EXHIBIT 4.3
FORM OF INDENTURE
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
COMED TRANSITIONAL FUNDING TRUST,
Note Issuer,
and
XXXXXX TRUST AND SAVINGS BANK,
Indenture Trustee
______________________________
INDENTURE
Dated as of December __, 1998
______________________________
Issuable in Series
TABLE OF CONTENTS
Page
ARTICLE I
Definitions and Incorporation by Reference. . . . . . . . . . . . . . . . . . .3
SECTION 1.01. Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . .3
SECTION 1.02. Incorporation by Reference of Trust Indenture Act. . . . . . . .3
SECTION 1.03. Rules of Construction. . . . . . . . . . . . . . . . . . . . . 3
ARTICLE II
The Notes.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4
SECTION 2.01. Form . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4
SECTION 2.02. Denominations; Notes Issuable in Series. . . . . . . . . . . . .4
SECTION 2.03. Execution, Authentication and Delivery . . . . . . . . . . . . .6
SECTION 2.04. Temporary Notes. . . . . . . . . . . . . . . . . . . . . . . . .6
SECTION 2.05. Registration; Registration of Transfer and Exchange of
Notes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7
SECTION 2.06. Mutilated, Destroyed, Lost or Stolen Notes . . . . . . . . . . .8
SECTION 2.07. Persons Deemed Owner . . . . . . . . . . . . . . . . . . . . . .9
SECTION 2.08. Payment of Principal, Premium, if any, and Interest;
Interest on Overdue Principal; Principal, Premium, if any,
and Interest Rights Preserved. . . . . . . . . . . . . . . . . .9
SECTION 2.09. Cancellation . . . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 2.10. Outstanding Amount; Authentication and Delivery of Notes . . . 10
SECTION 2.11. Book-Entry Notes . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 2.12. Notices to Clearing Agency . . . . . . . . . . . . . . . . . . 18
SECTION 2.13. Definitive Notes . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 2.14. CUSIP Number . . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 2.15. Letter of Representations. . . . . . . . . . . . . . . . . . . 19
SECTION 2.16. Release of Note Collateral . . . . . . . . . . . . . . . . . . 19
SECTION 2.17. Special Terms Applicable to Subsequent Transfers of
Certain Notes. . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 2.18. Tax Treatment. . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 2.19. State Pledge . . . . . . . . . . . . . . . . . . . . . . . . . 20
ARTICLE III
Covenants.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 3.01. Payment of Principal, Premium, if any, and Interest. . . . . . 21
SECTION 3.02. Maintenance of Office or Agency. . . . . . . . . . . . . . . . 21
SECTION 3.03. Money for Payments To Be Held in Trust . . . . . . . . . . . . 22
SECTION 3.04. Existence. . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Page
SECTION 3.05. Protection of Note Collateral. . . . . . . . . . . . . . . . . 23
SECTION 3.06. Opinions as to Note Collateral . . . . . . . . . . . . . . . . 24
SECTION 3.07. Performance of Obligations; Servicing; SEC Filings . . . . . . 25
SECTION 3.08. Certain Negative Covenants . . . . . . . . . . . . . . . . . . 27
SECTION 3.09. Annual Statement as to Compliance. . . . . . . . . . . . . . . 27
SECTION 3.10. Note Issuer May Consolidate, etc., Only on Certain Terms . . . 28
SECTION 3.11. Successor or Transferee. . . . . . . . . . . . . . . . . . . . 30
SECTION 3.12. No Other Business. . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 3.13. No Borrowing . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 3.14. Servicer's Obligations . . . . . . . . . . . . . . . . . . . . 30
SECTION 3.15. Guarantees, Loans, Advances and Other Liabilities. . . . . . . 30
SECTION 3.16. Capital Expenditures . . . . . . . . . . . . . . . . . . . . . 31
SECTION 3.17. Restricted Payments. . . . . . . . . . . . . . . . . . . . . . 31
SECTION 3.18. Notice of Events of Default. . . . . . . . . . . . . . . . . . 31
SECTION 3.19. Further Instruments and Acts . . . . . . . . . . . . . . . . . 31
SECTION 3.20. Purchase of Subsequent Transition Property . . . . . . . . . . 31
ARTICLE IV
Satisfaction and Discharge; Defeasance. . . . . . . . . . . . . . . . . . . . 33
SECTION 4.01. Satisfaction and Discharge of Indenture; Defeasance. . . . . . 33
SECTION 4.02. Conditions to Defeasance . . . . . . . . . . . . . . . . . . . 35
SECTION 4.03. Application of Trust Money . . . . . . . . . . . . . . . . . . 36
SECTION 4.04. Repayment of Moneys Held by Paying Agent . . . . . . . . . . . 36
ARTICLE V
Remedies. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 5.01. Events of Default. . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 5.02. Acceleration of Maturity; Rescission and Annulment . . . . . . 38
SECTION 5.03. Collection of Indebtedness and Suits for Enforcement
by Indenture Trustee . . . . . . . . . . . . . . . . . . . . . 39
SECTION 5.04. Remedies; Priorities . . . . . . . . . . . . . . . . . . . . . 41
SECTION 5.05. Optional Preservation of the Note Collateral . . . . . . . . . 42
SECTION 5.06. Limitation of Suits. . . . . . . . . . . . . . . . . . . . . . 42
SECTION 5.07. Unconditional Rights of Holders To Receive Principal,
Premium, if any, and Interest. . . . . . . . . . . . . . . . . 43
SECTION 5.08. Restoration of Rights and Remedies . . . . . . . . . . . . . . 43
SECTION 5.09. Rights and Remedies Cumulative . . . . . . . . . . . . . . . . 43
SECTION 5.10. Delay or Omission Not a Waiver . . . . . . . . . . . . . . . . 44
SECTION 5.11. Control by Holders . . . . . . . . . . . . . . . . . . . . . . 44
SECTION 5.12. Waiver of Past Defaults. . . . . . . . . . . . . . . . . . . . 44
SECTION 5.13. Undertaking for Costs. . . . . . . . . . . . . . . . . . . . . 45
SECTION 5.14. Waiver of Stay or Extension Laws . . . . . . . . . . . . . . . 45
SECTION 5.15. Action on Notes. . . . . . . . . . . . . . . . . . . . . . . . 45
SECTION 5.16. Performance and Enforcement of Certain Obligations . . . . . . 46
ii
Page
ARTICLE VI
The Indenture Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
SECTION 6.01. Duties of Indenture Trustee. . . . . . . . . . . . . . . . . . 46
SECTION 6.02. Rights of Indenture Trustee. . . . . . . . . . . . . . . . . . 48
SECTION 6.03. Individual Rights of Indenture Trustee . . . . . . . . . . . . 48
SECTION 6.04. Indenture Trustee's Disclaimer . . . . . . . . . . . . . . . . 49
SECTION 6.05. Notice of Defaults . . . . . . . . . . . . . . . . . . . . . . 49
SECTION 6.06. Reports by Indenture Trustee to Holders. . . . . . . . . . . . 49
SECTION 6.07. Compensation and Indemnity . . . . . . . . . . . . . . . . . . 50
SECTION 6.08. Replacement of Indenture Trustee . . . . . . . . . . . . . . . 50
SECTION 6.09. Successor Indenture Trustee by Merger. . . . . . . . . . . . . 51
SECTION 6.10. Appointment of Co-Trustee or Separate Trustee. . . . . . . . . 52
SECTION 6.11. Eligibility; Disqualification. . . . . . . . . . . . . . . . . 53
SECTION 6.12. Preferential Collection of Claims Against Note Issuer. . . . . 53
SECTION 6.13. Representations and Warranties of Indenture Trustee. . . . . . 53
ARTICLE VII
Holders' Lists and Reports. . . . . . . . . . . . . . . . . . . . . . . . . . 54
SECTION 7.01. Note Issuer To Furnish Indenture Trustee Names and
Addresses of Holders . . . . . . . . . . . . . . . . . . . . . 54
SECTION 7.02. Preservation of Information; Communications to Holders. . . . 54
SECTION 7.03. Reports by Note Issuer . . . . . . . . . . . . . . . . . . . . 54
SECTION 7.04. Reports by Indenture Trustee . . . . . . . . . . . . . . . . . 55
ARTICLE VIII
Accounts, Disbursements and Releases. . . . . . . . . . . . . . . . . . . . . 55
SECTION 8.01. Collection of Money. . . . . . . . . . . . . . . . . . . . . . 55
SECTION 8.02. Collection Account . . . . . . . . . . . . . . . . . . . . . . 55
SECTION 8.03. General Provisions Regarding the Collection Account. . . . . . 58
SECTION 8.04. Release of Note Collateral . . . . . . . . . . . . . . . . . . 59
SECTION 8.05. Opinion of Counsel . . . . . . . . . . . . . . . . . . . . . . 59
SECTION 8.06. Reports by Independent Accountants . . . . . . . . . . . . . . 60
ARTICLE IX
Supplemental Indentures . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
SECTION 9.01. Supplemental Indentures Without Consent of Holders . . . . . . 60
SECTION 9.02. Supplemental Indentures with Consent of Holders. . . . . . . . 62
SECTION 9.03. Execution of Supplemental Indentures . . . . . . . . . . . . . 63
SECTION 9.04. Effect of Supplemental Indenture . . . . . . . . . . . . . . . 64
SECTION 9.05. Conformity with Trust Indenture Act. . . . . . . . . . . . . . 64
SECTION 9.06. Reference in Notes to Supplemental Indentures. . . . . . . . . 64
ARTICLE X
Redemption of Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
SECTION 10.01. Optional Redemption by Note Issuer. . . . . . . . . . . . . . 64
iii
Page
SECTION 10.02. Form of Optional Redemption Notice. . . . . . . . . . . . . . 65
SECTION 10.03. Notes Payable on Optional Redemption Date . . . . . . . . . . 65
ARTICLE XI
Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
SECTION 11.01. Compliance Certificates and Opinions, etc.. . . . . . . . . . 66
SECTION 11.02. Form of Documents Delivered to Indenture Trustee. . . . . . . 67
SECTION 11.03. Acts of Holders . . . . . . . . . . . . . . . . . . . . . . . 68
SECTION 11.04. Notices, etc., to Indenture Trustee, Note Issuer and
Rating Agencies . . . . . . . . . . . . . . . . . . . . . . . 69
SECTION 11.05. Notices to Holders; Waiver. . . . . . . . . . . . . . . . . . 69
SECTION 11.06. Conflict with Trust Indenture Act . . . . . . . . . . . . . . 70
SECTION 11.07. Effect of Headings and Table of Contents. . . . . . . . . . . 70
SECTION 11.08. Successors and Assigns. . . . . . . . . . . . . . . . . . . . 70
SECTION 11.09. Separability. . . . . . . . . . . . . . . . . . . . . . . . . 70
SECTION 11.10. Benefits of Indenture . . . . . . . . . . . . . . . . . . . . 70
SECTION 11.11. Legal Holidays. . . . . . . . . . . . . . . . . . . . . . . . 71
SECTION 11.12. GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . . . . 71
SECTION 11.13. Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . 71
SECTION 11.14. Recording of Indenture. . . . . . . . . . . . . . . . . . . . 71
SECTION 11.15. Trust Obligation. . . . . . . . . . . . . . . . . . . . . . . 71
SECTION 11.16. No Recourse to Note Issuer. . . . . . . . . . . . . . . . . . 71
SECTION 11.17. Inspection. . . . . . . . . . . . . . . . . . . . . . . . . . 72
SECTION 11.18 No Petition . . . . . . . . . . . . . . . . . . . . . . . . . 72
EXHIBIT A -- Form of Notes
EXHIBIT B -- Form of Trustee's Issuance Certificate
EXHIBIT C -- Form of Series Supplement
iv
CROSS REFERENCE TABLE
TIA Section INDENTURE SECTION
310 (a)(1) 6.11
(a)(2) 6.11
(a)(3) 6.10
(a)(4) N.A.
(a)(5) 6.11
(b) 6.11
(c) N.A.
311 (a) 6.12
(b) 6.12
(c) N.A.
312 (a) 7.01, 7.02
(b) 7.02
(c) 7.02
313 (a) 7.04
(b)(1) 7.04
(b)(2) 7.04
(c) 7.04
(d) 7.04
314 (a) 7.03(a), 3.09
(b) 3.06
(c)(1) 2.10,4.01,11.01(a)
(c)(2) 2.10,4.01,11.01(a)
(c)(3) 2.10,4.01,11.01(a)
(d) 2.10, 11.01(b)
(e) 11.01(a)
(f) 11.01(a)
315 (a) 6.01(b)
(b) 6.05
(c) 6.01 (a)
(d) 6.02, 6.01(c)
(e) 5.13
316 (a)last
sentence Appendix A "Outstanding"
(a)(1)(A) 5.11
(a)(1)(B) 5.12
(a)(2) Omitted
(b) 5.07
(c) Appendix A "Record Date"
317 (a)(1) 5.03(b)
(a)(2) 5.03(c)
(b) 3.03
318 (a) 11.07
N.A. means Not Applicable.
Note: This cross reference table shall not, for any purpose, be deemed
to be part of this Indenture.
INDENTURE dated as of December __, 1998, between COMED TRANSITIONAL
FUNDING TRUST, a Delaware business trust (the "Note Issuer"), and Xxxxxx
Trust and Savings Bank, a banking corporation organized under the laws of
the State of Illinois, as trustee (the "Indenture Trustee").
In consideration of the mutual agreements herein contained, each
party agrees as follows for the benefit of the other and each of the Holders:
RECITALS OF THE NOTE ISSUER
The Note Issuer has duly authorized the execution and delivery of
this Indenture and the creation and issuance of Notes issuable in Series
hereunder, each Series to be of substantially the tenor set forth herein and
in the respective Trustee's Issuance Certificate or Series Supplement, if
any, relating to each such Series of Notes.
The Notes shall be non-recourse obligations and shall be secured by
and payable solely out of the proceeds of the Intangible Transition Property
and the other Note Collateral. If and to the extent that such proceeds of
Intangible Transition Property and the other Note Collateral are insufficient
to pay all amounts owing with respect to the Notes, then, except as otherwise
expressly provided hereunder, the Holders of the Notes shall have no Claim in
respect of such insufficiency against the Note Issuer, and the Holders, by
their acceptance of the Notes, waive any such Claim.
All things necessary to (a) make the Notes, when executed by the
Note Issuer and authenticated and delivered by the Indenture Trustee
hereunder and duly issued by the Note Issuer, valid obligations, and (b) make
this Note Indenture a valid agreement of the Note Issuer, in each case, in
accordance with their respective terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
That the Note Issuer, in consideration of the premises herein
contained and of the purchase of the Notes by the Holders and of other good
and lawful consideration, the receipt and sufficiency of which are hereby
acknowledged, and to secure, equally and ratably without prejudice, priority
or distinction, except as specifically otherwise set forth in this Indenture,
the payment of the Notes, the payment of all other amounts due under or in
connection with this Indenture and the performance and observance of all of
the covenants and conditions contained herein or in such Notes, has hereby
executed and delivered this Indenture and by these presents does hereby
convey, grant and assign, transfer and pledge, in each case, in and unto the
Indenture Trustee, its successors and assigns forever, for the benefit of the
Holders, all and singular the property hereinafter described (hereinafter
referred to as the "Note Collateral"), to wit:
1
GRANTING CLAUSE
The Note Issuer hereby Grants to the Indenture Trustee at the
Closing Date, as Indenture Trustee for the benefit of the Holders of the
Notes from time to time issued and outstanding, all of the Note Issuer's
right, title and interest in and to (a) the Intangible Transition Property
created under and pursuant to the 1998 Funding Order, and transferred by the
Grantee to the Note Issuer pursuant to the Sale Agreement (including, to the
fullest extent permitted by law, all revenues, collections, claims, rights,
payments, money or proceeds of or arising from the IFCs authorized in the
1998 Funding Order and any Tariffs filed pursuant thereto and any Allocable
IFC Revenue Amounts), (b) all Intangible Transition Property created under
and pursuant to any Subsequent Funding Order, and transferred by the Grantee
to the Note Issuer pursuant to a Subsequent Sale Agreement (including, to the
fullest extent permitted by law, all revenues, collections, claims, rights,
payments, money or proceeds of or arising from the IFCs authorized in such
Subsequent Funding Order and any Subsequent Tariffs filed pursuant thereto
and any Allocable IFC Revenue Amounts), (c) the Grant Agreement, the Sale
Agreement and all property and interests in property transferred under the
Sale Agreement, (d) each Subsequent Grant Agreement, Subsequent Sale
Agreement and all property and interests in property transferred under any
Subsequent Sale Agreement, (e) the Servicing Agreement, (f) the Collection
Account, all subaccounts thereof and all amounts of cash or investment
property on deposit therein or credited thereto from time to time, (g) any
interest rate exchange agreement which is executed in connection with the
issuance of Floating Rate Notes, if any, (h) all rights to compel the
Servicer to file for and obtain adjustments to the IFCs in accordance with
Section 18-104(d) of the Funding Law, the 1998 Funding Order or any
Subsequent Funding Order or any Tariff or Subsequent Tariff filed in
connection therewith, (i) all present and future claims, demands, causes and
choses in action in respect of any or all of the foregoing, and (j) all
payments on or under, and all proceeds in respect of, any or all of the
foregoing; it being understood that the following do not constitute note
collateral: (i) cash that has been released pursuant to Section 8.02(d)
(xiii) following retirement of all Outstanding Series of Notes, (ii) net
investment earnings which have been released to the Note Issuer pursuant to
Section 8.02(d), and (iii) amounts deposited with the Note Issuer on any
Series Issuance Date, including the Closing Date, for payment of costs of
issuance with respect to the related Series (together with any interest
earnings thereon), it being understood that such amounts described in clauses
(i) and (iii) above shall not be subject to Section 3.17.
The foregoing Grant is made in trust to secure the payment of
principal of and premium, if any, interest on, and any other amounts owing in
respect of, the Notes equally and ratably without prejudice, priority or
distinction, except as expressly provided in this Indenture, and to secure
compliance with the provisions of this Indenture with respect to the Notes,
all as
2
provided in this Indenture. This Indenture constitutes a security agreement
within the meaning of the UCC to the extent that, under Illinois law, the
provisions of the UCC are applicable hereto.
The Indenture Trustee, as trustee on behalf of the Holders,
acknowledges such Grant and accepts the trusts under this Indenture in
accordance with the provisions of this Indenture.
AND IT IS HEREBY COVENANTED, DECLARED AND AGREED between the
parties hereto that all Notes are to be issued, countersigned and delivered
and that all of the Note Collateral is to be held and applied, subject to the
further covenants, conditions, releases, uses and trusts hereinafter set
forth, and the Note Issuer, for itself and any successor, does hereby
covenant and agree to and with the Indenture Trustee and its successors in
said trust, for the benefit of the Holders, as follows:
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. DEFINITIONS. Except as otherwise specified herein
or as the context may otherwise require, the capitalized terms used herein
shall have the respective meanings set forth in Appendix A attached hereto
and made a part hereof for all purposes of this Indenture.
SECTION 1.02. INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT.
Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture. The
following TIA terms used in this Indenture have the following meanings:
"indenture securities" means the Notes.
"indenture security holder" means a Holder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Indenture
Trustee.
"obligor" on the indenture securities means the Note Issuer and any
other obligor on the indenture securities.
All other TIA terms used in this Indenture that are defined by the
TIA, defined by TIA reference to another statute or defined by SEC rule have
the meanings assigned to them by such definitions.
3
SECTION 1.03. RULES OF CONSTRUCTION. Unless the context otherwise
requires:
(i) a term has the meaning assigned to it;
(ii) an accounting term not otherwise defined has the meaning
assigned to it in accordance with generally accepted accounting principles
as in effect from time to time;
(iii) "or" is not exclusive;
(iv) "including" means including without limitation;
(v) words in the singular include the plural and words in the
plural include the singular; and
(vi) the words "herein," "hereof," "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision.
ARTICLE II
THE NOTES
SECTION 2.01. FORM. The Notes and the Indenture Trustee's
certificate of authentication shall be in substantially the forms set forth
in Exhibit B, with such appropriate insertions, omissions, substitutions and
other variations as are required or permitted by this Indenture or by the
related Trustee's Issuance Certificate or Series Supplement, if any, and may
have such letters, numbers or other marks of identification and such legends
or endorsements placed thereon as may, consistently herewith, be determined
by the officers executing such Notes, as evidenced by their execution of such
Notes. Any portion of the text of any Note may be set forth on the reverse
thereof, with an appropriate reference thereto on the face of the Note.
The Notes shall be typewritten, printed, lithographed or engraved
or produced by any combination of these methods (with or without steel
engraved borders), all as determined by the officers executing such Notes, as
evidenced by their execution of such Notes.
Each Note shall be dated the date of its authentication. The terms
of the Notes set forth in Exhibit B are part of the terms of this Indenture.
SECTION 2.02. DENOMINATIONS; NOTES ISSUABLE IN SERIES. The Notes
shall be issuable in the Minimum Denomination specified in the applicable
Trustee's Issuance Certificate or Series Supplement, if any, and, except as
otherwise provided in such Trustee's Issuance Certificate or Series
Supplement, if any, in integral multiples thereof.
4
The Notes may, at the election of and as authorized by a
Responsible Officer of the Note Issuer, be issued in one or more Series (each
comprised of one or more Classes), and shall be designated generally as the
"Transitional Funding Trust Notes" of the Note Issuer, with such further
particular designations added or incorporated in such title for the Notes of
any particular Series or Class as a Responsible Officer of the Note Issuer
may determine. Each Note shall bear upon its face the designation so
selected for the Series or Class to which it belongs. All Notes of the same
Series shall be identical in all respects except for the denominations
thereof, unless such Series is comprised of one or more Classes, in which
case all Notes of the same Class shall be identical in all respects except
for the denominations thereof. All Notes of a particular Series or, if such
Series is comprised of one or more Classes, all Notes of a particular Class
thereof, in each case issued under this Indenture, shall be in all respects
equally and ratably entitled to the benefits hereof without preference,
priority, or distinction on account of the actual time or times of
authentication and delivery, all in accordance with the terms and provisions
of this Indenture.
Each Series of Notes shall be created by a Trustee's Issuance
Certificate or Series Supplement, as the case may be, authorized by a
Responsible Officer of the Note Issuer and establishing the terms and
provisions of such Series. The several Series and Classes thereof may differ
as between Series and Classes, in respect of any of the following matters:
(1) designation of the Series and, if applicable, the Classes
thereof;
(2) the principal amount;
(3) the Note Interest Rate;
(4) the Payment Dates;
(5) the Scheduled Maturity Date;
(6) the Final Maturity Date;
(7) the Series Issuance Date;
(8) the place or places for the payment of interest, principal and
premium, if any;
(9) the Minimum Denominations;
(10) the Expected Amortization Schedule;
(11) provisions with respect to the definitions set forth in Appendix
A hereto;
5
(12) whether or not the Notes of such Series are to be Book-Entry
Notes and the extent to which Section 2.11 should apply;
(13) any redemption provisions applicable to the Notes of such Series
and the price or prices at which and the terms and conditions upon which
Notes of such Series shall be redeemed or purchased;
(14) to the extent applicable, the extent to which payments on the
Notes of the related Series are subordinate to or PARI PASSU in right of
payment of principal and interest to other Notes; and
(15) any other provisions expressing or referring to the terms and
conditions upon which the Notes of the applicable Series or Class are to be
issued under this Indenture that are not in conflict with the provisions of
this Indenture and as to which the Rating Agency Condition is satisfied.
SECTION 2.03. EXECUTION, AUTHENTICATION AND DELIVERY. The Notes
shall be executed on behalf of the Note Issuer by any of its Responsible
Officers. The signature of any such Responsible Officer on the Notes may be
manual or facsimile.
Notes bearing the manual or facsimile signature of individuals who
were at any time Responsible Officers of the Note Issuer shall bind the Note
Issuer, notwithstanding that such individuals or any of them have ceased to
hold such offices prior to the authentication and delivery of such Notes or
did not hold such offices at the date of such Notes.
At any time and from time to time after the execution and delivery
of this Indenture, the Note Issuer may deliver Notes executed by the Note
Issuer to the Indenture Trustee pursuant to an Issuer Order for
authentication; and the Indenture Trustee shall authenticate and deliver such
Notes as in this Indenture provided and not otherwise.
No Note shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose, unless there appears on such Note a
certificate of authentication substantially in the form provided for therein
executed by the Indenture Trustee by the manual signature of one of its
authorized signatories, and such certificate upon any Note shall be
conclusive evidence, and the only evidence, that such Note has been duly
authenticated and delivered hereunder.
SECTION 2.04. TEMPORARY NOTES. Pending the preparation of
Definitive Notes, the Note Issuer may execute, and upon receipt of an Issuer
Order the Indenture Trustee shall authenticate and deliver, Temporary Notes
which are printed, lithographed, typewritten, mimeographed or otherwise
produced, of the tenor of the Definitive Notes in lieu of which they are
issued and with such variations not inconsistent with the terms of this
Indenture as the officers executing such Notes may determine, as evidenced by
their execution of such Notes.
6
If Temporary Notes are issued, the Note Issuer will cause
Definitive Notes to be prepared without unreasonable delay. After the
preparation of Definitive Notes, the temporary Notes shall be exchangeable
for Definitive Notes upon surrender of the Temporary Notes at the office or
agency of the Note Issuer to be maintained as provided in Section 3.02,
without charge to the Holder. Upon surrender for cancellation of any one or
more Temporary Notes, the Note Issuer shall execute and the Indenture Trustee
shall authenticate and deliver in exchange therefor a like principal amount
of Definitive Notes of authorized denominations. Until so delivered in
exchange, the Temporary Notes shall in all respects be entitled to the same
benefits under this Indenture as Definitive Notes.
SECTION 2.05. REGISTRATION; REGISTRATION OF TRANSFER AND EXCHANGE
OF NOTES. The Note Issuer shall cause to be kept a register (the "Note
Register") in which, subject to such reasonable regulations as it may
prescribe, the Note Issuer shall provide for the registration of Notes and
the registration of transfers of Notes. The Indenture Trustee shall be "Note
Registrar" for the purpose of registering Notes and transfers of Notes as
herein provided. Upon any resignation of any Note Registrar, the Note Issuer
shall promptly appoint a successor or, if it elects not to make such an
appointment, assume the duties of Note Registrar.
If a Person other than the Indenture Trustee is appointed by the
Note Issuer as Note Registrar, the Note Issuer will give the Indenture
Trustee prompt written notice of the appointment of such Note Registrar and
of the location, and any change in the location, of the Note Register, and
the Indenture Trustee shall have the right to inspect the Note Register at
all reasonable times and to obtain copies thereof, and the Indenture Trustee
shall have the right to rely conclusively upon a certificate executed on
behalf of the Note Registrar by a Responsible Officer thereof as to the names
and addresses of the Holders of the Notes and the principal amounts and
number of such Notes.
Upon surrender for registration of transfer of any Note at the
office or agency of the Note Issuer to be maintained as provided in Section
3.02, the Note Issuer shall execute, and the Indenture Trustee shall
authenticate and the Holder shall obtain from the Indenture Trustee, in the
name of the designated transferee or transferees, one or more new Notes in
any Minimum Denominations, of the same Series (and, if applicable, Class) and
aggregate principal amount.
At the option of the Holder, Notes may be exchanged for other Notes
in any Minimum Denominations, of the same Series (and, if applicable, Class)
and aggregate principal amount, upon surrender of the Notes to be exchanged
at such office or agency. Whenever any Notes are so surrendered for
exchange, the Note Issuer shall execute, and the Indenture Trustee shall
authenticate and the Holder shall obtain from the Indenture Trustee, the
Notes which the Holder making the exchange is entitled to receive.
All Notes issued upon any registration of transfer or exchange of
other Notes shall be the valid obligations of the Note Issuer, evidencing the
same debt, and entitled to the same
7
benefits under this Indenture, as the Notes surrendered upon such
registration of transfer or exchange.
Every Note presented or surrendered for registration of transfer or
exchange shall be duly endorsed by, or be accompanied by (a) a written
instrument of transfer in form satisfactory to the Indenture Trustee duly
executed by the Holder thereof or such Holder's attorney duly authorized in
writing, with such signature guaranteed by an institution which is a member
of one of the following recognized Signature Guaranty Programs: (i) The
Securities Transfer Agent Medallion Program (STAMP); (ii) The New York Stock
Exchange Medallion Program (MSP); (iii) The Stock Exchange Medallion Program
(SEMP); or (iv) such other guarantee program acceptable to the Indenture
Trustee, and (b) such other documents as the Indenture Trustee may require.
No service charge shall be made to a Holder for any registration of
transfer or exchange of Notes, but the Note Issuer or Indenture Trustee may
require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any registration of transfer or
exchange of Notes, other than exchanges pursuant to Section 2.04 or 9.06 not
involving any transfer.
The preceding provisions of this Section notwithstanding, the Note
Issuer shall not be required to make, and the Note Registrar need not
register transfers or exchanges (i) of Notes that have been selected for
redemption pursuant to Article X, (ii) of any Note that has been submitted
within 15 days preceding the due date for any payment with respect to such
Note or (iii) of Unregistered Notes unless Section 2.17 has been complied
with in connection with such transfer or exchange.
SECTION 2.06. MUTILATED, DESTROYED, LOST OR STOLEN NOTES. If (i)
any mutilated Note is surrendered to the Indenture Trustee, or the Indenture
Trustee receives evidence to its satisfaction of the destruction, loss or
theft of any Note, and (ii) there is delivered to the Indenture Trustee such
security or indemnity as may be required by it to hold the Note Issuer and
the Indenture Trustee harmless, then the Note Issuer shall execute and, upon
its written request, the Indenture Trustee shall authenticate and deliver, in
exchange for or in lieu of any such mutilated, destroyed, lost or stolen
Note, a replacement Note of like Series (and, if applicable, Class), tenor
and principal amount, bearing a number not contemporaneously outstanding;
PROVIDED, HOWEVER, that if any such destroyed, lost or stolen Note, but not a
mutilated Note, shall have become or within seven days shall be due and
payable, or shall have been called for redemption, instead of issuing a
replacement Note, the Note Issuer may pay such destroyed, lost or stolen Note
when so due or payable or upon the Optional Redemption Date without surrender
thereof. If, after the delivery of such replacement Note or payment of a
destroyed, lost or stolen Note pursuant to the proviso to the preceding
sentence, a purchaser of the original Note in lieu of which such replacement
Note was issued presents for payment such original Note, the Note Issuer and
the Indenture Trustee shall be entitled to recover
8
such replacement Note (or such payment) from the Person to whom it was
delivered or any Person taking such replacement Note from such Person to whom
such replacement Note was delivered or any assignee of such Person and shall
be entitled to recover upon the security or indemnity provided therefor to
the extent of any loss, damage, cost or expense incurred by the Note Issuer
or the Indenture Trustee in connection therewith.
Upon the issuance of any replacement Note under this Section, the
Note Issuer and/or the Indenture Trustee may require the payment by the
Holder of such Note of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
reasonable expenses (including the fees and expenses of the Indenture
Trustee) connected therewith.
Every replacement Note issued pursuant to this Section in
replacement of any mutilated, destroyed, lost or stolen Note shall constitute
an original additional contractual obligation of the Note Issuer, whether or
not the mutilated, destroyed, lost or stolen Note shall be found at any time
or enforced by any Person, and shall be entitled to all the benefits of this
Indenture equally and proportionately with any and all other Notes duly
issued hereunder.
The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the
replacement or payment of mutilated, destroyed, lost or stolen Notes.
SECTION 2.07. PERSONS DEEMED OWNER. Prior to due presentment for
registration of transfer of any Note, the Note Issuer, the Indenture Trustee
and any agent of the Note Issuer or the Indenture Trustee may treat the
Person in whose name any Note is registered (as of the day of determination)
as the owner of such Note for the purpose of receiving payments of principal
of and premium, if any, and interest on such Note and for all other purposes
whatsoever, whether or not such Note be overdue, and neither the Note Issuer,
the Indenture Trustee nor any agent of the Note Issuer or the Indenture
Trustee shall be affected by notice to the contrary.
SECTION 2.08. PAYMENT OF PRINCIPAL, PREMIUM, IF ANY, AND INTEREST;
INTEREST ON OVERDUE PRINCIPAL; PRINCIPAL, PREMIUM, IF ANY, AND INTEREST
RIGHTS PRESERVED. (a) The Notes shall accrue interest as provided in the
related Trustee's Issuance Certificate or Series Supplement, if any, at the
applicable Note Interest Rate specified therein, and such interest shall be
payable on each Payment Date as specified therein. Any installment of
interest, principal or premium, if any, payable on any Note which is
punctually paid or duly provided for on the applicable Payment Date shall be
paid to the Person in whose name such Note (or one or more Predecessor Notes)
is registered on the Record Date for such Payment Date, by check mailed
first-class, postage prepaid to such Person's address as it appears on the
Note Register on such Record Date or in such other manner as may be provided
in the related Trustee's Issuance Certificate or Series Supplement, if any,
except that (i) upon application to the Indenture Trustee by any Holder
owning Notes of any Class in the principal amount of $10,000,000 or
9
more not later than the applicable Record Date payment will be made by wire
transfer to an account maintained by such Holder and (ii) with respect to
Book Entry Notes payments will be made by wire transfer in immediately
available funds to the account designated by the Holder of the applicable
Global Note unless and until such Global Note is exchanged for Definitive
Notes (in which event payments shall be made as provided above) and except
for the final installment of principal and premium, if any, payable with
respect to such Note on a Payment Date which shall be payable as provided
below. The funds represented by any such checks returned undelivered shall be
held in accordance with Section 3.03 hereof.
(b) The principal of each Note of each Series (and, if applicable,
Class) shall be paid, to the extent funds are available therefor in the
Collection Account, in installments on each Payment Date specified in the
related Trustee's Issuance Certificate or Series Supplement, if any.
Notwithstanding the foregoing, the entire unpaid principal amount of the
Notes of a Series shall be due and payable, if not previously paid, on the
date on which an Event of Default shall have occurred and be continuing with
respect to such Series, if the Indenture Trustee or the Holders of the Notes
representing not less than a majority of the Outstanding Amount of the Notes
of all Series have declared the Notes to be immediately due and payable in
the manner provided in Section 5.02. All payments of principal and premium,
if any, on the Notes of any Series shall be made pro rata to the Holders
entitled thereto unless otherwise provided in the related Trustee's Issuance
Certificate or Series Supplement, if any, with respect to any Class of Notes
included in such Series. The Indenture Trustee shall notify the Person in
whose name a Note is registered at the close of business on the Record Date
preceding the Payment Date on which the Note Issuer expects that the final
installment of principal of and premium, if any, and interest on such Note
will be paid. Such notice shall be mailed no later than five days prior to
such final Payment Date and shall specify that such final installment will be
payable only upon presentation and surrender of such Note and shall specify
the place where such Note may be presented and surrendered for payment of
such installment. Notices in connection with redemptions of Notes shall be
mailed to Holders as provided in Section 10.02.
(c) If interest on the Notes of any Series is not paid when due,
such defaulted interest shall be paid (plus interest on such defaulted
interest at the applicable Note Interest Rate to the extent lawful) to the
Persons who are Holders on a subsequent Special Record Date, which date shall
be at least five Business Days prior to the Special Payment Date. The Note
Issuer shall fix or cause to be fixed any such Special Record Date and
Special Payment Date, and, at least 20 days before any such Special Record
Date, the Note Issuer shall mail to each affected Holder a notice that states
the Special Record Date, the Special Payment Date and the amount of defaulted
interest (plus interest on such defaulted interest) to be paid.
