EXHIBIT 1.1
CPL Transition Funding LLC
Transition Notes, Series [_________]
Central Power and Light Company
Underwriting Agreement
----------------------
___________ ___, 2002
Xxxxxxx, Xxxxx & Co.
[Names of Co-Representatives]
c/o Goldman, Sachs & Co.,
00 Xxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
From time to time, CPL Transition Funding LLC, a limited liability
company formed under the laws of the State of Delaware (the "Issuer"), and
Central Power and Light Company, a Texas corporation (the "Company"), each
proposes to enter into one or more Pricing Agreements in the form of Annex I
hereto (each a "Pricing Agreement"), with such additions and deletions as the
parties thereto may determine, and the Issuer proposes, subject to the terms and
conditions stated herein, to issue and sell to the Underwriters named in
Schedule I to the applicable Pricing Agreement (such firms constituting the
"Underwriters" with respect to such Pricing Agreement and the Securities
specified therein) certain of the Issuer's Transition Notes (the "Securities").
The Securities covered by such Pricing Agreement are referred to as the
"Designated Securities" with respect to such Pricing Agreement.
The terms and rights of any particular issuance of Designated
Securities shall be as specified in the Pricing Agreement relating thereto.
The Issuer was formed pursuant to a Certificate of Formation dated as
of October 28, 1999 and will be governed by a limited liability company
agreement dated as of __________, 2002 (the "LLC Agreement"). The Designated
Securities will be issued pursuant to an indenture to be dated as of ________,
2002 (as amended and supplemented from time to time, including all Series
Supplements and Trustee's Issuance Certificates, the "Indenture"), between the
Issuer and U.S. Bank National Association, as indenture
trustee (the "Indenture Trustee"). The Securities will be secured primarily by,
and will be payable from, the Transition Property described in the final
financing order (the "Financing Order") dated March 27, 2000 in Docket No. 21528
issued by the Public Utility Commission of Texas ("PUCT") pursuant to subchapter
G of Chapter 39 of the Texas Utilities Code, as amended from time to time (the
"Securitization Law"), and sold to the Issuer by the Company pursuant to a
transition property purchase and sale agreement to be dated as of ________, 2002
(the "Sale Agreement") between the Company, as seller, and the Issuer. Pursuant
to the Indenture, the Issuer has granted to the Indenture Trustee, as trustee
for the benefit of the holders of the Securities, a security interest in all of
its right, title and interest in and to Transition Property as security for the
Securities. The Transition Property will be serviced pursuant to a transition
property servicing agreement to be dated as of ________, 2002 (as amended and
supplemented from time to time, the "Servicing Agreement"), between the Company,
as servicer, and the Issuer. The Issuer will also enter into an administration
agreement with the Company dated as of _________, 2002 (the "Administration
Agreement").
Capitalized terms used and not otherwise defined herein shall have the
respective meanings given to them in the Indenture (including Appendix A
thereto).
1. Particular sales of Designated Securities may be made from time to
time to the Underwriters of such Designated Securities, for whom the firms
designated as representatives of the Underwriters of such Designated Securities
in the Pricing Agreement relating thereto will act as representatives (the
"Representatives"). The term "Representatives" also refers to a single firm
acting as sole representative of the Underwriters and to an Underwriter or
Underwriters who act without any firm being designated as its or their
representatives. This Underwriting Agreement shall not be construed as an
obligation of the Issuer to sell any of the Securities or as an obligation of
any of the Underwriters to purchase any of the Securities. The obligation of the
Issuer to issue and sell any of the Securities and the obligation of any of the
Underwriters to purchase any of the Securities shall be evidenced by the Pricing
Agreement with respect to the Designated Securities specified therein. Each
Pricing Agreement shall specify the aggregate principal amount of Designated
Securities, the initial public offering price of such Securities or the manner
of determining such price, the terms of the Designated Securities, the purchase
price to the Underwriters of such Designated Securities, the names of the
Underwriters of such Designated Securities, the names of the Representatives of
such Underwriters, the aggregate principal amount of such Designated Securities
to be purchased by each Underwriter and the commission payable to the
Underwriters with respect thereto and shall set forth the date, time and manner
of delivery of such Designated Securities, and payment therefor. The Pricing
Agreement shall also specify (to the extent not set forth in the registration
statement and prospectus with respect thereto) the terms of such Designated
Securities. A Pricing Agreement may be evidenced by an exchange of telegraphic
communications or any other rapid transmission device designed to produce a
written record of communications transmitted. The obligations of the
Underwriters under this Agreement and each Pricing Agreement shall be several
and not joint.
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2. Each of the Company and the Issuer, jointly and severally,
represents and warrants to, and agrees with, each of the Underwriters that:
(a) The Issuer and the Securities meet the requirements for
the use of Form S-3 and Rule 415 under the Securities Act of 1933, as
amended (the "Act"), and the Issuer has filed a registration statement
on Form S-3 (File No. 333-91273), as amended by Amendment No. 1 and
Amendment No. 2 thereto (the "Initial Registration Statement"), in
respect of the Securities, including a prospectus relating to the
Securities, and the offering thereof from time to time in accordance
with Rule 415 under the Act with the Securities and Exchange Commission
(the "Commission"); the Initial Registration Statement and any
post-effective amendment thereto, each in the form heretofore delivered
or to be delivered to the Representatives and, excluding exhibits to
such registration statement but including all documents incorporated by
reference in the prospectus included therein, to the Representatives
for each of the other Underwriters has been declared effective by the
Commission in such form; other than a registration statement, if any,
increasing the size of the offering (a "Rule 462(b) Registration
Statement"), filed pursuant to Rule 462(b) under the Act, which becomes
effective upon filing, no other document with respect to the Initial
Registration Statement or document incorporated by reference therein
has heretofore been filed, or transmitted for filing, with the
Commission (other than prospectuses filed pursuant to Rule 424 under
the Act, each in the form heretofore delivered to the Representatives);
and no stop order suspending the effectiveness of the Initial
Registration Statement, any post-effective amendment thereto or the
Rule 462(b) Registration Statement, if any, has been issued and no
proceeding for that purpose has been initiated or threatened, to the
knowledge of the Company or the Issuer, by the Commission (any
preliminary prospectus included in the Initial Registration Statement
or filed with the Commission pursuant to Rule 424(a) under the Act, is
hereinafter called a "Preliminary Prospectus"; the various parts of the
Initial Registration Statement, any post-effective amendment thereto
and the 462(b) Registration Statement, if any, including all exhibits
thereto, any information contained in the form of final prospectus
filed with the Commission pursuant to Rule 424(b) under the Act in
accordance with Section 5(a) hereof and deemed by virtue of Rule 430A
under the Act to be part of the Initial Registration Statement at the
time it was declared effective and the documents incorporated by
reference in the prospectus contained in the Initial Registration
Statement at the time such part of the Initial Registration Statement
became effective (but excluding Form T-1), each as amended at the time
such part of the Initial Registration Statement became effective or
such part of the Rule 462(b) Registration Statement, if any, became or
hereafter becomes effective, are hereinafter collectively called the
"Registration Statement"; the final prospectus relating to the
Securities in the form in which it has most recently been filed, or
transmitted for filing, with the Commission on or prior to the date of
this Agreement is hereinafter called the "Prospectus"; any reference
herein to any
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Preliminary Prospectus or the Prospectus shall be deemed to refer to
and include the documents incorporated by reference therein pursuant to
Item 12 of Form S-3 under the Act, as of the date of such Preliminary
Prospectus or Prospectus, as the case may be; any reference to any
amendment or supplement to any Preliminary Prospectus or the Prospectus
shall be deemed to refer to and include any documents filed after the
date of such Preliminary Prospectus or Prospectus, as the case may be,
under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and incorporated by reference in such Preliminary Prospectus or
Prospectus, as the case may be; any reference to any amendment to the
Registration Statement shall be deemed to refer to and include any
annual report of the Issuer filed pursuant to Section 13(a) or 15(d) of
the Exchange Act after the effective date of the Initial Registration
Statement that is incorporated by reference in the Registration
Statement; and any reference to the Prospectus as amended or
supplemented shall be deemed to refer to the Prospectus as amended or
supplemented in relation to the applicable Designated Securities in the
form in which it is filed with the Commission pursuant to Rule 424(b)
under the Act in accordance with Section 5(a) hereof, including any
documents incorporated by reference therein as of the date of such
filing).
