EXECUTION COPY
ATLANTIC CITY ELECTRIC TRANSITION FUNDING LLC
TRANSITION BONDS, SERIES 2003-1
ATLANTIC CITY ELECTRIC COMPANY
UNDERWRITING AGREEMENT
New York, New York
December 18, 2003
To the Representative named
in Schedule I hereto of the
Underwriters named in
Schedule II hereto
Ladies and Gentlemen:
1. Introduction. Atlantic City Electric Transition Funding LLC, a
Delaware limited liability company (the "Issuer"), proposes to sell to the
underwriters named in Schedule II hereto (the "Underwriters"), for whom you (the
"Representative") are acting as representative, the principal amount of the
securities identified in Schedule I hereto (the "Transition Bonds"). If the firm
or firms listed in Schedule II hereto include only the firm listed in Schedule I
hereto, then the terms "Underwriters" and "Representative", as used herein,
shall each be deemed to refer to such firm.
The Issuer is a wholly-owned subsidiary of Atlantic City Electric
Company, an operating electric utility incorporated under the laws of the State
of New Jersey (the "Company"), and was formed on March 28, 2001 for the purpose
of purchasing and owning the Bondable Transition Property, issuing one or more
series of Transition Bonds, and pledging its interest in the Collateral to The
Bank of New York (the "Bond Trustee") under an indenture, dated as of December
19, 2002 (as amended and supplemented from time to time, including any Series
Supplement, the "Indenture"), between the Issuer and the Bond Trustee, to secure
such Transition Bonds. All outstanding series of transition bonds issued under
the Indenture (collectively the "Issuer Transition Bonds") will be secured
primarily by the Bondable Transition Property. The Initial Bondable Transition
Property was sold by the Company to the Issuer pursuant to a sale agreement,
dated as of December 19, 2002 (the "Sale Agreement"), and the related xxxx of
sale (the "Series 2002-1 Xxxx of Sale"), between the Company and the Issuer in
connection with the issuance by the Issuer of $440,000,000 aggregate principal
amount of its Transition Bonds, Series 2002-1 (the "Series 2002-1 Transition
Bonds") on December 19, 2002. The additional Bondable Transition Property
established pursuant to the Financing Order (as defined below) in connection
with the issuance of the Transition Bonds (the "Series 2003-1 Bondable
Transition Property") will be sold to the Issuer by the Company pursuant to the
Sale Agreement and a related xxxx of sale (together with the Series 2002-1 Xxxx
of Sale, the "Bills of Sale") in connection with the issuance of the Transition
Bonds. The Bondable Transition Property is serviced pursuant to a servicing
agreement, dated as of December 19, 2002 (as
amended and supplemented from time to time, the "Servicing Agreement"), between
the Company, as servicer, and the Issuer.
Capitalized terms used and not otherwise defined herein shall have the
meanings given to them in the Indenture.
2. Representations and Warranties. Each of the Company and the Issuer
represents and warrants to, and agrees with, each Underwriter as set forth below
in this Section 2. Certain terms used in this Section 2 are defined in paragraph
(c) hereof.
(a) If the offering of the Transition Bonds is a Delayed Offering (as
specified in Schedule I hereto), paragraph (i) below is applicable and, if
the offering of the Transition Bonds is a Non-Delayed Offering (as so
specified), paragraph (ii) below is applicable.
(i) The Issuer and the Transition Bonds meet the requirements for
the use of Form S-3 under the Securities Act of 1933 (the "Act"), and
the Issuer has filed with the Securities and Exchange Commission (the
"SEC") a registration statement (the file number of which is set forth
in Schedule I hereto) on such Form, including a basic prospectus, for
registration under the Act of the offering and sale of the Transition
Bonds. The Issuer may have filed one or more amendments thereto, and
may have used a Preliminary Final Prospectus, each of which has
previously been furnished to you. Such registration statement, as so
amended, has become effective. The offering of the Transition Bonds is
a Delayed Offering and, although the Basic Prospectus may not include
all the information with respect to the Transition Bonds and the
offering thereof required by the Act and the rules thereunder to be
included in the Final Prospectus, the Basic Prospectus includes all
such information required by the Act and the rules thereunder to be
included therein as of the Effective Date. The Issuer will next file
with the SEC pursuant to Rules 415 and 424(b) (2) or (5) a final
supplement to the form of prospectus included in such registration
statement relating to the Transition Bonds and the offering thereof.
As filed, such final prospectus supplement shall include all required
information with respect to the Transition Bonds and the offering
thereof and, except to the extent the Representative shall agree in
writing to a modification, shall be in all substantive respects in the
form furnished to you prior to the Execution Time or, to the extent
not completed at the Execution Time, shall contain only such specific
additional information and other changes (beyond that contained in the
Basic Prospectus and any Preliminary Final Prospectus) as the Issuer
has advised you, prior to the Execution Time, will be included or made
therein.
(ii) The Issuer and the Transition Bonds meet the requirements
for the use of Form S-3 under the Act and the Issuer has filed with
the SEC a registration statement (the file number of which is set
forth in Schedule I hereto) on such Form, including a basic
prospectus, for registration under the Act of the offering and sale of
the Transition Bonds. The Issuer may have filed one or more amendments
thereto, including a Preliminary Final Prospectus, each of which has
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previously been furnished to you. The Issuer will next file with the
SEC either (x) a final prospectus supplement relating to the
Transition Bonds in accordance with Rules 430A and 424(b)(l) or (4),
or (y) prior to the effectiveness of such registration statement, an
amendment to such registration statement, including the form of final
prospectus supplement. In the case of clause (x), the Issuer has
included in such registration statement, as amended at the Effective
Date, all information (other than Rule 430A Information) required by
the Act and the rules thereunder to be included in the Final
Prospectus with respect to the Transition Bonds and the offering
thereof. As filed, such final prospectus supplement or such amendment
and form of final prospectus supplement shall contain all Rule 430A
Information, together with all other such required information, with
respect to the Transition Bonds and the offering thereof and, except
to the extent the Representative shall agree in writing to a
modification, shall be in all substantive respects in the form
furnished to you prior to the Execution Time or, to the extent not
completed at the Execution Time, shall contain only such specific
additional information and other changes (beyond that contained in the
Basic Prospectus and any Preliminary Final Prospectus) as the Issuer
has advised you, prior to the Execution Time, will be included or made
therein.
(b) On the Effective Date, the Registration Statement did or will, and
when the Final Prospectus is first filed (if required) in accordance with
Rule 424(b) and on the Closing Date, the Final Prospectus (and any
supplement thereto) will, comply in all material respects with the
applicable requirements of the Act, the Securities Exchange Act of 1934
(the "Exchange Act") and the Trust Indenture Act of 1939 (the "Trust
Indenture Act") and the respective rules thereunder; on the Effective Date,
the Registration Statement did not or will not contain any untrue statement
of a material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein not
misleading; on the Effective Date and on the Closing Date, the Indenture
did or will comply in all material respects with the requirements of the
Trust Indenture Act and the rules thereunder; and, on the Effective Date,
the Final Prospectus, if not filed pursuant to Rule 424(b), did not or will
not, and on the date of any filing pursuant to Rule 424(b) and on the
Closing Date, the Final Prospectus (together with any supplement thereto)
will not, include any untrue statement of a material fact or omit to state
a material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
provided, however, that neither the Issuer nor the Company makes any
representations or warranties as to (i) that part of the Registration
Statement which shall constitute the Statements of Eligibility and
Qualification (Forms T-l) under the Trust Indenture Act of the Bond Trustee
or (ii) the information contained in or omitted from the Registration
Statement or the Final Prospectus (or any supplement thereto) in reliance
upon and in conformity with information furnished in writing to the Issuer
by or on behalf of any Underwriter through the Representative specifically
for inclusion in the Registration Statement or the Final Prospectus (or any
supplement thereto).
(c) The terms which follow, when used in this Agreement, shall have
the meanings indicated. The term "Effective Date" shall mean each date that
the Registration Statement and any post-effective amendment or amendments
thereto became or become
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effective and each date after the date hereof on which a document
incorporated by reference in the Registration Statement is filed.
"Execution Time" shall mean the date and time that this Agreement is
executed and delivered by the parties hereto. "Basic Prospectus" shall mean
the prospectus referred to in paragraph (a) above contained in the
Registration Statement at the Effective Date including, in the case of a
Non-Delayed Offering, any Preliminary Final Prospectus. "Preliminary Final
Prospectus" shall mean any preliminary prospectus supplement to the Basic
Prospectus which describes the Transition Bonds and the offering thereof
and is used prior to filing of the Final Prospectus. "Final Prospectus"
shall mean the prospectus supplement relating to the Transition Bonds that
is first filed pursuant to Rule 424(b) after the Execution Time, together
with the Basic Prospectus or, if, in the case of a Non-Delayed Offering, no
filing pursuant to Rule 424(b) is required, shall mean the form of final
prospectus relating to the Transition Bonds, including the Basic
Prospectus, included in the Registration Statement at the Effective Date.
"Registration Statement" shall mean the registration statement referred to
in paragraph (a) above, including incorporated documents, exhibits and
financial statements, as amended at the Execution Time (or, if not
effective at the Execution Time, in the form in which it shall become
effective) and, in the event any post-effective amendment thereto becomes
effective prior to the Closing Date (as hereinafter defined), shall also
mean such registration statement as so amended. Such term shall include any
Rule 430A Information deemed to be included therein at the Effective Date
as provided by Rule 430A. "Rule 415", "Rule 424", "Rule 430A" and
"Regulation S-K" refer to such rules or regulation under the Act. "Rule
430A Information" means information with respect to the Transition Bonds
and the offering thereof permitted to be omitted from the Registration
Statement when it becomes effective pursuant to Rule 430A. Any reference
herein to the Registration Statement, the Basic Prospectus, any Preliminary
Final Prospectus or the Final Prospectus shall be deemed to refer to and
include the documents incorporated by reference therein pursuant to Item 12
of Form S-3 which were filed under the Exchange Act on or before the
Effective Date of the Registration Statement or the issue date of the Basic
Prospectus, any Preliminary Final Prospectus or the Final Prospectus, as
the case may be; and any reference herein to the terms "amend", "amendment"
or "supplement" with respect to the Registration Statement, the Basic
Prospectus, any Preliminary Final Prospectus or the Final Prospectus shall
be deemed to refer to and include the filing of any document under the
Exchange Act after the Effective Date of the Registration Statement or the
issue date of the Basic Prospectus, any Preliminary Final Prospectus or the
Final Prospectus, as the case may be, deemed to be incorporated therein by
reference. A "Non-Delayed Offering" shall mean an offering of securities
which is intended to commence promptly after the effective date of a
registration statement, with the result that, pursuant to Rules 415 and
430A, all information (other than Rule 430A Information) with respect to
the securities so offered must be included in such registration statement
at the effective date thereof. A "Delayed-Offering" shall mean an offering
of securities pursuant to Rule 415 which does not commence promptly after
the effective date of a registration statement, with the result that only
information required pursuant to Rule 415 need be included in such
registration statement at the effective date thereof with respect to the
securities so offered. Whether the offering of the Transition Bonds is a
Non-Delayed Offering or a Delayed Offering shall be set forth in Schedule I
hereto.
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2A Each Underwriter represents and warrants severally to and agrees
with the Company and the Issuer that:
(a) As of the date hereof and as of the Closing Date, each Underwriter
has complied with all of its obligations under Section 11 hereof. Prior to the
delivery of the Preliminary Final Prospectus, no written material of any kind
relating to the Transition Bonds will be delivered to potential investors other
than Computational Materials and ABS Term Sheets (as such terms are defined in
Section 11 hereof). It is understood and agreed between the parties hereto that
the only ABS Term Sheets or Computational Materials that have been or will be
delivered to prospective investors by the Underwriters are the Computational
Materials dated December 10, 2003 and the Computational Materials dated December
17, 2003 that have been delivered by the Issuer to the Representative and that
are attached hereto as Exhibit B and Exhibit C, respectively.
3. Purchase and Sale. Subject to the terms and conditions and in
reliance upon the representations and warranties herein set forth, the Issuer
agrees to sell to each Underwriter, and each Underwriter 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 Transition Bonds set forth
opposite such Underwriter's name in Schedule II hereto. Such purchase shall be
in accordance with the other terms and conditions set forth in Schedule I
hereto.
4. Delivery and Payment. Delivery of and payment for the Transition
Bonds shall be made on the date and at the time specified in Schedule I hereto,
which date and time may be postponed by agreement between the Representative and
the Issuer or as provided in Section 9 hereof (such date and time of delivery
and payment for the Transition Bonds being herein called the "Closing Date").
Delivery of the Transition Bonds shall be made to the Representative for the
respective accounts of the several Underwriters against payment by the several
Underwriters through the Representative of the purchase price thereof to the
Issuer by wire transfer of immediately available funds. Delivery of the
Transition Bonds shall be made at such location as the Representative shall
reasonably designate at least one business day in advance of the Closing Date.
The Transition Bonds to be so delivered shall be initially represented by Bonds
registered in the name of Cede & Co., as nominee of The Depository Trust Company
("DTC"). The interests of beneficial owners of the Transition Bonds will be
represented by book entries on the records of DTC and participating members
thereof. Definitive Transition Bonds will be available only under limited
circumstances.
The Issuer agrees to have the Transition Bonds available for
inspection, checking and packaging by the Representative in New York, New York,
not later than 1:00 PM on the business day prior to the Closing Date.
5. Covenants.
(a) Covenants of the Issuer. The Issuer covenants and agrees with the
several Underwriters that:
(i) The Issuer will use its best efforts to cause the
Registration Statement, if not effective at the Execution Time, and
any amendment thereto, to
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become effective. Prior to the termination of the offering of the
Transition Bonds, the Issuer will not file any amendment of the
Registration Statement or supplement (including the Final Prospectus
or any Preliminary Final Prospectus) to the Basic Prospectus unless
the Issuer has furnished you a copy for your review prior to filing
and will not file any such proposed amendment or supplement to which
you reasonably object. Subject to the foregoing sentence, the Issuer
will cause the Final Prospectus, properly completed, and any
supplement thereto to be filed with the SEC pursuant to the applicable
paragraph of Rule 424(b) within the time period prescribed and will
provide evidence satisfactory to the Representative of such timely
filing. The Issuer will promptly advise the Representative (i) when
the Registration Statement, if not effective at the Execution Time,
and any amendment thereto, shall have become effective, (ii) when the
Final Prospectus, and any supplement thereto, shall have been filed
with the SEC pursuant to Rule 424(b), (iii) when, prior to termination
of the offering of the Transition Bonds, any amendment to the
Registration Statement shall have been filed or become effective, (iv)
of any request by the SEC for any amendment of the Registration
Statement or supplement to the Final Prospectus or for any additional
information, (v) of the issuance by the SEC of any stop order
suspending the effectiveness of the Registration Statement or the
institution or threatening of any proceeding for that purpose and (vi)
of the receipt by the Issuer of any notification with respect to the
suspension of the qualification of the Transition Bonds for sale in
any jurisdiction or the initiation or threatening of any proceeding
for such purpose. The Issuer will use its best efforts to prevent the
issuance of any such stop order and, if issued, to obtain as soon as
possible the withdrawal thereof.