SECTION 2.09. CANCELLATION. All Notes surrendered for payment,
registration of transfer, exchange or redemption shall, if surrendered to any
Person other than the Indenture Trustee, be delivered to the Indenture
Trustee and shall be promptly canceled by the Indenture Trustee. The Note
Issuer may at any time deliver to the Indenture Trustee for cancellation any
Notes previously authenticated and delivered hereunder which the Note Issuer
may have acquired
10
in any manner whatsoever, and all Notes so delivered shall be promptly
canceled by the Indenture Trustee. No Notes shall be authenticated in lieu
of or in exchange for any Notes canceled as provided in this Section, except
as expressly permitted by this Indenture. All canceled Notes may be held or
disposed of by the Indenture Trustee in accordance with its standard
retention or disposal policy as in effect at the time.
SECTION 2.10. OUTSTANDING AMOUNT; AUTHENTICATION AND DELIVERY OF
NOTES. The aggregate Outstanding Amount of Notes that may be authenticated
and delivered under this Indenture shall be limited as provided in Section
3.08 hereof.
Notes of each Series created and established by a Trustee's
Issuance Certificate or Series Supplement, if any, may from time to time be
executed by the Note Issuer and delivered to the Indenture Trustee for
authentication and thereupon the same shall be authenticated and delivered by
the Indenture Trustee upon Issuer Request and upon delivery by the Note
Issuer to the Indenture Trustee, and receipt by the Indenture Trustee, or the
causing to occur by the Note Issuer, of the following; PROVIDED, HOWEVER,
that compliance with such conditions and delivery of such documents shall
only be required in connection with the original issuance of a Note or Notes
of such Series:
(1) NOTE ISSUER ACTION. An Issuer Order authorizing and directing
the execution, authentication and delivery of the Notes by the Indenture
Trustee and specifying the principal amount of Notes to be authenticated.
(2) AUTHORIZATIONS. A Funding Order related to such Series which
shall be in full force and effect and be Final.
(3) OPINIONS. (a) An Opinion of Counsel that the applicable Funding
Order is in full force and effect and Final and that no other
authorization, approval or consent of any governmental body or bodies at
the time having jurisdiction in the premises is required for the valid
issuance, authentication and delivery of such Notes, except for such
registrations as are required under the Blue Sky and securities laws of any
State or such authorizations, approvals or consents of governmental bodies
that have been obtained and copies of which have been delivered with such
Opinion of Counsel.
(b) An Opinion of Counsel that no authorization, approval or consent
of any governmental body or bodies at the time having jurisdiction in the
premises is required for the valid execution and delivery by the Note
Issuer of each of the Basic Documents to which the Note Issuer is a party,
except for such authorizations, approvals or consents of governmental
bodies that have been obtained and copies of which have been delivered with
such Opinion of Counsel.
(4) AUTHORIZING CERTIFICATE. An Officer's Certificate, dated the
Series Issuance Date, of the Note Issuer certifying that (i) the
11
Note Issuer has duly authorized the execution and delivery of this
Indenture and the related Trustee's Issuance Certificate or Series
Supplement, as the case may be, and the execution and delivery of the
Notes of such Series and (ii) that the Trustee's Issuance Certificate or
Series Supplement, as the case may be, for such Series of Notes is in
the form attached thereto, which Trustee's Issuance Certificate or
Series Supplement, as the case may be, shall comply with the
requirements of Section 2.02 hereof.
(5) THE NOTE COLLATERAL. The Note Issuer shall have made or caused
to be made all filings with the ICC pursuant to the Funding Order and the
Funding Law and all other filings necessary to perfect the Grant of the
Note Collateral to the Indenture Trustee and the lien of this Indenture.
(6) CERTIFICATES OF THE NOTE ISSUER AND THE GRANTEE. (a) An Officer's
Certificate from the Note Issuer, dated as of the Series Issuance Date:
(i) to the effect that (A) the Note Issuer is not in Default
under this Indenture and that the issuance of the Notes applied for
will not result in any Default or in any breach of any of the terms,
conditions or provisions of or constitute a default under the Funding
Order or any indenture, mortgage, deed of trust or other agreement or
instrument to which the Note Issuer is a party or by which it or its
property is bound or any order of any court or administrative agency
entered in any Proceeding to which the Note Issuer is a party or by
which it or its property may be bound or to which it or its property
may be subject and (B) that all conditions precedent provided in this
Indenture relating to the execution, authentication and delivery of
the Notes applied for have been complied with;
(ii) to the effect that the Note Issuer has not assigned any
interest or participation in the Note Collateral except for the Grant
contained in this Indenture; the Note Issuer has the power and right
to Grant the Note Collateral to the Indenture Trustee as security
hereunder; and the Note Issuer, subject to the terms of this
Indenture, has Granted to the Indenture Trustee all of its right,
title and interest in and to such Note Collateral free and clear of
any lien, mortgage, pledge, charge, security interest, adverse claim
or other encumbrance arising as a result of actions of the Note Issuer
or through the Note Issuer, except the lien of this Indenture;
(iii) to the effect that the Note Issuer has appointed the firm
of Independent certified public accountants as contemplated in Section
8.06 hereof;
(iv) to the effect that attached thereto are duly executed, true
and complete copies of the Grant Agreement and the Sale Agreement or
Subsequent Grant Agreement and Subsequent Sale Agreement, as
applicable, and the Servicing Agreement; and
12
(v) stating that all filings with the ICC pursuant to the
Funding Law and the Funding Order and all UCC financing statements
with respect to the Note Collateral which are required to be filed by
the terms of the Funding Order, the Funding Law, the Grant Agreement
and the Sale Agreement or Subsequent Grant Agreement and Subsequent
Sale Agreement, as applicable, the Servicing Agreement and this
Indenture have been filed as required.
(b) An Officer's Certificate from the Grantee, dated as of the Series
Issuance Date, to the effect that, in the case of the Intangible Transition
Property, immediately prior to the conveyance thereof to the Note Issuer
pursuant to the Sale Agreement or the Subsequent Sale Agreement, as
applicable:
(i) the Grantee was the owner of such Intangible Transition
Property, free and clear of any Lien; the Grantee had not assigned any
interest or participation in such Intangible Transition Property and
the proceeds thereof other than to the Note Issuer pursuant to the
Sale Agreement or Subsequent Sale Agreement, as applicable; the
Grantee has the power and right to convey such Intangible Transition
Property and the proceeds thereof to the Note Issuer; and the Grantee,
subject to the terms of the Sale Agreement or the Subsequent Sale
Agreement, as applicable, has validly conveyed to the Note Issuer all
of its right, title and interest in and to such Intangible Transition
Property and the proceeds thereof, free and clear of any lien,
mortgage, pledge, charge, security interest, adverse claim or other
encumbrance; and
(ii) the attached copy of the Funding Order creating such
Intangible Transition Property is true and correct.
(7) OPINION OF TAX COUNSEL. ComEd shall have delivered to the
Grantee, the Note Issuer, the Delaware Trustee and the Indenture Trustee an
opinion of independent tax counsel and/or a ruling from the Internal
Revenue Service (as selected by, and in form and substance reasonably
satisfactory to, ComEd) to the effect that, for federal income tax
purposes, (i) such issuance of Notes, and transfer of the Note proceeds to
ComEd, will not result in gross income to the Grantee, the Note Issuer or
ComEd and (ii) such issuance will not materially adversely affect the
characterization of any then Outstanding Notes as obligations of ComEd.
(8) OPINION OF COUNSEL. Unless otherwise specified in a Trustee's
Issuance Certificate or Series Supplement, if any, an Opinion of Counsel,
portions of which may be delivered by counsel for the Note Issuer, portions
of which may be delivered by counsel for the Grantee and the Servicer, and
portions of which may be delivered by counsel for the Indenture Trustee,
dated the Series Issuance Date, in each case subject to the customary
exceptions, qualifications and assumptions contained therein, to the
collective effect that:
13
(a) the Indenture has been duly qualified under the Trust
Indenture Act and either the related Trustee's Issuance Certificate
or Series Supplement, if any, has been duly qualified under the Trust
Indenture Act or no such qualification of the Trustee's Issuance
Certificate or Series Supplement is necessary;
(b) all instruments furnished to the Indenture Trustee pursuant
to this Indenture conform to the requirements set forth in this
Indenture and constitute all of the documents required to be delivered
hereunder for the Indenture Trustee to authenticate and deliver the
Notes applied for, and all conditions precedent provided for in this
Indenture relating to the authentication and delivery of the Notes
have been complied with;
(c) the Note Issuer has the power and authority to execute and
deliver the Trustee's Issuance Certificate, the Series Supplement, if
any, and this Indenture and to issue the Notes, and each of the
Trustee's Issuance Certificate, the Series Supplement, if any, this
Indenture, and the Notes have been duly authorized and the Note Issuer
is duly formed and is validly existing in good standing under the laws
of the jurisdiction of its organization;
(d) the Trustee's Issuance Certificate, the Series Supplement,
if any, and the Indenture have been duly executed and delivered by
the Note Issuer;
(e) the Notes applied for have been duly authorized and executed
and, when authenticated in accordance with the provisions of the
Indenture and delivered against payment of the purchase price
therefor, will constitute valid and binding obligations of the Note
issuer (subject to bankruptcy, insolvency, reorganization and other
similar laws affecting the rights of creditors generally and general
principles of equity), entitled to the benefits of the indenture and
any related Trustee's Issuance Certificate or Series Supplement;
(f) this Indenture, the Grant Agreement or the Subsequent Grant
Agreement as applicable, the Sale Agreement or the Subsequent Sale
Agreement as applicable, the Servicing Agreement and the related
Trustee's Issuance Certificate or Series Supplement, if any, are valid
and binding agreements of the Note Issuer, enforceable in accordance
with their respective terms, except as such enforceability may be
subject to bankruptcy, insolvency, reorganization and other similar
laws affecting the rights of creditors generally and general
principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law);
(g) in accordance with the Funding Law, the Funding Order (A)
creates Intangible Transition Property in an amount not less than the
amount, if any,
14
specified in the Trustee's Issuance Certificate or Series
Supplement, if any, which was vested by the Funding Order in the
Grantee; (B) approves and authorizes the sale, transfer and
assignment by the Grantee of such Intangible Transition Property to
the Note Issuer; (C) approves the issuance and sale by the Note
Issuer of the Notes to be issued on such Series Issuance Date in an
aggregate principal amount which equals or exceeds the initial
Outstanding Amount of the Notes referred to in (1) above; and (D)
declares and establishes that such Notes are Transitional Funding
Instruments within the meaning of Section 18-102 of the Funding Law;
(h) (A) at the time of the issuance of such Notes the lien of
this Indenture in favor of the Holders in the Intangible Transition
Property attaches automatically; (B) such lien has been perfected in
accordance with Section 18-107(c) of the Funding Law and in accordance
with the Funding Order; (C) such lien is valid and enforceable against
ComEd, the Servicer, the Grantee, the Note Issuer, and all third
parties, including judgment lien creditors; and (D) such lien ranks
prior to any other lien which subsequently attaches to the Intangible
Transition Property;
(i) with respect to the Note Collateral other than the
Intangible Transition Property, upon the giving of value by the
Indenture Trustee to the Note Issuer with respect to such Note
Collateral, (A) this Indenture, together with any related Trustee's
Issuance Certificate or Series Supplement, creates in favor of the
Indenture Trustee a security interest in the rights of the Note Issuer
in such Note Collateral, and such security interest is enforceable
against ComEd, the Servicer, the Grantee, the Note Issuer and all
third parties, (B) such security interest is perfected, and (C) such
perfected security interest is of first priority;
(j) either (A) the Registration Statement covering the Notes is
effective under the Securities Act and, to such counsel's knowledge,
no stop order suspending the effectiveness of such Registration
Statement has been issued under the Securities Act and no proceedings
for that purpose have been initiated or are pending or threatened by
the SEC or (B) the Notes are exempt from the registration requirements
under the Securities Act;
(k) the Note Issuer is not now and, assuming that the Note
Issuer uses the proceeds of the sale of the Notes for the purpose of
acquiring Intangible Transition Property in accordance with the terms
of the Sale Agreement or the Subsequent Sale Agreement, as applicable,
following the sale of the Notes to the underwriter, underwriters,
placement agent or agents or similar Person, neither the Note Issuer
nor the Grantee will be required to be registered under the Investment
Company Act of 1940, as amended;
15
(l) the Grant Agreement or Subsequent Grant Agreement, as
applicable, is a valid and binding agreement of ComEd enforceable
against ComEd in accordance with its terms and the Sale Agreement or
Subsequent Sale Agreement as applicable, is a valid and binding
agreement of the Grantee enforceable against the Grantee in
accordance with its terms, except in each case as such enforceability
may be subject to bankruptcy, insolvency, reorganization and other
similar laws affecting the rights of creditors generally and general
principles of equity (regardless of whether such enforcement is
considered in a proceeding in equity or at law);
(m) the Servicing Agreement is a valid and binding agreement of
the Servicer enforceable against the Servicer in accordance with its
terms except as such enforceability may be subject to bankruptcy,
insolvency, reorganization and other similar laws affecting the rights
of creditors generally and general principles of equity (regardless of
whether such enforcement is considered in a proceeding in equity or at
law);
(n) pursuant to the Funding Order and upon the delivery of the
fully executed Sale Agreement or Subsequent Sale Agreement, as
applicable, to the Note Issuer and the payment of the purchase price
of the Intangible Transition Property by the Note Issuer to the
Grantee pursuant to the Sale Agreement or Subsequent Sale Agreement,
as applicable, (i) the transfer of the Intangible Transition Property
by the Grantee to the Note Issuer conveys the Grantee's right, title
and interest in the Intangible Transition Property to the Note Issuer
and will be treated under Illinois state law as an absolute transfer
of all of the Grantee's right, title, and interest in the Intangible
Transition Property, other than for federal and state income and
franchise tax purposes, (ii) such transfer of the Intangible
Transition Property is perfected, (iii) such transfer has priority
over any other assignment of the Intangible Transition Property and
(iv) the Intangible Transition Property is free and clear of all liens
created prior to its transfer to the Note Issuer pursuant to the Sale
Agreement; and
(o) such other matters as the Indenture Trustee may reasonably
require.
(8) ACCOUNTANT'S CERTIFICATE OR OPINION. Unless otherwise specified
in a Trustee's Issuance Certificate or a Series Supplement, if any, a
certificate or opinion, addressed to the Note Issuer and the Indenture
Trustee complying with the requirements of Section 11.01(a) hereof, of a
firm of Independent certified public accountants of recognized national
reputation to the effect that (a) such accountants are Independent with
respect to the Note Issuer within the meaning of this Indenture, and are
independent public accountants within the meaning of the standards of The
American Institute of Certified Public Accountants, and (b) with respect to
the Note Collateral, they have made such calculations as they deemed
necessary for the purpose and determined that, based on the
16
assumptions used in calculating the initial IFCs or, if applicable, the
most recent revised IFCs, as of the Series Issuance Date for such Series
(after giving effect to the issuance of such Series and the application
of the proceeds therefrom) such IFCs are sufficient to pay (a) Operating
Expenses when incurred, plus (b) the Overcollateralization Amount, plus
(c) interest on each Series of Notes at their respective Note Interest
Rates when due, plus (d) principal of each Series of Notes in accordance
with the Expected Amortization Schedule.
(9) RATING AGENCY CONDITION. The Indenture Trustee shall receive
evidence reasonably satisfactory to it that the Rating Agency Condition
will be satisfied with respect to the issuance of such new Series.
(10) REQUIREMENTS OF TRUSTEE'S ISSUANCE CERTIFICATE OR SERIES
SUPPLEMENT. Such other funds, accounts, documents certificates,
agreements, instruments or opinions as may be required by the terms of the
Trustee's Issuance Certificate or Series Supplement, if any, creating such
Series.
(11) OTHER REQUIREMENTS. Such other documents, certificates,
agreements, instruments or opinions as the Indenture Trustee may reasonably
require.
SECTION 2.11. BOOK-ENTRY NOTES. Unless the applicable Trustee's
Issuance Certificate or Series Supplement, if any, provides otherwise, all of
the related Series of Notes shall be issued in Book-Entry Form, and the Note
Issuer shall execute and the Indenture Trustee shall, in accordance with this
Section and the Issuer Order with respect to such Series, authenticate and
deliver one or more Global Notes, evidencing the Notes of such Series which
(i) shall be an aggregate original principal amount equal to the aggregate
original principal amount of such Notes to be issued pursuant to the
applicable Issuer Order, (ii) shall be registered in the name of the Clearing
Agency therefor or its nominee, which shall initially be Cede & Co., as
nominee for The Depository Trust Company, the initial Clearing Agency,
(iii) shall be delivered by the Indenture Trustee to such Clearing Agency's
or such nominee's instructions, and (iv) shall bear a legend substantially to
the following effect: "Transfers of this Global Note shall be limited to
transfers in the Clearing Agency or to a successor thereof or such
successor's nominee and transfers of portions of this Global Note shall be
limited to transfers made in accordance with the restrictions set forth in
the Indenture."
Each Clearing Agency designated pursuant to this Section 2.11 must,
at the time of its designation and at all times while it serves as Clearing
Agency hereunder, be a "clearing agency" registered under the Exchange Act
and any other applicable statute or regulation.
No Holder of any such Series of Notes issued in Book-Entry Form
shall receive a Definitive Note representing such Holder's interest in any
such Notes, except as provided in Section 2.13 or in the applicable Trustee's
Issuance Certificate or Series Supplement, if any, relating to such Notes.
Unless (and until) certificated, fully registered Notes of any Series (the
17
"Definitive Notes") have been issued to the Holders of such Series pursuant
to Section 2.13 or pursuant to any applicable Trustee's Issuance Certificate
or Series Supplement, if any, relating thereto:
(a) the provisions of this Section 2.11 shall be in full force
and effect;
(b) the Note Issuer, the Servicer, the Paying Agent, the Note
Registrar and the Indenture Trustee may deal with the Clearing Agency
for all purposes (including the making of distributions on the Notes
of such Series) as the authorized representatives of the Holders of
such Series;
(c) to the extent that the provisions of this Section 2.11
conflict with any other provisions of this Indenture, the provisions
of this Section 2.11 shall control; and
(d) the rights of Holders of such Series shall be exercised only
through the Clearing Agency and the Clearing Agency Participants and
shall be limited to those established by law and agreements between
such Holders and the Clearing Agency and/or the Clearing Agency
Participants. Unless and until Definitive Notes are issued pursuant
to Section 2.13, the initial Clearing Agency will make book-entry
transfers among the Clearing Agency Participants and receive and
transmit distributions of principal and interest on the Book-Entry
Notes to such Clearing Agency Participants.
SECTION 2.12. NOTICES TO CLEARING AGENCY. Unless and until
Definitive Notes shall have been issued to Holders of such Series pursuant to
Section 2.13 or the applicable Trustee's Issuance Certificate or Series
Supplement, if any, relating to such Notes, whenever notice, payment, or
other communication to the holders of Book-Entry Notes of any Series is
required under this Indenture, the Indenture Trustee, the Servicer and the
Paying Agent shall give all such notices and communications specified herein
to be given to Holders of such Series to the Clearing Agency.
SECTION 2.13. DEFINITIVE NOTES. If (i)(A) the Administrator
advises the Indenture Trustee in writing that the Clearing Agency is no
longer willing or able to properly discharge its responsibilities under any
Letter of Representations and (B) the Administrator is unable to locate a
qualified successor Clearing Agency, (ii) the Administrator, at its option,
advises the Indenture Trustee in writing that, with respect to any Series, it
elects to terminate the book-entry system through the Clearing Agency or
(iii) after the occurrence of a Servicer Default, Holders holding Notes
aggregating not less than 50% of the aggregate Outstanding Amount of any
Series of Notes maintained as Book-Entry Notes advise the Indenture Trustee,
the Administrator, the Note Issuer and the Clearing Agency (through the
Clearing Agency Participants) in writing that the continuation of a
book-entry system through the Clearing Agency is no longer in the best
interests of the Holders of such Series, the Administrator shall notify the
18
Clearing Agency, the Indenture Trustee and all such Holders of such Series in
writing of the occurrence of any such event and of the availability of
Definitive Notes of such Series to the Holders of such Series requesting the
same. Upon surrender to the Indenture Trustee of the Global Notes of such
Series by the Clearing Agency accompanied by registration instructions from
such Clearing Agency for registration, the Indenture Trustee shall
authenticate and deliver Definitive Notes of such Series. None of the Note
Issuer, the Note Registrar, or the Indenture Trustee shall be liable for any
delay in delivery of such instructions and may conclusively rely on, and
shall be fully protected in relying on, such instructions. Upon the issuance
of Definitive Notes of any Series, all references herein to obligations with
respect to such Series imposed upon or to be performed by the Clearing Agency
shall be deemed to be imposed upon and performed by the Indenture Trustee, to
the extent applicable with respect to such Definitive Notes and the Indenture
Trustee shall recognize the Holders of the Definitive Notes as Holders
hereunder.
SECTION 2.14. CUSIP NUMBER. The Note Issuer in issuing any Note or
Series of Notes may use a "CUSIP" number and, if so used, the Indenture Trustee
shall use the CUSIP number in any notices to the Holders thereof as a
convenience to such Holders; PROVIDED, that any such notice may state that no
representation is made as to the correctness or accuracy of the CUSIP number
printed in the notice or on the Notes and that reliance may be placed only on
the other identification numbers printed on the Notes. The Note Issuer shall
promptly notify the Indenture Trustee in writing of any change in the CUSIP
number with respect to any Note.
SECTION 2.15. LETTER OF REPRESENTATIONS. Notwithstanding anything to
the contrary in this Indenture or any Series Supplement or any Trustee's
Issuance Certificate, the parties hereto shall comply with the terms of each
Letter of Representations.
SECTION 2.16. RELEASE OF NOTE COLLATERAL. Subject to Section 11.01,
the Indenture Trustee shall release property from the lien of this Indenture
only as specified in Section 8.02(d) or upon receipt of an Issuer Request
accompanied by an Officer's Certificate, an Opinion of Counsel and Independent
Certificates in accordance with TIA Sections 314(c) and 314(d)(l) or an Opinion
of Counsel in lieu of such Independent Certificates to the effect that the TIA
does not require any such Independent Certificates.
SECTION 2.17. SPECIAL TERMS APPLICABLE TO SUBSEQUENT TRANSFERS OF
CERTAIN NOTES.
(a) Certain Series of Notes may not be registered under the
Securities Act, or the securities laws of any other jurisdiction. Consequently,
such Unregistered Notes shall not be transferable other than pursuant to an
exemption from the registration requirements of the Securities Act and
satisfaction of certain other provisions specified herein or in the related
Trustee s Issuance Certificate or Series Supplement, if any. Unless otherwise
provided in the related Trustee s Issuance Certificate or Series Supplement, if
any, no sale, pledge or other transfer of any Unregistered Note (or interest
therein) may be made by any Person unless either (i)
19
such sale, pledge or other transfer is made to a "qualified institutional
buyer" (as defined under Rule 144A under the Securities Act) or to an
"institutional accredited investor" (as described in Rule 501(a)(l), (2), (3)
or (7) under the Securities Act) and, if so requested by the Grantee or the
Indenture Trustee, such proposed transferee executes and delivers a
certificate, to such effect in form and substance satisfactory to the
Indenture Trustee and the Note Issuer, or (ii) such sale, pledge or other
transfer is otherwise made in a transaction exempt from the registration
requirements of the Securities Act, in which case (A) the Indenture Trustee
shall require that both the prospective transferor and the prospective
transferee certify to the Indenture Trustee and the Note Issuer in writing
the facts surrounding such transfer, which certification shall be in form and
substance satisfactory to the Indenture Trustee and the Note Issuer, and (B)
the Indenture Trustee shall require a written opinion of counsel (which shall
not be at the expense of the Note Issuer, the Servicer or the Indenture
Trustee) satisfactory to the Note Issuer and the Indenture Trustee to the
effect that such transfer will not violate the Securities Act. Neither the
Grantee, the Note Issuer, nor the Indenture Trustee nor the Servicer shall be
obligated to register any Unregistered Notes under the Securities Act,
qualify any Unregistered Notes under the securities laws of any state or
provide registration rights to any purchaser or holder thereof.
(b) Unless otherwise provided in the related Trustee's Issuance
Certificate or Series Supplement, the Unregistered Notes may not be acquired by
or for the account of a Benefit Plan and, by accepting and holding an
Unregistered Note, the Holder thereof shall be deemed to have represented and
warranted that it is not a Benefit Plan and, if requested to do so by the Note
Issuer or the Indenture Trustee, the Holder of an Unregistered Note shall
execute and deliver to the Indenture Trustee a certificate to such effect in
form and substance satisfactory to the Indenture Trustee and the Note Issuer.
(c) Unless otherwise provided in the related Trustee s Issuance
Certificate or Series Supplement, Unregistered Notes shall be issued in the form
of Definitive Notes, shall be in fully registered form and Sections 2.11 and
2.12 of this Indenture shall not apply thereto.
(d) Each Unregistered Note shall bear legends to the effect set forth
in subsections (a) and (b) (if subsection (b) is applicable) above.
SECTION 2.18. TAX TREATMENT. The Note Issuer and the Indenture
Trustee, by entering into this Indenture, and the Holders and any Persons
holding a beneficial interest in any Note, by acquiring any Note or interest
therein, (i) express their intention that the Notes qualify under applicable tax
law as indebtedness of ComEd secured by the Note Collateral and (ii) agree to
treat the Notes as indebtedness of ComEd secured by the Note Collateral for the
purpose of federal income, state and local income and franchise taxes, and any
other taxes imposed upon, measured by or based upon gross or net income, unless
otherwise required by appropriate taxing authorities.
20
SECTION 2.19. STATE PLEDGE. At the Closing Date, under the laws
of the State of Illinois and the United States in effect on the Closing Date,
the State of Illinois has agreed with the Holders, pursuant to Section
18-105(b) of the Funding Law, as follows:
"(b) The State pledges to and agrees with the holders of any transitional
funding instruments who may enter into contracts with an electric utility,
grantee, assignee or issuer pursuant to this Article XVIII that the State
will not in any way limit, alter, impair or reduce the value of intangible
transition property created by, or instrument funding charges approved by,
a transitional funding order so as to impair the terms of any contract made
by such electric utility, grantee, assignee or issuer with such holders or
in any way impair the rights and remedies of such holders until the
pertinent grantee instruments or, if the related transitional funding order
does not provide for the issuance of grantee instruments, the transitional
funding instruments and interest, premium and other fees, costs and charges
related thereto, as the case may be, are fully paid and discharged.
Electric utilities, grantees and issuers are authorized to include these
pledges and agreements of the State in any contract with the holders of
transitional funding instruments or with any assignees pursuant to this
Article XVIII and any assignees are similarly authorized to include these
pledges and agreements of the State in any contract with any issuer, holder
or any other assignee. Nothing in this Article XVIII shall preclude the
State of Illinois from requiring adjustments as may otherwise be allowed by
law to the electric utility's base rates, transition charges, delivery
services charges, or other charges for tariffed services, so long as any
such adjustment does not directly affect or impair any instrument funding
charges previously authorized by a transitional funding order issued by the
[ICC]."
As a result of the foregoing pledge, the State of Illinois may not, except as
provided in the succeeding sentence, in any way limit, alter, impair or
reduce the value of the ITP or the IFCs in a manner substantially impairing
this Indenture or the rights and remedies of the Holders (and, consequently,
may not revoke, reduce, postpone or terminate any Funding Order or the rights
of the Holders to receive IFC Payments and all other proceeds of the 1998
Transition Property), until the Notes, together with interest thereon, are
fully paid and discharged. Notwithstanding the immediately preceding
sentence, the State of Illinois would be allowed to effect a temporary
impairment of the Holders' rights if it could be shown that such impairment
was necessary to advance a significant and legitimate public purpose.
ARTICLE III
COVENANTS
SECTION 3.01. PAYMENT OF PRINCIPAL, PREMIUM, IF ANY, AND INTEREST.
The principal of and premium, if any, and interest on the Notes will be duly
and punctually paid in accordance with the terms of the Notes and this
Indenture. Amounts properly withheld under the Code or other tax laws by any
Person from a payment to any Holder of interest or principal or
21
premium, if any, shall be considered as having been paid by the Note Issuer
to such Holder for all purposes of this Indenture.
SECTION 3.02. MAINTENANCE OF OFFICE OR AGENCY. The Note Issuer
will maintain in the Borough of Manhattan, the City of New York, an office
or agency at 00 Xxxx Xxxxxx, Xxxx Xxxxxx Plaza, 19th Floor, New York, New
York 10005 where Notes may be surrendered for registration of transfer or
exchange. The Note Issuer hereby initially appoints the Indenture Trustee to
serve as its agent for the foregoing purposes. The Note Issuer will give
prompt written notice to the Indenture Trustee of the location, and of any
change in the location, of any such office or agency. If at any time the
Note Issuer shall fail to maintain any such office or agency or shall fail to
furnish the Indenture Trustee with the address thereof, such surrenders may
be made at the Corporate Trust Office of the Indenture Trustee, and the Note
Issuer hereby appoints the Indenture Trustee as its agent to receive all such
surrenders.
SECTION 3.03. MONEY FOR PAYMENTS TO BE HELD IN TRUST. As provided
in Section 8.02(a), all payments of amounts due and payable with respect to
any Notes that are to be made from amounts withdrawn from the Collection
Account pursuant to Section 8.02(d) shall be made on behalf of the Note
Issuer by the Indenture Trustee or by another Paying Agent, and no amounts so
withdrawn from the Collection Account for payments with respect to any Notes
shall be paid over to the Note Issuer except as provided in this Section and
Section 8.02.
The Note Issuer will cause each Paying Agent other than the
Indenture Trustee to execute and deliver to the Indenture Trustee an
instrument in which such Paying Agent shall agree with the Indenture Trustee
(and if the Indenture Trustee acts as Paying Agent, it hereby so agrees),
subject to the provisions of this Section, that such Paying Agent will:
(i) hold all sums held by it for the payment of amounts due with
respect to the Notes in trust for the benefit of the Persons entitled
thereto until such sums shall be paid to such Persons or otherwise disposed
of as herein provided and pay such sums to such Persons as herein provided;
(ii) give the Indenture Trustee written notice of any default by the
Note Issuer of which it has actual knowledge in the making of any payment
required to be made with respect to the Notes;
(iii) at any time during the continuance of any such default, upon
the written request of the Indenture Trustee, forthwith pay to the
Indenture Trustee all sums so held in trust by such Paying Agent;
(iv) immediately resign as a Paying Agent and forthwith pay to the
Indenture Trustee all sums held by it in trust for the payment of Notes if
at any time it determines that it has ceased to meet the standards required
to be met by a Paying Agent at the time of such determination; and
22
(v) comply with all requirements of the Code and other tax laws with
respect to the withholding from any payments made by it on any Notes of any
applicable withholding taxes imposed thereon and with respect to any
applicable reporting requirements in connection therewith.
The Note Issuer may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, by
Issuer Order direct any Paying Agent to pay to the Indenture Trustee all sums
held in trust by such Paying Agent, such sums to be held by the Indenture
Trustee upon the same trusts as those upon which the sums were held by such
Paying Agent; and upon such payment by any Paying Agent to the Indenture
Trustee, such Paying Agent shall be released from all further liability with
respect to such money.
Subject to applicable laws with respect to escheat of funds, any
money held by the Indenture Trustee or any Paying Agent in trust for the
payment of any amount due with respect to any Note and remaining unclaimed
for two years after such amount has become due and payable shall be
discharged from such trust and be paid to the Note Issuer on an Issuer
Request; and, subject to Section 11.16, the Holder of such Note shall
thereafter, as an unsecured general creditor, look only to the Note Issuer
for payment thereof (but only to the extent of the amounts so paid to the
Note Issuer), and all liability of the Indenture Trustee or such Paying Agent
with respect to such trust money shall thereupon cease; PROVIDED, HOWEVER,
that the Indenture Trustee or such Paying Agent, before being required to
make any such repayment, may at the expense of the Note Issuer, cause to be
published once, in a newspaper published in the English language, customarily
published on each Business Day and of general circulation in the City of
Chicago, notice that such money remains unclaimed and that, after a date
specified therein, which shall not be less than 30 days from the date of such
publication, any unclaimed balance of such money then remaining will be
repaid to the Note Issuer. The Indenture Trustee may also adopt and employ,
at the expense of the Note Issuer, any other reasonable means of notification
of such repayment (including, but not limited to, mailing notice of such
repayment to Holders whose Notes have been called but have not been
surrendered for redemption or whose right to or interest in moneys due and
payable but not claimed is determinable from the records of the Indenture
Trustee or of any Paying Agent, at the last address of record for each such
Holder).
SECTION 3.04. EXISTENCE. The Note Issuer will keep in full effect
its existence, rights and franchises as a business trust under the laws of the
State of Delaware (unless it becomes, or any successor Note Issuer hereunder is
or becomes, organized under the laws of any other State or of the United States
of America, in which case the Note Issuer will keep in full effect its
existence, rights and franchises under the laws of such other jurisdiction) and
will obtain and preserve its qualification to do business in each jurisdiction
in which such qualification is or shall be necessary to protect the validity and
enforceability of this Indenture, the Notes, the Note Collateral and each other
instrument or agreement included in the Note Collateral.
SECTION 3.05. PROTECTION OF NOTE COLLATERAL The Note Issuer will
from time to time execute and deliver all such supplements and amendments hereto
and all filings with the ICC
23
pursuant to the Funding Order or to the Funding Law and all financing
statements, continuation statements, instruments of further assurance and
other instruments, and will take such other action necessary or advisable to:
(i) maintain or preserve the lien and security interest (and the
priority thereof) of this Indenture or carry out more effectively the
purposes hereof;
(ii) perfect, publish notice of or protect the validity of any Grant
made or to be made by this Indenture;
(iii) enforce any of the Note Collateral;
(iv) preserve and defend title to the Note Collateral and the rights
of the Indenture Trustee and the Holders in such Note Collateral against
the Claims of all Persons and parties, including the challenge by any party
to the validity or enforceability of any Funding Order, any Tariff, the
Intangible Transition Property or any proceeding relating thereto and
institute any action or proceeding necessary to compel performance by the
ICC or the State of Illinois of any of its obligations or duties under the
Funding Law, the State Pledge, or any Funding Order; or
(v) pay any and all taxes levied or assessed upon all or any part of
the Note Collateral.
The Note Issuer hereby designates the Indenture Trustee its agent and
attorney-in-fact to execute any filings with the ICC, financing statements,
continuation statements or other instrument required by the Indenture Trustee
pursuant to this Section, it being understood that the Indenture Trustee
shall have no such obligation or any duty to prepare such documents.
SECTION 3.06. OPINIONS AS TO NOTE COLLATERAL. (a) On the Series
Issuance Date for each Series (including the Closing Date), the Note Issuer
shall furnish to the Indenture Trustee an Opinion of Counsel either stating
that, in the opinion of such counsel, such action has been taken with respect to
the recording and filing of this Indenture, any indentures supplemental hereto,
and any other requisite documents, and with respect to the execution and filing
of any filings with the ICC pursuant to the Funding Law and the applicable
Funding Order and any financing statements and continuation statements, as are
necessary to perfect and make effective the lien and security interest of this
Indenture and reciting the details of such action, or stating that, in the
opinion of such counsel, no such action is necessary to make such lien and
security interest effective.
