AMENDMENT NO.1 TO
INTANGIBLE TRANSITION PROPERTY CONTRIBUTION AGREEMENT
among
PP&L, INC.
CEP GROUP, INC.,
CEP RESERVES, INC.
and
CEP SECURITIES CO. LLC
Dated August 10, 1999
Amendment No. 1 dated August 10, 1999 (this "Amendment") to
Intangible Transition Property Contribution Agreement dated May 13, 1999
(the "Original Agreement", and as amended by this Amendment and as further
amended, supplemented or otherwise modified from time to time, the
"Agreement"), among PP&L, Inc., a Pennsylvania corporation ("PP&L"), CEP
Group, Inc., a Pennsylvania corporation ("Group"), CEP Reserves, Inc., a
Delaware corporation ("Reserves"), and CEP Securities Co. LLC, a Delaware
limited liability company ("CEP Securities").
WHEREAS, PP&L, Group, Reserves and CEP Securities entered into
the Original Agreement on May 13, 1999;
WHEREAS, pursuant to Section 4.06(e) of the Original Agreement
PP&L has agreed, in connection with the issuance of any Transition Bonds,
to execute and deliver, or cause to be delivered, such amendments to this
Agreement and such additional agreements, certificates, documents and
opinions as may in PP&L's judgment be required to obtain the highest
possible rating for such Transition Bonds from each rating agency rating
such bonds and to effect the sale of such Transition Bonds to the
underwriters of such bonds;
WHEREAS, in connection with the issuance of the Transition Bonds
on the date hereof, the parties hereto desire to amend the Original
Agreement to add additional representations and warranties of PP&L and to
clarify certain provisions of the Original Agreement so as to obtain the
highest possible rating for such Transition Bonds;
NOW, THEREFORE, in consideration of the premises and intending to
be legally bound hereby, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Capitalized terms used in this Amendment and not
otherwise defined herein have the meanings assigned to them in the Original
Agreement.
ARTICLE II
AMENDMENTS
SECTION 2.01. Section 3.08 of the Original Agreement is hereby
amended to restate subsection (c) thereto in its entirety and to add new
subsections (h) and (i) thereto as follows:
"(c) Transfer Filings. PP&L is the sole owner of the Intangible
Transition Property being assigned to CEP Securities pursuant to
the Assignment; upon the execution and delivery of the
Assignment, the Intangible Transition Property will have been
validly assigned, transferred and conveyed to CEP Securities free
and clear of all Liens. All actions and filings, including
filings with the PUC under the Competition Act, necessary in any
jurisdiction to give CEP Securities and its permitted assignees a
valid perfected ownership interest in the Intangible Transition
Property, free and clear of all Liens have been taken or made."
"(h) Effect of Transfer to the Issuer. The sale, transfer
and assignment contemplated by the Sale Agreement constitute
an absolute transfer of the Intangible Transition Property
from CEP Securities to the Issuer as provided in Section
2812(e) of the Competition Act. The Transferred Intangible
Transition Property would not be part of the debtor's estate
in the event of the filing of a bankruptcy petition by or
against CEP Securities under any bankruptcy law."
"(i) Transfer Filings by CEP Securities. CEP Securities is
the sole owner of the Intangible Transition Property being
sold, transferred and assigned by CEP Securities to the
Issuer pursuant to the ▇▇▇▇ of Sale; upon the execution and
delivery of the ▇▇▇▇ of Sale, the Intangible Transition
Property will have been validly sold, assigned,
transferred and conveyed to the Issuer free and clear of all
Liens. All filings, including filings with the PUC under the
Competition Act, necessary in any jurisdiction to give the
Issuer and its permitted assignees a valid perfected
ownership interest in the Intangible Transition Property,
free and clear of all Liens have been made."
SECTION 2.02. Subsection (f)(ii)(A) and subsection (f)(iii) of
Section 3.08 of the Original Agreement are hereby restated in their
entirety to read as follows:
"[(f)(ii)](A) the irrevocable right of PP&L
to receive through Intangible Transition
Charges, unless adequate protection is made
by law for the protection of Transition
Bondholders, an amount sufficient to recover
all of the Qualified Transition Expenses
described in the Qualified Rate Order in an
amount equal to the aggregate principal
amount of the Transition Bonds plus an amount
sufficient to provide for any credit
enhancement (including the
Overcollateralization Amount relating to each
Series of Transition Bonds), to fund any
reserves, and to pay interest, premium, if
any, servicing fees and other expenses
relating to the Transition Bonds,"
"[f](iii) paragraphs five through twenty-one of the
Qualified Rate Order as issued on August 27, 1998, including
the right to collect Intangible Transition Charges, and the
Supplemental Order issued by the PUC on May 21, 1999 have
been declared to be irrevocable by the PUC, and any
supplemental order of the PUC adopted pursuant to paragraph
19 of the PUC's August 27, 1998 order when issued will have
been declared to be irrevocable by the PUC."
