Exhibit 10.5
Form of Remediation Agreement
REMEDIATION AGREEMENT
REMEDIATION AGREEMENT, dated as of December ___, 1998 (as amended,
restated, supplemented or otherwise modified from time to time, this
"AGREEMENT") is made by ILLINOIS POWER COMPANY, an Illinois corporation
("ILLINOIS POWER") in favor of the "Holders" (as defined below) and XXXXXX
TRUST AND SAVINGS BANK, an Illinois banking corporation not in its individual
capacity but solely in its capacity as Indenture Trustee (the "INDENTURE
TRUSTEE") under the Indenture (as defined below).
WITNESSETH
WHEREAS, pursuant to that certain Indenture dated as of the date
hereof, between Illinois Power Special Purpose Trust (the "NOTE ISSUER") and
the Indenture Trustee (as the same may be amended, restated, supplemented or
otherwise modified from time to time, the "INDENTURE"), the Note Issuer will
be issuing certain Notes, to be supported by certain assets vested in
Illinois Power Securitization Limited Liability Company (the "GRANTEE") and
assigned by the Grantee to the Note Issuer, all as more particularly
described in that certain Agreement Relating to Grant of Intangible
Transition Property (as the same may be amended, restated, supplemented or
otherwise modified from time to time, the "GRANT AGREEMENT") by and between
Illinois Power and the Grantee dated as of December ___ 1998 and that certain
Intangible Transition Property Sale Agreement (as the same may be amended,
restated, supplemented or otherwise modified from time to time, the "SALE
AGREEMENT") by and between the Grantee and the Note Issuer, dated as of
December ___ 1998; and
WHEREAS, the proceeds of the Notes are being paid to Illinois Power
in connection with certain transactions contemplated by Article XVIII of the
Public Utilities Act and the issuance of the Notes is therefore of direct and
tangible benefit to Illinois Power;
NOW, THEREFORE, in order to induce the Holders to purchase the
Notes, and to provide further assurance to such Holders that all proceeds of
the assets which are intended to be vested in the Grantee and assigned to the
Note Issuer to support the payment of the Notes will in fact be paid to the
Indenture Trustee to pay the Notes, Illinois Power hereby agrees, for the
direct benefit of the Holders, and not by way of assignment of any rights
under the Grant Agreement, as follows:
SECTION 1. DEFINED TERMS. (a) Capitalized terms used herein and not
otherwise defined herein have the meanings assigned to them in the Indenture.
(b) Non-capitalized terms used herein which are defined in the
Public Utilities Act shall, as the context requires, have the meanings
assigned to such terms in the Public Utilities Act, but without giving effect
to amendments to the Public Utilities Act after the date hereof which have a
material adverse effect on the Indenture Trustee or the Holders.
(c) All terms defined in this Agreement shall have the defined
meaning when used in any certificate or other document made or delivered
pursuant hereto unless otherwise defined therein.
(d) The words "hereof," "herein," "hereunder" and words of similar
import, when used in this Agreement, shall refer to this Agreement as a whole
and not to any particular provision of this Agreement; and the term
"including" shall mean "including without limitation".
(e) The definitions contained in this Agreement are applicable to
the singular as well as the plural forms of such terms and to the masculine
as well as to the feminine and neuter forms of such terms.
SECTION 2. REPRESENTATIONS AND WARRANTIES OF ILLINOIS POWER
(a) Illinois Power is duly organized and validly existing as a
corporation in good standing under the laws of the State of Illinois, with
the power and authority to own its properties and to conduct its business as
such properties are currently owned and such business is presently conducted
and to enter into this Agreement.
(b) Illinois Power has the requisite power and authority to
execute and deliver this Agreement and to carry out its terms and the
execution, delivery and performance of this Agreement have been duly
authorized by Illinois Power by all necessary corporate action.
(c) This Agreement constitutes a legal, valid and binding
obligation of Illinois Power enforceable against Illinois Power in accordance
with its terms, subject to applicable insolvency, reorganization, moratorium,
fraudulent transfer and other similar laws relating to or affecting
creditors' rights generally from time to time in effect and to general
principles of equity (including, without limitation, concepts of materiality,
reasonableness, good faith and fair dealing), regardless of whether
considered in a proceeding in equity or at law.