(b) Any documents incorporated by reference in the Prospectus
as amended or supplemented, when they became effective or were filed
with the Commission, as the case may be, conformed in all material
respects to the requirements of the Act or the Exchange Act, as
applicable, and the rules and regulations of the Commission thereunder,
and none of such documents contained an untrue statement of a material
fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein not misleading; and any
further documents so filed and incorporated by reference in the
Prospectus or any further amendment or supplement thereto, when such
documents become effective or are filed with the Commission, as the
case may be, will conform in all material respects to the requirements
of the Act or the Exchange Act, as applicable, and the rules and
regulations of the Commission thereunder and will not contain an untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading; provided, however, that this representation and warranty
shall not apply to any statements or omissions made in reliance upon
and in conformity with information furnished in writing to the Issuer
or the Company by an Underwriter of Designated Securities through the
Representatives expressly for use in the Prospectus as amended or
supplemented relating to such Designated Securities.
(c) The Registration Statement, as of its effective date, the
Preliminary Prospectus, as of its date, and the Prospectus, at the time
it is filed with the Commission, conform and will conform, as the case
may be, and any further amendments or supplements to the Registration
Statement, the Preliminary Prospectus or the Prospectus will conform,
in all material respects with the
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applicable requirements of the Act, the Exchange Act and the Trust
Indenture Act of 1939, as amended (the "Trust Indenture Act"), and the
rules and regulations of the Commission thereunder; neither the
Registration Statement nor any amendment thereto, as of the applicable
effective date, nor the Preliminary Prospectus, as of its date,
contains or will contain an untrue statement of a material fact or
omits or will omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading; and
each of the Prospectus and any amendment or supplement thereto at the
time it is filed with the Commission, does not include and will not
include an untrue statement of a material fact and does not omit and
will not omit to state a material fact necessary to make the statements
therein in light of the circumstances under which they were made not
misleading; provided, however, that this representation and warranty
shall not apply to the part of the Registration Statement that
constitutes the statement of eligibility on Form T-1 under the Trust
Indenture Act of the Indenture Trustee and any statements or omissions
made in reliance upon and in conformity with information furnished in
writing to the Issuer or the Company by an Underwriter of Designated
Securities through the Representatives expressly for use in the
Registration Statement or the Prospectus as amended or supplemented
relating to such Designated Securities.
(d) Since the respective dates as of which information is
given in the Registration Statement and in the Prospectus as amended or
supplemented, there has been no (i) material adverse change in the
condition, financial or otherwise, or in the earnings, business or
operations of the Company and its subsidiaries, taken as a whole, or
the Issuer, (ii) adverse development concerning the business or assets
of the Company and its subsidiaries, taken as a whole, or the Issuer,
which would result in a material adverse change in the prospective
financial condition or results of operations of the Company and its
subsidiaries, taken as a whole, or the Issuer, or (iii) material
adverse effect on the ability of the Company or the Issuer to perform
its obligations under this Agreement, any Pricing Agreement, the Sale
Agreement, the Servicing Agreement or any other Basic Document to which
it is a party, except, in each case, such changes as are set forth or
contemplated in such Registration Statement or the Prospectus as
amended or supplemented (including the financial statements and notes
thereto included or incorporated by reference therein) (clauses (i),
(ii) and (iii) hereof are collectively referred to herein as a
"Material Adverse Effect").
(e) The Issuer has been duly formed and is validly existing as
a limited liability company in good standing under the Limited
Liability Company Act of the State of Delaware (the "Delaware LLC Act")
with full power and authority to execute, deliver and perform its
obligations under this Agreement, any Pricing Agreement, the
Securities, the Sale Agreement, the Servicing Agreement, the Indenture,
the LLC Agreement, the Intercreditor Agreement, any Swap Agreement, the
Administration Agreement and the other agreements and instruments
contemplated by the LLC Agreement (collectively, the "Issuer
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Documents") and to own its properties and conduct its business as
described in the Prospectus as amended or supplemented; the Issuer has
been duly qualified as a foreign limited liability company for the
transaction of business and is in good standing under the laws of each
other jurisdiction in which it owns or leases properties or conducts
any business so as to require such qualification, except where failure
to so qualify would not have a Material Adverse Effect on the Issuer;
the Issuer has conducted and will conduct no business in the future
that would be inconsistent with the description of the Issuer set forth
in the Prospectus as amended or supplemented; the Issuer is not a party
to or bound by any agreement or instrument other than the Issuer
Documents; the Issuer has no liabilities or obligations other than
those arising out of the transactions contemplated by the Issuer
Documents and as described in the Prospectus; based on current law, the
Issuer is not classified as an association taxable as a corporation for
United States federal income tax purposes; and the Issuer is not a
party to or subject to any action, suit or proceeding of any nature
other than Docket No. 21528 before the PUCT entitled "Application of
Central Power and Light Company for Financing Order to Securitize
Regulatory Assets and Other Qualified Costs".
(f) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Texas, with full corporate power and authority to execute, deliver
and perform its obligations under this Agreement, the Sale Agreement
and the Servicing Agreement and to own its properties and conduct its
business as described in the Prospectus as amended or supplemented, and
has been duly qualified as a foreign corporation for the transaction of
business and is in good standing under the laws of each other
jurisdiction in which it owns or leases properties, or conducts any
business so as to require such qualification except where the failure
to so qualify would not have a Material Adverse Effect on the Company.
(g) The Company has no significant subsidiaries, as
"significant subsidiary" is defined in Rule 405 of Regulation C of the
rules and regulations promulgated by the Commission under the Act.
(h) This Agreement and any Pricing Agreement have been duly
authorized, executed and delivered by each of the Company and the
Issuer and conform to the descriptions thereof in the Prospectus.
(i) The Securities have been duly and validly authorized by
the Issuer in accordance with the LLC Agreement, and, when executed and
authenticated in accordance with the Indenture and delivered pursuant
to this Agreement and, in the case of the Designated Securities,
pursuant to the Pricing Agreement with respect to such Designated
Securities, such Designated Securities will have been duly executed,
authenticated, issued and delivered and will constitute valid and
legally binding obligations of the Issuer entitled to the benefits
provided by the
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Indenture; the Securities and the Indenture conform in all material
respects to the description thereof contained in the Registration
Statement and the Designated Securities will conform in all material
respects to the description thereof contained in the Prospectus as
amended or supplemented; and the issuance of the Securities is not
subject to preemptive or other similar rights; and the terms of the
Securities are valid and binding on the Issuer.
(j) The Indenture has been duly and validly authorized by the
Issuer and when executed and delivered by the Issuer and the Trustee
will have been duly executed and delivered and will constitute a valid
and legally binding obligation of the Issuer enforceable in accordance
with its terms, except as limited by bankruptcy, insolvency, fraudulent
conveyance, reorganization and other similar laws relating to or
affecting creditors' rights generally and general equitable principles
(whether considered in a proceeding in equity or at law); and the
Indenture has been qualified under the Trust Indenture Act.
(k) Other than as set forth in the Prospectus as amended or
supplemented, there is no legal or governmental proceedings or any
arbitration pending or, to the knowledge of the Issuer or the Company,
threatened to which the Issuer or the Company or any of the Company's
subsidiaries is a party or to which any of the properties of the
Company or any of its subsidiaries is subject, which are required to be
described in the Prospectus as amended or supplemented; and there are
no contracts or other documents that are required to be described in
the Registration Statement or the Prospectus as amended or supplemented
or to be filed as exhibits to the Registration Statement that are not
described or filed as required.
(l) The Company (i) is in compliance with any and all
applicable foreign, federal, state and local laws and regulations
relating to the protection of human health and safety, the environment
or hazardous or toxic substances or wastes, pollutants or contaminants
("Environmental Laws"), (ii) has received all permits, licenses or
other approvals required of them under applicable Environmental Laws to
conduct their respective businesses and (iii) is in compliance with all
terms and conditions of any such permit, license or approval, except
where such noncompliance with Environmental Laws, failure to receive
required permits, licenses or other approvals or failure to comply with
the terms and conditions of such permits, licenses or approvals would
not, singly or in the aggregate, have a Material Adverse Effect on the
Company.
(m) Each of the Sale Agreement and the Servicing Agreement has
been duly and validly authorized by each of the Company and the Issuer
and when, executed and delivered by each of the Company and the Issuer
will constitute a valid and legally binding obligation of each of the
Company and the Issuer enforceable against each of the Company and the
Issuer in accordance with its terms, except as limited by bankruptcy,
insolvency, fraudulent conveyance, reorganization and other similar
laws relating to or affecting creditors' rights
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generally and general equitable principles (whether considered in a
proceeding in equity or at law).
(n) Each of the LLC Agreement and Intercreditor Agreement has
been duly and validly authorized, and when executed and delivered by
the Company will constitute a valid and legally binding agreement of
the Company enforceable in accordance with its terms, except as limited
by bankruptcy, insolvency, fraudulent conveyance, reorganization and
other similar laws relating to or affecting creditors' rights generally
and general equitable principles (whether considered in a proceeding in
equity or at law).
