PECO ENERGY TRANSITION TRUST
PECO ENERGY COMPANY
UNDERWRITING AGREEMENT
----------------------
[ ], 2000
To Xxxxxxx Xxxxx Xxxxxx Inc. as
representative of the Underwriters
named in Schedule II hereto
Ladies and Gentlemen:
PECO Energy Transition Trust, a statutory business trust created under the
laws of the State of Delaware (the "Issuer") and PECO Energy Company, a
Pennsylvania corporation (the "Company") as grantor and owner of all beneficial
interest in the Issuer, propose, subject to the terms and conditions stated
herein, that the Issuer issue and sell to the underwriters named in Schedule II
hereto (the "Underwriters"), for whom Xxxxxxx Xxxxx Barney Inc. (the
"Representative") is acting as representative, the principal amount of its
securities identified in Schedule I hereto (the "Securities").
Each of the capitalized terms used and not otherwise defined herein shall
have the meaning given to it in the Amended and Restated Sale Agreement, dated
as of [ ], 2000 (the "Sale Agreement"), between the Company, as seller,
and the Issuer or, if not defined therein, in the Amended and Restated Master
Servicing Agreement, dated as of [ ], 2000 (the "Servicing Agreement"),
between the Company, as servicer, and the Issuer or, if not defined therein,
in the Indenture, dated as of March 1, 1999 (as amended and supplemented from
time to time, including by the supplemental indenture for the Securities, the
"Indenture"), between the Issuer and The Bank of New York (the "Bond Trustee")
or, if not defined therein, in the Second Amended and Restated Trust Agreement,
dated as of [ ], 2000 (the "Trust Agreement"), among the Company, First
Union Trust Company, National Association, as issuer trustee (the "Issuer
Trustee"), and Xxxxxx X. Xxxxxxx and Xxxxxx X. Xxxxxx, as beneficiary trustees
(each a "Beneficiary Trustee").
1. As of the date hereof, each of the Company and the Issuer represents and
warrants to each of the Underwriters that:
(a) The Issuer and the Securities meet the requirements for the use of
Form S-3 under the Securities Act of 1933, as amended (the "Act"), and a
registration statement on Form S-3 (File No. 333-[ ]) in respect of the
Securities has been filed with the Securities and Exchange Commission (the
"Commission"); such registration statement and any post-effective amendment
thereto, each in the form heretofore delivered to you, and, excluding
exhibits thereto but including all documents incorporated by reference in
the prospectus included therein, have been declared effective by the
Commission in such form; no other document with respect to such
registration statement or document incorporated by reference therein has
heretofore been filed with the Commission; and no stop order suspending the
effectiveness of such registration statement has been issued and no
proceeding for that purpose has been initiated or to the knowledge of the
Company or the Issuer threatened by the Commission (any preliminary
prospectus included in such registration statement or filed with the
Commission pursuant to Rule 424(b) of the rules and regulations of the
Commission under the Act, being hereinafter called a "Preliminary
Prospectus"; the various parts of such registration statement, including
all exhibits thereto and the documents incorporated by reference in the
prospectus contained in the registration statement at the time such part of
the registration statement became effective, each as amended at the time
such part of the registration statement became effective, being hereinafter
called the "Registration Statement"; such final prospectus, in the form
first filed pursuant to Rule 424(b) under the Act, being hereinafter called
the "Prospectus"; any reference herein to any 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; and any reference to any amendment or supplement to the
Registration Statement, any Preliminary Prospectus or the Prospectus shall
be deemed to refer to and include any documents filed after the effective
date of the Registration Statement or the date of such Preliminary
Prospectus or Prospectus, as the case may be, under the Securities and
Exchange Act of 1934, as amended (the "Exchange Act"), and incorporated by
reference in such Registration Statement, Preliminary Prospectus or
Prospectus, as the case may be);
(b) Each Preliminary Prospectus, at the time of circulation thereof by
the Underwriters, conformed in all material respects to the requirements of
the Act and the rules and regulations of the Commission
2
thereunder, and as of the date thereof did 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, in the light of the
circumstances under which they were made, not misleading; provided,
however, that this representation and warranty shall not apply to any
statement or omission made in reliance upon and in conformity with
information regarding any Underwriter or the arrangements with respect to
the underwriting of the offering of the Securities contemplated hereby
furnished in writing to the Issuer or the Company by an Underwriter through
you expressly for use therein;
(c) The Registration Statement conforms, and the Prospectus and any
further amendments or supplements to the Registration Statement or the
Prospectus will conform, in all material respects, to the requirements of
the Act, the Exchange Act, the Trust Indenture Act of 1939 (the "Trust
Indenture Act") and the respective rules and regulations of the Commission
thereunder; the Registration Statement does not and will not, as of the
applicable effective date as to the Registration Statement and any
amendment thereto, 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; the Indenture complies in all
material respects with the requirements of the Trust Indenture Act and the
rules thereunder; and the Prospectus does not and will not, as of the
applicable filing date as to the Prospectus and any amendment or supplement
thereto, contain an untrue statement of a material fact or omit to state a
material fact necessary in order 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 any
statements or omissions made in reliance upon and in conformity with
information regarding any Underwriter or the arrangements with respect to
the underwriting of the offering of the Securities contemplated hereby
furnished in writing to the Issuer or the Company by an Underwriter through
you expressly for use therein;
(d) The documents incorporated by reference in the Registration
Statement and the Prospectus, when they became effective or were filed (or,
if an amendment with respect to any such document was filed or became
effective, when such amendment was filed or became effective) with the
Commission, as the case may be, conformed in all material respects to the
requirements of the Act, the Exchange Act, the Trust Indenture Act and the
rules and regulations thereunder,
3
and any further documents so filed and incorporated by reference will, when
they become effective or are filed with the Commission, as the case may be,
conform in all material respects to the requirements of the Act, the
Exchange Act, the Trust Indenture Act and the rules and regulations
thereunder; none of such documents, when it became effective or was filed
(or, if an amendment with respect to any such documents was filed or became
effective, when such amendment was filed or became effective) contained any
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,
in light of the circumstances under which they were made, not misleading;
(e) PricewaterhouseCoopers LLP are independent certified public
accountants as required by the Act and the rules and regulations of the
Commission thereunder;
(f) The Issuer has been duly created and is validly existing in good
standing as a business trust under the Delaware Business Trust Act, has the
trust power and authority to conduct its business as presently conducted
and as described in the Prospectus, will not be required to be authorized
to do business in any other jurisdiction; and the Issuer has all requisite
business trust power and authority to issue the Securities and purchase the
Intangible Transition Property as described in the Prospectus;
(g) The Company is a validly existing and subsisting corporation under
the laws of the Commonwealth of Pennsylvania; each of the Company's
subsidiaries ("Subsidiaries") which constitutes a "gas utility company" or
an "electric utility company," as defined in the Public Utility Holding
Company Act of 1935, as amended (a "Utility Subsidiary"), is a validly
existing corporation under the laws of its jurisdiction of incorporation;
the Company and each Utility Subsidiary have all requisite power and
