EXHIBIT 10.1
INTANGIBLE TRANSITION PROPERTY SALE AGREEMENT
between
PP&L TRANSITION BOND COMPANY LLC
Issuer
and
CEP SECURITIES CO. LLC
Seller
Dated as of July __, 1999
TABLE OF CONTENTS
ARTICLE I
Definitions
SECTION 1.01 Definitions....................................................1
SECTION 1.02 Other Definitional Provisions..................................1
ARTICLE II
Conveyance of Intangible Transition Property
SECTION 2.01 Conveyance of Initial Intangible Transition Property...........2
SECTION 2.02 Conditions to Conveyance of Intangible Transition Property.....3
ARTICLE III
Representations and Warranties of Seller
SECTION 3.01 Organization and Good Standing.................................5
SECTION 3.02 Due Qualification..............................................5
SECTION 3.03 Power and Authority............................................5
SECTION 3.04 Binding Obligation.............................................5
SECTION 3.05 No Violation...................................................5
SECTION 3.06 No Proceedings.................................................6
SECTION 3.07 Approvals......................................................6
SECTION 3.08 The Intangible Transition Property.............................6
SECTION 3.09 Solvency.......................................................7
ARTICLE IV
Covenants of the Seller
SECTION 4.01 Seller's Existence.............................................7
SECTION 4.02 No Liens or Conveyances........................................7
SECTION 4.03 Delivery of Collections........................................8
SECTION 4.04 Notice of Liens................................................8
SECTION 4.05 Compliance with Law............................................8
SECTION 4.06 Covenants Related to Intangible Transition Property............8
SECTION 4.07 Protection of Title............................................9
SECTION 4.08 Taxes..........................................................9
SECTION 4.09 Reliance by Seller, etc.......................................10
ARTICLE V
Miscellaneous Provisions
SECTION 5.01 Amendment.....................................................10
SECTION 5.02 Notices.......................................................10
SECTION 5.03 Assignment....................................................11
SECTION 5.04 Limitations on Rights of Others...............................11
SECTION 5.05 Severability..................................................11
SECTION 5.06 Separate Counterparts.........................................11
SECTION 5.07 Headings......................................................11
SECTION 5.08 Governing Law.................................................11
SECTION 5.09 Assignment to Trustee.........................................11
SECTION 5.10 Nonpetition Covenants.........................................11
INTANGIBLE TRANSITION PROPERTY SALE AGREEMENT dated as of July
__, 1999, between PP&L TRANSITION BOND COMPANY LLC, a Delaware limited
liability company (the "Issuer"), and CEP SECURITIES CO. LLC, a Delaware
limited liability company, as seller (the "Seller").
WHEREAS the Issuer desires to purchase from time to time
Intangible Transition Property created pursuant to the Competition Act and
the Qualified Rate Order;
WHEREAS the Seller is willing to sell Intangible Transition
Property to the Issuer;
WHEREAS the Issuer, in order to finance the purchase of the
Transferred Intangible Transition Property, will from time to time issue
Transition Bonds under the Indenture; and
WHEREAS the Issuer, to secure its obligations under the
Transition Bonds and the Indenture, will pledge its right, title and
interest in the Transferred Intangible Transition Property to the Trustee
for the benefit of the Transition Bondholders.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained and intending to be legally bound hereby, the
parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01 DEFINITIONS. Capitalized terms used herein and not
otherwise defined herein have the meanings assigned to them in Appendix A
of this Sale Agreement.
SECTION 1.02 OTHER DEFINITIONAL PROVISIONS.
(a) Agreement means this Intangible Transition Property Sale
Agreement, as the same may be amended, supplemented or otherwise
modified from time to time.
(b) Non-capitalized terms used herein which are defined in the
Competition Act shall, as the context requires, have the meanings
assigned to such terms in the Competition Act, but without giving
effect to amendments to the Competition Act after the date hereof
which have a material adverse effect on the Issuer or the Transition
Bondholders.
(c) All terms defined in this Agreement shall have the defined
meanings when used in any certificate or other document made or
delivered pursuant hereto unless otherwise defined therein.
(d) The words "hereof", "herein", "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement; Section,
Schedule and Exhibit references contained in this Agreement are
references to Sections, Schedules and Exhibits in or to this
Agreement unless otherwise specified; and the term "including" shall
mean "including without limitation".
(e) The definitions contained in this Agreement are applicable to the
singular as well as the plural forms of such terms.
ARTICLE II
CONVEYANCE OF INTANGIBLE TRANSITION PROPERTY
SECTION 2.01 CONVEYANCE OF INITIAL INTANGIBLE TRANSITION
PROPERTY.
