EXHIBIT 10.3
NOTE PURCHASE AGREEMENT
This Note Purchase Agreement (this "Agreement"), dated as of December
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8, 1997, is made by and between PG&E Funding LLC, a Delaware limited liability
company (the "Note Issuer"), and the California Infrastructure and Economic
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Development Bank Special Purpose Trust PG&E-1, a not-for-profit business trust
organized under the laws of the State of Delaware (the "Trust"), for which
Bankers Trust Company of California, N.A., a national banking association, is
acting as certificate trustee (in such capacity, the "Certificate Trustee")
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pursuant to that certain Amended and Restated Declaration and Agreement of Trust
(the "Trust Agreement"), dated as of December 8, 1997 among Bankers Trust
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(Delaware), as Delaware Trustee, the Certificate Trustee and the California
Infrastructure and Economic Development Bank (the "Infrastructure Bank"), as
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Originator.
RECITALS
A. Capitalized terms used herein without definition shall have the
meanings ascribed to them in that certain Indenture (the "Note Indenture"),
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dated as of December 8, 1997, between the Note Issuer and Bankers Trust Company
of California, N.A., a national banking association, as trustee (the "Note
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Trustee"), which is incorporated herein by this reference.
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B. On the Closing Date, and on the terms set forth herein, the Note
Issuer has agreed to sell to the Trust and the Trust has agreed to purchase from
the Note Issuer $2,901,000,000 in principal amount of PG&E Funding LLC Notes,
Series 1997-1 (the "Notes"), issued pursuant to the Note Indenture.
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AGREEMENT
NOW, THEREFORE, on the terms and conditions set forth below and for
good and valuable consideration, the receipt and adequacy of which is hereby
acknowledged, the Note Issuer and the Certificate Trustee agree as follows:
1. SALE OF NOTES
a. Authorization of Notes.
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On or before the Closing Date, the Note Issuer shall have caused to be
authorized pursuant to the Note Indenture the issuance of a series of Notes in
such classes and principal amounts as set forth in Schedule 1(a) attached hereto
and incorporated herein by this reference.
b. Issuance and Purchase.
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On the basis of the representations, warranties and covenants
contained in this Agreement and in the Note Indenture (collectively, the "Note
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Purchase Documents"), and subject to the terms and conditions of the Note
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Purchase Documents, the Note Issuer agrees to issue and
sell to the Trust and the Trust agrees to purchase from the Note Issuer, the
Notes set forth in Schedule 1(a) hereto. The purchase price of each class of
Notes is set forth in Schedule 1(a) attached hereto, and the aggregate purchase
price of the Notes shall be an amount equal to the proceeds to the Trust set
forth in Schedule I to the Underwriting Agreement dated as of November 25, 1997
(the "Underwriting Agreement"), among Pacific Gas and Electric Company, the Note
Issuer, the Trust, the California Inftrastructure and Economic Development Bank,
the California State Treasurer's Office and the underwriters named therein, for
whom Xxxxxx Xxxxxxx & Co. Incorporated and Xxxxxx Brothers Inc. are acting as
representatives , less an amount equal to $143,850 (representing reimbursable
expenses payable by the Note Issuer to the Underwriters) resulting in a net
transfer to the Note Issuer of $2,886,643,367.60.
c. Delivery.
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Delivery of, and payment of the purchase price for the Notes shall be
made by federal wire transfer of immediately available funds as early as
possible after 6:00 a.m. (P.S.T.) on the Closing Date to account designated
by the Note Issuer not later than the Business Day prior to the Closing
Date
2. CONDITIONS PRECEDENT
The obligations of the Trust to purchase the Notes under this
Agreement are subject to the satisfaction of each of the following conditions:
a. All the representations and warranties of the Note Issuer contained in
this Agreement shall be true and correct on the Closing Date with the same force
and effect as if made on and as of the Closing Date.
b. Neither the Notes nor the Certificates shall have received a lower
rating by any Rating Agency than that on which the Notes or the Certificates,
respectively, were marketed.
c. The Certificate Trustee shall have received on the Closing Date on
behalf of the Trust an Officer's Certificate dated the Closing Date confirming
the matters set forth in Sections 2(a) and 2(b).
d. The Certificate Trustee shall have received on behalf of the Trust a
copy of the executed Note Indenture (certified by an Authorized Officer of the
Note Issuer) which shall have been entered into by the Note Issuer and the Note
Trustee.
e. The Note Issuer shall not have failed at or prior to the Closing Date
to perform or comply in any material respect with any of the agreements herein
contained and required to be performed or complied with by the Note Issuer at or
prior to the Closing Date.