(b) On or before [September 30] in each calendar year, while any
Series is outstanding, beginning on _________, 1999, the Note Issuer shall
furnish to the Indenture Trustee an Opinion of Counsel either stating that, in
the opinion of such counsel, such action has been taken with respect to the
recording, filing, re-recording and refiling of this Indenture, any
24
indentures supplemental hereto and any other requisite documents and with
respect to the execution and filing of any filings with the ICC pursuant to
the Funding Law and the Funding Order and any financing statements and
continuation statements as is necessary to maintain the lien and security
interest created by this Indenture and reciting the details of such action or
stating that in the opinion of such counsel no such action is necessary to
maintain such lien and security interest. Such Opinion of Counsel shall also
describe the recording, filing, re-recording and refiling of this Indenture,
any indentures supplemental hereto and any other requisite documents and the
execution and filing of any filings with the ICC, financing statements and
continuation statements that will, in the opinion of such counsel, be
required to maintain the lien and security interest created by this Indenture
until [September 30] in the following calendar year.
(c) Prior to the effectiveness of any Subsequent Sale Agreement or
any amendment to any Sale Agreement, the Note Issuer shall furnish to the
Indenture Trustee an Opinion of Counsel either (A) stating that, in the
opinion of such counsel, all filings, including filings with the ICC pursuant
to the Funding Law, or the Funding Order, have been executed and filed that
are necessary fully to preserve and protect the interest of the Note Issuer
and the Indenture Trustee in the Intangible Transition Property and the
proceeds thereof, and reciting the details of such filings or referring to
prior Opinions of Counsel in which such details are given, or (B) stating
that, in the opinion of such counsel, no such action shall be necessary to
preserve and protect such interest.
SECTION 3.07. PERFORMANCE OF OBLIGATIONS; SERVICING; SEC FILINGS.
(a) The Note Issuer (i) will diligently pursue any and all actions to enforce
its rights under each instrument or agreement included in the Note Collateral
and (ii) will not take any action and will use its best efforts not to permit
any action to be taken by others that would release any Person from any of
such Person's covenants or obligations under any such instrument or agreement
or that would result in the amendment, hypothecation, subordination,
termination or discharge of, or impair the validity or effectiveness of, any
such instrument or agreement, except, in each case, as expressly provided in
this Indenture, any Trustee's Issuance Certificate, any Series Supplement,
the Sale Agreement, any Subsequent Sale Agreement related to the applicable
Note Collateral, the Servicing Agreement, the Administration Agreement or
such other instrument or agreement.
(b) The Note Issuer may contract with other Persons to assist it
in performing its duties under this Indenture, and any performance of such
duties by a Person identified to the Indenture Trustee herein or in an
Officer's Certificate of the Note Issuer shall be deemed to be action taken
by the Note Issuer. Initially, the Note Issuer has contracted with the
Administrator to assist the Note Issuer in performing its duties under this
Indenture.
(c) The Note Issuer will punctually perform and observe all of its
obligations and agreements contained in this Indenture, the Basic Documents and
in the instruments and agreements included in the Note Collateral, including,
but not limited to, filing or causing to be filed all filings with the ICC
pursuant to the Funding Law or the Funding Order, all UCC financing statements
and continuation statements required to be filed by it by the terms of this
25
Indenture, the Sale Agreement, any Subsequent Sale Agreement and the Servicing
Agreement in accordance with and within the time periods provided for herein and
therein.
(d) If the Note Issuer shall have knowledge of the occurrence of a
Servicer Default under the Servicing Agreement, the Note Issuer shall promptly
give written notice thereof to the Indenture Trustee and the Rating Agencies,
and shall specify in such notice the response or action, if any, the Note Issuer
has taken or is taking with respect of such default. If a Servicer Default
shall arise from the failure of the Servicer to perform any of its duties or
obligations under the Servicing Agreement with respect to the Intangible
Transition Property or the IFCs, the Note Issuer shall take all reasonable steps
available to it to remedy such failure.
(e) As promptly as possible after the giving of notice of termination
to the Servicer and the Rating Agencies of the Servicer's rights and powers
pursuant to Section 7.01 of the Servicing Agreement, the Note Issuer shall
appoint a successor Servicer (the "Successor Servicer") with the Grantee's
prior written consent thereto (which consent shall not be unreasonably
withheld), and such Successor Servicer shall accept its appointment by a written
assumption in a form acceptable to the Grantee, the Note Issuer and the
Indenture Trustee. A Person shall qualify as a Successor Servicer only if such
Person satisfies the requirements of the Servicing Agreement. If within 30 days
after the delivery of the notice referred to above, the Note Issuer shall not
have obtained such a Successor Servicer, the Indenture Trustee may petition the
ICC or a court of competent jurisdiction to appoint a Successor Servicer. In
connection with any such appointment, the Grantee may make such arrangements for
the compensation of such Successor Servicer as it and such successor shall
agree, subject to the limitations set forth below and in the Servicing
Agreement.
(f) Upon any termination of the Servicer's rights and powers pursuant
to the Servicing Agreement, the Indenture Trustee shall promptly notify the Note
Issuer, the Holders and the Rating Agencies. As soon as a Successor Servicer is
appointed, the Indenture Trustee shall notify the Grantee, the Note Issuer, the
Holders and the Rating Agencies of such appointment, specifying in such notice
the name and address of such Successor Servicer.
(g) Without derogating from the absolute nature of the assignment
Granted to the Indenture Trustee under this Indenture or the rights of the
Indenture Trustee hereunder, the Note Issuer agrees that it will not, without
the prior written consent of the Indenture Trustee or the Holders of at least
a majority in Outstanding Amount of the Notes of all Series, amend, modify,
waive, supplement, terminate or surrender, or agree to any amendment,
modification, supplement, termination, waiver or surrender of, the terms of
any Note Collateral or the Basic Documents, or waive timely performance or
observance by ComEd, the Grantee or the Servicer under the Grant Agreement,
any Subsequent Grant Agreement, the Sale Agreement any Subsequent Sale
Agreement or the Servicing Agreement, respectively; PROVIDED, that no such
consent shall be required if (i) the Indenture Trustee shall have received
an Officer's Certificate stating that such waiver, amendment, modification,
supplement or termination shall not adversely affect in any material respect
the interests of the Holders and (ii) the Rating Agency Condition
26
shall have been satisfied with respect thereto. If any such amendment,
modification, supplement or waiver shall be so consented to by the Indenture
Trustee or such Holders, the Note Issuer agrees to execute and deliver, in
its own name and at its own expense, such agreements, instruments, consents
and other documents as shall be necessary or appropriate in the
circumstances. The Note Issuer agrees that no such amendment, modification,
supplement or waiver shall adversely affect the rights of the Holders of the
Notes outstanding at the time of any such amendment, modification, supplement
or waiver.
(h) The Note Issuer shall, or shall cause the Administrator to,
file with the SEC such periodic reports, if any, as are required from time to
time under Section 13 of the Exchange Act.
(i) The Note Issuer shall make all filings required under the
Funding Law relating to the transfer of the ownership or security interest in
the Intangible Transition Property other than those required to be made by
the Grantee pursuant to the Basic Documents.
SECTION 3.08. CERTAIN NEGATIVE COVENANTS.
(a) The Note Issuer shall not issue Notes in an aggregate initial
Outstanding Amount (i) during the twelve-month period beginning on August 1,
1998 in excess of $3,400,000,000; and (ii) on any date from and after July
31, 1999, in excess of $6,800,000,000, less the aggregate initial Outstanding
Amount of any Notes issued on or prior to July 31, 1999.
(b) So long as any Notes are Outstanding, the Note Issuer shall
not:
(i) except as expressly permitted by this Indenture, sell, transfer,
exchange or otherwise dispose of any of the properties or assets of the
Note Issuer, including those included in the Note Collateral, unless
directed to do so by the Indenture Trustee in accordance with Article V;
(ii) claim any credit on, or make any deduction from the principal or
premium, if any, or interest payable in respect of, the Notes (other than
amounts properly withheld from such payments under the Code or other tax
laws) or assert any claim against any present or former Holder by reason of
the payment of the taxes levied or assessed upon any part of the Note
Collateral;
(iii) terminate its existence or dissolve or liquidate in whole or in
part; or
(iv) (A) permit the validity or effectiveness of this Indenture to be
impaired, or permit the lien of this Indenture to be amended, hypothecated,
subordinated, terminated or discharged, or permit any Person to be released
from any covenants or obligations with respect to the Notes under this
Indenture except as may be expressly permitted hereby, (B) permit any lien,
charge, excise, claim, security interest, mortgage or other
27
encumbrance (other than the lien of this Indenture), to be created on or
extend to or otherwise arise upon or burden the Note Collateral or any
part thereof or any interest therein or the proceeds thereof (other than
tax liens arising by operation of law with respect to amounts not yet
due) or (C) permit the lien of this Indenture not to constitute a valid
first priority security interest in the Note Collateral; or
(v) elect to be classified as an association taxable as a corporation
for federal income tax purposes.
SECTION 3.09. ANNUAL STATEMENT AS TO COMPLIANCE. The Note Issuer
will deliver to the Indenture Trustee and the Rating Agencies not later than
[September 30] of each year (commencing with _________), an Officer's
Certificate stating, as to the Responsible Officer signing such Officer's
Certificate, that
(i) a review of the activities of the Note Issuer during the
preceding twelve months ended [________] and of performance under this
Indenture has been made under such Responsible Officer's supervision; and
(ii) to the best of such Responsible Officer's knowledge, based on
such review, the Note Issuer has in all material respects complied with all
conditions and covenants under this Indenture throughout such twelve month
period, or, if there has been a default in the compliance of any such
condition or covenant, specifying each such default known to such
Responsible Officer and the nature and status thereof.
SECTION 3.10. NOTE ISSUER MAY CONSOLIDATE, ETC., ONLY ON CERTAIN
TERMS. (a) The Note Issuer shall not consolidate or merge with or into any
other Person, unless
(i) the Person (if other than the Note Issuer) formed by or surviving
such consolidation or merger shall be a Person organized and existing under
the laws of the United States of America or any State and shall expressly
assume, by an indenture supplemental hereto, executed and delivered to the
Indenture Trustee, in form and substance satisfactory to the Indenture
Trustee, the performance or observance of every agreement and covenant of
this Indenture on the part of the Note Issuer to be performed or observed,
all as provided herein and in the applicable Trustee's Issuance
Certificates and Series Supplements, if any;
(ii) immediately after giving effect to such merger or consolidation,
no Default or Event of Default shall have occurred and be continuing;
(iii) the Rating Agency Condition shall have been satisfied with
respect to such merger or consolidation;
28
(iv) ComEd shall have delivered to the Grantee, the Note Issuer, the
Delaware Trustee and the Indenture Trustee an opinion of independent tax
counsel (as selected by, and in form and substance reasonably satisfactory
to, ComEd, and which may be based on a ruling from the Internal Revenue
Service) to the effect that such consolidation or merger will not result in
a material adverse federal income tax consequence to ComEd, the Grantee,
the Note Issuer, the Delaware Trustee, the Indenture Trustee or the then
existing Holders;
(v) any action as is necessary to maintain the lien and security
interest created by this Indenture shall have been taken; and
(vi) the Note Issuer shall have delivered to the Indenture Trustee an
Officer's Certificate and an Opinion of Counsel each stating that such
consolidation or merger and such supplemental indenture comply with this
Section 3.10(a) and that all conditions precedent herein provided for in
this Section 3.10(a) with respect to such transaction have been complied
with (including any filing required by the Exchange Act).
(b) Except as specifically provided herein, the Note Issuer shall not
sell, convey, exchange, transfer or otherwise dispose of any of its properties
or assets included in the Note Collateral, to any Person, unless
(i) the Person that acquires the properties and assets of the Note
Issuer, the conveyance or transfer of which is hereby restricted shall (A)
be a United States citizen or a Person organized and existing under the
laws of the United States of America or any State, (B) expressly assumes,
by an indenture supplemental hereto, executed and delivered to the
Indenture Trustee, in form and substance satisfactory to the Indenture
Trustee, the performance or observance of every agreement and covenant of
this Indenture on the part of the Note Issuer to be performed or observed,
all as provided herein and in the applicable Trustee's Issuance
Certificates or Series Supplements, if any, (C) expressly agrees by means
of such supplemental indenture that all right, title and interest so sold,
conveyed, exchanged, transferred or otherwise disposed of shall be subject
and subordinate to the rights of Holders of the Notes, (D) unless otherwise
provided in the supplemental indenture referred to in clause (B) above,
expressly agrees to indemnify, defend and hold harmless the Note Issuer
against and from any loss, liability or expense arising under or related to
this Indenture and the Notes and (E) expressly agrees by means of such
supplemental indenture that such Person (or if a group of Persons, then one
specified Person) shall make all filings with the SEC (and any other
appropriate Person) required by the Exchange Act in connection with the
Notes;
29
(ii) immediately after giving effect to such transaction, no Default
or Event of Default shall have occurred and be continuing;
(iii) the Rating Agency Condition shall have been satisfied with
respect to such transaction;
(iv) ComEd shall have delivered to the Grantee, the Note Issuer, the
Delaware Trustee and the Indenture Trustee an opinion of independent tax
counsel (as selected by, and in form and substance reasonably satisfactory
to, ComEd, and which may be based on a ruling from the Internal Revenue
Service) to the effect that such transaction will not result in a material
adverse federal income tax consequence to ComEd, the Grantee, the Note
Issuer, the Delaware Trustee, the Indenture Trustee or the then existing
Holders;
(v) any action as is necessary to maintain the lien and security
interest created by this Indenture pursuant to the Funding Order or the
Funding Law shall have been taken; and
(vi) the Note Issuer shall have delivered to the Indenture Trustee an
Officer's Certificate and an Opinion of Counsel each stating that such
sale, conveyance, exchange, transfer or other disposition and such
supplemental indenture comply with this Section 3.10(b) and that all
conditions precedent herein provided for in this Section 3.10(b) with
respect to such transaction have been complied with (including any filing
required by the Exchange Act).
SECTION 3.11. SUCCESSOR OR TRANSFEREE. (a) Upon any consolidation or
merger of the Note Issuer in accordance with Section 3.10(a), the Person formed
by or surviving such consolidation or merger (if other than the Note Issuer)
shall succeed to, and be substituted for, and may exercise every right and power
of, the Note Issuer under this Indenture with the same effect as if such Person
had been named as the Note Issuer herein.
(b) Except as set forth in Section 6.07, upon a sale, conveyance,
exchange, transfer or other disposition of all the assets and properties of the
Note Issuer pursuant to Section 3.10(b), the Note Issuer and the Grantee will be
released from every covenant and agreement of this Indenture and the other Basic
Documents to be observed or performed on the part of the Note Issuer and the
Grantee with respect to the Notes and the Intangible Transition Property
immediately upon the delivery of written notice to the Indenture Trustee from
the Person acquiring such assets and properties stating that the Note Issuer and
the Grantee are to be so released.
SECTION 3.12. NO OTHER BUSINESS. The Note Issuer shall not engage in
any business other than financing, purchasing, owning and managing the
Intangible Transition Property and the other Note Collateral and the issuance of
the Notes in the manner contemplated
30
by the Funding Order and this Indenture and the Basic Documents and
activities incidental thereto.
SECTION 3.13. NO BORROWING. The Note Issuer shall not issue,
incur, assume, guarantee or otherwise become liable, directly or indirectly,
for any indebtedness except for the Notes.
SECTION 3.14. SERVICER'S OBLIGATIONS. The Note Issuer shall
enforce the Servicer's compliance with all of the Servicer's material
obligations under the Servicing Agreement.
SECTION 3.15. GUARANTEES, LOANS, ADVANCES AND OTHER LIABILITIES.
Except as otherwise contemplated by the Sale Agreement, any Subsequent Sale
Agreement, the Servicing Agreement or this Indenture, the Note Issuer shall
not make any loan or advance or credit to, or guarantee (directly or
indirectly or by an instrument having the effect of assuring another's
payment or performance on any obligation or capability of so doing or
otherwise), endorse or otherwise become contingently liable, directly or
indirectly, in connection with the obligations, stocks or dividends of, or
own, purchase, repurchase or acquire (or agree contingently to do so) any
stock, obligations, assets or securities of, or any other interest in, or
make any capital contribution to, any other Person.
SECTION 3.16. CAPITAL EXPENDITURES. Other than the purchase of
Intangible Transition Property from the Grantee on each Series Issuance Date
and other than expenditures made out of available funds in an aggregate
amount not to exceed $25,000 in any calendar year, the Note Issuer shall not
make any expenditure (by long-term or operating lease or otherwise)for
capital assets (either realty or personalty).
SECTION 3.17. RESTRICTED PAYMENTS. The Note Issuer shall not,
directly or indirectly, (i) pay any dividend or make any distribution (by
reduction of capital or otherwise), whether in cash, property, securities or a
combination thereof, to any owner of a beneficial interest in the Note Issuer or
otherwise with respect to any ownership or equity interest or similar security
in or of the Note Issuer, (ii) redeem, purchase, retire or otherwise acquire for
value any such ownership or equity interest or similar security or (iii) set
aside or otherwise segregate any amounts for any such purpose; PROVIDED,
HOWEVER, that, if no Event of Default shall have occurred and be continuing, the
Note Issuer may make, or cause to be made, any such distributions to any owner
of a beneficial interest in the Note Issuer or otherwise with respect to any
ownership or equity interest or similar security in or of the Note Issuer using
funds distributed to the Note Issuer pursuant to Section 8.02(d) to the extent
that such distributions would not cause the book value of the remaining equity
in the Note Issuer to decline below 0.5 percent of the original principal amount
of all Series of Notes which remain outstanding. The Note Issuer will not,
directly or indirectly, make payments to or distributions from the Collection
Account except in accordance with this Indenture and the Basic Documents.
31
SECTION 3.18. NOTICE OF EVENTS OF DEFAULT. The Note Issuer agrees
to give the Indenture Trustee and the Rating Agencies prompt written notice
of each Event of Default hereunder and each default on the part of the
Grantee or the Servicer of its obligations under the Sale Agreement, any
Subsequent Sale Agreement or the Servicing Agreement, respectively.
SECTION 3.19. FURTHER INSTRUMENTS AND ACTS. Upon request of the
Indenture Trustee, the Note Issuer will execute and deliver such further
instruments and do such further acts as may be reasonably necessary or proper
to carry out more effectively the purpose of this Indenture.
SECTION 3.20. PURCHASE OF SUBSEQUENT TRANSITION PROPERTY. (a)
The Note Issuer may from time to time purchase Subsequent Transition Property
from the Grantee pursuant to a Subsequent Sale Agreement, subject to the
conditions specified in paragraph (b) below.
(b) The Note Issuer shall be permitted to purchase from the Grantee
Subsequent Transition Property and the proceeds thereof only upon the
satisfaction of each of the following conditions on or prior to the related
Subsequent Sale Date:
(i) the Grantee shall have provided the Note Issuer, the Indenture
Trustee and the Rating Agencies with written notice, which shall be given
not later than 10 days prior to the related Subsequent Sale Date,
specifying the Subsequent Sale Date for such Subsequent Transition
Property and the aggregate amount of the IFCs related to such Subsequent
Transition Property, and shall have provided any information reasonably
requested by any of the foregoing Persons with respect to the Subsequent
Transition Property then being conveyed to the Note Issuer;
(ii) ComEd, the Grantee and the Note Issuer shall have delivered to
the Indenture Trustee a duly executed Subsequent Grant Agreement in
substantially the form of the Grant Agreement and a duly executed
Subsequent Sale Agreement in substantially the form of the Sale Agreement
and a filing shall have been made pursuant to Section 18-107 of the Funding
Law;
(iii) as of such Subsequent Sale Date, the Grantee was not insolvent
and will not have been made insolvent by such transfer and the Grantee is
not aware of any pending insolvency with respect to itself;
(iv) the Rating Agency Condition shall have been satisfied with
respect to such conveyance;
(v) ComEd shall have delivered to the Grantee, the Note Issuer, the
Delaware Trustee and the Indenture Trustee an opinion of independent tax
counsel and/or a ruling from the Internal Revenue Service (as selected by,
and in form and substance reasonably
32
satisfactory to, ComEd) to the effect that, for federal income tax
purposes (i) the ICC's issuance of the Subsequent Funding Order creating
and establishing the Subsequent Transition Property in the Grantee, and
the assignment pursuant to such Subsequent Sale Agreement of such
Subsequent Transition Property, will not result in gross income to the
Grantee, the Note Issuer or ComEd, and the future revenues relating to
the Subsequent Transition Property and the assessment of the IFCs
authorized in such Subsequent Funding Order (except for revenue related
to certain lump-sum payments) will be included in ComEd's gross income
in the year in which the related electrical service is provided to
Customers, and (ii) the assignment pursuant to such Subsequent Sale
Agreement will not adversely affect the characterization of the then
Outstanding Notes as obligations of ComEd;
(vi) as of such Subsequent Sale Date, no breach by ComEd of its
representations, warranties or covenants in the related Subsequent Grant
Agreement and no breach by the Grantee of its representations, warranties
or covenants in the related Subsequent Sale Agreement and no Servicer
Default shall exist;
(vii) as of such Subsequent Sale Date, the Note Issuer shall have
sufficient funds available to pay the purchase price for the Subsequent
Transition Property to be conveyed on such date and all conditions to the
issuance of one or more Series of Notes intended to provide such funds set
forth in Section 2.10 of this Indenture shall have been satisfied;
(viii) the Note Issuer shall have delivered to the Indenture Trustee
an Officer's Certificate confirming the satisfaction of each condition
precedent specified in this paragraph (b);
(ix) (A) the Note Issuer shall have delivered to the Rating Agencies
any Opinions of Counsel requested by the Rating Agencies and (B) the Note
Issuer shall have delivered to the Indenture Trustee the Opinion of Counsel
required by Section 3.06(c) of this Indenture; and
(x) the Grantee and the Note Issuer shall have taken any action
required to maintain the first perfected ownership interest of the Note
Issuer in the Subsequent Transition Property and the proceeds thereof, and
the Note Issuer shall have taken any action required to maintain the first
perfected security interest of the Indenture Trustee in the Subsequent
Transition Property and the proceeds thereof.
33
ARTICLE IV
SATISFACTION AND DISCHARGE; DEFEASANCE
SECTION 4.01. SATISFACTION AND DISCHARGE OF INDENTURE; DEFEASANCE.
(a) This Indenture shall cease to be of further effect with respect to the Notes
of any Series and the Indenture Trustee, on reasonable demand of and at the
expense of the Note Issuer, shall execute proper instruments acknowledging
satisfaction and discharge of this Indenture with respect to the Notes of such
Series, when
(A) either
(1) all Notes of such Series theretofore authenticated and
delivered (other than (i) Notes that have been destroyed, lost or
stolen and that have been replaced or paid as provided in Section 2.06
and (ii) Notes for whose payment money has theretofore been deposited
in trust or segregated and held in trust by the Note Issuer and
thereafter repaid to the Note Issuer or discharged from such trust, as
provided in Section 3.03) have been delivered to the Indenture Trustee
for cancellation; or
(2) either (x) the Scheduled Maturity Date has occurred with
respect to all Notes of such Series not theretofore delivered to the
Indenture Trustee for cancellation, (y) such Notes will be due and
payable on their respective Scheduled Maturity Dates within one year,
or (z) such Notes are to be called for redemption within one year in
accordance with the provisions of the applicable Trustee's Issuance
Certificate or Series Supplement, if any, and in any such case, the
Note Issuer has irrevocably deposited or caused to be irrevocably
deposited with the Indenture Trustee cash, in trust for such purpose,
in an amount sufficient to pay and discharge the entire indebtedness
on such Notes not theretofore delivered to the Indenture Trustee for
cancellation when due;
(B) the Note Issuer has paid or caused to be paid all other sums
payable hereunder by the Note Issuer with respect to such Series; and
(C) the Note Issuer has delivered to the Indenture Trustee an
Officer's Certificate, an Opinion of Counsel and (if required by the TIA or
the Indenture Trustee) an Independent Certificate from a firm of certified
public accountants, each meeting the applicable requirements of Section
11.01(a) and each stating that all conditions precedent herein provided for
relating to the satisfaction and discharge of this Indenture with respect
to Notes of such Series have been complied with.
(b) Subject to Sections 4.01(c) and 4.02, the Note Issuer at any time
may terminate (i) all its obligations under this Indenture with respect to the
Notes of any Series ("Legal
34
Defeasance Option") or (ii) its obligations under Sections 3.04, 3.05, 3.06,
3.07, 3.08, 3.09, 3.10, 3.12, 3.13, 3.14, 3.15, 3.16, 3.17, 3.18 AND 3.19
and the operation of Section 5.01(iv) ("Covenant Defeasance Option") with
respect to any Series of Notes. The Note Issuer may exercise the Legal
Defeasance Option with respect to any Series of Notes notwithstanding its
prior exercise of the Covenant Defeasance Option with respect to such Series.
If the Note Issuer exercises the Legal Defeasance Option with respect
to any Series, the maturity of the Notes of such Series may not be accelerated
because of an Event of Default. If the Note Issuer exercises the Covenant
Defeasance Option with respect to any Series, the maturity of the Notes of such
Series may not be accelerated because of an Event of Default specified in
Section 5.01(iv).
Upon satisfaction of the conditions set forth herein to the
exercise of the Legal Defeasance Option or the Covenant Defeasance Option
with respect to any Series of Notes, the Indenture Trustee, on reasonable
demand of and at the expense of the Note Issuer, shall execute proper
instruments acknowledging satisfaction and discharge of the obligations that
are terminated pursuant to such exercise.
(c) Notwithstanding Sections 4.01(a) and 4.01(b) above, (i) rights
of registration of transfer and exchange, (ii) substitution of mutilated,
destroyed, lost or stolen Notes, (iii) rights of Holders to receive payments
of principal, premium, if any, and interest, (iv) Sections 4.03 and 4.04, (v)
the rights, obligations and immunities of the Indenture Trustee hereunder
(including the rights of the Indenture Trustee under Section 6.07 and the
obligations of the Indenture Trustee under Section 4.03) and (vi) the rights
of Holders as beneficiaries hereof with respect to the property deposited
with the Indenture Trustee payable to all or any of them, shall survive until
the Notes of the Series as to which this Indenture or certain obligations
hereunder have be satisfied and discharged pursuant to Section 4.01(a) or
4.01(b) have been paid in full. Thereafter the obligations in Sections 6.07
and 4.04 with respect to such Series shall survive.
SECTION 4.02. CONDITIONS TO DEFEASANCE. The Note Issuer may
exercise the Legal Defeasance Option or the Covenant Defeasance Option with
respect to any Series of Notes only if:
(a) the Note Issuer irrevocably deposits or causes to be deposited in
trust with the Indenture Trustee cash or U.S. Government Obligations for
the payment of principal of and premium, if any, and interest on such Notes
to the Scheduled Maturity Dates or Optional Redemption Date therefor, as
applicable;
(b) the Note Issuer delivers to the Indenture Trustee a certificate
from a nationally recognized firm of Independent accountants expressing its
opinion that the payments of principal and interest when due and without
reinvestment of the deposited U.S. Government Obligations plus any
deposited cash without investment will provide cash at such times and in
such amounts (but, in the case of the Legal Defeasance Option only, not
35
more than such amounts) as will be sufficient to pay in respect of the
Notes of such Series (i) subject to clause (ii), principal in accordance
with the Expected Amortization Schedule therefor, (ii) if such Series is to
be redeemed, the Optional Redemption Price therefor on the Optional
Redemption Date and (iii) interest when due;
(c) in the case of the Legal Defeasance Option, 91 days pass after
the deposit is made and during the 91-day period no Default specified in
Section 5.01(v) or (vi) occurs which is continuing at the end of the
period;
(d) no Default has occurred and is continuing on the day of such
deposit and after giving effect thereto;
(e) in the case of an exercise of the Legal Defeasance Option, the
Note Issuer shall have delivered to the Indenture Trustee an Opinion of
Counsel stating that (i) the Note Issuer has received from, or there has
been published by, the Internal Revenue Service a ruling, or (ii) since the
date of execution of this Indenture, there has been a change in the
applicable Federal income tax law, in either case to the effect that, and
based thereon such opinion shall confirm that, the Holders of the Notes of
such Series will not recognize income, gain or loss for Federal income tax
purposes as a result of such legal defeasance and will be subject to
Federal income tax on the same amounts, in the same manner and at the same
times as would have been the case if such legal defeasance had not
occurred;
(f) in the case of an exercise of the Covenant Defeasance Option, the
Note Issuer shall have delivered to the Indenture Trustee an Opinion of
Counsel to the effect that the Holders of the Notes of such Series will not
recognize income, gain or loss for Federal income tax purposes as a result
of such covenant defeasance and will be subject to Federal income tax on
the same amounts, in the same manner and at the same times as would have
been the case if such covenant defeasance had not occurred;
(g) the Note Issuer delivers to the Indenture Trustee an Officer's
Certificate and an Opinion of Counsel, each stating that all conditions
precedent to the satisfaction and discharge of the Notes of such Series to
the extent contemplated by this Article IV have been complied with; and
(h) the Rating Agency Condition shall have been satisfied with
respect to the exercise of any Legal Defeasance Option or Covenant
Defeasance Option.
Before or after a deposit pursuant to this Section 4.02 with respect
to any Series of Notes, the Note Issuer may make arrangements satisfactory to
the Indenture Trustee for the redemption of such Notes at a future date in
accordance with Article X.
36
SECTION 4.03. APPLICATION OF TRUST MONEY. All moneys or U.S.
Government Obligations deposited with the Indenture Trustee pursuant to Section
4.01 or 4.02 hereof shall be held in trust and applied by it, in accordance with
the provisions of the Notes and this Indenture, to the payment, either directly
or through any Paying Agent, as the Indenture Trustee may determine, to the
Holders of the particular Notes for the payment or redemption of which such
moneys have been deposited with the Indenture Trustee, of all sums due and to
become due thereon for principal, premium, if any, and interest; but such moneys
need not be segregated from other funds except to the extent required herein or
in the Servicing Agreement or required by law.
SECTION 4.04. REPAYMENT OF MONEYS HELD BY PAYING AGENT. In
connection with the satisfaction and discharge of this Indenture or the Covenant
Defeasance Option or Legal Defeasance Option with respect to the Notes of any
Series, all moneys then held by any Paying Agent other than the Indenture
Trustee under the provisions of this Indenture with respect to such Notes shall,
upon demand of the Note Issuer, be paid to the Indenture Trustee to be held and
applied according to Section 3.03 and thereupon such Paying Agent shall be
released from all further liability with respect to such moneys.
ARTICLE V
REMEDIES
SECTION 5.01. EVENTS OF DEFAULT. "Event of Default" with respect to any
Series, wherever used herein, means any one of the following events (whatever
the reason for such Event of Default and whether it shall be voluntary or
involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
(i) default in the payment of any interest on any Note when the same
becomes due and payable, and such default shall continue for a period of
five days; or
(ii) default in the payment of the then unpaid principal of any Note
of any Series on the Final Maturity Date for such Series; or
(iii) default in the payment of the Optional Redemption Price for any
Note on the Optional Redemption Date therefor; or
(iv) default in the observance or performance in any material respect
of any covenant or agreement of the Note Issuer made in this Indenture
(other than defaults specified in clauses (i), (ii) or (iii) above), or any
representation or warranty of the Note Issuer made in this Indenture or in
any certificate or other writing delivered pursuant hereto or in connection
herewith proving to have been incorrect in any material respect as of the
time when the same shall have been made, and such default shall continue or
not be cured, or the circumstance or condition in respect of which such
misrepresentation or
37
warranty was incorrect shall not have been eliminated or otherwise
cured, for a period of 30 days after there shall have been given, by
registered or certified mail, to the Note Issuer by the Indenture
Trustee or to the Note Issuer and the Indenture Trustee by the Holders
of at least 25 percent of the Outstanding Amount of the Notes of such
Series, a written notice specifying such default or incorrect
representation or warranty and requiring it to be remedied and stating
that such notice is a "Notice of Default" hereunder; or
(v) the filing of a decree or order for relief by a court having
jurisdiction in the premises in respect of the Note Issuer or any
substantial part of the Note Collateral in an involuntary case under any
applicable Federal or state bankruptcy, insolvency or other similar law now
or hereafter in effect, or appointing a receiver, liquidator, assignee,
custodian, trustee, sequestrator or similar official of the Note Issuer or
for any substantial part of the Note Collateral, or ordering the winding-up
or liquidation of the Note Issuer's affairs, and such decree or order shall
remain unstayed and in effect for a period of 60 consecutive days; or
(vi) the commencement by the Note Issuer of a voluntary case under
any applicable Federal or state bankruptcy, insolvency or other similar law
now or hereafter in effect, or the consent by the Note Issuer to the entry
of an order for relief in an involuntary case under any such law, or the
consent by the Note Issuer to the appointment or taking possession by a
receiver, liquidator, assignee, custodian, trustee, sequestrator or similar
official of the Note Issuer or for any substantial part of the Note
Collateral, or the making by the Note Issuer of any general assignment for
the benefit of creditors, or the failure by the Note Issuer generally to
pay its debts as such debts become due, or the taking of action by the Note
Issuer in furtherance of any of the foregoing; or
(vii) any act or failure to act by the State of Illinois or any of
its agencies (including the ICC), officers or employees which violates or
is not in accordance with the State Pledge; or
(viii) any other event designated as such in a Trustee's Issuance
Certificate or Series Supplement, if any.
The Note Issuer shall deliver to a Responsible Officer of the
Indenture Trustee and the Rating Agencies, within five days after a Responsible
Officer of the Note Issuer has knowledge of the occurrence thereof, written
notice in the form of an Officer's Certificate of any event (i) which is an
Event of Default under clause (vii) or (ii) which with the giving of notice and
the lapse of time would become an Event of Default under clause (iv), including,
in each case, the status of such Event of Default and what action the Note
Issuer is taking or proposes to take with respect thereto.
SECTION 5.02. ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT. If
an Event of Default (other than an Event of Default under clause (vii) of
Section 5.01) should occur
38
and be continuing with respect to any Series, then and in every such case the
Indenture Trustee or the Holders of Notes representing not less than a
majority of the Outstanding Amount of the Notes of all Series may declare all
the Notes to be immediately due and payable, by a notice in writing to the
Note Issuer (and to the Indenture Trustee if given by Holders), and upon any
such declaration the unpaid principal amount of the Notes of all Series,
together with accrued and unpaid interest thereon through the date of
acceleration, shall become immediately due and payable.
At any time after such declaration of acceleration of maturity has
been made and before a judgment or decree for payment of the money due has
been obtained by the Indenture Trustee as hereinafter in this Article V
provided, the Holders of Notes representing a majority of the Outstanding
Amount of the Notes of all Series, by written notice to the Note Issuer and
the Indenture Trustee, may rescind and annul such declaration and its
consequences if:
(i) the Note Issuer has paid or deposited with the Indenture Trustee
a sum sufficient to pay:
(A) all payments of principal of and premium, if any, and
interest on all Notes of all Series and all other amounts that would
then be due hereunder or upon such Notes if the Event of Default
giving rise to such acceleration had not occurred; and
(B) all sums paid or advanced by the Indenture Trustee hereunder
and the reasonable compensation, expenses, disbursements and advances
of the Indenture Trustee and its agents and counsel; and
(ii) all Events of Default with respect to all Series, other than the
nonpayment of the principal of the Notes of all Series that has become due
solely by such acceleration, have been cured or waived as provided in
Section 5.12.