authority to own and occupy their respective properties and carry on their
respective businesses as presently conducted and as described in the
Prospectus and are duly qualified as foreign corporations to do business
and in good standing in every jurisdiction in which the nature of the
business conducted or property owned by them makes such qualification
necessary and in which the failure to so qualify would have a materially
adverse effect on the Company; and the Company has all requisite power and
authority to sell the Intangible Transition Property to the Issuer as
described in the Prospectus;
(h) Each of the Basic Documents to which the Company or the Issuer is
a party has been duly
4
authorized by the Company or the Issuer, as applicable, and when executed
and delivered by the Issuer or the Company, as applicable, will constitute
a legal, valid and binding obligation of the Company or the Issuer, as
applicable, enforceable in accordance with its terms, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or affecting creditor's
rights and to general equity principles;
(i) The Securities have been duly authorized by the Issuer and will
conform to the description thereof in the Prospectus; and when the
Securities are authenticated by the Bond Trustee and executed and delivered
to the Underwriters and are paid for by the Underwriters in accordance with
the terms of this Agreement, the Securities will constitute the legal,
valid and binding obligations of the Issuer, enforceable in accordance with
their terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability
relating to or affecting creditor's rights and to general equity
principles;
(j) The issue and sale of the Securities by the Issuer, the sale of
the Intangible Transition Property by the Company to the Issuer, the
execution, delivery and compliance by the Company and the Issuer with all
of the provisions of each of this Agreement and the Basic Documents to
which the Company or the Issuer, as applicable, is a party, and the
consummation of the transactions herein and therein contemplated 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 trust agreement,
indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Issuer or the Company is a party or by which the
Issuer or the Company is bound or to which any of the property or assets of
the Issuer or the Company 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 general affairs, management,
prospects, financial position or results of operations of the Issuer or the
Company or on the stockholders' equity of the Company, nor will such action
result in any violation of the provisions of the Articles of Incorporation
or Bylaws of the Company or the Issuer's Certificate of Trust or the Trust
Agreement or any statute, order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Issuer or the
Company or any of their properties;
5
(k) Except (i) for the order of the Commission making the Registration
Statement effective, (ii) for permits and similar authorizations required
under the securities or "Blue Sky" laws of any jurisdiction, and to the
extent, if any, required pursuant to the undertakings set forth under Item
17 of Part II of the Registration Statement, and (iii) the Qualified Rate
Orders, no consent, approval, authorization or other order of any
governmental authority is legally required for the execution, delivery and
performance of this Agreement by the Issuer and the Company and the
consummation of the transactions contemplated hereby; and
(l) This Agreement has been duly authorized, executed and delivered by
the Company and the Issuer.
2. Subject to the terms and conditions and in reliance upon the
representations and warranties herein set forth, the Issuer agrees to sell to
each of the Underwriters, and each of the Underwriters agrees, severally and not
jointly, to purchase from the Issuer, at the purchase price set forth in
Schedule I hereto the principal amount of the Securities set forth opposite the
name of such Underwriter in Schedule II hereto.
3. Upon the authorization by you of the release of the Securities, the
several Underwriters propose to offer the Securities for sale upon the terms and
conditions set forth in the Prospectus.
4. The Securities, on original issuance, will be issued in the form of one
or more global bonds registered in the name of The Depository Trust Company or
its nominee for the accounts of the Underwriters representing the Securities.
The time and date of delivery and payment for the Securities shall be 9:30 a.m.,
Philadelphia time on [ ], 2000, or at such other time and date as you
and the Issuer may agree upon in writing. The time and date for such
delivery is herein called the "Time of Delivery." The Securities shall be
delivered by or on behalf of the Issuer to The Depository Trust Company for the
account of each Underwriter, against payment by such Underwriter or on its
behalf of the purchase price therefor by wire transfer of immediately available
funds to an account specified by the Issuer. The Securities will be made
available to the Representative for checking and packaging at least twenty-four
hours prior to the Time of Delivery at the office of The Depository Trust
Company, 00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, 00000.
6
5. The Issuer agrees with each of the Underwriters, and the Company agrees
with each of the Underwriters to cause the Issuer:
(a) To use its best efforts to cause the Registration Statement, if
not effective at the Execution Time, and any amendment thereto, to become
effective; to complete the Prospectus in a form approved by you, to file
the 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
execution and delivery of this Agreement and to provide evidence
satisfactory to you of such timely filing; and to furnish you, without
charge, three signed copies of the Registration Statement (or copies
thereof), including exhibits, and, during the period mentioned in paragraph
(d) below, as many copies of the Prospectus and any supplements and
amendments thereto as you may reasonably request and to furnish to the
Representative copies of all reports on Form SR required by Rule 463 under
the Act.
(b) Other than pursuant to filings under the Exchange Act incorporated
in the Registration Statement and the Prospectus by reference, before
amending or supplementing the Registration Statement or the Prospectus, to
furnish to you a copy of each such proposed amendment or supplement prior
to filing and not to file any such proposed amendment or supplement to
which you reasonably object.
(c) As soon as the Company or the Issuer is advised thereof, to
promptly advise you orally, and (if requested by you) to confirm such
advice in writing, (i) when the Registration Statement, if not effective at
the Execution Time, and any amendment thereto, has become effective, (ii)
when the Prospectus, and any Supplement thereto, has been filed with the
Commission pursuant to Rule 424(b), (iii) when any amendment to the
Registration Statement has been filed or become effective, (iv) of any
request by the Commission for any amendment of the Registration Statement
or supplement to the Prospectus or for any additional information, (v) when
any stop order has been issued under the Act with respect to the
Registration Statement or any proceedings therefor have been instituted or
are threatened; and to make every reasonable effort to secure the prompt
removal of any stop order, if issued, (vi) of the receipt by the Company or
the Issuer of any notification with respect to the suspension of the
qualification of the Securities for offering or sale in any jurisdiction,
or the initiation or threatening of any proceeding for that purpose and
(vii) of the happening of any event
7
during the period mentioned in subparagraph (d) below which in the judgment
of the Company or the Issuer makes any statement made in the Registration
Statement or the Prospectus untrue and which requires the making of any
changes in the Registration Statement or the Prospectus in order to make
the statements therein not misleading.
(d) If, at any time when a prospectus is required to be delivered
under the Act, any event shall occur as a result of which it is necessary
to amend or supplement the Prospectus in order to make the statements
therein, in the light of the circumstances when the Prospectus is delivered
to a purchaser, not misleading, or if it is necessary to amend or
supplement the Prospectus to comply with law, forthwith to prepare and duly
file with the Commission an appropriate supplement or amendment thereto,
and furnish, at its own expense, to you such reasonable number of copies
thereof as you shall reasonably request.