3. REPRESENTATIONS AND WARRANTIES
To induce the Trust to enter into this Agreement and to purchase the
Notes, the Note Issuer represents and warrants to the Trust on the date of this
Agreement that the following
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statements are true, correct and complete:
a. The Note Issuer has been duly formed and is validly existing in good
standing as a limited liability company under the laws of the State of Delaware
and has the organizational power and authority to carry on its business as
described in the Registration Statement covering the Notes (the "Registration
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Statement") and to own, lease and operate its properties, and is registered to
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transact intrastate business in the State of California.
b. This Agreement has been duly authorized, executed and delivered by the
Note Issuer.
c. The Note Indenture has been duly authorized by the Note Issuer and, on
the Closing Date, will have been validly executed and delivered by the Note
Issuer. When the Note Indenture has been duly executed and delivered by the Note
Issuer, the Note Indenture will be a valid and binding agreement of the Note
Issuer, enforceable against the Note Issuer in accordance with its terms except
as (i) the enforceability thereof may be limited by bankruptcy, insolvency or
similar laws affecting creditors' rights generally and (ii) rights of
acceleration and the availability of equitable remedies may be limited by
equitable principles of general applicability. On the Closing Date, the Note
Indenture will conform in all material respects to the requirements of the Trust
Indenture Act, and the rules and regulations of the Commission applicable to an
indenture which is qualified thereunder.
d. The Notes have been duly authorized and, on the Closing Date, will have
been validly executed and delivered by the Note Issuer. When the Notes have been
issued, executed and authenticated in accordance with the provisions of the Note
Indenture and delivered to and paid for by the Trust in accordance with the
terms of this Agreement, the Notes will be entitled to the benefits of the Note
Indenture and will be valid and binding obligations of the Note Issuer,
enforceable in accordance with their terms except as (i) the enforceability
thereof may be limited by bankruptcy, insolvency or similar laws affecting
creditors' rights generally and (ii) rights of acceleration and the availability
of equitable remedies may be limited by equitable principles of general
applicability.
e. No Default or Event of Default under the Note Indenture has occurred, is
occurring or would reasonably occur as a result of the sale of the Notes
pursuant to the terms hereof.
f. The execution, delivery and performance of this Agreement and the other
Basic Documents by the Note Issuer, compliance by the Note Issuer with all
provisions hereof and thereof and the consummation of the transactions
contemplated hereby and thereby will not (i) require any consent, approval,
authorization or other order of, or qualification with, any court or
governmental body or agency (except such as may be required under the California
Government Code, the PU Code, the Securities Act of 1933, as amended (the
"Securities Act"), or the securities or Blue Sky laws of the various states),
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(ii) conflict with or constitute a breach of any of the terms or provisions of,
or a default under, the limited liability company agreement of the Note Issuer,
(iii) violate or conflict with any applicable law or any rule, regulation,
judgment, order or decree of any court or any governmental body or agency having
jurisdiction over the Note Issuer or its property, (iv) result in the imposition
or creation of (or the obligation to create or impose) a lien under, any
agreement or instrument to which the Note Issuer is a party or by
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which the Note Issuer or its respective property is bound, except under the
Basic Documents and any statutory lien under Section 843(g) of the PU Code and
under that certain First and Refunding Mortgage dated December 1, 1920, executed
by Pacific Gas and Electric Company, as supplemented and amended to the date
hereof, in favor of BNY Western Trust Company, successor by acquisition to Xxxxx
Fargo Bank, N.A., successor by merger to First Interstate Bank of California, as
Trustee (which lien shall be released on the Closing Date contemporaneously with
the payment of the purchase price of the Notes).
g. To the best knowledge of the Note Issuer, there are no legal or
governmental proceedings pending or threatened to which the Note Issuer is or
reasonably could be a party or to which any of its property is or reasonably
could be subject, which might result, singly or in the aggregate, in a material
adverse effect on the value of the Notes.
h. The Note Issuer is not and, after giving effect to the offering and sale
of the Notes and the application of the net proceeds thereof as described in the
Registration Statement, will not be, an "investment company," as such term is
defined in the Investment Company Act of 1940, as amended.
i. The Note Issuer is not and, after giving effect to the offering and sale
of the Notes and the application of the net proceeds thereof as described in the
Registration Statement, will not be, a "holding company," as such term is
defined in the Public Utilities Holding Company Act of 1935, as amended.
j. The Note Issuer has not taken any action that might cause this Agreement
or the issuance or sale of the Notes to violate Regulation G (12 C.F.R. Part
207), Regulation T (12 C.F.R. Part 220), Regulation U (12 C.F.R. Part 221) or
Regulation X (12 C.F.R. Part 224) of the Board of Governors of the Federal
Reserve System.