No such rescission shall affect any subsequent default or impair any
right consequent thereto.
SECTION 5.03. COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY
INDENTURE TRUSTEE. (a) If an Event of Default under Section 5.01(i), (ii) or
(iii) has occurred and is continuing with respect to any Series, subject to
Section 11.18, the Indenture Trustee, in its own name and as trustee of an
express trust, may institute a Proceeding for the collection of the sums so due
and unpaid, and may prosecute such Proceeding to judgment or final decree, and,
subject to the limitations on recourse set forth herein, may enforce the same
and collect in the manner provided by law out of the Note Collateral and the
proceeds thereof, the whole amount then due and payable on the Notes of such
Series for principal, premium, if any, and interest, with interest upon the
overdue principal and premium, if any, and, to the extent payment at such rate
of interest
39
shall be legally enforceable, upon overdue installments of interest, at the
respective rate borne by the Notes of such Series or the applicable Class of
such Series and in addition thereto such further amount as shall be
sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the
Indenture Trustee and its agents and counsel.
(b) If an Event of Default (other than Event of Default under
clause (vii) of Section 5.01) occurs and is continuing with respect to any
Series, the Indenture Trustee may, as more particularly provided in Section
5.04, in its discretion, proceed to protect and enforce its rights and the
rights of the Holders of such Series, by such appropriate Proceedings as the
Indenture Trustee shall deem most effective to protect and enforce any such
rights, whether for the specific enforcement of any covenant or agreement in
this Indenture or in aid of the exercise of any power granted herein, or to
enforce any other proper remedy or legal or equitable right vested in the
Indenture Trustee by this Indenture or by law.
(c) If an Event of Default under Section 5.01(v) or (vi) has
occurred and is continuing, the Indenture Trustee, irrespective of whether
the principal of any Notes of any Series shall then be due and payable as
therein expressed or by declaration or otherwise and irrespective of whether
the Indenture Trustee shall have made any demand pursuant to the provisions
of this Section, shall be entitled and empowered, by intervention in any
Proceedings related to such Event of Default or otherwise:
(i) to file and prove a claim or claims for the whole amount of
principal, premium, if any, and interest owing and unpaid in respect of the
Notes and to file such other papers or documents as may be necessary or
advisable in order to have the claims of the Indenture Trustee (including
any claim for reasonable compensation to the Indenture Trustee and each
predecessor Indenture Trustee, and their respective agents, attorneys and
counsel, and for reimbursement of all expenses and liabilities incurred,
and all advances made, by the Indenture Trustee and each predecessor
Indenture Trustee, except as a result of negligence or bad faith) and of
the Holders allowed in such Proceedings;
(ii) unless prohibited by applicable law and regulations, to vote on
behalf of the Holders of Notes in any election of a trustee in bankruptcy,
a standby trustee or Person performing similar functions in any such
Proceedings; and
(iii) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute all amounts received with
respect to the claims of the Holders and of the Indenture Trustee on their
behalf;
and any trustee, receiver, liquidator, custodian or other similar official in
any such Proceeding is hereby authorized by each of such Holders to make
payments to the Indenture Trustee, and, in the event that the Indenture
Trustee shall consent to the making of payments directly to such Holders, to
pay to the Indenture Trustee such amounts as shall be sufficient to cover
reasonable
40
compensation to the Indenture Trustee, each predecessor Indenture Trustee and
their respective agents, attorneys and counsel, and all other expenses and
liabilities incurred, and all advances made, by the Indenture Trustee and
each predecessor Indenture Trustee except as a result of negligence or bad
faith.
(d) Nothing herein contained shall be deemed to authorize the
Indenture Trustee to authorize or consent to or vote for or accept or adopt
on behalf of any Holder any plan of reorganization, arrangement, adjustment
or composition affecting the Notes or the rights of any Holder thereof or to
authorize the Indenture Trustee to vote in respect of the claim of any Holder
in any such proceeding except, as aforesaid, to vote for the election of a
trustee in bankruptcy or similar Person.
(e) All rights of action and of asserting claims under this
Indenture, or under any of the Notes of any Series, may be enforced by the
Indenture Trustee without the possession of any of the Notes of such Series
or the production thereof in any trial or other Proceedings relative thereto,
and any such action or proceedings instituted by the Indenture Trustee shall
be brought in its own name as trustee of an express trust, and any recovery
of judgment, subject to the payment of the expenses, disbursements and
compensation of the Indenture Trustee, each predecessor Indenture Trustee and
their respective agents and attorneys, shall be for the ratable benefit of
the Holders of the Notes of such Series.
(f) In any Proceedings brought by the Indenture Trustee (and also
any Proceedings involving the interpretation of any provision of this
Indenture to which the Indenture Trustee shall be a party), the Indenture
Trustee shall be held to represent all the Holders of the Notes, and it shall
not be necessary to make any Holder a party to any such Proceedings.
SECTION 5.04. REMEDIES; PRIORITIES. (a) If an Event of Default
(other than an Event of Default under clause (vii) of Section 5.01) shall
have occurred and be continuing with respect to a Series, the Indenture
Trustee may do one or more of the following (subject to Section 5.05):
(i) institute Proceedings in its own name and as trustee of an
express trust for the collection of all amounts then payable on the Notes
of such Series or under this Indenture with respect thereto, whether by
declaration of acceleration or otherwise, and, subject to the limitations
on recovery set forth herein, enforce any judgment obtained, and collect
moneys adjudged due upon such Notes;
(ii) institute Proceedings from time to time for the complete or
partial foreclosure of this Indenture with respect to the Note Collateral;
(iii) exercise any remedies of a secured party under the UCC or the
Funding Law and take any other appropriate action to protect and enforce
the rights and remedies of the Indenture Trustee and the Holders of the
Notes of such Series; and
41
(iv) sell the Note Collateral or any portion thereof or rights or
interest therein, at one or more public or private sales called and
conducted in any manner permitted by law;
PROVIDED, HOWEVER, that the Indenture Trustee may not sell or otherwise
liquidate any portion of the Note Collateral following such an Event of
Default, other than an Event of Default described in Section 5.01(i), (ii) or
(iii), with respect to any Series unless (A) the Holders of 100 percent of
the Outstanding Amount of the Notes of all Series consent thereto, (B) the
proceeds of such sale or liquidation distributable to the Holders of all
Series are sufficient to discharge in full all amounts then due and unpaid
upon such Notes for principal, premium, if any, and interest after taking
into account payment of all amounts due prior thereto pursuant to the
priorities set forth in Section 8.02(d) or (C) the Indenture Trustee
determines that the Note Collateral will not continue to provide sufficient
funds for all payments on the Notes of all Series as they would have become
due if the Notes had not been declared due and payable, and the Indenture
Trustee obtains the consent of Holders of 66-2/3 percent of the Outstanding
Amount of the Notes of all Series. In determining such sufficiency or
insufficiency with respect to clause (B) and (C), the Indenture Trustee may,
but need not, obtain and conclusively rely upon an opinion of an Independent
investment banking or accounting firm of national reputation as to the
feasibility of such proposed action and as to the sufficiency of the Note
Collateral for such purpose.
(b) If an Event of Default under clause (vii) of Section 5.01
shall have occurred and be continuing, the Indenture Trustee, for the benefit
of the Holders, shall be entitled and empowered to the extent permitted by
applicable law, to institute or participate in Proceedings reasonably
necessary to compel performance of or to enforce the State Pledge and to
collect any monetary damages incurred by the Holders or the Indenture Trustee
as a result of any such Event of Default, and may prosecute any such
Proceeding to final judgment or decree. The rights and remedies set forth in
this Section 5.04(b) and the obligations of the Servicer under Section
5.02(c) of the Servicing Agreement shall be the sole and exclusive remedies
for such an Event of Default.
(c) If the Indenture Trustee collects any money pursuant to this
Article V, it shall pay out such money in accordance with the priorities set
forth in Section 8.02(d).
SECTION 5.05. OPTIONAL PRESERVATION OF THE NOTE COLLATERAL. If the
Notes of all Series have been declared to be due and payable under Section
5.02 following an Event of Default and such declaration and its consequences
have not been rescinded and annulled, the Indenture Trustee may, but need
not, elect to maintain possession of the Note Collateral. It is the desire
of the parties hereto and the Holders that there be at all times sufficient
funds for the payment of principal of and premium, if any, and interest on
the Notes, and the Indenture Trustee shall take such desire into account when
determining whether or not to maintain possession of the Note Collateral. In
determining whether to maintain possession of the Note Collateral, the
Indenture Trustee may, but need not, obtain and conclusively rely upon an
opinion of an Independent investment banking or accounting firm of national
reputation as to the feasibility of such proposed action and as to the
sufficiency of the Note Collateral for such purpose.
42
SECTION 5.06. LIMITATION OF SUITS. No Holder of any Note of any
Series shall have any right to institute any Proceeding, judicial or
otherwise, with respect to this Indenture, or for the appointment of a
receiver or trustee, or for any other remedy hereunder, unless:
(i) such Holder previously has given written notice to the Indenture
Trustee of a continuing Event of Default with respect to such Series;
(ii) the Holders of not less than 25 percent of the Outstanding
Amount of the Notes of all Series have made written request to the
Indenture Trustee to institute such Proceeding in respect of such Event of
Default in its own name as Indenture Trustee hereunder;
(iii) such Holder or Holders have offered to the Indenture Trustee
indemnity satisfactory to it against the costs, expenses and liabilities to
be incurred in complying with such request;
(iv) the Indenture Trustee for 60 days after its receipt of such
notice, request and offer of indemnity has failed to institute such
Proceedings; and
(v) no direction inconsistent with such written request has been
given to the Indenture Trustee during such 60-day period by the Holders of
a majority of the Outstanding Amount of the Notes of all Series;
it being understood and intended that no one or more Holders of Notes shall
have any right in any manner whatever by virtue of, or by availing of, any
provision of this Indenture to affect, disturb or prejudice the rights of any
other Holders of Notes or to obtain or to seek to obtain priority or
preference over any other Holders or to enforce any right under this
Indenture, except in the manner herein provided.
In the event the Indenture Trustee shall receive conflicting or
inconsistent requests and indemnity from two or more groups of Holders of
Notes, each representing less than a majority of the Outstanding Amount of
the Notes of all Series, the Indenture Trustee in its sole discretion may
determine what action, if any, shall be taken, notwithstanding any other
provisions of this Indenture.
SECTION 5.07. UNCONDITIONAL RIGHTS OF HOLDERS TO RECEIVE
PRINCIPAL, PREMIUM, IF ANY, AND INTEREST. Notwithstanding any other
provisions in this Indenture, the Holder of any Note shall have the right,
which is absolute and unconditional, (a) to receive payment of (i) the
interest, if any, on such Note on the due dates thereof expressed in such
Note or in this Indenture, (ii) the unpaid principal, if any, of such Notes
on the Final Maturity Date therefor or (iii) in the case of redemption,
receive payment of the unpaid principal and premium, if any, and interest, if
any, on such Note on the Optional Redemption Date therefor and (b) to
institute suit for the
43
enforcement of any such payment, and such right shall not be impaired without
the consent of such Holder.
SECTION 5.08. RESTORATION OF RIGHTS AND REMEDIES. If the
Indenture Trustee or any Holder has instituted any Proceeding to enforce any
right or remedy under this Indenture and such Proceeding has been
discontinued or abandoned for any reason or has been determined adversely to
the Indenture Trustee or to such Holder, then and in every such case the Note
Issuer, the Indenture Trustee and the Holders shall, subject to any
determination in such Proceeding, be restored severally and respectively to
their former positions hereunder, and thereafter all rights and remedies of
the Indenture Trustee and the Holders shall continue as though no such
Proceeding had been instituted.
SECTION 5.09. RIGHTS AND REMEDIES CUMULATIVE. No right or remedy
herein conferred upon or reserved to the Indenture Trustee or to the Holders
is intended to be exclusive of any other right or remedy, and every right and
remedy shall, to the extent permitted by law, be cumulative and in addition
to every other right and remedy given hereunder or now or hereafter existing
at law or in equity or otherwise. The assertion or employment of any right
or remedy hereunder, or otherwise, shall not prevent the concurrent assertion
or employment of any other appropriate right or remedy.
SECTION 5.10. DELAY OR OMISSION NOT A WAIVER. No delay or
omission of the Indenture Trustee or any Holder to exercise any right or
remedy accruing upon any Default or Event of Default shall impair any such
right or remedy or constitute a waiver of any such Default or Event of
Default or an acquiescence therein. Every right and remedy given by this
Article V or by law to the Indenture Trustee or to the Holders may be
exercised from time to time, and as often as may be deemed expedient, by the
Indenture Trustee or by the Holders, as the case may be.
SECTION 5.11. CONTROL BY HOLDERS. The Holders of a majority of
the Outstanding Amount of the Notes of all Series (or, if less than all
Series or Classes are affected, the affected Series or Class or Classes)
shall have the right to direct the time, method and place of conducting any
Proceeding for any remedy available to the Indenture Trustee with respect to
the Notes of such Series or Class or Classes or exercising any trust or power
conferred on the Indenture Trustee with respect to such Series or Class or
Classes; PROVIDED that
(i) such direction shall not be in conflict with any rule of law or
with this Indenture;
(ii) subject to the express terms of Section 5.04, any direction to
the Indenture Trustee to sell or liquidate the Note Collateral shall be by
the Holders of Notes representing not less than 100 percent of the
Outstanding Amount of the Notes of all Series;
44
(iii) if the conditions set forth in Section 5.05 have been satisfied
and the Indenture Trustee elects to retain the Note Collateral pursuant to
such Section, then any direction to the Indenture Trustee by Holders of
Notes representing less than 100 percent of the Outstanding Amount of the
Notes of all Series to sell or liquidate the Note Collateral shall be of no
force and effect; and
(iv) the Indenture Trustee may take any other action deemed proper by
the Indenture Trustee that is not inconsistent with such direction;
PROVIDED, HOWEVER, that, the Indenture Trustee's duties shall be subject to
Section 6.01, and the Indenture Trustee need not take any action that it
determines might involve it in liability or might materially adversely affect
the rights of any Holders not consenting to such action.
SECTION 5.12. WAIVER OF PAST DEFAULTS. Prior to the declaration
of the acceleration of the maturity of the Notes of all Series as provided in
Section 5.02, the Holders of Notes representing not less than a majority of
the Outstanding Amount of the Notes of all Series may waive any past Default
or Event of Default and its consequences except a Default (a) in payment of
principal of or premium, if any, or interest on any of the Notes or (b) in
respect of a covenant or provision hereof which cannot be modified or amended
without the consent of the Holder of each Note of all Series or Classes
affected. In the case of any such waiver, the Note Issuer, the Indenture
Trustee and the Holders of the Notes shall be restored to their former
positions and rights hereunder, respectively; but no such waiver shall extend
to any subsequent or other Default or impair any right consequent thereto.
Upon any such waiver, such Default shall cease to exist and be deemed
to have been cured and not to have occurred, and any Event of Default arising
therefrom shall be deemed to have been cured and not to have occurred, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other Default or Event of Default or impair any right consequent thereto.
SECTION 5.13. UNDERTAKING FOR COSTS. All parties to this
Indenture agree, and each Holder of any Note by such Holder's acceptance
thereof shall be deemed to have agreed, that any court may in its discretion
require, in any suit for the enforcement of any right or remedy under this
Indenture, or in any suit against the Indenture Trustee for any action taken,
suffered or omitted by it as Indenture Trustee, the filing by any party
litigant in such suit of an undertaking to pay the costs of such suit, and
that such court may in its discretion assess reasonable costs, including
reasonable attorneys' fees, against any party litigant in such suit, having
due regard to the merits and good faith of the claims or defenses made by
such party litigant; but the provisions of this Section shall not apply to
(a) any suit instituted by the Indenture Trustee, (b) any suit instituted by
any Holder, or group of Holders, in each case holding in the aggregate more
than 10 percent of the Outstanding Amount of the Notes of a Series or (c) any
suit instituted by any Holder for the enforcement of the payment of (i)
interest on any Note on or after the due dates expressed in such Note and in
this Indenture, (ii) the unpaid principal, if any, of any Note on or
45
after the Final Maturity Date therefor or (iii) in the case of redemption,
the unpaid principal of and premium, if any, and interest on any Note on or
after the Optional Redemption Date therefor.
SECTION 5.14. WAIVER OF STAY OR EXTENSION LAWS. The Note Issuer
covenants (to the extent that it may lawfully do so) that it will not at any
time insist upon, or plead or in any manner whatsoever, claim or take the
benefit or advantage of, any stay or extension law wherever enacted, now or
at any time hereafter in force, that may affect the covenants or the
performance of this Indenture; and the Note Issuer (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such
law, and covenants that it will not hinder, delay or impede the execution of
any power herein granted to the Indenture Trustee, but will suffer and permit
the execution of every such power as though no such law had been enacted.
SECTION 5.15. ACTION ON NOTES. The Indenture Trustee's right to
seek and recover judgment on the Notes or under this Indenture shall not be
affected by the seeking, obtaining or application of any other relief under
or with respect to this Indenture. Neither the lien of this Indenture nor
any rights or remedies of the Indenture Trustee or the Holders shall be
impaired by the recovery of any judgment by the Indenture Trustee against the
Note Issuer or by the levy of any execution under such judgment upon any
portion of the Note Collateral or any other assets of the Note Issuer.
SECTION 5.16. PERFORMANCE AND ENFORCEMENT OF CERTAIN OBLIGATIONS.
(a) Promptly following a request from the Indenture Trustee to do so and at
the Note Issuer's expense, the Note Issuer agrees to take all such lawful
action as the Indenture Trustee may request to compel or secure the
performance and observance by ComEd, the Grantee and the Servicer, as
applicable, of each of their obligations to the Note Issuer under or in
connection with the Grant Agreement or any Subsequent Grant Agreement, the
Sale Agreement, or any Subsequent Sale Agreement and the Servicing Agreement,
respectively, in accordance with the terms thereof, and to exercise any and
all rights, remedies, powers and privileges lawfully available to the Note
Issuer under or in connection with any such agreements, respectively, to the
extent and in the manner directed by the Indenture Trustee, including the
transmission of notices of default on the part of ComEd, the Grantee or the
Servicer thereunder and the institution of legal or administrative actions or
proceedings to compel or secure performance by ComEd, the Grantee or the
Servicer of each of their respective obligations under the Grant Agreement,
any Subsequent Grant Agreement, the Sale Agreement, any Subsequent Sale
Agreement and the Servicing Agreement, respectively.
(b) If an Event of Default has occurred and is continuing, the
Indenture Trustee may, and, at the direction (which direction shall be in
writing or by telephone (confirmed in writing promptly thereafter)) of the
Holders of 66-2/3 percent of the Outstanding Amount of the Notes of all
Series shall, subject to Article VI, exercise all rights, remedies, powers,
privileges and claims of the Note Issuer against the Grantee or the Servicer
under or in connection with the Sale Agreement, any Subsequent Sale Agreement
and the Servicing Agreement, respectively, including the right or power to
take any action to compel or secure performance or observance by the
46
Grantee or the Servicer of each of their obligations to the Note Issuer
thereunder and to give any consent, request, notice, direction, approval,
extension or waiver under the Sale Agreement, any Subsequent Sale Agreement
or the Servicing Agreement, respectively, and any right of the Note Issuer to
take such action shall be suspended.
ARTICLE VI
THE INDENTURE TRUSTEE
SECTION 6.01. DUTIES OF INDENTURE TRUSTEE. (a) If an Event of
Default has occurred and is continuing, the Indenture Trustee shall exercise
the rights and powers vested in it by this Indenture and use the same degree
of care and skill in their exercise as a prudent person would exercise or use
under the circumstances in the conduct of such person's own affairs.
(b) Except during the continuance of an Event of Default:
(i) the Indenture Trustee undertakes to perform such duties and only
such duties as are specifically set forth in this Indenture and no implied
covenants or obligations shall be read into this Indenture against the
Indenture Trustee; and
(ii) in the absence of bad faith on its part, the Indenture Trustee
may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Indenture Trustee and conforming to the
requirements of this Indenture; however, the Indenture Trustee shall
examine the certificates and opinions to determine whether or not they
conform to the requirements of this Indenture.
(c) The Indenture Trustee may not be relieved from liability for
its own negligent action, its own negligent failure to act or its own wilful
misconduct, except that:
(i) this paragraph (c) does not limit the effect of paragraph (b) of
this Section 6.01;
(ii) the Indenture Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer unless it is proved
that the Indenture Trustee was negligent in ascertaining the pertinent
facts; and
(iii) the Indenture Trustee shall not be liable with respect to any
action it takes or omits to take in good faith in accordance with a
direction received by it pursuant to Section 5.11.
(d) Every provision of this Indenture that in any way relates to
the Indenture Trustee is subject to paragraphs (a), (b) and (c) of this
Section.
47
(e) The Indenture Trustee shall not be liable for interest on any
money received by it except as the Indenture Trustee may agree in writing
with the Note Issuer.
(f) Money held in trust by the Indenture Trustee need not be
segregated from other funds except to the extent required by law or the terms
of this Indenture, the Sale Agreement, any Subsequent Sale Agreement and the
Servicing Agreement.
(g) No provision of this Indenture shall require the Indenture
Trustee to expend or risk its own funds or otherwise incur financial
liability in the performance of any of its duties hereunder or in the
exercise of any of its rights or powers, if it shall have reasonable grounds
to believe that repayments of such funds or indemnity satisfactory to it
against such risk or liability is not reasonably assured to it.
(h) Every provision of this Indenture relating to the conduct or
affecting the liability of or affording protection to the Indenture Trustee
shall be subject to the provisions of this Section and to the provisions of
the TIA.
(i) In the event that the Indenture Trustee is also acting as
Paying Agent or Note Registrar hereunder, the protections of this Article VI
shall also be afforded to the Indenture Trustee in its capacity as Paying
Agent or Note Registrar.
(j) Except as expressly set forth in the Basic Documents, the
Indenture Trustee shall have no obligation to administer, service or collect
Intangible Transition Property or to maintain, monitor or otherwise supervise
the administration, servicing or collection of the Intangible Transition
Property.
SECTION 6.02. RIGHTS OF INDENTURE TRUSTEE. (a) The Indenture
Trustee may conclusively rely and shall be fully protected in relying on any
document believed by it to be genuine and to have been signed or presented by
the proper person. The Indenture Trustee need not investigate any fact or
matter stated in the document.
(b) Before the Indenture Trustee acts or refrains from acting, it may
require and shall be entitled to receive an Officer's Certificate or an Opinion
of Counsel that such action is required or permitted hereunder. The Indenture
Trustee shall not be liable for any action it takes or omits to take in good
faith in reliance on such Officer's Certificate or Opinion of Counsel.
(c) The Indenture Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents or attorneys or a custodian or nominee, and the Indenture Trustee shall
not be responsible for any misconduct or negligence on the part of, or for the
supervision of, any such agent, attorney, custodian or nominee appointed with
due care by it hereunder.
48
(d) The Indenture Trustee shall not be liable for any action it
takes or omits to take in good faith which it believes to be authorized or
within its rights or powers; PROVIDED, HOWEVER, that the Indenture Trustee's
conduct does not constitute willful misconduct, negligence or bad faith.
(e) The Indenture Trustee may consult with counsel, and the advice
or opinion of counsel with respect to legal matters relating to this
Indenture and the Notes shall be full and complete authorization and
protection from liability in respect to any action taken, omitted or suffered
by it hereunder in good faith and in accordance with the advice or opinion of
such counsel.
SECTION 6.03. INDIVIDUAL RIGHTS OF INDENTURE TRUSTEE. The
Indenture Trustee in its individual or any other capacity may become the
owner or pledgee of Notes and may otherwise deal with the Note Issuer or its
affiliates with the same rights it would have if it were not Indenture
Trustee. Any Paying Agent, Note Registrar, co-registrar or co-paying agent
may do the same with like rights. However, the Indenture Trustee must comply
with Sections 6.11 and 6.12.
SECTION 6.04. INDENTURE TRUSTEE'S DISCLAIMER. The Indenture
Trustee shall not be responsible for and makes no representation as to the
validity or adequacy of this Indenture or the Notes, it shall not be
accountable for the Note Issuer's use of the proceeds from the Notes, and it
shall not be responsible for any statement of the Note Issuer in the
Indenture or in any document issued in connection with the sale of the Notes
or in the Notes other than the Indenture Trustee's certificate of
authentication.
SECTION 6.05. NOTICE OF DEFAULTS. If a Default occurs and is
continuing with respect to any Series and if it is actually known to a
Responsible Officer of the Indenture Trustee, the Indenture Trustee shall
mail to each Holder of Notes of all Series notice of the Default within 90
days after it occurs. Except in the case of a Default in payment of
principal of and premium, if any, or interest on any Note, the Indenture
Trustee may withhold the notice if and so long as a committee of its
Responsible Officers in good faith determines that withholding the notice is
in the interests of Holders. Except as provided in the first sentence of
this section 6.05, in no event shall the Indenture Trustee be deemed to have
knowledge of a Default.
SECTION 6.06. REPORTS BY INDENTURE TRUSTEE TO HOLDERS.
(a) So long as Notes are Outstanding and the Indenture Trustee is
the Note Registrar and Paying Agent, within the prescribed period of time for
tax reporting purposes after the end of each calendar year it shall deliver
to each relevant current or former Holder such information in its possession
as may be required to enable such Holder to prepare its Federal and state
income tax returns.
49
(b) With respect to each Series of Notes, on or prior to each Payment
Date or Special Payment Date therefor, the Indenture Trustee will deliver to
each Holder of such Notes on such Payment Date or Special Payment Date a
statement as provided and prepared by the Servicer which will include (to the
extent applicable) the following information (and any other information so
specified in the applicable Trustee's Issuance Certificate or Series Supplement,
if any,) as to the Notes of such Series with respect to such Payment Date or
Special Payment Date or the period since the previous Payment Date, as
applicable:
(i) the amount of the payment to Holders allocable to principal, if
any;
(ii) the amount of the payment to Holders allocable to interest;
(iii) the aggregate Outstanding Amount of such Notes, after giving
effect to any payments allocated to principal reported under (i) above; and
(iv) the difference, if any, between the amount specified in
subsection (iii) above and the Outstanding Amount specified in the related
Expected Amortization Schedule.
(c) The Note Issuer shall send a copy of each of the Certificate of
Compliance delivered to it pursuant to Section 3.03 of the Servicing Agreement
and the Annual Accountant's Report delivered to it pursuant to Section 3.04 of
the Servicing Agreement to the Rating Agencies. A copy of such certificate and
report may be obtained by any Holder by a request in writing to the Indenture
Trustee.
SECTION 6.07. COMPENSATION AND INDEMNITY. The Note Issuer shall
pay to the Indenture Trustee from time to time reasonable compensation for
its services. The Indenture Trustee's compensation shall not be limited by
any law on compensation of a trustee of an express trust. The Note Issuer
shall reimburse the Indenture Trustee for all reasonable out-of-pocket
expenses incurred or made by it, including costs of collection, in addition
to the compensation for its services. Such expenses shall include the
reasonable compensation and expenses, disbursements and advances of the
Indenture Trustee's agents, counsel, accountants and experts. The Note
Issuer shall indemnify the Indenture Trustee and its officers, directors,
employees and agents against any and all loss, liability or expense
(including attorneys' fees and expenses) incurred by it in connection with
the administration of this trust and the performance of its duties hereunder.
The Indenture Trustee shall notify the Note Issuer as soon as is reasonably
practicable of any claim for which it may seek indemnity. Failure by the
Indenture Trustee to so notify the Note Issuer shall not relieve the Note
Issuer of its obligations hereunder. The Note Issuer shall defend the claim
and the Indenture Trustee may have separate counsel and the Note Issuer shall
pay the fees and expenses of such counsel. The Note Issuer need not
reimburse any expense or indemnify against any loss, liability or expense
incurred by the Indenture Trustee through the Indenture Trustee's own wilful
misconduct, negligence or bad faith.
50
The payment obligations to the Indenture Trustee pursuant to this
Section shall survive the discharge of this Indenture or the earlier
resignation or removal of the Indenture Trustee. When the Indenture Trustee
incurs expenses after the occurrence of a Default specified in Section
5.01(v) or (vi) with respect to the Note Issuer, the expenses are intended to
constitute expenses of administration under Title 11 of the United States
Code or any other applicable Federal or state bankruptcy, insolvency or
similar law.
SECTION 6.08. REPLACEMENT OF INDENTURE TRUSTEE. The Indenture
Trustee may resign at any time by so notifying the Note Issuer, provided that
no such resignation shall be effective until either (a) the Note Collateral
has been completely liquidated and the proceeds of the liquidation
distributed to the Holders or (b) a successor trustee having the
qualifications set forth in Section 6.11 has been designated and has accepted
such trusteeship. The Holders of a majority in Outstanding Amount of the
Notes of all Series may remove the Indenture Trustee by so notifying the
Indenture Trustee and may appoint a successor Indenture Trustee. The Note
Issuer shall remove the Indenture Trustee if:
(i) the Indenture Trustee fails to comply with Section 6.11;
(ii) the Indenture Trustee is adjudged a bankrupt or insolvent;
(iii) a receiver or other public officer takes charge of the
Indenture Trustee or its property; or
(iv) the Indenture Trustee otherwise becomes incapable of acting.
If the Indenture Trustee gives notice of resignation or is removed
or if a vacancy exists in the office of Indenture Trustee for any reason (the
Indenture Trustee in such event being referred to herein as the retiring
Indenture Trustee), the Note Issuer shall promptly appoint a successor
Indenture Trustee.
A successor Indenture Trustee shall deliver a written acceptance of
its appointment to the retiring Indenture Trustee and to the Note Issuer.
Thereupon the resignation or removal of the retiring Indenture Trustee shall
become effective, and the successor Indenture Trustee shall have all the
rights, powers and duties of the Indenture Trustee under this Indenture. The
successor Indenture Trustee shall mail a notice of its succession to Holders.
The retiring Indenture Trustee shall promptly transfer all property held by
it as Indenture Trustee to the successor Indenture Trustee.
If a successor Indenture Trustee does not take office within 60
days after the retiring Indenture Trustee resigns or is removed, the retiring
Indenture Trustee, the Note Issuer or the Holders of a majority in
Outstanding Amount of the Notes of all Series may petition any court of
competent jurisdiction for the appointment of a successor Indenture Trustee.
51
If the Indenture Trustee fails to comply with Section 6.11, any
Holder may petition any court of competent jurisdiction for the removal of
the Indenture Trustee and the appointment of a successor Indenture Trustee.
Notwithstanding the replacement of the Indenture Trustee pursuant
to this Section, the Note Issuer's obligations under Section 6.07 shall
continue for the benefit of the retiring Indenture Trustee.
SECTION 6.09. SUCCESSOR INDENTURE TRUSTEE BY MERGER. If the
Indenture Trustee consolidates with, merges or converts into, or transfers
all or substantially all its corporate trust business or assets to, another
corporation or banking association, the resulting, surviving or transferee
corporation without any further act shall be the successor Indenture Trustee;
PROVIDED, however, that if such successor Indenture Trustee is not eligible
under Section 6.11, then the successor Indenture Trustee shall be replaced in
accordance with Section 6.08.
In case at the time such successor or successors by merger,
conversion or consolidation to the Indenture Trustee shall succeed to the
trusts created by this Indenture any of the Notes shall have been
authenticated but not delivered, any such successor to the Indenture Trustee
may adopt the certificate of authentication of any predecessor trustee, and
deliver such Notes so authenticated; and in case at that time any of the
Notes shall not have been authenticated, any successor to the Indenture
Trustee may authenticate such Notes either in the name of any predecessor
hereunder or in the name of the successor to the Indenture Trustee; and in
all such cases such certificates shall have the full force which it is
anywhere in the Notes or in this Indenture provided that the certificate of
the Indenture Trustee shall have.
SECTION 6.10. APPOINTMENT OF CO-TRUSTEE OR SEPARATE TRUSTEE. (a)
Notwithstanding any other provisions of this Indenture, at any time, for the
purpose of meeting any legal requirement of any jurisdiction in which any
part of the trust created by this Indenture or the Note Collateral may at the
time be located, the Indenture Trustee shall have the power and may execute
and deliver all instruments to appoint one or more Persons to act as a
co-trustee or co-trustees, or separate trustee or separate trustees, of all
or any part of the trust created by this Indenture or the Note Collateral,
and to vest in such Person or Persons, in such capacity and for the benefit
of the Holders, such title to the Note Collateral, or any part hereof, and,
subject to the other provisions of this Section, such powers, duties,
obligations, rights and trusts as the Indenture Trustee may consider
necessary or desirable. No co-trustee or separate trustee hereunder shall be
required to meet the terms of eligibility as a successor trustee under
Section 6.11 and no notice to Holders of the appointment of any co-trustee or
separate trustee shall be required under Section 6.08 hereof.
(b) Every separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following provisions
and conditions:
52
(i) all rights, powers, duties and obligations conferred or
imposed upon the Indenture Trustee shall be conferred or imposed upon
and exercised or performed by the Indenture Trustee and such separate
trustee or co-trustee jointly (it being understood that such separate
trustee or co-trustee is not authorized to act separately without the
Indenture Trustee joining in such act), except to the extent that under
any law of any jurisdiction in which any particular act or acts are to
be performed the Indenture Trustee shall be incompetent or unqualified
to perform such act or acts, in which event such rights, powers, duties
and obligations (including the holding of title to the Note Collateral
or any portion thereof in any such jurisdiction) shall be exercised and
performed singly by such separate trustee or co-trustee, but solely at
the direction of the Indenture Trustee;
(ii) no trustee hereunder shall be personally liable by reason of
any act or omission of any other trustee hereunder; and
(iii) the Indenture Trustee may at any time accept the resignation of
or remove any separate trustee or co-trustee.
(c) Any notice, request or other writing given to the Indenture
Trustee shall be deemed to have been given to each of the then separate trustees
and co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Indenture and
the conditions of this Article VI. Each separate trustee and co-trustee, upon
its acceptance of the trusts conferred, shall be vested with the estates or
property specified in its instrument of appointment, either jointly with the
Indenture Trustee or separately, as may be provided therein, subject to all the
provisions of this Indenture, specifically including every provision of this
Indenture relating to the conduct of, affecting the liability of, or affording
protection to, the Indenture Trustee. Every such instrument shall be filed with
the Indenture Trustee.
(d) Any separate trustee or co-trustee may at any time constitute
the Indenture Trustee, its agent or attorney-in-fact with full power and
authority, to the extent not prohibited by law, to do any lawful act under or
in respect of this Indenture on its behalf and in its name. If any separate
trustee or co-trustee shall die, become incapable of acting, resign or be
removed, all of its estates, properties, rights, remedies and trusts shall
vest in and be exercised by the Indenture Trustee, to the extent permitted by
law, without the appointment of a new or successor trustee.