(o) The Commission has entered two orders, HCAR No. 26811 and
HCAR No. 27168 (together, the "1935 Act Orders") under the Public
Utility Holding Company Act of 1935, as amended (the "1935 Act"),
permitting to become effective the Form U-1 Application-Declaration
filed by the Company authorizing the creation of the Issuer, the sale
and transfer of the Transition Property to the Issuer, and the issue
and sale of the Securities by the Issuer. A copy of such order
heretofore entered by the Commission has been or will be delivered to
Xxxxxxx, Xxxxx & Co., on behalf of the Representatives.
(p) The issue and sale of the Securities by the Issuer, the
compliance by the Issuer with all of the provisions of this Agreement,
any Pricing Agreement, the Sale Agreement, the Servicing Agreement and
the Indenture, and the consummation of the transactions contemplated
herein and therein will not conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute a default
under, any indenture or other agreement or instrument to which the
Issuer is a party or by which the Issuer is bound or to which any of
the property or assets of the Issuer is subject, which conflict,
breach, violation or default would be material to the issue and sale of
the Securities or would have a Material Adverse Effect on the Issuer,
nor will such action result in any violation of the provisions of the
LLC Agreement or any statute or any order, rule or regulation of any
court or governmental agency or body having jurisdiction over the
Issuer or any of its properties; and no consent, approval,
authorization, order, license, certificate, permit, registration or
qualification of or with any such court or governmental agency or body,
other than the Financing Order and the 1935 Act Orders, which have been
duly obtained and are in full force and effect, is required, for the
issue and sale of the Securities by the Issuer or the consummation by
the Issuer of the transactions contemplated by this Agreement, any
Pricing Agreement, the Sale Agreement, the Servicing Agreement and the
Indenture, except such as have been, or will have been prior to the
Time of Delivery (as defined in Section 4 hereof), obtained under the
Act and the Exchange Act, the qualification of the Indenture under the
Trust Indenture Act, and such consents, approvals, authorizations,
orders, licenses, certificates, permits, registrations or
qualifications as have already been obtained, or as may be required
under state
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securities or Blue Sky laws in connection with the purchase of the
Securities and the distribution of the Securities by the Underwriters.
(q) The compliance by the Company with all of the provisions
of this Agreement, any Pricing Agreement, the Sale Agreement, the
Servicing Agreement and the LLC Agreement, and the consummation of the
transactions contemplated herein and therein will not conflict with or
result in a breach or violation of any of the terms or provisions of,
or constitute a default under, any indenture or other agreement or
instrument to which the Company or any of its subsidiaries is a party
or by which the Company or any of its subsidiaries is bound or to which
any of the property or assets of the Company or any of its subsidiaries
is subject, which conflict, breach, violation or default would be
material to the issue and sale of the Securities or would have a
Material Adverse Effect on the Company and its subsidiaries taken as a
whole, nor will such action result in any violation of the provisions
of the Restated Articles of Incorporation or by-laws of the Company or
the charter or by-laws of any of its subsidiaries or any statute or any
order, rule or regulation of any court or governmental agency or body
having jurisdiction over the Company or any of its subsidiaries or any
of their properties; and no consent, approval, authorization, order,
license, certificate, permit, registration or qualification of or with
any such court or other governmental agency or body, other than the
Financing Order and the 1935 Act Orders, which have been duly obtained
and are in full force and effect, is required for the consummation by
the Company of the transactions contemplated by this Agreement, any
Pricing Agreement, the Sale Agreement, the Servicing Agreement or the
LLC Agreement, except the registration under the Act of the Securities,
the qualification of the Indenture under the Trust Indenture Act and
such consents, approvals, authorizations, orders, licenses,
certificates, permits, registrations or qualifications as have already
been obtained, or as may be required under state securities or Blue Sky
laws and in connection with the purchase of the Securities and
distribution of the Securities by the Underwriters.
(r) Neither the Issuer or the Company is in violation of its
organizational documents or in default in the performance or observance
of any obligation, agreement, covenant or condition contained in any
indenture or other agreement or instrument to which it is a party or by
which it or any of its properties may be bound, which violation or
default would be material to the issue and sale of the Securities or
would have a Material Adverse Effect on the Company and its
subsidiaries taken as a whole or the Issuer.
(s) The statements set forth in the Prospectus under the
captions "Description of the Notes" and "Security for the Notes",
insofar as they purport to constitute a summary of the terms of the
Securities and under the captions "Energy Deregulation and New Texas
Market Structure", "Description of the Transition Property", "The Sale
Agreement" and "The Servicing Agreement", insofar as they purport to
describe the provisions of the laws and documents
9
referred to therein, are accurate summaries in all material respects of
such laws and documents.
(t) Neither the Issuer nor the Company is, and after giving
effect to the offering and sale of the Securities and the use of the
proceeds thereof, neither the Issuer nor the Company will be, an
"investment company" or an entity "controlled" by an "investment
company" as such terms are defined in the Investment Company Act of
1940, as amended (the "Investment Company Act").
(u) Xxxxxx Xxxxxxxx LLP, who have certified financial
statements of the Company and the Company's subsidiaries for the
periods ____ and Deloitte & Touche, LLP, who have certified financial
statements of the Company and the Company's subsidiaries for the
periods ____, are each independent public accountants as required by
the Act and the rules and regulations of the Commission thereunder.
(v) Deloitte & Touche LLP, who have certified financial
statements of the Issuer [for the periods ____], are independent public
accountants as required by the Act and the rules and regulations of the
Commission thereunder.
3. Upon the execution of the Pricing Agreement applicable to any
Designated Securities, the several Underwriters party to such Pricing Agreement
propose to offer the Designated Securities for sale upon the terms and
conditions set forth in the Prospectus as amended or supplemented.
4. The Designated Securities to be purchased by each Underwriter and
under the applicable Pricing Agreement, in the form specified in the related
Pricing Agreement, and in such authorized denominations and registered in such
names as Xxxxxxx, Sachs & Co. may request upon at least forty-eight hours' prior
notice to the Issuer, shall be delivered by or on behalf of the Issuer to the
Representatives, through the facilities of The Depository Trust Company ("DTC"),
for the accounts of the several Underwriters, against payment by or on behalf of
the several Underwriters of the purchase price therefor by wire transfer of
immediately available funds to the account specified by the Issuer to the
Representatives at least forty-eight hours in advance. The Issuer will cause the
certificates representing the Designated Securities to be made available for
checking and packaging by the Representatives at least twenty-four hours prior
to the Time of Delivery (as defined below). The time, date and place of such
delivery shall be as Xxxxxxx, Xxxxx & Co. and the Issuer shall specify in the
related Pricing Agreement. Such time and date are herein called the "Time of
Delivery".