k. Since the date as of which information is given in the Registration
Statement and other than as set forth in the Registration Statement (exclusive
of any amendments or supplements thereto subsequent to the date of this
Agreement), (i) there has not occurred any material adverse change or any
development involving a prospective material adverse change in the condition,
financial or otherwise, or the earnings, business, management or operations of
the Note Issuer and (ii) the Note Issuer has not incurred any material liability
or obligation, direct or contingent.
l. No Rating Agency has indicated to the Note Issuer that it has assigned
(or is considering assigning) a lower rating to the Notes or the Certificates
than that on which the Notes or the Certificates, respectively, were marketed.
m. Each certificate signed by any officer of the Note Issuer and delivered
to the Certificate Trustee or counsel for the Certificate Trustee shall be
deemed to be a representation and warranty by the Note Issuer to the Certificate
Trustee on behalf of the Trust as to the matters covered thereby.
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4. COVENANTS
The Note Issuer covenants and agrees that, until payment in full of
the Notes, unless the Certificate Trustee shall otherwise give prior written
consent, the Note Issuer shall perform all covenants in this Section 4.
a. To advise the Certificate Trustee promptly and, if requested by the
Certificate Trustee, confirm such advice in writing, of the issuance by the
Commission or any state securities commission of any stop order suspending the
qualification or exemption from qualification of any Note for offering or sale
in any jurisdiction in which the Certificates have been offered for sale, or the
initiation of any proceeding by the Commission, any state securities commission
or any other federal or state regulatory authority for such purpose. The Note
Issuer shall use its best efforts to prevent the issuance of any stop order or
order suspending the qualification or exemption of any Note or Certificate under
the Securities Act, or any state securities or Blue Sky laws and, if at any time
the Commission or any state securities commission or other federal or state
regulatory authority shall issue an order suspending the qualification or
exemption of any Note or Certificate under the Securities Act, or any state
securities or Blue Sky laws, the Note Issuer shall use its best efforts to
obtain the withdrawal or lifting of such order at the earliest possible time.
b. Not to claim voluntarily the benefit of any usury laws against the
holders of any Notes. To resist actively any attempts to claim the benefit of
any usury laws against the holders of any Notes.
c. To use its best efforts to do and perform all things required or
necessary to be done and performed under this Agreement by it prior to the
Closing Date and to satisfy all conditions precedent to the delivery of the
Notes.
d. At the written request of the Certificate Trustee or the Infrastructure
Bank, to provide, or cause to be provided, to the Certificate Trustee or the
Infrastructure Bank, as applicable, a copy of any requested certificate, notice,
opinion or other document delivered to the Note Trustee pursuant to the terms of
the Note Indenture.
5. MISCELLANEOUS
a. Fees.
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If for any reason the Notes are not delivered by or on behalf of the
Note Issuer as provided herein (other than as a result of any termination of
this Agreement pursuant to the terms hereof), the Note Issuer agrees to
reimburse the Certificate Trustee for all out-of-pocket expenses (including the
reasonable fees and disbursements of counsel) reasonably incurred by it. The
Note Issuer also agrees to reimburse the Certificate Trustee, the Delaware
Trustee and the Infrastructure Bank and their respective officers, directors and
each person, if any, who controls the Certificate Trustee, the Delaware Trustee
or the Infrastructure Bank within the meaning of Section 15 of the Securities
Act or Section 20 of the Exchange Act for any and all fees and expenses
(including without limitation the reasonable fees and expenses of counsel)
reasonably
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incurred by them in connection with enforcing their rights under this Agreement
(including without limitation its rights under this Section 5(a)); provided,
however, that the Note Issuer's obligations pursuant to this Section 5(a) shall
be treated as Operating Expenses under the Note Indenture and shall be payable
only to the extent that funds are available for such Operating Expenses in the
priority set forth in Section 8.02(d) of the Note Indenture.
b. Effective Date of Agreement.
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This Agreement shall become effective upon the execution and delivery
of this Agreement by the parties hereto. This Agreement shall terminate
automatically upon the termination of the Underwriting Agreement prior to the
Closing.
c. Survival of Representations and Agreements.
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All agreements, representations and warranties made herein shall
survive the execution and delivery of this Agreement and the purchase of the
Notes hereunder. Notwithstanding anything in this Agreement or implied by law to
the contrary, the agreements of the Note Issuer set forth in Section 5(a) shall
survive the payment of the Notes and the termination of this Agreement.
d. Notice.