(a) In consideration of the Issuer's payment to or upon the order of
the Seller of $_____________ (the "Initial Purchase Price") by wire
transfer of funds immediately available on the date hereof to
Seller's account no. _______________at _____________, routing transit
# __________, subject to the conditions specified in Section 2.02,
the Seller does hereby irrevocably sell, transfer, assign, set over
and otherwise convey to the Issuer, without recourse (subject to the
obligations herein), all right, title and interest of the Seller in,
to and under (i) the Initial Intangible Transition Property (such
sale, transfer, assignment, setting over and conveyance of the
Initial Intangible Transition Property to include, to the fullest
extent permitted by the Competition Act, the assignment of all
revenues, collections, claims, rights, payments, money or proceeds of
or arising from the Intangible Transition Charges related to the
Initial Intangible Transition Property, as the same may be adjusted
from time to time) and (ii) all rights of the Seller under the
Contribution Agreement and the Assignment. Such sale, transfer,
assignment, setting over and conveyance of the Initial Intangible
Transition Property is hereby expressly stated to be a sale and,
pursuant to Section 2812(e) of the Competition Act, shall be treated
as an absolute transfer of all of the Seller's right, title and
interest (as in a true sale), and not as a pledge or other financing,
of the Initial Intangible Transition Property. The preceding sentence
is the statement referred to in Section 2812(e) of the Competition
Act. The Seller agrees and confirms that after giving effect to the
sale contemplated by clause (a), it has no rights in the Initial
Intangible Transition Property to which a security interest of
creditors of the Seller could attach because it has sold all of its
rights in the Initial Intangible Transition Property to the Issuer
pursuant to Section 2812(e) of the Competition Act.
(b) Subject to the conditions specified in Section 2.02, the Issuer
does hereby purchase the Initial Intangible Transition Property from
the Seller for the consideration set forth in paragraph (a) above.
(c) The Seller and the Issuer each acknowledge and agree that the
purchase price for the Initial Intangible Transition Property sold
pursuant to this Agreement is equal to its fair market value at the
time of sale.
(d) The Seller and the Issuer further agree that from time to time,
the Seller may offer to sell, and the Issuer may purchase, Subsequent
Intangible Transition Property as of Subsequent Transfer Dates,
subject to the conditions specified in Section 2.02, in exchange for
consideration to be agreed upon (the "Subsequent Purchase Price").
The Seller and the Issuer hereby agree that each such sale, transfer,
assignment, setting over and conveyance of any Subsequent Intangible
Transition Property shall be expressly stated to be a sale and,
pursuant to Section 2812(e) of the Competition Act, shall be treated
as an absolute transfer of all of the Seller's right, title and
interest (as in a true sale), and not as a pledge or other financing,
of the Subsequent Intangible Transition Property. The preceding
sentence shall constitute the statement referred to in Section
2812(e) of the Competition Act with respect to any Subsequent
Intangible Transition Property. The Seller agrees and confirms that
after giving effect to any such sale contemplated by this clause (d),
it shall have no rights in the Subsequent Intangible Transition
Property to which a security interest of creditors of the Seller
could attach because it will have sold all of its rights in the
Subsequent Intangible Transition Property to the Issuer pursuant to
Section 2812(e) of the Competition Act.
SECTION 2.02 CONDITIONS TO CONVEYANCE OF INTANGIBLE TRANSITION
PROPERTY. The sale by the Seller to the Issuer, and the purchase by the
Issuer from the Seller, of Intangible Transition Property upon the Initial
Transfer Date or any Subsequent Transfer Date shall be subject to and
conditioned upon the satisfaction or waiver of each of the following
conditions:
(i) on or prior to the Transfer Date, the Seller shall deliver to the
Issuer a duly executed ▇▇▇▇ of Sale identifying the Intangible
Transition Property to be conveyed as of that date, substantially in
the form of Exhibit A hereto;
(ii) as of the Transfer Date, no breach by the Seller of its
representations, warranties or covenants in this Agreement shall
exist and no Servicer Default shall have occurred and be continuing;
(iii) as of the Transfer Date, the representations and warranties of
PP&L under the Contribution Agreement shall be true and correct and
no default shall exist thereunder, and PP&L shall have delivered to
the Issuer and the Trustee an Officer's Certificate to such effect
and confirming that the Issuer may exercise all of the rights of the
Seller under the Contribution Agreement;
(iv) as of the Transfer Date:
(A) the Issuer shall have sufficient funds available to pay the
purchase price for the Transferred Intangible Transition
Property to be conveyed on such date, and
(B) all conditions to the issuance of one or more Series of
Transition Bonds intended to provide such funds set forth in
the Indenture shall have been satisfied or waived;
(v) on or prior to Transfer Date, the Seller shall have taken all
action required to transfer to the Issuer ownership of the
Transferred Intangible Transition Property to be conveyed on such
date, free and clear of all Liens other than Liens created by the