(ii) If, at any time when a prospectus relating to the Transition
Bonds is required to be delivered under the Act, any event occurs as a
result of which the Final Prospectus as then supplemented would
include any untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein in the light of
the circumstances under which they were made not misleading, or if it
shall be necessary to amend the Registration Statement or supplement
the Final Prospectus to comply with the Act or the Exchange Act or the
respective rules thereunder, the Issuer promptly will (i) prepare and
file with the SEC, subject to the second sentence of paragraph (a)(i)
of this Section 5, an amendment or supplement which will correct such
statement or omission or effect such compliance and (ii) supply any
supplemented Prospectus to you in such quantities as you may
reasonably request.
(iii) As soon as practicable, the Issuer will make generally
available to the Bondholders 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.
(iv) The Issuer will furnish to the Representative and counsel
for the Underwriters, without charge, copies of the Registration
Statement (including exhibits thereto) and, so long as delivery of a
prospectus by an Underwriter or
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dealer may be required by the Act, as many copies of any Preliminary
Final Prospectus and the Final Prospectus and any supplement thereto
as the Representative may reasonably request. The Issuer shall furnish
or cause to be furnished to the Representative copies of all reports
on Form SR required by Rule 463 under the Act. The Issuer will pay the
expenses of printing or other production of all documents specifically
relating to the offering of the Transition Bonds under the Act.
(v) The Issuer will cooperate in qualifying the Transition Bonds
for sale under the laws of such jurisdictions as the Representative
may reasonably request, will maintain such qualifications in effect so
long as required for the distribution of the Transition Bonds and will
arrange for the determination of the legality of the Transition Bonds
for purchase by institutional investors; provided that in no event
shall the Issuer (a) submit to any State requirements which it deems
unduly burdensome or (b) be obligated to qualify to do business in any
jurisdiction where it is not now so qualified or to take any action
that would subject it to service of process in suits, other than those
arising out of the offering or sale of the Transition Bonds, in any
jurisdiction where it is not now so subject.
(vi) Until the business date set forth on Schedule I hereto, the
Issuer will not, without the consent of the Representative, offer,
sell or contract to sell, or otherwise dispose of, directly or
indirectly, or announce the offering of, any asset-backed securities
of a special purpose vehicle (other than the Transition Bonds).
(vii) For a period from the date of this Agreement until the
retirement of the Transition Bonds, or until such time as the
Underwriters shall cease to maintain a secondary market in the
Transition Bonds, whichever occurs first, the Issuer will deliver to
the Representative the annual statements of compliance and the annual
independent auditor's servicing reports 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.
(viii) So long as any of the Transition Bonds are outstanding,
the Issuer will furnish to the Representative (i) as soon as
available, a copy of each report filed with the SEC under the Exchange
Act, or mailed to Bondholders, (ii) a copy of any filings with the New
Jersey Board of Public Utilities (the "BPU") or any other governmental
agency or instrumentality relating to the Transition Bonds, and (iii)
from time to time, any information concerning the Company or the
Issuer, as the Representative may reasonably request.
(ix) To the extent, if any, that any rating necessary to satisfy
the condition set forth in Section 6(o) of this Agreement is
conditioned upon the furnishing of documents or the taking of other
actions by the Issuer on or after the Closing Date, the Issuer shall
furnish such documents and take such other actions as are reasonably
required.
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(x) The Issuer will file with the SEC a report on Form 8-K
setting forth all Computational Materials and ABS Term Sheets (as such
terms are defined in Section 11) provided to the Issuer by an
Underwriter and identified by it as such within the time period
allotted for such filing pursuant to the No-Action Letters (as defined
in Section 11); provided, however, that prior to any filing of the
Computational Materials and ABS Terms Sheets by the Issuer, such
Underwriter must comply with its obligations pursuant to Section 11
and the Issuer must receive a letter from PricewaterhouseCoopers LLP,
certified public accountants, satisfactory in form and substance to
the Issuer and such Underwriter, to the effect that such accountants
have performed specified procedures, all of which have been agreed to
by the Issuer and such Underwriter, as a result of which they have
determined that the information included in the Computational
Materials and ABS Term Sheets (if any), provided by such Underwriter
to the Issuer for filing on Form 8-K pursuant to Section 11 and this
subsection (x), and which the accountants have examined in accordance
with such agreed upon procedures, is accurate. The Issuer shall file
any corrected Computational Materials or ABS Term Sheets described in
Section 11(a)(iii) as soon as practicable following receipt thereof.
(b) Covenants of the Company. The Company covenants and agrees with
the several Underwriters that, to the extent that the Issuer has not
already performed such act pursuant to Section 5 (a):
(i) The Company will use its best efforts to cause the
Registration Statement, if not effective at the Execution Time, and
any amendment thereto, to become effective. The Company will use its
best efforts to prevent the issuance by the SEC of any stop order
suspending the effectiveness of the Registration Statement and, if
issued, to obtain as soon as possible the withdrawal thereof.
(ii) Until the business date set forth on Schedule I hereto, the
Company will not, without the consent of the Representative, offer,
sell or contract to sell, or otherwise dispose of, directly or
indirectly, or announce the offering of, any asset-backed securities
of a special purpose vehicle (other than the Transition Bonds).
(iii) So long as any of the Transition Bonds are outstanding and
the Company is the Servicer, the Company will furnish to the
Representative (i) as soon as available, a copy of each report filed
with the SEC under the Exchange Act, or mailed to Bondholders, (ii) a
copy of any filings with the BPU pursuant to the Financing Order
relating to the Transition Bonds, including, without limitation,
filings to adjust the Transition Bond Charge from time to time, and
(iii) from time to time, any information concerning the Company and,
to the extent readily available, the Issuer, as the Representative may
reasonably request.
(iv) To the extent, if any, that any rating necessary to satisfy
the condition set forth in Section 6(o) of this Agreement is
conditioned upon the furnishing of documents or the taking of other
actions by the Company on or after
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the Closing Date, the Company shall furnish such documents and take
such other actions as are reasonably required.
6. Conditions to the Obligations of the Underwriters. The obligations
of the Underwriters to purchase the Transition Bonds shall be subject to the
accuracy of the representations and warranties on the part of the Issuer and the
Company contained herein as of the Execution Time and the Closing Date and on
the part of the Company contained in the Sale Agreement and the Servicing
Agreement as of the Closing Date, to the performance by the Issuer and the
Company of their respective obligations hereunder and to the following
additional 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) 12:00 Noon on the business day
following the day on which the public offering price was determined, if
such determination occurred after 3:00 PM New York City time on such date;
if filing of the Final Prospectus, or any supplement thereto, is required
pursuant to Rule 424(b), the Final Prospectus, and any such supplement,
shall have been filed in the manner and within the time period required by
Rule 424 (b); and no stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceedings for that
purpose shall have been instituted or threatened.
(b) The Representative shall have received opinions of counsel for the
Company, portions of which may be delivered by LeBoeuf, Lamb, Xxxxxx &
XxxXxx, L.L.P., outside counsel for the Company, and portions of which may
be delivered by Xxxxxxx X. Xxxxxxx, in-house counsel for the Company, each
dated the Closing Date and each subject to customary qualifications,
exceptions, and limitations, 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 as a corporation in good standing under the laws of the
jurisdiction in which it is organized, (b) has all requisite corporate
power to own its properties, conduct its business as presently
conducted and execute, deliver and perform its obligations under this
Agreement, the Sale Agreement, and the Servicing Agreement, as
applicable, and (c) is duly qualified to do business, in all
jurisdictions (and is in good standing under the laws of all such
jurisdictions) to the extent that such qualification and good standing
is or shall be necessary to protect the validity and enforceability of
this Agreement, the Basic Documents to which the Company is party and
each other instrument or agreement necessary or appropriate to the
proper administration of this Agreement and the transactions
contemplated hereby;
(ii) the Sale Agreement and the Servicing Agreement have been
duly authorized, executed and delivered by the Company and constitute
legal, valid and binding agreements of the Company enforceable against
the Company in
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accordance with their terms (subject to applicable bankruptcy,
reorganization, insolvency, moratorium and other similar laws and to
equitable principles affecting the rights and remedies of creditors
generally);
(iii) to the knowledge of such counsel, there is no pending or
threatened action, suit or proceeding before any court or governmental
agency, authority or body or any arbitrator involving the Company or
any of its subsidiaries of a character required to be disclosed in the
Registration Statement which is not adequately disclosed in the Final
Prospectus, and there is no franchise, contract or other document of a
character required to be described in the Registration Statement or
Final Prospectus, or to be filed as an exhibit, which is not described
or filed as required;
(iv) this Agreement has been duly authorized, executed and
delivered by the Company;
(v) no consent, approval, authorization or order of any court or
governmental agency or body is required for the consummation by the
Company, of the transactions contemplated herein, except such as have
been obtained under the New Jersey Electric Discount and Energy
Competition Act (the "Competition Act") and such as may be required
under the blue sky laws of any jurisdiction in connection with the
purchase and distribution of the Transition Bonds by the Underwriters
and such other consents, approvals and authorizations as have been
obtained;
(vi) neither the execution and delivery of this Agreement, the
Sale Agreement, or the Servicing Agreement, nor the consummation of
the transactions contemplated by this Agreement, the Sale Agreement or
the Servicing Agreement, nor the fulfillment of the terms of this
Agreement, the Sale Agreement or the Servicing Agreement by the
Company will (A) conflict with, result in any breach of any of the
terms or provisions of, or constitute (with or without notice or lapse
of time) a default under the articles of incorporation, bylaws or
other organizational documents of the Company, or conflict with or
breach any of the material terms or provisions of, or constitute (with
or without notice or lapse of time) a default under, any indenture,
material agreement or other material instrument to which the Company
is a party or by which the Company is bound, (B) result in the
creation or imposition of any lien upon any properties of the Company
pursuant to the terms of any such indenture, agreement or other
instrument (other than as contemplated by the Basic Documents and the
Competition Act), or (C) violate any law or any order, rule or
regulation applicable to the Company of any court or of any federal or
New Jersey regulatory body, administrative agency or other
governmental instrumentality having jurisdiction over the Company or
any of its properties;
(vii) all filings, that are necessary to fully preserve and
protect the interests of the Issuer in the Bondable Transition
Property have been executed and filed; and
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(viii) neither the execution and delivery of this Agreement, the
Sale Agreement, the Servicing Agreement or the Indenture, nor the
issue and sale of the Transition Bonds, 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 violate the terms of the Mortgage and
Deed of Trust dated January 15, 1937, as amended, between the Company
and The Bank of New York, as trustee.
In rendering such opinions, such counsel may rely as to matters of fact, to the
extent deemed proper, on certificates of responsible officers of the Company.
References to the Final Prospectus in this paragraph (b) include any supplements
thereto at the Closing Date.
(c) The Representative shall have received opinions of counsel for the
Issuer, portions of which may be delivered by LeBoeuf, Lamb, Xxxxxx &
XxxXxx L.L.P., outside counsel for the Issuer, and portions of which may be
delivered by Xxxxxxx X. Xxxxxxx, in-house counsel for the Company, each
dated the Closing Date, in form and substance reasonably satisfactory to
the Representative, to the effect that:
(i) the Issuer has been duly formed and is validly existing as a
limited liability company and is in good standing under the laws of
the State of Delaware, with all requisite limited liability company
power to execute, deliver and perform its obligations under this
Agreement, the Sale Agreement, the Servicing Agreement, the
Administration Agreement and the Indenture;
(ii) the Sale Agreement, the Servicing Agreement, the
Administration Agreement and the Indenture have been duly authorized,
executed and delivered by the Issuer and constitute legal, valid and
binding agreements of the Issuer enforceable against the Issuer in
accordance with their terms (subject to applicable bankruptcy,
reorganization, insolvency, moratorium and other similar laws and to
equitable principles affecting the rights and remedies of creditors
generally); and the Transition Bonds have been duly authorized and
executed by the Issuer, and when authenticated in accordance with the
provisions of the Indenture and delivered to and paid for by the
Underwriters in accordance with the terms of this Agreement, will
constitute legal, valid and binding obligations of the Issuer entitled
to the benefits of the Indenture and enforceable against the Issuer in
accordance with their terms (subject to applicable bankruptcy,
reorganization, insolvency, moratorium and other similar laws and to
equitable principles affecting the rights and remedies of creditors
generally);
(iii) this Agreement has been duly authorized, executed and
delivered by the Issuer;
(iv) the Indenture has been duly qualified under the Trust
Indenture Act;
-11-
(v) 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 Transition Bonds, the Competition Act, the bondable
stranded costs rate order issued by the BPU to the Company on
September 25, 2003 (the "Financing Order") or the use and enjoyment of
Bondable Transition Property of a character required to be disclosed
in the Registration Statement which is not adequately disclosed in the
Final Prospectus, and there is no franchise, contract or other
document of a character required to be described in the Registration
Statement or Final Prospectus, or to be filed as an exhibit to the
Registration Statement, which is not described or filed as required;
(vi) the Registration Statement has become effective under the
Act; any required filing of the Basic Prospectus, any Preliminary
Final Prospectus and the Final Prospectus, and any supplements
thereto, pursuant to Rule 424(b) has been made in the manner and
within the time period required by Rule 424(b); to the knowledge of
such counsel (and after being advised by the staff of the Commission
to such effect), no stop order suspending the effectiveness of the
Registration Statement has been issued, no proceedings for that
purpose have been instituted or threatened, and the Registration
Statement and the Final Prospectus (other than the financial
statements and the notes and schedules thereto and other financial and
statistical information contained therein and in the Form T-1 as to
which such counsel need express no belief) 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; in addition, such counsel shall confirm, on the basis of
certain assumptions, that such counsel has no reason to believe that
at the Effective Date the Registration Statement contained any untrue
statement of a material fact or omitted to state any material fact
required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made,
not misleading or that the Final Prospectus as of its date and the
Closing Date includes any untrue statement of a material fact or omits
to state a material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not
misleading (other than the financial statements and other financial
and statistical information contained therein as to which such counsel
need express no belief);
(vii) no consent, approval, authorization or order of any court
or governmental agency or body is required for the consummation by the
Issuer of the transactions contemplated herein, except such as have
been obtained under the Competition Act and such as may be required
under the blue sky laws of any jurisdiction in connection with the
purchase and distribution of the Transition Bonds by the Underwriters
and such other consents, approvals and authorizations as have been
obtained;
(viii) neither the execution and delivery of this Agreement, the
Sale Agreement, the Servicing Agreement, the Administration Agreement
or the
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Indenture, nor the issue and sale of the Transition Bonds, nor the
consummation of the transactions contemplated by this Agreement, the
Sale Agreement, the Servicing Agreement, the Administration Agreement
or the Indenture, nor the fulfillment of the terms of this Agreement,
the Sale Agreement, the Servicing Agreement, the Administration
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 without notice or lapse of time) a default under
the Issuer LLC Agreement, or conflict with or breach any of the 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 and the Competition Act), or (C)
violate any law or any order, rule or regulation applicable to the
Issuer of any court or of any federal or New Jersey or Delaware
regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over the Issuer, or any of its
properties;
(ix) the Indenture is effective to create in favor of the Bond
Trustee for the benefit of the holders of all outstanding series of
Transition Bonds a security interest in the Collateral (as defined in
the Indenture) consisting of the Bondable Transition Property and (to
the extent a security interest therein can be granted under the New
Jersey UCC or the Delaware UCC, as applicable) in the proceeds of the
Bondable Transition Property; upon the issuance of the Transition
Bonds and the giving of value to the Issuer by the Bond Trustee on
behalf of the purchasers of the Transition Bonds with respect to the
Bondable Transition Property and such proceeds, such security interest
in the Bondable Transition Property, and in the portion of the
proceeds of the Bondable Transition Property in which a security
interest can be perfected by filing in the respective jurisdictions,
will be perfected; and based solely on the Search Reports and factual
certificates, such perfected security interest will rank prior to any
other security interest of any other creditor of the Issuer with
respect to the Bondable Transition Property and such portion of such
proceeds;
(x) the Indenture is effective to create in favor of the Bond
Trustee for the benefit of the holders of all outstanding series of
Transition Bonds a security interest in the Collateral consisting of
the Issuer's rights in the Sale Agreement, the Bills of Sale, the
Servicing Agreement and the Administration Agreement (collectively,
the "Pledged Contracts"); upon the issuance of the Transition Bonds
and the giving of value to the Issuer by the Bond Trustee on behalf of
the purchasers of the Transition Bonds with respect to the Pledged
Contracts, such security interest in the Pledged Contracts will be
perfected; and based solely on the Search Reports and factual
certificates, such perfected security interest will rank prior to any
other security interest of any other creditor of the Issuer with
respect to the Pledged Contracts;
-13-
(xi) the Indenture is effective to create in favor of the Bond
Trustee for the benefit of the holders of all outstanding series of
Transition Bonds a security interest in (i) the Collection Account and
the Subaccounts (each as defined in the Indenture) for each
outstanding Series (collectively, the "Accounts") and (ii) to the
extent a security interest therein can be granted under the New Jersey
UCC, all of the Collateral held in or credited to the Accounts; and
assuming that (i) the Bond Trustee in its capacity as securities
intermediary is a "securities intermediary" within the meaning of
Section 8-102(a)(4) of the New Jersey UCC, (ii) the parties to the
Indenture and the Collection Account Control Agreement, dated as of
December 19, 2002, as the same may be supplemented, comply with the
terms thereof, and (iii) no person or other entity other than the Bond
Trustee in its capacity as trustee under the Indenture obtains and
maintains "control" (as defined in Section 8-106 of the New Jersey
UCC) of the Accounts or of any such Collateral held therein or
credited thereto, then, to the extent the Accounts are "securities
accounts" within the meaning of Section 8-501 (a) of the New Jersey
UCC, the security interests in the Accounts and in any "securities"
and "security entitlements" (within the meaning of Section 8-102 of
the New Jersey UCC) held therein or credited thereto constituting
Collateral will be perfected and will rank prior to any other security
interest of any other creditor of the Issuer with respect thereto;
(xii) the Issuer is not an "investment company" or under the
"control" of an "investment company" as such terms are defined under
the Investment Company Act of 1940, as amended;
(xiii) the Transition Bonds, the Indenture, the Sale Agreement,
the Servicing Agreement, the Issuer LLC Agreement, the Administration
Agreement, the Competition Act, and the Financing Order conform to the
descriptions thereof contained in the Final Prospectus; and
(xiv) the statements included in the Final Prospectus under the
captions "Material Income Tax Matters" (other than under the
sub-heading "Material State of New Jersey Tax Matters", as to which
such counsel need express no opinion) and "ERISA Considerations", to
the extent that they constitute matters of law or legal conclusions
with respect thereto, provide a fair and accurate summary of such law
and conclusions.