5. Each of the Issuer and the Company, jointly and severally agrees
with each of the Underwriters of any Designated Securities:
(a) To prepare the Prospectus as amended and supplemented in
relation to the applicable Designated Securities in a form approved by
the Representatives and to file such Prospectus pursuant to Rule 424(b)
under the Act not later than the Commission's close of business on the
second business day following the
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execution and delivery of the Pricing Agreement relating to the
applicable Designated Securities, or, if applicable, such time as may
be required by Rule 424(b) under the Act; to make no further amendment
or any supplement to the Registration Statement or Prospectus as
amended or supplemented after the date of the Pricing Agreement
relating to such Securities and prior to any Time of Delivery for such
Securities which shall be disapproved in writing by the Representatives
for such Securities promptly after reasonable notice thereof; to advise
the Representatives promptly of any such amendment or supplement after
any Time of Delivery for such Securities and furnish the
Representatives with copies thereof; to file promptly all reports and
any definitive proxy or information statements required to be filed by
the Issuer or the Company with the Commission pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Exchange Act for so long as the
delivery of a prospectus is required in connection with the offering or
sale of such Securities, and during such same period to advise the
Representatives, promptly after it receives notice thereof, of the time
when any amendment to the Registration Statement has been filed or
becomes effective or any supplement to the Prospectus or any amended
Prospectus has been filed with the Commission, of the issuance by the
Commission of any stop order or of any order preventing or suspending
the use of any prospectus relating to the Securities, of the suspension
of the qualification of the Securities for offering or sale in any
jurisdiction, of the initiation or threatening of any proceeding for
any such purpose, or of any request by the Commission for the amending
or supplementing of the Registration Statement or Prospectus or for
additional information; and, in the event of the issuance of any such
stop order or of any such order preventing or suspending the use of any
prospectus relating to the Securities or suspending any such
qualification, promptly to use its best efforts to obtain the
withdrawal of such order;
(b) Promptly from time to time to take such action as the
Representatives may reasonably request to qualify the Securities for
offering and sale under the securities laws of such jurisdictions as
the Representatives may request and to comply with such laws so as to
permit the continuance of sales and dealings therein in such
jurisdictions for as long as may be necessary to complete the
distribution of such Securities, provided that in connection therewith
neither the Issuer nor the Company shall be required to qualify as a
foreign corporation or limited liability company or to qualify as a
dealer in securities or to file any general consents to service of
process in any jurisdiction;
(c) To use its reasonable best efforts to furnish, prior to
12:00 noon, New York City time, on the New York Business Day next
succeeding the date of the applicable Pricing Agreement and from time
to time during the period when a prospectus is required to be delivered
under the Act by any Underwriter or dealer, the Underwriters with
copies of the Prospectus as amended or supplemented in New York City in
such quantities as the Representatives may reasonably request, and if,
in the reasonable opinion of counsel to the Company, the delivery of a
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prospectus is required at any time in connection with the offering or
sale of the Securities and if at such time any event shall have
occurred as a result of which the Prospectus as then amended or
supplemented would in the reasonable opinion of counsel for the Company
include an untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made when such
Prospectus is delivered, not misleading, or, if for any other reason it
shall be necessary during such period to amend or supplement the
Prospectus or to file under the Exchange Act any document incorporated
by reference in the Prospectus in order to comply in the reasonable
opinion of counsel for the Company with the Act, the Exchange Act or
the respective rules thereunder, to notify the Representatives and upon
their request to file such document with the Commission and to prepare
and furnish without charge to each Underwriter and to any dealer in
securities as many written and electronic copies as the Representatives
may from time to time reasonably request of an amended Prospectus or a
supplement to the Prospectus, if any, which will correct such statement
or omission or effect such compliance;
(d) To make generally available to its security holders as
soon as practicable, but in any event not later than eighteen months
after the effective date of the Registration Statement (as defined in
Rule 158(c) under the Act), an earnings statement of the Issuer (which
need not be audited) complying with Section 11(a) of the Act and the
rules and regulations of the Commission thereunder (including, at the
option of the Company, Rule 158);
(e) During the period beginning from the date of the Pricing
Agreement for such Designated Securities and continuing to and
including the earlier of (i) the date, after the Time of Delivery, on
which the distribution of such Designated Securities ceases, as
determined by the Representatives on behalf of the Underwriters, and
(ii) 30 days after the Time of Delivery for such Designated Securities,
not to offer, sell, contract to sell or otherwise dispose of, except as
provided hereunder, any securities of the Issuer, any other membership
interests of the Issuer, or any other securities of the Issuer or the
Company, as the case may be, that are substantially similar to the
Designated Securities and including but not limited to any securities
that are convertible into or exchangeable for, or that represent the
right to receive Securities or any substantially similar securities of
either the Issuer or the Company, without the prior consent of the
Representatives;
(f) If the Issuer and the Company elect to rely upon Rule
462(b), to file a Rule 462(b) Registration Statement with the
Commission in compliance with Rule 462(b) by 10:00 p.m. Washington,
D.C. time, on the date of the applicable Pricing Agreement, and at the
time of filing either pay to the Commission the filing fee for the Rule
462(b) Registration Statement or give irrevocable instructions for the
payment of such fee pursuant to Rule 111(b) under the Act;
12
(g) To cause the proceeds for the issuance and sale of the
Securities to be applied for the purposes described in the Prospectus
and in compliance with the Securitization Law and the Financing Order
and to furnish or cause to be furnished to the Representatives copies
of all reports required by Rule 463 under the Act;
(h) So long as any of the Securities are outstanding, to
deliver to the Representatives the annual statements of compliance and
the annual independent auditor's servicing reports furnished to the
Issuer or the Indenture Trustee pursuant to the Servicing Agreement or
the Indenture, as applicable, as soon as such statements or reports, as
the case may be, are furnished to the Note Issuer or Indenture Trustee;
(i) So long as any of the Securities are outstanding, to
furnish to the Representatives (i) as soon as available, a copy of each
report filed by it with the Commission under the Exchange Act, or
mailed to holders of Securities, (ii) a copy of any filings with the
PUCT pursuant to the Financing Order or the Securitization Law and
(iii) any information concerning either of the Company or the Issuer,
as the Representatives may reasonably request from time to time; and
(j) To the extent that any rating necessary to satisfy the
condition set forth in Section 7(aa) hereof is conditioned upon the
furnishing of documents or taking of other actions by the Issuer or the
Company on or after the Closing Date, to furnish such documents and
take such other actions.
6. Each of the Issuer and the Company, jointly and severally, covenants
and agrees with the several Underwriters that it will pay or cause to be paid
the following whether or not the transactions contemplated hereunder are
consummated or this Agreement is terminated: (i) the fees, disbursements and
expenses of the Issuer's and the Company's counsel and accountants in connection
with the registration of the Securities under the Act, the reasonable fees,
disbursements and expenses of counsel to the Underwriters, and all other
expenses in connection with the preparation, printing and filing of the
Registration Statement, any Preliminary Prospectus and the Prospectus and any
amendments and supplements thereto and the mailing and delivering of copies
thereof to the Underwriters and dealers; (ii) the cost of printing or producing
any Agreement among Underwriters, this Agreement, any Pricing Agreement, the
Sale Agreement, the Servicing Agreement, the Indenture, the LLC Agreement, any
Blue Sky Memorandum and any other documents in connection with the offering,
purchase, sale and delivery of the Securities; (iii) all expenses in connection
with the qualification of the Securities for offering and sale under state
securities laws as provided in Section 5(b) hereof, including the fees and
disbursements of counsel for the Underwriters in connection with such
qualification and in connection with the Blue Sky surveys, not exceeding,
however, $6,000 in the aggregate and any filing fees incident to, and the fees
and disbursements of counsel for the Underwriters in connection with, any
required review by the National Association of Securities Dealers, Inc. of the
terms of the sale of
13
the Securities; (iv) any fees charged by securities rating services for rating
the Securities; (v) the cost of preparing the Securities and the cost of
qualifying the Securities with The Depository Trust Company; (vi) all reasonable
fees and expenses of the Issuer's Managers, the Indenture Trustee and their
respective counsel; and (vii) the cost of preparing certificates for the
Securities. It is understood, however, that, except as provided in this Section
and Sections 8 and 11 hereof, the Underwriters will pay all of their own costs
and expenses, transfer taxes on resale of any of the Securities by them, and any
advertising expenses connected with any offers they may make.
7. The obligations of the Underwriters of any Designated Securities
under the Pricing Agreement relating to such Designated Securities shall be
subject, in the discretion of the Representatives, to the condition that all
representations and warranties and other statements of the Issuer and the
Company in or incorporated by reference in the Pricing Agreement relating to
such Designated Securities, on the part of the Issuer contained in Article [ ]
of the Indenture and on the part of the Company contained in Article [ ] of the
Sale Agreement and in Section [ ] of the Servicing Agreement, are, at and as of
each Time of Delivery for such Designated Securities, true and correct, the
condition that the Issuer and the Company shall have performed all of their
respective obligations hereunder theretofore to be performed, and the following
additional conditions:
(a) The Prospectus as amended or supplemented in relation to
such Designated Securities shall have been filed with the Commission
pursuant to Rule 424(b) within the applicable time period prescribed
for such filing by the rules and regulations under the Act and in
accordance with Section 5(a) hereof; if the Issuer and the Company have
elected to rely upon Rule 462(b), the Rule 462(b) Registration
Statement shall have become effective by 10:00 p.m. Washington, D.C.
time, on the date of the applicable Pricing Agreement; no stop order
suspending the effectiveness of the Registration Statement or any part
thereof shall have been issued and no proceeding for that purpose shall
have been initiated or, to the knowledge of the Company or the
Representatives, threatened by the Commission.;
(b) Milbank, Tweed, Xxxxxx & XxXxxx LLP, counsel for the
Underwriters, shall have furnished to the Representatives their written
opinion (substantially in the form attached as Annex II(a) hereto),
dated each Time of Delivery for such Designated Securities, with
respect to the issuance and sale of the Notes, the Indenture, the other
Transaction Documents, the Registration Statement and other related
matters; and such counsel shall have received such papers and
information as they may request to enable them to pass upon such
matters;
(c) Xxxxxxxx, Xxxxxx & Finger, P.A., special Delaware counsel
for the Company and the Issuer, shall have furnished to the
Representatives their written opinion (substantially in the form
attached as Annex II(b) hereto), dated each
14
Time of Delivery for such Designated Securities, to the effect that if
properly presented to a Delaware court, a Delaware court applying
Delaware law, would conclude that in order for a person to file a
voluntary bankruptcy petition on behalf of the Issuer, the prior
affirmative vote of its Sole Member and of all of its Managers
(including the Independent Manager), as provided in Section [ ] of the
LLC Agreement is required.