(d) The consummation of the transactions contemplated by this
Agreement and the fulfillment of the terms hereof do not (i) conflict with,
result in any breach of any of the terms and provisions of, or constitute
(with or without notice or lapse of time) a default under, the Articles of
Incorporation or by-laws of Illinois Power,
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or any indenture, agreement or other instrument to which Illinois Power is a
party or by which it is bound; (ii) result in the creation or imposition of
any Lien upon any of its properties pursuant to the terms of any such
indenture, agreement or other instrument; or (iii) violate any law or any
order, rule or regulation applicable to Illinois Power of any court or of any
Federal or state regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over Illinois Power or its properties.
(e) Upon the effectiveness of the 1998 Initial Tariff (i) all of
the 1998 Transition Property constitutes a current property right vested in
the Grantee; (ii) the 1998 Transition Property includes, without limitation,
(A) the right, title and interest in the IFCs authorized under the 1998
Funding Order, as adjusted from time to time, (B) the right, title and
interest in all revenues, collections, claims, payments, money or proceeds of
or arising from the IFCs set forth in the 1998 Initial Tariff, and (C) all
rights to obtain adjustments to the IFCs pursuant to the 1998 Funding Order;
and (iii) the Note Issuer is entitled to impose and collect the IFCs
described in the 1998 Funding Order and the 1998 Initial Tariff in an
aggregate amount equal to the principal amount of the Notes, all interest
thereon, all amounts required to be deposited in the Reserve Subaccount, the
Overcollateralization Subaccount and (to the extent payable from the proceeds
of the IFCs) the Capital Subaccount, and all related fees, costs and expenses
in respect of the Notes until they have been paid in full, subject only to
the $1.634 billion limitation set forth in the 1998 Funding Order as to the
maximum dollar amount of 1998 Transition Property created thereunder.
(f) To the fullest extent permitted by the Funding Law and all
other applicable law, the 1998 Transition Property and the right to impose
and collect IFCs contemplated thereunder constitute current property rights
of the Grantee and its assigns, including the Note Issuer and its assigns
(including the Indenture Trustee on behalf of the Holders), which property
has been placed beyond the reach of Illinois Power and its creditors, as in a
true sale, and which property rights may not be limited, altered, impaired,
reduced or otherwise terminated by any subsequent actions of Illinois Power
or any third party and which shall, to the full extent permitted by law, be
enforceable against Illinois Power, its successors and assigns, and all other
third parties (including judicial lien creditors) claiming an interest
therein by or through Illinois Power or its successors and assigns.
SECTION 3: COVENANTS OF ILLINOIS POWER. So long as any of the Notes
are outstanding, Illinois Power will take any and all actions reasonably
necessary to preserve the rights of Holders with respect to payments on the
Notes out of the amounts represented by IFCs or their equivalent, including,
but not limited to, (i) making appropriate filings with the State of
Illinois, the ICC or other regulatory bodies to defend, preserve and create
on behalf of Holders the right to receive payments as provided in the Notes,
(ii) defending against or instituting and pursuing legal actions and
appearing or testifying at hearings or similar proceedings, as may be
necessary to block or
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overturn any attempts to cause a repeal of; modification of or supplement to
or judicial invalidation of the Amendatory Act or any Funding Order or the
rights of the Holders by legislative enactment or otherwise that would be
adverse to the Grantee, the Note Issuer or any Holders, (iii) continuing to
deduct and pay over to the Indenture Trustee for the benefit of the Holders,
all IFCs and IFC Payments or equivalent revenues received by Illinois Power
notwithstanding any declaration of invalidity of the Amendatory Act, the
Funding Law, the Funding Order and/or the Grant Agreement, and (iv) making
any and all payments required to be made by Illinois Power under the Basic
Documents for the benefit of the Holders and the Indenture Trustee
notwithstanding any declaration of invalidity described above.
SECTION 4: NATURE OF REPRESENTATIONS AND WARRANTIES. The
representations and warranties set forth in SECTION 2 of this Agreement,
insofar as they involve conclusions of law, are made not on the basis that
Illinois Power purports to be a legal expert or to be rendering legal advice,
but rather to reflect the parties' good faith understanding of the legal
basis on which the parties are entering into this Agreement and the other
Basic Documents and the basis on which the Holders are purchasing the Notes,
and to reflect the parties' agreement that, if such understanding turns out
to be incorrect or inaccurate, Illinois Power will be obligated to indemnify
the Holders on account of any such inaccuracy.
