Exhibit 1.1
EXECUTION COPY
CALIFORNIA INFRASTRUCTURE AND ECONOMIC DEVELOPMENT
BANK SPECIAL PURPOSE TRUST SDG&E-1
RATE REDUCTION CERTIFICATES
SDG&E FUNDING LLC
SAN DIEGO GAS & ELECTRIC COMPANY
UNDERWRITING AGREEMENT
New York, New York
December 4, 1997
To the Representatives
named in Schedule I
hereto of the Under-
writers named in
Schedule II hereto
Ladies and Gentlemen:
1. Introduction. California Infrastructure and Economic
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Development Bank Special Purpose Trust SDG&E-1 (the "Trust") proposes to
sell to the underwriters named in Schedule II hereto (the "Underwriters"),
for whom you (the "Representatives") are acting as representatives, the
principal amount of the certificates identified in Schedule I hereto (the
"Certificates"). 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.
The Trust was formed pursuant to a declaration and agreement of
trust dated as of November 1, 1997, between the California Infrastructure
and Economic Development Bank (the "Infrastructure Bank") and Bankers Trust
(Delaware), a Delaware banking corporation, as Delaware trustee (the
"Delaware Trustee"), and the Certificates will be issued pursuant to an
amended and restated declaration and agreement of trust dated as of
December 16, 1997, as supplemented by a first supplemental agreement of
trust (and as further amended and supplemented from time to time, the
"Trust Agreement"), among the Infrastructure Bank, the Delaware Trustee and
Bankers Trust Company of California, N.A., a national banking association,
as certificate
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trustee (the "Certificate Trustee"). The assets of the Trust will consist
solely of the SDG&E Funding LLC Notes, Series 1997-1 (the "Notes"), issued
by SDG&E Funding LLC, a Delaware limited liability company (the "Note
Issuer"), and the proceeds thereof. The Notes will be issued pursuant to
an indenture dated as of December 16, 1997 (as amended and supplemented
from time to time, including any Series Supplement, the "Indenture"),
between the Note Issuer and Bankers Trust Company of California, N.A., a
national banking association, as note trustee (the "Note Trustee"), and
purchased by the Certificate Trustee, on behalf of the Trust, pursuant to a
note purchase agreement dated as of December 16, 1997 (the "Note Purchase
Agreement"), between the Note Issuer and the Certificate Trustee. Each
Class of Certificates will correspond to a Class of Notes and will
represent fractional undivided beneficial interests in such underlying
Class of Notes and the proceeds thereof. The Notes will be secured
primarily by the Transition Property described in the related Issuance
Advice Letter. Such Transition Property will be sold to the Note Issuer by
San Diego Gas & Electric Company, a California corporation (the "Company"),
pursuant to a transition property purchase and sale agreement dated as of
December 16, 1997 (the "Sale Agreement"), between the Company, as seller,
and the Note Issuer. Other Transition Property may be sold to the Note
Issuer by the Company pursuant to an agreement substantially similar to the
Sale Agreement. The Transition Property will be serviced pursuant to a
transition property servicing agreement dated as of December 16, 1997 (as
amended and supplemented from time to time, the "Servicing Agreement"),
between the Company, as servicer, and the Note Issuer.
Capitalized terms used and not otherwise defined herein shall
have the meanings given to them in the Indenture.
2. Representations and Warranties. Each of the Company and the
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Note Issuer 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 Certificates is a Delayed Offering
(as specified in Schedule I hereto), paragraph (i) below is applicable
and, if the offering of the Certificates is a Non-Delayed Offering (as
so specified), paragraph (ii) below is applicable.
(i) The Note Issuer and the Notes and the Certificates meet
the requirements for the use of Form S-3 under the Securities Act
of 1933 (the "Act"), and the Note Issuer has filed with the
Securities and Exchange Commission (the "SEC") a registration
statement (the file number of which is set forth in
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Schedule I hereto) on such Form, including a basic prospectus,
for registration under the Act of the offering and sale of the
Certificates. The Note Issuer 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 Certificates is a Delayed Offering and,
although the Basic Prospectus may not include all the information
with respect to the Certificates 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 Note Issuer 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 Certificates and the
offering thereof. As filed, such final prospectus supplement
shall include all required information with respect to the
Certificates 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 Note
Issuer has advised you, prior to the Execution Time, will be
included or made therein.
(ii) The Note Issuer and the Notes and the Certificates
meet the requirements for the use of Form S-3 under the Act and
the Note Issuer 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 Certificates. The Note
Issuer may have filed one or more amendments thereto, including a
Preliminary Final Prospectus, each of which has previously been
furnished to you. The Company will next file with the SEC either
(x) a final prospectus supplement relating to the Certificates 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 Note
Issuer has included in such registration
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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 Certificates 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 Certificates 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 Note Issuer 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 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 and the Trust Agreement 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
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the Note Issuer 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 Note Trustee and the
Certificate Trustee or (ii) the information contained in or omitted
from the Registration
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Statement or the Final Prospectus (or any supplement thereto) in
reliance upon and in conformity with information furnished in writing
to the Note Issuer 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 Certificates
and the offering thereof and is used prior to filing of the Final
Prospectus. "Final Prospectus" shall mean the prospectus supplement
relating to the Certificates 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 Certificates, 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 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 Certificates 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
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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
Certificates is a Non-Delayed Offering or a Delayed Offering shall be
set forth in Schedule I hereto.
3. Purchase and Sale. Subject to the terms and conditions and
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in reliance upon the representations and warranties herein set forth, the
Trust agrees to sell to each Underwriter, and each Underwriter agrees,
severally and not jointly, to purchase from the Trust, at the purchase
price set forth in Schedule I hereto the principal amount of the
Certificates set forth opposite such Underwriter's name in Schedule II
hereto.
4. Delivery and Payment. Delivery of and payment for the
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Certificates 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 Note Issuer or as provided in Section 9 hereof (such date and time of
delivery and payment for the Certificates being herein called the "Closing
Date"). Delivery of the Certificates 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 Trust by
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wire transfer of immediately available funds. Delivery of the Certificates
shall be made at such location as the Representatives shall reasonably
designate at least one business day in advance of the Closing Date. The
Certificates to be so delivered shall be initially represented by
Certificates registered in the name of Cede & Co., as nominee of The
Depository Trust Company ("DTC"). The interests of beneficial owners of
the Certificates will be represented by book entries on the records of DTC
and participating members thereof. Definitive Certificates will be
available only under limited circumstances.
The Trust agrees to have the Certificates available for
inspection, checking and packaging by the Representatives in New York, New
York, not later than 1:00 PM on the business day prior to the Closing Date.