(e) To cooperate with you and counsel for the Underwriters to qualify
the Securities for offer and sale under the securities or Blue Sky laws of
such jurisdictions as you shall reasonably request, to maintain such
qualifications in effect so long as required for the distribution of the
Securities and to arrange for the determination of the legality of the
Securities for purchase by institutional investors; provided that neither
the Company nor the Issuer shall be obligated to qualify to do business in
any jurisdiction where it is not now so qualified or to take any action
that would subject it to general service of process in any jurisdiction
where it is not now so subject, other than in suits arising out of the
offering or sale of the Securities, and to pay all expenses (including fees
and disbursements of counsel) in connection therewith.
(f) As soon as practicable, to make generally available to holders of
the Securities and to the Representative an earnings statement or
statements of the Issuer which will satisfy the provisions of Section 11(a)
of the Act and Rule 158 under the Act.
(g) During the period beginning from the date hereof and continuing to
and including the earlier of (i) the date, after the last Time of Delivery,
on which the distribution of the Securities ceases, as determined by the
Representative or (ii) the date which is 30 days after the last Time of
Delivery, not to offer, sell or contract to sell, or otherwise dispose of,
directly or indirectly, or announce the offering
8
of, any "transition bonds" (as defined in the Statute) issued by a trust or
other special purpose vehicle without the prior written consent of the
Representative.
(h) During a period from the date of this Agreement until the
retirement of the Securities, or until such time as the Underwriters shall
cease to maintain a secondary market in the Securities, whichever occurs
first, to deliver to the Representative the annual statements of compliance
and the annual independent auditor's servicing reports of the Company or
the Servicer furnished to the Issuer or the Bond Trustee pursuant to the
Servicing Agreement or the Indenture, as applicable, as soon as such
statements and reports are furnished to the Issuer or the Bond Trustee.
(i) So long as any of the Securities are outstanding, to furnish to
the Representative (i) as soon as available, a copy of each report of the
Issuer filed with the Commission under the Exchange Act, or mailed to
holders of the Securities, (ii) a copy of any filings of the Company or the
Servicer with the Pennsylvania Public Utility Commission pursuant to the
Qualified Rate Orders, including, but not limited to, any Adjustment
Requests and (iii) from time to time, any information concerning the
Company or the Issuer as the Representative may reasonably request.
(j) To the extent, if any, that any rating necessary to satisfy the
condition set forth in Section 6(i) of this Agreement is conditioned upon
the furnishing of documents or the taking of other actions by the Company
or the Issuer on or after the Time of Delivery, to furnish such documents
and take such other actions.
6. The Company covenants and agrees with the several Underwriters that the
Company will pay or cause to be paid the following: (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 and other
expenses in connection with the preparation, printing and filing of the
Registration Statement, any Preliminary Prospectus and the Prospectus and
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 the Underwriters, this Agreement, the Blue Sky and Legal
Investment Memoranda, if any, 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
9
offering and sale under state securities and insurance securities laws as
provided in Section 5(e) hereof, including the fees and disbursements of counsel
for the Underwriters in connection with such qualification and in connection
with the Blue Sky and Legal Investment Memoranda; (iv) any fees charged by
securities rating services for rating the Securities; (v) the cost of preparing
certificates for the Securities; (vi) the cost and charges of any transfer agent
or registrar; (vii) the cost of qualifying the Securities with The Depository
Trust Company; (viii) all other costs and expenses incident to the performance
of its obligations hereunder which are not otherwise specifically provided for
in this Section; and (ix) all fees, costs and expenses of the Underwriters,
including the reasonable fees and disbursements of their counsel and transfer
taxes on resale of any of the Securities by them.
7. The several obligations of the Underwriters hereunder are subject to the
accuracy of the representations and warranties on the part of each of the
Company and the Issuer contained herein as of the Execution Time and the Time of
Delivery, in the latter case, on and as of the Time of Delivery with the same
effect as if made at the Time of Delivery, and in the Sale Agreement and the
Servicing Agreement as of the Time of Delivery, to the accuracy of the
statements of each of the Company and the Issuer made in any certificates
pursuant to the provisions hereof, to the performance by each of the Company and
the Issuer of its obligations hereunder and to the following conditions:
(a) If the Registration Statement has not become effective prior to
the Execution Time, unless the Representative agrees in writing to a later
time, the Registration Statement will become effective not later than (i)
6:00 PM New York City time, on the date of determination of the public
offering price, if such determination occurred at or prior to 3:00 PM New
York City time on such date, or (ii) 9:30 AM on the business day following
the day on which the public offering price was determined, if such
determination occurred after 3:00 PM New York City time on such date; if
filing of the Prospectus, or any supplement thereto, is required pursuant
to Rule 424(b), the Prospectus, and any such supplement, shall have been
filed in the manner and within the time period required by Rule 424(b); and
no stop order suspending the effectiveness of the Registration Statement
shall have been issued and no proceedings for that purpose shall have been
instituted or threatened.
