty or personalty).
SECTION 4.16. NOTICE OF DEFAULTS. The Grantee shall promptly notify the
Note Issuer, in writing, of each default under the Indenture and each material
default on the part of ComEd or the Servicer of their respective obligations
under the Grant Agreement or the Servicing Agreement.
SECTION 4.17. SEPARATE EXISTENCE. The Grantee shall:
(i) Maintain with commercial banking institutions its own deposit
account or accounts separate from those of any Affiliate of the Grantee.
The Grantee's funds will not be diverted to any other Person or for other
than the Grantee's use, and, except as may be expressly permitted by this
Agreement or the Servicing Agreement, the funds of the Grantee shall not be
commingled with those of any Affiliate of the Grantee.
17
(ii) Ensure that, to the extent that it shares the same officers or
other employees as any of its members or Affiliates, the salaries of and
the expenses related to providing benefits to such officers and other
employees shall be fairly allocated among such entities, and each such
entity shall bear its fair share of the salary and benefit costs associated
with all such common officers and employees.
(iii) Ensure that, to the extent that it jointly contracts with any of
its members or Affiliates to do business with vendors or service providers
or to share overhead expenses, the costs incurred in so doing shall be
allocated fairly among such entities, and each such entity shall bear its
fair share of such costs. To the extent that the Grantee contracts or does
business with vendors or service providers where the goods and services
provided are partially for the benefit of any other Person, the costs
incurred in so doing shall be fairly allocated to or among such entities
for whose benefit the goods and services are provided, and each such entity
shall bear its fair share of such costs. All material transactions between
the Grantee and any of its Affiliates shall be only on an arm's-length
basis.
(iv) Maintain a principal executive and administrative office through
which its business is conducted separate from those of its members and
Affiliates. To the extent that the Grantee and any of its members or
Affiliates have offices in contiguous space, there shall be fair and
appropriate allocation of overhead costs among them, and each such entity
shall bear its fair share of such expenses.
(v) Conduct its affairs strictly in accordance with its Operating
Agreement and observe all necessary, appropriate and customary formalities,
including, but not limited to, holding all regular and special members'
meetings, and meetings of the Grantee's management committee, appropriate
to authorize all action on behalf of the Grantee,
18
keeping all resolutions or consents necessary to authorize actions taken or
to be taken, and maintaining accurate and separate books, records and
accounts, including, but not limited to, payroll and intercompany
transaction accounts.
(vi) Ensure that its management committee (a) shall not include any
Person who is also a member of the Board of Directors of any of the
Grantee's Affiliates and (b) shall at all times include at least two
Independent Managers (as such term is defined in the Grantee's Operating
Agreement).
(vii) Act solely in its own name and through its own authorized
managers and agents, and no Affiliate of the Grantee shall be appointed to
act as agent of the Grantee, except as expressly contemplated by this
Agreement or the Servicing Agreement.
(viii) Ensure that no Affiliate of the Grantee shall advance funds to
the Grantee, or otherwise guaranty debts of, the Grantee, except as
provided in the Grantee's Operating Agreement; PROVIDED, HOWEVER, that an
Affiliate of the Grantee may provide funds to the Grantee in connection
with capitalization of the Grantee.
(ix) Not enter into any guaranty, or otherwise become liable, with
respect to any obligation of any Affiliate of the Grantee.
SECTION 4.18. FURTHER INSTRUMENTS AND ACTS. Upon request of the Note
Issuer, the Grantee will execute and deliver such further instruments and do
such further acts as may be reasonably necessary or proper to carry out more
effectively the purposes of this Agreement.
SECTION 4.19. SUBSEQUENT TRANSITION PROPERTY. (a) Notwithstanding any
provision hereof to the contrary, the Grantee may from time to time accept
newly-created Subsequent Transition Property pursuant to a related Subsequent
Funding Order and a Subsequent Tariff, subject to the conditions specified in
paragraph (b) below.