5. Covenants.
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(a) Covenants of the Note Issuer. The Note Issuer covenants and
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agrees with the several Underwriters that:
(i) The Note Issuer will use its best 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 Certificates, the Note Issuer 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 Note Issuer 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 Note Issuer 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 Note Issuer will promptly
advise the Representatives (i) when the Registration Statement, if not
effective at the Execution Time, and any amendment thereto, shall have
become 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 Certificates,
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
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purpose and (vi) of the receipt by the Note Issuer of any notification
with respect to the suspension of the qualification of the
Certificates for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose. The Note Issuer will
use its best efforts to prevent the issuance of any such stop order
and, if issued, to obtain as soon as possible the withdrawal thereof.
(ii) If, at any time when a prospectus relating to the
Certificates 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 Note Issuer 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 Note Issuer will cause the
Trust to make generally available to the Certificateholders and to the
Representatives an earnings statement or statements of the Trust which
will satisfy the provisions of Section 11(a) of the Act and Rule 158
under the Act.
(iv) The Note Issuer 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 Note Issuer 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 Note Issuer will pay the
expenses of printing or other production of all documents relating to
the offering.
(v) The Note Issuer will arrange for the qualification of the
Certificates for sale under the laws of such jurisdictions as the
Representatives may designate, will maintain such qualifications in
effect so long as required
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for the distribution of the Certificates and will arrange for the
determination of the legality of the Certificates for purchase by
institutional investors; provided that in no event shall the Note
Issuer 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 Certificates, in any jurisdiction
where it is not now so subject.
(vi) Until the business date set forth on Schedule I hereto, the
Note Issuer 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
Certificates).
(vii) For a period from the date of this Agreement until the
retirement of the Certificates, or until such time as the Underwriters
shall cease to maintain a secondary market in the Certificates,
whichever occurs first, the Note Issuer will deliver to the
Representatives the annual statements of compliance and the annual
independent auditor's servicing reports furnished to the Note Issuer
or the Note Trustee pursuant to the Servicing Agreement or the
Indenture, as applicable, as soon as such statements and reports are
furnished to the Note Issuer or the Note Trustee.
(viii) So long as any of the Certificates are outstanding, the
Note Issuer will furnish to the Representatives (i) as soon as
available, a copy of each report of the Trust filed with the SEC under
the Exchange Act, or mailed to Certificateholders, (ii) a copy of any
filings with the California Public Utility Commission pursuant to the
Financing Order, including, but not limited to, any Advice Letters,
and (iii) from time to time, any information concerning the Company or
the Note Issuer, and, to the extent readily available, the
Infrastructure Bank or the Trust, 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(r) of this Agreement is
conditioned upon the furnishing of documents or the taking of other
actions by the Note Issuer on or after the Closing Date, the Note
Issuer shall furnish such documents and take such other actions.
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(b) Covenants of the Company. The Company covenants and agrees
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with the several Underwriters that, to the extent that the Note Issuer has
not already performed such act pursuant to Section 5(a):
(i) The Company will use its best efforts to cause the
Registration Statement, if not effective at the Execution Time, and
any amendment thereto, to become effective. The Company will use its
best 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) 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
Certificates).
(iii) So long as any of the Certificates 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
Trust filed with the SEC under the Exchange Act, or mailed to
Certificateholders, (ii) a copy of any filings with the California
Public Utility Commission pursuant to the Financing Order, including,
but not limited to, any Advice Letters, and (iii) from time to time,
any information concerning the Company and, to the extent readily
available, the Note Issuer, the Infrastructure Bank or the Trust, as
the Representatives may reasonably request.
(iv) To the extent, if any, that any rating necessary to satisfy
the condition set forth in Section 6(r) 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.
6. Conditions to the Obligations of the Underwriters. The
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obligations of the Underwriters to purchase the Certificates shall be
subject to the accuracy of the representations and warranties on the part
of the Note Issuer and the Company contained herein as of the Execution
Time and the Closing Date and on the part of the Company contained in
Article III of the Sale Agreement and in Section 6.01 of the Servicing
Agreement as of the Closing Date, to the accuracy of the statements of the
Note Issuer, the Company and the Trust made in any certificates pursuant to
the provisions hereof, to the performance by the Note
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Issuer, the Company and the Trust of their obligations hereunder and to the
following additional conditions:
(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 New York City time, on the date of
determination of the public offering price, if such determination
occurred at or prior to 3:00 PM New York City time on such date, or
(ii) 12:00 Noon on the business day following the day on which the
public offering price was determined, if such determination occurred
after 3:00 PM New York City 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, the Infrastructure Bank, the California
State Treasurer's Office, as agent for sale (the "STO"), and the Trust
shall have received opinions of counsel for the Company, portions of
which may be delivered by O'Melveny & Xxxxx LLP, outside counsel for
the Company, portions of which may be delivered by Xxxxx X. Xxxxx,
Esq., in-house counsel for the Company, and portions of which may be
delivered by Xxxxxxxx, Xxxxxx & Finger, P.A., special Delaware counsel
for the Company, each dated the Closing Date, in form and substance
reasonably satisfactory to the Representatives, to the effect that:
(i) the Company (a) has been duly incorporated and is
validly existing as a corporation in good standing under the laws
of the jurisdiction in which it is chartered or organized, (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 this
Agreement, the Sale Agreement and the Servicing 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 this
Agreement, the Basic Documents to which the Company is party and
each other instrument or agreement necessary or appropriate to
the proper administration of this Agreement and the transactions
contemplated hereby;
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(ii) the Sale Agreement and the Servicing Agreement have
been duly authorized, executed and delivered, and constitute
legal, valid and binding instruments enforceable against the
Company in accordance with their 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);
(iii) to the knowledge of such counsel, there is no pending
or threatened action, suit or proceeding before any court or
governmental agency, authority or body or any arbitrator
involving the Company or any of its 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, which is not described or filed as
required;
(iv) this Agreement has been duly authorized, executed and
delivered by the Company;
(v) no consent, approval, authorization or order of any
court or governmental agency or body is required for the
consummation of the transactions contemplated herein, except such
as have been obtained under the California Government Code, the
PU Code and the Act and such as may be required under the blue
sky laws of any jurisdiction in connection with the purchase and
distribution of the Certificates by the Underwriters and such
other approvals (specified in such opinion) as have been
obtained;
(vi) neither the execution and delivery of this Agreement,
the Sale Agreement, the Servicing Agreement, nor the consummation
of the transactions contemplated by this Agreement, the Sale
Agreement or the Servicing Agreement, nor the fulfillment of the
terms of this Agreement, the Sale Agreement or the Servicing
Agreement by the Company, 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 articles
of incorporation, bylaws or other organizational documents of the
Company, 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, material agreement or other
material
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instrument to which the Company is a party or by which the
Company is bound, (B) result in the creation or imposition of any
lien upon any properties of the Company pursuant to the terms of
any such indenture, agreement or other instrument (other than as
contemplated by the Basic Documents and Section 843(g) of the PU
Code), or (C) violate any law or any order, rule or regulation
applicable to the Company of any court or of any federal or state
regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over the Company, or any of
its properties; and
(vii) upon the delivery of the fully executed Sale Agreement
to the Note Issuer and the payment of the purchase price of the
Transition Property by the Note Issuer to the Seller pursuant to
the Sale Agreement, then (A) the transfer of the Transition
Property by the Seller to the Note Issuer pursuant to the Sale
Agreement conveys the Seller's right, title and interest in the
Transition Property to the Note Issuer and will be treated as an
absolute transfer of all of the Seller's right, title, and
interest in the Transition Property, other than for federal and
state income and franchise tax purposes, (B) such transfer of the
Transition Property is perfected, (C) such transfer has priority
over any other assignment of the Transition Property, and (D) the
Transition Property is free and clear of all liens created prior
to its transfer to the Note Issuer pursuant to the Sale
Agreement.