In rendering such opinions, such counsel may rely as to matters of fact, to the
extent deemed proper, on certificates of responsible officers of the Issuer and
public officials. References to the Final Prospectus in this paragraph (c)
include any supplements thereto at the Closing Date.
(d) The Representative and the Issuer have received an opinion of
Xxxxxx & Xxxxxx, counsel to the Bond Trustee, dated the Closing Date, in
form and substance reasonably satisfactory to the Representative, to the
effect that:
(i) the Bond Trustee is a banking corporation validly existing
under the laws of the State of New York;
-14-
(ii) the Bond Trustee has the requisite power and authority to
execute and deliver the Indenture, and the Indenture has been duly
executed and delivered by the Bond Trustee, and constitutes a legal,
valid and binding obligation of the Bond Trustee enforceable against
the Bond Trustee in accordance with its terms except that such
enforcement may be limited by bankruptcy, reorganization, insolvency,
moratorium, liquidation or other similar laws or equitable principles
affecting creditors' rights generally from time to time in effect; and
(iii) the Transition Bonds have been duly authenticated by the
Trustee.
(e) The Representative shall have received from Dechert LLP, counsel
for the Underwriters, such opinion or opinions, dated the Closing Date,
with respect to the issuance and sale of the Transition Bonds, the
Indenture, the Registration Statement, the Final Prospectus (together with
any supplement thereto) and other related matters as the Representative may
reasonably require, and 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.
(f) The Representative and the Bond Trustee shall have received a
certificate of the Issuer, signed by the President and the principal
financial or accounting officer of the Issuer, dated the Closing Date, to
the effect that the signers of such certificate have carefully examined the
Registration Statement, the Final Prospectus, any supplement to the Final
Prospectus and this Agreement and that:
(i) the representations and warranties of the Issuer in this
Agreement and in the Indenture are true and correct in all material
respects on and as of the Closing Date with the same effect as if made
on the Closing Date, and the Issuer has complied with all the
agreements and satisfied all the conditions on its part to be
performed or satisfied at or prior to the Closing Date;
(ii) no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that
purpose have been instituted or, to the Issuer's knowledge,
threatened; and
(iii) since the dates as of which information is given in the
Final Prospectus (exclusive of any supplement thereto), there has been
no material adverse change in (x) the condition (financial or other),
prospects, earnings, business or properties of the Issuer, whether or
not arising from transactions in the ordinary course of business, or
(y) the Bondable Transition Property, except as set forth in or
contemplated in the Final Prospectus (exclusive of any supplement
thereto).
(g) The Representative and the Bond Trustee shall have received a
certificate of the Company, signed by a Vice President and the Treasurer of
the Company, dated the Closing Date, to the effect that the signers of such
certificate have carefully examined the Registration Statement, the Final
Prospectus, any supplement to the Final Prospectus and this Agreement and
that:
-15-
(i) the representations and warranties of the Company in this
Agreement, the Sale Agreement and the Servicing Agreement are true and
correct in all material respects on and as of the Closing Date with
the same effect as if made on the Closing Date, and the Company has
complied with all the agreements and satisfied all the conditions on
its part to be performed or satisfied at or prior to the Closing Date;
(ii) no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that
purpose have been instituted or, to the Company's knowledge,
threatened; and
(iii) since the dates as of which information is given in the
Final Prospectus (exclusive of any supplement thereto), there has been
no material adverse change in (x) the condition (financial or other),
prospects, earnings, business or properties of the Company and its
subsidiaries taken as a whole, whether or not arising from
transactions in the ordinary course of business, or (y) the Bondable
Transition Property, except as set forth in or contemplated in the
Final Prospectus (exclusive of any supplement thereto).
(h) At the Closing Date, PricewaterhouseCoopers LLP, shall have
furnished to the Representative (i) a letter or letters (which may refer to
letters previously delivered to the Representative), dated the Closing
Date, 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 they have audited the financial statements of the Issuer
included in the Registration Statement and the Final Prospectus as set
forth in their report included therein and stating in effect that they have
performed certain specified procedures as a result of which they determined
that certain information of an accounting, financial or statistical nature
(which is limited to accounting, financial or statistical information
derived from the general accounting records of the Company and its
subsidiaries) set forth in the Registration Statement and the Final
Prospectus, agrees with the accounting records of the Company and its
subsidiaries, excluding any questions of legal interpretation, and (ii) the
letter, dated the Closing Date, in form and substance satisfactory to the
Representative, satisfying the requirements of Section 2. l0(b)(vi) of the
Indenture.
References to the Final Prospectus in this paragraph (i) include any
supplement thereto at the date of the letter.
In addition, except as provided in Schedule I hereto, at the Execution
Time, PricewaterhouseCoopers LLP, shall have furnished to the Representative a
letter or letters, dated the Execution Time, in form and substance satisfactory
to the Representative, to the effect set forth above.
(i) Subsequent to the Execution Time or, if earlier, the dates as of
which information is given in the Registration Statement (exclusive of any
amendment thereof) and the Final Prospectus (exclusive of any supplement
thereto), there shall not have been
-16-
any change, or any development involving a prospective change, in or
affecting either (i) the business, properties or financial condition of the
Company or the Issuer or (ii) the Bondable Transition Property, the
Transition Bonds, the Financing Order or the Competition Act, 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 Transition Bonds as contemplated by the Registration
Statement (exclusive of any amendment thereof) and the Final Prospectus
(exclusive of any supplement thereto).
(j) The Representative and the Issuer shall have received on the
Closing Date an opinion letter or letters of LeBoeuf, Lamb, Xxxxxx &
XxxXxx, L.L.P., outside counsel to the Company and the Issuer, dated the
Closing Date, in form and substance reasonably satisfactory to the
Representative, (i) with respect to the characterization of the transfers
of the Bondable Transition Property by the Company to the Issuer as "true
sales" for bankruptcy purposes, and (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.
(k) The Representative and the Issuer shall have received on the
Closing Date an opinion letter of LeBoeuf, Lamb, Xxxxxx & XxxXxx, L.L.P.,
outside counsel for the Company and the Issuer, dated the Closing Date, in
form and substance reasonably satisfactory to the Representative, to the
effect that: (i) the Financing Order has been duly authorized and adopted
by the BPU and is irrevocable; (ii) the decisions of the BPU adopting the
Financing Order are non-appealable; and (iii) any state action (whether by
legislative action, BPU action, or otherwise ) to revoke or limit the
Financing Order, the Bondable Transition Property, or the Transition Bond
Charges would be subject to a successful constitutional contract clause and
taking clause challenge under the United States and New Jersey
Constitutions, and with respect to such additional matters as shall be
agreed upon with the Rating Agencies.
(l) The Representative and the Issuer shall have received on the
Closing Date an opinion letter of LeBoeuf, Lamb, Xxxxxx & XxxXxx, L.L.P.,
special counsel for the Company with respect to the state tax consequences
of the issuance of the Transition Bonds, dated the Closing Date, in form
and substance reasonably satisfactory to the Representative, to the effect
that the statements included in the Final Prospectus under the caption
"Material Income Tax Matters - Material State of New Jersey Tax Matters" to
the extent that they constitute matters of law or legal conclusions with
respect thereto, provide a fair and accurate summary of such law and
conclusions.
(m) On or prior to the Closing Date, the Company shall have furnished
to the Representative (i) copies of the private letter ruling, dated July
31, 2001, issued by the Internal Revenue Service to the Company, and (ii)
copies of the order issued by the SEC to the Company on November 19, 2003
under the Public Utility Holding Company Act of 1935.
-17-
(n) The Representative and the Bond Trustee shall have received on the
Closing Date an opinion letter or letters of Blank Rome Xxxxxxx & XxXxxxxx
LLP, special Delaware counsel to the Issuer, dated the Closing Date, in
form and substance reasonably satisfactory to the Representative, to the
effect that: (i) if properly presented to a Delaware court, a Delaware
court applying Delaware law, would conclude that (x) in order for a person
to file a voluntary bankruptcy petition on behalf of the Issuer, the prior
unanimous consent of the Managers of the Issuer (including the two
Independent Managers), as provided in Section 3.04(b) of the Issuer LLC
Agreement (the "Issuer LLC Agreement"), is required, and (y) such
provision, contained in Section 3.04(b) of the Issuer LLC Agreement, that
requires the unanimous consent of the Managers of the Issuer (including the
two Independent Managers) in order for a person to file a voluntary
bankruptcy petition on behalf of the Issuer, constitutes a legal, valid and
binding agreement of the Member and is enforceable against the Member, in
accordance with its terms; and (ii) the Issuer LLC Agreement constitutes a
legal, valid and binding agreement of the Member, and is enforceable
against the Member in accordance with its terms, and with respect to such
additional matters as shall be agreed upon with the Rating Agencies.
(o) The Transition Bonds shall have been rated in the long-term rating
categories by each of the Rating Agencies set forth in Schedule I hereto.
(p) On or prior to the Closing Date, the Issuer shall have delivered
to the Representative evidence, in form and substance reasonably
satisfactory to the Representative, that appropriate filings have been or
are being made in accordance with the Competition Act and other applicable
law reflecting the grant of a security interest by the Issuer in the
Collateral to the Bond Trustee, including the filing of the UCC financing
statements in the office of the Secretary of the State of New Jersey and
the State of Delaware.
(q) On or prior to the Closing Date, the Issuer shall have delivered
to the Representative a copy of the Financing Order relating to the
Transition Bonds and the Series 2003-1 Bondable Transition Property.
(r) On or prior to the Closing Date, the Issuer shall have furnished
to the Representative the documents required pursuant to Section 2.10 of
the Indenture.
(s) Prior to the Closing Date, the Issuer and the Company shall have
furnished to the Representative such further information, certificates,
opinions and documents as the Representative may reasonably request,
including any documents provided to the Rating Agencies.
If any of the conditions specified in this Section 6 shall not have
been fulfilled in all respects when and as provided in this Agreement, or if any
of the opinions and certificates mentioned above or elsewhere in this Agreement
shall not be in all respects satisfactory in form and substance to the
Representative and counsel for the Underwriters, this Agreement and all
obligations of the Underwriters hereunder may be canceled at, or at any time
prior to, the Closing Date by the Representative. Notice of such cancellation
shall be given to the Issuer in writing or by telephone or telegraph confirmed
in writing.
-18-
The documents required to be delivered by this Section 6 shall be
delivered at the offices of LeBoeuf, Lamb, Xxxxxx & XxxXxx, L.L.P., 000 Xxxx
00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000-0000 on the Closing Date.
7. Reimbursement of Underwriters' Expenses. If the sale of the
Transition Bonds provided for herein is not consummated because any condition to
the obligations of the Underwriters set forth in Section 6 hereof is not
satisfied, because of any termination pursuant to Section 10 hereof or because
of any refusal, inability or failure on the part of the Company or the Issuer to
perform any agreement herein or comply with any provision hereof other than by
reason of a default by any of the Underwriters under Section 9 hereof, the
Company and the Issuer will, jointly and severally, reimburse the Underwriters
upon demand for all out-of -pocket expenses (including reasonable fees and
disbursements of counsel) that shall have been incurred by them in connection
with the proposed purchase and sale of the Transition Bonds.