19
(b) The Grantee shall be permitted to accept Subsequent Transition Property
only upon the satisfaction of each of the following conditions on or prior to
the related Subsequent Creation Date:
(i) ComEd shall have provided the Grantee, the Subsequent Note
Issuer, the Indenture Trustee and the Rating Agencies with written
notice, which shall be given not later than 10 days prior to the related
Subsequent Creation Date, specifying the Subsequent Creation Date for
such Subsequent Transition Property and the aggregate amount of the IFCs
related to such Subsequent Transition Property, and shall have provided
any information reasonably requested by any of the foregoing Persons
with respect to the Subsequent Transition Property to be created in
favor of the Grantee;
(ii) ComEd and the Grantee shall have delivered to the Note Issuer a
duly executed Subsequent Grant Agreement, and the Grantee shall have
delivered to the Note Issuer a duly executed Subsequent Sale Agreement;
(iii) as of such Subsequent Creation Date, ComEd will not be
insolvent and will not have been made insolvent by such transfer and ComEd
will not be aware of any pending insolvency with respect to itself;
(iv) the Rating Agency Condition shall have been satisfied with
respect to such creation;
(v) ComEd shall have delivered to the Grantee, the Trust, the
Indenture Trustee and the Delaware Trustee an opinion of independent tax
counsel and/or a ruling from the IRS (as selected by, and in form and
substance reasonably satisfactory to, ComEd) to the effect that, for
federal income tax purposes, (i) the ICC's issuance of the Funding Order
creating and establishing the Subsequent Transition Property in the
Grantee, and the assignment of such Subsequent Transition Property, will
not result in gross income to the
20
Grantee, the Note Issuer or ComEd, and the future revenues relating to the
Subsequent Transition Property and the assessment of the IFCs (except for
revenue related to certain lump-sum payments) will be included in ComEd's
gross income in the year in which the related electrical service is
provided to consumers and (ii) such conveyance will not adversely affect
the characterization of the then outstanding Notes as obligations of ComEd;
(vi) as of such Subsequent Creation Date, no breach by ComEd of its
representations, warranties or covenants in the Grant Agreement and no
Servicer Default shall exist;
(vii) as of such Subsequent Creation Date, the Grantee shall have
sufficient funds available to pay ComEd the consideration set forth in the
Subsequent Grant Agreement, and all conditions shall have been satisfied
for the issuance of one or more instruments under the Indenture in order to
provide such funds;
(viii) the Grantee shall have delivered to the Rating Agencies any
Opinions of Counsel requested by the Rating Agencies;
(ix) the Grantee and the Note Issuer shall have taken all actions
required to perfect the ownership interest or security interest (as the
case may be) of the Note Issuer in the Subsequent Transition Property and
Subsequent Related Assets and the proceeds thereof, free and clear of any
Liens; and
(x) the Grantee shall have delivered to the Note Issuer an
Officer's Certificate confirming the satisfaction of each condition
precedent specified in this paragraph (b).
21
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
22
(collectively, "LOSSES"), as a result of the Grantee's breach of any of its
representations, warranties or covenants contained in this Agreement.
(d) The Grantee shall pay any and all taxes levied or assessed upon all or
any part of the Note Issuer's property or assets based on existing law as of the
Closing Date.
(e) Indemnification under this Section 5.01 shall survive the resignation
or removal of the Indenture Trustee or the Delaware Trustee and the termination
of this Agreement and shall include reasonable fees and expenses of
investigation and litigation (including reasonable attorneys' fees and
expenses).
SECTION 5.02. MERGER OR CONSOLIDATION OF, OR ASSUMPTION OF THE OBLIGATIONS
OF, GRANTEE. Any Person (a) into which the Grantee may be merged or
consolidated, (b) which may result from any merger or consolidation to which the
Grantee shall be a party or (c) which may succeed to the properties and assets
of the Grantee substantially as a whole, which Person in any of the foregoing
cases executes an agreement of assumption to perform every obligation of the
Grantee hereunder, shall be the successor to the Grantee under this Agreement
without further act on the part of any of the parties to this Agreement;
PROVIDED, HOWEVER, that (i) immediately after giving effect to such transaction,
no representation or warranty made pursuant to Article III shall have been
breached, (ii) the Grantee shall have delivered to the Note Issuer and the
Indenture Trustee an Officers' Certificate and an Opinion of Counsel each
stating that such consolidation, merger or succession and such agreement of
assumption comply with this Section and that all conditions precedent, if any,
provided for in this Agreement relating to such transaction have been complied