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than the
State of California or the United States, to the extent deemed proper
and specified in such opinion, upon the opinion of other counsel of
good standing believed to be reliable and who are satisfactory to
counsel for the Underwriters and (B) as to matters of fact, to the
extent deemed proper, on certificates of responsible officers of the
Company. References to the Final Prospectus in this paragraph (b)
include any supplements thereto at the Closing Date.
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(c) The Representatives, the Infrastructure Bank and the STO
shall have received opinions of counsel for the Note Issuer, portions
of which may be delivered by O'Melveny & Xxxxx LLP, outside counsel
for the Note Issuer, portions of which may be delivered by Xxxxx X.
Xxxxx, Esq., in-house counsel for the Note Issuer, and portions of
which may be delivered by Xxxxxxxx, Xxxxxx & Finger, P.A., special
Delaware counsel for the Note Issuer, each dated the Closing Date, in
form and substance reasonably satisfactory to the Representatives, to
the effect that:
(i) the Note Issuer 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 this Agreement, the Sale Agreement, the
Servicing Agreement, the Indenture, the Note Purchase Agreement
and the Notes;
(ii) the Sale Agreement, the Servicing Agreement, the
Indenture and the Note Purchase Agreement have been duly authorized,
executed and delivered, and constitute legal, valid and binding
instruments enforceable against the Note Issuer in accordance with
their 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 the Notes have been duly authorized
and executed, and when authenticated in accordance with the provisions
of the Indenture and delivered to and paid for by the Trust in
accordance with the terms of the Note Purchase Agreement, will
constitute legal, valid and binding obligations of the Note Issuer
entitled to the benefits of the Indenture and any related Series
Supplement (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);
(iii) the Notes, the Indenture, the Sale Agreement and the
Note Purchase Agreement conform to the descriptions thereof
contained in the Final Prospectus;
(iv) the Indenture has been duly qualified under the Trust
Indenture Act;
(v) to the knowledge of such counsel, there is no pending or
threatened action, suit or proceeding before
15
any court or governmental agency, authority or body or any
arbitrator involving the Note Issuer, or relating to the Notes,
the Financing Order or the collection of FTA Payments or the use
and enjoyment of transition property under the Statute 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, which is not described
or filed as required; and the statements included or incorporated
in the Final Prospectus under the headings "Energy Deregulation
and New California Market Structure" (to the extent the Statute
is described), "Description of the Transition Property", "The
Note Issuer", "Servicing" (to the extent the Servicing Agreement
is described) and "Description of the Notes" fairly summarize the
matters described therein;
(vi) 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 the
knowledge of such counsel, 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 the financial statements and other financial and statistical
information contained therein as to which such counsel need
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; and
such counsel has no reason to believe that at the Effective Date
the Registration Statement contained any untrue statement of a
material fact or omitted to state any material fact required to
be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not
misleading or that the Final Prospectus as of its date and the
Closing Date includes any untrue statement of a material fact or
omits to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they were
made, not misleading (other than the financial statements and
other financial and statistical information contained
16
therein as to which such counsel need express no opinion);
(vii) this Agreement has been duly authorized, executed and
delivered by the Note Issuer;
(viii) no consent, approval, authorization or order of any
court or governmental agency or body is required for the
consummation of the transactions contemplated herein, except such
as have been obtained under the California Government Code, the
PU Code and the Act and such as may be required under the blue
sky laws of any jurisdiction in connection with the purchase and
distribution of the Certificates by the Underwriters and such
other approvals (specified in such opinion) as have been
obtained;
(ix) neither the execution and delivery of this Agreement,
the Sale Agreement, the Servicing Agreement, the Indenture or the
Note Purchase Agreement, nor the issue and sale of the Notes, nor
the consummation of the transactions contemplated by this
Agreement, the Sale Agreement, the Servicing Agreement, the
Indenture or the Note Purchase Agreement, nor the fulfillment of
the terms of this Agreement, the Sale Agreement, the Servicing
Agreement, the Indenture or the Note Purchase Agreement 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 Amended and Restated
Limited Liability Company Agreement of the Note Issuer, 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 such counsel 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 properties of the Note Issuer
pursuant to the terms of any such indenture, agreement or other
instrument (other than as contemplated by the Basic Documents and
Section 843(g) of the PU Code), or (C) 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;
(x) (A) to the extent that the provisions of Section 843 of
the PU Code apply to the grant of a security interest by the Note
Issuer in the Collateral
17
pursuant to the Indenture, then upon the giving of value by the
Note Trustee to the Note Issuer with respect to the Collateral,
(I) the Indenture creates in favor of the Note Trustee a security
interest in the rights of the Note Issuer in the Collateral, (II)
such security interest is valid and enforceable against the Note
Issuer and third parties (subject to the rights of any third
parties holding security interests in such Collateral perfected
in the manner described in Section 843 of the PU Code), and has
attached, (III) such security interest is perfected, and (IV)
such perfected security interest is of first priority. (B) To
the extent that the provisions of Section 843 of the PU Code do
not apply to the grant of a security interest by the Note Issuer
in the Collateral pursuant to the Indenture, then upon the giving
of value by the Note Trustee to the Note Issuer with respect to
the Collateral, (I) the Indenture creates in favor of the Note
Trustee a security interest in the rights of the Note Issuer in
the Collateral, and such security interest is enforceable against
the Note Issuer with respect to such Collateral, (II) such
security interest is perfected, and (III) such perfected security
interest is of first priority; and
(xi) the Note Issuer 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.