SECTION 6.11. ELIGIBILITY; DISQUALIFICATION. The Indenture Trustee
shall at all times satisfy the requirements of TIA Section 310(a) and Section
26(a)(i) of the Investment Company Act of 1940. The Indenture Trustee shall
have a combined capital and surplus of at least $50,000,000 as set forth in its
most recent published annual report of condition and it shall have a long term
debt rating of A (or the equivalent thereof) or better by all of the Rating
Agencies from which a rating is available. The Indenture Trustee shall comply
with TIA Section 310(b), including the optional provision permitted by the
second sentence of TIA Section 310(b)(9); PROVIDED, HOWEVER, that there shall be
excluded from the operation of TIA Section 310(b)(1) any indenture or indentures
under
53
which other securities of the Note Issuer are outstanding if the requirements
for such exclusion set forth in TIA Section 310(b)(1) are met.
SECTION 6.12. PREFERENTIAL COLLECTION OF CLAIMS AGAINST NOTE
ISSUER, The Indenture Trustee shall comply with TIA Section 311(a), excluding
any creditor relationship listed in TIA Section 311(b). An Indenture Trustee
who has resigned or been removed shall be subject to TIA Section 311(a) to
the extent indicated.
SECTION 6.13. REPRESENTATIONS AND WARRANTIES OF INDENTURE TRUSTEE.
The Indenture Trustee hereby represents and warrants that:
(a) the Indenture Trustee is a banking corporation validly existing
and in good standing under the laws of the State of Illinois; and
(b) the Indenture Trustee has full power, authority and legal right to
execute, deliver and perform this Indenture and the Basic Documents to which
the Indenture Trustee is a party and has taken all necessary action to
authorize the execution, delivery, and performance by it of this Indenture
and such Basic Documents.
54
ARTICLE VII
HOLDERS' LISTS AND REPORTS
SECTION 7.01. NOTE ISSUER TO FURNISH INDENTURE TRUSTEE NAMES AND
ADDRESSES OF HOLDERS. The Note Issuer will furnish or cause to be furnished
to the Indenture Trustee (a) not more than five days after the earlier of (i)
each Record Date with respect to each Series and (ii) three months after the
last Record Date with respect to each Series, a list, in such form as the
Indenture Trustee may reasonably require, of the names and addresses of the
Holders of Notes of such Series as of such Record Date, (b) at such other
times as the Indenture Trustee may request in writing, within 30 days after
receipt by the Note Issuer of any such request, a list of similar form and
content as of a date not more than 10 days prior to the time such list is
furnished; PROVIDED, HOWEVER, that so long as the Indenture Trustee is the
Note Registrar, no such list shall be required to be furnished.
SECTION 7.02. PRESERVATION OF INFORMATION; COMMUNICATIONS TO
HOLDERS. (a) The Indenture Trustee shall preserve, in as current a form as
is reasonably practicable, the names and addresses of the Holders of Notes
contained in the most recent list furnished to the Indenture Trustee as
provided in Section 7.01 and the names and addresses of Holders of Notes
received by the Indenture Trustee in its capacity as Note Registrar. The
Indenture Trustee may destroy any list furnished to it as provided in such
Section 7.01 upon receipt of a new list so furnished.
(b) Holders may communicate pursuant to TIA Section 312(b) with
other Holders with respect to their rights under this Indenture or under the
Notes.
(c) The Note Issuer, the Indenture Trustee and the Note Registrar
shall have the protection of TIA Section 312(c).
SECTION 7.03. REPORTS BY NOTE ISSUER. (a) The Note Issuer shall:
(i) so long as the Note Issuer is required to file such documents
with the SEC, provide to the Indenture Trustee, within 15 days after the
Note Issuer is required to file the same with the SEC, copies of the annual
reports and of the information, documents and other reports (or copies of
such portions of any of the foregoing as the SEC may from time to time by
rules and regulations prescribe) which the Note Issuer may be required to
file with the SEC pursuant to Section 13 or 15(d) of the Exchange Act;
(ii) provide to the Indenture Trustee and file with the SEC in
accordance with rules and regulations prescribed from time to time by the
SEC such additional information, documents and reports with respect to
compliance by the Note Issuer with the conditions and covenants of this
Indenture as may be required from time to time by such rules and
regulations; and
55
(iii) supply to the Indenture Trustee (and the Indenture Trustee
shall transmit by mail to all Holders described in TIA Section 313(c))
such summaries of any information, documents and reports required to be
filed by the Note Issuer pursuant to clauses (i) and (ii) of this Section
7.03(a) as may be required by rules and regulations prescribed from time to
time by the SEC.
(b) Unless the Note Issuer otherwise determines, the fiscal year
of the Note Issuer shall end on December 31 of each year.
SECTION 7.04. REPORTS BY INDENTURE TRUSTEE. If required by TIA
Section 313(a), within 60 days after [September 30] of each year, commencing
with the year after the issuance of the Notes of any Series, the Indenture
Trustee shall mail to each Holder of Notes of such Series as required by TIA
Section 313(c) a brief report dated as of such date that complies with TIA
Section 313(a). The Indenture Trustee also shall comply with TIA Section
313(b); PROVIDED, HOWEVER, that the initial report so issued shall be
delivered not more than 12 months after the initial issuance of each Series.
A copy of each report at the time of its mailing to Holders shall
be filed by the Servicer with the SEC and each stock exchange, if any, on
which the Notes are listed. The Note Issuer shall notify the Indenture
trustee in writing if and when the notes are listed on any stock exchange.
ARTICLE VIII
ACCOUNTS, DISBURSEMENTS AND RELEASES
SECTION 8.01. COLLECTION OF MONEY. Except as otherwise expressly
provided herein, the Indenture Trustee may demand payment or delivery of, and
shall receive and collect, directly and without intervention or assistance of
any fiscal agent or other intermediary, all money and other property payable
to or receivable by the Indenture Trustee pursuant to this Indenture. The
Indenture Trustee shall apply all such money received by it as provided in
this Indenture. Except as otherwise expressly provided in this Indenture, if
any default occurs in the making of any payment or performance under any
agreement or instrument that is part of the Note Collateral, the Indenture
Trustee may take such action as may be appropriate to enforce such payment or
performance, subject to Article VI, including the institution and prosecution
of appropriate Proceedings. Any such action shall be without prejudice to
any right to claim a Default or Event of Default under this Indenture and any
right to proceed thereafter as provided in Article V.
SECTION 8.02. COLLECTION ACCOUNT. (a) Prior to the Series
Issuance Date for the first Series of Notes issued hereunder, the Note Issuer
shall open, at the Indenture Trustee's Corporate Trust Office, or at another
Eligible Institution, one or more segregated trust accounts in the Indenture
Trustee's name for the deposit of Estimated IFC Collections (collectively, the
56
"Collection Account"). The Collection Account will consist of four
subaccounts: a general subaccount (the "General Subaccount"), a reserve
subaccount (the "Reserve Subaccount"), a subaccount for the
Overcollateralization Amount (the "Overcollateralization Subaccount") and a
capital subaccount (the "Capital Subaccount"). All amounts in the Collection
Account not allocated to any other subaccount shall be allocated to the
General Subaccount. Prior to the initial Payment Date, all amounts in the
Collection Account (other than funds deposited into the Capital Subaccount,
up to the Required Capital Level for any Series of Notes) shall be allocated
to the General Subaccount. All references to the Collection Account shall be
deemed to include reference to all subaccounts contained therein.
Withdrawals from and deposits to each of the foregoing subaccounts of the
Collection Account shall be made as set forth in Section 8.02(d) and (e).
The Collection Account shall at all times be maintained in an Eligible
Deposit Account and only the Indenture Trustee shall have access to the
Collection Account for the purpose of making deposits in and withdrawals from
the Collection Account in accordance with this Indenture. Funds in the
Collection Account shall not be commingled with any other moneys. All moneys
deposited from time to time in the Collection Account, all deposits therein
pursuant to this Indenture, and all investments made in Eligible Investments
with such moneys, including all income or other gain from such investments,
shall be held by the Indenture Trustee in the Collection Account as part of
the Note Collateral as herein provided.
(b) The Indenture Trustee shall have sole dominion and exclusive
control over all moneys in the Collection Account and shall apply such amounts
therein as provided in this Section 8.02. The Indenture Trustee shall also pay
from the Collection Account any amounts requested to be paid by or to the
Servicer pursuant to Section 6.11(d)(ii) of the Servicing Agreement.
(c) IFC Collections shall be deposited in the General Subaccount as
provided in Section 6.11 of the Servicing Agreement. All deposits to and
withdrawals from the Collection Account , all allocations to the subaccounts of
the Collection Account and any amounts to be paid to the Servicer under Section
8.02(b) shall be made by the Indenture Trustee in accordance with the written
instructions provided by the Servicer in the Monthly Servicer's Certificate ,
the Quarterly Servicer's Certificate or upon other written notice provided by
the Servicer pursuant to Section 6.11(d)(ii) of the Servicing Agreement, as
applicable.
(d) On each Payment Date for any Series of Notes, the Indenture
Trustee shall apply all amounts on deposit in the Collection Account, including
all net earnings thereon, to pay the following amounts, in accordance with the
Quarterly Servicer's Certificate, in the following priority:
(i) all amounts owed by the Note Issuer to the Indenture Trustee
(including legal fees and expenses) shall be paid to the Indenture Trustee
(subject to Section 6.07) and all amounts owed to the Delaware Trustee in
connection with its acting as trustee under the Trust Agreement shall be
paid to the Delaware Trustee, as appropriate;
57
(ii) the Servicing Fee for such Payment Date and all unpaid Servicing
Fees for prior Payment Dates shall be paid to the Servicer;
(iii) the Quarterly Administration Fee and all unpaid Quarterly
Administration Fees, if any, from prior Payment Dates shall be paid to the
Administrator;
(iv) so long as no Default or Event of Default shall have occurred
and be continuing or would result from such payment, all other Operating
Expenses shall be paid to the Persons entitled thereto or, if such have
been previously paid by the Note Issuer, to the Note Issuer in
reimbursement thereof; PROVIDED that the amount paid on each Payment Date
pursuant to this clause (iv) shall not exceed $100,000;
(v) any overdue Quarterly Interest (together with, to the extent
lawful, interest on such overdue Quarterly Interest at the applicable Note
Interest Rate) and then Quarterly Interest for such Payment Date with
respect to each Series of Notes shall be paid to the Holders of such Series
of Notes;
(vi) principal due and payable on the Notes of any Series as a result
of an Event of Default or on the Final Maturity Date of the Notes of such
Series, shall be paid to the Holders of such Series of Notes;
(vii) Quarterly Principal for such Payment Date with respect to each
Series of Notes shall be paid to the Holders of such Series of Notes;
(viii) unpaid Operating Expenses shall be paid to the Persons
entitled thereto or, if such have been previously paid by the Note Issuer,
to the Note Issuer or as it directs in reimbursement thereof;
(ix) the amount, if any, by which the Required Capital Level with
respect to all Outstanding Series of Notes exceeds the amount in the
Capital Subaccount as of such Payment Date shall be allocated to the
Capital Subaccount;
(x) the amount, if any, by which the Required Overcollateralization
Level with respect to all Outstanding Series of Notes exceeds the amount in
the Overcollateralization Subaccount as of such Payment Date shall be
allocated to the Overcollateralization Subaccount;
(xi) funds up to the amount of net earnings on amounts in the
Collection Account for the prior quarter without cumulation shall be paid
to the Note Issuer, free from the lien of this Indenture;
(xii)
58
the balance, if any, shall be allocated to the Reserve Subaccount for
distribution on subsequent Payment Dates; and
(xiii) after principal of and premium, if any, and interest on all
Notes of all Series, and all of the other foregoing amounts, have been paid
in full, the balance (including all amounts then held in the
Overcollateralization Subaccount, the Capital Subaccount and the Reserve
Subaccount), if any, shall be paid to the Note Issuer, free from the lien
of this Indenture.
All payments to the Holders of a Series pursuant to clauses (v), (vi) and
(vii) above or, in the case of clause (vi), if there is more than one Series
of Notes outstanding all payments to the Holders of all Series, shall be made
to such Holders pro rata based on the respective principal amounts of Notes
of such Series held by such Holders, unless, in the case of a Series
comprised of two or more Classes, the Trustee's Issuance Certificate or
Series Supplement, if any, for such Series provides otherwise. Payments in
respect of principal of and premium, if any, and interest on any Class of
Notes will be made on a pro rata basis among all the Holders of such Class.
(e) If on any Payment Date funds on deposit in the General Subaccount
are insufficient to make the payments contemplated by clauses (i) through (vii)
of Section 8.02(d) above, the Indenture Trustee shall (i) FIRST, draw from
amounts on deposit in the Reserve Subaccount, (ii) SECOND, draw from amounts on
deposit in the Overcollateralization Subaccount and (iii) THIRD, draw from
amounts on deposit in the Capital Subaccount, in each case, up to the amount of
such shortfall in order to make the payments contemplated by clauses (i) through
(vii) of Section 8.02(d). In addition, if on any Payment Date funds on deposit
in the General Subaccount are insufficient to make the allocations contemplated
by clauses (ix) and (x) above, the Indenture Trustee shall draw from amounts on
deposit in the Reserve Subaccount to make such allocations notwithstanding the
fact that on such Payment Date the allocation contemplated by clause (viii)
above may not have been fully satisfied.
SECTION 8.03. GENERAL PROVISIONS REGARDING THE COLLECTION ACCOUNT.
(a) So long as no Default or Event of Default shall have occurred and be
continuing, all or a portion of the funds in the Collection Account shall be
invested in Eligible Investments and reinvested by the Indenture Trustee upon
Issuer Order; PROVIDED, HOWEVER, that (i) such Eligible Investments shall not
mature later than the Business Day prior to the next Payment Date for the
related Series of Notes and (ii) such Eligible Investments shall not be
sold, liquidated or otherwise disposed of at a loss prior to the maturity
thereof. All income or other gain from investments of moneys deposited
59
in the Collection Account shall be deposited by the Indenture Trustee in the
Collection Account, and any loss resulting from such investments shall be
charged to the Collection Account. The Note Issuer will not direct the
Indenture Trustee to make any investment of any funds or to sell any
investment held in the Collection Account unless the security interest
Granted and perfected in such account will continue to be perfected in such
investment or the proceeds of such sale, in either case without any further
action by any Person, and, in connection with any direction to the Indenture
Trustee to make any such investment or sale, if requested by the Indenture
Trustee, the Note Issuer shall deliver to the Indenture Trustee an Opinion of
Counsel, acceptable to the Indenture Trustee, to such effect. In no event
shall the Indenture Trustee be liable for the selection of Eligible
Investments or for investment losses incurred thereon. The Indenture Trustee
shall have no liability in respect of losses incurred as a result of the
liquidation of any Eligible Investment prior to its stated maturity or the
failure of the Note Issuer or the Servicer to provide timely written
investment direction. The Indenture Trustee shall have no obligation to
invest or reinvest any amounts held hereunder in the absence of written
investment direction pursuant to an Issuer Order.
(b) Subject to Section 6.01(c), the Indenture Trustee shall not in
any way be held liable by reason of any insufficiency in the Collection Account
resulting from any loss on any Eligible Investment included therein except for
losses attributable to the Indenture Trustee's failure to make payments on such
Eligible Investments issued by the Indenture Trustee, in its commercial capacity
as principal obligor and not as trustee, in accordance with their terms.
(c) If (i) the Note Issuer shall have failed to give written
investment directions for any funds on deposit in the Collection Account to the
Indenture Trustee by 11:00 a.m. Eastern Time (or such other time as may be
agreed by the Note Issuer and Indenture Trustee) on any Business Day; or (ii) a
Default or Event of Default shall have occurred and be continuing with respect
to the Notes of any Series but the Notes of such Series shall not have been
declared due and payable pursuant to Section 5.02, then the Indenture Trustee
shall, to the fullest extent practicable, invest and reinvest funds in the
Collection Account in one or more investments which qualify as investments in
money market funds described under paragraph (d) of the definition of Eligible
Investments.
(d) The parties hereto acknowledge that the Servicer may, pursuant to
the Servicing Agreement, select Eligible Investments on behalf of the Note
Issuer.
SECTION 8.04. RELEASE OF NOTE COLLATERAL. (a) The Indenture Trustee
may, and when required by the provisions of this Indenture shall, execute
instruments to release property from the lien of this Indenture, or convey the
Indenture Trustee's interest in the same, in a manner and under circumstances
that are not inconsistent with the provisions of this Indenture. No party
relying upon an instrument executed by the Indenture Trustee as provided in this
Article VIII shall be bound to ascertain the Indenture Trustee's authority,
inquire into the satisfaction of any conditions precedent or see to the
application of any moneys.
60
(b) The Indenture Trustee shall, at such time as there are no
Notes Outstanding, release any remaining portion of the Note Collateral that
secured the Notes from the lien of this Indenture and release to the Note
Issuer or any other Person entitled thereto any funds then on deposit in the
Collection Account. The Indenture Trustee shall release property from the
lien of this Indenture pursuant to this Section 8.04(b) only upon receipt of
an Issuer Request accompanied by an Officer's Certificate, an Opinion of
Counsel and (if required by the TIA) Independent Certificates in accordance
with TIA Sections 314(c) and 314(d)(1) meeting the applicable requirements of
Section 11.01.
SECTION 8.05. OPINION OF COUNSEL. The Indenture Trustee shall
receive at least seven days' notice when requested by the Note Issuer to take
any action pursuant to Section 8.04(a), accompanied by copies of any
instruments involved, and the Indenture Trustee shall also require, as a
condition to such action, an Opinion of Counsel, in form and substance
satisfactory to the Indenture Trustee, stating the legal effect of any such
action, outlining the steps required to complete the same, and concluding
that all conditions precedent to the taking of such action have been complied
with and such action will not materially and adversely impair the security
for the Notes or the rights of the Holders in contravention of the provisions
of this Indenture; PROVIDED, HOWEVER, that such Opinion of Counsel shall not
be required to express an opinion as to the fair value of the Note
Collateral. Counsel rendering any such opinion may rely, without independent
investigation, on the accuracy and validity of any certificate or other
instrument delivered to the Indenture Trustee in connection with any such
action.
SECTION 8.06. REPORTS BY INDEPENDENT ACCOUNTANTS. As of the
Closing Date, the Note Issuer shall appoint a firm of Independent certified
public accountants of recognized national reputation for purposes of
preparing and delivering the reports or certificates of such accountants
required by this Indenture and the related Trustee's Issuance Certificates or
Series Supplements, if any. In the event such firm requires the Indenture
Trustee to agree to the procedures performed by such firm, the Note Issuer
shall direct the Indenture Trustee in writing to so agree; it being
understood and agreed that the Indenture Trustee will deliver such letter of
agreement in conclusive reliance upon the direction of the Note Issuer, and
the Indenture Trustee makes no independent inquiry or investigation to, and
shall have no obligation or liability in respect of, the sufficiency,
validity or correctness of such procedures. Upon any resignation by such
firm the Note Issuer shall provide written notice thereof to the Indenture
Trustee and shall promptly appoint a successor thereto that shall also be a
firm of Independent certified public accountants of recognized national
reputation. If the Note Issuer shall fail to appoint a successor to a firm
of Independent certified public accountants that has resigned within 15 days
after such resignation, the Indenture Trustee shall promptly notify the Note
Issuer of such failure in writing. If the Note Issuer shall not have
appointed a successor within 10 days thereafter the Indenture Trustee shall
promptly appoint a successor firm of Independent certified public accountants
of recognized national reputation; PROVIDED that the Indenture Trustee shall
have no liability with respect to such appointment if the Indenture Trustee
acted with due care with respect thereto. The fees of such Independent
certified public accountants and its successor shall be payable by the Note
Issuer.
61
ARTICLE IX
SUPPLEMENTAL INDENTURES
SECTION 9.01. SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF HOLDERS.
(a) Without the consent of the Holders of any Notes but with prior notice to
the Rating Agencies, the Note Issuer and the Indenture Trustee, when
authorized by an Issuer Order, at any time and from time to time, may enter
into one or more indentures supplemental hereto (which shall conform to the
provisions of the Trust Indenture Act as in force at the date of the
execution thereof), in form satisfactory to the Indenture Trustee, for any of
the following purposes:
(i) to correct or amplify the description of any property at any time
subject to the lien of this Indenture, or better to assure, convey and
confirm unto the Indenture Trustee any property subject or required to be
subjected to the lien of this Indenture, or to subject to the lien of this
Indenture additional property;
(ii) to evidence the succession, in compliance with the applicable
provisions hereof, of another person to the Note Issuer, and the assumption
by any such successor of the covenants of the Note Issuer herein and in the
Notes contained;
(iii) to add to the covenants of the Note Issuer, for the benefit of
the Holders of the Notes, or to surrender any right or power herein
conferred upon the Note Issuer;
(iv) to convey, transfer, assign, mortgage or pledge any property to
or with the Indenture Trustee;
(v) to cure any ambiguity, to correct or supplement any provision
herein or in any supplemental indenture which may be inconsistent with any
other provision herein or in any supplemental indenture or to make any
other provisions with respect to matters or questions arising under this
Indenture or in any supplemental indenture; PROVIDED that such action shall
not, as evidenced by an Opinion of Counsel, adversely affect the interests
of the Holders of the Notes;
(vi) to evidence and provide for the acceptance of the appointment
hereunder by a successor trustee with respect to the Notes and to add to or
change any of the provisions of this Indenture as shall be necessary to
facilitate the administration of the trusts hereunder by more than one
trustee, pursuant to the requirements of Article VI;
(vii) to modify, eliminate or add to the provisions of this Indenture
to such extent as shall be necessary to effect the qualification of this
Indenture under the TIA or under any similar Federal statute hereafter
enacted and to add to this Indenture such other provisions as may be
expressly required by the TIA; or
62
(viii) to set forth the terms of any Series that has not theretofore
been authorized by a Trustee's Issuance Certificate or Series Supplement,
if any, or to provide for the execution and delivery of any Swap Agreement.
The Indenture Trustee is hereby authorized to join in the execution
of any such supplemental indenture and to make any further appropriate
agreements and stipulations that may be therein contained.
(b) The Note Issuer and the Indenture Trustee, when authorized by
an Issuer Order, may, also without the consent of any of the Holders of the
Notes, enter into an indenture or indentures supplemental hereto for the
purpose of adding any provisions to, or changing in any manner or eliminating
any of the provisions of, this Indenture or of modifying in any manner the
rights of the Holders of the Notes under this Indenture; PROVIDED, HOWEVER,
that (i) such action shall not, as evidenced by an Opinion of Counsel,
adversely affect in any material respect the interests of the Holders and
(ii) the Rating Agency Condition shall have been satisfied with respect
thereto.
SECTION 9.02. SUPPLEMENTAL INDENTURES WITH CONSENT OF HOLDERS. The
Note Issuer and the Indenture Trustee, when authorized by an Issuer Order,
also may, with prior notice to the Rating Agencies and with the consent of
the Holders of not less than a majority of the Outstanding Amount of the
Notes of each Series or Class to be affected, by Act of such Holders
delivered to the Note Issuer and the Indenture Trustee, enter into an
indenture or indentures supplemental hereto for the purpose of adding any
provisions to, or changing in any manner or eliminating any of the provisions
of, this Indenture or of modifying in any manner the rights of the Holders of
the Notes under this Indenture; PROVIDED, HOWEVER, that no such supplemental
indenture shall, without the consent of the Holder of each Outstanding Note
of each Series or Class affected thereby:
(i) change the date of payment of any installment of principal of or
premium, if any, or interest on any Note, or reduce the principal amount
thereof, the interest rate thereon or premium, if any, with respect
thereto, change any Optional Redemption Price, change the provisions of
this Indenture and the related applicable Trustee's Issuance Certificate or
Series Supplement, if any, relating to the application of collections on,
or the proceeds of the sale of, the Note Collateral to payment of principal
of or premium, if any, or interest on the Notes, or change any place of
payment where, or the coin or currency in which, any Note or the interest
thereon is payable, or impair the right to institute suit for the
enforcement of the provisions of this Indenture requiring the application
of funds available therefor, as provided in Article V, to the payment of
any such amount due on the Notes on or after the respective due dates
thereof (or, in the case of optional redemption, on or after the Optional
Redemption Date);
(ii) reduce the percentage of the Outstanding Amount of the Notes or
of a Series or Class thereof, the consent of the Holders of which is
required for any such
63
supplemental indenture, or the consent of the Holders of which is
required for any waiver of compliance with certain provisions of this
Indenture or certain defaults hereunder and their consequences provided
for in this Indenture;
(iii) modify or alter the provisions of the proviso to the definition
of the term "Outstanding";
(iv) reduce the percentage of the Outstanding Amount of the Notes
required to direct the Indenture Trustee to direct the Note Issuer to sell
or liquidate the Note Collateral pursuant to Section 5.04;
(v) modify any provision of this Section to decrease any minimum
percentage specified herein necessary to approve any amendments to any
provisions of this Indenture;
(vi) modify any of the provisions of this Indenture in such manner as
to affect the calculation of the amount of any payment of interest,
principal or premium, if any, due on any Note on any Payment Date
(including the calculation of any of the individual components of such
calculation) ;
(vii) permit the creation of any lien ranking prior to or on a parity
with the lien of this Indenture with respect to any part of the Note
Collateral or, except as otherwise permitted or contemplated herein,
terminate the lien of this Indenture on any property at any time subject
hereto or deprive the Holder of any Note of the security provided by the
lien of this Indenture; or
(viii) cause any material adverse federal income tax consequence to
ComEd, the Grantee, the Note Issuer, the Delaware Trustee, the Indenture
Trustee or the then existing Holders.
The Indenture Trustee may in its discretion determine whether or
not any Notes of a Series or Class would be affected by any supplemental
indenture and any such determination shall be conclusive upon the Holders of
all Notes of such Series or Class, whether theretofore or thereafter
authenticated and delivered hereunder. The Indenture Trustee shall not be
liable for any such determination made in good faith.
It shall not be necessary for any Act of Holders under this Section
to approve the particular form of any proposed supplemental indenture, but it
shall be sufficient if such Act shall approve the substance thereof.
Promptly after the execution by the Note Issuer and the Indenture
Trustee of any supplemental indenture pursuant to this Section, the Note
Issuer shall mail to the Rating Agencies
64
and the Holders of the Notes to which such supplemental indenture relates a
notice setting forth in general terms the substance of such supplemental
indenture. Any failure of the Indenture Trustee to mail such notice, or any
defect therein, shall not, however, in any way impair or affect the validity
of any such supplemental indenture.
SECTION 9.03. EXECUTION OF SUPPLEMENTAL INDENTURES. In executing,
or permitting the additional trusts created by, any supplemental indenture
permitted by this Article IX or the modifications thereby of the trusts
created by this Indenture, the Indenture Trustee shall be entitled to
receive, and subject to Sections 6.01 and 6.02, shall be fully protected in
relying upon, an Opinion of Counsel stating that the execution of such
supplemental indenture is authorized or permitted by this Indenture. The
Indenture Trustee may, but shall not be obligated to, enter into any such
supplemental indenture that affects the Indenture Trustee's own rights,
duties, liabilities or immunities under this Indenture or otherwise.
SECTION 9.04. EFFECT OF SUPPLEMENTAL INDENTURE. Upon the
execution of any supplemental indenture pursuant to the provisions hereof,
this Indenture shall be and be deemed to be modified and amended in
accordance therewith with respect to each Series or Class of Notes affected
thereby, and the respective rights, limitations of rights, obligations,
duties, liabilities and immunities under this Indenture of the Indenture
Trustee, the Note Issuer and the Holders of the Notes shall thereafter be
determined, exercised and enforced hereunder subject in all respects to such
modifications and amendments, and all the terms and conditions of any such
supplemental indenture shall be and be deemed to be part of the terms and
conditions of this Indenture for any and all purposes.
SECTION 9.05. CONFORMITY WITH TRUST INDENTURE ACT. Every amendment
of this Indenture and every supplemental indenture executed pursuant to this
Article IX shall conform to the requirements of the Trust Indenture Act as
then in effect so long as this Indenture shall then be qualified under the
Trust Indenture Act.
SECTION 9.06. REFERENCE IN NOTES TO SUPPLEMENTAL INDENTURES.
Notes authenticated and delivered after the execution of any supplemental
indenture pursuant to this Article IX may, and if required by the Indenture
Trustee shall, bear a notation in form approved by the Indenture Trustee as
to any matter provided for in such supplemental indenture. If the Note
Issuer or the Indenture Trustee shall so determine, new Notes so modified as
to conform, in the opinion of the Indenture Trustee and the Note Issuer, to
any such supplemental indenture may be prepared and executed by the Note
Issuer and authenticated and delivered by the Indenture Trustee in exchange
for Outstanding Notes.
65
ARTICLE X
REDEMPTION OF NOTES
SECTION 10.01. OPTIONAL REDEMPTION BY NOTE ISSUER. The Note
Issuer may, at its option, redeem all, but not less than all, of the Notes of
a Series (a) on any Payment Date if, after giving effect to payments that
would otherwise be made on such Payment Date, the Outstanding Amount of any
such Series of Notes has been reduced to less than five percent of the
initial principal balance thereof, or (b) if and to the extent specified in
the related Trustee's Issuance Certificate or Series Supplement, if any, on
any Payment Date on or prior to December 31, 2004, from the proceeds of the
issuance and sale of the Notes of any other Series. In addition, a Series of
Notes shall be subject to redemption if and to the extent provided in the
related Trustee's Issuance Certificate or Series Supplement, if any. In no
event, however, shall any Notes be redeemable unless the Rating Agency
Condition shall be satisfied with respect to each Rating Agency other than
Moody's, to which prior written notice of such redemption shall have been
given, with respect to any Notes which remain Outstanding after such
redemption. The redemption price in any case shall be equal to the
outstanding principal amount of the Notes to be redeemed plus accrued and
unpaid interest thereon at the Note Interest Rate to the Optional Redemption
Date (such price being called the "Optional Redemption Price"). If the Note
Issuer shall elect to redeem the Notes of a Series pursuant to this Section
10.01, it shall furnish written notice (which notice shall state all items
listed in Section 10.02) of such election to the Indenture Trustee and the
Rating Agencies not more than 50 and not less than 25 days prior to the
Optional Redemption Date and shall deposit with the Indenture Trustee not
later than one Business Day prior to the Optional Redemption Date the
Optional Redemption Price of the Notes to be redeemed whereupon all such
Notes shall be due and payable on the Optional Redemption Date upon the
furnishing of a notice complying with Section 10.02 hereof to each Holder of
the Notes of such Series pursuant to this Section 10.01.
SECTION 10.02. FORM OF OPTIONAL REDEMPTION NOTICE. Unless otherwise
specified in the Trustee's Issuance Certificate or Series Supplement, if any,
relating to a Series of Notes, notice of redemption under Section 10.01 hereof
shall be given by the Indenture Trustee by first-class mail, postage prepaid,
mailed not less than five days nor more than 25 days prior to the applicable
Optional Redemption Date to each Holder of Notes to be redeemed, as of the close
of business on the Record Date preceding the applicable Optional Redemption Date
at such Holder's address appearing in the Note Register.
All notices of redemption shall state:
(1) the Optional Redemption Date;
(2) the Optional Redemption Price;
66
(3) the place where such Notes are to be surrendered for payment of
the Optional Redemption Price (which shall be the office or agency of the
Note Issuer to be maintained as provided in Section 3.02 hereof);
(4) the CUSIP number, if applicable; and
(5) the principal amount of Notes to be redeemed.
Notice of redemption of the Notes to be redeemed shall be given by
the Indenture Trustee in the name and at the expense of the Note Issuer.
Failure to give notice of redemption, or any defect therein, to any Holder of
any Note selected for redemption shall not impair or affect the validity of
the redemption of any other Note.
SECTION 10.03. NOTES PAYABLE ON OPTIONAL REDEMPTION DATE. Notice
of redemption having been given as provided in Section 10.02 hereof, the
Notes to be redeemed shall on the Optional Redemption Date become due and
payable at the Optional Redemption Price and (unless the Note Issuer shall
default in the payment of the Optional Redemption Price) no interest shall
accrue on the Optional Redemption Price for any period after the date to
which accrued interest is calculated for purposes of calculating the Optional
Redemption Price.
67
ARTICLE XI
MISCELLANEOUS
SECTION 11.01. COMPLIANCE CERTIFICATES AND OPINIONS, ETC. (a)
Upon any application or request by the Note Issuer to the Indenture Trustee
to take any action under any provision of this Indenture, the Note Issuer
shall furnish to the Indenture Trustee (i) an Officer's Certificate stating
that all conditions precedent, if any, provided for in this Indenture
relating to the proposed action have been complied with, (ii) an Opinion of
Counsel stating that in the opinion of such counsel all such conditions
precedent, if any, have been complied with and (iii) (if required by the TIA)
an Independent Certificate from a firm of certified public accountants
meeting the applicable requirements of this Section, except that, in the case
of any such application or request as to which the furnishing of such
documents is specifically required by any provision of this Indenture, no
additional certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(i) a statement that each signatory of such certificate or opinion
has read or has caused to be read such covenant or condition and the
definitions herein relating thereto;
(ii) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(iii) a statement that, in the opinion of each such signatory, such
signatory has made such examination or investigation as is necessary to
enable such signatory to express an informed opinion as to whether or not
such covenant or condition has been complied with; and
(iv) a statement as to whether, in the opinion of each such
signatory, such condition or covenant has been complied with.
(b)(i) Prior to the deposit of any Note Collateral or other property
or securities with the Indenture Trustee that is to be made the basis for the
release of any property or securities subject to the lien of this Indenture, the
Note Issuer shall, in addition to any obligation imposed in Section 11.01(a) or
elsewhere in this Indenture, furnish to the Indenture Trustee an Officer's
Certificate certifying or stating the opinion of each person signing such
certificate as to the fair value (within 90 days of such deposit) to the Note
Issuer of the Note Collateral or other property or securities to be so
deposited.
(ii) Whenever the Note Issuer is required to furnish to the Indenture
Trustee an Officer's Certificate certifying or stating the opinion of any signer
thereof as to the matters described in clause (i) above, the Note Issuer shall
also deliver to the Indenture Trustee an
68
Independent Certificate as to the same matters, if the fair value to the Note
Issuer of the securities to be so deposited and of all other such securities
made the basis of any such withdrawal or release since the commencement of
the then-current fiscal year of the Note Issuer, as set forth in the
certificates delivered pursuant to clause (i) above and this clause (ii), is
ten percent or more of the Outstanding Amount of the Notes of all Series, but
such a certificate need not be furnished with respect to any securities so
deposited, if the fair value thereof to the Note Issuer as set forth in the
related Officer's Certificate is less than the lesser of (A) $25,000 or (B)
one percent of the Outstanding Amount of the Notes of all Series.
(iii) Whenever any property or securities are to be released from
the lien of this Indenture other than pursuant to Section 8.02(d), the Note
Issuer shall also furnish to the Indenture Trustee an Officer's Certificate
certifying or stating the opinion of each person signing such certificate as
to the fair value (within 90 days of such release) of the property or
securities proposed to be released and stating that in the opinion of such
person the proposed release will not impair the security under this Indenture
in contravention of the provisions hereof.
(iv) Whenever the Note Issuer is required to furnish to the
Indenture Trustee an Officer's Certificate certifying or stating the opinion
of any signatory thereof as to the matters described in clause (iii) above,
the Note Issuer shall also furnish to the Indenture Trustee an Independent
Certificate as to the same matters if the fair value of the property or
securities and of all other property with respect to such Series, or
securities released from the lien of this Indenture (other than pursuant to
Section 8.02(d) hereof) since the commencement of the then-current calendar
year, as set forth in the certificates required by clause (iii) above and
this clause (iv), equals 10 percent or more of the Outstanding Amount of the
Notes of all Series, but such certificate need not be furnished in the case
of any release of property or securities if the fair value thereof as set
forth in the related Officer's Certificate is less than the lesser of (A)
$25,000 or (B) one percent of the then Outstanding Amount of the Notes of all
Series.