(d) Xxxxxxxx, Xxxxxx & Finger, P.A., special Delaware counsel
for the Company and the Issuer, shall have furnished to the
Representatives their written opinion (substantially in the form
attached as Annex II(c) hereto), dated each Time of Delivery for such
Designated Securities, as required by Sections 2.10(3)(a), 2.10(3)(b)
and 2.10(8) of the Indenture and as more fully set forth in such Annex.
(e) Xxxxxxxx, Xxxxxx & Finger, P.A., special Delaware counsel
for the Company and the Issuer, shall have furnished to the
Representatives their written opinion (substantially in the form
attached as Annex II(d) hereto), dated each Time of Delivery for such
Designated Securities, regarding certain security interest matters, as
more fully set forth in such Annex;
(f) Sidley Xxxxxx Xxxxx & Xxxx, counsel for the Issuer and the
Company, shall have furnished to the Representatives their written
opinion (substantially in the form attached as Annex II(e) hereto),
dated each Time of Delivery for such Designated Securities, regarding
the Designated Securities and certain other matters as more fully set
forth in such Annex;
(g) Sidley Xxxxxx Xxxxx & Xxxx, counsel for the Issuer and the
Company, shall have furnished to the Representatives their written
opinion (substantially in the form attached as Annex II(f) hereto),
dated each Time of Delivery for such Designated Securities, to the
effect that a Federal court would not order the substantive
consolidation of the assets and liabilities of the Issuer with those of
the Company in the event of a bankruptcy, reorganization or other
insolvency proceeding involving the Company as more fully set forth in
such Annex;
(h) Sidley Xxxxxx Xxxxx & Xxxx, counsel for the Issuer and the
Company, shall have furnished to the Representatives their written
opinion (substantially in the form attached as Annex II(g) hereto),
dated each Time of Delivery for such Designated Securities, to the
effect that a bankruptcy court would follow applicable state law and
the LLC Agreement with respect to a bankruptcy filing by the Issuer as
more fully set forth in such Annex.
(i) Sidley Xxxxxx Xxxxx & Xxxx, counsel for the Issuer and the
Company, shall have furnished to the Representatives their written
opinion
15
(substantially in the form attached as Annex II(h) hereto), dated each
Time of Delivery for such Designated Securities, regarding certain
Federal constitutional matters relating to the Transition Property as
more fully set forth in such Annex;
(j) Sidley Xxxxxx Xxxxx & Xxxx, counsel for the Issuer and the
Company, shall have furnished to the Representatives their written
opinion (substantially in the form attached as Annex II(i) hereto),
dated each Time of Delivery for such Designated Securities, regarding
certain Federal tax matters, as more fully set forth in such Annex;
(k) Sidley Xxxxxx Xxxxx & Xxxx, counsel for the Issuer and the
Company, shall have furnished to the Representatives their written
opinion (substantially in the form attached as Annex II(j) hereto),
dated each Time of Delivery for such Designated Securities, to the
effect that the Transition Property is not subject to the lien of the
Company's First Mortgage Bond Indenture and as more fully set forth in
such Annex.
(l) Sidley Xxxxxx Xxxxx & Xxxx, counsel for the Issuer and the
Company, shall have furnished to the Representatives their written
opinion (substantially in the form attached as Annex II(k) hereto),
dated each Time of Delivery for such Designated Securities, as required
by Sections 2.10(3)(a), 2.10(3)(b) and 2.10(8) of the Indenture, and as
more fully set forth in such Annex;
(m) Xxxxxx & Xxxxxx L.L.P., special Texas counsel for the
Company and the Issuer, shall have furnished to the Representatives
their written opinion (substantially in the form attached as Annex
II(l) hereto), dated each Time of Delivery for such Designated
Securities, regarding the Designated Securities and certain other
matters as more fully set forth in such Annex;
(n) Xxxxxx & Xxxxxx L.L.P., special Texas counsel for the
Issuer and the Company, shall have furnished to the Representatives
their written opinion (substantially in the form attached as Annex
II(m) hereto), dated each Time of Delivery for such Designated
Securities, with respect to the characterization of the transfer of the
Transition Property by the Company to the Issuer as a "true sale" for
Texas law purposes;
(o) Xxxxxx & Xxxxxx L.L.P., special Texas counsel for the
Issuer and the Company, shall have furnished to the Representatives
their written opinion (substantially in the form attached as Annex
II(n) hereto), dated each Time of Delivery for such Designated
Securities, regarding certain Texas and Federal constitutional matters
relating to the Transition Property as more fully set forth in such
Annex;
16
(p) Xxxxxx & Xxxxxx L.L.P, special Texas counsel for the
Issuer and the Company, shall have furnished to the Representatives
their written opinion (substantially in the form attached as Annex
II(o) hereto), dated each Time of Delivery for such Designated
Securities, to the effect that the Transition Property is not subject
to the lien of the Company's First Mortgage Bond Indenture and as more
fully set forth in such Annex.
(q) Xxxxxx & Xxxxxx L.L.P., special Texas counsel for the
Issuer and the Company, shall have furnished to the Representatives
their written opinion (substantially in the form attached as Annex
II(p) hereto), dated each Time of Delivery for such Designated
Securities, as required by Sections 2.10(3)(a), 2.10(3)(b) and
2.10(b)(8) of the Indenture and as more fully set forth in such Annex;
(r) Xxxxxx & Xxxxxx L.L.P., special Texas counsel for the
Issuer and the Company, shall have furnished to the Representatives
their written opinion (substantially in the form attached as Annex
II(q) hereto), dated each Time of Delivery for such Designated
Securities, regarding certain Texas state tax matters, as more fully
set forth in such Annex;
(s) Xxxxxx & Whitney, special counsel for the Indenture
Trustee, shall have furnished to the Representatives their written
opinion (substantially in the form attached as Annex II(r) hereto),
dated each Time of Delivery for such Designated Securities, to the
effect set forth in such Annex;
(t) Xxxxx, Xxxxxx & Xxxxxxx, special regulatory counsel for
the Company and the Issuer, shall have furnished to the representatives
their opinion (substantially in the form attached as Annex II(s)
hereto), dated each Time of Delivery for such Designated Securities,
regarding the possibility and merits of any appeal or collateral attack
of the Securitization Law to the effect set forth in such Annex;
(u) Xxxxx, Xxxxxx & Xxxxxxx, special regulatory counsel for
the Company and the Issuer, shall have furnished to the representatives
their opinion (substantially in the form attached as Annex II(t)
hereto), dated each Time of Delivery for such Designated Securities, to
the effect that the REP payments are Transition Property within the
meaning of the Securitization Law as more fully set forth in such
Annex.
(v) Xxxxx, Xxxxxx & Xxxxxxx, special regulatory counsel for
the Company and the Issuer, shall have furnished to the representatives
their opinion (substantially in the form attached as Annex II(u)
hereto), dated each Time of Delivery for such Designated Securities,
regarding certain Texas regulatory issues as more fully set forth in
such Annex.