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than the
State of California or the United States, to the extent deemed proper
and specified in such opinion, upon the opinion of other counsel of
good standing believed to be reliable and who are satisfactory to
counsel for the Underwriters and (B) as to matters of fact, to the
extent deemed proper, on certificates of responsible officers of the
Note Issuer and public officials. References to the Final Prospectus
in this paragraph (c) include any supplements thereto at the Closing
Date.
(d) The Representatives, the Note Issuer, the Company, the
Infrastructure Bank, the STO, the Trust and the Certificate Trustee
shall have received opinions of counsel for the Trust and the
Infrastructure Bank, portions of which may be delivered by Xxxxx &
Wood LLP, outside counsel for the Trust and the Infrastructure Bank,
portions of which may be delivered by Xxxxxx Xxxxxxx, in-house counsel
for the Infrastructure Bank, and portions of which may be delivered
18
by Xxxxxxxx, Xxxxxx & Finger, P.A., special Delaware counsel for the
Trust, each dated the Closing Date, in form and substance reasonably
satisfactory to the Representatives, to the effect that:
(i) the Certificates and the Trust Agreement conform to the
descriptions thereof contained in the Final Prospectus;
(ii) the Trust 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
and the Certificates;
(iii) the Infrastructure Bank has been duly formed and is
validly existing as a public body established within the state
government of the State of California, with full power and
authority to execute, deliver and perform its obligations under
the Trust Agreement and the IED Bank Issuance Resolution (as
defined in the Sale Agreement);
(iv) the Trust Agreement has been duly authorized, executed
and delivered by the Infrastructure Bank and constitutes a legal,
valid and binding instrument enforceable against the
Infrastructure Bank 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);
(v) the Certificates have been duly authorized and executed
and, when authenticated in accordance with the provisions of the Trust
Agreement and delivered to and paid for by the Underwriters pursuant
to this Agreement, will be duly issued and entitled to the benefits of
the Trust Agreement;
(vi) the Note Purchase Agreement has been duly authorized
and delivered by the Trust and constitutes a legal, valid and
binding instrument enforceable against the Trust 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);
19
(vii) the IED Bank Issuance Resolution has been duly and
validly adopted by the Infrastructure Bank, in compliance with
all applicable laws, rules and regulations, and is in full force
and effect, not having been amended, altered or repealed since
November 10, 1997;
(viii) pursuant to the IED Bank Issuance Resolution, the
Infrastructure Bank has validly authorized and approved the
formation of the Trust, the issuance of the Certificates and all
other transactions and actions contemplated by the Basic
Documents; such authorizations and approvals are valid and in
full force and effect; the Certificates qualify as "rate
reduction bonds" under Section 840(e) of the PU Code;
(ix) the Trust Agreement has been duly qualified under the
Trust Indenture Act;
(x) to the knowledge of such counsel, 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 IED Bank
Issuance Resolution or actions taken by the Infrastructure Bank
in connection therewith or otherwise involving the Infrastructure
Bank or relating to the Certificates or the Trust 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
Infrastructure Bank, the Certificates or the Trust 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 "Description of the
Certificates," "The Trust," and "The Infrastructure Bank" fairly
summarize the matters described therein and the statements
included or incorporated in the Final Prospectus under the
headings "Certain Federal Income Tax Consequences", "State
Taxation" and "ERISA Considerations", to the extent that they
constitute matters of California, Delaware or federal law or
legal conclusions with respect thereto, provide a fair and
accurate summary of such law or conclusions;
(xi) to the knowledge of such counsel, the Registration
Statement and the Final Prospectus (other than (A) the financial
statements and other financial and statistical information
contained therein and
20
(B) information contained under the captions "The Note Issuer"
and "The Seller and Servicer", in each case as to which such
counsel need 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, and such counsel has no reason to believe that
at the Effective Date the Registration Statement contained any
untrue statement of a material fact or omitted to state any
material fact required to be stated therein or necessary to make
the statements therein, in the light of the circumstances under
which they were made, not misleading or that the Final Prospectus
as of its date and the Closing Date includes any untrue statement
of a material fact or omits to state a material fact necessary to
make the statements therein, in the light of the circumstances
under which they were made, not misleading (other than (A) the
financial statements and other financial and statistical
information contained therein and (B) information contained under
the captions "The Note Issuer" and "The Seller and Servicer", in
each case as to which such counsel need express no opinion);
(xii) this Agreement has been duly authorized, executed and
delivered by the Trust;
(xiii) no consent, approval, authorization or order of any
court or governmental agency or body is required for the issuance
of the Certificates, except such as have been obtained under the
California Government Code, the PU Code and the Act and such as
may be required under the blue sky laws of any jurisdiction in
connection with the purchase and distribution of the Certificates
by the Underwriters and such other approvals (specified in such
opinion) as have been obtained;
(xiv) neither the execution and delivery of this Agreement
or the Trust Agreement, nor the issue and sale of the
Certificates, nor the consummation of the transactions
contemplated by this Agreement or the Trust Agreement, nor the
fulfillment of the terms of this Agreement or the Trust Agreement
by the Infrastructure Bank 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 bylaws or
procedural documents of the Infrastructure Bank, 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
21
under, any indenture, agreement or other instrument known to such
counsel and to which the Infrastructure Bank is a party or by
which the Infrastructure Bank is bound, (B) result in the
creation or imposition of any lien upon any properties of the
Infrastructure Bank pursuant to the terms of any such indenture,
agreement or other instrument, or (C) violate any law or any
order, rule or regulation applicable to the Infrastructure Bank
of any court or of any federal or state regulatory body,
administrative agency or other governmental instrumentality
having jurisdiction over the Infrastructure Bank, or any of its
properties; and
(xv) the Trust 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.
In rendering such opinion, such counsel may (A) rely as to matters
involving the application of laws of any jurisdiction other than the
State of California or the United States, to the extent deemed proper
and specified in such opinion, upon the opinion of other counsel of
good standing believed to be reliable and who are satisfactory to
counsel for the Underwriters, (B) as to matters relating to actions
taken by the Company, the Note Issuer, the Note Trustee, the CPUC and
the Servicer, assume such matters which are the subject of opinions
rendered by counsel to such parties hereunder or under the Basic
Documents, and (C) rely as to matters of fact, to the extent deemed
proper, on certificates of responsible officers of the Trust, the
Infrastructure Bank and public officials. References to the Final
Prospectus in this paragraph (d) include any supplements thereto at
the Closing Date.