SECTION 2.03. The first two sentences of Section 4.08 of the
Original Agreement are hereby amended to read in their entirety as follows:
"PP&L shall execute and file or cause to be executed and
filed such filings, including filings with the PUC pursuant
to the Competition Act, and take such actions, in such
manner and in such places as may be required by law fully to
preserve, maintain and protect the interests of CEP
Securities, the Issuer and the Trustee in the Intangible
Transition Property, including all filings contemplated by
the Competition Act relating to the transfer of the
ownership of the Intangible Transition Property by PP&L to
CEP Securities and by CEP Securities to the Issuer and the
pledge of the Intangible Transition Property by the Issuer
to the Trustee. PP&L shall deliver to CEP Securities, the
Issuer and the Trustee file-stamped copies of, or filing
receipts for, any document filed as provided above, as soon
as available following such filing."
SECTION 2.04. Article IV of the Original Agreement is hereby
amended to add a new Section 4.10 thereto as follows:
"SECTION 4.10. OPINIONS OF COUNSEL. PP&L shall deliver to
CEP Securities, the Issuer and the Trustee:
(a) promptly after the execution and delivery of the Sale
Agreement and of each amendment thereto or to the Servicing
Agreement and on each Subsequent Transfer Date (as defined
in the Sale Agreement), an Opinion of Counsel either
(i) to the effect that, in the opinion of such counsel,
all filings, including filings with the PUC pursuant to
the Competition Act, that are necessary to fully
preserve and protect the interests of the Trustee in
the Intangible Transition Property have been executed
and filed, and reciting the details of such filings or
referring to prior Opinions of Counsel in which such
details are given, or
(ii) to the effect that, in the opinion of such
counsel, no such action is necessary to preserve and
protect such interest; and
(b) within 90 days after the beginning of each calendar year
beginning with the first calendar year beginning more than
three months after the Initial Transfer Date (as defined in
the Sale Agreement), an Opinion of Counsel, dated as of a
date during such 90-day period, either
(i) to the effect that, in the opinion of such counsel,
all filings, including filings with the PUC pursuant to
the Competition Act, have been executed and filed that
are necessary to preserve fully and protect fully the
interest of the Trustee in the Intangible Transition
Property, and reciting the details of such filings or
referring to prior Opinions of Counsel in which such
details are given, or
(ii) to the effect that, in the opinion of such
counsel, no such action is necessary to preserve and
protect such interest.
Each Opinion of Counsel referred to in clause (a) or (b) above
shall specify any action necessary (as of the date of such
opinion) to be taken in the following year to preserve and
protect such interest."
SECTION 2.05. Subsections (b) and (c) of Section 5.01 of the
Original Agreement are hereby amended to read in their entirety as follows:
"(b) PP&L shall indemnify CEP Securities, the Issuer
and the Trustee, for itself and on behalf of the
Transition Bondholders, and each of their respective
officers, directors, managers, employees and agents
for, and defend and hold harmless each such Person from
and against, any and all taxes (other than any taxes
imposed on Transition Bondholders solely as a result of
their ownership of Transition Bonds) that may at any
time be imposed on or asserted against any such Person
under existing law as of any Transfer Date as a result
of the assignment of the Intangible Transition
Property by PP&L to CEP Securities, or the sale and
assignment of the Intangible Transition Property by CEP
Securities to the Issuer, or the acquisition or holding
of Intangible Transition Property by CEP Securities or
the Issuer, or the issuance and sale by the Issuer of
the Transition Bonds, including any sales, gross
receipts, general corporation, personal property,
privilege, franchise or license taxes not recovered by
the Issuer through Intangible Transition Charges, but
excluding any taxes imposed as a result of a failure of
such person to properly withhold or remit taxes imposed
with respect to payments on any Transition Bond.
(c) PP&L shall indemnify CEP Securities, the Issuer and the
Trustee, for itself and on behalf of the Transition
Bondholders, and each of their respective officers,
directors, managers, employees and agents for, and defend
and hold harmless each such Person from and against, (i) any
and all amounts of principal of and interest on the
Transition Bonds not paid when due or when scheduled to be
paid in accordance with their terms and the amount of any
deposits to the Issuer required to have been made in
accordance with the terms of the Basic Documents which are
not made when so required and (ii) any and all liabilities,
obligations, claims, actions, suits, or payments of any kind
whatsoever that may be imposed on or asserted against any
such Person, other than any liabilities, obligations or
claims for or payments of principal of or interest on the
Transition Bonds, together with any reasonable costs and
expenses incurred by such Person (collectively, "Losses"),
in any such case as a result of PP&L's breach of any of its
representations, warranties or covenants contained in
Articles III, IV or V."