8. Indemnification and Contribution.
(a) The Company and the Issuer will, jointly and severally, indemnify
and hold harmless each Underwriter, the directors, officers, members,
employees and agents of each Underwriter, and each person who controls any
Underwriter, within the meaning of either the Act or the Exchange Act
against any and all losses, claims, damages or liabilities, joint or
several, to which they or any of them may become subject under the Act, the
Exchange Act or other federal or state statutory law or regulation, at
common law or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon
any untrue statement or alleged untrue statement of a material fact
contained in the registration statement for the registration of the
Transition Bonds as originally filed or in any amendment thereof, or in the
Basic Prospectus, any Preliminary Final Prospectus or the Final Prospectus,
or in any amendment thereof or supplement thereto, or the Computational
Materials and ABS Term Sheets (as defined in Section 11 hereof), or arise
out of or are based upon the omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were
made, not misleading, and will reimburse each such indemnified party, as
incurred, for any legal or other expenses incurred by them in connection
with investigating or defending any such loss, claim, damage, liability or
action; provided, however, that neither the Company nor the Issuer will be
liable in any such case to the extent that any such loss, claim, damage or
liability arises out of or is based upon any such untrue statement or
alleged untrue statement or omission or alleged omission made therein in
reliance upon and in conformity with written information furnished to the
Issuer or the Company by or on behalf of any Underwriter through the
Representative specifically for inclusion therein; provided further, that
with respect to any untrue statement or omission of material fact made in
any Preliminary Final Prospectus, the indemnity agreement contained in this
Section 8(a) shall not inure to the benefit of any Underwriter or any
person controlling such Underwriter from whom the person asserting any such
loss, claim, damage or liability purchased the Transition Bonds that are
the subject thereof, to the extent that any such loss, claim, damage or
liability of such Underwriter occurs under the circumstance where it shall
have been determined by a court of competent jurisdiction by final and
nonappealable judgment that (w) the
-19-
Company or the Issuer had previously furnished copies of the Final
Prospectus to the Representative, (x) delivery of the Final Prospectus was
required by the Act to be made to such person, (y) the untrue statement or
omission of a material fact contained in the Preliminary Final Prospectus
was corrected in the Final Prospectus and (z) there was not sent or given
to such person, at or prior to the written confirmation of the sale of such
Transition Bonds to such person, a copy of the Final Prospectus. This
indemnity agreement will be in addition to any liability which the Company
and the Issuer may otherwise have.
(b) Each Underwriter severally agrees to indemnify and hold harmless
the Company and the Issuer, each of their directors, each of their officers
who signs the Registration Statement, and each person who controls the
Company or the Issuer within the meaning of either the Act or the Exchange
Act, to the same extent as the foregoing indemnity from the Company and the
Issuer to each Underwriter, but only with reference to written information
relating to such Underwriter furnished to the Issuer or 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 Issuer and the Company acknowledge that
the statements set forth in the third, fourth, fifth, sixth and seventh
paragraphs under the heading "Underwriting The Series 2003-1 Bonds" and in
the fourth paragraph under the heading "Plan of Distribution" in any
Preliminary Final Prospectus or the Final Prospectus constitute the only
information furnished in writing by or on behalf of the several
Underwriters for inclusion in the documents referred to in the foregoing
indemnity.
(c) Promptly after receipt by an indemnified party under this Section
8 of notice of the commencement of any action, such indemnified party will,
if a claim in respect thereof is to be made against the indemnifying party
under this Section 8, notify the indemnifying party in writing of the
commencement thereof; but the failure so to notify the indemnifying party
(i) will not relieve it from liability under paragraph (a) or (b) above
unless and to the extent it did not otherwise learn of such action and such
failure results in the forfeiture by the indemnifying party of substantial
rights and defenses and (ii) will not, in any event, relieve the
indemnifying party from any obligations to any indemnified party other than
the indemnification obligation provided in paragraph (a) or (b) above. The
indemnifying party shall be entitled to appoint counsel of the indemnifying
party's choice at the indemnifying party's expense to represent the
indemnified party in any action for which indemnification is sought (in
which case the indemnifying party shall not thereafter be responsible for
the fees and expenses of any separate counsel retained by the indemnified
party or parties except as set forth below); provided, however, that such
counsel shall be reasonably satisfactory to the indemnified party.
Notwithstanding the indemnifying party's election to appoint counsel to
represent the indemnified party in an action, the indemnified party shall
have the right to employ separate counsel (including local counsel), and
the indemnifying party shall bear the reasonable fees, costs and expenses
of such separate counsel if (i) the use of counsel chosen by the
indemnifying party to represent the indemnified party would present such
counsel with a conflict of interest, (ii) the actual or potential
defendants in, or targets of, any such action include both the indemnified
party and the indemnifying party and the
-20-
indemnified party shall have reasonably concluded that there may be legal
defenses available to it and/or other indemnified parties which are
different from or additional to those available to the indemnifying party,
(iii) the indemnifying party shall not have employed counsel reasonably
satisfactory to the indemnified party to represent the indemnified party
within a reasonable time after notice of the institution of such action or
(iv) the indemnifying party shall authorize the indemnified party to employ
separate counsel at the expense of the indemnifying party. An indemnifying
party will not, without the prior written consent of the indemnified
parties, settle or compromise or consent to the entry of any judgment with
respect to any pending or threatened claim, action, suit or proceeding in
respect of which indemnification or contribution may be sought hereunder
(whether or not the indemnified parties are actual or potential parties to
such claim or action) unless such settlement, compromise or consent
includes an unconditional release of each indemnified party from all
liability arising out of such claim, action, suit or proceeding.
(d) In the event that the indemnity provided in paragraph (a) or (b)
of this Section 8 is unavailable to or insufficient to hold harmless an
indemnified party for any reason, the Company, the Issuer and the
Underwriters agree to contribute to the aggregate losses, claims, damages
and liabilities (including legal or other expenses reasonably incurred in
connection with investigating or defending same) (collectively "Losses") to
which the Issuer and one or more of the Underwriters may be subject in such
proportion as is appropriate to reflect the relative benefits received by
the Issuer and the Company on the one hand and by the Underwriters on the
other hand from the offering of the Transition Bonds. If the allocation
provided by the immediately preceding sentence is unavailable for any
reason, the Company, the Issuer and the Underwriters shall contribute in
such proportion as is appropriate to reflect not only such relative
benefits but also the relative fault of the Issuer and the Company on the
one hand and of the Underwriters on the other hand in connection with the
statements or omissions which resulted in such Losses as well as any other
relevant equitable considerations. Benefits received by the Issuer and the
Company shall be deemed to be equal to the total net proceeds from the
offering (before deducting expenses) of the Transition Bonds, and benefits
received by the Underwriters shall be deemed to be equal to the total
underwriting discounts and commissions, in each case as set forth on the
cover page of the Final Prospectus. Relative fault shall be determined by
reference to whether any alleged untrue statement or omission relates to
information provided by the Issuer and the Company on the one hand or the
Underwriters on the other hand. The Company, the Issuer and the
Underwriters agree that it would not be just and equitable if contribution
were determined by pro rata allocation or any other method of allocation
which does not take account of the equitable considerations referred to
above. Notwithstanding the provisions of this paragraph (d), no Underwriter
shall be required to contribute any amount in excess of the amount by which
the total underwriting discounts and commissions received by such
Underwriter in connection with the offering of the Transition Bonds exceeds
the amount of damages that 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.
For purposes of this Section 8, each person who controls an
-21-
Underwriter within the meaning of either the Act or the Exchange Act and
each director, officer, employee and agent of an Underwriter shall have the
same rights to contribution as such Underwriter, and each person who
controls the Issuer or the Company within the meaning of either the Act or
the Exchange Act, each officer of the Issuer or the Company who shall have
signed the Registration Statement and each director of the Issuer or the
Company shall have the same rights to contribution as the Issuer or the
Company, subject in each case to the applicable terms and conditions of
this paragraph (d).
(e) The Underwriters' respective obligations to contribute pursuant to
this Section 8 are several in proportion to the respective principal amount
of Transition Bonds they have purchased hereunder, and not joint.
9. Default by an Underwriter. If any one or more Underwriters shall
fail to purchase and pay for any of the Transition Bonds 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 Transition
Bonds set forth opposite their names in Schedule II hereto bears to the
aggregate amount of Transition Bonds set forth opposite the names of all the
remaining Underwriters) the Transition Bonds which the defaulting Underwriter or
Underwriters agreed but failed to purchase; provided, however, that in the event
that the aggregate amount of Transition Bonds which the defaulting Underwriter
or Underwriters agreed but failed to purchase shall exceed 10% of the aggregate
amount of Transition Bonds 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 Transition Bonds, and if such nondefaulting
Underwriters do not purchase all the Transition Bonds, 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 Closing Date shall be postponed for such period, not exceeding
three days, as the Representative shall determine in order that the required
changes in the Registration Statement and the Final Prospectus or in any other
documents or arrangements may be effected. Nothing contained in this Agreement
shall relieve any defaulting Underwriter of its liability, if any, to the Issuer
and the Company and any nondefaulting Underwriter for damages occasioned by its
default hereunder.
10. Termination. This Agreement shall be subject to termination in the
absolute discretion of the Representative, by notice given to the Issuer prior
to delivery of and payment for the Transition Bonds, if prior to such time (i)
there shall have occurred any change, or any development involving a prospective
change, in or affecting either (A) the business, properties or financial
condition of the Issuer or the Company or (B) the Bondable Transition Property,
the Transition Bonds, the Financing Order or the Competition Act, the effect of
which, in the judgment of the Representative, materially impairs the investment
quality of the Transition Bonds or makes it impractical or inadvisable to market
the Transition Bonds, (ii) trading in the Company's Common Stock shall have been
suspended by the SEC or the New York Stock Exchange or trading in securities
generally on the New York Stock Exchange shall have been suspended or limited or
minimum prices shall have been established on such Exchange, (iii) a banking
moratorium shall have been declared either by federal, New York State or New
Jersey State authorities, or (iv) there shall have occurred a material
disruption in securities settlement,
-22-
payment or clearance services in the United States, or (v) there shall have
occurred any outbreak or escalation of hostilities, declaration by the United
States of a national emergency or war or any change in financial markets 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 Transition Bonds as contemplated by
the Final Prospectus (exclusive of any supplement thereto).
11. Computational Materials and ABS Term Sheets.
(a) In connection with the offering of the Transition Bonds, each
Underwriter may prepare and provide to prospective investors (i) items
similar to computational materials ("Computational Materials") as defined
in the no-action letter of May 20, 1994 issued by the SEC to Xxxxxx,
Peabody Acceptance Corporation I, Xxxxxx, Xxxxxxx & Co. Incorporated and
Xxxxxx Structured Asset Corporation, as made applicable to other issuers
and underwriters by the SEC in response to the request of the Public
Securities Association dated May 24, 1994, as well as the PSA Letter
referred to below (collectively, the "No-Action Letters") and (ii) items
similar to ABS term sheets ("ABS Term Sheets") as defined in the no-action
letter of February 17, 1995 issued by the SEC to the Public Securities
Association, subject to the following conditions:
(i) All Computational Materials and ABS Terms Sheets provided to
prospective investors that are required to be filed pursuant to the
No-Action Letters shall bear a legend substantially in the form
attached hereto as Exhibit A. The Issuer shall have the right to
require additional specific legends or notations to appear on any
Computational Materials or ABS Terms Sheets, the right to require
changes regarding the use of terminology and the right to determine
the types of information appearing therein. Notwithstanding the
foregoing, this subsection (i) will be satisfied if all Computational
Materials and ABS Term Sheets referred to herein bear a legend in a
form previously approved in writing by the Issuer.
(ii) Such Underwriter shall provide to the Issuer, for approval
by the Issuer, representative forms of all Computational Materials and
ABS Term Sheets at least two business days prior to their first use.
Such Underwriter shall provide to the Issuer, for filing on Form 8-K
as provided in Section 5(a)(x), copies (in such format as required by
the Issuer) of all Computational Materials and ABS Term Sheets that
are required to be filed with the SEC pursuant to the No-Action
Letters. The Underwriter may provide copies of the foregoing in a
consolidated or aggregated form including all information required to
be filed if filing in such format is permitted by the No-Action
Letters. All Computational Materials and ABS Term Sheets described in
this subsection (ii) must be provided to the Issuer not later than
10:00 a.m. New York City time at least two business days before filing
thereof is required pursuant to the terms of this Agreement. Such
Underwriter shall not provide to any investor or prospective investor
in the Transition Bonds any Computational Materials or ABS Term Sheets
on or after the day on which Computational Materials or ABS Term
Sheets are required to be provided to the Issuer pursuant to this
paragraph (ii) (other than copies of
-23-
Computational Materials or ABS Term Sheets previously submitted to the
Issuer in accordance with this paragraph (ii) for filing pursuant to
Section 5(a)(x)), unless such Computational Materials or ABS Term
Sheets are preceded or accompanied by the delivery of a Final
Prospectus to such investor or prospective investor.
(iii) The Issuer shall not be obligated to file any Computational
Materials or ABS Term Sheets that have been determined to contain any
material error or omission, provided that, at the request of any
Underwriter, the Issuer will file Computational Materials or ABS Term
Sheets that contain a material error or omission if clearly marked
`SUPERSEDED BY MATERIALS DATED _______________" and accompanied by
corrected Computational Materials or ABS Term Sheets that are marked,
"MATERIAL PREVIOUSLY DATED ___________, AS CORRECTED." If, within the
period during which a prospectus relating to the Transition Bonds is
required to be delivered under the Act, any Computational Materials or
ABS Term Sheets are determined, in the reasonable judgment of the
Issuer or such Underwriter, to contain a material error or omission,
such Underwriter shall prepare a corrected version of such
Computational Materials or ABS Term Sheets, shall circulate such
corrected Computational Materials or ABS Term Sheets to all recipients
of the prior versions thereof that either indicated orally to such
Underwriter they would purchase all or any portion of the Transition
Bonds, or actually purchased all or any portion thereof, and shall
deliver copies of such corrected Computational Materials or ABS Term
Sheets (marked, "AS CORRECTED") to the Issuer for filing with the SEC
in a subsequent Form 8-K submission (subject to the Issuer's obtaining
an accountant's comfort letter in respect of such corrected
Computational Materials or ABS Term Sheets).
(iv) Each Underwriter shall be deemed to have represented, as of
the Closing Date, that, except for Computational Materials and ABS
Term Sheets provided to the Issuer pursuant to subsection (ii) above,
such Underwriter did not provide any prospective investors with any
information in written or electronic form in connection with the
offering of the Transition Bonds that is required to be filed with the
SEC in accordance with the No-Action Letters.
(v) In the event of any delay in the delivery by any Underwriter
to the Issuer of all Computational Materials and ABS Term Sheets
required to be delivered in accordance with subsection (ii) above, or
in the delivery of the accountant's comfort letter in respect thereof
pursuant to Section 5(a)(x), the Issuer shall have the right to delay
the release of the Final Prospectus to investors or to any
Underwriter, to delay the Closing Date and to take other appropriate
actions, in each case set forth in Section 5(a)(x), to file the
Computational Materials and ABS Term Sheets by the time specified
therein.