(v) Notwithstanding Section 2.16 or any other provision of this
Section 11.01, the Indenture Trustee may (A) collect, liquidate, sell or
otherwise dispose of the Intangible Transition Property and the other Note
Collateral as and to the extent permitted or required by the Basic Documents
and (B) make cash payments out of the Collection Account as and to the extent
permitted or required by the Basic Documents.
SECTION 11.02. FORM OF DOCUMENTS DELIVERED TO INDENTURE TRUSTEE.
In any case where several matters are required to be certified by, or covered
by an opinion of, any specified Person, it is not necessary that all such
matters be certified by, or covered by the opinion of, only one such Person,
or that they be so certified or covered by only one document, but one such
Person may certify or give an opinion with respect to some matters and one or
more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
69
Any certificate or opinion of a Responsible Officer of the Note
Issuer may be based, insofar as it relates to legal matters, upon a
certificate or opinion of, or representations by, counsel, unless such
officer knows, or in the exercise of reasonable care should know, that the
certificate or opinion or representations with respect to the matters upon
which his or her certificate or opinion is based are erroneous. Any such
certificate of a Responsible Officer or Opinion of Counsel may be based,
insofar as it relates to factual matters, upon a certificate or opinion of,
or representations by, an officer or officers of the Servicer, the Grantee,
the Note Issuer or the Administrator, stating that the information with
respect to such factual matters is in the possession of the Servicer, the
Grantee, the Note Issuer or the Administrator, unless such counsel knows, or
in the exercise of reasonable care should know, that the certificate or
opinion or representations with respect to such matters are erroneous.
Whenever in this Indenture, in connection with any application or
certificate or report to the Indenture Trustee, it is provided that the Note
Issuer shall deliver any document as a condition of the granting of such
application, or as evidence of the Note Issuer's compliance with any term
hereof, it is intended that the truth and accuracy, at the time of the
granting of such application or at the effective date of such certificate or
report (as the case may be), of the facts and opinions stated in such
document shall in such case be conditions precedent to the right of the Note
Issuer to have such application granted or to the sufficiency of such
certificate or report. The foregoing shall not, however, be construed to
affect the Indenture Trustee's right to rely upon the truth and accuracy of
any statement or opinion contained in any such document as provided in
Article VI.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
SECTION 11.03. ACTS OF HOLDERS. (a) Any request, demand,
authorization, direction, notice, consent, waiver or other action provided by
this Indenture to be given or taken by Holders may be embodied in and
evidenced by one or more instruments of substantially similar tenor signed by
such Holders in person or by agents duly appointed in writing; and except as
herein otherwise expressly provided such action shall become effective when
such instrument or instruments are delivered to the Indenture Trustee, and,
where it is hereby expressly required, to the Note Issuer. Such instrument
or instruments (and the action embodied therein and evidenced thereby) are
herein sometimes referred to as the "Act" of the Holders signing such
instrument or instruments. Proof of execution of any such instrument or of a
writing appointing any such agent shall be sufficient for any purpose of this
Indenture and (subject to Section 6.01) conclusive in favor of the Indenture
Trustee and the Note Issuer, if made in the manner provided in this Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved in any manner that the Indenture Trustee
deems sufficient.
70
(c) The ownership of Notes shall be proved by the Note Register.
(d) Any request, demand, authorization, direction, notice,
consent, waiver or other action by the Holder of any Notes shall bind the
Holder of every Note issued upon the registration thereof or in exchange
therefor or in lieu thereof, in respect of anything done, omitted or suffered
to be done by the Indenture Trustee or the Note Issuer in reliance thereon,
whether or not notation of such action is made upon such Note.
SECTION 11.04. NOTICES, ETC., TO INDENTURE TRUSTEE, NOTE ISSUER
AND RATING AGENCIES. (a) Any request, demand, authorization, direction,
notice, consent, waiver or Act of Holders or other documents provided or
permitted by this Indenture to be made upon, given or furnished to or filed
with:
(i) the Indenture Trustee by any Holder or by the Note Issuer shall
be sufficient for every purpose hereunder if made, given, furnished or
filed in writing by facsimile transmission, first-class mail or overnight
delivery service to or with the Indenture Trustee at its Corporate Trust
Office, or
(ii) the Note Issuer by the Indenture Trustee or by any Holder
shall be sufficient for every purpose hereunder if in writing and
mailed, first-class, postage prepaid, to the Note Issuer addressed to:
ComEd Transitional Funding Trust, C/O First Union Trust Company,
National Association, One Xxxxxx Square, 000 Xxxx Xxxxxx, 0xx Xxxxx,
Xxxxxxxxxx, Xxxxxxxx 00000, Attention: Corporate Trust Administration or
at any other address previously furnished in writing to the Indenture
Trustee by the Note Issuer. The Note Issuer shall promptly transmit any
notice received by it from the Holders to the Indenture Trustee.
(b) Notices required to be given to the Rating Agencies by the Note
Issuer or the Indenture Trustee shall be in writing, personally delivered or
mailed by certified mail, return receipt requested to (i) in the case of
Moody's, to: Xxxxx'x Investors Service, Inc., ABS Monitoring Department, 00
Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, (ii) 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, (iii) in the case of
Fitch IBCA, to Fitch IBCA, Inc., Xxx Xxxxx Xxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx
00000, Attention ABS Surveillance, and (iv) in the case of Duff & Xxxxxx, to
Xxxx & Xxxxxx Credit Rating Co., 00 Xxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx
00000, Attention: Asset-Backed Monitoring Group.
SECTION 11.05. NOTICES TO HOLDERS; WAIVER. Where this Indenture
provides for notice to Holders of any event, such notice shall be sufficiently
given (unless otherwise herein expressly provided) if in writing and mailed,
first-class, postage prepaid to each Holder affected by such event, at such
Holder's address as it appears on the Note Register, not later than the latest
date, and not earlier than the earliest date, prescribed for the giving of such
notice. In any case
71
where notice to Holders is given by mail, neither the failure to mail such
notice nor any defect in any notice so mailed to any particular Holder shall
affect the sufficiency of such notice with respect to other Holders, and any
notice that is mailed in the manner herein provided shall conclusively be
presumed to have been duly given.
Where this Indenture provides for notice in any manner, such notice
may be waived in writing by any Person entitled to receive such notice,
either before or after the event, and such waiver shall be the equivalent of
such notice. Waivers of notice by Holders shall be filed with the Indenture
Trustee but such filing shall not be a condition precedent to the validity of
any action taken in reliance upon such a waiver.
In case, by reason of the suspension of regular mail service as a
result of a strike, work stoppage or similar activity, it shall be
impractical to mail notice of any event of Holders when such notice is
required to be given pursuant to any provision of this Indenture, then any
manner of giving such notice as shall be satisfactory to the Indenture
Trustee shall be deemed to be a sufficient giving of such notice.
Where this Indenture provides for notice to the Rating Agencies,
failure to give such notice shall not affect any other rights or obligations
created hereunder, and shall not under any circumstance constitute a Default
or Event of Default.
SECTION 11.06. CONFLICT WITH TRUST INDENTURE ACT. If any
provision hereof limits, qualifies or conflicts with another provision hereof
that is required to be included in this Indenture by any of the provisions of
the Trust Indenture Act, such required provision shall control.
The provisions of TIA Sections 310 through 317 that impose duties
on any person (including the provisions automatically deemed included herein
unless expressly excluded by this Indenture) are a part of and govern this
Indenture, whether or not physically contained herein.
SECTION 11.07. EFFECT OF HEADINGS AND TABLE OF CONTENTS. The
Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.
SECTION 11.08. SUCCESSORS AND ASSIGNS. All covenants and
agreements in this Indenture and the Notes by the Note Issuer shall bind its
successors and assigns, whether so expressed or not. All agreements of the
Indenture Trustee in this Indenture shall bind its successors.
SECTION 11.09. SEPARABILITY. In case any provision in this
Indenture or in the Notes shall be invalid, illegal or unenforceable, the
validity, legality, and enforceability of the remaining provisions shall not
in any way be affected or impaired thereby.
72
SECTION 11.10. BENEFITS OF INDENTURE. Nothing in this Indenture
or in the Notes, express or implied, shall give to any Person, other than the
parties hereto and their successors hereunder, and the Holders, and any other
party secured hereunder, and any other Person with an ownership interest in
any part of the Note Collateral, any benefit or any legal or equitable right,
remedy or claim under this Indenture.
SECTION 11.11. LEGAL HOLIDAYS. In any case where the date on
which any payment is due shall not be a Business Day, then (notwithstanding
any other provision of the Notes or this Indenture) payment need not be made
on such date, but may be made on the next succeeding Business Day with the
same force and effect as if made on the date on which nominally due, and no
interest shall accrue for the period from and after any such nominal date.
SECTION 11.12. GOVERNING LAW. THIS INDENTURE SHALL BE CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF ILLINOIS, WITHOUT REFERENCE TO
ITS CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF
THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
SECTION 11.13. COUNTERPARTS. This Indenture may be executed in
any number of counterparts, each of which so executed shall be deemed to be
an original, but all such counterparts shall together constitute but one and
the same instrument.
SECTION 11.14. RECORDING OF INDENTURE. If this Indenture is
subject to recording in any appropriate public recording offices, such
recording is to be effected by the Note Issuer and at its expense accompanied
by an Opinion of Counsel (which may be counsel to the Indenture Trustee or
any other counsel reasonably acceptable to the Indenture Trustee) to the
effect that such recording is necessary either for the protection of the
Holders or any other Person secured hereunder or for the enforcement of any
right or remedy granted to the Indenture Trustee under this Indenture.
SECTION 11.15. TRUST OBLIGATION. No recourse may be taken,
directly or indirectly, with respect to the obligations of the Note Issuer or
the Indenture Trustee on the Notes or under this Indenture or any certificate
or other writing delivered in connection herewith or therewith, against (i)
the Indenture Trustee or the Delaware Trustee in its respective individual
capacity, (ii) any owner of a beneficial interest in the Note Issuer
(including the Grantee and ComEd) or (iii) any partner, owner, beneficiary,
agent, officer, or employee of the Indenture Trustee or the Delaware Trustee
in its respective individual capacity, any holder of a beneficial interest in
the Indenture Trustee or of any successor or assign of any of them in their
respective individual or corporate capacities, except as any such Person may
have expressly agreed (it being understood that none of the Indenture
Trustee, the Delaware Trustee, the Grantee and ComEd has any such
obligations in their respective individual or corporate capacities).
73
SECTION 11.16. NO RECOURSE TO NOTE ISSUER. Notwithstanding any
provision of this Indenture or any Trustee's Issuance Certificate or any
Series Supplement to the contrary, Holders shall have no recourse against the
Note Issuer, but shall look only to the Note Collateral with respect to any
amounts due to the Holders hereunder and under the Notes.
SECTION 11.17. INSPECTION. The Note Issuer agrees that, on
reasonable prior notice, it will permit any representative of the Indenture
Trustee, during the Note Issuer's normal business hours, to examine all the
books of account, records, reports, and other papers of the Note Issuer, to
make copies and extracts therefrom, to cause such books to be audited by
Independent certified public accountants, and to discuss the Note Issuer's
affairs, finances and accounts with the Note Issuer's officers, employees,
and Independent certified public accountants, all at such reasonable times
and as often as may be reasonably requested. The Indenture Trustee shall and
shall cause its representatives to hold in confidence all such information
except to the extent disclosure may be required by law (and all reasonable
applications for confidential treatment are unavailing) and except to the
extent that the Indenture Trustee may reasonably determine that such
disclosure is consistent with its obligations hereunder. Notwithstanding
anything herein to the contrary, the foregoing shall not be construed to
prohibit (i) disclosure of any and all information that is or becomes
publicly known, or information obtained by the Indenture Trustee from sources
other than the Note Issuer, provided such parties are rightfully in
possession of such information, (ii) disclosure of any and all information
(A) if required to do so by any applicable statute, law, rule or regulation,
(B) pursuant to any subpoena, civil investigative demand or similar demand or
request of any court or regulatory authority exercising its proper
jurisdiction, (C) in any preliminary or final offering circular, registration
statement or contract or other document pertaining to the transactions
contemplated by this Indenture or the Basic Documents approved in advance by
the Note Issuer or (D) to any affiliate, independent or internal auditor,
agent, employee or attorney of the Indenture Trustee having a need to know
the same, provided that such parties agree to be bound by the confidentiality
provisions contained in this Section 11.17, or (iii) any other disclosure
authorized by the Note Issuer.
SECTION 11.18 NO PETITION. The Indenture Trustee, by entering
into this Indenture, and each Holder, by accepting a Note (or interest
therein) issued hereunder, hereby covenant and agree that they shall not,
prior to the date which is one year and one day after the termination of the
Indenture, acquiesce, petition or otherwise invoke or cause the Grantee , the
Note Issuer or the Delaware Trustee to invoke the process of any court or
government authority for the purpose of commencing or sustaining a case
against the Grantee , the Note Issuer or the Delaware Trustee under any
insolvency law or appointing a receiver, liquidator, assignee, trustee,
custodian, sequestrator or other similar official of the Grantee , the Note
Issuer or the Delaware Trustee or any substantial part of its respective
property, or ordering the winding up or liquidation of the affairs of the
Grantee, the Note Issuer or the Delaware Trustee .
74
IN WITNESS WHEREOF, the Note Issuer and the Indenture Trustee have
caused this Indenture to be duly executed by their respective officers
thereunto duly authorized and duly attested, all as of the day and year first
above written.
COMED TRANSITIONAL FUNDING TRUST
By: FIRST UNION TRUST COMPANY, NATIONAL
ASSOCIATION, not in its individual capacity
but solely as Delaware Trustee
By: ____________________________
Name: __________________________
Title: _________________________
XXXXXX TRUST AND SAVINGS BANK, not in its
individual capacity but solely as Indenture Trustee
By: _____________________________
Name: ___________________________
Title: __________________________
STATE OF ILLINOIS, )
)ss:
COUNTY OF XXXX )
On the day of [ ], 1998, before me, [ ], a Notary Public in
and for said county and state, personally appeared [ ], personally known to
me (or proved to me on the basis of satisfactory evidence) to be the person
and officer whose name is subscribed to the within instrument and
acknowledged to me that such person executed the same in such person's
authorized capacity, and that by the signature on the instrument Xxxxxx
Trust and Savings Bank, a banking corporation organized under the laws of the
State of Illinois, and the entity upon whose behalf the person acted,
executed this instrument.
WITNESS my hand and official seal.
------------------------------
Notary Public
My commission expires:
76
STATE OF ILLINOIS, )
)ss:
COUNTY OF XXXX )
On the day of [ ], 1998, before me, [ ], a Notary Public in and
for said county and state, personally appeared [ ], personally known to me
(or proved to me on the basis of satisfactory evidence) to be the person and
officer whose name is subscribed to the within instrument and acknowledged to
me that he executed the same in his authorized capacity, and that by his
signature on the instrument COMED TRANSITIONAL FUNDING TRUST, a Delaware
business trust and the entity upon whose behalf the person acted, executed
this instrument.
WITNESS my hand and official seal.
-----------------------------
Notary Public
My commission expires:
77
EXHIBIT A
REGISTERED $________
No.
SEE REVERSE FOR CERTAIN DEFINITIONS
CUSIP NO.
THE PRINCIPAL OF THIS SERIES [ ], CLASS [__-__] ("THIS CLASS
[__-__ ] NOTE") WILL BE PAID IN INSTALLMENTS AS SET FORTH HEREIN.
ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS CLASS [__-__] NOTE AT
ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF. THE HOLDER OF
THIS NOTE HAS NO RECOURSE TO THE ISSUER HEREOF AND AGREES TO LOOK ONLY TO THE
NOTE COLLATERAL, AS DESCRIBED IN THE INDENTURE AND ANY RELATED TRUSTEE'S
ISSUANCE CERTIFICATE OR SERIES SUPPLEMENT REFERRED TO ON THE REVERSE HEREOF,
FOR PAYMENT OF ANY AMOUNTS DUE HEREUNDER. ALL OBLIGATIONS OF THE ISSUER OF
THIS CLASS [__-__] NOTE UNDER THE TERMS OF THE INDENTURE WILL BE RELEASED AND
DISCHARGED UPON PAYMENT IN FULL HEREOF OR AS OTHERWISE PROVIDED IN SECTION
3.10(B) OR ARTICLE IV OF THE INDENTURE. THE HOLDER OF THIS CLASS [__-__]
NOTE HEREBY COVENANTS AND AGREES THAT PRIOR TO THE DATE WHICH IS ONE (1) YEAR
AND ONE (1) DAY AFTER THE PAYMENT IN FULL OF THE SERIES [ ] CLASS [__-__]
NOTES, IT WILL NOT INSTITUTE AGAINST, OR JOIN ANY OTHER PERSON IN INSTITUTING
AGAINST, THE ISSUER ANY BANKRUPTCY, REORGANIZATION, ARRANGEMENT, INSOLVENCY
OR LIQUIDATION PROCEEDINGS OR OTHER SIMILAR PROCEEDING UNDER THE LAWS OF THE
UNITED STATES OR ANY STATE OF THE UNITED STATES. NOTHING IN THIS PARAGRAPH
SHALL PRECLUDE, OR BE DEEMED TO ESTOP, SUCH HOLDER (A) FROM TAKING OR
OMITTING TO TAKE ANY ACTION PRIOR TO SUCH DATE IN (I) ANY CASE OR PROCEEDING
VOLUNTARILY FILED OR COMMENCED BY OR ON BEHALF OF THE ISSUER UNDER OR
PURSUANT TO ANY SUCH LAW OR (II) ANY INVOLUNTARY CASE OR PROCEEDING
PERTAINING TO THE ISSUER WHICH IS FILED OR COMMENCED BY OR ON BEHALF OF A
PERSON OTHER THAN SUCH HOLDER AND IS NOT JOINED IN BY SUCH HOLDER (OR ANY
PERSON TO WHICH SUCH HOLDER SHALL HAVE ASSIGNED, TRANSFERRED OR OTHERWISE
CONVEYED ANY PART OF THE OBLIGATIONS OF THE ISSUER HEREUNDER) UNDER OR
PURSUANT TO ANY SUCH LAW, OR (B) FROM COMMENCING OR PROSECUTING ANY LEGAL
ACTION WHICH IS NOT AN
A-1
INVOLUNTARY CASE OR PROCEEDING UNDER OR PURSUANT TO ANY SUCH LAW AGAINST THE
ISSUER OR ANY OF ITS PROPERTIES.
COMED TRANSITIONAL FUNDING TRUST NOTES,
SERIES [ ], Class [__-__].
INTEREST ORIGINAL PRINCIPAL FINAL MATURITY
RATE AMOUNT DATE
ComEd Transitional Funding Trust, a business trust organized and
existing under the laws of the State of Delaware (herein referred to as the
"Note Issuer"), for value received, hereby promises to pay to [ ], or
registered assigns, the Original Principal Amount shown above
[in quarterly installments] on the Payment Dates and in the amounts specified
on the reverse hereof or, if less, the amounts determined pursuant to Section
8.02 of the Indenture, in each year, commencing on the date determined as
provided on the reverse hereof and ending on or before the Final Maturity
Date shown above and to pay interest, at the Interest Rate shown above, on
each [March 15, June 15, September 15 and December 15] or if any such day is
not a Business Day, the next succeeding Business Day, commencing on [ ] and
continuing until the earlier of the payment in full of the principal hereof
and the Final Maturity Date (each a "Payment Date"), on the principal amount
of this Series [ ], Class [__-__] Note (hereinafter referred to as "this
Class [__-__] Note"). Interest on this Class [__-__] Note will accrue for
each Payment Date from the most recent Payment Date on which interest has
been paid to but excluding such Payment Date or, if no interest has yet been
paid, from [ ]. Interest will be computed on the basis of
[specify method of computation]. Such principal of and interest on this
Class [__-__] Note shall be paid in the manner specified on the reverse
hereof.
The principal of and interest on this Class [__-__] Note are payable
in such coin or currency of the United States of America as at the time of
payment is legal tender for payment of public and private debts. All payments
made by the Note Issuer with respect to this Class [__-__] Note shall be applied
first to interest due and payable on this Class [__-__] Note as provided above
and then to the unpaid principal of and premium, if any, on this Class [__-__]
Note, all in the manner set forth in Section 8.02 of the Indenture.
Reference is made to the further provisions of this Class [__-__] Note
set forth on the reverse hereof, which shall have the same effect as though
fully set forth on the face of this Class [__-__] Note.
A-2
Unless the certificate of authentication hereon has been executed
by the Indenture Trustee whose name appears below by manual signature, this
Class [__-__] Note shall not be entitled to any benefit under the Indenture
referred to on the reverse hereof, or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Note Issuer has caused this instrument to
be signed, manually or in facsimile, by its Responsible Officer.
Date:
COMED TRANSITIONAL FUNDING TRUST
By: FIRST UNION TRUST COMPANY, NATIONAL
ASSOCIATION, not in its individual capacity
BUT solely as Delaware Trustee
By: ____________________________
Name:
Title:
A-3
INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
Dated:_______,______
This is one of the Series [ ], Class [__-__] Notes, designated
above and referred to in the within-mentioned Indenture.
XXXXXX TRUST AND SAVINGS BANK, not in its
individual capacity but solely as Indenture
Trustee
By: _______________________________
Name: _____________________________
Title: ______________________________
A-4
REVERSE OF NOTE
This Series [ ], Class [__-__] Note is one of a duly authorized
issue of Notes of the Note Issuer (herein called the "Notes"), issued and to
be issued in one or more Series, which Series are issuable in one or more
Classes, and the Series [ ] Notes consists of [ ] Classes, including
this Class [__-__] Note (herein called the "Class [__-__] Notes"), all issued
and to be issued under an Indenture dated as of [ ], 1998, (the
"Indenture"), between the Note Issuer and Xxxxxx Trust and Savings Bank, as
Indenture Trustee (the "Indenture Trustee", which term includes any successor
trustee under the Indenture), to which Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the
respective rights and obligations thereunder of the Note Issuer, the
Indenture Trustee and the Holders of the Notes. All terms used in this Class
[__-__] Note that are defined in the Indenture, as supplemented or amended,
shall have the meanings assigned to them in the Indenture.
The Class [__-__] Notes, the other Classes of Series [ ] Notes
(all of such Classes being referred to herein as "Series [ ] Notes") and
any other Series of Notes issued by the Note Issuer are and will be equally
and ratably secured by the Note Collateral pledged as security therefor as
provided in the Indenture.
The principal of this Class [__-__] Note shall be payable on each
Payment Date only to the extent that amounts in the Collection Account are
available therefor, and only until the outstanding principal balance thereof
on the preceding Payment Date (after giving effect to all payments of
principal, if any, made on the preceding Payment Date) has been reduced to
the principal balance specified in the Expected Amortization Schedule which
is attached to the related Trustee's Issuance Certificate or Series
Supplement, if any, as Schedule A, unless payable earlier either because (x)
an Event of Default shall have occurred and be continuing and the Indenture
Trustee or the Holders of Notes representing not less than a majority of the
Outstanding Amount of the Notes of all Series have declared the Notes of all
Series to be immediately due and payable in accordance with Section 5.02 of
the Indenture or (y) the Note Issuer, at its option, shall have called for
the redemption of the Series [ ] Notes pursuant to Section 10.01 of the
Indenture. However, actual principal payments may be made in lesser than
expected amounts and at later than expected times as determined pursuant to
Section 8.02 of the Indenture. The entire unpaid principal amount of this
Class [__-__] Note shall be due and payable on the earlier of the Final
Maturity Date hereof and the Optional Redemption Date, if any.
Notwithstanding the foregoing, the entire unpaid principal amount of the
Notes shall be due and payable, if not then previously paid, on the date on
which an Event of Default shall have occurred and be continuing and the
Indenture Trustee or the Holders of the Notes representing not less than a
majority of the Outstanding Amount of the Notes of all Series have
-----------------
1 The form of the reverse of a Note is substantially as follows, unless
otherwise specified in the related Trustee's Issuance Certificate or Series
Supplement.
A-5
declared the Notes of all Series to be immediately due and payable in the
manner provided in Section 5.02 of the Indenture. All principal payments on
the Class [__-__] Notes shall be made pro rata to the Class [__-__] Holders
entitled thereto based on the respective principal amounts of the Class
[__-__] Notes held by them.
Payments of interest on this Class [__-__] Note due and payable on
each Payment Date, together with the installment of principal or premium, if
any, shall be made by check mailed first-class, postage prepaid, to the Person
whose name appears as the Registered Holder of this Class [__-__] Note (or one
or more Predecessor Notes) on the Note Register as of the close of business on
the Record Date or in such other manner as may be provided in the related
Trustee's Issuance Certificate or Series Supplement, if any, except for the
final installment of principal and premium, if any, payable with respect to this
Class [__-__] Note on a Payment Date which shall be payable as provided below.
Such checks shall be mailed to the Person entitled thereto at the address of
such Person as it appears on the Note Register as of the applicable Record Date
without requiring that this Class [__-__] Note be submitted for notation of
payment. Any reduction in the principal amount of this Class [__-__] Note (or
any one or more Predecessor Notes) effected by any payments made on any Payment
Date shall be binding upon all future Holders of this Class [__-__] Note and of
any Note issued upon the registration of transfer hereof or in exchange hereof
or in lieu hereof, whether or not noted hereon. If funds are expected to be
available, as provided in the Indenture, for payment in full of the then
remaining unpaid principal amount of this Class [__-__] Note on a Payment Date,
then the Indenture Trustee, in the name of and on behalf of the Note Issuer,
will notify the Person who was the Registered Holder hereof as of the Record
Date preceding such Payment Date by notice mailed no later than five days prior
to such final Payment Date and shall specify that such final installment will be
payable only upon presentation and surrender of this Class [__-__] Note and
shall specify the place where this Class [__-__] Note may be presented and
surrendered for payment of such installment.
The Note Issuer shall pay interest on overdue installments of interest
at the Note Interest Rate to the extent lawful.
As provided in the Indenture, the Class [__-__] Notes may be
redeemed, in whole but not in part, at the option of the Note Issuer on any
Payment Date at the Optional Redemption Price if, after giving effect to
payments that would otherwise be made on such Payment Date, the Outstanding
Amount of the Class [__-__] Notes has been reduced to less than five percent
of the initial principal balance thereof.
This Note is a transitional funding instrument as such term is defined
in the Funding Law. Principal and interest due and payable on this Note are
payable from and secured primarily by intangible transition property created and
established by a transitional funding order obtained from the Illinois Commerce
Commission pursuant to the Funding Law. Intangible transition property consists
of the right to impose and collect certain charges (defined in the Funding Law
as "instrument funding charges") to be included in regular electric utility
bills of
A-6
existing and future electric service customers of Commonwealth Edison
Company, an Illinois electric utility.
The Funding Law provides that: "The State [of Illinois] pledges to
and agrees with the holders of any transitional funding instruments who may
enter into contracts with an electric utility, grantee, assignee or issuer
pursuant to this Article XVIII [of the Public Utility Act] that the State
[of Illinois] will not in any way limit, alter, impair or reduce the value of
intangible transition property created by, or instrument funding charges
approved by, a transitional funding order so as to impair the terms of any
contract made by such electric utility, grantee, assignee or issuer with such
holders or in any way impair the rights and remedies of such holders until
the pertinent grantee instruments or, if the related transitional funding
order does not provide for the issuance of grantee instruments, the pertinent
transitional funding instruments and interest, premium and other fees, costs
and charges related thereto, as the case may be, are fully paid and
discharged. Electric utilities, grantees and issuers are authorized to
include these pledges and agreements of the State [of Illinois] in any
contract with the holders of transitional funding instruments or with any
assignees pursuant to this Article XVIII [of the Public Utility Act] and any
assignees are similarly authorized to include these pledges and agreements of
the State [of Illinois] in any contract with any issuer, holder or any other
assignee. Nothing in this Article XVIII [of the Public Utility Act] shall
preclude the State of Illinois from requiring adjustments as may otherwise be
allowed by law to the electric utility's base rates, transition charges,
delivery services charges, or other charges for tariffed services, so long as
any such adjustment does not directly affect or impair any instrument funding
charges previously authorized by a transitional funding order issued by the
[Illinois Commerce Commission]."
As a result of the foregoing pledge, the State of Illinois may not,
except as provided in the succeeding sentence, in any way limit, alter,
impair or reduce the value of such intangible transition property or such
instrument funding changes in a manner substantially impairing the Note
Indenture or the rights and remedies of the Holders, until the Notes,
together with interest thereon, are fully paid and discharged.
Notwithstanding the immediately preceding sentence, the State of Illinois
would be allowed to effect a temporary impairment of the Holders' rights if
it could be shown that such impairment was necessary to advance a significant
and legitimate public purpose.
As provided in the Indenture and subject to certain limitations set
forth therein, the transfer of this Class [__-__] Note may be registered on
the Note Register upon surrender of this Class [__-__] Note for registration
of transfer at the office or agency designated by the Note Issuer pursuant to
the Indenture, duly endorsed by, or accompanied by (a) a written instrument
of transfer in form satisfactory to the Indenture Trustee duly executed by
the Holder hereof or his attorney duly authorized in writing, with such
signature guaranteed by an institution which is a member of one of the
following recognized Signature Guaranty Programs: (i) The Securities
Transfer Agent Medallion Program (STAMP); (ii)The New York Stock Exchange
Medallion Program (MSP); (iii) The Stock Exchange Medallion Program (SEMP);
or (iv) in such other guarantee program acceptable to the Indenture Trustee,
and (b) such other documents as
A-7
the Indenture Trustee may require, and thereupon one or more new Class [__-__]
Notes of Minimum Denominations and in the same aggregate principal amount
will be issued to the designated transferee or transferees. No service
charge will be charged for any registration of transfer or exchange of this
Class [__-__] Note, but the transferor may be required to pay a sum
sufficient to cover any tax or other governmental charge that may be imposed
in connection with any such registration of transfer or exchange, other than
exchanges pursuant to Section 2.04 or 9.06 of the Indenture not involving any
transfer.
Each Note holder, by acceptance of a Note, covenants and agrees
that no recourse may be taken, directly or indirectly, with respect to the
obligations of the Note Issuer or the Indenture Trustee on the Notes or under
the Indenture or any certificate or other writing delivered in connection
therewith, against (i) the Indenture Trustee or the Delaware Trustee in its
respective individual capacity, (ii) any owner of a beneficial interest in
the Note Issuer (including the Grantee and ComEd) or (iii) any partner,
owner, beneficiary, agent, officer or employee of the Indenture Trustee or
the Delaware Trustee in its respective individual capacity, any holder of a
beneficial interest in the Indenture Trustee or of any successor or assign
of any of them in their individual or corporate capacities, except as any
such Person may have expressly agreed (it being understood that none of the
Indenture Trustee, the Delaware Trustee, the Grantee and ComEd has any such
obligations in their respective individual or corporate capacities).
Prior to the due presentment for registration of transfer of this
Class [__-__] Note, the Note Issuer, the Indenture Trustee and any agent of
the Note Issuer or the Indenture Trustee may treat the Person in whose name
this Class [__-__] Note is registered (as of the day of determination) as the
owner hereof for the purpose of receiving payments of principal of and
premium, if any, and interest on this Class [__-__] Note and for all other
purposes whatsoever, whether or not this Class [__-__] Note be overdue, and
neither the Note Issuer, the Indenture Trustee nor any such agent shall be
affected by notice to the contrary.
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of
the Note Issuer and the rights of the Holders of the Notes under the
Indenture at any time by the Note Issuer with the consent of the Holders of
Notes representing a majority of the Outstanding Amount of all Notes at the
time outstanding of each Series or Class to be affected. The Indenture also
contains provisions permitting the Holders of Notes representing specified
percentages of the Outstanding Amount of the Notes of all Series, on behalf
of the Holders of all the Notes, to waive compliance by the Note Issuer with
certain provisions of the Indenture and certain past defaults under the
Indenture and their consequences. Any such consent or waiver by the Holder
of this Class [__-__] Note (or any one of more Predecessor Notes) shall be
conclusive and binding upon such Holder and upon all future Holders of this
Class [__-__] Note and of any Note issued upon the registration of transfer
hereof or in exchange hereof or in lieu hereof
A-8
whether or not notation of such consent or waiver is made upon this Class
[__-__] Note. The Indenture also permits the Indenture Trustee to amend or
waive certain terms and conditions set forth in the Indenture without the
consent of Holders of the Notes issued thereunder.
The term "Note Issuer" as used in this Class [__-__] Note includes
any successor to the Note Issuer under the Indenture.
The Note Issuer is permitted by the Indenture, under certain
circumstances, to merge or consolidate, subject to the rights of the
Indenture Trustee and the Holders of Notes under the Indenture.
The Class [__-__] Notes are issuable only in registered form in
denominations as provided in the Indenture and the related Trustee's Issuance
Certificate or Series Supplement, if any, subject to certain limitations
therein set forth.
This Class [__-__] Note, the Indenture and the related Trustee's
Issuance Certificate or Series Supplement, if any, shall be construed in
accordance with the laws of the State of Illinois, without reference to its
conflict of law provisions, and the obligations, rights and remedies of the
parties hereunder and thereunder shall be determined in accordance with such
laws.
No reference herein to the Indenture and no provision of this Class
[__-__] Note or of the Indenture shall alter or impair the obligation, which is
absolute and unconditional, to pay the principal of and interest on this Class
[__-__] Note at the times, place, and rate, and in the coin or currency herein
prescribed.
The Holder of this Class [__-__] Note by the acceptance hereof
agrees that, notwithstanding any provision of the Indenture or the related
Trustee's Issuance Certificate or Series Supplement, if any, to the
contrary, the Holder shall have no recourse against the Note Issuer, but
shall look only to the Note Collateral, with respect to any amounts due to
the Holder under this Class [__-__] Note.
The Note Issuer and the Indenture Trustee, by entering into the
Indenture, and the Holders and any Persons holding a beneficial interest in
any Class [__-__] Note, by acquiring any Class [__-__] Note or interest
therein, (i) express their intention that the Class [__-__] Notes qualify
under applicable tax law as indebtedness of ComEd secured by the Note
Collateral and (ii) unless otherwise required by appropriate taxing
authorities, agree to treat the Class [__-__] Notes as indebtedness of ComEd
secured by the Note Collateral for the purpose of federal income, state and
local income and franchise taxes, and any other taxes imposed upon, measured
by or based upon gross or net income.
A-9
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee
------------------------
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto _____________________________________________
(name and address of assignee)
the within Class [__-__] Note and all rights thereunder, and hereby
irrevocably constitutes and appoints_____________, attorney, to transfer
said Class [__-__] Note on the books kept for registration thereof, with full
power of substitution in the premises.
Dated: ___________ __________________________
Signature Guaranteed:
___________________________
-----------------
NOTE: The signature to this assignment must correspond with the name of the
registered owner as it appears on the face of the within Class [__-__] Note
in every particular, without alteration, enlargement or any change
whatsoever.
