ILLINOIS POWER SPECIAL PURPOSE TRUST
TRANSITIONAL FUNDING TRUST NOTES
ILLINOIS POWER SECURITIZATION LIMITED LIABILITY COMPANY
ILLINOIS POWER COMPANY
UNDERWRITING AGREEMENT
New York, New York
December __, 1998
To the Representatives
named in Schedule I hereto of
the Underwriters named in
Schedule II hereto
Ladies and Gentlemen:
1. INTRODUCTION. Illinois Power Securitization Limited Liability
Company, a special purpose Delaware limited liability company (the "Grantee")
proposes to cause and be sold to the underwriters named in Schedule II hereto
(the "Underwriters"), for whom you are acting as representatives (the
"Representatives"), the principal amount of the notes identified in Schedule I
hereto (the "Notes") to be issued. If the firm or firms listed in Schedule II
hereto include only the firm or firms listed in Schedule I hereto, then the
terms "Underwriters" and "Representatives," as used herein, shall each be deemed
to refer to such firm or firms.
Illinois Power Special Purpose Trust, a Delaware business trust (the "Note
Issuer") was formed pursuant to an amended and restated declaration of trust,
dated as of September 10, 1998, by First Union Trust Company, National
Association, a national banking association, as Delaware Trustee (the "Delaware
Trustee"), and Xxxxxxx X. Xxxxxxx and Xxxx X. Xxxxxx, each as a Beneficiary
Trustee (the "Trust Agreement"), and the Notes will be issued pursuant to an
indenture, dated as of December 1, 1998, as supplemented by a first supplemental
indenture or Trust Issuance Certificate (and as amended and supplemented from
time to time, the "Indenture"), by and between the Note Issuer and Xxxxxx Trust
and Savings Bank, a banking corporation organized under the laws of the State of
Illinois, as Indenture Trustee (the "Indenture Trustee"). The assets of the
Note Issuer will consist primarily of the Intangible Transition Property
(whether created by the Transitional Funding Order issued by the Illinois
Commerce
Commission (the "ICC") on September 10, 1998 (the "1998 Funding Order")
or any other Transitional Funding Order) transferred to the Note Issuer pursuant
to the Sale Agreement (as hereinafter defined). Such Intangible Transition
Property was, by virtue of the 1998 Funding Order, granted to and vested in the
Grantee, whose sole member is Illinois Power Company (the "Company"). Pursuant
to an agreement relating to the grant of Intangible Transition Property, dated
as of December __, 1998 (the "Grant Agreement"), by and between the Company and
the Grantee, the Company has confirmed the absolute nature of the ownership of
the Intangible Transition Property in the Grantee. The Intangible Transition
Property will be transferred to the Note Issuer by the Grantee pursuant to an
Intangible Transition Property sale agreement, dated as of December __, 1998
(the "Sale Agreement"), by and between the Grantee and the Note Issuer. Other
Intangible Transition Property may be granted to and vested in the Grantee
pursuant to Subsequent Financing Orders and confirmed by Subsequent Grant
Agreements and transferred to the Note Issuer by the Grantee pursuant to
Subsequent Sale Agreements. Pursuant to the Indenture, the Note Issuer has
granted to the Indenture Trustee, as trustee for the benefit of the holders of
the Notes, all of its right, title and interest in and to the Intangible
Transition Property as security for the Notes. The Intangible Transition
Property will be serviced pursuant to an Intangible Transition Property
servicing agreement, dated as of December __, 1998 (as amended and supplemented
from time to time, the "Servicing Agreement"), by and between the Company, as
servicer, and the Grantee. All of the Grantee's right, title and interest in
and to the Grant Agreement, the Sale Agreement and the Servicing Agreement,
among other things, wil be transferred to the Note Issuer as Related Assets
pursuant to the Sale Agreement.
Capitalized terms used and not otherwise defined herein shall have the
meanings given to them in the Indenture, including Appendix A thereto.
2. REPRESENTATIONS AND WARRANTIES. Each of the Company and the Grantee
represents and warrants to, and agrees with, each Underwriter as set forth below
in this Section 2. Certain terms used in this Section 2 are defined in
paragraph (c) hereof.
(a) If the offering of the Notes is a Delayed Offering (as specified
in Schedule I hereto), paragraph (i) below is applicable and, if the
offering of the Notes is a Non-Delayed Offering (as so specified),
paragraph (ii) below is applicable.
(i) The Grantee and the Notes meet the requirements for the use
of Form S-3 under the Securities Act of 1933 (the "Act"), and the
Grantee has filed with the Securities and Exchange Commission (the
"SEC") a registration statement (the file number of which is set forth
in Schedule I hereto) on such Form, including a basic prospectus, for
registration under the Act of the offering and sale of the Notes. The
Grantee may have filed one or more amendments thereto, and may have
used a Preliminary Final Prospectus, each of which has previously been
furnished to you. Such registration statement, as so amended, has
become effective. The offering of the Notes is a Delayed Offering
and, although the Basic Prospectus may not include all the information
with respect to the Notes
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and the offering thereof required by the Act and the rules
thereunder to be included in the Final Prospectus, the Basic
Prospectus includes all such information required by the Act and
the rules thereunder to be included therein as of the Effective
Date. The Grantee will next file with the SEC pursuant to Rules 415
and 424(b)(2) or (5) a final supplement to the form of prospectus
included in such registration statement relating to the Notes and
the offering thereof. As filed, such final prospectus supplement
shall include all required information with respect to the Notes
and the offering thereof and, except to the extent the
Representatives shall agree in writing to a modification, shall be
in all substantive respects in the form furnished to you prior to
the Execution Time or, to the extent not completed at the Execution
Time, shall contain only such specific additional information and
other changes (beyond that contained in the Basic Prospectus and
any Preliminary Final Prospectus) as the Grantee has advised you,
prior to the Execution Time, will be included or made therein.
(ii) The Grantee and the Notes meet the requirements for the use
of Form S-3 under the Act and the Grantee has filed with the SEC a
registration statement (the file number of which is set forth in
Schedule I hereto) on such Form, including a basic prospectus, for
registration under the Act of the offering and sale of the Notes. The
Grantee may have filed one or more amendments thereto, including a
Preliminary Final Prospectus, each of which has previously been
furnished to you. The Note Issuer will next file with the SEC either
(x) a final prospectus supplement relating to the Notes in accordance
with Rules 430A and 424(b)(1) or (4), or (y) prior to the
effectiveness of such registration statement, an amendment to such
registration statement, including the form of final prospectus
supplement. In the case of clause (x), the Grantee has included in
such registration statement, as amended at the Effective Date, all
information (other than Rule 430A Information) required by the Act and
the rules thereunder to be included in the Final Prospectus with
respect to the Notes and the offering thereof. As filed, such final
prospectus supplement or such amendment and form of final prospectus
supplement shall contain all Rule 430A Information, together with all
other such required information, with respect to the Notes and the
offering thereof and, except to the extent the Representatives shall
agree in writing to a modification, shall be in all substantive
respects in the form furnished to you prior to the Execution Time or,
to the extent not completed at the Execution Time, shall contain only
such specific additional information and other changes (beyond that
contained in the Basic Prospectus and any Preliminary Final
Prospectus) as the Grantee has advised you, prior to the Execution
Time, will be included or made therein.
(b) On the Effective Date, the Registration Statement did or will,
and when the Final Prospectus is first filed (if required) in accordance
with Rule 424(b) and on the
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Closing Date, the Final Prospectus (and any supplement thereto) will,
comply in all material respects with the applicable requirements of the
Act, the Securities Exchange Act of 1934 (the "Exchange Act") and the
Trust Indenture Act of 1939 (the "Trust Indenture Act") and the
respective rules thereunder; on the Effective Date, the Registration
Statement did not or will not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein not misleading; on the
Effective Date and on the Closing Date the Indenture did or will comply
in all material respects with the requirements of the Trust Indenture
Act and the rules thereunder; and, on the Effective Date, the Final
Prospectus, if not filed pursuant to Rule 424(b), did not or will not,
and on the date of any filing pursuant to Rule 424(b) and on the Closing
Date, the Final Prospectus (together with any supplement thereto) will
not, include any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
provided, however, that neither the Grantee nor the Company makes any
representations or warranties as to (i) that part of the Registration
Statement which shall constitute the Statements of Eligibility and
Qualification (Forms T-1) under the Trust Indenture Act of the Indenture
Trustee or (ii) the information contained in or omitted from the
Registration Statement or the Final Prospectus (or any supplement
thereto) in reliance upon and in conformity with information furnished
in writing to the Grantee by or on behalf of any Underwriter through the
Representatives specifically for inclusion in the Registration Statement
or the Final Prospectus (or any supplement thereto).
(c) The terms which follow, when used in this Agreement, shall have
the meanings indicated. The term "the Effective Date" shall mean each date
that the Registration Statement and any post-effective amendment or
amendments thereto became or become effective and each date after the date
hereof on which a document incorporated by reference in the Registration
Statement is filed. "Execution Time" shall mean the date and time that
this Agreement is executed and delivered by the parties hereto. "Basic
Prospectus" shall mean the prospectus referred to in paragraph (a) above
contained in the Registration Statement at the Effective Date including, in
the case of a Non-Delayed Offering, any Preliminary Final Prospectus.
"Preliminary Final Prospectus" shall mean any preliminary prospectus
supplement to the Basic Prospectus which describes the Notes and the
offering thereof and is used prior to filing of the Final Prospectus.
"Final Prospectus" shall mean the prospectus supplement relating to the
Notes that is first filed pursuant to Rule 424(b) after the Execution Time,
together with the Basic Prospectus or, if, in the case of a Non-Delayed
Offering, no filing pursuant to Rule 424(b) is required, shall mean the
form of final prospectus relating to the Notes, including the Basic
Prospectus, included in the Registration Statement at the Effective Date.