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Unless otherwise specifically provided herein, all notices,
directions, consents and waivers required under the terms and provisions of this
Agreement shall be in English and in writing, and any such notice, direction,
consent or waiver 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 notice, direction, consent or waiver shall be
effective when delivered, or if mailed, three days after deposit in the United
States mail with proper postage for ordinary mail prepaid,
if to the Note Issuer, to:
PG&E Funding LLC
000 Xxxxxx Xxxxxx, Xxxx 000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Corporate Secretary
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
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if to the Trust, in care of the Certificate Trustee at the address
specified below
if to the Certificate Trustee, to:
Bankers Trust Company of California, N.A.
c/o Bankers Trust Company
Corporate Trust and Agency Services
Four Xxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Structured Finance Group
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
if to the Delaware Trustee, to:
Bankers Trust (Delaware)
E. A. Delle Donne Corporate Center
Xxxxxxxxxx Building
0000 Xxxxxx Xxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxxx 00000-0000
Attention: M. Xxxx Xxxxxxx
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
(with a copy to the Certificate Trustee)
if to the Infrastructure Bank, to:
California Infrastructure and Economic Development Bank
c/o California Trade and Commerce Agency
000 X Xxxxxx, Xxxxx 0000
Xxxxxxxxxx, Xxxxxxxxxx 00000
Attention: Executive Director
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
3. Parties.
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Except as otherwise provided, this Agreement has been and is made
solely for the benefit of and shall be binding upon the Note Issuer, the Trust,
the Certificate Trustee, the Delaware Trustee, the Infrastructure Bank, the
directors and officers of the Certificate Trustee, the Delaware Trustee, the
Infrastructure Bank, any controlling persons referred to herein, the directors,
officers and any manager of the Note Issuer (not in their individual capacities
but in their respective capacities as directors, officers or manager of the Note
Issuer) and their respective successors and assigns, all as and to the extent
provided in this Agreement, and no other person shall acquire or have any right
under or by virtue of this Agreement, except as
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contemplated by the Trust Agreement and the other Basic Documents. The term
"successors and assigns" shall not include a purchaser of any of the Notes from
the Trust merely because of such purchase.
f. Governing Law.
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This Agreement shall be governed by, and shall be construed and
enforced in accordance with, the internal laws of the State of California,
without regard to conflicts of laws or principles.
g. Severability.
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If any provision of this Agreement shall be prohibited or invalid
under applicable law, the Agreement shall be ineffective only to such extent,
without invalidating the remainder of the Agreement.
h. Nonpetition Covenants.
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Notwithstanding any prior termination of this Agreement or the Note
Indenture, but subject to the CPUC's right to order the sequestration and
payment of revenues arising with respect to the Transition Property
notwithstanding any bankruptcy, reorganization or other insolvency proceedings
with respect to the debtor, pledgor or transferor of the Transition Property
pursuant to Section 843(e) and (g) of the PU Code, each of the Certificate
Trustee and the Infrastructure Bank agrees that it shall not, prior to the date
which is one year and one day after the termination of the Note Indenture with
respect to the Note Issuer, acquiesce, petition or otherwise invoke or cause the
Note Issuer or the Trust to invoke the process of any court or government
authority for the purpose of commencing or sustaining a case against the Note
Issuer under any Federal or state bankruptcy, insolvency or similar law or
appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator or
other similar official of the Note Issuer or any substantial part of the
property or the Note Issuer, or ordering the winding up or liquidation of the
affairs of the Note Issuer or the Trust.
i. Further Assurances.
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The Note Issuer agrees to execute and deliver such instruments and
take such actions as the Certificate Trustee may, from time to time, reasonably
request in order to effectuate the purpose and to carry out the terms of this
Agreement.
j. Headings.
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Section and subsection headings in this Agreement are included herein
for convenience of reference only and shall not constitute a part of this
Agreement for any other purpose or be given any substantive effect.
k. Counterparts.
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This Agreement may be signed in various counterparts which together
shall
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constitute one and the same instrument.
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IN WITNESS WHEREOF, the Note Issuer and the Trust have caused this
Note Purchase Agreement to be duly executed by their respective officers,
thereunto duly authorized, all as of the day and year first above written.
PG&E FUNDING LLC,
a Delaware limited liability company
By:_________________________________
Name: Xxxxxxx X. Xxxxxxx
Title: Treasurer
BANKERS TRUST COMPANY OF
CALIFORNIA, N.A.,
not in its individual capacity but
solely as Certificate Trustee on behalf of the
California Infrastructure and Economic
Development Bank Special Purpose Trust PG&E-1
By:_________________________________
Name: Xxxxx X. Xxxxxxx
Title: Vice President
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SCHEDULE 1(a)
NOTES
CLASS OF NOTE PRINCIPAL AMOUNT PURCHASE PRICE
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A-1 $125,000,000 99.78717%
A-2 $265,000,000 99.69664%
A-3 $280,000,000 99.63875%
A-4 $300,000,000 99.57709%
A-5 $290,000,000 99.53630%
A-6 $375,000,000 99.45817%
A-7 $866,000,000 99.43876%
A-8 $400,000,000 99.34358%