Issuer pursuant to the Indenture, including, without limitation,
filing a notice of such transfer with the PUC pursuant to the
Competition Act; and the Issuer shall have taken any action required
for the Issuer to grant the Trustee a first priority perfected
security interest in the Collateral and maintain such security
interest as of such date;
(vi) in the case of any sale of Subsequent Intangible Transition
Property only, the Seller shall have provided the Issuer and the
Rating Agencies with a notice specifying the Subsequent Transfer Date
for the Subsequent Intangible Transition Property not later than 10
days prior to the Subsequent Transfer Date;
(vii) the Seller shall have delivered to the Rating Agencies and to
the Issuer:
(A) an Opinion of Counsel with respect to the transfer of the
Transferred Intangible Transition Property then being conveyed
to the Issuer substantially in the form of Exhibit B hereto and
(B) an Opinion of Counsel to the Seller, substantially in the
form of Exhibit C hereto;
(viii) the Seller shall have delivered to the Trustee and the Issuer
an Officers' Certificate confirming the satisfaction of each
condition precedent specified in this Section 2.02;
(ix) with respect to any Subsequent Sale, the Seller shall have
taken any action necessary in order for the Rating Agency Condition
to have been satisfied; and
(x) the Seller shall have received the Initial Purchase Price or the
Subsequent Purchase Price, as applicable, in funds immediately
available on the applicable Transfer Date.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLER
As of the Transfer Date, the Seller makes the following
representations and warranties on which the Issuer has relied and will rely
in acquiring Transferred Intangible Transition Property. The
representations and warranties shall survive the sale of Transferred
Intangible Transition Property to the Issuer and the pledge thereof to the
Trustee pursuant to the Indenture.
SECTION 3.01 ORGANIZATION AND GOOD STANDING. The Seller is a
limited liability company duly organized and in good standing under the
laws of the State of Delaware, with power and authority to own its
properties and conduct its business as currently owned or conducted and had
at all relevant times, and has, the requisite power, authority and legal
right to own the Intangible Transition Property.
SECTION 3.02 DUE QUALIFICATION. The Seller is duly qualified to
do business as a foreign corporation in good standing, and has obtained all
necessary licenses and approvals, in all jurisdictions in which the
ownership or lease of property or the conduct of its business requires such
qualifications, licenses or approvals (except where the failure to so
qualify would not be reasonably likely to have a material adverse effect on
the Seller's business, operations, assets, revenues, properties or
prospects).
SECTION 3.03 POWER AND AUTHORITY. The Seller has the power and
authority to execute and deliver this Agreement and to carry out its terms;
the Seller has full power and authority to own the Intangible Transition
Property and sell and assign the Intangible Transition Property to the
Issuer, and the Seller has duly authorized such sale and assignment to the
Issuer; and the execution, delivery and performance of this Agreement has
been duly authorized by the Seller.
SECTION 3.04 BINDING OBLIGATION. This Agreement constitutes a
legal, valid and binding obligation of the Seller enforceable against the
Seller in accordance with its terms subject to bankruptcy, receivership,
insolvency, reorganization, moratorium or other laws affecting creditors'
rights generally from time to time in effect and to general principles of
equity (regardless of whether considered in a proceeding in equity or at
law).
SECTION 3.05 NO VIOLATION. The consummation of the transactions
contemplated by this Agreement and the fulfillment of the terms hereof do
not conflict with, result in any breach of any of the terms and provisions
of, or constitute (with or without notice or lapse of time) a default
under, the limited liability company agreement or the certificate of
formation of the Seller, or any indenture, agreement or other instrument to
which the Seller is a party or by which it is bound; or result in the
creation or imposition of any Lien upon any of its properties pursuant to
the terms of any such indenture, agreement or other instrument; nor violate
any law or any order, rule or regulation applicable to the Seller of any
court or of any federal or state regulatory body, administrative agency or
other governmental instrumentality having jurisdiction over the Seller or
its properties.
SECTION 3.06 NO PROCEEDINGS. To the Seller's best knowledge,
there are no proceedings or investigations pending or threatened, before
any court, federal or state regulatory body, administrative agency or other
governmental instrumentality having jurisdiction over the Seller or its
properties:
(i) asserting the invalidity of the Basic Documents or the Transition
Bonds;
(ii) seeking to prevent the issuance of the Transition Bonds or the
consummation of any of the transactions contemplated by the Basic
Documents or the Transition Bonds;
(iii) which might materially and adversely affect the treatment of
the Transition Bonds as debt for federal or state income tax
purposes; or
(iv) seeking any determination or ruling that could reasonably be
expected to materially and adversely affect the performance by the
Seller of its obligations under, or the validity or enforceability
of, the Basic Documents or the Transition Bonds.