"Registration Statement" shall mean the registration statement referred to
in paragraph (a) above, including incorporated documents, exhibits and
financial statements, as amended at the Execution Time (or, if not
effective at the Execution Time, in the form in which it shall
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become effective) and, in the event any post-effective amendment thereto
becomes effective prior to the Closing Date (as hereinafter defined),
shall also mean such registration statement as so amended. Such term
shall include any Rule 430A Information deemed to be included therein at
the Effective Date as provided by Rule 430A. "Rule 415," "Rule 424,"
"Rule 430A" and "Regulation S-K" refer to such rules or regulation under
the Act. "Rule 430A Information" means information with respect to the
Notes and the offering thereof permitted to be omitted from the
Registration Statement when it becomes effective pursuant to Rule 430A.
Any reference herein to the Registration Statement, the Basic
Prospectus, any Preliminary Final Prospectus or the Final Prospectus
shall be deemed to refer to and include the documents incorporated by
reference therein pursuant to Item 12 of Form S-3 which were filed under
the Exchange Act on or before the Effective Date of the Registration
Statement or the issue date of the Basic Prospectus, any Preliminary
Final Prospectus or the Final Prospectus, as the case may be; and any
reference herein to the terms "amend," "amendment" or "supplement" with
respect to the Registration Statement, the Basic Prospectus, any
Preliminary Final Prospectus or the Final Prospectus shall be deemed to
refer to and include the filing of any document under the Exchange Act
after the Effective Date of the Registration Statement or the issue date
of the Basic Prospectus, any Preliminary Final Prospectus or the Final
Prospectus, as the case may be, deemed to be incorporated therein by
reference. A "Non-Delayed Offering" shall mean an offering of
securities which is intended to commence promptly after the effective
date of a registration statement, with the result that, pursuant to
Rules 415 and 430A, all information (other than Rule 430A Information)
with respect to the securities so offered must be included in such
registration statement at the effective date thereof. A "Delayed
Offering" shall mean an offering of securities pursuant to Rule 415
which does not commence promptly after the effective date of a
registration statement, with the result that only information required
pursuant to Rule 415 need be included in such registration statement at
the effective date thereof with respect to the securities so offered.
Whether the offering of the Notes is a Non-Delayed Offering or a Delayed
Offering shall be set forth in Schedule I hereto.
(d) PricewaterhouseCoopers LLP, the accountants who certified certain
financial statements of the Grantee and the Note Issuer included in the
Prospectus, are independent public accountants as required by the Act and
the rules and regulations of the SEC thereunder.
(e) The financial statements included or incorporated by reference in
the Prospectus present fairly the financial position and results of
operations of the Grantee and the Note Issuer, respectively, as of the
respective dates and for the respective periods specified and, except as
otherwise stated in the Prospectus, such financial statements have been
prepared in conformity with generally accepted accounting principals
applied on a consistent basis during the periods involved. Neither the
Grantee nor the Note Issuer has any material contingent obligation which is
not disclosed in the Prospectus.
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(f) The Note Issuer has been duly formed and is validly existing as a
Delaware business trust and is in good standing under the laws of the State
of Delaware, with full power and authority to execute, deliver and perform
its obligations under this Agreement, the Sale Agreement, the Indenture and
the Notes.
(g) The Note Issuer is not in violation of the Trust Agreement, or in
default in the performance or observance of any material obligation,
agreement, covenant or condition contained in any material contract, lease,
note or other instrument to which it is a party or by which it may be
bound, or materially in violation of any law, administrative regulation or
administrative, arbitration or court order, except in each case to such
extent as may be set forth in the Prospectus; and the execution and
delivery of the Sale Agreement, and the Indenture and the Notes, the
incurrence of the obligations set forth therein and the consummation of the
transaction therein contemplated will not conflict with or constitute a
breach of, or default under, the Trust Agreement or any mortgage, contract,
lease, note or other instrument to which the Note Issuer is a party or by
which it may be bound, or any law, administrative regulation or
administrative, arbitration or court order.
(h) There is no pending or threatened suit or proceeding before any
court or governmental agency, authority or body or any arbitration
involving the Company or any of its significant subsidiaries or the Note
Issuer required to be disclosed in the Prospectus which is not adequately
disclosed in the Prospectus.
(i) The Indenture has been duly and validly authorized by the
necessary action and duly qualified under the Trust Indenture Act; and the
Indenture has been duly and validly executed and delivered and is a valid
and enforceable instrument in accordance with its terms (subject to
bankruptcy, reorganization, insolvency, moratorium or other similar laws or
equitable principles affecting the enforcement of creditors' rights from
time to time in effect).
(j) The issuance and sale of the Notes in accordance with the terms
of this Agreement have been duly and validly authorized by the necessary
action; the Notes, when duly executed, authenticated and delivered against
payment of the agreed consideration therefor, will be valid and enforceable
obligations in accordance with their terms, entitled to the benefits
provided by the Indenture, and the holders of the Notes will be entitled to
the payment of principal and interest as therein provided; and the Notes
and the Indenture conform to the descriptions thereof contained in the
Prospectus.
Any certificate signed by any officer of the Company or the Grantee and
delivered to you or to counsel for the Underwriters shall be deemed a
representation and warranty by the Company and the Grantee to each Underwriters
as to the matters covered thereby.
3. PURCHASE AND SALE. Subject to the terms and conditions and in
reliance upon the representations and warranties herein set forth, the Grantee
will cause to be sold to each
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Underwriter, and each Underwriter agrees, severally and not jointly, to
purchase from the Note Issuer, at the purchase price set forth in Schedule I
hereto the principal amount of the Notes set forth opposite such
Underwriter's name in Schedule II hereto.
4. DELIVERY AND PAYMENT. Delivery of and payment for the Notes shall be
made on the date and at the time specified in Schedule I hereto (or such later
date not later than five business days after such specified date as the
Representatives shall designate), which date and time may be postponed by
agreement between the Representatives and the Grantee or as provided in Section
9 hereof (such date and time of delivery and payment for the Notes being herein
called the "Closing Date"). Delivery of the Notes shall be made to the
Representatives for the respective accounts of the several Underwriters against
payment by the several Underwriters through the Representatives of the purchase
price thereof to the Note Issuer by wire transfer of immediately available
funds. Delivery of the Notes shall be made at such location as the
Representatives shall reasonably designate at least one business day in advance
of the Closing Date. The Notes to be so delivered shall be initially
represented by Notes registered in the name of Cede & Co., as nominee of The
Depository Trust Company ("DTC"). The interests of beneficial owners of the
Notes will be represented by book entries on the records of DTC and
participating members thereof. Definitive Notes will be available only under
limited circumstances.
The Grantee will cause the Note Issuer to have the Notes available for
inspection, checking and packaging by the Representatives in New York, New York,
not later than 1:00 PM Eastern Standard Time on the business day prior to the
Closing Date.
5. COVENANTS.
(a) COVENANTS OF THE GRANTEE. The Grantee covenants and agrees with the
several Underwriters that:
(i) The Grantee will use commercially reasonable efforts to
cause the Registration Statement, if not effective at the Execution
Time, and any amendment thereto, to become effective. Prior to the
termination of the offering of the Notes, the Grantee will not file
any amendment of the Registration Statement or supplement (including
the Final Prospectus or any Preliminary Final Prospectus) to the Basic
Prospectus unless the Grantee has furnished you a copy for your review
prior to filing and will not file any such proposed amendment or
supplement to which you reasonably object. Subject to the foregoing
sentence, the Grantee will cause the Final Prospectus, properly
completed, and any supplement thereto to be filed with the SEC
pursuant to the applicable paragraph of Rule 424(b) within the time
period prescribed and will provide evidence satisfactory to the
Representatives of such timely filing. The Grantee will promptly
advise the Representatives (i) when the Registration Statement, if not
effective at the Execution Time, and any amendment thereto, shall have
become
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effective, (ii) when the Final Prospectus, and any supplement
thereto, shall have been filed with the SEC pursuant to Rule
424(b), (iii) when, prior to termination of the offering of the
Notes, any amendment to the Registration Statement shall have been
filed or become effective, (iv) of any request by the SEC for any
amendment of the Registration Statement or supplement to the Final
Prospectus or for any additional information, (v) of the issuance
by the SEC of any stop order suspending the effectiveness of the
Registration Statement or the institution or threatening of any
proceeding for that purpose and (vi) of the receipt by the Grantee
of any notification with respect to the suspension of the
qualification of the Notes for sale in any jurisdiction or the
initiation or threatening of any proceeding for such purpose. The
Grantee will use commercially reasonable efforts to prevent the
issuance of any such stop order and, if issued, to obtain as soon
aspossible the withdrawal thereof.
(ii) If, at any time when a prospectus relating to the Notes is
required to be delivered under the Act, any event occurs as a result
of which the Final Prospectus as then supplemented would include any
untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein in the light of the
circumstances under which they were made not misleading, or if it
shall be necessary to amend the Registration Statement or supplement
the Final Prospectus to comply with the Act or the Exchange Act or the
respective rules thereunder, the Grantee promptly will (i) prepare and
file with the SEC, subject to the second sentence of paragraph (a) of
this Section 5, an amendment or supplement which will correct such
statement or omission or effect such compliance and (ii) supply any
supplemented Prospectus to you in such quantities as you may
reasonably request.
(iii) As soon as practicable, the Grantee will cause Note Issuer
to make generally available to the Noteholders and to the
Representatives an earnings statement or statements of the Note Issuer
which will satisfy the provisions of Section 11(a) of the Act and Rule
158 under the Act.
(iv) The Grantee will furnish to the Representatives and counsel
for the Underwriters, without charge, copies of the Registration
Statement (including exhibits thereto) and, so long as delivery of a
prospectus by an Underwriter or dealer may be required by the Act, as
many copies of any Preliminary Final Prospectus and the Final
Prospectus and any supplement thereto as the Representatives may
reasonably request. The Grantee shall furnish or cause to be
furnished to the Representatives copies of all reports on Form SR
required by Rule 463 under the Act. The Grantee will pay the expenses
of printing or other production of all documents relating to the
offering.
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(v) The Grantee will arrange for the qualification of the Notes
for sale under the laws of such jurisdictions as the Representatives
may designate, will maintain such qualifications in effect so long as
required for the distribution of the Notes and will arrange for the
determination of the legality of the Notes for purchase by
institutional investors; provided that in no event shall the Grantee
be obligated to qualify to do business in any jurisdiction where it is
not now so qualified or to take any action that would subject it to
service of process in suits, other than those arising out of the
offering or sale of the Notes, in any jurisdiction where it is not now
so subject.