(b) Each Underwriter further represents and warrants that, if and to
the extent it has provided any prospective investors with any Computational
Materials or ABS Term Sheets prior to the date hereof in connection with
the offering of the Transition Bonds, all
-24-
of the conditions set forth in clause (a) of this Section 11 have been
satisfied with respect thereto.
12. Representations and Indemnities to Survive. The respective
agreements, representations, warranties, indemnities and other statements of the
Company or its officers, the Issuer or its officers and of the Underwriters set
forth in or made pursuant to this Agreement will remain in full force and
effect, regardless of any investigation made by or on behalf of any Underwriter
or of the Company, the Issuer or any of the officers, directors or controlling
persons referred to in Section 9 hereof, and will survive delivery of and
payment for the Transition Bonds. The provisions of Sections 3, 7 and 8 hereof
shall survive the termination or cancellation of this Agreement.
13. Notices. All communications hereunder will be in writing and may
be given by United States mail, courier service, telegram, telex, telemessage,
telecopy, telefax, cable or facsimile (confirmed by telephone or in writing in
the case of notice by telegram, telex, telemessage, telecopy, telefax, cable or
facsimile) or any other customary means of communication, and any such
communication shall be effective when delivered, -or if mailed, three days after
deposit in the United States mail with proper postage for ordinary mail prepaid,
and if sent to the Representative, to them at the address specified in Schedule
I hereto; and if sent to the Company, to it at Atlantic City Electric Company,
000 Xxxx Xxxxxx, Xxxx Xxxxxx Xxx 000, Xxxxxxxxxx, Xxxxxxxx 00000-0000,
Attention: Treasurer; and if sent to the Issuer, to it at Atlantic City Electric
Transition Funding LLC, X.X. Xxx 00000, Xxxxxxxxxx, Xxxxxxxx 00000-0000,
Attention: President. The parties hereto, by notice to the others, may designate
additional or different addresses for subsequent communications.
14. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the officers
and directors and controlling persons referred to in Section 8 hereof, and no
other person will have any right or obligation hereunder.
15. Applicable Law. This Agreement will be governed by and construed
in accordance with the laws of the State of New York.
16. Counterparts. This Agreement may be signed in any number of
counterparts, each of which shall be deemed an original, which taken together
shall constitute one and the same instrument.
-25-
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicate hereof, whereupon
this letter and your acceptance shall represent a binding agreement among the
Company, the Issuer and the several Underwriters.
Very truly yours,
ATLANTIC CITY ELECTRIC COMPANY,
by /s/ X.X. Xxxxxxxx
------------------------------
Name: X.X. Xxxxxxxx
Title: Treasurer
ATLANTIC CITY ELECTRIC TRANSITION
FUNDING LLC,
by /s/ Xxxxxxx X. Xxxxxx
------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Asst. Treasurer
-26-
The foregoing Agreement is
hereby confirmed and accepted
as of the date specified in
Schedule I hereto.
XXXXXX XXXXXXX & CO. INCORPORATED
by /s/ Xxxxxxx Xxxxxx
------------------------------
Name: Xxxxxxx Xxxxxx
Title: Executive Director
for themselves and the other several
Underwriters, if any, named in
Schedule II to the foregoing Agreement.
-27-
SCHEDULE I
Underwriting Agreement dated December 18, 2003
Registration Statement No. 333-59558
Representative:
Xxxxxx Xxxxxxx & Co.
Incorporated
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxxx
with a copy to:
Xxxxxx Xxxxxxx & Co.
Incorporated
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxx Xxxxx, Esq.
Title, Purchase Price and Description of Bonds:
Title: Atlantic City Electric Transition Funding LLC $152,000,000
Transition Bonds, Series 0000-0
Xxxxxxxxx Xxxxxx, Price to Public, Underwriting Discounts and
Commissions, Purchase Price to the Issuer, and Required Ratings:
Required
Underwriting Purchase Ratings
Principal Price to Discounts and Price to (Xxxxx'x/S&P/
amount of Class Public Commissions the Issuer Fitch
--------------- ------------- ------------- ------------ -------------
Class A-1 Bonds $ 46,000,000 99.97903% 0.475% 99.50403% Aaa/AAA/AAA
Class A-2 Bonds $ 52,000,000 99.93985% 0.475% 99.46485% Aaa/AAA/AAA
Class A-3 Bonds $ 54,000,000 99.99640% 0.550% 99.44640% Aaa/AAA/AAA
Total $152,000,000
Expenses: The Issuer will pay or cause to be paid all expenses
incident to the performance of the obligations of the Issuer and the
Company under this Agreement, including, without limitation, (i) the
fees, disbursements and expenses of counsel for the Issuer and the
Company in connection with the issuance and sale of the Transition
Bonds, (ii) all fees and expenses incurred in connection with the
registration and delivery of the Transition Bonds under the Act, and
all other fees or expenses in connection with the preparation and
filing
of the Registration Statement, the Preliminary Final Prospectus, the
Final Prospectus and amendments and supplements to any of the
foregoing, including all printing costs associated therewith, and the
mailing and delivering of copies thereof to the Underwriters and
dealers, in the quantities specified, (iii) all costs and expenses
related to the transfer and delivery of the Transition Bonds to the
Underwriters, including any transfer or other taxes payable thereon,
(iv) the costs of printing or producing any "blue sky" memorandum in
connection with the offer and sale of the Transition Bonds under state
securities laws and all expenses in connection with the qualification
of the Transition Bonds for the offer and sale under state securities
laws as provided in Section 5(a)(v), including filing fees and the
reasonable fees and disbursements of counsel for the Underwriters in
connection with such qualification and in connection with the "blue
sky" memorandum, (v) the cost of printing the Transition Bonds, (vi)
the costs and charges of any transfer agent, registrar or depository,
(vii) the fees and expenses of the rating agencies incurred in
connection with the issuance and sale of the Transition Bonds, (viii)
the costs arising out of any Computational Materials and ABS Term
Sheets distributed by the Underwriters in connection with the purchase
and sale of the Transition Bonds, and (xi) all other costs and
expenses incident to the performance of the obligations of the Issuer
and the Company under this Agreement for which provision is not
otherwise made herein. The Underwriters will be reimbursed by the
Issuer for reasonable out-of-pocket expenses and Underwriters' Counsel
fees.
Original Issue Discount (if any):
Redemption provisions: 5% clean-up call
Closing Date, Time and Location: December 23, 2003, 10:00 a.m., Eastern
Standard Time, at the offices of LeBoeuf,
Lamb, Xxxxxx & XxxXxx, L.L.P., 000 Xxxx
00xx Xxxxxx, Xxx Xxxx, XX 00000-0000
Type of Offering: Delayed Offering
Date referred to in Section 5(a) (vi) and Section 5(b)(ii) after which the
Issuer and the Company may offer or sell asset-backed securities in a
special purpose vehicle without the consent of the Representative: December
31, 2003
-2-
SCHEDULE II
Principal Amount of Bonds to be Purchased
Class A-1 Class A-2 Class A-3
Underwriters Bonds Bonds Bonds Total
------------ ----- ----- ----- -----
Xxxxxx Xxxxxxx & Co. $30,820,000 $34,840,000 $36,180,000 $101,840,000
Incorporated
Banc of America 1,840,000 2,080,000 2,160,000 6,080,000
Securities
Banc One Capital 3,220,000 3,640,000 3,780,000 10,640,000
Markets, Inc.
Credit Suisse First 3,220,000 3,640,000 3,780,000 10,640,000
Boston Corporation
Fleet Securities, Inc. 1,840,000 2,080,000 2,160,000 6,080,000
SunTrust Capital Markets, 1,840,000 2,080,000 2,160,000 6,080,000
Inc.
Wachovia Capital Markets, LLC 3,220,000 3,640,000 3,780,000 10,640,000
Total ................ $46,000,000 $52,000,000 $54,000,000 $152,000,000
EXHIBIT A
This information is furnished on a confidential basis and may not be reproduced
in whole or in part and is being delivered to a specific number of prospective
sophisticated investors in order to assist them in determining whether they have
an interest in the type of security described herein. It has been prepared
solely for information purposes and is not an offer to buy or sell or a
solicitation of an offer to buy or sell any security or instrument or to
participate in any trading strategy. This material is based on information
provided by Atlantic City Electric Transition Funding LLC and Atlantic City
Electric Company with respect to the expected characteristics of the transition
property securing these securities. The actual characteristics and performance
of the transition property will differ from the assumptions used in preparing
these materials, which are hypothetical in nature. Changes in the assumptions
may have a material impact on the information set forth in these materials.
Xxxxxx Xxxxxxx & Co. Incorporated makes no representation or warranty with
respect to the appropriateness, usefulness, accuracy or completeness of the
information, or with respect to the terms of any future offer of securities
conforming to the terms hereof. Any such offer of securities would be made
pursuant to a definitive Prospectus and Prospectus Supplement prepared by the
issuer which could contain material information not contained herein and to
which the prospective purchasers are referred. In the event of any such
offering, this information shall be deemed superseded, amended and supplemented
in its entirety by such Prospectus and Prospectus Supplement. Such Prospectus
and Prospectus Supplement will contain all material information in respect of
any securities offered thereby and any decision to invest in such securities
should be made solely in reliance upon such Prospectus and Prospectus
Supplement. The information contained in this material may be based on
assumptions regarding market conditions and other matters as reflected therein
and is therefore subject to change. We make no representations regarding the
reasonableness of such assumptions or the likelihood that any of such
assumptions will coincide with actual market conditions or events, and this
material should not be relied on for such purposes. No representation is made
that any returns indicated will be achieved. Changes to the assumptions may have
a material impact on any returns detailed. Although the analyses herein may not
show a negative return on the securities referred to herein, such securities are
not principal protected and, in certain circumstances, investors in such
securities may suffer a complete or partial loss on their investment. Xxxxxx
Xxxxxxx & Co. Incorporated disclaims any and all liability relating to this
information, including without limitation any express or implied representations
or warranties for, statements contained in, and omissions from, this
information. Additional information is available upon request. Xxxxxx Xxxxxxx &
Co. Incorporated and others associated with it may have positions in, and may
effect transactions in, securities and instruments of issuers mentioned herein
and may also perform or seek to perform investment banking services for the
issuers of such securities and instruments. Past performance is not necessarily
indicative of future results. Price and availability are subject to change
without notice. Information contained in this material is current as of the date
appearing on this material only. Information in this material regarding any
assets backing any securities discussed herein supercedes all prior information
regarding such assets. Xxxxxx Xxxxxxx & Co. Incorporated is acting as the lead
underwriter and not acting as agent for the issuer or its affiliates in
connection with the proposed transaction. To our readers worldwide: In addition,
please note that this publication has been issued by Xxxxxx Xxxxxxx & Co.
Incorporated, approved by Xxxxxx
Xxxxxxx International Limited, a member of The Securities and Futures Authority,
and by Xxxxxx Xxxxxxx Japan Ltd. We recommend that such investors obtain the
advice of their Xxxxxx Xxxxxxx & Co. Incorporated, Xxxxxx Xxxxxxx International
or Xxxxxx Xxxxxxx Japan Ltd. representative about the investments concerned.
With respect to any UK recipients, this communication is directed only to those
persons who are marked counterparties or intermediate customers (as defined in
the UK Financial Services Authority's rules). Notwithstanding any other express
or implied agreement, arrangement, or understanding to the contrary, Xxxxxx
Xxxxxxx and each recipient hereof are deemed to agree that both Xxxxxx Xxxxxxx
and such recipient (and their respective employees, representatives, and other
agents) may disclose to any and all persons, without limitation of any kind from
the commencement of discussions, the U.S. federal income tax treatment of the
transaction ("tax treatment") and any fact that may be relevant to understanding
the tax treatment of the transaction described herein ("tax structure") and all
materials of any kind (including opinions or other tax analyses) that are
provided to such person relating to such tax treatment and tax structure, except
where confidentiality is reasonably necessary to comply with securities laws
(including, where applicable, confidentiality regarding the identity of an
issuer of securities or its affiliates, agents and advisors).
EXHIBIT B
--------------------------------------------------------------------------------
Xxxxxx Xxxxxxx
ATLANTIC CITY ELECTRIC COMPANY DECEMBER 10, 2003 SECURITIZED PRODUCTS GROUP
--------------------------------------------------------------------------------
New ABS Lead-Managed Transaction
Computational Materials
Atlantic City Electric Transition Funding LLC,
Issuer of the Transition Bonds
$152,000,000
Transition Bonds, Series 2003-1
ATLANTIC CITY ELECTRIC COMPANY
SELLER AND SERVICER
This information is furnished on a confidential basis and may not be reproduced
in whole or in part and is being delivered to a specific number of prospective
sophisticated investors in order to assist them in determining whether they have
an interest in the type of security described herein. It has been prepared
solely for information purposes and is not an offer to buy or sell or a
solicitation of an offer to buy or sell any security or instrument or to
participate in any trading strategy. This material is based on information
provided by Atlantic City Electric Transition Funding LLC and Atlantic City
Company with respect to the expected characteristics of the transition property
securing these securities. The actual characteristics and performance of the
transition property will differ from the assumptions used in preparing these
materials, which are hypothetical in nature. Changes in the assumptions may have
a material impact on the information set forth in these materials. Xxxxxx
Xxxxxxx & Co. Incorporated makes no representation or warranty with respect to
the appropriateness, usefulness, accuracy or completeness of the information, or
with respect to the terms of any future offer of securities conforming to the
terms hereof. Any such offer of securities would be made pursuant to a
definitive Prospectus and Prospectus Supplement prepared by the issuer which
could contain material information not contained herein and to which the
prospective purchasers are referred. In the event of any such offering, this
information shall be deemed superseded, amended and supplemented in its entirety
by such Prospectus and Prospectus Supplement. Such Prospectus and Prospectus
Supplement will contain all material information in respect of any securities
offered thereby and any decision to invest in such securities should be made
solely in reliance upon such Prospectus and Prospectus Supplement. The
information contained in this material may be based on assumptions regarding
market conditions and other matters as reflected therein and is therefore
subject to change. We make no representations regarding the reasonableness of
such assumptions or the likelihood that any of such assumptions will coincide
with actual market conditions or events, and this material should not be relied
on for such purposes. No representation is made that any returns indicated will
be achieved. Changes to the assumptions may have a material impact on any
returns detailed. Although the analyses herein may not show a negative return on
the securities referred to herein, such securities are not principal protected
and, in certain circumstances, investors in such securities may suffer a
complete or partial loss on their investment. Xxxxxx Xxxxxxx & Co. Incorporated
disclaims any and all liability relating to this information, including without
limitation any express or implied representations or warranties for, statements
contained in, and omissions from, this information. Additional information is
available upon request. Xxxxxx Xxxxxxx & Co. Incorporated and others associated
with it may have positions in, and may effect transactions in, securities and
instruments of issuers mentioned herein and may also perform or seek to perform
investment banking services for the issuers of such securities and instruments.