SECTION 2.06. Clause (iii)(A) of Section 5.02 of the Original
Agreement is hereby amended to read in its entirety as follows:
"(A) stating that, in the opinion of such counsel, all
filings to be made by PP&L, including filings with the PUC
pursuant to the Competition Act, have been executed and
filed that are necessary fully to preserve and protect the
respective interests of CEP Securities, the Issuer and the
Trustee in the Intangible Transition Property and reciting
the details of such filings, or"
SECTION 2.07. Section 6.02 of the Original Agreement is hereby
amended to read in its entirety as follows:
"SECTION 6.02. NOTICES. All demands, notices and
communications upon or to PP&L, CEP Securities, Group, Reserves,
the Issuer, the Trustee or the Rating Agencies under this
Agreement shall be in writing, delivered personally, by
facsimile, overnight courier or certified mail, return-receipt
requested, and shall be deemed to have been duly given upon
receipt
(a) in the case of PP&L, to PP&L, Inc., ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇, Attention: Senior Vice
President & Chief Financial Officer,
(b) in the case of CEP Securities, to CEP Securities Co. LLC,
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇,
(c) in the case of the Issuer, to PP&L Transition Bond Company
LLC, Two ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇-▇, room 3, ▇▇▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇, Attention: Manager,
(d) in the case of Group, to CEP Group, Inc., ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇;
(e) in the case of Reserves, to CEP Reserves, Inc., ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
(f) in the case of the Trustee, at the Corporate Trust
Office,
(g) in the case of Moody's, to ▇▇▇▇▇'▇ Investors Service,
Inc., ABS Monitoring Department, ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
(h) in the case of Standard & Poor's, to Standard & Poor's
Corporation, ▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
Attention of Asset Backed Surveillance Department, and
(i) in the case of Fitch ICBA, to Fitch IBCA, Inc., ▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇.
or, as to each of the foregoing, at such other address as shall
be designated by written notice to the other parties."
SECTION 2.08. Appendix A of the Original Agreement is hereby
amended to add the following definitions:
Administration Agreement means the Administration Agreement
dated August 10, 1999, between PP&L, as administrator, and
the Issuer, as the same may be amended or supplemented from
time to time.
Administrator means PP&L as administrator under the
Administration Agreement.
▇▇▇▇ of Sale means any ▇▇▇▇ of sale issued by CEP Securities
to the Issuer pursuant to the Sale Agreement evidencing the
sale of Intangible Transition Property by CEP Securities to
the Issuer.
Issuer Certificate of Formation means the Certificate of
Formation of the Issuer which was filed with the Delaware
Secretary of State's Office on March 25, 1999.
Issuer LLC Agreement means the Amended and Restated
Limited Liability Company Agreement between the Issuer
and PP&L, as sole Member, dated August 10, 1999.
SECTION 2.09. Appendix A of the Original Agreement is hereby
amended to restate the following definitions in their entirety as follows:
Collateral has the meaning set forth in the Granting Clause
of the Indenture.
Intangible Transition Property means the irrevocable
right of PP&L or its successor or assignee to collect
Intangible Transition Charges from Customers to recover
through the issuance of Transition Bonds the Qualified
Transition Expenses described in the Qualified Rate
Order, including all right, title and interest of PP&L
or its successor or assignee in the Qualified Rate
Order and in all revenues, collections, claims,
payments, money or proceeds of or arising from
Intangible Transition Charges pursuant to the Qualified
Rate Order, and all proceeds of any of the foregoing,
which term is intended and shall be construed to be the
same as "intangible transition property" as used in the
Competition Act and the Qualified Rate Order.
Losses has the meaning set forth in Section 5.01(c) of
this Agreement.
Qualified Rate Order means the order of the PUC issued on
August 27, 1998 pursuant to the Competition Act, as such
order has been supplemented by the Supplemental Order issued
by the PUC on May 21, 1999, and as such order may hereafter
be further supplemented by an order of the PUC issued
pursuant to paragraph 19 of the August 27, 1998 order.
Servicer Default has the meaning set forth in the Servicing
Agreement.
Serviced Intangible Transition Property means all of the
Intangible Transition Property.
Transferred Intangible Transition Property means all of the
Intangible Transition Property."
ARTICLE III
MISCELLANEOUS
SECTION 3.01. The Agreement as amended by this Amendment is
hereby ratified and confirmed and as so amended shall remain in full force
and effect.
SECTION 3.02. PP&L represents and warrants that the
representations and warranties of PP&L in the Original Agreement are true
and correct on and as of the date of this Amendment as if made on the date
of this Amendment.
SECTION 3.03. This Amendment may be executed by the parties
hereto in separate counterparts, each of which when so executed and
delivered shall be an original, but all such counterparts shall together
constitute but one and the same instrument.
SECTION 3.04. This Amendment shall be construed in accordance
with the laws of the Commonwealth of Pennsylvania, without reference to its
conflict of law provisions, and the obligations, rights and remedies of the
parties hereunder shall be determined in accordance with such laws.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment
to be duly executed by their respective officers or manager as of the day
and year first above written.
PP&L, INC.
by /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
_____________________________
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Senior Vice President and
Chief Financial Officer
CEP GROUP, INC.
by /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
_______________________________
Name: ▇▇▇▇▇ ▇. ▇▇▇▇
Title: Treasurer
CEP RESERVES, INC.
by /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
____________________________
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
CEP SECURITIES CO. LLC
by /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
_____________________________
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Manager