(vi) Until the business date set forth on Schedule I hereto, the
Grantee will not, without the consent of the Representatives, offer,
sell or contract to sell, or otherwise dispose of, directly or
indirectly, or announce the offering of, any asset-backed securities
of a trust or other special purpose vehicle (other than the Notes).
(vii) For a period from the date of this Agreement until the
retirement of the Notes, or until such time as the Underwriters shall
cease to maintain a secondary market in the Notes, whichever occurs
first, the Grantee will deliver to the Representatives the annual
statements of compliance and the annual independent auditor's
servicing reports furnished to the Grantee Trustee, the Note Issuer or
the Indenture Trustee pursuant to the Servicing Agreement or the
Indenture, as applicable, as soon as such statements and reports are
furnished to the Grantee, Note Issuer or the Indenture Trustee.
(viii) So long as any of the Notes are outstanding, the
Grantee will furnish to the Representatives, to the extent not
provided by the Company pursuant to clause (b)(iii) below, (i) as soon
as available, a copy of each report of the Grantee or the Note Issuer
filed with the SEC under the Exchange Act, or mailed to Noteholders,
(ii) a copy of any filings made by the Grantee or the Note Issuer with
the ICC pursuant to the 1998 Funding Order, and (iii) from time to
time, any information concerning the Company, the Grantee, the Note
Issuer, as the Representatives may reasonably request.
(ix) To the extent, if any, that any rating necessary to satisfy
the condition set forth in Section 6(m) of this Agreement is
conditioned upon the furnishing of documents or the taking of other
actions by the Grantee on or after the Closing Date, the Grantee shall
furnish such documents and take such other actions.
(b) COVENANTS OF THE COMPANY. The Company covenants and agrees with
the several Underwriters that, to the extent that the Note Issuer has not
already performed such act pursuant to Section 5(a):
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(i) The Company will use commercially reasonable efforts to
cause the Registration Statement, if not effective at the Execution
Time, and any amendment thereto, to become effective. The Company
will use commercially reasonable efforts to prevent the issuance by
the SEC of any stop order suspending the effectiveness of the
Registration Statement and, if issued, to obtain as soon as possible
the withdrawal thereof.
(ii) The Company will apply the proceeds of the issuance and sale
of the Notes for the purposes described in the Prospectus.
(iii) Until the business date set forth on Schedule I hereto, the
Company will not, without the consent of the Representatives, offer,
sell or contract to sell, or otherwise dispose of, directly or
indirectly, or announce the offering of, any asset-backed securities
of a trust or other special purpose vehicle (other than the Notes).
(iv) So long as any of the Notes are outstanding and the Company
is the Servicer, the Company will furnish to the Representatives (i)
as soon as available, a copy of each report of the Company, the
Grantee or the Note Issuer filed with the SEC under the Exchange Act,
or mailed to Noteholders, (ii) a copy of any filings with the ICC by
the Company, the Grantee or the Note Issuer pursuant to the 1998
Funding Order, and (iii) from time to time, any information concerning
the Company, the Grantee or the Note Issuer, as the Representatives
may reasonably request.
(v) To the extent, if any, that any rating necessary to satisfy
the condition set forth in Section 6(m) of this Agreement is
conditioned upon the furnishing of documents or the taking of other
actions by the Company on or after the Closing Date, the Company shall
furnish such documents and take such other actions.
(vi) The Company recognizes and agrees that a substantial
impairment of the rights of Holders with respect to the collection of
IFCs and payments on the Notes, arising from a declaration of
invalidity of the Amendatory Act and/or the Funding Law or for any
other reason, occurring after the Company and its affiliates received
the proceeds of such Notes, would not be equitable. The Company
agrees to 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 and (ii) so long as the 1998 Funding Order remains in effect,
continuing to deduct and pay over to the Servicer for the benefit of
the
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Note issuer all IFCs and IFC Payments or equivalent revenues
received by the Company notwithstanding any declaration of
invalidity of the Amendatory Act and/or the Funding Law.
(vii) The Initial IFC Tariff has been calculated in accordance
with the 1998 Funding Order.
6. CONDITIONS TO THE OBLIGATIONS OF THE UNDERWRITERS. The obligations of
the Underwriters to purchase the Notes shall be subject to the accuracy of the
representations and warranties on the part of the Grantee and the Company
contained herein as of the Execution Time and the Closing Date, on the part of
the Grantee contained in Article III of the Sale Agreement and on the part of
the Company contained in Article III of the Grant Agreement and in Section 6.01
of the Servicing Agreement as of the Closing Date (which representations and
warranties are hereby incorporated herein as if set forth in full),to the
accuracy of the statements in the Notes pursuant to the provisions hereof, to
the performance by the Grantee, the Company and the Note Issuer of their
obligations hereunder and to the following additional conditions precedent:
(a) If the Registration Statement has not become effective prior to
the Execution Time, unless the Representatives agree in writing to a later
time, the Registration Statement will become effective not later than (i)
6:00 PM Eastern Standard Time, on the date of determination of the public
offering price, if such determination occurred at or prior to 3:00 PM
Eastern Standard Time on such date, or (ii) 12:00 Noon Eastern Standard
Time on the business day following the day on which the public offering
price was determined, if such determination occurred after 3:00 PM Eastern
Standard Time on such date; if filing of the Final Prospectus, or any
supplement thereto, is required pursuant to Rule 424(b), the Final
Prospectus, and any such supplement, shall have been filed in the manner
and within the time period required by Rule 424(b); and no stop order
suspending the effectiveness of the Registration Statement shall have been
issued and no proceedings for that purpose shall have been instituted or
threatened.
(b) The Representatives shall have received an opinion of Xxxxxx
Xxxxxx & Xxxxx, counsel for the Company, the Grantee and the Note Issuer,
dated the Closing Date, substantially in the form of Exhibit A hereto.
(c) The Representatives shall have received an opinion letter of, or
a reliance letter thereon from, Xxxxxx Xxxxxx & Xxxxx, counsel to the Note
Issuer, dated the Closing Date, in form and substance reasonably
satisfactory to the Representatives, required to be delivered by such
counsel pursuant to the requirements of clauses (3) and (8) of Section 2.10
of the Indenture.
(d) The Representatives shall have received (i) opinion letters of,
or a reliance letter or letters thereon from, Xxxxxxxx, Xxxxxx and Xxxxxx,
P.A., special Delaware
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counsel to the Grantee and the Note Issuer, dated the Closing Date, in
form and substance reasonably satisfactory to the Representatives, as to
matters relating to the Grantee and the Note Issuer and the
transactions contemplated hereby, respectively, and (ii) an opinion of
Xxxxxxxx, Xxxxxx & Finger, P.A., counsel to the Delaware Trustee, dated
the Closing Date, in form and substance reasonably satisfactory to the
Representatives, to the effect that:
(i) the Delaware Trustee is validly existing as a national
banking association in good standing under the laws of the State of
Delaware and of the federal laws of the United States of America, with
full corporate trust power and authority to enter into and perform its
obligations as Delaware Trustee under the Trust Agreement, the Sale
Agreement and the Indenture; and
(ii) the Trust Agreement has been duly authorized, executed and
delivered by the Delaware Trustee and constitutes a legal, valid and
binding agreement enforceable against the Delaware Trustee in
accordance with its terms (subject, as to enforcement of remedies, to
applicable bankruptcy, reorganization, insolvency, moratorium or other
similar laws or equitable principles affecting creditors' rights
generally from time to time in effect).
(e) The Representatives shall have received an opinion of Xxxxxx &
Xxxxxx, counsel to the Indenture Trustee, dated the Closing Date, in form
and substance reasonably satisfactory to the Representatives, to the effect
that:
(i) the Indenture Trustee is validly existing as a banking
corporation in good standing under the laws of Illinois;
(ii) the Indenture has been duly authorized, executed and
delivered by the Indenture Trustee and constitutes the legal, valid
and binding agreement enforceable against the Indenture Trustee in
accordance with its terms (subject, as to enforcement of remedies, to
applicable bankruptcy, reorganization, insolvency, moratorium or other
similar laws or equitable principles affecting creditors' rights
generally from time to time in effect); and
(iii) the Indenture Trustee has duly executed and authenticated
the Notes issued on the Closing Date on behalf of the Note Issuer.
(f) The Representatives shall have received from Brown & Wood LLP,
counsel for the Underwriters, such opinion or opinions, dated the Closing
Date, with respect to the issuance and sale of the Notes, the Indenture,
the Registration Statement, the Final Prospectus (together with any
supplement thereto) and other related matters as the Representatives may
reasonably require, and the Company, the Grantee and the Note
12
Issuer shall have furnished to such counsel such documents as they
request for the purpose of enabling them to pass upon such matters.
(g) The Representatives shall have received a certificate of the
Grantee, signed by the Sole Member or any Manager of the Grantee, including
the Independent Manager of the Grantee, dated the Closing Date, to the
effect that the signers of such certificate have carefully examined the
Registration Statement, the Final Prospectus, any supplement to the Final
Prospectus and this Agreement and that:
(i) the representations and warranties of the Grantee in this
Agreement and in the Sale Agreement are true and correct in all
material respects on and as of the Closing Date with the same effect
as if made on the Closing Date, and the Grantee and the Note Issuer
have complied with all the agreements and satisfied all the conditions
on each of their part to be performed or satisfied at or prior to the
Closing Date;
(ii) no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that
purpose have been instituted or, to the Grantee's knowledge,
threatened; and
(iii) since the dates as of which information is given in the
Final Prospectus (exclusive of any supplement thereto), there has been
no material adverse change in (A) the condition (financial or other),
prospects, earnings, business or properties of the Grantee or the Note
Issuer, whether or not arising from transactions in the ordinary
course of business, or (B) the Intangible Transition Property or any
right related thereto under the Funding Law or the 1998 Funding Order,
except as set forth in or contemplated in the Final Prospectus
(exclusive of any supplement thereto).