(b) The Representative and the Issuer shall have received opinions of
counsel for the Company, portions of which may be delivered by (i) Xxxxxxx
Xxxxx
00
Xxxxxxx & Xxxxxxxxx, XXX, xxxxxxx counsel for the Company and (ii)
Xxxxxxxx, Xxxxxx & Finger, P.A., special Delaware counsel for the Company,
each dated the Time of Delivery, in form and substance reasonably
satisfactory to the Representative, to the effect that:
(i) the Company (a) has been duly incorporated and is validly
existing and subsisting as a corporation under the laws of the
jurisdiction in which it is chartered or organized, (b) has all
requisite corporate power and authority to own its properties, conduct
its business as presently conducted and execute, deliver and perform
its obligations under this Agreement, the Trust Agreement, the Sale
Agreement and the Servicing Agreement, and (c) is duly qualified to do
business in all jurisdictions (and is in good standing under the laws
of all such jurisdictions) to the extent that such qualification and
good standing is or shall be necessary to protect the validity and
enforceability of this Agreement, the Basic Documents to which the
Company is a party and each other instrument or agreement necessary or
appropriate to the proper administration of this Agreement and the
transactions contemplated hereby;
(ii) the Trust Agreement, the Sale Agreement and the Servicing
Agreement have been duly authorized, executed and delivered by the
Company, and constitute legal, valid and binding agreements
enforceable against the Company in accordance with their terms
(subject to applicable bankruptcy, reorganization, fraudulent
transfer, insolvency, moratorium or other similar laws or equitable
principles affecting creditors' rights generally from time to time in
effect);
(iii) to the knowledge of such counsel, there is no pending or
threatened action, suit or proceeding before any court or governmental
agency, authority or body or any arbitrator involving the Company or
any of its subsidiaries of a character required to be disclosed in the
Registration Statement which is not adequately disclosed in the
Prospectus, and there is no franchise, contract or other document of a
character required to be described in the Registration Statement or
Prospectus, or to be filed as an exhibit, which is not described or
filed as required;
11
(iv) this Agreement has been duly authorized, executed and
delivered by the Company;
(v) no consent, approval, authorization, filing with or order of
any court or governmental agency or body is required in connection
with the transactions contemplated herein, except such as have been
obtained under the Statute and the Qualified Rate Orders and such as
may be required under the blue sky laws of any jurisdiction in
connection with the purchase and distribution of the Securities by the
Underwriters and such other approvals (specified in such opinion) as
have been obtained;
(vi) neither the execution and delivery of this Agreement, the
Trust Agreement, the Sale Agreement or the Servicing Agreement, nor
the issue and sale of the Securities, nor the consummation of the
transactions contemplated by this Agreement, the Trust Agreement, the
Sale Agreement or the Servicing Agreement, nor the fulfillment of the
terms of this Agreement, the Trust Agreement, the Sale Agreement or
the Servicing Agreement by the Company, will (A) conflict with, result
in any breach of any of the terms or provisions of, or constitute
(with or without notice or lapse of time) a default under the articles
of incorporation, bylaws or other organizational documents of the
Company, or conflict with or breach any of the material terms or
provisions of, or constitute (with or without notice or lapse of time)
a default under, any indenture, agreement or other instrument known to
such counsel after reasonable inquiry to which the Company or the
Issuer is a party or by which the Company or the Issuer is bound, (B)
result in the creation or imposition of any lien upon any properties
of the Company or the Issuer, pursuant to the terms of any such
indenture, agreement or other instrument (other than as contemplated
by the Basic Documents), or (C) violate any law, rule or regulation
or, to the knowledge of such counsel, any order, promulgated by the
United States, the State of Delaware or the Commonwealth of
Pennsylvania applicable to the Company or the Issuer, of any court or
of any federal or state regulatory body, administrative agency or
other governmental instrumentality having jurisdiction over the
Company or the Issuer or any of their respective properties; and
(vii) (A) each of the Qualified Rate Orders has been duly
authorized and adopted by the
12
Pennsylvania Public Utility Commission and is in full force and
effect, (B) the Securities constitute "transition bonds" under Section
2812 of the Statute, and (C) upon the issuance of the Securities, the
Securities are entitled to the protections provided in the first
sentence of Section 2812(c)(2) of the Statute.
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than the States
of Pennsylvania, New York and Delaware or the United States, to the extent
deemed proper and specified in such opinion, upon the opinion of other
counsel of good standing believed to be reliable and who are satisfactory
to counsel for the Underwriters and (B) as to matters of fact, to the
extent deemed proper, on certificates of responsible officers of the
Company, the Issuer Trustee and public officials. References to the
Prospectus in this paragraph (b) include any supplements thereto at the
Time of Delivery.
(c) The Representative shall have received the opinions of counsel for
the Issuer, portions of which may be delivered by (i) Xxxxxxx Xxxxx Xxxxxxx
& Ingersoll, LLP, outside counsel for the Issuer and (ii) Xxxxxxxx, Xxxxxx
& Finger, P.A., special Delaware counsel for the Issuer, each dated as of
the Time of Delivery, in form and substance reasonably satisfactory to the
Representative, to the effect that:
(i) the Securities, the Indenture, the Sale Agreement, the
Servicing Agreement and the Trust Agreement conform to the
descriptions thereof contained in the Prospectus;
(ii) the Issuer has been duly formed and is validly existing as a
statutory business Trust and is in good standing under the laws of the
State of Delaware, with full power and authority to execute, deliver
and perform its obligations under this Agreement and the Securities;
(iii) the Indenture, the Sale Agreement and the Servicing
Agreement have been duly authorized, executed and delivered, and
constitute legal, valid and binding agreements enforceable against the
Issuer in accordance with their terms (subject to applicable
bankruptcy, reorganization, insolvency, fraudulent transfer,
moratorium or other similar laws or equitable principles affecting
creditors' rights generally from time to time in effect); and the
Securities have been duly
13
authorized and, when executed and authenticated in accordance with the
provisions of the Indenture and delivered to and paid for by the
Underwriters pursuant to this Agreement will constitute legal, valid
and binding obligations of the Issuer entitled to the benefits of the
Indenture and any related Series Supplement (subject to applicable
bankruptcy, reorganization, insolvency, fraudulent transfer,
moratorium or other similar laws or equitable principles affecting
creditors' rights generally from time to time in effect);
(iv) the Sale Agreement, the Servicing Agreement and the Trust
Agreement are not required to be qualified under the Trust Indenture
Act;
(v) the Indenture has been duly qualified under the Trust
Indenture Act;
(vi) to the knowledge of such counsel, there is no pending or
threatened action, suit or proceeding before any court or governmental
agency, authority or body or any arbitrator involving the Issuer or
relating to the Securities, the Qualified Rate Orders or the
collection of Intangible Transition Charges or the use and enjoyment
of Intangible Transition Property under the Statute, of a character
required to be disclosed in the Registration Statement which is not
adequately disclosed in the Prospectus, and there is no franchise,
contract or other document of a character required to be described in
the Registration Statement or Prospectus, or to be filed as an
exhibit, which is not described or filed as required; and the
statements included or incorporated in the Prospectus under the
headings "The Pennsylvania Competition Act," "The Qualified Rate
Orders And The Intangible Transition Charges," "The Indenture," "The
Sale Agreement," "The Master Servicing Agreement," "The Transition
Bonds," "United States Taxation," "Material Commonwealth of
Pennsylvania Tax Matters" and "ERISA Considerations" fairly summarize
the matters described therein;
(vii) the Registration Statement has become effective under the
Act; any required filing of the Prospectus, any Preliminary
Prospectus, and any supplements thereto, pursuant to Rule 424(b) has
been made in the manner and within the time period required by Rule
424(b); to the knowledge of such counsel, no stop order suspending the
effectiveness of the Registration Statement has
14
been issued, no proceedings for that purpose have been instituted or
threatened, and the Registration Statement and the Prospectus (other
than the financial statements and the notes and schedules thereto and
other financial and statistical information contained therein and the
Form T-1 as to which such counsel need express no opinion) comply as