SECTION 5: MERGER OR CONSOLIDATION OF OR ASSUMPTION OF THE
OBLIGATIONS OF ILLINOIS POWER. Any Person (a) into which Illinois Power may
be merged or consolidated, (b) which may result from any merger or
consolidation to which Illinois Power shall be a party or (c) which may
succeed to the properties and assets of Illinois Power substantially as a
whole, which Person in any of the foregoing cases executes an agreement of
assumption to perform every obligation of Illinois Power hereunder, shall be
the successor to Illinois Power under this Agreement without further act on
the part of any of the parties to this Agreement.
SECTION 6. AMENDMENTS. This Agreement may, with the prior written
consent of the Rating Agencies and written notice to the Indenture Trustee,
be amended in writing from time to time by Illinois Power PROVIDED that,
unless the Rating Agency Condition has been satisfied with respect to such
amendment, this Agreement may not be so amended except with the prior written
consent of the Indenture Trustee and Holders holding not less than a majority
of the Outstanding Amount of the Notes of all Series. Promptly after the
execution of any such amendment or consent, Illinois Power shall furnish a
copy of such amendment or consent to the Grantee, the Note Issuer and each of
the Rating Agencies. It shall not be necessary for the consent of the Rating
Agencies or the Holders pursuant to this Section to approve the particular
form of any proposed amendment or consent, but it shall be sufficient if such
consent shall approve the substance thereof.
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SECTION 7: NOTICES. All demands, notices and communications upon or
to Illinois Power or the Indenture Trustee shall be in writing, personally
delivered, mailed or sent by facsimile or other similar form of rapid
transmission, and shall be deemed to have been duly given upon receipt (a) in
the case of Illinois Power, to Illinois Power Company, 000 Xxxxx 00xx Xxxxxx,
Xxxxxxx, Xxxxxxxx 00000 and (b) in the case of the Indenture Trustee, at the
Corporate Trust Office, or as to each of the foregoing, at such other address
as shall be designated by written notice to the other party.
SECTION 8. ASSIGNMENT. Notwithstanding anything to the contrary
contained herein, except as provided in Section 6, this Agreement may not be
assigned by Illinois Power.
SECTION 9. LIMITATIONS ON RIGHTS OF OTHERS. The provisions of this
Agreement are solely for the benefit of the Indemnified Parties and nothing
in this Agreement, whether express or implied, shall be construed to give to
any other Person (including, without lmitation, the Grantee or the Note
Issuer) any legal or equitable right, remedy or claim under or in respect of
this Agreement or any covenants, conditions or provisions contained herein.
SECTION 10. SEVERABILITY. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof; and
any such prohibition or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in any other jurisdiction.
SECTION 11. SEPARATE COUNTERPARTS. This Agreement may be executed
by the parties hereto in separate counterparts, each of which when so
executed and delivered shall be an original, but all such counterparts shall
together constitute but one and the same instrument
SECTION 12. HEADINGS. The headings of the various Sections herein
are for convenience of reference only and shall not define or limit any of
the terms or provisions hereof
SECTION 13. INTEGRATION. This Agreement represents the agreement of
Illinois Power with respect to the subject matter hereof; and there are no
promises, undertakings, representations or warranties by Illinois Power
relative to the subject matter hereof not expressly set forth or referred to
herein.
SECTION 14. GOVERNING LAW. This Agreement shall be construed in
accordance with the laws of the State of Illinois, without reference to its
conflict of law
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provisions, and the obligations, rights and remedies of the parties hereunder
shall be determined in accordance with such laws.
SECTION 15. HOLDERS AS THIRD PARTY BENEFICIARIES. Illinois Power
and the Indenture Trustee agree that (i) the Holders are direct and express
third-party beneficiaries of the provisions of this Agreement and (ii) the
Indenture Trustee is authorized to enforce the terms and provisions of this
Agreement on behalf of, and for the benefit of, the Holders.
SECTION 16. REPRESENTATIONS. WARRANTIES AND INDEMNITIES TO SURVIVE.
The agreements, representations, warranties, indemnities and other statements
of Illinois Power or its officers set forth in or made pursuant to this
Agreement will remain in full force and effect and will survive (a) the grant
of the 1998 Transition Property and the issuance and delivery of the Notes
and (b) the termination, cancellation or invalidity of the Amendatory Act,
the Funding Law, any Funding Order or the Grant Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed by their respective officers as of the day and year first
above written.
ILLINOIS POWER COMPANY
By: ___________________________________
Name:
Title:
XXXXXX TRUST AND SAVINGS BANK,
not in its individual capacity, but solely in its
capacity as INDENTURE TRUSTEE
under the Indenture
By: ___________________________________
Name:
Title:
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