Past performance is not necessarily indicative of future results. Price and
availability are subject to change without notice. Information contained in this
material is current as of the date appearing on this material only. Information
in this material regarding any assets backing any securities discussed herein
supercedes all prior information regarding such assets. Xxxxxx Xxxxxxx & Co.
Incorporated is acting as the lead underwriter and not acting as agent for the
issuer or its affiliates in connection with the proposed transaction. To our
readers worldwide: In addition, please note that this publication has been
issued by Xxxxxx Xxxxxxx & Co. Incorporated, approved by Xxxxxx Xxxxxxx
International Limited, a member of The Securities and Futures Authority, and by
Xxxxxx Xxxxxxx Japan Ltd. We recommend that such investors obtain the advice of
their Xxxxxx Xxxxxxx & Co. Incorporated, Xxxxxx Xxxxxxx International or Xxxxxx
Xxxxxxx Japan Ltd. representative about the investments concerned.
Notwithstanding any other express or implied agreement, arrangement, or
understanding to the contrary, Xxxxxx Xxxxxxx and each recipient hereof are
deemed to agree that both Xxxxxx Xxxxxxx and such recipient (and their
respective employees, representatives, and other agents) may disclose to any and
all persons, without limitation of any kind from the commencement of
discussions, the U.S. federal income tax treatment of the transaction ("tax
treatment") and any fact that may be relevant to understanding the tax treatment
of the transaction described herein ("tax structure") and all materials of any
kind (including opinions or other tax analyses) that are provided to such person
relating to such tax treatment and tax structure, except where confidentiality
is reasonably necessary to comply with securities laws (including, where
applicable, confidentiality regarding the identity of an issuer of securities or
its affiliates, agents and advisors).
With respect to any UK recipients, this communication is directed only to those
persons who are marked counterparties or intermediate customers (as defined in
the UK Financial Services Authority's rules).
--------------------------------------------------------------------------------
Xxxxxx Xxxxxxx
ATLANTIC CITY ELECTRIC COMPANY DECEMBER 10, 2003 SECURITIZED PRODUCTS GROUP
--------------------------------------------------------------------------------
Atlantic City Electric Transition Funding LLC
$152,000,000
Transition Bonds, Series 2003-1
Transaction Highlights
Anticipated Transition Bond Structure
---------- ---------- ------------- --------------------- ------------- ------------- --------------- ------------- -------------
Expected Ratings Expected Payment Window Scheduled Legal Final
Size Tranche Fixed/ Average
Class ($MM) Type (Xxxxx'x/S&P/Fitch) Floating Life (Years) (Mo/Yr) Final
---------- ---------- ------------- --------------------- ------------- ------------- --------------- ------------- -------------
A 152.0 Single Class Aaa/AAA/AAA Fixed 8.39 10/04-10/18 10/20/18 10/20/20
---------- ---------- ------------- --------------------- ------------- ------------- --------------- ------------- -------------
Issuer........................ Atlantic City Electric Transition Funding LLC
Seller / Servicer............. Atlantic City Electric Company ("ACE")
Trustee....................... Bank of New York
Lead Manager.................. Xxxxxx Xxxxxxx
Co-Managers................... Banc of America Securities, Banc One Capital Markets, Credit Suisse First Boston,
Fleet Securities, SunTrust Capital Markets, and Wachovia Securities
Financial Advisor to the BPU.. Bear, Xxxxxxx & Co. Inc.
Expected Pricing.............. Week of December 15, 2003
Expected Settlement........... December 23, 2003
Interest/Principal Payments... Quarterly on the 20th day of January, April, July and October
First Interest/Principal October 20, 2004
Payment.......................
Day Count Basis............... 30/360
This information is furnished on a confidential basis and may not be reproduced
in whole or in part and is being delivered to a specific number of prospective
sophisticated investors in order to assist them in determining whether they have
an interest in the type of security described herein. It has been prepared
solely for information purposes and is not an offer to buy or sell or a
solicitation of an offer to buy or sell any security or instrument or to
participate in any trading strategy. This material is based on information
provided by Atlantic City Electric Transition Funding LLC and Atlantic City
Electric Company with respect to the expected characteristics of the transition
property securing these securities. The actual characteristics and performance
of the transition property will differ from the assumptions used in preparing
these materials, which are hypothetical in nature. Changes in the assumptions
may have a material impact on the information set forth in these materials.
Xxxxxx Xxxxxxx & Co. Incorporated makes no representation or warranty with
respect to the appropriateness, usefulness, accuracy or completeness of the
information, or with respect to the terms of any future offer of securities
conforming to the terms hereof. Any such offer of securities would be made
pursuant to a definitive Prospectus and Prospectus Supplement prepared by the
issuer which could contain material information not contained herein and to
which the prospective purchasers are referred. In the event of any such
offering, this information shall be deemed superseded, amended and supplemented
in its entirety by such Prospectus and Prospectus Supplement. Such Prospectus
and Prospectus Supplement will contain all material information in respect of
any securities offered thereby and any decision to invest in such securities
should be made solely in reliance upon such Prospectus and Prospectus
Supplement. The information contained in this material may be based on
assumptions regarding market conditions and other matters as reflected therein
and is therefore subject to change. We make no representations regarding the
reasonableness of such assumptions or the likelihood that any of such
assumptions will coincide with actual market conditions or events, and this
material should not be relied on for such purposes. No representation is made
that any returns indicated will be achieved. Changes to the assumptions may have
a material impact on any returns detailed. Although the analyses herein may not
show a negative return on the securities referred to herein, such securities are
not principal protected and, in certain circumstances, investors in such
securities may suffer a complete or partial loss on their investment. Xxxxxx
Xxxxxxx & Co. Incorporated disclaims any and all liability relating to this
information, including without limitation any express or implied representations
or warranties for, statements contained in, and omissions from, this
information. Additional information is available upon request. Xxxxxx Xxxxxxx &
Co. Incorporated and others associated with it may have positions in, and may
effect transactions in, securities and instruments of issuers mentioned herein
and may also perform or seek to perform investment banking services for the
issuers of such securities and instruments. Past performance is not necessarily
indicative of future results. Price and availability are subject to change
without notice. Information contained in this material is current as of the date
appearing on this material only. Information in this material regarding any
assets backing any securities discussed herein supercedes all prior information
regarding such assets. Xxxxxx Xxxxxxx & Co. Incorporated is acting as the lead
underwriter and not acting as agent for the issuer or its affiliates in
connection with the proposed transaction. To our readers worldwide: In addition,
please note that this publication has been issued by Xxxxxx Xxxxxxx & Co.
Incorporated, approved by Xxxxxx Xxxxxxx International Limited, a member of The
Securities and Futures Authority, and by Xxxxxx Xxxxxxx Japan Ltd. We recommend
that such investors obtain the advice of their Xxxxxx Xxxxxxx & Co.
Incorporated, Xxxxxx Xxxxxxx International or Xxxxxx Xxxxxxx Japan Ltd.
representative about the investments concerned. Notwithstanding any other
express or implied agreement, arrangement, or understanding to the contrary,
Xxxxxx Xxxxxxx and each recipient hereof are deemed to agree that both Xxxxxx
Xxxxxxx and such recipient (and their respective employees, representatives, and
other agents) may disclose to any and all persons, without limitation of any
kind from the commencement of discussions, the U.S. federal income tax treatment
of the transaction ("tax treatment") and any fact that may be relevant to
understanding the tax treatment of the transaction described herein ("tax
structure") and all materials of any kind (including opinions or other tax
analyses) that are provided to such person relating to such tax treatment and
tax structure, except where confidentiality is reasonably necessary to comply
with securities laws (including, where applicable, confidentiality regarding the
identity of an issuer of securities or its affiliates, agents and advisors).
With respect to any UK recipients, this communication is directed only to those
persons who are marked counterparties or intermediate customers (as defined in
the UK Financial Services Authority's rules).
2
--------------------------------------------------------------------------------
Xxxxxx Xxxxxxx
ATLANTIC CITY ELECTRIC COMPANY DECEMBER 10, 2003 SECURITIZED PRODUCTS GROUP
--------------------------------------------------------------------------------
Credit Enhancement............ 1. Mandatory true-up mechanism: enables Transition Bond Charges ("TBCs") to be
adjusted to cover scheduled debt service, pay expenses, fund the
overcollateralization subaccount and replenish the capital subaccount
2. Capital subaccount: upfront deposit of 0.5% of initial aggregate principal
balance, corresponding to $760,000
3. Overcollateralization subaccount: 0.5% of initial aggregate principal balance,
initially $0 and funded ratably over life of Transition Bonds to reach an
aggregate balance of $760,000
4. Reserve subaccount: any collections in excess of the amounts necessary to pay
fees and expenses, scheduled interest and principal, and fund the capital
subaccount and the overcollateralization subaccount to its required levels
True-Up Adjustments........... Frequency Period
---------------------------------------------- ----------------------------------------------
Yearly October 2004 - October 2017
Quarterly October 2017 - October 2018
The BPU order also gives ACE, as servicer, the ability to apply for quarterly true-ups
over the life of the transaction, and to file for monthly true-ups beginning two years
before the expected maturity of the last class of transition bonds
Optional non-routine true-ups are also allowed to modify the true-up methodology to
more accurately project and generate adequate revenues
Optional Clean-up Call........ 5% of initial total principal balance
ERISA Eligibility............. Subject to applicable ERISA exemptions
Min. Denomination............. $1,000
Use of Proceeds............... Refinance or retire a portion of its debt or equity, or both
This information is furnished on a confidential basis and may not be reproduced
in whole or in part and is being delivered to a specific number of prospective
sophisticated investors in order to assist them in determining whether they have
an interest in the type of security described herein. It has been prepared
solely for information purposes and is not an offer to buy or sell or a
solicitation of an offer to buy or sell any security or instrument or to
participate in any trading strategy. This material is based on information
provided by Atlantic City Electric Transition Funding LLC and Atlantic City
Electric Company with respect to the expected characteristics of the transition
property securing these securities. The actual characteristics and performance
of the transition property will differ from the assumptions used in preparing
these materials, which are hypothetical in nature. Changes in the assumptions
may have a material impact on the information set forth in these materials.
Xxxxxx Xxxxxxx & Co. Incorporated makes no representation or warranty with
respect to the appropriateness, usefulness, accuracy or completeness of the
information, or with respect to the terms of any future offer of securities
conforming to the terms hereof. Any such offer of securities would be made
pursuant to a definitive Prospectus and Prospectus Supplement prepared by the
issuer which could contain material information not contained herein and to
which the prospective purchasers are referred. In the event of any such
offering, this information shall be deemed superseded, amended and supplemented
in its entirety by such Prospectus and Prospectus Supplement. Such Prospectus
and Prospectus Supplement will contain all material information in respect of
any securities offered thereby and any decision to invest in such securities
should be made solely in reliance upon such Prospectus and Prospectus
Supplement. The information contained in this material may be based on
assumptions regarding market conditions and other matters as reflected therein
and is therefore subject to change. We make no representations regarding the
reasonableness of such assumptions or the likelihood that any of such
assumptions will coincide with actual market conditions or events, and this
material should not be relied on for such purposes. No representation is made
that any returns indicated will be achieved. Changes to the assumptions may have
a material impact on any returns detailed. Although the analyses herein may not
show a negative return on the securities referred to herein, such securities are
not principal protected and, in certain circumstances, investors in such
securities may suffer a complete or partial loss on their investment. Xxxxxx
Xxxxxxx & Co. Incorporated disclaims any and all liability relating to this
information, including without limitation any express or implied representations
or warranties for, statements contained in, and omissions from, this
information. Additional information is available upon request. Xxxxxx Xxxxxxx &
Co. Incorporated and others associated with it may have positions in, and may
effect transactions in, securities and instruments of issuers mentioned herein
and may also perform or seek to perform investment banking services for the
issuers of such securities and instruments. Past performance is not necessarily
indicative of future results. Price and availability are subject to change
without notice. Information contained in this material is current as of the date
appearing on this material only. Information in this material regarding any
assets backing any securities discussed herein supercedes all prior information
regarding such assets. Xxxxxx Xxxxxxx & Co. Incorporated is acting as the lead
underwriter and not acting as agent for the issuer or its affiliates in
connection with the proposed transaction. To our readers worldwide: In addition,
please note that this publication has been issued by Xxxxxx Xxxxxxx & Co.
Incorporated, approved by Xxxxxx Xxxxxxx International Limited, a member of The
Securities and Futures Authority, and by Xxxxxx Xxxxxxx Japan Ltd. We recommend
that such investors obtain the advice of their Xxxxxx Xxxxxxx & Co.
Incorporated, Xxxxxx Xxxxxxx International or Xxxxxx Xxxxxxx Japan Ltd.
representative about the investments concerned. Notwithstanding any other
express or implied agreement, arrangement, or understanding to the contrary,
Xxxxxx Xxxxxxx and each recipient hereof are deemed to agree that both Xxxxxx
Xxxxxxx and such recipient (and their respective employees, representatives, and
other agents) may disclose to any and all persons, without limitation of any
kind from the commencement of discussions, the U.S. federal income tax treatment
of the transaction ("tax treatment") and any fact that may be relevant to
understanding the tax treatment of the transaction described herein ("tax
structure") and all materials of any kind (including opinions or other tax
analyses) that are provided to such person relating to such tax treatment and
tax structure, except where confidentiality is reasonably necessary to comply
with securities laws (including, where applicable, confidentiality regarding the
identity of an issuer of securities or its affiliates, agents and advisors).
With respect to any UK recipients, this communication is directed only to those
persons who are marked counterparties or intermediate customers (as defined in
the UK Financial Services Authority's rules).