to form in all material respects with the applicable requirements of
the Act, the Exchange Act and the Trust Indenture Act and the
respective rules thereunder; and such counsel has no reason to believe
that at the Effective Date the Registration Statement contained any
untrue statement of a material fact or omitted to state any material
fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made,
not misleading or that the Prospectus as of its date and at the Time
of Delivery included or includes any untrue statement of a material
fact or omitted or omits to state a material fact necessary to make
the statements therein, in the light of the circumstances under which
they were made, not misleading (in each case, other than the financial
statements and the notes and schedules thereto and other financial and
statistical information contained therein as to which such counsel
need express no opinion);
(viii) this Agreement has been duly authorized, executed and
delivered by the Issuer;
(ix) no consent, approval, authorization, filing with or order of
any court or governmental agency or body is required for the issuance
of the Securities except such as have been obtained under the Statute
and the Qualified Rate Orders and such as may be required under the
blue sky laws of any jurisdiction in connection with the purchase and
distribution of the Securities by the Underwriters and such other
approvals (specified in such opinion) as have been obtained;
(x) neither the execution and delivery of this Agreement, the
Sale Agreement, the Servicing Agreement or the Indenture, nor the
issue and sale of the Securities, nor the consummation of the
transactions contemplated by this Agreement, the Sale Agreement, the
Servicing Agreement or the Indenture, nor the fulfillment of the terms
of this Agreement, the Sale Agreement, the Servicing Agreement or the
Indenture, by the Issuer will (A) conflict with, result in any breach
of any of the terms or provisions of, or constitute (with or
15
without notice or lapse of time) a default under the Trust Agreement,
or conflict with or breach any of the material terms or provisions of,
or constitute (with or without notice or lapse of time) a default
under, any indenture, agreement or other instrument known to such
counsel and to which the Issuer is a party or by which the Issuer, is
bound, (B) result in the creation or imposition of any lien upon any
properties of the Issuer, pursuant to the terms of any such indenture,
agreement or other instrument (other than as contemplated by the Basic
Documents), or (C) violate any law or any order, rule or regulation
promulgated by the United States, the State of Delaware or the
Commonwealth of Pennsylvania applicable to the Issuer, of any court or
of any federal or state regulatory body, administrative agency or
other governmental instrumentality having jurisdiction over the Issuer
or any of its properties;
(xi) (A) to the extent that the provisions of Section 2812 of the
Statute apply to the grant of a security interest by the Issuer in the
Collateral pursuant to the Indenture, then upon the giving of value by
the Bond Trustee to the Issuer with respect to the Collateral, (I) the
Indenture creates in favor of the Bond Trustee a security interest in
the rights of the Issuer in the Collateral, (II) such security
interest is valid and enforceable against the Issuer and third parties
(subject to the rights of any third parties holding security interests
in such Collateral perfected in the manner described in Section 2812
of the Statute), and has attached, (III) such security interest is
perfected, and (IV) such perfected security interest ranks prior to
any other security interest created under Section 2812 of the Statute.
(B) To the extent that the provisions of Section 2812 of the Statute
do not apply to the grant of a security interest by the Issuer in the
Collateral pursuant to the Indenture, then upon the giving of value by
the Bond Trustee to the Issuer with respect to the Collateral, (I) the
Indenture creates in favor of the Bond Trustee a security interest in
the rights of the Issuer in the Collateral, and such security interest
is enforceable against the Issuer with respect to such Collateral,
(II) insofar as perfection of such security interest can be
accomplished only by filing financing statements under the Uniform
Commercial Code in [list filing offices and jurisdictions], upon the
filing of such financing statements in such filing offices,
16
the Bond Trustee will have a perfected security interest in such
Collateral, and (III) when so perfected, the Bond Trustee's security
interest in such Collateral as to which perfection of such security
interest can be accomplished only by filing a financing statement will
have priority over any other security interest in such Collateral if
such other security interest, in order to achieve priority over the
Bond Trustee's security interest by the filing of one or more
financing statements, was required by law to have been perfected by
making such filings in the filing offices prior to the effective date
of [describe search reports and effective date]; and
(xii) the Issuer is not and, after giving effect to the offering
and sale of the Securities and the application of the proceeds thereof
as described in the Prospectus, will not be an "investment company" or
under the "control" of an "investment company" as such terms are
defined under the Investment Company Act of 1940, as amended.
(d) The Representative shall have received from Cravath, Swaine &
Xxxxx, counsel for the Underwriters, such opinion or opinions, dated the
Time of Delivery, with respect to the issuance and sale of the Securities,
the Indenture, the Registration Statement, the Prospectus (together with
any supplement thereto) and other related matters as the Representative may
reasonably require, and each of the Company and the Issuer shall have
furnished to such counsel such documents as they request for the purpose of
enabling them to pass upon such matters.
(e) The Representative shall have received a certificate of the
Company, signed by any Vice President of the Company, dated the Time of
Delivery, in form and substance reasonably satisfactory to the
Representative, to the effect that the signer of such certificate has
reviewed the Registration Statement, the Prospectus, any supplement to the
Prospectus and this Agreement and that:
(i) the representations and warranties of the Company and the
Issuer in this Agreement, the Sale Agreement and the Servicing
Agreement are true and correct in all material respects on and as of
the Time of Delivery with the same effect as if made at the Time of
Delivery, and the Company and the Issuer have complied with all the
agreements and satisfied all the conditions on their respective
17
parts to be performed or satisfied at or prior to the Time of
Delivery;
(ii) no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that
purpose have been instituted or, to the Company's knowledge,
threatened; and
(iii) since the dates as of which information is given in the
Prospectus (exclusive of any supplement thereto), there has been no
material adverse change in the condition (financial or other),
earnings, business or properties of the Company and its Subsidiaries
taken as a whole (if such a change would impair the investment quality
of the Securities or make it impractical or inadvisable to market the
Securities) or the Issuer, whether or not arising from transactions in
the ordinary course of business, except as set forth in or
contemplated in the Prospectus (exclusive of any supplement thereto).
(f) At the Time of Delivery, the Representative shall have received
from PricewaterhouseCoopers LLP (i) a letter or letters (which may refer to
letters previously delivered to one or more of the Representative), dated
as of the Time of Delivery, in form and substance satisfactory to the
Representative, confirming that they are independent accountants within the
meaning of the Act and the Exchange Act and the respective applicable
published rules and regulations thereunder and stating in effect that they
have performed certain specified procedures as a result of which they
determined that certain information of an accounting, financial or
statistical nature (which is limited to accounting, financial or
statistical information derived from the general accounting records of the
Company and its Subsidiaries) set forth in the Registration Statement and
the Prospectus, including information specified by the Underwriters and set
forth under the captions "Prospectus Summary," "PECO Energy's Restructuring
Plan," "The Qualified Rate Orders And The Intangible Transition Charges,"
"The Seller and Servicer," and "The Transition Bonds" in the Prospectus,
agrees with the accounting records of the Company and its Subsidiaries,
excluding any questions of legal interpretation, and (ii) the opinion or
certificate, dated as of the Time of Delivery, in form and substance
satisfactory to the Representative, satisfying the requirements of Section
2.10(7) of the Indenture.
18
References to the Prospectus in this clause (f) include any supplement
thereto at the date of the letter.
In addition, except as provided in Schedule I hereto, at the Execution
Time, the Representative shall have received from PricewaterhouseCoopers
LLP a letter or letters, dated as of the Execution Time, in form and
substance satisfactory to the Representative, to the effect set forth
above.