(e) The Representatives, the Trust, the Infrastructure Bank and
the STO shall have received an opinion of Xxxxxx & Xxxxxx, counsel to
the Note Trustee, dated the Closing Date, in form and substance
reasonably satisfactory to the Representatives, to the effect that:
(i) the Note Trustee is validly existing as a national
banking association in good standing under the federal laws of
the United States of America;
(ii) the Indenture has been duly authorized, executed and
delivered, and constitutes a legal, valid and binding instrument
enforceable against the Note Trustee in accordance with its terms
(subject, as to enforcement of remedies, to applicable
bankruptcy, reorganization, insolvency, moratorium or other
similar
22
laws or equitable principles affecting creditors' rights
generally from time to time in effect); and
(iii) the Notes have been duly authenticated by the Note
Trustee.
(f) The Representatives, the Trust, the Infrastructure Bank and
the STO shall have received an opinion of Xxxxxx & Xxxxxx, counsel to
the Certificate Trustee, dated the Closing Date, in form and substance
reasonably satisfactory to the Representatives, to the effect that:
(i) the Certificate Trustee is validly existing as a
national banking association in good standing under the federal
laws of the United States of America;
(ii) the Trust Agreement and the Note Purchase Agreement
have been duly executed by the Certificate Trustee, and the Trust
Agreement has been duly authorized and delivered by the
Certificate Trustee and constitutes a legal, valid and binding
instrument enforceable against the Certificate 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 Certificate Trustee has duly executed and
authenticated the Certificates issued on the Closing Date on
behalf of the Trust;
(g) The Representatives, the Trust, the Infrastructure Bank, the
STO and the Certificate Trustee shall have received 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 duly incorporated and is validly
existing as a banking corporation in good standing under the laws
of the State of Delaware, with full corporate trust power and
authority to enter into and perform its obligations under the
Trust Agreement; and
(ii) the Trust Agreement has been duly authorized, executed
and delivered by the Delaware Trustee, and constitutes a legal,
valid and binding instrument enforceable against the Delaware
Trustee in accordance with its terms (subject, as to enforcement
of remedies,
23
to applicable bankruptcy, reorganization, insolvency, moratorium
or other similar laws or equitable principles affecting
creditors' rights generally from time to time in effect);
(h) The Representatives shall have received from Cravath, Swaine
& Xxxxx, counsel for the Underwriters, such opinion or opinions, dated
the Closing Date, with respect to the issuance and sale of the Notes
and the Certificates, the Indenture, the Trust Agreement, 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 Note Issuer and the Trust
shall have furnished to such counsel such documents as they request
for the purpose of enabling them to pass upon such matters.
(i) The Representatives, the Infrastructure Bank, the STO and
the Note Trustee shall have received a certificate of the Note Issuer,
signed by the Chairman of the Board or the President and the principal
financial or accounting officer of the Note Issuer, 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 Note Issuer in
this Agreement and in the Indenture 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 Note Issuer has
complied with all the agreements and satisfied all the conditions
on its 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 Note Issuer'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 (x) the condition
(financial or other), prospects, earnings, business or properties
of the Note Issuer, whether or not arising from transactions in
the ordinary course of business, or (y) the Transition Property,
except as set forth in or contemplated in the Final Prospectus
(exclusive of any supplement thereto).
24
(j) The Representatives, the Infrastructure Bank, the STO, the
Note Trustee and the Certificate Trustee shall have received a
certificate of the Company, signed by the Chief Executive Officer 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 Sale Agreement and the Servicing 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 with all the agreements and
satisfied all the conditions on its 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 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 (x) 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 in the ordinary course of business,
or (y) the Transition Property, except as set forth in or
contemplated in the Final Prospectus (exclusive of any supplement
thereto).
(k) At the Closing Date, Deloitte & Touche 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
25
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
Transition Property," "The Seller and the Servicer," "Description of
the Notes," and "Description of the Certificates" 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(7) of the Indenture.
References to the Final Prospectus in this paragraph (k) include
any supplement thereto at the date of the letter.
In addition, except as provided in Schedule I hereto, at the
Execution Time, Deloitte & Touche 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.
(l) 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 Note Issuer or the Infrastructure Bank or (ii) the
Transition Property, the Notes, the Certificates, the Financing Order
or the Statute, the effect of which is, 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 or
the Certificates as contemplated by the Registration Statement
(exclusive of any amendment thereof) and the Final Prospectus
(exclusive of any supplement thereto).
(m) The Representatives, the Trust, the Infrastructure Bank and
the STO shall have received on the Closing Date an opinion letter or
letters of O'Melveny & Xxxxx LLP, counsel
26
to the Company and the Note Issuer, dated the Closing Date, in form
and substance reasonably satisfactory to the Representatives, (i) with
respect to the characterization of the transfer of the Transition
Property by the Company to the Note Issuer as a "true sale" for
bankruptcy purposes and (ii) to the effect that a court would not
order the substantive consolidation of the assets and liabilities of
the Note Issuer with those of the Company in the event of a
bankruptcy, reorganization or other insolvency proceeding involving
the Company.
(n) The Representatives, the Trust, the Infrastructure Bank and
the STO shall have received on the Closing Date an opinion letter of
Xxxxx & Xxxx LLP, outside counsel to the Infrastructure Bank and the
Trust, dated the Closing Date, in form and substance reasonably
satisfactory to the Representatives, to the effect that a court would
not order the substantive consolidation of the assets and liabilities
of the Infrastructure Bank with those of the Trust.