17
(w) On the date of the Pricing Agreement for such Designated
Securities and at each Time of Delivery for such Designated Securities,
Deloitte & Touche LLP shall have furnished to the Representatives
letters, each dated the date of the Pricing Agreement and the Time of
Delivery, respectively, to the effect set forth in Annex III hereto,
and with respect to such letter dated such Time of Delivery, as to such
other matters as the Representatives may reasonably request and in form
and substance satisfactory to the Representatives;
(x) Subsequent to the respective dates as of which information
is given in each of the Registration Statement and the Prospectus,
there shall not have been any change specified in the letters required
by subsection (w) of this Section 7 which is, in the judgment of the
Representatives, so material and adverse as to make it impracticable or
inadvisable to proceed with the offering or the delivery of the
Designated Securities as contemplated by the Registration Statement and
the Prospectus;
(y) The LLC Agreement, the Sale Agreement, the Servicing
Agreement and the Indenture and any amendment or supplement to any of
the foregoing shall have been executed and delivered, in each case in a
form reasonably satisfactory to the Representatives;
(z) Since the respective dates as of which information is
given in each of the Registration Statement and in the Prospectus as
amended prior to the date of the Pricing Agreement relating to the
Designated Securities there shall have been no (i) material adverse
change in the condition, financial or otherwise, or in the earnings,
business or operations of the Company and its subsidiaries, taken as a
whole, or the Issuer or (ii) adverse development concerning the
business or assets of the Company and its subsidiaries, taken as a
whole, or the Issuer which would result in a material adverse change in
the prospective financial condition or results of operations of the
Company and its subsidiaries, taken as a whole, or the Issuer or (iii)
development which would result in a material adverse change, in the
Transition Property, the Securities, the Financing Order, or the
Securitization Law;
(aa) The Designated Securities shall have been rated in the
highest long-term rating category by each of the Rating Agencies and on
or after the date of the Pricing Agreement relating to the Designated
Securities no downgrading shall have occurred in the rating accorded
the Securities or the Company's debt securities or preferred stock by
any "nationally recognized statistical rating organization," as that
term is defined by the Commission for purposes of Rule 436(g)(2) under
the Act.;
(bb) On or after the date of the Pricing Agreement relating to
the Designated Securities there shall not have occurred any of the
following: (i) a suspension or material limitation in trading in
securities generally on the New
18
York Stock Exchange; (ii) a suspension or material limitation in
trading in the Company's or the Issuer's securities; (iii) a general
moratorium on commercial banking activities declared by either Federal,
New York State or Texas authorities or a material disruption in
commercial banking or securities settlement or clearance services in
the United States; (iv) the outbreak or escalation of hostilities
involving the United States or the declaration by the United States of
national emergency or war or (v) the occurrence of any other calamity
or crisis or any change in financial markets in the United States or
elsewhere, if the effect of any such event specified in these clauses
(iv) or (v) in the judgment of the Representatives makes it
impracticable or inadvisable to proceed with the public offering or the
delivery of the Designated Securities on the terms and in the manner
contemplated in the Prospectus as amended or supplemented relating to
the Designated Securities;
(cc) The Issuer and the Company shall have furnished or caused
to be furnished to the Representatives at each Time of Delivery for
Designated Securities certificates of officers of the Company and the
Issuer, satisfactory to the Representatives, as to the accuracy of the
representations and warranties of the Issuer and the Company herein, in
the Sale Agreement, Servicing Agreement and the Indenture at and as of
such Time of Delivery, as to the performance by the Issuer and the
Company of all of their obligations hereunder to be performed at or
prior to such Time of Delivery, as to the matters set forth in
subsections (a) and (z) of this Section and as to such other matters as
the Representatives may reasonably request;
(dd) The Issuance Advice Letter, in a form satisfactory to the
Representatives, shall have been filed with the PUCT and shall have
become effective;
(ee) On or prior to the Time of Delivery, the 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
Securitization Law and other applicable law reflecting the grant of a
security interest by the Issuer in the Collateral to the Trustee,
including the filing of the UCC financing statements in the office of
the Secretary of State of the State of Texas and the Secretary of State
of the State of Delaware;
(ff) On or prior to the Time of Delivery, the Issuer shall
have delivered to the Representatives evidence, in form and substance
satisfactory to the Representatives, of the PUCT's issuance of the
Financing Order relating to the Transition Property and a copy of the
related Issuance Advice Letter;
(gg) Prior to the Time of Delivery, the Company shall have
funded the Capital Subaccount with cash in an amount equal to $_______;
19
(hh) The Issuer and the Company shall have furnished or caused
to be furnished to the Rating Agencies at the Time of Delivery such
opinions and certificates as the Rating Agencies may reasonably
request;
(ii) Prior to the Time of Delivery, the Issuer and the Company
shall have furnished to the Underwriters such further certificates as
the Underwriters may reasonably request, including such certificates as
the Representatives may reasonably request to evidence the
enforceability of any interest rate swap agreement entered into in
connection with any class of floating rate Designated Securities and
the qualification or listing of any floating rate Designated Securities
as contemplated by the Prospectus.
8. (a) The Issuer and the Company, jointly and severally, agree to
indemnify and hold harmless each Underwriter and each person, if any, who
controls any Underwriter within the meaning of Section 15 of the Securities Act
or Section 20 of the Exchange Act from and against any and all losses, claims,
damages or liabilities, joint or several, to which such Underwriter or such
controlling person may become subject under the Securities Act, the Exchange Act
or the common law or otherwise, and to reimburse each such Underwriter or such
controlling person for any reasonable legal or other expenses (including, to the
extent hereinafter provided, reasonable counsel fees) incurred by it or them in
connection with defending against any such losses, claims, damages or
liabilities, arising out of or based upon (i) any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement or
any amendment thereof, any preliminary prospectus or the Prospectus (as amended
or supplemented if the Issuer shall have furnished any amendments or supplements
thereto) or any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading and/or (ii) the invalidation (for any reason) of the Securitization
Law or the Financing Order; provided, however, that the indemnity agreement
contained in this subsection (a) shall not apply to any such losses, claims,
damages or liabilities arising out of or based upon (x) any such untrue
statement or alleged untrue statement, or any such omission or alleged omission,
if such statement or omission was made in reliance upon and in conformity with
information furnished in writing to the Issuer or the Company by any of the
Underwriters expressly for use in the Registration Statement or the Prospectus
or any amendment or supplement to either thereof or (y) the failure of any
Underwriter, to deliver (either directly or through the Representatives) a copy
of the Prospectus (excluding the documents incorporated therein by reference),
or of the Prospectus as amended or supplemented after it shall have been amended
or supplemented by the Company (excluding the documents incorporated therein by
reference), to any person to whom a copy of any preliminary prospectus shall
have been delivered by or on behalf of such Underwriter and to whom any
Designated Securities shall have been sold by such Underwriter, as such delivery
may be required by the Securities Act and the rules and regulations of the
Commission thereunder.
(b) Each of the Underwriters, severally and not jointly, agrees to
indemnify and hold harmless the Issuer and the Company, each of their officers
who signs the
20
Registration Statement, each of their directors, each person who controls the
Issuer or the Company within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act, each other Underwriter and each person, if any,
who so controls such other Underwriter from and against any and all losses,
claims, damages or liabilities, joint or several, to which any one or more of
them may become subject under the Securities Act, the Exchange Act or the common
law or otherwise, and to reimburse each of them for any reasonable legal or
other expenses (including, to the extent hereinafter provided, reasonable
counsel fees) incurred by them in connection with defending against any such
losses, claims, damages or liabilities of the character above specified arising
out of or based upon (i) any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement or the Prospectus or any
amendment to the Registration Statement or amendment or supplement to the
Prospectus or upon any omission or alleged omission to state in any thereof a
material fact required to be stated therein or necessary to make the statements
therein not misleading if such statement or omission was made in reliance upon
and in conformity with information furnished in writing to the Issuer or the
Company by such Underwriter expressly for use in the Registration Statement or
the Prospectus or any amendment or supplement to either thereof or (ii) the
failure of such Underwriter, due to the negligence of such Underwriter, to
deliver (either directly or through the Representatives) a copy of the
Prospectus (excluding the documents incorporated therein by reference), or of
the Prospectus as amended or supplemented after it shall have been amended or
supplemented by the Issuer (excluding the documents incorporated therein by
reference), to any person to whom a copy of any preliminary prospectus shall
have been delivered by or on behalf of such Underwriter and to whom any
Designated Securities shall have been sold by such Underwriter, as such delivery
may be required by the Securities Act and the rules and regulations of the
Commission thereunder.
(c) Promptly after receipt by a party indemnified under this Section 8
(an "indemnified party") of notice of the commencement of any action, such
indemnified party will, if a claim in respect thereof is to be made against a
party granting an indemnity under this Section 8 (the "indemnifying party"),
notify the indemnifying party in writing of the commencement thereof; but the
omission so to notify the indemnifying party will not relieve it from any
liability which it may have to any indemnified party otherwise than under this
Section 8. In case any such action is brought against any indemnified party, and
it notifies the indemnifying party of the commencement thereof, the indemnifying
party will be entitled to participate therein, and to the extent that it may
elect by written notice delivered to the indemnified party promptly after
receiving the aforesaid notice from such indemnified party, to assume the
defense thereof (thereby conceding that the action in question is subject to
indemnification by the indemnifying party), with counsel reasonably satisfactory
to such indemnified party, and shall pay the fees and disbursements of such
counsel related to such action; provided, however, that if the defendants in any
such action include both the indemnified party and the indemnifying party and
representation of both parties would be inappropriate due to actual or potential
differing interests between them, the indemnified party or parties shall have
the right to select separate counsel. Upon receipt of notice from the
indemnifying
21
party to such indemnified party of its election so to assume the defense of such
action and approval by the indemnified party of counsel, the indemnifying party
will not be liable to such indemnified party under this Section 8 for any legal
or other expenses subsequently incurred by such indemnified party in connection
with the defense thereof unless (i) the indemnified party shall have employed
separate counsel in accordance with the proviso to the next preceding sentence
(it being understood, however, that the indemnifying party shall not be liable
for the expenses of more than one separate counsel (in addition to any local
counsel), approved by the Representatives in the case of subsection (a),
representing the indemnified parties under subsection (a) who are parties to
such action and that all such fees and expenses shall be reimbursed as they are
incurred) or (ii) the indemnifying party has authorized the employment of
counsel for the indemnified party at the expense of the indemnifying party; and
except that such liability shall be only in respect of the counsel referred to
in clause (i) or (ii). The indemnifying party shall not be liable for any
settlement of any proceeding effected without its written consent, but if
settled with such consent or if there be a final judgment for the plaintiff, the
indemnifying party agrees to indemnify the indemnified party from and against
any loss or liability by reason of such settlement or judgment. No indemnifying
party shall, without the prior written consent of the indemnified party, effect
any settlement of any pending or threatened proceeding in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party, unless such settlement (i) includes
an unconditional release of such indemnified party from all liability on claims
that are the subject matter of such proceeding and (ii) does not include a
statement as to or an admission of fault, culpability or failure to act, by or
on behalf of any indemnified party.