(g) Subsequent to the Execution Time or, if earlier, the dates as of
which information is given in the Registration Statement (exclusive of any
amendment thereof) and the Prospectus (exclusive of any supplement
thereto), and at or prior to the Time of Delivery, there shall not have
been any change, or any development involving a prospective change, in or
affecting either (i) the business or properties or financial condition of
the Company or the Issuer, or (ii) the Intangible Transition Property, the
Securities, the Qualified Rate Orders or the Statute, the effect of which
is, in the judgment of the Representative, so material and adverse as to
make it impractical or inadvisable to proceed with the offering or delivery
of the Securities as contemplated by the Registration Statement (exclusive
of any amendment thereof) and the Prospectus (exclusive of any supplement
thereto).
(h) The Representative, the Company and the Issuer shall have received
on the Closing Date an opinion letter or letters of Xxxxxxx Xxxxx Xxxxxxx &
Ingersoll, counsel to the Company and the Issuer, dated the Time of
Delivery, in form and substance reasonably satisfactory to the
Representative, (i) with respect to the characterization of the transfer of
the Intangible Transition Property by the Company to the Issuer as a "true
sale" for bankruptcy purposes, (ii) to the effect that a 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 and
(iii) to the effect that upon the delivery of the fully executed Sale
Agreement to the Issuer and the payment of the purchase price of the
Intangible Transition Property by the Issuer to the Seller pursuant to the
Sale Agreement, then (A) the transfer of the Intangible Transition Property
by the Seller to the Issuer pursuant to the Sale Agreement conveys the
Seller's right, title and interest in the Intangible Transition Property to
the Issuer and will be treated as an absolute transfer of all the Seller's
right, title and
19
interest in the Intangible Transition Property, other than for federal and
state tax purposes, (B) such transfer of the Intangible Transition Property
is perfected, (C) such transfer has priority over any other assignment of
the Intangible Transition Property, and (D) the Intangible Transition
Property is free and clear of all liens created prior to its transfer to
the Issuer pursuant to the Sale Agreement.
(i) At or prior to the Time of Delivery, the Representative shall have
received evidence, in form and substance reasonably satisfactory to the
Representative, that the Company has obtained a release of the Intangible
Transition Property from the lien of that certain mortgage, dated May 1,
1923, as supplemented and amended to the date hereof, between the Company
and First Union Trust Company, National Association (as successor to
Fidelity Trust Company), as trustee.
(j) The Securities shall have been rated in the highest long-term
rating category by each of the Rating Agencies or in such other rating
category as was specified in the Preliminary Prospectus.
(k) At or prior to the Time of Delivery, the Representative shall have
received evidence, in form and substance reasonably satisfactory to the
Representative, that appropriate filings have been or are being made in
accordance with the Statute and other applicable law reflecting the grant
of a security interest by the Issuer in the Collateral to the Bond Trustee.
(l) At or prior to the Time of Delivery, the Representative shall have
received evidence of the Pennsylvania Public Utility Commission's approval
of the Qualified Rate Orders.
(m) Prior to the Time of Delivery, each of the Company and the Issuer
shall have furnished to the Representative such further information,
certificates, opinions and documents as the Representative may reasonably
request and as are customary for transactions of this type.
(n) The Representative shall have received an opinion of counsel to
the Bond Trustee, dated the Time of Delivery, in form and substance
reasonably satisfactory to the Representative, to the effect that:
(i) the Bond Trustee is a New York banking association in good
standing under the laws of the State of New York;
20
(ii) the Indenture has been duly authorized, executed and
delivered, and constitutes a legal, valid and binding instrument
enforceable against the Bond Trustee in accordance with its terms
(subject, as to enforcement of remedies, to applicable bankruptcy,
reorganization, insolvency, moratorium or other similar laws or
equitable principles affecting creditors' rights generally from time
to time in effect); and
(iii) the Securities have been duly authenticated by the Bond
Trustee.
(o) The Representative shall have received an opinion of counsel to
the Issuer Trustee, dated the Time of Delivery, in form and substance
reasonably satisfactory to the Representative, to the effect that:
(i) the Issuer Trustee has been duly incorporated and is validly
existing as a national banking association in good standing under the
federal laws of the United States of America, with full corporate
trust power and authority to enter into and perform its obligations
under the Trust Agreement; and
(ii) the Trust Agreement has been duly authorized, executed and
delivered by the Issuer, and constitutes a legal, valid and binding
instrument enforceable against the Issuer in accordance with its terms
(subject, as to enforcement of remedies, to applicable bankruptcy,
reorganization, insolvency, moratorium or other laws affecting
creditors' rights generally from time to time in effect).
This Agreement and all obligations of the Underwriters hereunder may be
canceled at, or at any time prior to, the Time of Delivery by the Representative
if any of the conditions specified in this Section 7 shall not have been
fulfilled in all material respects when and as provided in this Agreement.
Notice of such cancelation shall be given to the Company in writing or by
telephone or telegraph confirmed in writing.
The documents required to be delivered by this Section 7 shall
be delivered at the office of Xxxxxxx Xxxxx Xxxxxxx & Xxxxxxxxx, LLP, counsel
for the Company, at 0000 Xxxxxx Xxxxxx, 00xx Xxxxx, Xxxxxxxxxxxx, XX 00000-0000,
at the Time of Delivery.
8. Indemnification and Contribution. (a) The Company agrees to indemnify
and hold harmless each
21
Underwriter, the directors, officers, employees and agents of each Underwriter
and each person who controls any Underwriter within the meaning of either
Section 15 of the Act or Section 20 of the Exchange Act from and against any and
all losses, claims, damages, liabilities and expenses, based upon any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement (including the Prospectus contained therein and including
any amendment or supplement to any thereof) or any omission or alleged omission
to state therein a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading; provided, however, that the Company will not be liable in
any such case to the extent that any such losses, claims, damages, liabilities
or expenses are caused by (i) any such untrue statement or alleged untrue
statement or omission or alleged omission made therein in reliance upon and in
conformity with written information furnished to the Company or the Issuer by or
on behalf of any Underwriter through the Representative specifically for
inclusion therein, or (ii) the failure of any Underwriter to send to any
purchaser to whom it had sent a Preliminary Prospectus an amended Prospectus as
shall have been furnished by the Company within the time periods required by the
Act and in such quantities are required by each Underwriter for such purpose
(excluding documents incorporated therein by reference), if required by the Act,
to the extent that the amended prospectus would have cured the defect in the
Preliminary Prospectus giving rise to such losses, claims, damages or
liabilities, or (iii) any use of the Prospectus by any Underwriter after the
expiration of that period, if any, during which the Underwriter is required by
law to deliver a prospectus, unless the Company shall have been advised in
writing of such intended use. This indemnity agreement will be in addition to
any liability which the Company may otherwise have.