(o) The Representatives, the Trust, the Infrastructure Bank and
the STO shall have received on the Closing Date an opinion letter or
letters of counsel for the Company, portions of which may be delivered
by O'Melveny & Xxxxx LLP, outside counsel for the Company, and
portions of which may be delivered by Xxxxx X. Xxxxx, Esq., in-house
counsel for the Company, each dated the Closing Date, in form and
substance reasonably satisfactory to the Representatives, to the
effect that: (i) subject to the ultimate outcome of any Petition to
the California Supreme Court for Writ of Review filed by The Utility
Reform Network, the Financing Order has been duly authorized and
adopted by the CPUC and the Financing Order, giving effect to the
Issuance Advice Letter, is in full force and effect; in reliance on
the opinion of Xxxxx & Wood LLP that the Certificates are "rate
reduction bonds" under Section 840(e) of the PU Code, as of the
issuance of the Certificates, the Certificates are entitled to the
protections provided in the first sentences of PU Code Sections 841(c)
and 842(d); (ii) no person may challenge the Financing Order in
California state courts other than in a proceeding pursuant to a
Petition for Writ of Review brought by The Utility Reform Network to
the California Supreme Court; (iii) the likelihood of any outcome of
any Petition to the California Supreme Court for Writ of Review filed
by The Utility Reform Network having a material adverse effect on the
payment of principal and interest on the Certificates on the dates and
in the amounts set forth in the Final Prospectus is remote; and (iv)
the True-Up Adjustments (as defined in the Servicing Agreement) are
entitled under the Statute to take into account in determining the
amount of FTA Charges for future periods any
27
reduction in the amount of FTA Payments deposited in the Collection
Account from the amount collected from Customers ("Customer
Collections") as a result of (x) any default by the Servicer or an ESP
(as defined in the Servicing Agreement) under the Servicing Agreement
or an ESP Service Agreement (as defined in the Servicing Agreement) to
turn over any or all of such Customer Collections to the Collection
Account or (y) as a result of any surcharge, fee, offset, charge or
other deduction imposed by a bankruptcy court in a case in which the
Company is the debtor. In addition, the Representatives, the Trust,
the Infrastructure Bank and the STO shall have received on the Closing
Date an opinion letter of counsel for the Company, dated the Closing
Date, in form and substance reasonably satisfactory to the
Representatives, to the effect that (i) the legal requirements for The
Utility Reform Network to obtain a stay as requested in its Petition
for Writ of Review to the California Supreme Court include that the
proponent of the stay show that (A) great or irreparable damage would
otherwise result to the proponent of the stay, and (B) the harm that
would be caused from granting the stay does not outweigh the harm
which would result from not granting the stay and (ii) the general
legal standards for obtaining such a stay would also include a
requirement that the proponent show that it is likely to prevail on
the merits of the underlying claim (such opinion may note that the
court has broad equitable discretion in granting or denying such a
stay).
(p) The Representatives, the Infrastructure Bank, the STO, the
Company and the Note Issuer shall have received on the Closing Date an
opinion letter or letters of counsel for the Infrastructure Bank and
the Trust, portions of which may be delivered by Xxxxx & Xxxx LLP,
outside counsel for the Infrastructure Bank and the Trust, and
portions of which may be delivered by Xxxxxx Xxxxxxx, in-house counsel
for the Infrastructure Bank, each dated the Closing Date, in form and
substance reasonably satisfactory to the Representatives, to the
effect that: (i) Proposition 218 of the initiative provisions of the
Constitution of California does not apply to AB 1890; and (ii) any
state action (whether by legislative, CPUC, initiative or otherwise)
to revoke or limit the Financing Order, the Issuance Advice Letters,
the Transition Property or the Fixed Transition Amounts in a manner
which would substantially impair the rights of Certificateholders
would be subject to a successful constitutional contracts clause
defense.
(q) The Representatives, the Trust, the Infrastructure Bank, the
STO and the Note Trustee shall have received on the Closing Date an
opinion letter or letters of Xxxxxxxx,
28
Xxxxxx & Finger, P.A., special Delaware counsel to the Note Issuer,
dated the Closing Date, in form and substance reasonably satisfactory
to the Representatives, to the effect that: (i) if properly presented
to a Delaware court, a Delaware court applying Delaware law, would
conclude that (x) in order for a person to file a voluntary bankruptcy
petition on behalf of the Note Issuer, the prior unanimous written
consent of the Member and the Board of Directors (including the
Independent Director), as provided in Section 9(j)(iii) of the Amended
and Restated Limited Liability Company Agreement of the Note Issuer
(the "LLC Agreement"), is required, and (y) such provision, contained
in Section 9(j)(iii) of the LLC Agreement, that requires the unanimous
written consent of the Member and the Board of Directors (including
the Independent Director) in order for a person to file a voluntary
bankruptcy petition on behalf of the Note Issuer, constitutes a legal,
valid and binding agreement of the Member and is enforceable against
the Member, in accordance with its terms; and (ii) the LLC Agreement
constitutes a legal, valid and binding agreement of the Member
thereunder, and is enforceable against the Member in accordance with
its terms.
(r) The Notes and the Certificates shall have been rated in the
highest long-term rating category by each of the Rating Agencies.
(s) On or prior to the Closing Date, the Note Issuer shall have
delivered to the Representatives evidence, in form and substance
reasonably satisfactory to the Representatives, that appropriate
filings have been or are being made in accordance with the PU Code and
other applicable law reflecting the grant of a security interest by
the Note Issuer in the Collateral to the Note Trustee, including the
filing of the UCC financing statements in the office of the Secretary
of State of California.
(t) On or prior to the Closing Date, the Note Issuer shall have
delivered to the Representatives evidence, in form and substance
satisfactory to the Representatives, of the California Public Utility
Commission's issuance of the Financing Order relating to the
Transition Property and the related Issuance Advice Letters.
(u) On or prior to the Closing Date, the Company shall have
delivered to the Representatives, the Trust, the Infrastructure Bank
and the STO evidence, in form and substance reasonably satisfactory to
the Representatives, that the Company has obtained a release of the
Transition Property from the lien of that certain Mortgage and Deed of
Trust dated as of July 1, 1940, between San Diego Gas &
29
Electric Company and First Trust of California, N.A. (successor to
Bank of California, National Association), as trustee.
(v) Prior to the Closing Date, the Note Issuer, the Company and
the Trust 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 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 cancelation shall be
given to the Note Issuer and the Trust 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 office of San Diego Gas & Electric Company, 000 Xxx
Xxxxxx, Xxx Xxxxx, XX, on the Closing Date.
7. Reimbursement of Underwriters' Expenses. If the sale of the
----------------------------------------
Certificates 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 or
the Note Issuer or the Trust 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 Note Issuer
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 Certificates.
8. Indemnification and Contribution. (a) The Company and the
---------------------------------
Note Issuer will, jointly and severally, indemnify and hold harmless each
Underwriter, the Infrastructure Bank and the STO, the directors, officers,
members, employees and agents of each Underwriter, the Infrastructure Bank
and the STO and each person who controls any Underwriter, the
Infrastructure Bank and the STO 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
30
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 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
Certificates 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 Note Issuer
-------- -------
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 Note Issuer or the Company by or on behalf of any
Underwriter through the Representatives specifically for inclusion therein;
provided further, that 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
Certificates 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 (w) the Company or
the Note Issuer had previously furnished copies of the Final Prospectus to
the Representatives, (x) delivery of the Final Prospectus was required by
the Act to be made to such person, (y) the untrue statement or omission of
a material fact contained in the Preliminary Final Prospectus was corrected
in the Final Prospectus and (z) there was not sent or given to such person,
at or prior to the written confirmation of the sale of such Certificates to
such person, a copy of the Final Prospectus. This indemnity agreement will
be in addition to any liability which the Company and the Note Issuer may
otherwise have.