SECTION 3.07 APPROVALS. Except for UCC continuation filings, no
approval, authorization, consent, order or other action of, or filing with,
any court, federal or state regulatory body, administrative agency or other
governmental instrumentality is required in connection with the execution
and delivery by the Seller of this Agreement, the performance by the Seller
of the transactions contemplated hereby or the fulfillment by the Seller of
the terms hereof, except those that have been obtained or made.
SECTION 3.08 THE INTANGIBLE TRANSITION PROPERTY.
(a) Information. All information provided by the Seller to the Issuer
with respect to the Transferred Intangible Transition Property is
correct in all material respects.
(b) Effect of Transfer. The transfers and assignments herein
contemplated constitute a sale of the Intangible Transition Property,
from the Seller to the Issuer and the beneficial interest in and
title to 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 the Seller under any bankruptcy
law.
(c) Transfer Filings. The Seller is the sole owner of the Intangible
Transition Property being sold to the Issuer on the Transfer Date;
the Transferred Intangible Transition Property has been validly
transferred and sold to the Issuer free and clear of all Liens other
than Liens created by the Issuer pursuant to the Indenture. All
filings, including filings with the PUC under the Competition Act,
necessary in any jurisdiction to give the Issuer a valid ownership
interest in the Transferred Intangible Transition Property, free and
clear of all Liens of the Seller or anyone claiming through the
Seller, have been made, other than any such filings (except
for filings with the PUC under the Competition Act) the absence of
which would not have an adverse impact on
(i) the ability of the Servicer to collect Intangible
Transition Charges with respect to the Transferred Intangible
Transition Property, or
(ii) the rights of the Issuer or the Trustee with respect to
the Transferred Intangible Transition Property.
SECTION 3.09 SOLVENCY. After giving effect to the sale of any
Transferred Intangible Transition Property hereunder, the Seller:
(i) is solvent and expects to remain solvent,
(ii) is adequately capitalized to conduct its business and affairs
considering its size and the nature of its business and intended
purposes,
(iii) is not engaged in nor does it expect to engage in a business
for which its remaining property represents an unreasonably small
capital,
(iv) believes that it will be able to pay its debts as they come due
and that such belief is reasonable and
(v) is able to pay its debts as they mature and does not intend to
incur, or believe that it will incur, indebtedness that it will not
be able to repay at its maturity.
ARTICLE IV
COVENANTS OF THE SELLER
SECTION 4.01 SELLER'S EXISTENCE. So long as any of the
Transition Bonds are outstanding, the Seller shall keep in full force and
effect its existence as a limited liability company and remain in good
standing, under the laws of the jurisdiction of its organization, and shall
obtain and preserve its qualification to do business in each jurisdiction
in which such qualification is or will be necessary to protect the validity
and enforceability of this Agreement and each other instrument or agreement
to which the Seller is a party necessary to the proper administration of
this Agreement and the transactions contemplated hereby.
SECTION 4.02 NO LIENS OR CONVEYANCES. Except for the
conveyances hereunder, the Seller shall not sell, pledge, assign or
transfer to any other Person, or grant, create, incur, assume or suffer to
exist any Lien on, any of the Intangible Transition Property, whether now
existing or hereafter created, or any interest therein. The Seller shall
not at any time assert any Lien against or with respect to any Transferred
Intangible Transition Property, and shall defend the right, title and
interest of the Issuer and the Trustee, as assignee of the Issuer, in, to
and under the Intangible Transition Property, whether now existing or
hereafter created, against all claims of third parties claiming through or
under the Seller.
SECTION 4.03 DELIVERY OF COLLECTIONS. If the Seller receives
collections in respect of the Intangible Transition Charges or the proceeds
thereof, the Seller shall pay the Servicer all payments received by the
Seller in respect thereof as soon as practicable after receipt thereof by
the Seller, but in no event later than two Business Days after such
receipt.
SECTION 4.04 NOTICE OF LIENS. The Seller shall notify the Trustee
promptly after becoming aware of any Lien on any Intangible Transition
Property other than the conveyances hereunder or under the Indenture.
SECTION 4.05 COMPLIANCE WITH LAW. The Seller shall comply with its
organizational or governing documents and all laws, treaties, rules,
regulations and determinations of any governmental instrumentality
applicable to the Seller, except to the extent that failure to so comply
would not adversely affect the Issuer's or the Trustee's interests in the
Intangible Transition Property or under any of the Basic Documents or the
Seller's performance of its obligations hereunder.
SECTION 4.06 COVENANTS RELATED TO INTANGIBLE TRANSITION PROPERTY.
(a) So long as any of the Transition Bonds are outstanding, the
Seller shall:
(i) clearly disclose in its financial statements that it is not
the owner of the Transferred Intangible Transition Property and
that the assets of the Issuer are not available to pay
creditors of the Seller or any of its Affiliates and
(ii) clearly disclose the effects of all transactions between
the Seller and the Issuer in accordance with generally accepted
accounting principles.