(b) Each Underwriter severally and not jointly agrees to indemnify and hold
harmless the Company, each of its directors, each of its officers who signs the
Registration Statement, and each person who controls the Company within the
meaning of either the Act or the Exchange Act, the Issuer and each of its
controlling persons and trustees to the same extent as the foregoing indemnity
from the Company to each Underwriter, but only with reference to written
information relating to such Underwriter furnished to the Company by or on
behalf of such Underwriter through the Representative specifically for inclusion
in the documents referred to in the foregoing indemnity. This indemnity
agreement will be in addition to any liability which any Underwriter may
otherwise have. The Company acknowledges that the statements set forth in the
last paragraph of the cover page of the Prospectus Supplement and the Prospectus
and the information set forth under the
22
heading "Underwriting the Series __ Bonds" in the Prospectus Supplement and
"Plan of Distribution" in the Prospectus constitute the only information
furnished in writing by or on behalf of the several Underwriters for inclusion
in the documents referred to in the foregoing indemnity.
(c) If any action, suit or proceeding shall be brought against any
Underwriter or any person controlling any Underwriter in respect of which
indemnity may be sought against the Company, such Underwriter or such
controlling person shall promptly notify the Company and the Company shall
assume the defense thereof, including the employment of counsel and payment of
all fees and expenses. Such Underwriter or any such controlling person shall
have the right to employ separate counsel in any such action, suit or proceeding
and to participate in the defense thereof, but the fees and expenses of such
counsel shall be at the expense of such Underwriter or such controlling person
unless (i) the Company has agreed in writing to any such fees and expenses, (ii)
the Company has failed, within 30 days after the Company has been so notified,
to assume the defense and employ counsel, or (iii) the named parties to any such
action, suit or proceeding (including any impleaded parties) include both such
Underwriter or such controlling person and the Company and such Underwriter or
such controlling person shall have been advised by its counsel that
representation of such indemnified party and the Company by the same counsel
would be inappropriate under applicable standards of professional conduct
(whether or not such representation by the same counsel has been proposed) due
to actual or potential differing interests or defenses among them (in which case
the Company shall not have the right to assume the defense of such action, suit
or proceeding on behalf of such Underwriter or such controlling person). It is
understood, however, that the Company shall, in connection with any one such
action, suit or proceeding or separate but substantially similar or related
actions, suits or proceedings in the same jurisdiction arising out of the same
general allegations or circumstances, be liable for the reasonable fees and
expenses of only one separate firm of attorneys (in addition to any local
counsel) at any time for all such Underwriters and controlling persons not
having actual or potential differing interests or defenses with you or among
themselves, which firm shall be designated in writing by the Representative, and
that all such fees and expenses shall be reimbursed as they become due. The
Company shall not be liable for any settlement of any such action, suit or
proceeding effected without their written consent, but if settled with such
written consent, or if there be a final judgment for the plaintiff in any such
action, suit or proceeding, the Company agrees to indemnify and hold harmless
any Underwriter, to the extent provided in the preceding paragraph, and any such
controlling person
23
from and against any loss, claim, damage, liability or expense by reason of such
settlement or judgment.
(d) If the indemnification provided for in this Section 8 is for any reason
held to be unenforceable by an indemnified party although applicable in
accordance with its terms (including the terms of subsection (b) of this Section
8), an indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages, liabilities or expenses in such proportion as
is equitable and as shall reflect both the relative benefit received by the
Issuer and the Company on the one hand and the Underwriter or Underwriters, as
the case may be, on the other hand, from the offering of the Securities, and the
relative fault, if any, of the Issuer and the Company on the one hand and of the
Underwriter or Underwriters, as the case may be, on the other hand in connection
with the statements or omissions which resulted in such losses, liabilities,
claims, damages or expenses, as well as any other relevant equitable
considerations. The relative benefit received by the Issuer and the Company on
the one hand and the Underwriters or Underwriters, as the case may be, on the
other hand, in connection with the offering of the Securities shall be deemed to
be in the same proportion as the total net proceeds from the offering of the
Securities (before deducting expenses) received by the Issuer and the Company
bear to the total commissions, concessions and discounts received by the
Underwriter or Underwriters, as the case may be. The 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 and the Company on
the one hand, or the Underwriter or Underwriters, as the case may be, on the
other hand, and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission. The Company
and the Underwriters agree that it would not be just and equitable if
contribution pursuant to this Section 8 were determined by a pro rata allocation
(even if the Underwriters were treated as one entity for such purpose) or by any
other method of allocation that does not take account of the equitable
considerations referred to above. The amount paid or payable by an indemnified
party as a result of the losses, liabilities, claims, damages and expenses
referred to above 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.
Notwithstanding the provisions of this Section 8, no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price of the Securities underwritten by it and distributed to the
24
public exceeds the amount of any damages which such Underwriter has otherwise
been required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations to contribute pursuant to this
Section 8 are several in proportion to the respective principal amounts of
Securities set forth opposite their names in Schedule I hereto and not joint.
(e) No indemnifying party shall, without the prior written consent of the
indemnified party, effect any settlement of any pending or threatened action,
suit or 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 includes an unconditional release of such
indemnified party from all liability on claims that are the subject matter of
such action, suit or proceeding.
(f) Any losses, claims, damages, liabilities or expenses for which an
indemnified party is entitled to indemnification or contribution under this
Section 8 shall be paid by the indemnifying party to the indemnified party as
such losses, claims, damages, liabilities or expenses become due. A successor to
any Underwriter or any person controlling any Underwriter, or to the Issuer or
the Company, their directors or officers, or any person controlling the Issuer
or the Company, shall be entitled to the benefits of the indemnity, contribution
and reimbursement agreements contained in this Section 8.
9. If any one or more Underwriters shall fail to purchase and pay for any
of the Securities agreed to be purchased by such Underwriter or Underwriters
hereunder and such failure to purchase shall constitute a default in the
performance of its or their obligations under this Agreement, the nondefaulting
Underwriters shall be obligated severally to take up and pay for (in the
respective proportions which the amount of Securities set forth opposite their
names in Schedule II hereto bears to the aggregate amount of Securities set
forth opposite the names of all the remaining Underwriters) the Securities which
the defaulting Underwriter or Underwriters agreed but failed to purchase;
provided, however, that in the event that the aggregate amount of Securities
which the defaulting Underwriter or Underwrites agreed but failed to purchase
shall exceed 10% of the aggregate amount of Securities set forth in Schedule II
hereto, the nondefaulting Underwriters shall have the right to purchase all, but
shall not be under any obligation to purchase any, of the Securities, and if
such nondefaulting Underwriters do not purchase all the
25
Securities, this Agreement will terminate without liability to any nondefaulting
Underwriter, the Issuer or the Company. In the event of a default by any
Underwriter as set forth in this Section 9, the Time of Delivery shall be
postponed for such period, not exceeding seven days, as the Representative shall
determine in order that the required changes in the Registration Statement and
the Prospectus or in any other documents or arrangements may be effected.