(b) Each Underwriter severally agrees to indemnify and hold
harmless the Company, the Note Issuer, the Infrastructure Bank, the STO,
each of their directors (and in the case of the Infrastructure Bank or the
STO, their respective members, employees, officers or agents), each of
their officers who signs
31
the Registration Statement, and each person who controls the Company or the
Note Issuer within the meaning of either the Act or the Exchange Act, to
the same extent as the foregoing indemnity from the Company and the Note
Issuer to each Underwriter, but only with reference to written information
relating to such Underwriter furnished to the Note Issuer 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 Note Issuer 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
32
reasonably concluded that there may be legal defenses available to it
and/or other indemnified parties 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. 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 includes an
unconditional release of each indemnified party from all liability arising
out of such claim, action, suit or proceeding.
(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 Note Issuer 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 Note Issuer and one or more of the Underwriters may be subject in
such proportion as is appropriate to reflect the relative benefits received
by the Note Issuer and by the Underwriters from the offering of the
Certificates and 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 Certificates) be responsible for any amount
in excess of the underwriting discount or commission applicable to the
Certificates purchased by such Underwriter hereunder. If the allocation
provided by the immediately preceding sentence is unavailable for any
reason, the Company, the Note Issuer 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 Note Issuer and of the
Underwriters in connection with the statements or omissions which resulted
in such Losses as well as any other relevant equitable considerations.
Benefits received by the Note Issuer shall be deemed to be equal to the
total net proceeds from the offering (before deducting expenses) of the
Certificates (which shall be equal to the net proceeds from the sale of the
Notes to the Trust (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
33
statement or omission relates to information provided by the Note Issuer or
the Underwriters. The Company, the Note Issuer 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 Note Issuer or the Company within the
meaning of either the Act or the Exchange Act, each officer of the Note
Issuer or the Company who shall have signed the Registration Statement and
each director of the Note Issuer or the Company shall have the same rights
to contribution as the Note Issuer or the Company, subject in each case to
the applicable terms and conditions of this paragraph (d).
9. Default by an Underwriter. If any one or more Underwriters
--------------------------
shall fail to purchase and pay for any of the Certificates 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 Certificates set forth opposite their names in Schedule
II hereto bears to the aggregate amount of Certificates set forth opposite
the names of all the remaining Underwriters) the Certificates which the
defaulting Underwriter or Underwriters agreed but failed to purchase;
provided, however, that in the event that the aggregate amount of
-------- -------
Certificates which the defaulting Underwriter or Underwriters agreed but
failed to purchase shall exceed 10% of the aggregate amount of Certificates
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 Certificates, and if such nondefaulting Underwriters
do not purchase all the Certificates, this Agreement will terminate without
liability to any nondefaulting Underwriter, the Note Issuer 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 Note Issuer and the
34
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
Note Issuer and the Trust prior to delivery of and payment for the
Certificates, 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 Note
Issuer, the Infrastructure Bank or the Company or (B) the Transition
Property, the Notes, the Certificates, the Financing Order or the Statute,
the effect of which, in the judgment of the Representatives, materially
impairs the investment quality of the Certificates or makes it impractical
or inadvisable to market the Certificates, (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 California 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
such as to make it, in the judgment of the Representatives, impracticable
or inadvisable to proceed with the offering or delivery of the Certificates
as contemplated by the Final Prospectus (exclusive of any supplement
thereto).
11. Representations and Warranties of Infrastructure Bank. The
------------------------------------------------------
Infrastructure Bank represents and warrants to, and agrees with, each
Underwriter, the Company and the Note Issuer that the information under the
caption "The Infrastructure Bank" in the Basic Prospectus, any Preliminary
Final Prospectus or the Final Prospectus, or in any amendment thereof or
supplement thereto does not contain any untrue statement of a material fact
or omission of 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.
12. Computational Materials and ABS Term Sheets.
--------------------------------------------
(a) Each Underwriter severally represents and warrants to the
Note Issuer, the Company, the Infrastructure Bank and the STO that is has
not and will not use any information that constitutes "Computational
Materials," as defined in the SEC's No-Action Letter, dated May 20, 1994,
addressed to Xxxxxx, Xxxxxxx Acceptance Corporation I, Xxxxxx Peabody & Co.
Incorporated and Xxxxxx Structured Asset Corporation (as made generally
applicable to registrants, issuers and underwriters by
35
the SEC's response to the request of the Public Securities Association
dated May 27, 1994), with respect to the offering of the Certificates.
(b) Each Underwriter severally represents and warrants to the
Note Issuer, the Company, the Infrastructure Bank and the STO that is has
not and will not use any information that constitutes "ABS Term Sheets," as
defined in the SEC's No-Action Letter, dated February 17, 1995, addressed
to the Public Securities Association, with respect to the offering of the
Certificates.
13. Representations and Indemnities to Survive. The respective
-------------------------------------------
agreements, representations, warranties, indemnities and other statements
of the Company or its officers, the Note Issuer or its officers, the Trust
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 Note Issuer, the Trust or any of the officers, directors or controlling
persons referred to in Section 8 hereof, and will survive delivery of and
payment for the Certificates. The provisions of Sections 7 and 8 hereof
shall survive the termination or cancelation of this Agreement.
14. 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 San Diego Gas & Electric Company, 000 Xxx
Xxxxxx, Xxx Xxxxx, XX 00000, Attention: Chief Financial Officer; and if
sent to the Note Issuer, to it at SDG&E Funding LLC, 000 Xxx Xxxxxx, Xxxx
000, Xxx Xxxxx, XX 00000, Attention: President; and if sent to the Trust,
to it c/o Bankers Trust Company of California, N.A., as Certificate
Trustee, c/o Bankers Trust Company, Corporate Trust and Agency Services, at
Four Xxxxxx Xxxxxx, Xxx Xxxx, XX 00000, Attention: Structured Finance
Group; and if sent to the Infrastructure Bank, to it c/o California Trade
and Commerce Agency, at 000 X Xxxxxx, Xxxxx 0000, Xxxxxxxxxx, XX 00000,
Attention: Executive Director; and if sent to the STO, to it at 000
Xxxxxxx Xxxx, Xxxx 000, Xxxxxxxxxx, XX 00000, Attention: Deputy Treasurer.
The parties hereto, by notice to the others, may designate additional or
different addresses for subsequent communications.