(d) If the indemnification provided for in this Section 8 shall be
unenforceable under applicable law by an indemnified party, the Issuer and the
Company, jointly and severally, agree to contribute to such indemnified party
with respect to any and all losses, claims, damages and liabilities for which
such indemnification provided for in this Section 8 shall be unenforceable, in
such proportion as shall be appropriate to reflect the relative fault of the
Issuer and the Company on the one hand and the indemnified party on the other
hand in connection with the statements or omissions which have resulted in such
losses, claims, damages and liabilities, as well as any other relevant equitable
considerations; provided, however, that no indemnified party guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from the Issuer or the Company
if the Issuer or the Company, respectively, is not guilty of such fraudulent
misrepresentation. Relative fault shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to
information supplied by the Issuer or the Company or the indemnified party and
each such party's relative intent, knowledge, access to information and
opportunity to correct or prevent such untrue statement or omission. The Issuer,
the Company and each of the Underwriters agree that it would not be just and
equitable if contribution pursuant to this subparagraph were to be determined
solely by pro rata allocation or by any other
22
method of allocation which does not take account of the equitable considerations
referred to above.
(e) The amount paid or payable by an indemnified party as a result of
the losses, claims, damages and liabilities referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such action or claim.
(f) The indemnity and contribution agreements contained in this Section
8 and the representations and warranties of the Issuer and the Company in this
Agreement shall remain operative and in full force regardless of (i) any
termination of this Agreement, (ii) any investigation made by or on behalf of
any Underwriter or any person controlling any Underwriter or by or on behalf of
the Issuer or the Company, their directors or officers or any person controlling
the Issuer or the Company and (iii) acceptance of and payment for any of the
Designated Securities.
9. (a) If any Underwriter shall default in its obligation to purchase
the Designated Securities which it has agreed to purchase under the Pricing
Agreement relating to such Designated Securities, the Representatives may in
their discretion arrange for themselves or another party or other parties to
purchase such Designated Securities on the terms contained herein. If within
twenty-four hours after such default by any Underwriter the Representatives do
not arrange for the purchase of such Designated Securities, then the Issuer and
the Company shall be entitled to a further period of twenty-four hours within
which to procure another party or other parties satisfactory to the
Representatives to purchase such Designated Securities on such terms. In the
event that, within the respective prescribed period, the Representatives notify
the Issuer and the Company that they have so arranged for the purchase of such
Designated Securities, or the Issuer or the Company notifies the Representatives
that it has so arranged for the purchase of such Designated Securities, the
Representatives or the Issuer and the Company shall have the right to postpone a
Time of Delivery for a period of not more than seven days, in order to effect
whatever changes may thereby be made necessary in the Registration Statement or
the Prospectus as amended or supplemented, or in any other documents or
arrangements, and the Issuer and the Company agree to file promptly any
amendments or supplements to the Registration Statement or the Prospectus which
may be required in the opinion of counsel for the Issuer. The term "Underwriter"
as used in this Agreement shall include any person substituted under this
Section with like effect as if such person had originally been a party to the
Pricing Agreement with respect to such Designated Securities.
(b) If, after giving effect to any arrangements for the purchase of the
Designated Securities of a defaulting Underwriter or Underwriters by the
Representatives and the Issuer and the Company as provided in subsection (a)
above, the aggregate principal amount of such Designated Securities which
remains unpurchased does not exceed one-eleventh of the aggregate principal
amount of the Designated Securities to be purchased
23
at the respective Time of Delivery, then the Issuer and the Company shall have
the right to require each non-defaulting Underwriter to purchase the principal
amount of Designated Securities which such Underwriter agreed to purchase under
the Pricing Agreement relating to such Designated Securities and, in addition,
to require each non-defaulting Underwriter to purchase its pro rata share (based
on the principal amount of Designated Securities which such Underwriter agreed
to purchase under such Pricing Agreement) of the Designated Securities of such
defaulting Underwriter or Underwriters for which such arrangements have not been
made; but nothing herein shall relieve a defaulting Underwriter from liability
for its default.
(c) If, after giving effect to any arrangements for the purchase of the
Designated Securities of a defaulting Underwriter or Underwriters by the
Representatives and the Issuer and the Company as provided in subsection (a)
above, the aggregate principal amount of Designated Securities which remains
unpurchased exceeds one-eleventh of the aggregate principal amount of Designated
Securities to be purchased at the respective Time of Delivery, as referred to in
subsection (b) above, or if the Issuer and the Company shall not exercise the
right described in subsection (b) above to require non-defaulting Underwriters
to purchase Designated Securities of a defaulting Underwriter or Underwriters,
then the Pricing Agreement relating to such Designated Securities shall
thereupon terminate, without liability on the part of any non-defaulting
Underwriter, the Issuer or the Company, except for the expenses to be borne by
the Company and the Issuer as provided in Section 6 hereof and the indemnity and
contribution agreements in Section 8 hereof; but nothing herein shall relieve a
defaulting Underwriter from liability for its default.
10. The respective indemnities, agreements, representations, warranties
and other statements of the Issuer, the Company and the several Underwriters, as
set forth in this Agreement or made by or on behalf of them, respectively,
pursuant to this Agreement, shall remain in full force and effect, regardless of
any investigation (or any statement as to the results thereof) made by or on
behalf of any Underwriter or any controlling person of any Underwriter, or the
Issuer, the Company or any officer, trustee or director or controlling person of
the Issuer or the Company, and shall survive delivery of and payment for the
Securities.
11. If any Pricing Agreement shall be terminated pursuant to Section 9
hereof, neither the Issuer nor the Company shall then be under any liability to
any Underwriter with respect to the Designated Securities with respect to which
such Pricing Agreement shall have been terminated except as provided in Sections
6 and 8 hereof; but, if any Pricing Agreement shall be terminated by the
Underwriters, or any of them, because of any failure or refusal on the part of
the Issuer or the Company to comply with the terms or to fulfill any of the
conditions of the Pricing Agreement, or if for any reason the Issuer or the
Company shall be unable to perform its obligations under the Pricing Agreement,
the Issuer and the Company will reimburse the Underwriters or such Underwriters
who have so terminated the Pricing Agreement with respect to themselves,
severally, for all out-of-pocket expenses reasonably incurred by such
Underwriters (including the
24
reasonable fees and expenses of counsel) in connection with the Pricing
Agreement or the offering contemplated thereunder. Neither the Issuer nor the
Company shall in any event be liable to any of the Underwriters for damages on
account of loss of anticipated profits.
12. In all dealings hereunder, the Representatives of the Underwriters
of Designated Securities shall act on behalf of each of such Underwriters, and
the parties hereto shall be entitled to act and rely upon any statement,
request, notice or agreement on behalf of any Underwriter made or given by such
Representatives jointly or by such of the Representatives, if any, as may be
designated for such purpose in the Pricing Agreement.
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Underwriters shall be delivered or sent by mail or
facsimile transmission to the address of the Representatives as set forth in the
Pricing Agreement; and if to the Issuer or the Company shall be delivered or
sent by mail or facsimile transmission to the address of the Issuer or the
Company, respectively, set forth in the Registration Statement, Attention:
Secretary; provided, however that any notice to an Underwriter pursuant to
Section 8(c) hereof shall be delivered or sent by mail or facsimile transmission
to such Underwriter at its address set forth in its Underwriters' Questionnaire,
or telex constituting such Questionnaire, which address will be supplied to the
Issuer and the Company by the Representatives upon request. Any such statements,
requests, notices or agreements shall take effect upon receipt thereof.