(h) The Representatives shall have received a certificate of the
Company, signed by the Chief Executive Officer, the President or a
Vice-President and the principal financial or accounting officer of the
Company, dated the Closing Date, to the effect that the signers of such
certificate have carefully examined the Registration Statement, the
Final Prospectus, any supplement to the Final Prospectus and this
Agreement and that:
(i) the representations and warranties of the Company in this
Agreement, the Grant Agreement, the Servicing Agreement, the
Administration Agreement and the Remediation Agreement are true and
correct in all material respects on and as of the Closing Date with
the same effect as if made on the Closing Date, and the Company has
complied in all material respects with all the agreements and
satisfied all the conditions on its part to be performed or satisfied
at or prior to the Closing Date; provided, however, that the execution
of each certificate by any of said individuals on behalf of the
Company shall not be
13
deemed to be the expression of any legal opinion or opinions by any of
said individuals;
(ii) no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that
purpose have been instituted or, to the Company's knowledge,
threatened; and
(iii) since the dates as of which information is given in the
Final Prospectus (exclusive of any supplement thereto), there has been no
material adverse change in (A) the condition (financial or other),
prospects, earnings, business or properties of the Company and its
subsidiaries taken as a whole, whether or not arising from transactions
contemplated by the Final Prospectus or in the ordinary course of business,
or (B) the Intangible Transition Property, except as set forth in or
contemplated in the Final Prospectus (exclusive of any supplement thereto).
(i) At the Closing Date, PricewaterhouseCoopers LLP shall have
furnished to the Representatives (i) a letter or letters (which may refer
to letters previously delivered to one or more of the Representatives),
dated as of the Closing Date, in form and substance satisfactory to the
Representatives, confirming that they are independent accountants within
the meaning of the Act and the Exchange Act and the respective applicable
published rules and regulations thereunder and stating in effect that they
have performed certain specified procedures as a result of which they
determined that certain information of an accounting, financial or
statistical nature (which is limited to accounting, financial or
statistical information derived from the general accounting records of the
Company and its subsidiaries) set forth in the Registration Statement and
the Final Prospectus, including information specified by the Underwriters
and set forth under the captions "Prospectus Summary," "Description of the
Intangible Transition Property," "The Servicer" and "Description of the
Notes" in the Final Prospectus, agrees with the accounting records of the
Company and its subsidiaries, excluding any questions of legal
interpretation, and (ii) the opinion or certificate, dated as of the
Closing Date, in form and substance satisfactory to the Representatives,
satisfying the requirements of Section 2.10(9) of the Indenture.
References to the Final Prospectus in this paragraph (i) include any
supplement thereto at the date of the letter.
In addition, except as provided in Schedule I hereto, at the Execution
Time, PricewaterhouseCoopers LLP shall have furnished to the
Representatives a letter or letters, dated as of the Execution Time, in
form and substance satisfactory to the Representatives, to the effect set
forth above.
14
(j) Subsequent to the Execution Time or, if earlier, the dates as of
which information is given in the Registration Statement (exclusive of any
amendment thereof) and the Final Prospectus (exclusive of any supplement
thereto), there shall not have been any change, or any development
involving a prospective change, in or affecting either (i) the business,
properties or financial condition of the Company, the Grantee or the Note
Issuer, or (ii) the Intangible Transition Property, the Notes, the 1998
Funding Order or the Funding Law, the effect of which is, in the case of
either (i) or (ii) above, in the judgment of the Representatives, so
material and adverse as to make it impractical or inadvisable to proceed
with the offering or delivery of the Notes as contemplated by the
Registration Statement (exclusive of any amendment thereof) and the Final
Prospectus (exclusive of any supplement thereto).
(k) The Representatives shall have received on the Closing Date an
opinion letter or letters, portions of which may be delivered by Xxxxxx
Xxxxxx & Xxxxx, counsel to the Company, the Grantee and the Note Issuer,
and portions of which may be delivered by Xxxxxxxx, Xxxxxx & Finger, P.A.,
special Delaware counsel to the Grantee and the Note Issuer, dated the
Closing Date, in form and substance reasonably satisfactory to the
Representatives, (i) to the effect that a bankruptcy court would conclude
that, if the Company is deemed to have received some interest in the
Intangible Transition Property, that interest was transferred by the
Company to the Grantee as an absolute transfer (as in a true sale), and no
interest in or title to the Intangible Transition Property shall be part of
the Company's estate in the event of a bankruptcy petition by or against
the Company under any bankruptcy law; (ii) to the effect that a court would
not order the substantive consolidation of the assets and liabilities of
the Grantee with those of the Company in the event of a bankruptcy,
reorganization or other insolvency proceeding involving the Company; (iii)
to the effect a federal bankruptcy court or another federal court would
hold that Delaware law (and not United States federal law) governs the
determination of whether a voluntary bankruptcy petition filed on behalf of
the Grantee has been duly authorized; (iv) to the effect that if properly
presented to a Delaware court, a Delaware court applying Delaware law would
conclude that (A) pursuant to Section 2.7(b) of the Operating Agreement of
the Grantee, in order for a person to initiate any Event of Bankruptcy (as
defined in the Operating Agreement) with respect to the Grantee or take any
action in furtherance of any such Event of Bankruptcy, the affirmative vote
of all of the Managers (including the Independent Manager (as defined in
the Operating Agreement)) is required, and (B) such provision, contained in
Section 2.7(b) of the Operating Agreement, that requires the affirmative
vote o all of the Managers (including the Independent Manager), constitutes
a legal, valid and binding agreement of the Sole Member and is enforceable
against the Sole Member, in accordance with its terms; and (v) the
Operating Agreement constitutes a legal, valid and binding agreement of the
Sole Member thereunder, and is enforceable against the Sole Member in
accordance with its terms.
15
(l) The Representatives shall have received on the Closing Date an
opinion letter or letters of Xxxxxx Xxxxxx & Xxxxx, counsel to the Company,
the Grantee and the Note Issuer, dated the Closing Date, in form and
substance reasonably satisfactory to the Representatives, to the effect
that, but subject to the qualifications, limitations, assumptions and
analysis therein set forth, a reviewing court, in a properly prepared and
presented case: (i) would conclude that, absent a demonstration by the
State of Illinois (the "State") that an impairment is necessary to further
a significant and legitimate public purpose, the Noteholders (or the
Indenture Trustee acting on their behalf) could challenge successfully
under Article I, Section 10 of the United States Constitution (the
"Contract Clause") the constitutionality of any law passed by the State
legislature determined by such court to limit, alter, impair or reduce the
value of the Intangible Transition Property or the IFCs so as to cause an
impairment prior to the time that the Notes are fully paid and discharged;
(ii) would conclude that any attempt by citizens of the State to initiative
changes to the Amendatory Act determined by such court to limit, alter,
impair or reduce the value of the Intangible Transition Property or the
IFCs would be invalid; (iii) would conclude that under the Funding Law the
ICC would be prohibited from taking any action subsequent to the 1998
Funding Order becoming final determined by such court to reduce, postpone,
impair or terminate the value of the Intangible Transition Property or the
IFCs; (iv) should conclude that permanent injunctive relief is available,
pursuant to the Contract Clause, to prevent implementation of legislation
hereafter passed by the Illinois legislature determined by such court to
limit, alter, impair or reduce the value of the Intangible Transition
Property or the IFCs so as to cause an impairment; and although sound and
substantial arguments support the granting of preliminary injunctive
relief, the decision to o so will be in the discretion of the court
requested to take such action, which will be exercised on the basis of the
considerations discussed in such opinion; (v) in the event that a provision
of the Amendatory Act were hereafter declared to be invalid by a court, a
reviewing court should hold that the Intangible Transition Property remains
valid and vested in the Grantee or its assignees and the Noteholders would
continue to be secured thereby; (vi) if a reviewing court were to
determine, after such a declaration, that the Intangible Transition
Property would remain valid and so vested and that the Noteholders would
continue to be secured thereby, such court should also determine, for the
same reasons, that the substance of the State Pledge would continue in
effect for the benefit of the Noteholders; (vii) a reviewing court which
determines that the substance of the State Pledge continues in effect for
the benefit of the Noteholders should also determine, for the same reasons,
that the ICC could not take any action determined by such court to limit,
alter, impair or reduce materially the value of the Intangible Transition
Property or the IFCs, except for such actions, if any, which would be taken
by the State without violating the State Pledge; and (viii) notwithstanding
a judicial declaration of the invalidity of the Amendatory Act, the 1998
Funding Order would remain in effect and the Intangible Transition Property
would continue to be valid and enforceable, at least against the Company
and its successors and assigns (including a trustee in bankruptcy), unless
and until the 1998 Funding Order were modified by the
16
ICC or a court in subsequent proceedings initiated to vacate, amend or
otherwise modify the 1998 Funding Order; however, notwithstanding such a
declaration, it would be possible to seek a stay of any decision which
vacates, amends or otherwise modifies the 1998 Funding Order in a manner
adversely affecting the payment of the IFCs pending appellate review of
such decision; and while sound and substanial arguments support the
granting of such a stay, the decision to do so will be in the discretion
of the court requested to take such an action, which will be exercised
on the basis of the factors discussed in such opinion.
(m) The Notes shall have been rated in the highest long-term rating
category by each of the Rating Agencies and on or after the date hereof (i)
no downgrade shall have occurred in the rating accorded to the debt
securities of the Company by any Rating Agency, and (ii) no such
organization shall have publicly announced that it has under surveillance
or review, with possible negative implications, its rating of any of the
Company's debt securities.
(n) On or prior to the Closing Date, the Grantee shall have delivered
to the Representatives evidence, in form and substance reasonably
satisfactory to the Representatives, of compliance with Section 2.10 of the
Indenture, together with such reliance letters as the Representatives shall
request.
(o) On or prior to the Closing Date, the Grantee shall have delivered
to the Representatives evidence, in form and substance reasonably
satisfactory to the Representatives, that appropriate filings have been,
are being or will be made, as applicable, pursuant to Section 3.08 of the
Sale Agreement and in accordance with the Funding Law and other applicable
law reflecting the Note Issuer's first priority perfected ownership
interest in the Intangible Transition Property.