36
15. 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.
16. Applicable Law. This Agreement will be governed by and
---------------
construed in accordance with the laws of the State of New York.
17. 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.
37
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 Note Issuer, the Trust, the several
Underwriters, the Infrastructure Bank and the STO.
Very truly yours,
SAN DIEGO GAS & ELECTRIC
COMPANY,
by /s/ Xxxxx Xxxxx
__________________________
Name: Xxxxx Xxxxx
Title: Chief Financial Officer
SDG&E FUNDING LLC,
by /s/ Xxxxxxx XxXxxxxxx
__________________________
Name: Xxxxxxx XxXxxxxxx
Title: President and
Chief Executive Officer
CALIFORNIA INFRASTRUCTURE AND ECONOMIC
DEVELOPMENT BANK SPECIAL PURPOSE TRUST
SDG&E-1,
by California Infrastructure and Economic
Development Bank, as Originator,
by /s/ Xxxxxxxxxxx X. Xxxxxx
__________________________
Name: Xxxxxxxxxxx X. Xxxxxx
Title: Chair
CALIFORNIA INFRASTRUCTURE AND ECONOMIC
DEVELOPMENT BANK,
by /s/ Xxxxxxxxxxx X. Xxxxxx
__________________________
Name: Xxxxxxxxxxx X. Xxxxxx
Title: Chair
00
XXXXXXXXX XX XXX XXXXX XX XXXXXXXXXX,
by /s/ Xxxxx Xxxxxx
________________________
Name: Xxxxx Xxxxxx
Title: Deputy Treasurer
The foregoing Agreement is
hereby confirmed and accepted
as of the date specified in
Schedule I hereto.
XXXXXX XXXXXXX & CO. INCORPORATED
XXXXXX BROTHERS INC.
by XXXXXX XXXXXXX & CO. INCORPORATED
by /s/ Xxxxxx Xxxxxx
__________________________
Name: Xxxxxx Xxxxxx
Title:
by XXXXXX BROTHERS INC.
by /s/ Xxxxx Xxxxxx
__________________________
Name: Xxxxx Xxxxxx
Title:
For themselves and the other
several Underwriters, if any,
named in Schedule II to the
foregoing Agreement.
39
SCHEDULE I
Underwriting Agreement dated December 4, 1997
Registration Statement No. 333-30761
Representative(s):
Xxxxxx Xxxxxxx & Co. Incorporated
0000 Xxxxxxxx
Xxx Xxxx, XX 00000
Xxxxxx Brothers Inc.
Three World Financial Center
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Title, Purchase Price and Description of Certificates:
Title: California Infrastructure and Economic
Development Bank Special Purpose Trust SDG&E-1
$658,000,000 Rate Reduction Certificates,
Series 1997-1
Principal amount, Price to Public, Underwriting
Discounts and Commissions and Proceeds to Trust:
Underwriting
Total Principal Discounts and Proceeds to
Amount of Class Price to Public Commissions Trust
--------------- ---------------- ------------- ------------
Per Class A-1 $ 65,800,000 99.99553% 0.24837% 99.74716%
Certificate
Per Class A-2 $ 82,639,254 99.98666% 0.35000% 99.63666%
Certificate
Per Class A-3 $ 66,230,948 99.98061% 0.40000% 99.58061%
Certificate
Per Class A-4 $ 65,671,451 99.96564% 0.45000% 99.51564%
Certificate
Per Class A-5 $ 96,537,839 99.99826% 0.50000% 99.49826%
Certificate
Per Class A-6 $ 197,584,137 99.98005% 0.55000% 99.43005%
Certificate
Per Class A-7 $ 83,536,371 99.93387% 0.65000% 99.28387%
Certificate --------------- --------------- ------------- ---------------
Total $658,000,000.00 $657,854,287.38 $3,125,498.53 $654,728,788.85
40
Plus the Underwriters will be reimbursed by the Note Issuer for:
----
$186,850 of expenses,
consisting of $154,000
of out-of-pocket expenses and
Original Issue Discount (if any): $145,712.62
Redemption provisions: Optional Redemption and Mandatory Redemption
as set forth in Article X of the Indenture
Other provisions:
Closing Date, Time and Location: December 16, 1997,
6:00 a.m., Pacific
Standard Time,
San Diego, CA
Type of Offering: Delayed Offering
Date referred to in Section 5(a)(vi) 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
31, 1997
41
SCHEDULE II
Principal Amount of Certificates to be Purchased
-----------------------------------------------------
Underwriters Class A-1 Class A-2 Class A-3 Class A-4
------------ Certificates Certificates Certificates Certificates
------------ ------------ ------------ ------------
Xxxxxx Xxxxxxx & Co. $36,190,000 $45,451,593 $36,427,024 $36,119,301
Incorporated
Xxxxxx Brothers Inc. 16,450,000 20,659,813 16,557,737 16,417,862
Chase Securities Inc. 3,290,000 4,131,962 3,311,547 3,283,572
Prudential Securities 3,290,000 4,131,962 3,311,547 3,283,572
Incorporated
Salomon Brothers Inc 3,290,000 4,131,962 3,311,547 3,283,572
Artemis Capital Group, Inc. 1,645,000 2,065,981 1,655,773 1,641,786
Xxxxxx X. Xxxxxxx & Co. 1,645,000 2,065,981 1,655,773 1,641,786
Inc. ----------- ----------- ----------- -----------
Total...................... $65,800,000 $82,639,254 $66,230,948 $65,671,451
=========== =========== =========== ===========
Principal Amount of Certificates to be Purchased
-------------------------------------------------
Class A-5 Class A-6 Class A-7
Certificate sCertificates Certificates Total
----------- ------------ ------------ ------------
Xxxxxx Xxxxxxx & Co. $53,095,817 $108,671,275 $45,945,007 $361,900,000
Incorporated
Xxxxxx Brothers Inc. 24,134,459 49,396,034 20,884,092 164,500,000
Chase Securities Inc. 4,826,891 9,879,207 4,176,818 32,900,000
Prudential Securities 4,826,891 9,879,207 4,176,818 32,900,000
Incorporated
Salomon Brothers Inc 4,826,891 9,879,207 4,176,818 32,900,000
Artemis Capital Group, Inc. 2,413,445 4,939,603 2,088,409 16,450,000
Xxxxxx X. Xxxxxxx & Co. 2,413,445 4,939,603 2,088,409 16,450,000
Inc. ----------- ------------ ----------- ------------
Total...................... $96,537,839 $197,584,137 $83,536,371 $658,000,000
=========== ============ =========== ============