(b) The Seller agrees that upon the sale by the Seller of the
Transferred Intangible Transition Property to the Issuer pursuant to
this Agreement:
(i) to the fullest extent permitted by law, including
applicable PUC Regulations, the Issuer shall have all of the
rights originally held by the Seller or PP&L with respect to
the Transferred Intangible Transition Property, including the
right to collect any amounts payable by any Customer or Third
Party in respect of such Transferred Intangible Transition
Property, notwithstanding any objection or direction to the
contrary by the Seller or PP&L and
(ii) any payment by any Customer or Third Party to the Issuer
shall discharge such Customer's or such Third Party's
obligations in respect of such Transferred Intangible
Transition Property to the extent of such payment,
notwithstanding any objection or direction to the contrary by
the Seller.
(c) So long as any of the Transition Bonds are outstanding,
(i) the Seller shall not make any statement or reference in
respect of the Transferred Intangible Transition Property that
is inconsistent with the ownership thereof by the Issuer and
(ii) the Seller shall not take any action in respect of the
Transferred Intangible Transition Property except as
contemplated by the Basic Documents.
SECTION 4.07 PROTECTION OF TITLE. The Seller shall execute and file
such filings, and cause to be executed and filed such filings, all in such
manner and in such places as may be required by law fully to preserve,
maintain, and protect the interests of the Issuer in the Transferred
Intangible Transition Property, including all filings required under the
Competition Act relating to the transfer of the ownership of the
Transferred Intangible Transition Property by the Seller to the Issuer. The
Seller shall deliver (or cause to be delivered) to the Issuer file-stamped
copies of, or filing receipts for, any document filed as provided above, as
soon as available following such filing. The Seller shall take, or shall
cooperate with PP&L in taking, such legal or administrative actions,
including defending against or instituting and pursuing legal actions and
appearing or testifying at hearings or similar proceedings, as may be
reasonably necessary:
(a) to protect the Issuer and the Transition Bondholders from
claims, state actions or other actions or proceedings of third
parties which, if successfully pursued, would result in a
breach of any representation set forth in Article III; or
(b) to block or overturn any attempts to cause a repeal of,
modification of or supplement to the Competition Act, the PUC
Order or the rights of Transition Bondholders by legislative
enactment or constitutional amendment that would be adverse to
the Issuer, the Trustee or the Transition Bondholders.
The costs of any such actions or proceedings shall be payable by the
Seller. The Seller designates the Issuer as its agent and attorney-in-fact
to execute any filings with the PUC, financing statements, continuation
statements or other instruments required by the Issuer pursuant to this
Section, it being understood that the Issuer shall have no obligation to
execute any such instruments.
SECTION 4.08 TAXES. So long as any of the Transition Bonds are
outstanding, the Seller shall pay all material taxes, assessments and
governmental charges imposed upon it or any of its properties or assets or
with respect to any of its franchises, business, income or property before
any penalty accrues thereon if the failure to pay any such taxes,
assessments and governmental charges would, after any applicable grace
periods, notices or other similar requirements, result in a lien on the
Intangible Transition Property; provided that no such tax need be paid if
the Seller or one of its subsidiaries is contesting the same in good faith
by appropriate proceedings promptly instituted and diligently conducted and
if the Seller or such subsidiary has established appropriate reserves as
shall be required in conformity with generally accepted accounting
principles.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF ISSUER
As of the Transfer Date, the Issuer makes the following
representations and warranties on which the Seller has relied and will rely
in acquiring Transferred Intangible Transition Property. The
representations and warranties shall survive the purchase of Transferred
Intangible Transition Property by the Issuer and the pledge thereof to the
Trustee pursuant to the Indenture.
SECTION 5.01 ORGANIZATION AND GOOD STANDING. The Issuer is a
limited liability company duly organized and in good standing under the
laws of the State of Delaware, with power and authority to own its
properties and conduct its business as currently owned or conducted.
SECTION 5.02 DUE QUALIFICATION. The Issuer is duly qualified to
do business as a foreign corporation in good standing, and has obtained all
necessary licenses and approvals, in all jurisdictions in which the
ownership or lease of property or the conduct of its business requires such
qualifications, licenses or approvals (except where the failure to so
qualify would not be reasonably likely to have a material adverse effect on
the Issuer's business, operations, assets, revenues, properties or
prospects).
SECTION 5.03 POWER AND AUTHORITY. The Issuer has the power and
authority to execute and deliver this Agreement and to carry out its terms;
the Issuer has full power and authority to purchase the Intangible
Transition Property and the Issuer has duly authorized such purchase; and
the execution, delivery and performance of this Agreement has been duly
authorized by the Issuer.