(p) On or prior to the Closing Date, the Grantee shall have delivered
to the Representatives evidence, in form and substance reasonably
satisfactory to the Representatives, that appropriate filings have been,
are being or will be made, as applicable, pursuant to Section 18-104(h) of
the Funding Law.
(q) The Representatives shall have received an opinion, or reliance
letter thereon, from Xxxxx Xxxxx & Xxxxx, tax counsel to the Note Issuer,
substantially in the form of Exhibit 8.1 to the Registration Statement.
(r) Prior to the Closing Date, the Company, the Grantee and the Note
Issuer shall have furnished to the Representatives such further
information, certificates, opinions and documents as the Representatives
may reasonably request.
If any of the conditions specified in this Section 6 shall not have been
fulfilled in all material respects when and as provided in this Agreement, or if
any of the opinions and
17
certificates mentioned above or elsewhere in this Agreement shall not be in
all material respects reasonably satisfactory in form and substance to the
Representatives and counsel for the Underwriters, this Agreement and all
obligations of the Underwriters hereunder may be canceled at, or at any time
prior to, the Closing Date by the Representatives. Notice of such
cancellation shall be given to the Grantee and the Note Issuer in writing or
by telephone or telegraph confirmed in writing.
The documents required to be delivered by this Section 6 shall be delivered
at the offices of Xxxxxx Xxxxxx & Xxxxx, 0000 Xxxxx Xxxxx, Xxxxxxx, Xxxxxxxx, on
the Closing Date.
7. EXPENSES.
(a) The Company and the Grantee will pay, or cause to be paid, all
expenses incident to the performance of their respective obligations and those
of the Note Issuer under this Agreement, including without limitation,
(i) expenses incident to the word processing, printing, reproduction and
distribution of the registration statement as originally filed with the SEC and
each amendment thereto, Preliminary Final Prospectuses and the Final Prospectus
(including any amendments and supplements thereto), (ii) the fees and
disbursements of the Indenture Trustee, the Delaware Trustee, the Beneficiary
Trustees and their respective counsel, (iii) the fees and disbursements of
counsel to the Company, the Grantee, the Note Issuer, and the independent
public accountants of the Company, the Grantee and the Note Issuer, (iv) the
fees charged by the Rating Agencies in connection with the rating of the Notes,
(v) the fees of DTC in connection with the book-entry registration of the Notes,
and (vi) expenses incurred in distributing Preliminary Final Prospectuses and
the Final Prospectus (including any amendments and supplements thereto) by the
Underwriters. The Company and the Grantee will also pay all reasonable fees and
disbursements of Underwriters' counsel, and will reimburse the Underwriters for
any expenses incurred by the Underwriters pursuant to Section 5(a)(v) hereof in
connection with the qualification of the Notes for sale under the laws of such
jurisdictions in the United States as the Representatives may designate,
together with costs and expenses in connection with any filing with the National
Association of Securities Dealers with respect with the transactions
contemplated hereby.
(b) If the sale of the Notes provided for herein is not consummated
because any condition to the obligations of the Underwriters set forth in
Section 6 hereof is not satisfied, because of any termination pursuant to
Section 10 hereof or because of any refusal, inability or failure on the part
of the Company, the Grantee or the Note Issuer to perform any agreement
herein or comply with any provision hereof other than by reason of a default
(including under Section 9) by any of the Underwriters, the Company and the
Grantee will, jointly and severally, reimburse the Underwriters upon demand
for all out-of-pocket expenses (including reasonable fees and disbursements
of counsel) that shall have been incurred by them in connection with the
proposed purchase and sale of the Notes.
18
8. INDEMNIFICATION AND CONTRIBUTION.
(a) The Company and the Grantee will, jointly and severally, indemnify and
hold harmless each Underwriter, the directors, officers, members, employees and
agents of each Underwriter, and each person who controls any Underwriter within
the meaning of either the Act or the Exchange Act against any and all losses,
claims, damages or liabilities, joint or several, to which they or any of them
may become subject under the Funding Law, the Act, the Exchange Act or other
federal or state statutory law or regulation, at common law or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of, directly or indirectly, (i)(A) the complete or partial
judicial invalidation of the Amendatory Act and/or the Funding Law, [or (B) any
breach of any representation and warranty made herein or in any of the Basic
Documents by or on behalf of the Company, the Grantee or the Note Issuer,] or
(ii) arise out of or are based upon any untrue statement or alleged untrue
statement of a material fact contained in the registration statement for the
registration of the Notes as originally filed or in any amendment thereof, or in
the Basic Prospectus, any Preliminary Final Prospectus or the Final Prospectus,
or in any amendment thereof or supplement thereto, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading, and will reimburse
each such indemnified party, as incurred, for any legal or other expenses
reasonably incurred by them in connection with investigating or defending any
such loss, claim, damage, liability or action; provided, however, that neither
the Company nor the Grantee will be liable in any such case to the extent that
any such loss, claim, damage or liability arises out of or is based upon any
such untrue statement or alleged untrue statement or omission or alleged
omission made therein in reliance upon and in conformity with written
information furnished to the Grantee or the Company by or on behalf of any
Underwriter through the Representatives specifically for inclusion therein;
provided further, that, in the case of any indemnification under clause (ii)
above, with respect to any untrue statement or omission of material fact made in
any Preliminary Final Prospectus, the indemnity agreement contained in this
Section 8(a) shall not inure to the benefit of any Underwriter or any person
controlling such Underwriter from whom the person asserting any such loss,
claim, damage or liability purchased the Notes that are the subject thereof, to
the extent that any such loss, claim, damage or liability of such Underwriter
occurs under the circumstance where it shall have been determined by a court of
competent jurisdiction by final and nonappealable judgment that (A) the Company
or the Grantee had previously furnised copies of the Final Prospectus to the
Representatives, (B) delivery of the Final Prospectus was required by the Act to
be made to such person, (C) the untrue statement or omission of a material fact
contained in the Preliminary Final Prospectus was corrected in the Final
Prospectus and (D) there was not sent or given to such person, at or prior to
the written confirmation of the sale of such Notes to such person, a copy of the
Final Prospectus. This indemnity agreement will be in addition to any liability
which the Company and the Grantee may otherwise have.
19
(b) Each Underwriter severally agrees to indemnify and hold harmless the
Company and the Grantee, each of their directors, each of their officers who
signs the Registration Statement, and each person who controls the Company or
the Grantee within the meaning of either the Act or the Exchange Act, to the
same extent as the foregoing indemnity from the Company and the Grantee to each
Underwriter, but only with reference to written information relating to such
Underwriter furnished to the Grantee or the Company by or on behalf of such
Underwriter through the Representatives specifically for inclusion in the
documents referred to in the foregoing indemnity. This indemnity agreement will
be in addition to any liability which any Underwriter may otherwise have. The
Grantee and the Company acknowledge that the statements set forth in the last
paragraph of the cover page, under the heading "Underwriting" or "Plan of
Distribution" in any Preliminary Final Prospectus or the Final Prospectus
constitute the only information furnished in writing by or on behalf of the
several Underwriters for inclusion in the documents referred to in the foregoing
indemnity, and you, as the Representatives, confirm that such statements are
correct.
(c) Promptly after receipt by an indemnified party under this Section 8 of
notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under this
Section 8, notify the indemnifying party in writing of the commencement thereof;
but the failure so to notify the indemnifying party (i) will not relieve it from
liability under paragraph (a) or (b) above unless and to the extent it did not
otherwise learn of such action and such failure results in the forfeiture by the
indemnifying party of substantial rights and defenses and (ii) will not, in any
event, relieve the indemnifying party from any obligations to any indemnified
party other than the indemnification obligation provided in paragraph (a) or (b)
above. The indemnifying party shall be entitled to appoint counsel of the
indemnifying party's choice at the indemnifying party's expense to represent the
indemnified party in any action for which indemnification is sought (in which
case the indemnifying party shall not thereafter be responsible for the fees and
expenses of any separate counsel retained by the indemnified party or parties
except as set forth below); provided, however, that such counsel shall be
reasonably satisfactory to the indemnified party. Notwithstanding the
indemnifying party's election to appoint counsel to represent the indemnified
party in an action, the indemnified party shall have the right to employ
separate counsel (including local counsel), and the indemnifying party shall
bear the reasonable fees, costs and expenses of such separate counsel if (i) the
use of counsel chosen by the indemnifying party to represent the indemnified
party would present such counsel with a conflict of interest, (ii) the actual or
potential defendants in, or targets of, any such action include both the
indemnified party and the indemnifying party and the indemnified party shall
have reasonably concluded that there may be legal defenses available to it
and/or other indemnified partes which are different from or additional to those
available to the indemnifying party, (iii) the indemnifying party shall not have
employed counsel reasonably satisfactory to the indemnified party to represent
the indemnified party within a reasonable time after notice of the institution
of such action or (iv) the indemnifying party shall authorize the indemnified
party to employ separate counsel at the expense of the indemnifying party. It
is understood that the indemnifying party shall not, in connection with any
proceeding
20
or related proceedings in the same jurisdiction, be liable for the reasonable
fees and expenses of more than one separate firm for all such indemnified
parties. An indemnifying party will not, without the prior written consent
of the indemnified parties, settle or compromise or consent to the entry of
any judgment with respect to any pending or threatened claim, action, suit or
proceeding in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified parties are actual or potential
parties to such claim or action) unless such settlement, compromise or
consent (i) includes an unconditional release of each indemnified party from
all liability arising out of such claim, action, suit or proceeding and (ii)
does not include a statement as to or an admission of fault, culpability or
failure to act, by or on behalf of any indemnified party.