13. This Agreement and each Pricing Agreement shall be binding upon,
and inure solely to the benefit of, the Underwriters, the Issuer, the Company
and, to the extent provided in Sections 8 and 10 hereof, the officers and
directors of the Company and the Issuer and each person who controls the Issuer,
the Company or any Underwriter, and their respective heirs, executors,
administrators, successors and assigns, and no other person shall acquire or
have any right under or by virtue of this Agreement or any such Pricing
Agreement. No purchaser of any of the Securities from any Underwriter shall be
deemed a successor or assign by reason merely of such purchase.
14. Time shall be of the essence of each Pricing Agreement. As used
herein, the term "business day" shall mean any day when the Commission's office
in Washington, D.C. is open for business.
15. THIS AGREEMENT AND EACH PRICING AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
16. This Agreement and each Pricing Agreement may be executed by any
one or more of the parties hereto and thereto in any number of counterparts,
each of which shall be deemed to be an original, but all such respective
counterparts shall together constitute one and the same instrument.
25
If the foregoing is in accordance with your understanding, please sign
and return to us [eight] counterparts hereof.
Very truly yours,
CPL Transition Funding LLC
By: Central Power and Light Company, as
Sole Member
By:
----------------------------------
Name:
Title:
Central Power and Light Company
By:
---------------------------------------
Name:
Title:
Accepted as of the date hereof:
Xxxxxxx, Xxxxx & Co.
[Name of Co-Representatives]
By:
--------------------------------------
(Xxxxxxx, Sachs & Co.)
On behalf of each of the Underwriters
26
ANNEX I
PRICING AGREEMENT
Xxxxxxx, Xxxxx & Co.
[Name of Co-Representatives]
As Representatives of the several
Underwriters named in Schedule I hereto,
c/o Goldman, Sachs & Co.,
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
CPL Transition Funding LLC, a limited liability company formed under
the laws of the State of Delaware (the "Issuer") and Central Power and Light
Company, a Texas corporation (the "Company"), each propose, subject to the terms
and conditions stated herein and in the Underwriting Agreement, dated ________,
2002 (the "Underwriting Agreement"), among the Issuer and the Company on the one
hand and Xxxxxxx, Xxxxx & Co. [and (names of Co-Representatives named therein)]
on the other hand, that the Issuer issue and sell to the Underwriters named in
Schedule I hereto (the "Underwriters") the Securities specified in Schedule II
hereto (the "Designated Securities"). Each of the provisions of the Underwriting
Agreement is incorporated herein by reference in its entirety, and shall be
deemed to be a part of this Agreement to the same extent as if such provisions
had been set forth in full herein; and each of the representations and
warranties set forth therein shall be deemed to have been made at and as of the
date of this Pricing Agreement, except that each representation and warranty
which refers to the Prospectus in Section 2 of the Underwriting Agreement shall
be deemed to be a representation or warranty as of the date of the Underwriting
Agreement in relation to the Prospectus (as therein defined), and also a
representation and warranty as of the date of this Pricing Agreement in relation
to the Prospectus as amended or supplemented relating to the Designated
Securities which are the subject of this Pricing Agreement. Each reference to
the Representatives herein and in the provisions of the Underwriting Agreement
so incorporated by reference shall be deemed to refer to you. Unless otherwise
defined herein, terms defined in the Underwriting Agreement are used herein as
therein defined. The Representatives designated to act on behalf of the
Representatives and on behalf of each of the Underwriters of the Designated
Securities pursuant to Section 12 of the Underwriting Agreement and the address
of the Representatives referred to in such Section 12 are set forth in Schedule
II hereto.
An amendment to the Registration Statement, or a supplement to the
Prospectus, as the case may be, relating to the Designated Securities, in the
form heretofore delivered to you is now proposed to be filed with the
Commission.
Subject to the terms and conditions set forth herein and in the
Underwriting Agreement incorporated herein by reference, the Issuer agrees to
issue and sell to each of the Underwriters, and each of the Underwriters agrees,
severally and not jointly, to purchase from the Issuer, at the time and place
and at the purchase price to the Underwriters set forth in Schedule II hereto,
the respective principal amount of each class of Designated Securities set forth
opposite the name of such Underwriter in Schedule I hereto.
[Each of the Underwriters represents, warrants and agrees that (i) it
has not offered or sold, and prior to the expiration of a period of six months
from the closing date, will not offer or sell, any Designated Securities to
persons in the United Kingdom except to persons whose ordinary activities
involve them in acquiring, holding, managing or disposing of investments (as
principal or agent) for the purposes of their business or otherwise in
circumstances which have not resulted and will not result in an offer to the
public in the United Kingdom within the meaning of the Public Offers of
Securities Regulations 1995, (ii) it has only communicated or caused to be
communicated and will only communicate or cause the communicated any invitation
or inducement to engage in investment activity (within the meaning of section 21
of the Financial Services and Markets Act 2000 (the "FSMA")) received by it in
connection with the issue or sale of any Designated Securities in circumstances
in which section 21(1) of the FSMA does not apply to the Issuer, and (iii) it
has complied and will comply with all applicable provisions of the FSMA with
respect to anything done by it in relation to the Designated Securities in, from
or otherwise involving the United Kingdom.](1)
If the foregoing is in accordance with your understanding, please sign
and return to us [eight] counterparts hereof, and upon acceptance hereof by you,
on behalf of each of the Underwriters, this letter and such acceptance hereof,
including the provisions of the Underwriting Agreement incorporated herein by
reference, shall constitute a binding agreement between each of the Underwriters
and the Issuer and the Company, duly authorized, executed and delivered by the
Company and the Issuer. It is understood that your acceptance of this letter on
behalf of each of the Underwriters is or will be pursuant to the authority set
forth in a form of Agreement among Underwriters, the form of which shall be
submitted to the Issuer and the Company for examination but without warranty on
the part of the Representatives as to the authority of the signers thereof.
Very truly yours,
CPL Transition Funding LLC
---------------------
(1) To be included if any Designated Securities are to be marketed in the United
Kingdom.
2
By: Central Power and Light Company, as
Sole Member
By:
----------------------------------
Name:
Title:
Central Power and Light Company
By:
---------------------------------------
Name:
Title:
Accepted as of the date hereof:
Xxxxxxx, Sachs & Co.
[Name of Co-Representatives]
By:
--------------------------------------
(Xxxxxxx, Xxxxx & Co.)
On behalf of each of the Underwriters
3
Pricing Agreement
SCHEDULE I
Amount of Designated
Underwriter Securities to be Purchased
----------- --------------------------
Class [ ] Class [ ] Class [ ]
---------- ---------- ----------
Xxxxxxx, Sachs & Co.
[Names of other Underwriters]
Total
Pricing Agreement
SCHEDULE II
Title of Designated Securities:
Amount of Designated Securities:
Class [ ]:
Class [ ]:
Class [ ]:
Initial Offering Price to Public:
[$___ per Transition Bond] [formula]
Purchase Price by Underwriters:
[$____ per Transition Bond][formula]
[Commission Payable to Underwriters:
$_________ per Transition Bond in Federal (same day) Funds [by wire transfer]]
Form of Designated Securities:
Book-entry only form represented by one or more global securities deposited with
The Depository Trust Company ("DTC") or its designated custodian for trading in
the Same Day Funds Settlement System of DTC, and to be made available for
checking by the Representatives at least twenty-four hours prior to the Time of
Delivery at the office of DTC. Definitive Designated Securities will be
available only under limited circumstances described in the Prospectus as
amended or supplemented.
Specified Funds for Payment of Purchase Price:
[Immediately available funds] deliverable in New York City
[Describe any blackout provisions with respect to the Designated Securities]
Time of Delivery:
10:00 a.m. (New York City time), _________, 2002 (or such later date not later
than five business days after such specified date as the Representatives shall
designate)
Closing Location:
Milbank, Tweed, Xxxxxx & XxXxxx LLP
0 Xxxxx Xxxxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Names and addresses of Representatives:
Designated Representatives
Address for Notices, etc.:
[Other Terms]*:
--------------------------
* A description of particular tax, accounting or other unusual features
(including any event risk provisions) of the Designated Securities should
be set forth, or referenced to an attached or accompanying description, if
necessary, to ensure agreement as to the terms of the Designated Securities
to be purchased and sold. Such a description might appropriately be in the
form in which such features will be described in the Prospectus Supplement
for the offering.
2
ANNEX II
Form of Various Opinions of Counsel
ANNEX III
Form of letters of Deloitte & Touche LLP
to be delivered pursuant to Section 7(w)