Nothing contained in this Agreement shall relieve any defaulting Underwriter of
its liability, if any, to the Company, the Issuer and any nondefaulting
Underwriter for damages occasioned by its default hereunder.
10. This Agreement shall be subject to termination in the absolute
discretion of the Representative, by notice given to the Company prior to
delivery of and payment for the Securities, if at any time prior to such time
(i) there shall have occurred any change, or any development involving a
prospective change, in or affecting either (A) the business, properties or
financial condition of the Company (if such a change or development would, in
the judgment of the Representative, impair the investment quality of the
Securities or make it impractical or inadvisable to market the Securities) or
the Issuer or (B) the Intangible Transition Property, the Securities, the
Qualified Rate Orders or the Statute, the effect of which, in the judgment of
the Representative, materially impairs the investment quality of the Securities
or makes it impractical or inadvisable to market the Securities, (ii) trading in
the Company's Common Stock shall have been suspended by the Commission or the
New York Stock Exchange (if such a suspension would, in the judgment of the
Representative, impair the investment quality of the Securities or make it
impractical or inadvisable to market the Securities) or trading in securities
generally on the New York Stock Exchange shall have been suspended or limited or
minimum prices shall have been established on such Exchange, (iii) a banking
moratorium shall have been declared by Federal, New York State or Pennsylvania
State authorities or (iv) there shall have occurred any outbreak or escalation
of hostilities, declaration by the United States of a national emergency or war
or other calamity or crisis the effect of which on financial markets is such as
to make it, in the judgment of the Representative, impracticable or inadvisable
to proceed with the offering or delivery of the Securities as contemplated by
the Final Prospectus (exclusive of any supplement thereto).
11. If the sale of the Securities provided for herein is not consummated
because any condition to the obligations of the Underwriters set forth in
Section 7 hereof is not satisfied, because of any termination pursuant to
Section 10 hereof or because of any refusal, inability or failure on the part of
the Company to perform any agreement
26
herein or comply with any provision hereof other than by reason of a default by
any of the Underwriters, the Company will reimburse the Underwriters severally
upon demand for all out-of-pocket expenses (including reasonable fees and
disbursements of counsel) that shall have been incurred by them in connection
with the proposed purchase and sale of the Securities.
12. The respective agreements, representations, warranties, indemnities and
other statements of the Company, the Issuer and the several Underwriters 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 Company
or any officer, director or controlling person of the Company, and shall survive
delivery of and payment for the Securities. The provisions of Sections 8 and 12
hereof shall survive the termination or cancelation of this Agreement.
13. In all dealings hereunder, you shall act on behalf of each of the
Underwriters, and the parties hereto shall be entitled to act and rely on any
statement, request, notice or agreement on behalf of any Underwriter made or
given by you on behalf of the Underwriters.
All communications hereunder will be in writing and effective only on
receipt, and, if sent to the Representative, will be mailed, delivered or
telegraphed and confirmed to them, at the address specified in Schedule I
hereto; and if sent to the Company or the Issuer, will be mailed, delivered or
telegraphed and confirmed to the address of the Company set forth in the
Registration Statement, Attention: Secretary.
14. This Agreement shall be binding on and inure solely to the benefit of
the Underwriters, the Issuer, the Company and, to the extent provided in Section
8 and Section 12 hereof, the officers and directors of the Company 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. No purchaser of any of the Securities from any Underwriter shall be
deemed a successor or assign merely by reason of such purchase.
15. Time shall be of the essence of this 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 and the term "Execution Time"
27
shall mean the date and time that this Agreement is executed and delivered by
the parties hereto.
16. This Agreement shall be governed by and construed in accordance with
the laws of the State of New York.
17. This Agreement may be executed by any one or more of the parties hereto
in any number of counterparts, each of which shall be deemed to be an original,
but all such respective counterparties shall together constitute one and the
same instrument.
28
If the foregoing is in accordance with your understanding, please sign and
return to us 10 counterparts hereof, whereupon this letter and your acceptance
shall constitute a binding agreement between each of the Underwriters, on the
one hand, and the Company and the Issuer on the other. It is understood that
your acceptance of this letter on behalf of each of the Underwriters is pursuant
to the authority set forth in a form of Agreement among Underwriters, the form
of which shall be submitted to the Company for examination upon request, but
without warranty on your part as to the authority of the signers thereof.
Very truly yours,
PECO Energy Company
By:
-------------------------------
Name:
Title:
PECO Energy Transition Trust
By:
-------------------------------
Name:
Title:
Accepted, [ ], 2000
Xxxxxxx Xxxxx Xxxxxx Inc.
By: Xxxxxxx Xxxxx Barney Inc.
By:
-------------------------------
Name:
Title:
For itself and the other several
Underwriters, if any, named in
Schedule II to the foregoing
Agreement.
29
SCHEDULE I
Underwriting Agreement dated [ ], 2000
Registration Statement No. 333-[ ]
Representative:
Xxxxxxx Xxxxx Xxxxxx Inc.
0 Xxxxx Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Title, Purchase Price and Description of Securities:
Title: PECO Energy Transition Trust
$1,000,000,000 Transition Bonds
Series [ ]
Principal amount, Price to Public, Underwriting
Discounts and Commissions and Proceeds to Trust:
Total
Principal Underwriting
Amount of Price to Discounts and Proceeds to
Class Public Commissions Trust
------------- -------------- -------------- ----------------
Per Class $[ ] $[ ] $[ ] $[ ]
A-1 Bond
Per Class $[ ] $[ ] $[ ] $[ ]
A-2 Bond
Per Class $[ ] $[ ] $[ ] $[ ]
A-3 Bond
Per Class $[ ] $[ ] $[ ] $[ ]
A-4 Bond
-------------- -------------- -------------- --------------
Total $1,000,000,000 $[ ] $[ ] $[ ]
============== ============== ============== ==============
Original Issue Discount: None
Redemption provisions: Optional Redemption and Mandatory
Redemption as set forth in
Article X of the Indenture
Other provisions:
Closing Date, Time and Location: [ ], 2000
9:30 a.m., Philadelphia
time, Philadelphia, PA
SCHEDULE II
Principal Amount of Transition Bonds to be Purchased
------------------------------------------------------------------------------------------------------------------------------
Class A-1 Class A-2 Class A-3
Underwriters Bonds Bonds Bonds Class A-4 Bonds Total
--------------- ---------------- ---------------- ---------------- ---------------- --------------
Xxxxxxx Xxxxx $[ ] $[ ] $[ ] $[ ] $[ ]
Barney
[ ] $[ ] $[ ] $[ ] $[ ] $[ ]
[ ] $[ ] $[ ] $[ ] $[ ] $[ ]
[ ] $[ ] $[ ] $[ ] $[ ] $[ ]
---------------- ---------------- ---------------- ---------------- --------------
Total........... $[ ] $[ ] $[ ] $[ ] $1,000,000,000
================ ================ ================ ================ ==============