(d) In the event that the indemnity provided in paragraph (a) or (b) of
this Section 8 is unavailable to or insufficient to hold harmless an indemnified
party for any reason, the Company, the Grantee and the Underwriters agree to
contribute to the aggregate losses, claims, damages and liabilities (including
legal or other expenses reasonably incurred in connection with investigating or
defending same) (collectively "Losses") to which the Grantee and one or more of
the Underwriters may be subject in such proportion as is appropriate to reflect
the relative benefits received by the Grantee and by the Underwriters from the
offering of the Notes; provided, however, that in no case shall any Underwriter
(except as may be provided in any agreement among underwriters relating to the
offering of the Notes) be responsible for any amount in excess of the
underwriting discount or commission applicable to the Notes purchased by such
Underwriter hereunder. If the allocation provided by the immediately preceding
sentence is unavailable for any reason, the Company, the Grantee and the
Underwriters shall contribute in such proportion as is appropriate to reflect
not only such relative benefits but also the relative fault of the Company, the
Grantee and the Underwriters respectively in connection with the statements or
omissions which resulted in such Losses as well as any other relevant equitable
considerations. Benefits received by the Grantee shall be deemed to be equal to
the total net proceeds from the offering (before deducting expenses) of the
Notes (which shall be equal to the net proceeds from the sale of the Notes to
the Note Issuer (before deducting expenses)), and benefits received by the
Underwriters shall be deemed to be equal to the total underwriting discounts and
commissions, in each case as set forth on the cover page of the Final
Prospectus. Relative fault shall be determined by reference to whether any
alleged untrue statement or omission relates to information provided by the
Company or the Grantee, or the Undrwriters, as the case may be. The Company,
the Grantee and the Underwriters agree that it would not be just and equitable
if contribution were determined by pro rata allocation or any other method of
allocation which does not take account of the equitable considerations referred
to above. Notwithstanding the provisions of this paragraph (d), no person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Act) shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation. For purposes of this Section 8, each person
who controls an Underwriter within the meaning of either the Act or the Exchange
Act and each director, officer, employee and agent of an Underwriter shall have
the same rights to contribution as such Underwriter, and each person who
controls the
21
Grantee or the Company within the meaning of either the Act or the Exchange
Act, each officer of the Grantee or the Company who shall have signed the
Registration Statement and each director of the Grantee or the Company shall
have the same rights to contribution as the Grantee or the Company, subject
in each case to the applicable terms and conditions of this paragraph (d).
The Underwriters' obligations in this paragraph (d) to contribute are several
in proportion to their respective underwriting obligations and not joint.
9. DEFAULT BY AN UNDERWRITER. If any one or more Underwriters shall fail
to purchase and pay for any of the Notes agreed to be purchased by such
Underwriter or Underwriters hereunder and such failure to purchase shall
constitute a default in the performance of its or their obligations under this
Agreement, the nondefaulting Underwriters shall be obligated severally to take
up and pay for (in the respective proportions which the amount of Notes set
forth opposite their names in Schedule II hereto bears to the aggregate amount
of Notes set forth opposite the names of all the remaining Underwriters) the
Notes which the defaulting Underwriter or Underwriters agreed but failed to
purchase; provided, however, that in the event that the aggregate amount of
Notes which the defaulting Underwriter or Underwriters agreed but failed to
purchase shall exceed 10% of the aggregate amount of Notes set forth in Schedule
II hereto, the nondefaulting Underwriters shall have the right to purchase all,
but shall not be under any obligation to purchase any, of the Notes, and if such
nondefaulting Underwriters do not purchase all the Notes, this Agreement will
terminate without liability to any nondefaulting Underwriter, the Grantee or the
Company. In the event of a default by any Underwriter as set forth in this
Section 9, the Closing Date shall be postponed for such period, not exceeding
seven days, as the Representatives shall determine in order that the required
changes in the Registration Statement and the Final Prospectus or in any other
documents or arrangements may be effected. Nothing contained in this Agreement
shall relieve any defaulting Underwriter of its liability, if any, to the
Grantee and the Company and any nondefaulting Underwriter for damages occasioned
by its default hereunder.
10. TERMINATION. This Agreement shall be subject to termination in the
absolute discretion of the Representatives, by notice given to the Company and
the Grantee prior to delivery of and payment for the Notes, if prior to such
time (i) there shall have occurred any change, or any development involving a
prospective change, in or affecting either (A) the business, properties or
financial condition of the Grantee or the Company or (B) the Intangible
Transition Property, the Notes, the 1998 Funding Order or the Funding Law, the
effect of which, in the judgment of the Representatives, materially impairs the
investment quality of the Notes or makes it impractical or inadvisable to market
the Notes, (ii) trading in the Company's Common Stock shall have been suspended
by the SEC or the New York Stock Exchange or trading in securities generally on
the New York Stock Exchange shall have been suspended or limited or minimum
prices shall have been established on such Exchange, (iii) a banking moratorium
shall have been declared either by federal, New York State or Illinois State
authorities or (iv) there shall have occurred any outbreak or escalation of
hostilities, declaration by the United States of a national emergency or war or
other calamity or crisis the effect of which on financial markets is
22
such as to make it, in the judgment of the Representatives, impracticable or
inadvisable to proceed with the offering or delivery of the Notes as
contemplated by the Final Prospectus (exclusive of any supplement thereto).
11. REPRESENTATIONS AND INDEMNITIES TO SURVIVE. The respective agreements,
representations, warranties, indemnities and other statements of the Company or
its officers, the Grantee or its officers, the Note Issuer or its officers and
of the Underwriters set forth in or made pursuant to this Agreement will remain
in full force and effect, regardless of any investigation made by or on behalf
of any Underwriter or of the Company, the Grantee, the Note Issuer or any of the
officers, directors or controlling persons referred to in Section 8 hereof, and
will survive delivery of and payment for the Notes. The provisions of Sections
7 and 8 hereof shall survive the termination or cancellation of this Agreement
and the complete or partial judicial invalidation of the Amendatory Act and/or
the Funding Law.
12. NOTICES. All communications hereunder will be in writing and may be
given by United States mail, courier service, telegram, telex, telemessage,
telecopy, telefax, cable or facsimile (confirmed by telephone or in writing in
the case of notice by telegram, telex, telemessage, telecopy, telefax, cable or
facsimile) or any other customary means of communication, and any such
communication shall be effective when delivered, or if mailed, three days after
deposit in the United States mail with proper postage for ordinary mail prepaid,
and if sent to the Representatives, to them at the address specified in Schedule
I hereto; and if sent to the Company, to it at Illinois Power Company, the sole
member of Illinois Power Securitization Limited Liability Company, 000 Xxxxx
00xx Xxxxxx, Xxxxxxx, XX 00000, Attention: __________; and if sent to the
Grantee, to it at Illinois Power Securitization Limited Liability Company, 000
Xxxxx 00xx Xxxxxx, Xxxxxxx, XX 00000, Attention: __________. The parties
hereto, by notice to the others, may designate additional or different addresses
for subsequent communications.
13. SUCCESSORS. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the officers
and directors and controlling persons referred to in Section 8 hereof, and no
other person will have any right or obligation hereunder.
14. APPLICABLE LAW. This Agreement will be governed by and construed in
accordance with the laws of the State of New York.
15. COUNTERPARTS. This Agreement may be signed in any number of
counterparts, each of which shall be deemed an original, which taken together
shall constitute one and the same instrument.
23
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicate hereof,
whereupon this letter and your acceptance shall represent a binding agreement
among the Company, the Grantee and the several Underwriters.
Very truly yours,
ILLINOIS POWER COMPANY,
By:
----------------------------------------
Name:
Title:
ILLINOIS POWER SECURITIZATION LIMITED
LIABILITY COMPANY,
By:
----------------------------------------
Name:
Title:
The foregoing Underwriting
Agreement is hereby confirmed
and accepted as of the date
specified in Schedule I hereto.
XXXXXXX XXXXX & CO.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
By:
----------------------------------------
Name:
Title:
For itself and the other several Underwriters,
if any, named in Schedule II to the foregoing
Agreement.
24
SCHEDULE I
Underwriting Agreement dated December ___, 1998
Registration Statement No. 333-63537
Representative(s):
Xxxxxxx Xxxxx & Co.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
World Financial Center
North Tower
New York, New York 10281
Title, Purchase Price and Description of Notes:
Title: $864,000,000 Illinois Power Special Purpose Trust
Transitional Funding Trust Notes, Series 1998-1
Principal amount, Price to Public, Underwriting Discounts and
Commissions and Proceeds to Trust:
TOTAL PRINCIPAL PRICE TO PUBLIC UNDERWRITING PROCEEDS TO TRUST
AMOUNT OF CLASS DISCOUNTS AND
COMMISSIONS
$ % % %
Per Class A-1 Note
Per Class A-2 Note
Per Class A-3 Note
Per Class A-4 Note
Per Class A-5 Note
Per Class A-6 Note
Per Class A-7 Note ----------- ----------- ---------- -----------
Total $ % % %
----------- ----------- ---------- -----------
----------- ----------- ---------- -----------
Original Issue Discount (if any): $__________
Redemption provisions: Optional Redemption and Mandatory Redemption as
set forth in Article X of the Indenture
Other provisions:
Closing Date, Time and Location: December ___, 1998, ___ AM,
Central Standard Time,
Chicago, IL
Type of Offering: Delayed Offering
Date referred to in Section 5(a)(vi) and 5(b)(ii) after which the Company and
the Note Issuer may offer or sell asset-backed securities in a trust or special
purpose vehicle without the consent of the Representative(s): December ___,
1998
SCHEDULE II
Principal Amount of Notes to be Purchased
---------------------------------------------------------------------------------------------------
Underwriters Class A-1 Class A-2 Class A-3 Class A-4 Class A-5 Class A-6 Class A-7 Class A-8 Total
--------------------- Notes Notes Notes Notes Notes Notes Notes Notes
---------------------------------------------------------------------------------------------------
Xxxxxxx Xxxxx, Xxxxxx, $ $ $ $ $ $ $ $ $
Xxxxxx & Xxxxx
Incorporated
Xxxxxxx Xxxxx Xxxxxx
Inc.
Xxxxx Securities Inc.
Xxxxxxxxx, Xxxxxx &
Xxxxxxxx Securities
Corporation
First Chicago Capital
Markets, Inc.
NationsBanc Xxxxxxxxxx
Securities LLC
-------- -------- -------- -------- -------- -------- -------- -------- --------
Total $ $ $ $ $ $ $ $ $
-------- -------- -------- -------- -------- -------- -------- -------- --------
-------- -------- -------- -------- -------- -------- -------- -------- --------
A-28
EXHIBIT A
[XXXXXX XXXXXX & XXXXX LETTERHEAD]
December __, 1998
XXXXXXX XXXXX & CO.