with, (iii) the Grantee shall have delivered to the Note Issuer and the
Indenture Trustee an Opinion of Counsel either (A) stating that, in the opinion
of such counsel, all filings to be made by the Grantee, including filings with
the ICC pursuant to the Funding Law, have been executed and filed that are
necessary to fully preserve and protect the interest of the Note Issuer in the
23
1998 Transition Property and Related Assets and reciting the details of such
filings, or (B) stating that, in the opinion of such counsel, no such action
shall be necessary to preserve and protect such interests (iv) the Rating
Agencies shall have received prior written notice of such transaction and (v)
ComEd shall have delivered to the Grantee, the Note Issuer, the Delaware Trustee
and the Indenture Trustee an opinion of independent tax counsel (as selected by,
and in form and substance reasonably satisfactory to, ComEd, and which may be
based on a ruling form the Internal Revenue Service) to the effect that, for
federal income tax purposes, such consolidation or merger will not result in a
material adverse federal income tax consequence to ComEd, the Grantee, the Note
Issuer, the Delaware Trustee, the Indenture Trustee or the then existing
Holders. Notwithstanding anything herein to the contrary, the execution of the
foregoing agreement of assumption and compliance with clauses (i), (ii), (iii),
(iv) and (v) above shall be conditions to the consummation of any transaction
referred to in clauses (a), (b) or (c) above. When any Person acquires the
properties and assets of ComEd Funding, LLC substantially as a whole and becomes
the successor to ComEd Funding, LLC in accordance with the terms of this Section
5.02, then upon the satisfaction of all of the other conditions of this Section
5.02, ComEd Funding, LLC shall automatically and without further notice be
released from its obligations hereunder.
SECTION 5.03. LIMITATION ON LIABILITY OF GRANTEE AND OTHERS. The Grantee
and any director or officer or employee or agent of the Grantee may rely in good
faith on the advice of counsel or on any document of any kind, PRIMA FACIE
properly executed and submitted by any Person, respecting any matters arising
hereunder. Subject to Section 4.07, the Grantee shall not be under any
obligation to appear in, prosecute or defend any legal action that shall not be
incidental to its obligations under this Agreement, and that in its opinion may
involve it in any expense or liability.
24
ARTICLE VI
MISCELLANEOUS PROVISIONS
SECTION 6.01. AMENDMENT. The Agreement may be amended by the Grantee and
the Note Issuer, with prior written notice given to the Rating Agencies and the
prior written consent of the Indenture Trustee, but without the consent of any
of the Holders, to cure any ambiguity, to correct or supplement any provisions
in this Agreement or for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions in this Agreement or of
modifying in any manner the rights of the Holders; PROVIDED, HOWEVER, that such
action shall not, as evidenced by an Officer's Certificate delivered to the Note
Issuer and the Indenture Trustee, adversely affect in any material respect the
interests of any Holder.
This Agreement may also be amended from time to time by the Grantee and the
Note Issuer, with prior written notice given to the Rating Agencies and the
prior written consent of the Indenture Trustee and Holders holding not less than
a majority of the Outstanding Amount of the Notes of all Series affected
thereby, for the purpose of adding any provisions to or changing in any manner
or eliminating any of the provisions of this Agreement or of modifying in any
manner the rights of the Holders; PROVIDED, HOWEVER, that no such amendment
shall (a) increase or reduce in any manner the amount of, or accelerate or delay
the timing of, IFC Collections or (b) reduce the aforesaid percentage of the
Outstanding Amount of the Notes, the Holders of which are required to consent to
any such amendment, without the consent of the Holders of all the outstanding
Notes.
Promptly after the execution of any such amendment or consent, the Note
Issuer shall furnish a copy of such amendment or consent to the Indenture
Trustee and each of the Rating Agencies.
25
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 ComEd
Transitional Funding Trust, c/o First Union Trust Company, National Association,
One Xxxxxx Square, 000 Xxxx Xxxxxx, 0xx Xxxxx, Xxxxxxxxxx, Xxxxxxxx 00000,
Attention: Corporate Trust Administration, with a copy to Xxxxxxxx, Xxxxxx &
Finger, Attention: Xxxxxxx Xxxxx, (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,
00 Xxxxxxxx (00xx Xxxxx), Xxx Xxxx, Xxx Xxxx 00000, Attention of Asset Backed
Surveillance Department, (f) in the case of Fitch IBCA, to Fitch IBCA, Inc., Xxx
Xxxxx Xxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention of ABS Surveillance, 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
26
Asset Backed Monitoring Group, or as to each of the foregoing, at such other
address as shall be designated by written notice to the other parties.