A-10
EXHIBIT B
TRUSTEE'S ISSUANCE CERTIFICATE dated as of ____, ____ (this
"Certificate"), executed and delivered by COMED TRANSITIONAL
FUNDING TRUST, a business trust created under the laws of the
State of Delaware (the "Note Issuer"), to Xxxxxx Trust and
Savings Bank, a banking corporation organized under the laws of
the State of Illinois (the "Indenture Trustee"), as Indenture
Trustee under the Indenture dated as of [ ], 1998, between
the Note Issuer and the Indenture Trustee (the "Indenture").
PRELIMINARY STATEMENT
Article II of the Indenture provides, among other things, that the
Note Issuer may at any time and from time to time execute and deliver to
the Indenture Trustee one or more Trustee's Issuance Certificates for the
purposes of authorizing the issuance by the Note Issuer of a Series of Notes
and specifying the terms thereof. The Note Issuer has duly authorized the
creation of a Series of Notes with an initial aggregate principal amount of $
[ ] to be known as ComEd Transitional Funding Notes, Series [ ] (the
"Series [ ] Notes"), and the Note Issuer is executing and delivering this
Certificate in order to provide for the Series [ ] Notes.
All terms used in this Certificate that are defined in the
Indenture, either directly or by reference therein, have the meanings
assigned to them therein, except to the extent such terms are defined or
modified in this Certificate or the context clearly requires otherwise. In
the event that any term or provision contained herein shall conflict with or
be inconsistent with any term or provision contained in the Indenture, the
terms and provisions of this Certificate shall govern.
SECTION 1. DESIGNATION. The Series [ ] Notes shall be
designated generally as ComEd Transitional Funding Notes, Series [ ] and
further denominated as Classes [ ] through [ ].
SECTION 2. INITIAL PRINCIPAL AMOUNT; NOTE INTEREST RATE; SCHEDULED
MATURITY DATE; FINAL MATURITY DATE. The Notes of each Class of the Series
[ ] shall have the initial principal amount, bear interest at the rates per
annum and shall have Scheduled Maturity Dates and Final Maturity Dates set
forth below:
B-1
Initial Note Scheduled Final
Principal Interest Maturity Maturity
Class Amount Rate Date Date
----- ------ ---- ---- ----
The Note Interest Rate shall be computed on the basis of a 360-day year of
twelve 30-day months. [If the Notes of all or any Classes are to be Floating
Rate Notes, describe here the index or indexes to be used to determine the
applicable variable interest rate].
SECTION 3. AUTHENTICATION DATE; PAYMENT DATES; EXPECTED
AMORTIZATION SCHEDULE FOR PRINCIPAL; QUARTERLY INTEREST; REQUIRED
OVERCOLLATERALIZATION LEVEL; NO PREMIUM; OTHER TERMS. (a) AUTHENTICATION
DATE. The Series [ ] Notes that are authenticated and delivered by the
Indenture Trustee to or upon the order of the Note Issuer on [ ] (the
"Series Issuance Date") shall have as their date of authentication [ ].
(b) PAYMENT DATES. The Payment Dates for the Series [ ] Notes
are [March 15, June 15, September 15 and December 15] of each year or, if any
such date is not a Business Day, the next succeeding Business Day, commencing
on [ ] and continuing until the earlier of repayment of the Series [ ]
Notes in full and the Final Maturity Date for the Series [ ] Notes.
(c) EXPECTED AMORTIZATION SCHEDULE FOR PRINCIPAL. Unless an Event of
Default shall have occurred and be continuing on each Payment Date, the
Indenture Trustee shall distribute to the Holders of record as of the related
Record Date amounts payable pursuant to Section 8.02(d)(vii) of the Indenture as
principal, in the following order and priority: [(1) to the holders of the Class
A-1 Notes, until the Outstanding Amount of such Class of Notes thereof has been
reduced to zero; (2) to the holders of the Class A-2 Notes, until the
Outstanding Amount of such Class of Notes thereof has been reduced to zero; (3)
to the holders of the Class A-3 Notes, until the Outstanding Amount of such
Class of Notes thereof has been reduced to zero; (4) to the holders of the Class
A-4 Notes, until the Outstanding Amount of such Class of Notes thereof has been
reduced to zero; (5) to the holders of the Class A-5 Notes until the Outstanding
Amount of such Class of Notes thereof has been reduced to zero; (6) to the
holders of the Class A-6 Notes, until the Outstanding Amount of such Class of
Notes thereof has been reduced to zero; (7) to the holders of the Class A-7
Notes until the Outstanding Amount of such Class of Notes thereof has been
reduced to zero; and (8) to the holders of the Class A-8 Notes, until the
Outstanding Amount of such Class of Notes thereof has been reduced to zero;]
PROVIDED, HOWEVER, that in no event shall a principal payment pursuant to this
Section 3(c) on any Class on a Payment Date be greater than the amount necessary
to reduce the Outstanding Amount of such Class of Notes below the amount
specified in the Expected Amortization Schedule which is attached as Schedule A
hereto for such Class and Payment Date.
B-2
(d) QUARTERLY INTEREST. [Quarterly] Interest will be payable on each
Class of the Series [ ] Notes on each Payment Date in an equal amount to
[one-fourth] of the product of (i) the applicable Note Interest Rate and (ii)
the Outstanding Amount of the related Class of Notes as of the close of business
on the preceding Payment Date after giving effect to all payments of principal
made to the holders of the related Class of Series [ ] Notes on such
preceding Payment Date; PROVIDED, HOWEVER, that with respect to the initial
Payment Date, or, if no payment has yet been made, interest on the outstanding
principal balance will accrue from and including the Series Issuance Date to,
but excluding, the following Payment Date.
(e) REQUIRED OVERCOLLATERALIZATION LEVEL. The Required
Overcollateralization Level for any Payment Date shall be as set forth in
Schedule B hereto.
[(f) NO PREMIUM, No premium will be payable in connection with any
optional redemption of the Series [ ] Notes.]
[(g) The Series [ ] Notes shall not be Book-Entry Notes and the
applicable provisions of Section 2.11 of the Indenture shall not apply to such
Notes.]
SECTION 4. MINIMUM DENOMINATIONS. The Series [ ] Notes shall be
issuable in the Minimum Denomination and integral multiples thereof.
SECTION 5. CERTAIN DEFINED TERMS. Article I of the Indenture
provides that the meanings of certain defined terms used in the Indenture shall,
when applied to the Notes of a particular Series, be as defined in Appendix A
to the Indenture. Additionally, Article II of the Indenture provides that with
respect to a particular Series of Notes, certain terms will have the meanings
specified in the related Certificate. With respect to the Series [ ]
Notes, the following definitions shall apply:
"MINIMUM DENOMINATION" shall mean $1,000.
"NOTE INTEREST RATE" has the meaning set forth in Section 2 of this
Certificate.
"PAYMENT DATE" has the meaning set forth in Section 3(b) of this
Certificate.
"QUARTERLY INTEREST" has the meaning set forth in Section 3(d) of
this Certificate.
"SERIES ISSUANCE DATE" has the meaning set forth in Section 3(a) of
this Certificate.
B-3
SECTION 6. DELIVERY AND PAYMENT FOR THE SERIES [ ] NOTES; FORM
OF THE SERIES [ ] NOTES. The Indenture Trustee shall deliver the Series
[ ] Notes to the Note Issuer when authenticated in accordance with Section
2.03 of the Indenture. The Series [ ] Notes of each Class shall be in
the form of Exhibits [A-1 through A-_] hereto.
SECTION 7. RATIFICATION OF AGREEMENT. As supplemented by this
Certificate, the Indenture is in all respects ratified and confirmed and the
Indenture, as so supplemented by this Certificate, shall be read, taken, and
construed as one and the same instrument.
SECTION 8. COUNTERPARTS. This Certificate may be executed in any
number of counterparts, each of which so executed shall be deemed to be an
original, but all of such counterparts shall together constitute but one and
the same instrument.
SECTION 9. GOVERNING LAW. This Certificate shall be construed in
accordance with the laws of the State of Illinois, without reference to its
conflict of law provisions, and the obligations, rights and remedies of the
parties hereunder shall be determined in accordance with such laws.
SECTION 10. TRUST OBLIGATION. No recourse may be taken directly or
indirectly, with respect to the obligations of the Note Issuer or the Indenture
Trustee on the Notes or under this Certificate or any certificate or other
writing delivered in connection herewith or therewith, against (i) the Indenture
Trustee or the Delaware Trustee in its individual capacity, (ii) any owner of a
beneficial interest in the Note Issuer (including the Grantee or ComEd) or (iii)
any partner, owner, beneficiary, agent, officer, director, employee or agent of
the Indenture Trustee or the Delaware Trustee in its individual capacity, any
holder of a beneficial interest in the Note Issuer or the Indenture Trustee or
of any successor or assign of any of them in their respective individual or
corporate capacities, except as any such Person may have expressly agreed (it
being understood that none of the Indenture Trustee, the Delaware Trustee, the
Grantee and ComEd have any such obligations in their respective individual or
corporate capacities).
B-4
IN WITNESS WHEREOF, the Note Issuer has caused this Certificate to
be duly executed by a Responsible Officer thereunto duly authorized as of the
first day of the month and year first above written.
COMED TRANSITIONAL FUNDING TRUST, as
Note Issuer,
By: FIRST UNION TRUST COMPANY, NATIONAL
ASSOCIATION, not in its individual capacity but
solely as Delaware Trustee
By: _________________________________
Name: _____________________________
Title: ____________________________
RECEIVED, this ____ day
of ___________.
XXXXXX TRUST AND SAVINGS BANK, not in its individual
capacity but solely as Indenture Trustee
By: _________________________________
Name: _____________________________
Title: _____________________________
B-5
SCHEDULE A
EXPECTED AMORTIZATION SCHEDULE
OUTSTANDING PRINCIPAL BALANCE
Date Class Class Class Class Class
----- ----- ----- ----- ----- -----
Series Issuance $ $ $ $ $
Date
,199
,199
,199
,199
[Etc.]
B-6
SCHEDULE B
REQUIRED OVERCOLLATERALIZATION LEVEL SCHEDULE
Required
Payment Date Overcollateralization Level
------------ ---------------------------
,199 $
,199 $
,199 $
[Etc.] $
B-7
EXHIBIT C
SERIES SUPPLEMENT dated as of ____, 199 ____ (this "Supplement"),
by and between COMED TRANSITIONAL FUNDING TRUST, a business trust
created under the laws of the State of Delaware (the "Note
Issuer"), and, Xxxxxx Trust and Savings Bank, a banking
corporation organized under the laws of the State of Illinois
(the "Indenture Trustee"), as Indenture Trustee under the
Indenture dated as of [ ], 1998, between the Note Issuer and
the Indenture trustee (the "Indenture").
PRELIMINARY STATEMENT
Section 9.01 of the Indenture provides, among other things, that
the Note Issuer and the Indenture Trustee may at any time and from time to
time enter into one or more indentures supplemental to the Indenture for the
purposes of authorizing the issuance by the Note Issuer of a Series of Notes
and specifying the terms thereof. The Note Issuer has duly authorized the
creation of a series of Notes with an initial aggregate principal amount of
$ [ ] to be known as ComEd Transitional Funding Trust Notes, Series [ ]
(the "Series [ ] Notes"), and the Note Issuer and the Indenture Trustee are
executing and delivering this Supplement in order to provide for the Series
[ ] Notes.
All terms used in this Supplement that are defined in the Indenture,
either directly or by reference therein, have the meanings assigned to them
therein, except to the extent such terms are defined or modified in this
Supplement or the context clearly requires otherwise. In the event that any
term or provision contained herein shall conflict with or be inconsistent with
any term or provision contained in the Indenture, the terms and provisions of
this Supplement shall govern.
SECTION 1. DESIGNATION. The Series [ ] Notes shall be designated
generally as the ComEd Transitional Funding Trust Notes, Series [ ] and
further denominated as Classes [ ] through [ ].
SECTION 2. Initial Principal Amount; Note Interest Rate; Scheduled
Maturity Date; Final Maturity Date. The Notes of each class of the Series [ ]
shall have the initial principal amount, bear interest at the rates per annum
and shall have Scheduled Maturity Dates and Final Maturity Dates set forth
below:
C-1
Initial Note Scheduled Final
Principal Interest Maturity Maturity
Class Amount Rate Date Date
----- --------- -------- --------- --------
The Note Interest Rate shall be computed on the basis of a 360-day year of
twelve 30-day months. [If the Notes of all or any Classes are to be Floating
Rate Notes, describe here the index or indexes to be used to determine the
applicable variable rate.]
SECTION 3. AUTHENTICATION DATE; PAYMENT DATES; EXPECTED AMORTIZATION
SCHEDULE FOR PRINCIPAL; QUARTERLY INTEREST; REQUIRED OVERCOLLATERALIZATION
LEVEL; NO PREMIUM. (a) AUTHENTICATION DATE. The Series [ ] Notes that are
authenticated and delivered by the Indenture Trustee to or upon the order of the
Note Issuer on [ ] (the "Series Issuance Date") shall have as their date of
authentication [ ].
(b) PAYMENT DATES. The Payment Dates for the Series [ ] Notes are
[March 15, June 15, September 15 and December 15] of each year or, if any such
date is not a Business Day, the next succeeding Business Day, commencing on [ ]
and continuing until the earlier of repayment of the Series [ ] Notes in full
and the final maturity date for the Series [ ] Notes.
(c) EXPECTED AMORTIZATION SCHEDULE FOR PRINCIPAL. Unless an Event of
Default shall have occurred and be continuing on each Payment Date, the
Indenture Trustee shall distribute to the Holders of record as of the related
Record Date amounts payable pursuant to Section 8.02(d)(vii) of the Indenture as
principal, in the following order and priority: [(1) to the holders of the Class
A-1 Notes, until the Outstanding Amount of such Class of Notes thereof has been
reduced to zero; (2) to the holders of the Class A-2 Notes, until the
Outstanding Amount of such Class of Notes thereof has been reduced to zero; (3)
to the holders of the Class A-3 Notes, until the Outstanding Amount of such
Class of Notes thereof has been reduced to zero; (4) to the holders of the Class
A-4 Notes, until the Outstanding Amount of such Class of Notes thereof has been
reduced to zero; (5) to the holders of the Class A-5 Notes until the Outstanding
Amount of such Class of Notes thereof has been reduced to zero; (6) to the
holders of the Class A-6 Notes, until the Outstanding Amount of such Class of
Notes thereof has been reduced to zero; (7) to the holders of the Class A-7
Notes until the Outstanding amount of such Class of Notes thereof has been
reduced to zero; and (8) to the holders of the Class A-8 Notes, until the
Outstanding amount of such Class of Notes thereof has been reduced to zero;]
PROVIDED, HOWEVER, that in no event shall a principal payment pursuant to this
Section 3(c) on any Class on a Payment Date be greater than the amount necessary
to reduce the Outstanding Amount of such Class of Notes below the amount
specified in the Expected Amortization Schedule which is attached as Schedule A
hereto for such Class and Payment Date.
C-2
(d) QUARTERLY INTEREST. [Quarterly] Interest will be payable on
each Class of the Series [ ] Notes on each Payment Date in an equal amount
to [one-fourth] of the product of (i) the applicable Note Interest Rate and
(ii) the Outstanding Amount of the related Class of Notes as of the close of
business on the preceding Payment Date after giving effect to all payments of
principal made to the holders of the related Class of Series [ ] Notes on
such preceding Payment Date; PROVIDED, HOWEVER, that with respect to the
initial Payment Date, or, if no payment has yet been made, interest on the
outstanding principal balance will accrue from and including the Series
Issuance Date to, but excluding, the following Payment Date.
(e) REQUIRED OVERCOLLATERALIZATION LEVEL. The Required
Overcollateralization Level for any Payment Date shall be as set forth in
Schedule B hereto.
[(f) NO PREMIUM. No Premium will be payable in connection with any
optional redemption of the Series [ ] Notes.]
[(g) The Series [ ] Notes shall not be Book-Entry Notes and the
applicable provisions of Section 2.11 of the Indenture shall not apply to such
Notes.]
SECTION 4. MINIMUM DENOMINATIONS. The Series [ ] Notes shall be
Issuable in the Minimum Denomination and Integral Multiples thereof.
SECTION 5. CERTAIN DEFINED TERMS. Article I of the Indenture
provides that the meanings of certain defined terms used in the Indenture shall,
when applied to the Notes of a particular Series, be as defined in Appendix A to
the Indenture. Additionally, Article II of the Indenture provides that with
respect to a particular Series of Notes, certain terms will have the meanings
specified in the related Supplement. With respect to the Series [ ] Notes,
the following definitions shall apply:
"MINIMUM DENOMINATION" shall mean $1,000.
"NOTE INTEREST RATE" has the meaning set forth in Section 2 of this
Supplement.
"PAYMENT DATE" has the meaning set forth in section 3(b) of this
Supplement.
"QUARTERLY INTEREST" has the meaning set forth in Section 3(d) of
this Supplement.
"SERIES ISSUANCE DATE" has the meaning set forth in Section 3(a) of
this Supplement.
C-3
SECTION 6. DELIVERY AND PAYMENT FOR THE SERIES [ ] NOTES; FORM
OF THE SERIES [ ] NOTES. The Indenture Trustee shall deliver the Series
[ ] Notes to the Note Issuer when authenticated in accordance with Section
2.03 of the Indenture. The Series [ ] Notes of each Class shall be in
the form of Exhibits [A-1 through A-_] hereto.
SECTION 7. RATIFICATION OF AGREEMENT. As supplemented by this
Supplement, the Indenture is in all respects ratified and confirmed and the
Indenture, as so supplemented by this Supplement, shall be read, taken, and
construed as one and the same instrument.
SECTION 8. COUNTERPARTS. This Supplement may be executed in any
number of counterparts, each of which so executed shall be deemed to be an
original, but all of such counterparts shall together constitute but one and the
same instrument.
SECTION 9. GOVERNING LAW. This Supplement shall be construed in
accordance with the laws of the State of Illinois, without reference to its
conflict of law provisions, and the obligations, rights and remedies of the
parties hereunder shall be determined in accordance with such laws.
SECTION 10. TRUST OBLIGATION. No recourse may be taken directly or
indirectly, with respect to the obligations of the Note Issuer or the Indenture
Trustee on the Notes or under this Supplement or any certificate or other
writing delivered in connection herewith or therewith, against (i) the Indenture
Trustee or the Delaware Trustee in its individual capacity, (ii) any owner of a
beneficial interest in the Note Issuer (including the Grantee or ComEd) or (iii)
any partner, owner, beneficiary, agent, officer, director, employee or agent of
the Indenture Trustee or the Delaware Trustee in its individual capacity, any
holder of a beneficial interest in the Note Issuer or the Indenture Trustee or
of any successor or assign of any of them in their respective individual or
corporate capacities, except as any such person may have expressly agreed (it
being understood that none of the Indenture Trustee, the Delaware Trustee, the
Grantee and ComEd have any such obligations in their respective individual or
corporate capacities).
C-4
IN WITNESS WHEREOF, the Note Issuer and the Indenture Trustee have
caused this Supplement to be duly executed by their respective officers
thereunto duly authorized as of the first day of the month and year first above
written.
COMED TRANSITIONAL FUNDING TRUST, as
Note Issuer,
By: FIRST UNION TRUST COMPANY, NATIONAL
ASSOCIATION, not in its individual capacity
but solely as Delaware Trustee
By: _________________________________
Name: ______________________________
Title: _______________________________
XXXXXX TRUST AND SAVINGS BANK, not in its
individual capacity but solely as Indenture
Trustee
By: _________________________________
Name: ______________________________
Title: _______________________________
C-5
SCHEDULE A
Expected Amortization Schedule
Outstanding Principal Balance
Date Class Class Class Class Class
---- ----- ----- ----- ----- -----
Series Issuance $ $ $ $ $
Date
,199
,199
,199
,199
[Etc.]
C-6
SCHEDULE B
REQUIRED OVERCOLLATERALIZATION LEVEL SCHEDULE
Required
Payment Date Overcollateralization Level
------------ ---------------------------
,199 $
,199 $
,199 $
[Etc.] $
C-7
BLACKLINED VERSION REVISED FROM FORM FILED
WITH AMENDMENT NO. 1
EXHIBIT 4.3
FORM OF APPENDIX A TO INDENTURE
APPENDIX A
DEFINITIONS
This is APPENDIX A to the Indenture.
A. DEFINED TERMS. As used in the Grant Agreement, the Sale
Agreement, the Indenture, the Trust Agreement, the Servicing Agreement,
Trustee's Issuance Certificate, Series Supplement or any other Basic Document as
hereinafter defined, as the case may be (unless the context requires a different
meaning), the following terms have the following meanings:
"1998 FUNDING ORDER" means the Final Transitional Funding Order dated
July 21, 1998 issued by the ICC pursuant to the Funding Law, Docket No. 98-0319.
"1998 INITIAL TARIFF" means the initial Tariff filed with the ICC to
evidence the IFCs pursuant to the 1998 Funding Order.
"1998 TRANSITION PROPERTY" means all ITP created in favor of the
Grantee pursuant to the 1998 Funding Order.
"ACT" is defined in Section 11.03 of the Indenture.
"ACTUAL IFC COLLECTIONS" means, with respect to IFCs billed in any
Billing Period, the amount of such IFCs less Net IFC Write-Offs calculated for
the Billing Period which occurs five Collection Periods after the Billing Period
in which such IFCs were billed.
"ADJUSTMENTS" means a Reconciliation Adjustment or a True-Up
Adjustment, as the context may require.
"ADMINISTRATION AGREEMENT" means the Administration Agreement dated as
of [__], 1998, among ComEd, the Grantee and the Note Issuer, as the same may be
amended, supplemented or otherwise modified from time to time.
"ADMINISTRATOR" means ComEd and any successor in interest to the
extent permitted under the Administration Agreement.
"AFFILIATE" means, with respect to any specified Person, any other
Person controlling or controlled by or under common control with such specified
Person. For the purposes of this definition, "control" when used with respect
to any specified Person means the power to direct the management and policies of
such Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"AGENCY OFFICE" means the office of the Note Issuer maintained
pursuant to Section 3.02 of the Indenture.
"AGGREGATE REMITTANCE AMOUNT" has the meaning set forth in ANNEX I to
the Servicing Agreement.
"ALLOCABLE IFC REVENUE AMOUNTS" means, (i) with respect to any
lump-sum payments of transition charges under Section 16-108(h) of the Public
Utilities Act or (ii) with respect to any revenues derived from condemnation
proceedings, or FERC stranded cost recoveries or any other amounts which
reflect compensation for lost revenues which would otherwise have been
attributable to Applicable Rates, the allocable amounts of such transition
charges or other revenues which are deemed to be proceeds of the IFCs in
accordance with the terms of the Funding Order and which are to be set aside
for the benefit of the Note Issuer, in each case as calculated pursuant to
Section 6(f) of ANNEX I to the Servicing Agreement.
"AMENDATORY ACT" means the Electric Service Customer Choice and Rate
Relief Law of 1997, 220 ILCS 5/16-101 ET SEQ., 220 ILCS 5/17-101 ET SEQ. and 220
ILCS 5/18-101 ET SEQ., as amended from time to time.
"AMENDATORY TARIFF" means a tariff or notice filing filed with the ICC
in respect of a Reconciliation Adjustment or a True-Up Adjustment, substantially
in the form of EXHIBIT C to the Servicing Agreement.
"ANNUAL ACCOUNTANT'S REPORT" is defined in Section 3.04 of the
Servicing Agreement.
"APPLICABLE ARES" means, with respect to each Customer taking service
from an ARES, the ARES, if any, providing consolidated billing to that Customer
which includes billing of IFCs.
"APPLICABLE RATES" means all of ComEd's tariffed charges including,
without limitation, charges for base rates and delivery services and transition
charges (including lump-sum payments of such charges); PROVIDED, however, that
Applicable Rates shall not include late charges or charges set forth in those
tariffs which are filed specifically and primarily to collect amounts related to
decommissioning expense, taxes, franchise fees or other franchise cost
additions, costs imposed by local governmental units which are allocated and
charged to customers within the boundaries of such governmental units'
jurisdiction, renewable energy resources and coal technology development
assistance charges, energy assistance charges for the
2
Supplemental Low-Income Energy Assistance Fund, reimbursement for the costs
of optional or non-standard facilities and reimbursement for the costs of
optional or non-standard meters, or monies that will be paid to third parties
(after deduction of allowable administrative, servicing or similar fees).
"APPLICATION" means the Application for Transitional Funding Order and
Petition filed by ComEd with the ICC dated April 22, 1998 pursuant to Section
18-103 of the Funding Law.
"ARES" means an alternative retail electric supplier as defined in
Section 16-102 of the Amendatory Act.
"ARES SERVICE AGREEMENT" means an agreement between an ARES and ComEd
for the provision of consolidated billing by such ARES to customers in
accordance with ICC Regulations, the terms of any Tariffs and the terms of any
delivery service tariffs filed by ComEd under Section 16-118(b) of the Public
Utilities Act.
"BANKRUPTCY CODE" means Title 11 of the United States Code (11 U.S.C.
Section 101 ET SEQ.), as amended from time to time.
"BASIC DOCUMENTS" means each Grant Agreement, each Sale Agreement, the
Indenture, the Trust Agreement, the Servicing Agreement, each Series Supplement,
each Trustee's Issuance Certificate, the Administration Agreement, each Letter
of Representations, the Note Depository Agreement, each Underwriting Agreement
and all other documents and certificates delivered in connection therewith.
"BENEFIT PLAN" means, with respect to any Person, any defined benefit
plan (as defined in Section 3(35) of ERISA) that (a) is or was at any time
during the past six years maintained by such Person or any ERISA Affiliate of
such person, or to which contributions by any such Person are or were at any
time during the past six years required to be made or under which such Person
has or could have any liability or (b) is subject to the provisions of Title IV
of ERISA.
"BILLING PERIOD" means the period created by dividing the calendar
year into twelve consecutive periods of approximately twenty-one (21) Servicer
Business Days.
"BILLS" means each of the regular monthly bills, summary bills,
opening bills and closing bills issued to Customers or ARES by ComEd on its own
behalf and in its capacity as Servicer.
"BOOK-ENTRY FORM" means, with respect to any Note or Series of Notes,
that such Note or Series is not certificated and the ownership and transfers
thereof shall be made through the book entries by a Clearing Agency as described
in Section 2.11 of the Indenture and the applicable Trustee's Issuance
Certificate or Series Supplement, if any, pursuant to which such Note or Series
was issued.
3
"BOOK-ENTRY NOTES" means any Notes issued in Book-Entry Form;
PROVIDED, HOWEVER, that after the occurrence of a condition whereupon book-entry
registration and transfer are no longer permitted and Definitive Notes are to be
issued to the Holder of such Notes, such Notes shall no longer be "Book-Entry
Notes".
"BUSINESS DAY" means any day other than a Saturday, a Sunday or a day
on which banking institutions or trust companies in Wilmington, Delaware,
Chicago, Illinois or New York, New York or the Depository Trust Company are
authorized or required by law, regulation or executive order to remain closed.
"BUSINESS TRUST ACT" means the Delaware Business Trust Act, 12 Del.
Code Section 3801 ET SEQ.
"CALCULATION PERIOD" means initially, the period commencing on the
Closing Date and ending on May 31, 1999 and, thereafter, each period of six
Collection Periods which ends one month prior to a Reconciliation Adjustment
Date; PROVIDED, that, if a True-Up Adjustment is required, then the Calculation
Period for such True-Up Adjustment shall mean the Collection Period of three
Collection Periods commencing with the period during which such True-Up
Adjustment is calculated and ending with the last day of the Collection Period
immediately preceding the next Payment Date.
"CAPITAL CONTRIBUTION" means the amount of cash contributed to the
Note Issuer by the Grantee as specified in the Trust Agreement.
"CAPITAL SUBACCOUNT" is defined in Section 8.02(a) of the Indenture.
"CERTIFICATE OF COMPLIANCE" means the certificate referred to in
Section 3.03 of the Servicing Agreement and substantially in the form of EXHIBIT
B attached to the Servicing Agreement.
"CERTIFICATE OF FORMATION" means the Amended and Restated Certificate
of Formation of the Grantee filed as of October 21, 1998 pursuant to, and in
accordance with, the Delaware Limited Liability Company Act, 6 Del. Code Section
18-101 ET SEQ.
"CERTIFICATE OF TRUST" means the Certificate of Trust filed with the
Secretary of State pursuant to which the Trust was established, substantially in
the form of EXHIBIT A to the Trust Agreement.
"CLAIM" means a "claim" as defined in Section 101(5) of the Bankruptcy
Code.
"CLASS" means, with respect to any Series of Notes, any one of the
classes of Notes of that Series.
"CLEARING AGENCY" means an organization registered as a "clearing
agency" pursuant to Section 17A of the Exchange Act, as amended.
4
"CLEARING AGENCY PARTICIPANT" means a securities broker, dealer, bank,
trust company, clearing corporation or other financial institution or other
Person for whom from time to time a Clearing Agency effects book entry transfers
and pledges of securities deposited with the Clearing Agency.
"CLOSING DATE" means December __, 1998.
"CODE" means the Internal Revenue Code of 1986, as amended from time
to time, and Treasury Regulations promulgated thereunder.
"COLLECTION ACCOUNT" means the account established and maintained by
the Indenture Trustee in accordance with Section 8.02(a) of the Indenture and
any subaccounts contained therein.
"COLLECTION PERIOD" means any period commencing on the first Servicer
Business Day of any calendar month and ending on the last Servicer Business Day
of such month.
"COMED" means Commonwealth Edison Company, an Illinois corporation,
and any successor in interest to the extent permitted under the Grant
Agreement.
"CONSOLIDATED ARES BILLING" has the meaning set forth in ANNEX I to
the Servicing Agreement.
"CORPORATE TRUST OFFICE" means with respect to the Indenture Trustee
or the Delaware Trustee, the principal office at which at any particular time
the corporate trust business of the Indenture Trustee or the Delaware Trustee,
respectively, shall be administered, which offices at the Closing Date are
located, in the case of the Indenture Trustee, at 000 Xxxx Xxxxxx Xxxxxx,
Xxxxxxx, Xxxxxxxx, 00000, 12th Floor, Attention: Indenture Trust Administration,
and in the case of the Delaware Trustee, at First Union Trust Company, National
Association, One Xxxxxx Square, 000 Xxxx Xxxxxx, 0xx Xxxxx, Xxxxxxxxxx, Xxxxxxxx
00000, Attention: Corporate Trust Administration or at such other address as the
Indenture Trustee or Delaware Trustee may designate from time to time by notice
to the Holders and the Note Issuer, or the principal corporate trust office of
any successor Indenture Trustee or Delaware Trustee (the addresses of which the
successor Indenture Trustee or Delaware Trustee will notify the Holders and the
Note Issuer).
"COVENANT DEFEASANCE OPTION" is defined in Section 4.01(b) of the
Indenture.
"CUSTOMERS" means all existing and future retail customers or classes
of retail customers of ComEd or other Persons or group of Persons obligated from
time to time to pay ComEd or any successor "Applicable Rates," and all other
Persons obligated to pay IFCs pursuant to the 1998 Funding Order or any
Subsequent Funding Order, as applicable, and, including, without limitation, any
Persons who enter into contracts with ComEd to take non-tariffed electrical
services but would otherwise have been obligated to pay Applicable Rates.
5
"DEBT SERVICE BILLING REQUIREMENT" means, for any Calculation Period,
the aggregate amount of IFCs calculated by the Servicer as necessary to be
billed during such period in order to collect the Required Debt Service on or
before the end of the Collection Period immediately preceding the next Payment
Date.
"DEFAULT" means any occurrence that is, or with notice or the lapse of
time or both would become, an Event of Default as defined in Section 5.01 of the
Indenture.
"DEFINITIVE NOTES" means Notes issued in definitive form in accordance
with Section 2.13 of the Indenture.
"DELAWARE TRUSTEE" means the Person acting as Delaware Trustee under
the Trust Agreement.
"DTC" means the Depository Trust Company or any successor thereto.
"DUFF & XXXXXX" means Duff & Xxxxxx Credit Rating Co. or any successor
thereto.
"ELIGIBLE DEPOSIT ACCOUNT" means either (a) a segregated trust account
with an Eligible Institution or (b) a segregated trust account with the
corporate trust department of a depository institution organized under the laws
of the United States of America or any one of the states thereof or the District
of Columbia (or any domestic branch of a foreign bank), having corporate trust
powers and acting as trustee for funds deposited in such account, so long as any
of the securities of such depository institution shall have a credit rating from
each Rating Agency in one of its generic rating categories which signifies
investment grade.
"ELIGIBLE INSTITUTION" means (a) the corporate trust department of
the Indenture Trustee; PROVIDED that an account with the Indenture Trustee
will only be an Eligible Deposit Account if it is a segregated trust account
or (b) a depository institution organized under the laws of the United States
of America or any State (or any domestic branch of a foreign bank), which (i)
has either (A) a long-term unsecured debt rating of AAA by Standard & Poor's
and Aaa by Xxxxx'x, and if rated by Fitch IBCA, AAA by Fitch IBCA and if
rated by Duff & Xxxxxx, AAA by Duff & Xxxxxx or (B) a certificate of deposit
rating of A-1+ by Standard & Poor's and P-1 by Xxxxx'x, and if rated by Fitch
IBCA, F1+ by Fitch IBCA and if rated by Duff & Xxxxxx, D-1+ by Duff & Xxxxxx
or any other long-term, short-term or certificate of deposit rating
acceptable to the Rating Agencies and (ii) whose deposits are insured by the
FDIC. If so qualified under clause (b) above, the Indenture Trustee may be
considered an Eligible Institution for the purposes of clause (a) of this
definition.
"ELIGIBLE INVESTMENTS" mean instruments or investment property which
evidence:
(a) direct obligations of, and obligations fully and
unconditionally guaranteed as to timely payment by, the United States
of America;
6
(b) demand deposits, time deposits, certificates of deposit or
bankers' acceptances of depository institutions meeting the
requirements of clause (b) of the definition of Eligible Institution;
(c) commercial paper (other than commercial paper of ComEd or
any of its Affiliates) having, at the time of the investment or
contractual commitment to invest therein, a rating from each of the
Rating Agencies from which a rating is available in the highest
investment category granted thereby;
(d) investments in money market funds having a rating from each
of the Rating Agencies from which a rating is available in the highest
investment category granted thereby (including funds for which the
Indenture Trustee or any of its Affiliates is investment manager or
advisor);
(e) repurchase obligations with respect to any security that is a
direct obligation of, or fully guaranteed by, the United States of
America or any agency or instrumentality thereof the obligations of
which are backed by the full faith and credit of the United States of
America, in either case entered into with depository institutions or
trust companies meeting the requirements of clause (b) of the
definition of Eligible Institutions; and
(f) any other investment permitted by each of the Rating
Agencies;
in each case maturing not later than the Business Day immediately preceding the
next Payment Date. Notwithstanding the foregoing, (x) Eligible Investments in
the Collection Account may mature not later than the Business Day immediately
preceding the next Payment Date, and (y) subject to the conditions and
limitations set forth in Section 8.03 of the Indenture, funds in the Collection
Account may be invested in securities that will not mature prior to each Payment
Date; PROVIDED, HOWEVER, that any securities or investments which mature in 32
days or more shall not be an "Eligible Investment" unless the issuer thereof has
a long-term unsecured debt rating of at least A1 from Xxxxx'x and A+ from S&P.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"ESTIMATED IFC COLLECTIONS" means the sum of the amounts remitted with
respect to IFCs billed in any Billing Period during such Billing Period and
the five Collection Periods following such Billing Period based on the
Collections Curves.