Xxxxxxx Xxxxx, Xxxxxx, Xxxxxx & Xxxxx, Incorporated,
as Representative of the Underwriters
New York, New York
Ladies and Gentlemen:
We address this opinion to you individually and as Representatives of
the Underwriters (the "Underwriters") named in Schedule II to the Underwriting
Agreement dated December __, 1998 (the "Underwriting Agreement") among you,
Illinois Power Company, an Illinois corporation ("Illinois Power"), and Illinois
Power Securitization Limited Liability Company, a Delaware limited liability
company (the "Grantee"). The Underwriting Agreement provides for the sale on
the date hereof by Illinois Power Special Purpose Trust, a Delaware business
trust (the "Note Issuer") to the Underwriters of $864,000,000 aggregate
principal amount of Illinois Power Transitional Funding Trust Notes, Series 1998
(the "Notes"). This letter is delivered pursuant to Section 6(b) of the
Underwriting Agreement. Capitalized terms not defined herein have the meanings
specified in the Underwriting Agreement.
We have acted as special counsel to Illinois Power, the Grantee and
the Note Issuer (Illinois Power, the Note Issuer and the Grantee are hereinafter
sometimes collectively referred to as the "Companies") in connection with the
issuance and sale of the Notes and the following related matters: (a) the 1998
Funding Order issued by the Illinois Commerce Commission (the "ICC") dated
September 10, 1998 in Docket No. 98-0488 creating the Intangible Transition
Property and granting the same to the Grantee; (b) the Agreement Relating to
Grant of Intangible Transition Property dated as of December 1, 1998 between
Illinois Power and the Grantee (the "Grant Agreement"); (c) the Intangible
Transition Property Sale Agreement dated as of December 1, 1998 (the "Sale
Agreement") between the Note Issuer and the Grantee; (d) the Indenture dated as
of December 1, 1998 (the "Indenture") between the Note Issuer and Xxxxxx Trust
and Savings Bank, a banking corporation organized under the laws of the State of
Illinois, as indenture trustee (the "Indenture Trustee"); (e) the Trust
Issuance Certificate dated as of December 1, 1998 (the "Certificate") specifying
the terms of the Notes; (f)
A-1
the Administration Agreement dated as of December 1, 1998 (the
"Administration Agreement") among Illinois Power, as Administrator and the
Grantee; (g) the Intangible Transition Property Servicing Agreement dated as
of December 1, 1998 (the "Servicing Agreement") between the Grantee and
Illinois Power, as Servicer, and (h) the Remediation Agreement dated as of
December 1, 1998, by and between Illinois Power and the Indenture Trustee.
The Grant Agreement, the Sale Agreement, the Indenture, the Certificate, the
Remediation Agreement, the Administration Agreement and the Servicing
Agreement are sometimes collectively referred to herein as the "Relevant
Documents."
We have also participated with officers and representatives of
Illinois Power, the Grantee and the Note Issuer, including the Grantee's
independent public accountants and representatives of the Underwriters, in the
preparation of the Registration Statement on Form S-3 (Registration No.
333-63537) and Amendments Nos. 1, 2 and 3 thereto, filed on October 27, 1998,
December 4, 1998 and December 9, 1998 respectively, with the Securities and
Exchange Commission (the "Commission") under the Securities Act of 1933, as
amended (the "Securities Act"), which registration statement, as so amended,
became effective on ______, 1998. Such registration statement, as so amended,
at the time it became effective (including the documents then incorporated by
reference therein) is hereinafter referred to as the "Registration Statement".
The prospectus forming a part of the Registration Statement (including the
documents incorporated by reference therein) is hereinafter referred to as the
"Basic Prospectus". The Basic Prospectus as the same was supplemented on
__________, 1998 to reflect the terms of the offering and sale of the Notes by a
prospectus supplement filed with the Commission on ___________, 1998 pursuant to
Rule 424(b) under the Securities Act (including all documents incorporated by
reference therein at the date hereof) is hereinafter referred to as the "Final
Prospectus."
In addition, we have examined and relied on the originals or copies
certified or otherwise identified to our satisfaction of such instruments and
other certificates of public officials, officers and representatives of the
Companies and such other persons, and we have made such investigations of law,
as we have deemed appropriate as a basis for the opinions expressed below. In
our examination, we have assumed, without independent investigation, (i) the
genuineness of the signatures of and legal capacity of all persons signing all
documents and instruments in connection with which the opinions expressed herein
are rendered, (ii) the authority of such persons signing on behalf of the
parties thereto, (iii) the due organization, valid existence, good standing and
authority of all entities signing all documents in connection with which the
opinions expressed herein are rendered (other than the Companies), (iv) the due
authorization, execution and delivery of all documents by the parties thereto
(other than the Companies), (v) the authenticity of all documents submitted to
us as originals, and (vi) the conformity to original documents of all documents
submitted to us as certified, conformed, or photostatic copies.
A-2
Subject to the foregoing and the limitations and assumptions
hereinafter set forth, this will advise you that, in the opinion of the
undersigned:
(a) (i) Illinois Power (A) has been duly incorporated and is
validly existing as a corporation in good standing under the laws
of the State of Illinois, (B) has all requisite corporate power
and authority to own its properties, conduct its business as
presently conducted and execute, deliver and perform its
obligations under the Underwriting Agreement, the Grant
Agreement, the Servicing Agreement, the Remediation Agreement and
the Administration Agreement, and (C) is duly qualified to do
business in all jurisdictions (and is in good standing under the
laws of all such jurisdictions) to the extent that such
qualification and good standing is or shall be necessary to
protect the validity and enforceability of the Underwriting
Agreement, the Grant Agreement, the Servicing Agreement, the
Remediation Agreement and the Administration Agreement and each
other instrument or agreement necessary or appropriate to the
transactions contemplated by the Underwriting Agreement;
(ii) the Grant Agreement, the Servicing Agreement, the
Administration Agreement and the Remediation Agreement have been
duly authorized, executed and delivered by Illinois Power, and
constitute legal, valid and binding instruments enforceable
against Illinois Power in accordance with their respective terms,
except to the extent enforceability may be limited by bankruptcy,
reorganization, insolvency, moratorium, fraudulent transfer and
other similar laws of general applicability relating to or
affecting the enforcement of creditors' rights and by the effect
of general principles of equity (regardless of whether
enforceability is considered in a proceeding in equity or at
law);
(iii) to our knowledge, there is no pending or threatened
action, suit or proceeding before any court or governmental
agency, authority or body or any arbitrator involving Illinois
Power or any of its significant subsidiaries of a character
required to be disclosed in the Registration Statement which is
not adequately disclosed in the Final Prospectus, and there is no
franchise, contract or other document of a character required to
be described in the Registration Statement or Final Prospectus,
or to be filed as an exhibit to the Registration Statement, which
is not described or filed as required;
(iv) the Underwriting Agreement has been duly authorized,
executed and delivered by Illinois Power;
(v) no consent, approval, authorization or order of any
court or governmental agency or body is required for the
consummation of the
A-3
transactions contemplated by the Underwriting Agreement or the
Relevant Documents, except such as have been obtained under the
Securities Act, the Funding Law and the Public Utilities Act and
such as may be required under the blue sky laws of any
jurisdiction in connection with the purchase and distribution of
the Notes by the Underwriters; and
(vi) neither the execution and delivery of the Underwriting
Agreement, the Grant Agreement, the Servicing Agreement, the
Remediation Agreement, the Administration Agreement nor the
consummation of the transactions contemplated by the Underwriting
Agreement, the Grant Agreement, the Servicing Agreement, the
Administration Agreement, or the Remediation Agreement, nor the
fulfillment of the terms of the Underwriting Agreement, the Grant
Agreement, the Servicing Agreement, the Administration Agreement
or the Remediation Agreement by Illinois Power, will (A) conflict
with, result in any breach or any of the terms or provisions of,
or constitute (with or without notice or lapse of time) a default
under the articles of incorporation or bylaws of Illinois Power,
or to our knowledge, conflict with or breach any of the material
terms or provisions of, or constitute (with or without notice or
lapse of time) a default under, any indenture, material agreement
or other material instrument to which Illinois Power is a party
or by which Illinois Power is bound, (B) result in the creation
or imposition of any lien upon any properties of Illinois Power
pursuant to the terms of any such indenture, agreement or other
instrument (other than as contemplated by the Relevant Documents
and Section 18-107 of the Funding Law), or (C) to our knowledge,
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 any of its
properties.