SECTION 5.04 BINDING OBLIGATION. This Agreement constitutes a
legal, valid and binding obligation of the Issuer enforceable against the
Issuer in accordance with its terms subject to bankruptcy, receivership,
insolvency, reorganization, moratorium or other laws affecting creditors'
rights generally from time to time in effect and to general principles of
equity (regardless of whether considered in a proceeding in equity or at
law).
ARTICLE VI
MISCELLANEOUS PROVISIONS
SECTION 6.01 AMENDMENT. (a) This Agreement may be amended by
the Seller and the Issuer, with the consent of the Trustee. Promptly after
the execution of any such amendment or consent, the Issuer shall furnish
written notification of the substance of such amendment or consent to each
of the Rating Agencies.
(b) Prior to the execution of any amendment to this Agreement, the
Issuer and the Trustee shall be entitled to receive and rely upon an
Opinion of Counsel stating that the execution of such amendment is
authorized or permitted by this Agreement. The Issuer and the Trustee may,
but shall not be obligated to, enter into any such amendment which affects
their own rights, duties or immunities under this Agreement or otherwise.
SECTION 6.02 NOTICES. All demands, notices and communications
upon or to the Seller, the Issuer, the Trustee or the Rating Agencies under
this Agreement shall be in writing, delivered personally, via facsimile,
reputable overnight courier or by certified mail, return-receipt requested,
and shall be deemed to have been duly given upon receipt
(a) in the case of the Seller, to CEP Securities Co. LLC, ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention:
Managers,
(b) in the case of the Issuer, to PP&L Transition Bond Company LLC,
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: Managers,
(c) in the case of Moody's, to ▇▇▇▇▇'▇ Investors Service, Inc., ABS
Monitoring Department, ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
(d) in the case of Standard & Poor's, to Standard & Poor's
Corporation, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention:
Asset Backed Surveillance Department, and
(e) in the case of Fitch, to Fitch IBCA, Inc., ▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, Attention: Asset Backed Securities,
or, as to each of the foregoing, at such other address as shall be
designated by written notice to the other parties.
SECTION 6.03 ASSIGNMENT BY SELLER. Notwithstanding anything to
the contrary contained herein, this Agreement may not be assigned by the
Seller.
SECTION 6.04 ASSIGNMENT TO TRUSTEE. The Seller hereby
acknowledges and consents to any pledge, assignment and grant of a security
interest by the Issuer to the Trustee pursuant to the Indenture for the
benefit of the Transition Bondholders of all right, title and interest of
the Issuer in, to and under the Transferred Intangible Transition Property
and the proceeds thereof and the assignment of any or all of the Issuer's
rights hereunder to the Trustee.
SECTION 6.05 LIMITATIONS ON RIGHTS OF OTHERS. The provisions of
this Agreement are solely for the benefit of the Seller, the Issuer and the
Trustee, on behalf of itself and the Transition Bondholders, and nothing in
this Agreement, whether express or implied, shall be construed to give to
any other Person any legal or equitable right, remedy or claim in the
Collateral or under or in respect of this Agreement or any covenants,
conditions or provisions contained herein.
SECTION 6.06 SEVERABILITY. Any provision of this Agreement that
is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and
any such prohibition or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in any other
jurisdiction.
SECTION 6.07 SEPARATE COUNTERPARTS. This Agreement may be
executed by the parties hereto in separate counterparts, each of which when
so executed and delivered shall be an original, but all such counterparts
shall together constitute but one and the same instrument.
SECTION 6.08 HEADINGS. The headings of the various Articles and
Sections herein are for convenience of reference only and shall not define
or limit any of the terms or provisions hereof.
SECTION 6.09 GOVERNING LAW. This Agreement 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.
SECTION 6.10 NONPETITION COVENANTS. (a) Notwithstanding any
prior termination of this Agreement or the Indenture, the Seller shall not,
prior to the date which is one year and one day after the termination of
the Indenture, petition or otherwise invoke or cause the Issuer to invoke
the process of any court or government authority for the purpose of
commencing or sustaining a case against the Issuer under any federal or
state bankruptcy, insolvency or similar law or appointing a receiver,
liquidator, assignee, trustee, custodian, sequestrator or other similar
official of the Issuer or any substantial part of the property of the
Issuer, or ordering the winding up or liquidation of the affairs of the
Issuer.
(b) Notwithstanding any prior termination of this Agreement or
the Indenture, the Issuer shall not, prior to the date which is one year
and one day after the termination of the Indenture, petition or otherwise
invoke or cause the Seller to invoke the process of any court or government
authority for the purpose of commencing or sustaining a case against the
Seller under any federal or state bankruptcy, insolvency or similar law or
appointing a receiver, liquidator, assignee, trustee, custodian,
sequestrator or other similar official of the Seller or any substantial
part of the property of the Seller, or ordering the winding up or
liquidation of the affairs of the Seller.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their respective officers as of the day
and year first above written.