SECTION 6.03. ASSIGNMENT. Notwithstanding anything to the contrary
contained herein, except as provided in Section 5.02, this Agreement may not be
assigned by the Grantee.
SECTION 6.04. LIMITATIONS ON RIGHTS OF OTHERS. The provisions of this
Agreement are solely for the benefit of the Grantee, the Note Issuer, the
Indenture Trustee, the Delaware Trustee and the Holders, and nothing in this
Agreement, whether express or implied, shall be construed to give to any other
Person any legal or equitable right, remedy or claim in the 1998 Transition
Property or Related Assets or under or in respect of this Agreement or any
covenants, conditions or provisions contained herein.
SECTION 6.05. SEVERABILITY. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
SECTION 6.06. SEPARATE COUNTERPARTS. This Agreement may be executed by
the parties hereto in separate counterparts, each of which when so executed and
delivered shall be an original, but all such counterparts shall together
constitute but one and the same instrument.
SECTION 6.07. HEADINGS. The headings of the various Articles and Sections
herein are for convenience of reference only and shall not define or limit any
of the terms or provisions hereof.
SECTION 6.08. GOVERNING LAW. This Agreement shall be construed in
accordance with the laws of the State of Illinois, without reference to its
conflict of law provisions, and the
27
obligations, rights and remedies of the parties hereunder shall be determined in
accordance with such laws.
SECTION 6.09. ASSIGNMENT TO INDENTURE TRUSTEE. The Grantee acknowledges
and consents to any transfer, pledge, assignment and grant of a security
interest by the Note Issuer to the Indenture Trustee pursuant to the Indenture
for the benefit of the Holders of all right, title and interest of the Note
Issuer in, to and under the 1998 Transition Property and Related Assets and the
proceeds thereof and the assignment of any or all of the Note Issuer's rights
and obligations hereunder to the Indenture Trustee.
SECTION 6.10. LIMITATION OF LIABILITY. It is expressly understood and
agreed by the parties hereto that (a) this Agreement is executed and delivered
by First Union Trust Company, National Association ("First Union") not
individually or personally but solely as Delaware Trustee on behalf of the Note
Issuer, in the exercise of the powers and authority conferred and vested in it,
(b) the representations, undertakings and agreements herein made by the Delaware
Trustee on behalf of the Note Issuer are made and intended not as personal
representations, undertakings and agreements by First Union are made and
intended for the purpose of binding only the Note Issuer, (c) nothing herein
contained shall be construed as creating any liability on First Union
individually or personally, to perform any covenant either expressed or implied
contained herein, except in its capacity as Delaware Trustee, all such
liability, if any, being expressly waived by the parties who are signatories to
this Agreement and by any Person claiming by, through or under such parties and
(d) under no circumstances shall First Union be personally liable for the
payment of any indebtedness or expense of the Note Issuer or be personally
liable for the breach or failure of any obligation, representation, warranty or
covenant made or undertaken by the Note Issuer under this Agreement; PROVIDED,
HOWEVER, that this provision shall not protect First Union against any
28
liability that would otherwise be imposed by reason of willful misconduct, bad
faith or gross negligence in the performance of its obligations and duties under
this Agreement.
SECTION 6.11. LIMITATION OF LIABILITY. It is expressly understood and
agreed by the parties hereto that (a) this Agreement is executed and delivered
by Xxxxxx 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 Xxxxxx 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
29
applicable law, the provisions of Articles III, IV and V hereof shall survive
the termination and cancellation or invalidity of this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective officers as of the day and year first above
written.
COMED FUNDING LLC, Grantee
By: /s/ Xxxx Xxx X. Xxxxxx
---------------------------------
Name: Xxxx Xxx X. Xxxxxx
Title: Manager and President
COMED TRANSITIONAL FUNDING
TRUST, Note Issuer
By First Union Trust Company, National
Association, not in its individual
capacity but solely as Delaware Trustee
By: /s/ Xxxxxx X. Xxxxxx, Xx.
---------------------------------
Name: Xxxxxx X. Xxxxxx, Xx.
Title: Vice President
Acknowledged and accepted:
Xxxxxx Trust and Savings Bank, not in
its individual capacity but
solely as Indenture Trustee,
By: /s/ Xxxxxx X. Xxxxx
------------------------------
Name: Xxxxxx X. Xxxxx
Title: Vice President
SIGNATURE PAGE
TO SALE AGREEMENT
30