3
--------------------------------------------------------------------------------
Xxxxxx Xxxxxxx
ATLANTIC CITY ELECTRIC COMPANY DECEMBER 10, 2003 SECURITIZED PRODUCTS GROUP
--------------------------------------------------------------------------------
Scheduled Amortization
Projected Securitization Bond Amortization Schedule
and Decrement Table to Maturity
-------------------- --------------------------- -----------------
Payment Date Class A ($) Class A (%)
-------------------- --------------------------- -----------------
12/23/03 152,000,000 100
-------------------- --------------------------- -----------------
10/20/04 145,903,610 96
-------------------- --------------------------- -----------------
01/20/05 143,669,386 95
-------------------- --------------------------- -----------------
04/20/05 141,976,053 93
-------------------- --------------------------- -----------------
07/20/05 140,516,241 92
-------------------- --------------------------- -----------------
10/20/05 138,285,567 91
-------------------- --------------------------- -----------------
01/20/06 136,387,712 90
-------------------- --------------------------- -----------------
04/20/06 134,491,528 88
-------------------- --------------------------- -----------------
07/20/06 132,812,230 87
-------------------- --------------------------- -----------------
10/20/06 130,320,004 86
-------------------- --------------------------- -----------------
01/20/07 128,280,622 84
-------------------- --------------------------- -----------------
04/20/07 126,307,789 83
-------------------- --------------------------- -----------------
07/20/07 124,551,960 82
-------------------- --------------------------- -----------------
10/20/07 121,978,874 80
-------------------- --------------------------- -----------------
01/20/08 119,847,123 79
-------------------- --------------------------- -----------------
04/20/08 117,778,485 77
-------------------- --------------------------- -----------------
07/20/08 115,925,054 76
-------------------- --------------------------- -----------------
10/20/08 113,245,843 75
-------------------- --------------------------- -----------------
01/20/09 111,128,223 73
-------------------- --------------------------- -----------------
04/20/09 109,015,710 72
-------------------- --------------------------- -----------------
07/20/09 106,879,475 70
-------------------- --------------------------- -----------------
10/20/09 104,105,555 68
-------------------- --------------------------- -----------------
01/20/10 101,747,941 67
-------------------- --------------------------- -----------------
04/20/10 99,528,704 65
-------------------- --------------------------- -----------------
07/20/10 97,343,816 64
-------------------- --------------------------- -----------------
10/20/10 94,531,644 62
-------------------- --------------------------- -----------------
01/20/11 92,083,936 61
-------------------- --------------------------- -----------------
04/20/11 89,747,304 59
-------------------- --------------------------- -----------------
07/20/11 87,442,682 58
-------------------- --------------------------- -----------------
10/20/11 84,508,201 56
-------------------- --------------------------- -----------------
01/20/12 81,942,456 54
-------------------- --------------------------- -----------------
This information is furnished on a confidential basis and may not be reproduced
in whole or in part and is being delivered to a specific number of prospective
sophisticated investors in order to assist them in determining whether they have
an interest in the type of security described herein. It has been prepared
solely for information purposes and is not an offer to buy or sell or a
solicitation of an offer to buy or sell any security or instrument or to
participate in any trading strategy. This material is based on information
provided by Atlantic City Electric Transition Funding LLC and Atlantic City
Electric Company with respect to the expected characteristics of the transition
property securing these securities. The actual characteristics and performance
of the transition property will differ from the assumptions used in preparing
these materials, which are hypothetical in nature. Changes in the assumptions
may have a material impact on the information set forth in these materials.
Xxxxxx Xxxxxxx & Co. Incorporated makes no representation or warranty with
respect to the appropriateness, usefulness, accuracy or completeness of the
information, or with respect to the terms of any future offer of securities
conforming to the terms hereof. Any such offer of securities would be made
pursuant to a definitive Prospectus and Prospectus Supplement prepared by the
issuer which could contain material information not contained herein and to
which the prospective purchasers are referred. In the event of any such
offering, this information shall be deemed superseded, amended and supplemented
in its entirety by such Prospectus and Prospectus Supplement. Such Prospectus
and Prospectus Supplement will contain all material information in respect of
any securities offered thereby and any decision to invest in such securities
should be made solely in reliance upon such Prospectus and Prospectus
Supplement. The information contained in this material may be based on
assumptions regarding market conditions and other matters as reflected therein
and is therefore subject to change. We make no representations regarding the
reasonableness of such assumptions or the likelihood that any of such
assumptions will coincide with actual market conditions or events, and this
material should not be relied on for such purposes. No representation is made
that any returns indicated will be achieved. Changes to the assumptions may have
a material impact on any returns detailed. Although the analyses herein may not
show a negative return on the securities referred to herein, such securities are
not principal protected and, in certain circumstances, investors in such
securities may suffer a complete or partial loss on their investment. Xxxxxx
Xxxxxxx & Co. Incorporated disclaims any and all liability relating to this
information, including without limitation any express or implied representations
or warranties for, statements contained in, and omissions from, this
information. Additional information is available upon request. Xxxxxx Xxxxxxx &
Co. Incorporated and others associated with it may have positions in, and may
effect transactions in, securities and instruments of issuers mentioned herein
and may also perform or seek to perform investment banking services for the
issuers of such securities and instruments. Past performance is not necessarily
indicative of future results. Price and availability are subject to change
without notice. Information contained in this material is current as of the date
appearing on this material only. Information in this material regarding any
assets backing any securities discussed herein supercedes all prior information
regarding such assets. Xxxxxx Xxxxxxx & Co. Incorporated is acting as the lead
underwriter and not acting as agent for the issuer or its affiliates in
connection with the proposed transaction. To our readers worldwide: In addition,
please note that this publication has been issued by Xxxxxx Xxxxxxx & Co.
Incorporated, approved by Xxxxxx Xxxxxxx International Limited, a member of The
Securities and Futures Authority, and by Xxxxxx Xxxxxxx Japan Ltd. We recommend
that such investors obtain the advice of their Xxxxxx Xxxxxxx & Co.
Incorporated, Xxxxxx Xxxxxxx International or Xxxxxx Xxxxxxx Japan Ltd.
representative about the investments concerned. Notwithstanding any other
express or implied agreement, arrangement, or understanding to the contrary,
Xxxxxx Xxxxxxx and each recipient hereof are deemed to agree that both Xxxxxx
Xxxxxxx and such recipient (and their respective employees, representatives, and
other agents) may disclose to any and all persons, without limitation of any
kind from the commencement of discussions, the U.S. federal income tax treatment
of the transaction ("tax treatment") and any fact that may be relevant to
understanding the tax treatment of the transaction described herein ("tax
structure") and all materials of any kind (including opinions or other tax
analyses) that are provided to such person relating to such tax treatment and
tax structure, except where confidentiality is reasonably necessary to comply
with securities laws (including, where applicable, confidentiality regarding the
identity of an issuer of securities or its affiliates, agents and advisors).
With respect to any UK recipients, this communication is directed only to those
persons who are marked counterparties or intermediate customers (as defined in
the UK Financial Services Authority's rules).
4
--------------------------------------------------------------------------------
Xxxxxx Xxxxxxx
ATLANTIC CITY ELECTRIC COMPANY DECEMBER 10, 2003 SECURITIZED PRODUCTS GROUP
--------------------------------------------------------------------------------
-------------------- --------------------------- -----------------
04/20/12 79,489,329 52
-------------------- --------------------------- -----------------
07/20/12 77,066,975 51
-------------------- --------------------------- -----------------
10/20/12 74,013,534 49
-------------------- --------------------------- -----------------
01/20/13 71,326,827 47
-------------------- --------------------------- -----------------
04/20/13 68,751,019 45
-------------------- --------------------------- -----------------
07/20/13 66,204,554 44
-------------------- --------------------------- -----------------
10/20/13 63,025,554 41
-------------------- --------------------------- -----------------
01/20/14 60,211,908 40
-------------------- --------------------------- -----------------
04/20/14 57,507,731 38
-------------------- --------------------------- -----------------
07/20/14 54,831,416 36
-------------------- --------------------------- -----------------
10/20/14 51,521,067 34
-------------------- --------------------------- -----------------
01/20/15 48,574,547 32
-------------------- --------------------------- -----------------
04/20/15 45,735,957 30
-------------------- --------------------------- -----------------
07/20/15 42,923,677 28
-------------------- --------------------------- -----------------
10/20/15 39,475,793 26
-------------------- --------------------------- -----------------
01/20/16 36,390,150 24
-------------------- --------------------------- -----------------
04/20/16 33,410,830 22
-------------------- --------------------------- -----------------
07/20/16 30,456,195 20
-------------------- --------------------------- -----------------
10/20/16 26,864,311 18
-------------------- --------------------------- -----------------
01/20/17 23,633,006 16
-------------------- --------------------------- -----------------
04/20/17 20,506,341 13
-------------------- --------------------------- -----------------
07/20/17 17,402,659 11
-------------------- --------------------------- -----------------
10/20/17 13,660,007 9
-------------------- --------------------------- -----------------
01/20/18 10,303,847 7
-------------------- --------------------------- -----------------
04/20/18 7,065,725 5
-------------------- --------------------------- -----------------
07/20/18 3,849,252 3
-------------------- --------------------------- -----------------
10/20/18 - 0
-------------------- --------------------------- -----------------
This information is furnished on a confidential basis and may not be reproduced
in whole or in part and is being delivered to a specific number of prospective
sophisticated investors in order to assist them in determining whether they have
an interest in the type of security described herein. It has been prepared
solely for information purposes and is not an offer to buy or sell or a
solicitation of an offer to buy or sell any security or instrument or to
participate in any trading strategy. This material is based on information
provided by Atlantic City Electric Transition Funding LLC and Atlantic City
Electric Company with respect to the expected characteristics of the transition
property securing these securities. The actual characteristics and performance
of the transition property will differ from the assumptions used in preparing
these materials, which are hypothetical in nature. Changes in the assumptions
may have a material impact on the information set forth in these materials.
Xxxxxx Xxxxxxx & Co. Incorporated makes no representation or warranty with
respect to the appropriateness, usefulness, accuracy or completeness of the
information, or with respect to the terms of any future offer of securities
conforming to the terms hereof. Any such offer of securities would be made
pursuant to a definitive Prospectus and Prospectus Supplement prepared by the
issuer which could contain material information not contained herein and to
which the prospective purchasers are referred. In the event of any such
offering, this information shall be deemed superseded, amended and supplemented
in its entirety by such Prospectus and Prospectus Supplement. Such Prospectus
and Prospectus Supplement will contain all material information in respect of
any securities offered thereby and any decision to invest in such securities
should be made solely in reliance upon such Prospectus and Prospectus
Supplement. The information contained in this material may be based on
assumptions regarding market conditions and other matters as reflected therein
and is therefore subject to change. We make no representations regarding the
reasonableness of such assumptions or the likelihood that any of such
assumptions will coincide with actual market conditions or events, and this
material should not be relied on for such purposes. No representation is made
that any returns indicated will be achieved. Changes to the assumptions may have
a material impact on any returns detailed. Although the analyses herein may not
show a negative return on the securities referred to herein, such securities are
not principal protected and, in certain circumstances, investors in such
securities may suffer a complete or partial loss on their investment. Xxxxxx
Xxxxxxx & Co. Incorporated disclaims any and all liability relating to this
information, including without limitation any express or implied representations
or warranties for, statements contained in, and omissions from, this
information. Additional information is available upon request. Xxxxxx Xxxxxxx &
Co. Incorporated and others associated with it may have positions in, and may
effect transactions in, securities and instruments of issuers mentioned herein
and may also perform or seek to perform investment banking services for the
issuers of such securities and instruments. Past performance is not necessarily
indicative of future results. Price and availability are subject to change
without notice. Information contained in this material is current as of the date
appearing on this material only. Information in this material regarding any
assets backing any securities discussed herein supercedes all prior information
regarding such assets. Xxxxxx Xxxxxxx & Co. Incorporated is acting as the lead
underwriter and not acting as agent for the issuer or its affiliates in
connection with the proposed transaction. To our readers worldwide: In addition,
please note that this publication has been issued by Xxxxxx Xxxxxxx & Co.
Incorporated, approved by Xxxxxx Xxxxxxx International Limited, a member of The
Securities and Futures Authority, and by Xxxxxx Xxxxxxx Japan Ltd. We recommend
that such investors obtain the advice of their Xxxxxx Xxxxxxx & Co.
Incorporated, Xxxxxx Xxxxxxx International or Xxxxxx Xxxxxxx Japan Ltd.
representative about the investments concerned. Notwithstanding any other
express or implied agreement, arrangement, or understanding to the contrary,
Xxxxxx Xxxxxxx and each recipient hereof are deemed to agree that both Xxxxxx
Xxxxxxx and such recipient (and their respective employees, representatives, and
other agents) may disclose to any and all persons, without limitation of any
kind from the commencement of discussions, the U.S. federal income tax treatment
of the transaction ("tax treatment") and any fact that may be relevant to
understanding the tax treatment of the transaction described herein ("tax
structure") and all materials of any kind (including opinions or other tax
analyses) that are provided to such person relating to such tax treatment and
tax structure, except where confidentiality is reasonably necessary to comply
with securities laws (including, where applicable, confidentiality regarding the
identity of an issuer of securities or its affiliates, agents and advisors).
With respect to any UK recipients, this communication is directed only to those
persons who are marked counterparties or intermediate customers (as defined in
the UK Financial Services Authority's rules).
5
--------------------------------------------------------------------------------
Xxxxxx Xxxxxxx
ATLANTIC CITY ELECTRIC COMPANY DECEMBER 10, 2003 SECURITIZED PRODUCTS GROUP
--------------------------------------------------------------------------------
Average Life Sensitivity
The following table highlights the sensitivity of the average life (in years) of
Class A tranche to decreases in forecasted energy consumption. There can be no
assurance that the weighted average life of the transition bonds will be as
shown in this table.
------------------- ----------------- ---------------------------------------------------------------------
Targeted Annual Declines in Forecasted Energy Consumption
Class Avg. Life (5)% (10)% (15)%
------------------- ----------------- ----------------------- ---------------------- ----------------------
A 8.39 8.39 8.43 8.51
------------------- ----------------- ----------------------- ---------------------- ----------------------
For the purposes of preparing this table, we have assumed, among other things,
that:
o The Series 2003-1 bonds are issued on December 23, 2003
o Payments on the Series 2003-1 bonds are made on each payment date,
commencing on October 20, 2004
o The aggregate per annum servicing fee for the Series 2002-1 bonds and the
Series 2003-1 bonds equals 0.10% of the aggregate initial principal balance
of the Series 2002-1 bonds and the Series 2003-1 bonds, payable monthly
o There are no net earnings on amounts on deposit in the collection account
o Per annum operating expenses for the Series 2003-1 bonds and the Series
2002-1 bonds, including all fees, costs and charges of the issuer, the
trustee, the administrator and the independent managers, equals $400,000 in
the aggregate, accruing in 12 equal monthly payments
o All transition bond charge collections are received in accordance with
ACE's forecasts and deposited in the collection account
o The forecast error stays constant over the life of the transition bonds and
is equal to 5%, 10% or 15% below the initial forecasted energy consumption
each year as stated in the table above. The servicer will true up the
transition bond charge so as to ensure the billing of transition bond
charges necessary to
This information is furnished on a confidential basis and may not be reproduced
in whole or in part and is being delivered to a specific number of prospective
sophisticated investors in order to assist them in determining whether they have
an interest in the type of security described herein. It has been prepared
solely for information purposes and is not an offer to buy or sell or a
solicitation of an offer to buy or sell any security or instrument or to
participate in any trading strategy. This material is based on information
provided by Atlantic City Electric Transition Funding LLC and Atlantic City
Electric Company with respect to the expected characteristics of the transition
property securing these securities. The actual characteristics and performance
of the transition property will differ from the assumptions used in preparing
these materials, which are hypothetical in nature. Changes in the assumptions
may have a material impact on the information set forth in these materials.