(b) (i) the Grantee has been duly formed and is validly
existing as a single member limited liability company and is in
good standing under the laws of the State of Delaware, with full
power and authority to execute, deliver and perform its
obligations under the Grant Agreement, the Sale Agreement, the
Servicing Agreement and the Administration Agreement;
(ii) the Grant Agreement, the Sale Agreement, the Servicing
Agreement and the Administration Agreement have been duly
authorized, executed and delivered by the Grantee, and constitute
legal, valid and binding instruments enforceable against the
Grantee in accordance with their respective terms, except to the
extent enforceability may be limited by bankruptcy,
reorganization, insolvency, moratorium, fraudulent conveyance and
other similar laws of general
A-4
applicability relating to or affecting the enforceability of
creditors' rights and by the effect of general principles of
equity (regardless of whether enforceability is considered in a
proceeding in equity or at law);
(iii) the Grant Agreement, the Sale Agreement, the
Servicing Agreement, the Remediation Agreement, the Indenture
and the Notes conform in all material respects to the
descriptions thereof contained in the Final Prospectus;
(iv) neither the execution and delivery of the Grant
Agreement, the Sale Agreement, the Servicing Agreement, the
Underwriting Agreement or the Administration Agreement, nor the
consummation of the transactions contemplated thereby, nor the
fulfillment of the terms thereof by the Grantee, will (A)
conflict with, result in any breach of any of the terms or
provisions of, or constitute (with or without notice or lapse of
time) a default under the Certificate of Formation or Operating
Agreement of the Grantee or conflict with or breach any of the
material terms or provisions of, or constitute (with or without
notice or lapse of time) a default under, any indenture,
agreement or other instrument known to us and to which the
Grantee is a party or by which the Grantee is bound, (B) result
in the creation or imposition of any lien upon any properties of
the Grantee pursuant to the terms of any such indenture,
agreement or other instrument (other than as contemplated by the
Relevant Documents and Section 18-107 of the Funding Law), or (C)
to our knowledge, violate any law or any order, rule or
regulation applicable to the Grantee of any court or of any
federal or state regulatory body, administrative agency or other
governmental instrumentality having jurisdiction over the
Grantee, or any of its properties;
(v) to our knowledge, there is no pending or threatened
action, suit or proceeding before any court or governmental
agency, authority or body or any arbitrator challenging the
validity or enforceability of the Grant Agreement, the Sale
Agreement, the Servicing Agreement or the Administration
Agreement of a character required to be disclosed in the Final
Prospectus which is not adequately disclosed in the Final
Prospectus;
(vi) upon the delivery of the fully executed Sale Agreement
to the Note Issuer and the payment of the purchase price of the
Intangible Transition Property and related assets by the Note
Issuer to the Grantee pursuant to the Sale Agreement, (A) the
transfer of the Intangible Transition Property by the Grantee to
the Note Issuer pursuant to the Sale Agreement conveys all of the
Grantee's right, title and interest in the Intangible Transition
Property to the Note Issuer and will be treated as an
A-5
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, (B) such
transfer of the Intangible Transition Property is perfected,
(C) such transfer has priority over any other assignment of the
Intangible Transition Property and related assets, and (D) the
Intangible Transition Property and related assets are free and
clear of all liens created prior to its transfer to the Note
Issuer pursuant to the Sale Agreement; and
(vii) the Grantee is not an "investment company" or under
the "control" of an "investment company" as such terms are
defined under the Investment Company Act of 1940, as amended.
(ix) the Underwriting Agreement has been duly authorized,
executed and delivered by the Grantee;
(c) (i) the Notes have been duly authorized and executed by the
Note Issuer and, when authenticated in accordance with the
provisions of the Indenture and delivered to and paid for by the
Underwriters pursuant to the Underwriting Agreement, will be
valid and legally binding obligations enforceable in accordance
with their terms, except to the extent enforceability may be
limited by bankruptcy, reorganization, insolvency, moratorium,
fraudulent conveyance or other similar laws of general
applicability relating to or affecting the enforceability of
creditors' rights and by the effect of general principles of
equity (regardless of whether enforceability is considered in a
proceeding in equity or at law) and entitled to the benefits of
the Indenture; and the Notes and the Indenture conform in all
material respects to the descriptions thereof in the Final
Prospectus;
(ii) the Indenture, the Certificate and the Sale Agreement
have each been duly authorized, executed and delivered by the
Note Issuer and each constitutes a legal, valid and binding
instrument enforceable in accordance with its terms, except to
the extent enforceability may be limited by bankruptcy,
reorganization, insolvency, moratorium, fraudulent conveyance and
other similar laws of general applicability relating to or
effecting the enforceability of creditors' rights and by the
effect of general principles of equity (regardless of whether
enforceability is considered in a proceeding in equity or at
law);
(iii) the Indenture has been duly qualified under the Trust
Indenture Act;
(iv) to our knowledge, there is no pending or threatened
action, suit or proceeding before any court or governmental
agency, authority or
A-6
body or any arbitrator challenging the validity or
enforceability of the Notes or the Indenture, or relating to
the 1998 Funding Order or the collection of the IFC Charges,
of a character required to be disclosed in the Registration
Statement which is not adequately disclosed in the Final
Prospectus, and there is no franchise, contract or other
document relating to the Notes or the Indenture, or relating
to the 1998 Funding Order or the collection of the IFC
Charges, of a character required to be described in the
Registration Statement or Final Prospectus, or to be filed as
an exhibit, which is not described or filed as required; and
the statements included or incorporated in the Final
Prospectus under the headings "Electric Industry Restructuring
in Illinois" (to the extent the Amendatory Act is described)
"Description of the Intangible Transition Property"
"Description of the Notes," "The Trust," "The Grantee,"
"Servicing," "Security for the Notes," "Material United States
Federal Tax Consequences" and "ERISA Considerations", to the
extent that they constitute matters of Illinois, Delaware or
federal law or legal conclusions with respect thereto, provide
a fair and accurate summary of such law or conclusions;
(v) the Registration Statement has become effective under
the Act; any required filing of the Basic Prospectus, any
Preliminary Final Prospectus and the Final Prospectus, and any
supplements thereto, pursuant to Rule 424(b) has been made in the
manner and within the time period required by Rule 424(b); to our
knowledge, no stop order suspending the effectiveness of the
Registration Statement has been issued, no proceedings for that
purpose have been instituted or threatened, and the Registration
Statement and the Final Prospectus (other than operating
statistics, the financial statements and other financial and
statistical information contained therein and the Form T-1 as to
which we express no opinion) comply as to form in all material
respects with the applicable requirements of the Act, the
Exchange Act and the Trust Indenture Act and the respective rules
thereunder;
(vi) neither the execution and delivery of the Underwriting
Agreement or the Indenture, nor the issue and sale of the Notes,
nor the consummation of the transactions contemplated by the
Underwriting Agreement or the Indenture, nor the fulfillment of
the terms of the Underwriting Agreement or the Indenture by the
Note Issuer will (A) conflict with, result in any breach of any
of the terms or provisions of, or constitute (with or without
notice or lapse of time) a default under the Trust Agreement, or
conflict with or breach any of the material terms or provisions
of, or constitute (with or without notice or lapse of time) a
default under, any indenture, agreement or other instrument known
to us and to which the Note Issuer is a party or by which the
Note Issuer is bound, (B) result in the creation or imposition of
any lien upon any
A-7
properties of the Note Issuer pursuant to the terms of any
such indenture, agreement or other instrument other than the
lien created by the Indenture on the Note Collateral, or (C)
to our knowledge, violate any law or any order, rule or
regulation applicable to the Note Issuer of any court or of
any federal or state regulatory body, administrative agency or
other governmental instrumentality having jurisdiction over
the Note Issuer, or any of its properties;
(vii) (A) the lien of the 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 1998 Funding Order;
(C) such lien is valid and enforceable against Illinois Power,
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; and
(viii) Neither Illinois Power nor the Note Issuer is an
"investment company" or under the "control" of an "investment
company" as such terms are defined under the Investment Company
Act of 1940, as amended.
In the course of the preparation of the Registration Statement and the
Final Prospectus we have considered the information set forth therein in the
light of the matters required to be set forth therein, and, as noted above, we
have participated in discussions with your representatives and officers and
representatives of the Companies during the course of which the contents of the
Registration Statement, the Final Prospectus, the documents incorporated by
reference in the Final Prospectus and related matters were discussed. We have
not independently checked the accuracy or completeness of, or otherwise
verified, and accordingly are not passing upon, and do not assume any
responsibility for, the accuracy, completeness or fairness of the statements
contained in the Registration Statement or the Final Prospectus (except to the
extent stated in paragraphs (b)(iii), (c)(i) and (c)(iv) above); and we have
relied as to materially (with respect to non-legal matters), to a large extent,
upon the judgement of officers and representatives of the Companies. However,
as a result of such consideration and participation, nothing has come to our
attention that causes us to believe that the Registration Statement (except for
the operating statistics, financial statements and other financial or
statistical data included or incorporated by reference therein and the Form T-1,
as to which we have not been asked to comment) at the effective date thereof or
at the date hereof, contained any untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary to make the
statements therein not misleading, or that the Final Prospectus (except for the
operating statistics, financial statements and other financial or statistical
data contained or incorporated by reference therein and the Form T-1, as to
which we have not been asked to comment) as of its date contained, or as of the
date hereof contains, any untrue statement of a material fact
A-8
or omitted or omits to state a material fact necesary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.
The foregoing opinions are limited to the laws of Illinois and New
York, the Delaware Limited Liability Company Act and, to the extent specifically
referred to herein, the federal laws of the United States of America. In giving
the opinions set forth in paragraphs (a)(ii), (b)(ii), (b)(vi), (c)(i) and
(c)(ii) we have, with your consent, assumed the validity and continued
effectiveness of the Amendatory Act (including, without limitation, the Funding
Law and the 1998 Funding Order). In that regard we refer you to our opinion of
even date herewith delivered pursuant to Section 6(l) of the Underwriting
Agreement. Further, we have relied, with your consent, on the opinion of even
date herewith of Xxxxxxxx, Xxxxxx & Xxxxxx delivered pursuant to Section 6(d) of
the Underwriting Agreement and on the opinion of Xxxxx, Xxxxx & Xxxxx delivered
in the form of Exhibit 8.1 to the Registration Statement. We express no opinion
as to the enforceability of any provisions of the Grant Agreement or the
Servicing Agreement pursuant to which Illinois Power, the Grantee or the
servicer covenant to continue to deduct and collect amounts equal to the IFC
Charges and equivalent amounts, and to remit those amounts to the servicer or
the Note Issuer, as the case may be, if the Funding Order were no longer in
effect.
Any opinion or statement herein which is expressed to be "to our
knowledge" or is otherwise qualified by words of like import means that the
lawyers currently practicing law with this Firm who have had an active
involvement in the preparation of the Registration Statement have no current
conscious awareness of any facts or information contrary to such opinion or
statement; and, except as described above, we have undertaken no independent
investigation with respect to such facts or information.
We consent to the reliance on the opinions expressed herein by the
Rating Agencies and, with respect to the opinions set forth in (c) above, by
Illinois Power, the Grantee and the Indenture Trustee. Except as set forth in
the preceding sentence, this opinion is being delivered solely to you for your
benefit in connection with the closing under the Underwriting Agreement and may
not be delivered to, or relied upon by, or otherwise circulated to or utilized
by, any other party or for any other purpose without our prior written consent.
The opinions in this letter speak as of the date hereof and we assume
no obligation to supplement the foregoing opinions if any applicable laws change
after the date hereof or if we become aware of any facts which might change such
opinions after the date hereof.
Very truly yours,
XXXXXX XXXXXX & XXXXX
A-9
By:
-------------------------------------
Xxxxx X. Xxxxxxxxxx
A-10