PP&L BOND TRANSITION
COMPANY LLC,
as Issuer,
By:__________________________________
Name:
Title: Manager
CEP SECURITIES CO. LLC,
as Seller,
By:__________________________________
Name:
Title: Manager
APPENDIX A - DEFINITIONS
The definitions contained in this Appendix A are applicable to the singular
as well as the plural forms of such terms.
Affiliate means, with respect to any specified Person, any other
Person controlling or controlled by or under common control with such
specified Person. For the purposes of this definition, control when
used with respect to any specified Person means the power to direct
the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or
otherwise; and the terms controlling and controlled have meanings
correlative to the foregoing.
Assignment means the Assignment executed and delivered by PP&L in
favor of CEP Securities Co. LLC pursuant to, and in the form set
forth in Exhibit A of, the Contribution Agreement.
Basic Documents means the Issuer LLC Agreement, the Issuer
Certificate of Formation, the Contribution Agreement, the Assignment,
the Sale Agreement, the Servicing Agreement, the Administration
Agreement, the Indenture and any Bills of Sale.
▇▇▇▇ 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.
Business Day means any day other than a Saturday or Sunday or a day
on which banking institutions in the City of Allentown, Pennsylvania,
or in the City of New York, New York are required or authorized by
law or executive order to remain closed.
CEP Securities means CEP Securities Co. LLC, a Delaware limited
liability company, or its successor.
Collateral has the meaning specified in the Granting Clause of the
Indenture.
Competition Act means the Pennsylvania Electricity Generation
Customer Choice and Competition Act, Chapter 28 of Title 66 of the
Pennsylvania Consolidated Statutes, 66 Pa. C.S., Sections 2801, et
seq.
Contribution Agreement means the Contribution Agreement, dated as of
May 13, 1999, among PP&L, Group, Reserves and CEP Securities, as
amended by the Amendment thereto dated July __, 1999, as the same may
be further amended and supplemented from time to time.
Customers means each person that
(a) was a retail customer of electric service of PP&L located
within PP&L's service territory on January 1, 1997 or that became
a retail customer of electric service of PP&L located within
PP&L's service territory after January 1, 1997,
(b) is still located within PP&L's service territory, and
(c) is receiving distribution service from PP&L.
Default means any occurrence that is, or with notice or the lapse of
time or both would become, an Event of Default.
Event of Default has the meaning specified in Section 5.01 of the
Indenture.
Fitch means Fitch IBCA, Inc., or its successor.
Group means CEP Group, Inc., a Pennsylvania corporation, or its
successor.
Holder or Transition Bondholder means the Person in whose name a
Transition Bond of any Series or Class is registered on the
Transition Bond Register.
Indenture means the Indenture dated as of July __, 1999, between the
Issuer and the Trustee, as the same may be amended and supplemented
from time to time by one or more indentures supplemental hereto, and
shall include the forms and terms of the Transition Bonds established
thereunder.
Initial Intangible Transition Property means the Intangible
Transaction Property sold by the Seller to the Issuer as of the
Initial Transfer Date pursuant to the Sale Agreement.
Initial Transfer Date means the Series Issuance Date for the first
Series of Transition Bonds.
Intangible Transition Charges means the intangible transition charges
authorized by the PUC to be imposed on all Customers by PP&L or its
successor to recover Qualified Transition Expenses pursuant to the
Competition Act and the Qualified Rate Order.
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 such order and in all revenues, collections,
claims, payments, money or proceeds of or arising from Intangible
Transition Charges pursuant to such order, and all proceeds of any of
the foregoing.
Issuer means PP&L Transition Bond Company LLC, a Delaware limited
liability company, or its successor or the party named as such in the
Indenture until a successor replaces it and, thereafter, means the
successor.
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
as of July __, 1999.
Lien means a security interest, lien, charge, pledge, equity or
encumbrance of any kind.
Manager means any manager of the Issuer.
Member means PP&L, as the sole member of the Issuer.
Moody's means ▇▇▇▇▇'▇ Investors Service Inc., or its successor.
Officers' Certificate means a certificate signed, in the case of PP&L,
by
(a) the chairman of the board, the president, the vice chairman of
the board, the executive vice president or any vice president; and
(b) a treasurer, assistant treasurer, secretary or assistant
secretary
and, in the case of CEP Securities, by two of the Managers of CEP
Securities.
Opinion of Counsel means one or more written opinions of counsel who
may be an employee of or counsel to CEP Securities or PP&L, which
counsel shall be reasonably acceptable to the Trustee, the Issuer or
the Rating Agencies, as applicable, and which shall be in form
reasonably satisfactory to the Trustee, if applicable.