"EVENT OF DEFAULT" is defined in Section 5.01 of the Indenture.
"EXCESS REMITTANCE" means the amount, if any, calculated for a
particular Monthly Remittance Date, by which all Estimated IFC Collections
remitted to the Collection Account on and prior to such Monthly Remittance Date
with respect to the IFCs billed to
7
Customers during the sixth preceding Billing Period exceed Actual IFC
Collections received by the Servicer attributable to such preceding Billing
Period.
"EXPECTED AMORTIZATION SCHEDULE" means SCHEDULE 4.01(a) to the
Servicing Agreement, as the same may be amended from time to time.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"FDIC" means the Federal Deposit Insurance Corporation or any
successor thereto.
"FERC" means the Federal Energy Regulatory Commission or any successor
thereto.
"FINAL" means, with respect to any Funding Order, that such Funding
Order has become final and that the time for filing an appeal therefrom has
expired.
"FINAL MATURITY DATE" means, with respect to any Series or Class of
Notes, the Final Maturity Date therefor, as specified in the related Trustee's
Issuance Certificate or Series Supplement, if any.
"FITCH IBCA" means Fitch IBCA, Inc. or any successor thereto.
"FLOATING RATE NOTES" means any Series or Class of Notes that accrue
interest at a variable rate based on the index described in the related
Trustee's Issuance Certificate or Series Supplement, if any.
"FUNDING LAW" means the Electric Utility Transitional Funding Law of
1997, 220 ILCS 5/18-101 ET SEQ.
"FUNDING ORDER" means, as the context may require, (i) the 1998
Funding Order and/or (ii) any Subsequent Funding Order.
"GENERAL SUBACCOUNT" is defined in Section 8.02(a) of the Indenture.
"GLOBAL NOTE" means a Note evidencing all or any part of a Series of
Notes to be issued to the Holders thereof in Book-Entry Form, which Global Note
shall be issued to the Clearing Agency, or its nominee, for such Series, in
accordance with Section 2.11 of the Indenture and the applicable Trustee's
Issuance Certificate or Series Supplement, if any, pursuant to which the Note is
issued.
"GOVERNMENTAL AUTHORITY" means any nation or government, any federal,
state, local or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative function of
government.
8
"GRANT" means mortgage, pledge, bargain, sell, warrant, alienate,
remise, release, convey, grant, transfer, create, and xxxxx x xxxx upon and a
security interest in and right of set-off against, deposit, set over and confirm
pursuant to the Indenture. A Grant of the Note Collateral or of any other
agreement or instrument included therein shall include all rights, powers and
options (but none of the obligations) of the Granting party thereunder,
including the immediate and continuing right to claim for, collect, receive and
give receipt for payments in respect of the Note Collateral and all other moneys
payable thereunder, to give and receive notices and other communications, to
make waivers or other agreements, to exercise all rights and options, to bring
Proceedings in the name of the Granting party or otherwise and generally to do
and receive anything that the Granting party is or may be entitled to do or
receive thereunder or with respect thereto.
"GRANT AGREEMENT" means that certain Agreement Relating to Grant of
Intangible Transition Property dated as of December __, 1998 between ComEd and
the Grantee, as the same may be amended, supplemented or otherwise modified from
time to time.
"GRANTEE" means ComEd Funding, LLC, a Delaware limited liability
company, and any successor in interest to the extent permitted under the Sale
Agreement and the other Basic Documents.
"HOLDER" means the Person in whose name a Note is registered on the
Note Register.
"ICC" means the Illinois Commerce Commission, or any successor
thereto.
"ICC REGULATIONS" means the regulations, including proposed or
temporary regulations, promulgated under the Public Utilities Act.
"IFC" means the instrument funding charge as defined in Section 18-102
of the Funding Law (expressed in cents per kilowatt-hour) and as authorized by a
Funding Order, including, without limitation, each "IFC" or equivalent amount
which Customers agree to pay pursuant to any contract under which ComEd agrees
to provide non-tariffed electrical service and which are deemed to be proceeds
of the Intangible Transition Property in accordance with the terms of the
applicable Funding Order.
"IFC COLLECTIONS" means IFCs received by the Servicer which are
remitted to the Collection Account.
"IFC CUSTOMER CLASS" has the meaning set forth in Annex I of the
Servicing Agreement.
"IFC PAYMENTS" means the payments made by Customers based on the IFCs.
"INDENTURE" means the Indenture dated as of December __, 1998 between
the Note Issuer and the Indenture Trustee as originally executed and, as from
time to time
9
supplemented or amended by one or more Trustee's Issuance Certificate or
indentures supplemental thereto entered into pursuant to the applicable
provisions of the Indenture, as so supplemented or amended, or both, and
shall include the forms and terms of the Notes established thereunder.
"INDENTURE TRUSTEE" means Xxxxxx Trust and Savings Bank, an
Illinois banking corporation, as Indenture Trustee under the Indenture, or
any successor Indenture Trustee under the Indenture.
"INDEPENDENT" means, when used with respect to any specified
Person, that the Person (a) is in fact independent of the Note Issuer, any
other obligor on the Notes, the Grantee, the Servicer and any Affiliate of
any of the foregoing Persons, (b) does not have any direct financial interest
or any material indirect financial interest in the Note Issuer, any such
other obligor, the Grantee, the Servicer or any Affiliate of any of the
foregoing Persons and (c) is not connected with the Note Issuer, any such
other obligor, the Grantee, the Servicer or any Affiliate of any of the
foregoing Persons as an officer, employee, promoter, underwriter, trustee,
partner, director or person performing similar functions.
"INDEPENDENT CERTIFICATE" means a certificate or opinion to be
delivered to the Indenture Trustee under the circumstances described in, and
otherwise complying with, the applicable requirements of Section 11.01 of the
Indenture, made by an Independent appraiser or other expert appointed by an
Issuer Order and consented to by the Indenture Trustee, and such opinion or
certificate shall state that the signer has read the definition of "Independent"
in the Indenture and that the signer is Independent within the meaning thereof.
"INDIRECT PARTICIPANT" means a securities broker, dealer, bank, trust
company or other Person that clears through or maintains a custodial
relationship with a Clearing Agency Participant, either directly or indirectly.
"INSOLVENCY EVENT" means, with respect to a specified Person, (a) the
filing of a decree or order for relief by a court having jurisdiction in the
premises in respect of such Person or any substantial part of its property in an
involuntary case under any applicable Federal or state bankruptcy, insolvency or
other similar law now or hereafter in effect, or appointing a receiver,
liquidator, assignee, custodian, trustee, sequestrator or similar official for
such Person or for any substantial part of its property, or ordering the
winding-up or liquidation of such Person's affairs, and such decree or order
shall remain unstayed and in effect for a period of 60 consecutive days; or (b)
the commencement by such Person of a voluntary case under any applicable Federal
or state bankruptcy, insolvency or other similar law now or hereafter in effect,
or the consent by such Person to the entry of an order for relief in an
involuntary case under any such law, or the consent by such Person to the
appointment of or taking possession by a receiver, liquidator, assignee,
custodian, trustee, sequestrator or similar official for such Person or for any
substantial part of its property, or the making by such Person of any general
assignment for the benefit of creditors, or the failure by such Person generally
to pay its debts as such debts become due, or the taking of action by such
Person in furtherance of any of the foregoing.
10
"INSOLVENCY LAW" means any applicable Federal or state bankruptcy,
insolvency or other similar law now or hereafter in effect.
"INTANGIBLE TRANSITION PROPERTY" or "ITP" means all intangible
transition property as defined in Section 18-102 of the Funding Law created in
favor of the Grantee pursuant to a Funding Order and assigned to the Note Issuer
pursuant to a Sale Agreement, including the 1998 Transition Property and any
Subsequent Transition Property, and, including, without limitation, all
Allocable IFC Revenue Amounts.
"INVESTMENT EARNINGS" means investment earnings on funds deposited in
the Collection Account net of losses and investment expenses.
"ISSUER ORDER" and "ISSUER REQUEST" mean a written order or request
signed in the name of the Note Issuer by any one of its Responsible Officers and
delivered to the Indenture Trustee or Paying Agent, as applicable.
"LEGAL DEFEASANCE OPTION" is defined in Section 4.01(b) of the
Indenture.
"LETTER OF REPRESENTATIONS" means any applicable agreement among the
Note Issuer, the Indenture Trustee, the Administrator and the applicable
Clearing Agency, with respect to such Clearing Agency's rights and obligations
(in its capacity as a Clearing Agency) with respect to any Book-Entry Notes, as
the same may be amended, supplemented, restated or otherwise modified from time
to time.
"LIEN" means a security interest, lien, charge, pledge, equity or
encumbrance of any kind other than tax liens, mechanics' liens and any liens
that attach by operation of law.
"MINIMUM DENOMINATION" means, with respect to any Note, the minimum
denomination therefor specified in the applicable Trustee's Issuance Certificate
or Series Supplement, if any, which minimum denomination shall be not less than
[$1,000] and, except as otherwise provided in such Trustee's Issuance
Certificate or Series Supplement, if any, integral multiples thereof.
"MONTHLY COLLECTIONS CURVES" has the meaning set forth in the
Servicing Agreement.
"MONTHLY REMITTANCE DATE" means the tenth day of each calendar month
or, if such day is not a Business Day, the next succeeding Business Day.
"MONTHLY SERVICER'S CERTIFICATE" means a certificate, substantially in
the form of EXHIBIT A to the Servicing Agreement, completed and executed by a
Responsible Officer of the Servicer pursuant to Section 3.01(b)(i) of the
Servicing Agreement.
"MOODY'S" means Xxxxx'x Investors Service Inc. or any successor
thereto.
11
"NET IFC WRITE-OFFS" is defined in Annex I to the Servicing Agreement.
"NOTE COLLATERAL" has the meaning specified in the Granting Clause of
the Indenture.
"NOTE DEPOSITORY" means the depositary from time to time selected by
the Indenture Trustee on behalf of the Note Issuer in whose name the Notes are
registered prior to the issuance of Definitive Notes. The initial Note
Depository shall be Cede & Co., the nominee of the initial Clearing Agency.
"NOTE DEPOSITORY AGREEMENT" means the agreement, dated as of the
Closing Date, among the Note Issuer, the Indenture Trustee and the DTC, as the
initial Clearing Agency relating to the Notes, as the same may be amended
supplemented or otherwise modified from time to time.
"NOTE INTEREST RATE" means, with respect to any Series or Class of
Notes, the rate at which interest accrues on the Notes of such Series or Class,
as specified in the related Trustee's Issuance Certificate or Series Supplement,
if any.
"NOTE ISSUER" means ComEd Transitional Funding Trust, a Delaware
business trust named as such in the Indenture until a successor replaces it and,
thereafter, means the successor and, for purposes of any provision contained
herein and required by the TIA, each other obligor on the Notes.
"NOTE OWNER" means with respect to a Book-Entry Note, the Person who
is the beneficial owner of such Book-Entry Note, as reflected on the books of
the Clearing Agency, or on the books of a Person maintaining an account with
such Clearing Agency (directly as a Clearing Agency Participant or as an
Indirect Participant, in each case in accordance with the rules of such Clearing
Agency).
"NOTE REGISTER" means the register maintained pursuant to Section 2.05
of the Indenture, providing for the registration of the Notes and transfers and
exchanges thereof.
"NOTE REGISTRAR" means the registrar at any time of the Note Register,
appointed pursuant to Section 2.05 of the Indenture.
"NOTES" means one or more Series of Notes authorized by the 1998
Funding Order and any Subsequent Funding Order and issued under the Indenture.
"OFFICER'S CERTIFICATE" means a certificate signed by a Responsible
Officer of the Note Issuer under the circumstances described in, and otherwise
complying with, the applicable requirements of Section 11.01 of the Indenture,
and delivered to the Indenture Trustee. Unless otherwise specified, any
reference in the Indenture to an Officer's Certificate shall be to an Officer's
Certificate of any Responsible Officer of the party delivering such certificate.
12
"OPERATING AGREEMENT" means the Amended and Restated Limited Liability
Company Agreement of the Grantee dated as of October 21, 1998 executed by ComEd
as sole member of the Grantee.
"OPERATING EXPENSES" means all fees, costs and expenses of the Note
Issuer, including all amounts owed by the Note Issuer to the Indenture Trustee
and the Delaware Trustee, the Servicing Fee, the Quarterly Administration Fee,
any fees, costs and expenses payable or reimbursable by the Note Issuer to the
Administrator and legal and accounting fees, costs and expenses of the Note
Issuer and the Grantee.
"OPINION OF COUNSEL" means one or more written opinions of counsel who
may, except as otherwise expressly provided in the Basic Documents, be employees
of or counsel to the party providing such opinion of counsel, which counsel
shall be acceptable to the party receiving such opinion of counsel, and shall be
in form and substance acceptable to such party.
"OPTIONAL REDEMPTION DATE" means, with respect to any Series of Notes,
the Payment Date specified for the redemption of the Notes of such Series
pursuant to Section 10.01 of the Indenture.
"OPTIONAL REDEMPTION PRICE" is defined in Section 10.01 of the
Indenture.
"OUTSTANDING" means, as of the date of determination, all Notes
theretofore authenticated and delivered under this Indenture except:
(a) Notes theretofore canceled by the Note Registrar or delivered to
the Note Registrar for cancellation;
(b) Notes or portions thereof the payment for which money in the
necessary amount has been theretofore deposited with the Indenture Trustee
or any Paying Agent in trust for the Holders of such Notes (PROVIDED,
HOWEVER, that if such Notes are to be redeemed, notice of such redemption
has been duly given pursuant to this Indenture or provision therefor,
satisfactory to the Indenture Trustee, made); and
(c) Notes in exchange for or in lieu of other Notes which have been
authenticated and delivered pursuant to this Indenture unless proof
satisfactory to the Indenture Trustee is presented that any such Notes are
held by a bona fide purchaser;
PROVIDED that in determining whether the Holders of the requisite Outstanding
Amount of the Notes or any Series or Class thereof have given any request,
demand, authorization, direction, notice, consent or waiver hereunder or under
any Basic Document, Notes owned by the Note Issuer, any other obligor upon the
Notes, the Grantee or any Affiliate of any of the foregoing Persons shall be
disregarded and deemed not to be outstanding, except that, in determining
whether the Indenture Trustee shall be protected in relying upon any such
request, demand, authorization, direction, notice, consent or waiver, only Notes
that the Indenture Trustee actually knows to be so owned shall be so
disregarded. Notes so owned that have been pledged in good
13
faith may be regarded as outstanding if the pledgee establishes to the
satisfaction of the Indenture Trustee the pledgee's right so to act with
respect to such Notes and that the pledgee is not the Note Issuer, any other
obligor upon the Notes, the Grantee or any Affiliate of any of the foregoing
Persons.
"OUTSTANDING AMOUNT" means the aggregate principal amount of all Notes
or, if the context requires, all Notes of a Series or Class, Outstanding at the
date of determination.
"OVERCOLLATERALIZATION SUBACCOUNT" is defined in Section 8.02(a) of
the Indenture.
"PAYING AGENT" means with respect to the Indenture, the Indenture
Trustee or any other Person that meets the eligibility standards for the
Indenture Trustee specified in Section 6.11 of the Indenture and is authorized
by the Note Issuer to direct the Servicer to make the payments to and
distributions from the Collection Account, including payment of principal of or
interest on the Notes on behalf of the Note Issuer.
"PAYMENT DATE" means, with respect to any Series or Class of Notes,
March 25, June 25, September 25 and December 25 of each year, PROVIDED that
if any such date is not a Business Day, the Payment Date shall be the Business
Day immediately succeeding such date, commencing [ ].
"PERSON" means any individual, corporation, limited liability company,
estate, partnership, joint venture, association, joint stock company, trust
(including any beneficiary thereof), unincorporated organization or government
or any agency or political subdivision thereof.
"PREDECESSOR NOTE" means, with respect to any particular Note, every
previous Note evidencing all or a portion of the same debt as that evidenced by
such particular Note, and, for the purpose of this definition, any Note
authenticated and delivered under Section 2.06 of the Indenture in lieu of a
mutilated, lost, destroyed or stolen Note shall be deemed to evidence the same
debt as the mutilated, lost, destroyed or stolen Note.
"PRINCIPAL BALANCE" means, as of any Payment Date, the sum of the
outstanding principal amount of each Series of Notes.
"PROCEEDING" means any suit in equity, action at law or other judicial
or administrative proceeding.
"PROJECTED PRINCIPAL BALANCE" means, as of any Payment Date, the sum
of the projected outstanding principal amount of each Series of Notes for such
Payment Date set forth in the Expected Amortization Schedule.
"PUBLIC UTILITIES ACT" means the Illinois Public Utilities Act, 220
ILCS 5/1-101 ET SEQ., as the same may be amended from time to time.
14
"QUARTERLY ADMINISTRATION FEE" means $25,000 per calendar quarter.
"QUARTERLY INTEREST" means, with respect to any Payment Date and any
Series of Notes, the quarterly interest for such Payment Date and Series as
specified in the related Trustee's Issuance Certificate or Series Supplement,
if any.
"QUARTERLY PRINCIPAL" means, with respect to any Payment Date and any
Series of Notes, the excess, if any, of the Outstanding Amount of such Series of
Notes over the outstanding principal balance specified for such Payment Date on
the applicable Expected Amortization Schedule.
"QUARTERLY SERVICER'S CERTIFICATE" means a certificate, substantially
in the form of EXHIBIT D to the Servicing Agreement, completed and executed by a
Responsible Officer of the Servicer pursuant to Section 4.01(c)(ii) of the
Servicing Agreement.
"RATING AGENCY" means Moody's, Standard & Poor's, Duff & Xxxxxx and
Fitch IBCA. If no such organization or successor is any longer in existence,
"Rating Agency" shall be a nationally recognized statistical rating organization
or other comparable Person designated by the Note Issuer, notice of which
designation shall be given to the Indenture Trustee and the Servicer.
"RATING AGENCY CONDITION" means, with respect to any action, that each
Rating Agency shall have been given ten days prior notice thereof and that each
of the Rating Agencies shall have notified the Servicer, the Note Issuer and the
Indenture Trustee in writing that such action will not result in a reduction or
withdrawal of the then current rating by such Rating Agency of either any Series
or Class of Notes.
"RECONCILIATION ADJUSTMENT" means each adjustment to the IFCs made
pursuant to the terms of any Funding Order in accordance with Section 4.01(b)(i)
of the Servicing Agreement.
"RECONCILIATION ADJUSTMENT DATE" shall mean June 30 and December 31 of
each year, commencing on June 30, 1999.
"RECORD DATE" means, with respect to a Payment Date or Redemption
Date, in the case of Definitive Notes, the close of business on the last day of
the calendar month preceding the calendar month in which such Payment Date or
Redemption Date occurs, and in the case of Book Entry Notes, one Business Day
prior to the applicable Payment Date or Redemption Date.
"REDEMPTION DATE" means, with respect to any Series or Class of Notes,
the Payment Date specified by the Note Issuer for the redemption of the Notes of
such Series or Class pursuant to Section 10.01 of the Indenture.
"REDEMPTION PAYMENT" means with respect to any Series or Class of
Notes, any payment of principal of and interest on the Notes of such Series or
Class due from the Note Issuer upon the early redemption of such Series or Class
of Notes, other than any such payment due by reason of the occurrence of an
Event of Default with respect to such Series or Class of Notes.
15
"REDEMPTION PRICE" means with respect to any Series or Class of Notes,
the unpaid principal amount of the Notes of such Series or Class redeemed, plus
accrued and unpaid interest thereon at the interest rate applicable to such
Series or Class to but excluding the Redemption Date.
"REGISTERED HOLDER" means the Person in whose name a Note is
registered on the Note Register on the applicable Record Date.
"REGISTRATION STATEMENT" means the registration statement, Form S-3
Registration No. 333-60907, filed with the SEC for registration under the
Securities Act relating to the offering and sale of the Notes, and including all
supplements thereto.
"RELATED ASSETS" means all of Grantee's and/or the Note Issuer's
right, title and interest in and to the Grant Agreement, the Sale Agreement, the
Servicing Agreement and all present and future claims, demands, causes and
choses in action in respect of all of the foregoing and all payments on or under
and all proceeds of every kind and nature whatsoever in respect of any or all of
the foregoing, including all proceeds of the conversion, voluntary or
involuntary, into cash or other liquid property, all cash proceeds, accounts,
accounts receivable, notes, drafts, acceptances, chattel paper, checks, deposit
accounts, insurance proceeds, condemnation awards, rights to payment of any and
every kind, and other forms of obligations and receivables, instruments and
other property which in any time constitute all or part of or are included in
the proceeds of any of the foregoing.
"REMITTANCE SHORTFALL" means the amount, if any, calculated for a
particular Monthly Remittance Date, by which Actual IFC Collections received by
the Servicer attributable to IFCs billed to Customers during the sixth preceding
billing Period exceed all Estimated IFC Collections remitted to the Collection
Account on and prior to such Monthly Remittance Date with respect to such
Billing Period.
"REQUIRED CAPITAL LEVEL" means, with respect to each Series of Notes,
an amount equal to 0.50% of the initial principal amount of such Series,
deposited into the Capital Subaccount by the Grantee prior to or upon the
issuance of such Series.
"REQUIRED DEBT SERVICE" for any Calculation Period means the total
dollar amount of IFC Collections reasonably calculated by the Servicer in
accordance with SECTION 4.01 of the Servicing Agreement as necessary to be
received during such period (after giving effect to the allocation and
distribution of amounts on deposit in the Reserve Subaccount at the time of
calculation and which are available for payments on the Notes and including any
shortfalls in Required Debt Service for any prior Calculation Period) in order
to ensure that, as of the last Payment Date occurring in such Calculation
Period, (1) all accrued and unpaid interest on the Notes then due shall have
been paid in full, (2) the Principal Balance of the Notes is equal to the
Projected Principal Balance, (3) the balance on deposit in the
Overcollateralization Subaccount equals the aggregate Required
Overcollateralization Level, (4) the balance on deposit in the Capital
Subaccount equals the aggregate Required Capital Level and (5) all other fees
and
16
expenses due and owing and required or allowed to be paid under SECTION 8.02
of the Note Indenture as of such date shall have been paid in full; PROVIDED,
that, with respect to any Reconciliation Adjustment or True-Up Adjustment
occurring after the last Scheduled Maturity Date for any Notes, the Required
Debt Service shall be calculated to ensure that sufficient IFCs will be
collected to retire such Notes in full as of the earlier of (x) the Payment
Date preceding the next Reconciliation Adjustment Date and (y) the Final
Maturity Date for such Notes.
"REQUIRED OVERCOLLATERALIZATION LEVEL" means, as of any Payment Date
with respect to any Series, the amount required to be on deposit in the
Overcollateralization Subaccount as specified in the applicable Trustee's
Issuance Certificate or Series Supplement, if any, but not less than, as of the
Scheduled Maturity Date for such Series, 0.5% of the initial Outstanding amount
thereof.
"REQUIREMENT OF LAW" means any foreign, federal, state or local laws,
statutes, regulations, rules, codes or ordinances enacted, adopted, issued or
promulgated by any Governmental Authority or common law.
"RESERVE SUBACCOUNT" is defined in Section 8.02(a) of the Indenture.
"RESPONSIBLE OFFICER" means with respect to (a) the Note Issuer, any
officer within the Corporate Trust Office of the Delaware Trustee; (b) with
respect to the Indenture Trustee, the Delaware Trustee or other trustee, any
officer within the Corporate Trust office of such trustee (including, in the
case of (a) and (b) above, the President, any Vice President, Assistant Vice
President, Secretary or Assistant Treasurer or any other officer or assistant
officer of such Person customarily performing functions similar to those
performed by any of the chosen designated officers and also, with respect to a
particular matter, any other officer to whom such matter is referred to because
of such officer's knowledge and familiarity with the particular subject); (c)
any corporation, the Chief Executive Officer, the President, any Vice President,
the Chief Financial Officer or any other duly authorized officer of such Person
who has been authorized to act in the circumstances;(d) the Grantee, any Manager
or duly authorized officer who has been authorized to act in the circumstances;
(e) partnership, any general partner thereof; and (f) any other Person (other
than an individual), any duly authorized officer or member of such Person, as
the context may require, who is authorized to act in matters relating to such
Person.
"SALE AGREEMENT" means as the context may require, either (i) the
Intangible Transition Property Sale Agreement dated as of December __, 1998
between the Grantee and the Note Issuer, as the same may be amended,
supplemented or otherwise modified from time to time or (ii) any Subsequent Sale
Agreement.
17
"SCHEDULED FINAL PAYMENT DATE" means, with respect to any Series or
Class of Notes, the Scheduled Maturity Date thereof.
"SCHEDULED MATURITY DATE" means, with respect to any Series or Class
of Notes, the Scheduled Maturity Date therefor, as specified in the related
Trustee's Issuance Certificate or Series Supplement, if any.
"SCHEDULED PAYMENT DATE" is defined in the applicable Trustee's
Issuance Certificate or Series Supplement, if any, with respect to each Series
or Class of Notes.
"SEC" means the Securities and Exchange Commission.
"SECRETARY OF STATE" means the Secretary of State of the State of
Delaware or the Secretary of State of the State of Illinois, as the case may be,
or any Governmental Authority succeeding to the duties of such offices.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SERIES" means each series of Notes issued and authenticated pursuant
to the Indenture and a related Trustee's Issuance Certificate or Series
Supplement, if any.
"SERIES ISSUANCE DATE" means, with respect to any Series, the date on
which the Notes of such Series are to be originally issued in accordance with
Section 2.10 of the Indenture and the related Trustee's Issuance Certificate or
Series Supplement, if any.
"SERIES SUPPLEMENT" means an indenture supplemental to the Indenture
that authorizes the issuance of a particular Series of Notes.
"SERVICER" means ComEd, as Servicer under the Servicing Agreement, or
any successor Servicer to the extent permitted under the Servicing Agreement.
"SERVICER BUSINESS DAY" means any day other than a Saturday, Sunday or
holiday on which the Servicer maintains normal office hours and conducts
business.
"SERVICER DEFAULT" is defined in Section 7.01 of the Servicing
Agreement.
"SERVICER'S CERTIFICATE" means an Officer's Certificate of the
Servicer.
"SERVICING AGREEMENT" means the Intangible Transition Property
Servicing Agreement dated as of December __, 1998, between the Grantee and
ComEd assigned to the Note Issuer, as the same may be amended, supplemented or
otherwise modified from time to time.
"SERVICING FEE" means the fee payable to the Servicer on each Payment
Date for services rendered during the period from, but not including, the
preceding Payment Date to and
18
including the current Payment Date, determined pursuant to Section 6.06 of
the Servicing Agreement.
"SOLE MEMBER" means ComEd as sole member of the Grantee defined in the
Operating Agreement.
"SPECIAL PAYMENT" means with respect to any Series or Class of Notes,
any payment of principal of or interest on (including any interest accruing upon
default), or any other amount in respect of, the Notes of such Series or Class
(including, with respect to Floating Rate Notes only, a payment under any Swap)
that is not actually paid within five days of the Payment Date applicable
thereto.
"SPECIAL PAYMENT DATE" means the date on which a Special Payment is to
be made by the Indenture Trustee to the Holders.
"SPECIAL RECORD DATE" means with respect to any Special Payment Date,
the close of business on the 15th day (whether or not a Business Day) preceding
such Special Payment Date.
"STANDARD & POOR'S" means Standard & Poor's Ratings Services, a
division of The XxXxxx-Xxxx Companies, Inc. or any successor thereto.
"STATE" means any one of the 50 states of the United States of America
or the District of Columbia.
"STATE PLEDGE" means the pledge of the State of Illinois as set forth
in Section 18-105(b) of the Funding Law.
"SUBSEQUENT CLOSING DATE" means any date (other than the Closing Date)
specified in a Trustee's Issuance Certificate or Series Supplement, if any,
under which Notes of any Series or Class are issued.
"SUBSEQUENT CREATION DATE" means any date on which Subsequent
Intangible Transition Property is created in favor of the Grantee pursuant to a
Subsequent Funding Order.
"SUBSEQUENT FUNDING ORDER" means a transitional funding order (other
than the 1998 Funding Order) issued hereafter by the ICC in favor of the Grantee
at the request of ComEd.
"SUBSEQUENT GRANT AGREEMENT" means an agreement substantially similar
to the Grant Agreement, relating to Subsequent Transition Property, as the same
may be amended, supplemented or otherwise modified from time to time.
"SUBSEQUENT RELATED ASSETS" means all of the Grantee's and/or the Note
Issuer's right, title and interest in and to any Subsequent Grant Agreement and
all present and future
19
claims, demands, causes and choses in action in respect of any or all of the
foregoing and all payments on or under and all proceeds of every kind and
nature whatsoever in respect of any or all of the foregoing, including all
proceeds of the conversion, voluntary or involuntary, into cash or other
liquid property, all cash proceeds, accounts, accounts receivable, notes,
drafts, acceptances, chattel paper, checks, deposit accounts, insurance
proceeds, condemnation awards, rights to payment of any and every kind, and
other forms of obligations and receivables, instruments and other property
which in any time constitute all or part of or are included in the proceeds
of any of the foregoing.
"SUBSEQUENT SALE AGREEMENT" means an agreement substantially similar
to the initial Sale Agreement, relating to Subsequent Intangible Transition
Property, as the same may be amended, supplemented or otherwise modified from
time to time.
"SUBSEQUENT SALE DATE" means any date on which Subsequent Intangible
Transition Property is to be sold to the Note Issuer pursuant to a Subsequent
Sale Agreement.
"SUBSEQUENT TARIFF" means a Tariff filed with the ICC in connection
with a Subsequent Funding Order.
"SUBSEQUENT TRANSITION PROPERTY" or "SUBSEQUENT ITP" means the
intangible transition property contemplated by, and specifically described in, a
Subsequent Funding Order.
"SUCCESSOR SERVICER" is defined in Section 3.07(e) of the Indenture.
"SWAP" means an interest rate swap, cap, floor, collar or other
hedging transaction that may be entered into by the Note Issuer for the purpose
of managing interest rate risk with respect to a specified Series or Class of
Floating Rate Notes that are being issued concurrently with the execution of the
Swap.
"SWAP AGREEMENT" means an Interest Rate and Currency Exchange
Agreement (including the Schedule and Confirmation thereto) entered into between
the Note Issuer and a swap provider.
"SWAP COUNTERPARTY" means the entity that is a party to a Swap with
the Note Issuer.
"SWAP PAYMENT" means the payments made by the Note Issuer to the Swap
Counterparty pursuant to any Swap, subject to any netting of payments provided
in the applicable Swap.
"SWAP REVENUES" means the payments paid by a Swap Counterparty to the
Note Issuer pursuant to any Swap, subject to any netting of payments provided in
the applicable Swap.
"TARIFF" means any rate tariff filed with the ICC pursuant to the
Funding Law to evidence any IFCs.
20
"TEMPORARY NOTES" means Notes executed, and upon the receipt of an
Issuer Order, authenticated and delivered by the Indenture Trustee pending the
preparation of Definitive Notes pursuant to Section 2.04 of the Indenture.
"TREASURY REGULATIONS" means the regulations, including proposed or
temporary regulations, promulgated under the Code. References herein to
specific provisions of proposed or temporary regulations shall include analogous
provisions of final Treasury Regulations or other successor Treasury
Regulations.
"TRUE-UP ADJUSTMENT" means each adjustment to the IFCs made pursuant
to the terms of the 1998 Transitional Funding Order and in accordance with
Section 4.01(b)(ii) of the Servicing Agreement.
"TRUST AGREEMENT" means the Declaration of Trust by First Union Trust
Company, National Association as "Delaware Trustee", and Xxxx Xxx X. Xxxxxx and
Xxxxx X. Xxxxxxxxx as "Beneficiary Trustees" dated as of October 28, 1998
acknowledged and agreed to by the Grantee, as the same may be amended,
supplemented or otherwise modified from time to time.
"TRUST ESTATE" means all right, title and interest of the Note Issuer
in, to and under the property and rights assigned to the Note Issuer pursuant to
the Sale Agreement, all funds on deposit from time to time in the Collection
Account and all other property of or interests of the Note Issuer from time to
time, including all rights, interests and claims of the Delaware Trustee and the
Note Issuer under or in connection with any Basic Documents.
"TRUST INDENTURE ACT" or "TIA" means the Trust Indenture Act of 1939,
as amended by the Trust Indenture Reform Act of 1990, as in force on the Closing
Date, unless otherwise specifically provided.
"TRUSTEE'S ISSUANCE CERTIFICATE" means a certificate executed by a
Authorized Officer of the Delaware Trustee in accordance with the terms of the
Sale Agreement or any Subsequent Sale Agreement and delivered to the Indenture
Trustee under Section 2.01 of the Indenture substantially in the form attached
as EXHIBIT C to the Indenture.
"UCC" means, unless the context otherwise requires, the Uniform
Commercial Code, as in effect in the relevant jurisdiction, as amended from time
to time.
"UNDERWRITERS" means the underwriters who purchase Notes of any Series
or Class from the Note Issuer and sell such Notes in a public offering.
"UNDERWRITING AGREEMENT" means the Underwriting Agreement, dated as
of December __, 1998 among ComEd, the Underwriters party thereto, on their own
behalf and as representatives of the several underwriters named therein, and
the Note Issuer.
21
"UNREGISTERED NOTES" means any Notes not registered under the
Securities Act or the securities laws of any other jurisdiction.
"U.S. GOVERNMENT OBLIGATIONS" means direct obligations (or
certificates representing an ownership interest in such obligations) of the
United States of America (including any agency or instrumentality thereof) for
the payment of which the full faith and credit of the United States of America
is pledged and which are not callable at the Note Issuer's option.
B. OTHER TERMS. All accounting terms not specifically defined herein
shall be construed in accordance with United States generally accepted
accounting principles. To the extent that the definitions of accounting terms
in any Basic Document are inconsistent with the meanings of such terms under
generally accepted accounting principles or regulatory accounting principles,
the definitions contained in such Basic Document shall control. All terms used
in Article 9 of the UCC in the State of Illinois and not specifically defined
herein, are used herein as defined in such Article 9. As used in the Basic
Documents, the term "INCLUDING" means "including without limitation," and other
forms of the verb "to include" have correlative meanings. All references to any
Person shall include such Person's permitted successors.
C. COMPUTATION OF TIME PERIODS. Unless otherwise stated in any of
the Basic Documents, as the case may be, in the computation of a period of time
from a specified date to a later specified date, the word "from" means "from and
including" and the words "to" and "until" each means "to but excluding".
D. REFERENCE; CAPTIONS. The words "hereof", "herein" and "hereunder"
and words of similar import when used in any Transaction Document shall refer to
such Transaction Document as a whole and not to any particular provision of such
Transaction Document; and references to "SECTION", "SUBSECTION", "SCHEDULE" and
"EXHIBIT" in any Basic Document are references to Sections, subsections,
Schedules and Exhibits in or to such Transaction Document unless otherwise
specified in such Basic Document. The various captions (including the tables of
contents) in each Basic Document are provided solely for convenience of
reference and shall not affect the meaning or interpretation of any Basic
Document.
E. The definitions contained in this APPENDIX A are applicable to the
singular as well as the plural forms of such terms and to the masculine as well
as to the feminine and neuter forms of such terms.
22