Person means any individual, corporation, estate, partnership, joint
venture, association, joint stock company, trust (including any
beneficiary thereof), business trust, limited liability company,
unincorporated organization or government or any agency or political
subdivision thereof.
PP&L means PP&L, Inc., a Pennsylvania corporation, or its successor.
Proceeding means any suit in equity, action at law or other judicial
or administrative proceeding.
PUC means the Pennsylvania Public Utility Commission or any
successor.
PUC Regulations means any regulations, orders or directives
promulgated, issued or adopted by the PUC.
Qualified Rate Order means the Final Order issued by the PUC 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.
Qualified Transition Expenses has the meaning assigned to that term
in the Competition Act and the Qualified Rate Order.
Rating Agency means any rating agency rating the Transition Bonds of
any Class or Series at the time of issuance thereof at the request of
the Issuer. If no such organization or successor is any longer in
existence, "Rating Agency" shall be a nationally recognized
statistical rating organization or other comparable Person designated
by the Issuer, notice of which designation shall be given to the
Trustee under the Indenture, the Member of the Issuer and the
Servicer.
Rating Agency Condition means, with respect to any action, the
notification in writing by each Rating Agency to the Trustee and the
Issuer that such action will not result in a reduction or withdrawal
of the then current rating by such Rating Agency of any outstanding
Series or Class of Transition Bonds.
Reserves means CEP Reserves, Inc., a Delaware corporation, or its
successor.
Sale Agreement means this Intangible Transition Property Sale
Agreement, as the same may be amended and supplemented from time to
time.
Seller means CEP Securities Co. LLC, a Delaware limited liability
company, or its successor, in its capacity as seller of the
Intangible Transition Property to the Issuer pursuant to the Sale
Agreement.
Series means any series of Transition Bonds issued and authenticated
by the Issuer pursuant to the Indenture, as specified in the Series
Supplement therefor.
Series Issuance Date means, with respect to any Series, the date on
which the Transition Bonds of such Series are to be originally issued
in accordance with Section 2.10 of the Indenture and the Series
Supplement for such Series.
Series Supplement means an indenture supplemental to the Indenture
that authorizes a particular Series of Transition Bonds.
Servicer means PP&L, as the servicer of the Intangible Transition
Property, and each successor to PP&L (in the same capacity) pursuant
to Section 5.03 or 6.04 of the Servicing Agreement.
Servicer Default means an event specified in Section 6.01 of the
Servicing Agreement.
Servicing Agreement means the Servicing Agreement dated as of July
__, 1999, between the Issuer and the Servicer, as the same may be
amended and supplemented from time to time.
Standard & Poor's, or S&P, means Standard & Poor's Rating Group, a
division of The ▇▇▇▇▇▇-▇▇▇▇ Companies, or its successor.
State means any one of the 50 states of the United States of America
or the District of Columbia.
Subsequent Intangible Transition Property means Intangible Transition
Property sold by the Seller to the Issuer as of a Subsequent Transfer
Date pursuant to the Sale Agreement.
Subsequent Sale means the sale of additional Intangible Transition
Property by the Seller to the Issuer after the Initial Transfer Date,
subject to the satisfaction of the conditions specified in the Sale
Agreement and the Indenture.
Subsequent Transfer Date means the date that a Subsequent Sale will
be effective, specified in a written notice provided by the Seller to
the Issuer pursuant to the Sale Agreement.
Supplemental Order means the Order of the PUC dated May 21, 1999,
supplementing the Qualified Rate Order.
Third Party means any third party, including any electric generation
supplier, providing billing or metering services, licensed by the PUC
pursuant to relevant provisions of the Competition Act and any PUC
order.
Transfer Date means the Initial Transfer Date or any Subsequent
Transfer Date, as applicable.
Transferred Intangible Transition Property means Intangible
Transition Property which has been sold, assigned and transferred to
the Issuer pursuant to the Sale Agreement.
Transition Bond means any of the transition bonds (as defined in the
Competition Act) issued by the Issuer pursuant to the Indenture.
Transition Bond Register means a register, kept by the Transition
Bond Registrar on behalf of the Issuer in which, subject to such
reasonable regulations as it may prescribe, the Transition Bond
Registrar shall provide for the registration of Transition Bonds and
the registration of transfers of Transition Bonds.
Transition Bond Registrar means the Trustee, in its capacity as
keeper of the Transition Bond Register, or any successor to the
Trustee in such capacity.
Trustee means The Bank of New York, a New York banking corporation,
or its successor or any successor Trustee under the Indenture.
UCC means, unless the context otherwise requires, the Uniform
Commercial Code, as in effect in the relevant jurisdiction, as
amended from time to time