Xxxxxx Xxxxxxx & Co. Incorporated makes no representation or warranty with
respect to the appropriateness, usefulness, accuracy or completeness of the
information, or with respect to the terms of any future offer of securities
conforming to the terms hereof. Any such offer of securities would be made
pursuant to a definitive Prospectus and Prospectus Supplement prepared by the
issuer which could contain material information not contained herein and to
which the prospective purchasers are referred. In the event of any such
offering, this information shall be deemed superseded, amended and supplemented
in its entirety by such Prospectus and Prospectus Supplement. Such Prospectus
and Prospectus Supplement will contain all material information in respect of
any securities offered thereby and any decision to invest in such securities
should be made solely in reliance upon such Prospectus and Prospectus
Supplement. The information contained in this material may be based on
assumptions regarding market conditions and other matters as reflected therein
and is therefore subject to change. We make no representations regarding the
reasonableness of such assumptions or the likelihood that any of such
assumptions will coincide with actual market conditions or events, and this
material should not be relied on for such purposes. No representation is made
that any returns indicated will be achieved. Changes to the assumptions may have
a material impact on any returns detailed. Although the analyses herein may not
show a negative return on the securities referred to herein, such securities are
not principal protected and, in certain circumstances, investors in such
securities may suffer a complete or partial loss on their investment. Xxxxxx
Xxxxxxx & Co. Incorporated disclaims any and all liability relating to this
information, including without limitation any express or implied representations
or warranties for, statements contained in, and omissions from, this
information. Additional information is available upon request. Xxxxxx Xxxxxxx &
Co. Incorporated and others associated with it may have positions in, and may
effect transactions in, securities and instruments of issuers mentioned herein
and may also perform or seek to perform investment banking services for the
issuers of such securities and instruments. Past performance is not necessarily
indicative of future results. Price and availability are subject to change
without notice. Information contained in this material is current as of the date
appearing on this material only. Information in this material regarding any
assets backing any securities discussed herein supercedes all prior information
regarding such assets. Xxxxxx Xxxxxxx & Co. Incorporated is acting as the lead
underwriter and not acting as agent for the issuer or its affiliates in
connection with the proposed transaction. To our readers worldwide: In addition,
please note that this publication has been issued by Xxxxxx Xxxxxxx & Co.
Incorporated, approved by Xxxxxx Xxxxxxx International Limited, a member of The
Securities and Futures Authority, and by Xxxxxx Xxxxxxx Japan Ltd. We recommend
that such investors obtain the advice of their Xxxxxx Xxxxxxx & Co.
Incorporated, Xxxxxx Xxxxxxx International or Xxxxxx Xxxxxxx Japan Ltd.
representative about the investments concerned. Notwithstanding any other
express or implied agreement, arrangement, or understanding to the contrary,
Xxxxxx Xxxxxxx and each recipient hereof are deemed to agree that both Xxxxxx
Xxxxxxx and such recipient (and their respective employees, representatives, and
other agents) may disclose to any and all persons, without limitation of any
kind from the commencement of discussions, the U.S. federal income tax treatment
of the transaction ("tax treatment") and any fact that may be relevant to
understanding the tax treatment of the transaction described herein ("tax
structure") and all materials of any kind (including opinions or other tax
analyses) that are provided to such person relating to such tax treatment and
tax structure, except where confidentiality is reasonably necessary to comply
with securities laws (including, where applicable, confidentiality regarding the
identity of an issuer of securities or its affiliates, agents and advisors).
With respect to any UK recipients, this communication is directed only to those
persons who are marked counterparties or intermediate customers (as defined in
the UK Financial Services Authority's rules).
6
--------------------------------------------------------------------------------
Xxxxxx Xxxxxxx
ATLANTIC CITY ELECTRIC COMPANY DECEMBER 10, 2003 SECURITIZED PRODUCTS GROUP
--------------------------------------------------------------------------------
generate the collection of amounts sufficient to (a) pay ongoing fees and
expenses, (b) timely provide for all scheduled payments of principal and
interest, (c) fund the capital and overcollateralization subaccounts to
their required levels, and (d) return, if necessary, the reserve subaccount
to a zero balance by the related payment date
o Periodic annual standard true-ups occur on a transaction year basis
o Quarterly standard true-ups occur one year before the expected final
payment date of the Series 2003-1 bonds
o No nonstandard true-ups have been modeled
o No optional redemption has been exercised
This information is furnished on a confidential basis and may not be reproduced
in whole or in part and is being delivered to a specific number of prospective
sophisticated investors in order to assist them in determining whether they have
an interest in the type of security described herein. It has been prepared
solely for information purposes and is not an offer to buy or sell or a
solicitation of an offer to buy or sell any security or instrument or to
participate in any trading strategy. This material is based on information
provided by Atlantic City Electric Transition Funding LLC and Atlantic City
Electric Company with respect to the expected characteristics of the transition
property securing these securities. The actual characteristics and performance
of the transition property will differ from the assumptions used in preparing
these materials, which are hypothetical in nature. Changes in the assumptions
may have a material impact on the information set forth in these materials.
Xxxxxx Xxxxxxx & Co. Incorporated makes no representation or warranty with
respect to the appropriateness, usefulness, accuracy or completeness of the
information, or with respect to the terms of any future offer of securities
conforming to the terms hereof. Any such offer of securities would be made
pursuant to a definitive Prospectus and Prospectus Supplement prepared by the
issuer which could contain material information not contained herein and to
which the prospective purchasers are referred. In the event of any such
offering, this information shall be deemed superseded, amended and supplemented
in its entirety by such Prospectus and Prospectus Supplement. Such Prospectus
and Prospectus Supplement will contain all material information in respect of
any securities offered thereby and any decision to invest in such securities
should be made solely in reliance upon such Prospectus and Prospectus
Supplement. The information contained in this material may be based on
assumptions regarding market conditions and other matters as reflected therein
and is therefore subject to change. We make no representations regarding the
reasonableness of such assumptions or the likelihood that any of such
assumptions will coincide with actual market conditions or events, and this
material should not be relied on for such purposes. No representation is made
that any returns indicated will be achieved. Changes to the assumptions may have
a material impact on any returns detailed. Although the analyses herein may not
show a negative return on the securities referred to herein, such securities are
not principal protected and, in certain circumstances, investors in such
securities may suffer a complete or partial loss on their investment. Xxxxxx
Xxxxxxx & Co. Incorporated disclaims any and all liability relating to this
information, including without limitation any express or implied representations
or warranties for, statements contained in, and omissions from, this
information. Additional information is available upon request. Xxxxxx Xxxxxxx &
Co. Incorporated and others associated with it may have positions in, and may
effect transactions in, securities and instruments of issuers mentioned herein
and may also perform or seek to perform investment banking services for the
issuers of such securities and instruments. Past performance is not necessarily
indicative of future results. Price and availability are subject to change
without notice. Information contained in this material is current as of the date
appearing on this material only. Information in this material regarding any
assets backing any securities discussed herein supercedes all prior information
regarding such assets. Xxxxxx Xxxxxxx & Co. Incorporated is acting as the lead
underwriter and not acting as agent for the issuer or its affiliates in
connection with the proposed transaction. To our readers worldwide: In addition,
please note that this publication has been issued by Xxxxxx Xxxxxxx & Co.
Incorporated, approved by Xxxxxx Xxxxxxx International Limited, a member of The
Securities and Futures Authority, and by Xxxxxx Xxxxxxx Japan Ltd. We recommend
that such investors obtain the advice of their Xxxxxx Xxxxxxx & Co.
Incorporated, Xxxxxx Xxxxxxx International or Xxxxxx Xxxxxxx Japan Ltd.
representative about the investments concerned. Notwithstanding any other
express or implied agreement, arrangement, or understanding to the contrary,
Xxxxxx Xxxxxxx and each recipient hereof are deemed to agree that both Xxxxxx
Xxxxxxx and such recipient (and their respective employees, representatives, and
other agents) may disclose to any and all persons, without limitation of any
kind from the commencement of discussions, the U.S. federal income tax treatment
of the transaction ("tax treatment") and any fact that may be relevant to
understanding the tax treatment of the transaction described herein ("tax
structure") and all materials of any kind (including opinions or other tax
analyses) that are provided to such person relating to such tax treatment and
tax structure, except where confidentiality is reasonably necessary to comply
with securities laws (including, where applicable, confidentiality regarding the
identity of an issuer of securities or its affiliates, agents and advisors).
With respect to any UK recipients, this communication is directed only to those
persons who are marked counterparties or intermediate customers (as defined in
the UK Financial Services Authority's rules).
7
EXHIBIT C
--------------------------------------------------------------------------------
Xxxxxx Xxxxxxx
ATLANTIC CITY ELECTRIC COMPANY DECEMBER 17, 2003 SECURITIZED PRODUCTS GROUP
--------------------------------------------------------------------------------
New ABS Lead-Managed Transaction
Computational Materials
Atlantic City Electric Transition Funding LLC,
Issuer of the Transition Bonds
$152,000,000
Transition Bonds, Series 2003-1
ATLANTIC CITY ELECTRIC COMPANY
SELLER AND SERVICER
This information is furnished on a confidential basis and may not be reproduced
in whole or in part and is being delivered to a specific number of prospective
sophisticated investors in order to assist them in determining whether they have
an interest in the type of security described herein. It has been prepared
solely for information purposes and is not an offer to buy or sell or a
solicitation of an offer to buy or sell any security or instrument or to
participate in any trading strategy. This material is based on information
provided by Atlantic City Electric Transition Funding LLC and Atlantic City
Company with respect to the expected characteristics of the transition property
securing these securities. The actual characteristics and performance of the
transition property will differ from the assumptions used in preparing these
materials, which are hypothetical in nature. Changes in the assumptions may have
a material impact on the information set forth in these materials. Xxxxxx
Xxxxxxx & Co. Incorporated makes no representation or warranty with respect to
the appropriateness, usefulness, accuracy or completeness of the information, or
with respect to the terms of any future offer of securities conforming to the
terms hereof. Any such offer of securities would be made pursuant to a
definitive Prospectus and Prospectus Supplement prepared by the issuer which
could contain material information not contained herein and to which the
prospective purchasers are referred. In the event of any such offering, this
information shall be deemed superseded, amended and supplemented in its entirety
by such Prospectus and Prospectus Supplement. Such Prospectus and Prospectus
Supplement will contain all material information in respect of any securities
offered thereby and any decision to invest in such securities should be made
solely in reliance upon such Prospectus and Prospectus Supplement. The
information contained in this material may be based on assumptions regarding
market conditions and other matters as reflected therein and is therefore
subject to change. We make no representations regarding the reasonableness of
such assumptions or the likelihood that any of such assumptions will coincide
with actual market conditions or events, and this material should not be relied
on for such purposes. No representation is made that any returns indicated will
be achieved. Changes to the assumptions may have a material impact on any
returns detailed. Although the analyses herein may not show a negative return on
the securities referred to herein, such securities are not principal protected
and, in certain circumstances, investors in such securities may suffer a
complete or partial loss on their investment. Xxxxxx Xxxxxxx & Co. Incorporated
disclaims any and all liability relating to this information, including without
limitation any express or implied representations or warranties for, statements
contained in, and omissions from, this information. Additional information is
available upon request. Xxxxxx Xxxxxxx & Co. Incorporated and others associated
with it may have positions in, and may effect transactions in, securities and
instruments of issuers mentioned herein and may also perform or seek to perform
investment banking services for the issuers of such securities and instruments.
Past performance is not necessarily indicative of future results. Price and
availability are subject to change without notice. Information contained in this
material is current as of the date appearing on this material only. Information
in this material regarding any assets backing any securities discussed herein
supercedes all prior information regarding such assets. Xxxxxx Xxxxxxx & Co.
Incorporated is acting as the lead underwriter and not acting as agent for the
issuer or its affiliates in connection with the proposed transaction. To our
readers worldwide: In addition, please note that this publication has been
issued by Xxxxxx Xxxxxxx & Co. Incorporated, approved by Xxxxxx Xxxxxxx
International Limited, a member of The Securities and Futures Authority, and by
Xxxxxx Xxxxxxx Japan Ltd. We recommend that such investors obtain the advice of
their Xxxxxx Xxxxxxx & Co. Incorporated, Xxxxxx Xxxxxxx International or Xxxxxx
Xxxxxxx Japan Ltd. representative about the investments concerned.
Notwithstanding any other express or implied agreement, arrangement, or
understanding to the contrary, Xxxxxx Xxxxxxx and each recipient hereof are
deemed to agree that both Xxxxxx Xxxxxxx and such recipient (and their
respective employees, representatives, and other agents) may disclose to any and
all persons, without limitation of any kind from the commencement of
discussions, the U.S. federal income tax treatment of the transaction ("tax
treatment") and any fact that may be relevant to understanding the tax treatment
of the transaction described herein ("tax structure") and all materials of any
kind (including opinions or other tax analyses) that are provided to such person
relating to such tax treatment and tax structure, except where confidentiality
is reasonably necessary to comply with securities laws (including, where
applicable, confidentiality regarding the identity of an issuer of securities or
its affiliates, agents and advisors).
With respect to any UK recipients, this communication is directed only to those
persons who are marked counterparties or intermediate customers (as defined in
the UK Financial Services Authority's rules).
--------------------------------------------------------------------------------
Xxxxxx Xxxxxxx
ATLANTIC CITY ELECTRIC COMPANY DECEMBER 17, 2003 SECURITIZED PRODUCTS GROUP
--------------------------------------------------------------------------------
Atlantic City Electric Transition Funding LLC
$152,000,000
Transition Bonds, Series 2003-1
Transaction Highlights
Anticipated Transition Bond Structure
---------- ---------- ------------- --------------------- ------------- ------------- --------------- ------------- -------------
Expected Ratings Expected Payment Window Scheduled Legal Final
Size Tranche Fixed/ Average
Class ($MM) Type (Xxxxx'x/S&P/Fitch) Floating Life (Years) (Mo/Yr) Final
---------- ---------- ------------- --------------------- ------------- ------------- --------------- ------------- -------------
A-1 46.0 Sequential Aaa/AAA/AAA Fixed 2.97 10/04-7/09 7/20/09 7/20/11
---------- ---------- ------------- --------------------- ------------- ------------- --------------- ------------- -------------
A-2 52.0 Sequential Aaa/AAA/AAA Fixed 8.24 7/09-10/14 10/20/14 10/20/16
---------- ---------- ------------- --------------------- ------------- ------------- --------------- ------------- -------------
A-3 54.0 Sequential Aaa/AAA/AAA Fixed 12.90 10/14-10/18 10/20/18 10/20/20
---------- ---------- ------------- --------------------- ------------- ------------- --------------- ------------- -------------
Issuer........................ Atlantic City Electric Transition Funding LLC
Seller / Servicer............. Atlantic City Electric Company ("ACE")
Trustee....................... Bank of New York
Lead Manager.................. Xxxxxx Xxxxxxx
Co-Managers................... Banc of America Securities, Banc One Capital Markets, Credit Suisse First Boston, Fleet
Securities, SunTrust Capital Markets, and Wachovia Securities
Financial Advisor to the BPU.. Bear, Xxxxxxx & Co. Inc.
Expected Pricing.............. Week of December 15, 2003
Expected Settlement........... December 23, 2003
Interest/Principal Payments... Quarterly on the 20th day of January, April, July and October
First Interest/Principal
Payment....................... October 20, 2004
Day Count Basis............... 30/360
This information is furnished on a confidential basis and may not be reproduced
in whole or in part and is being delivered to a specific number of prospective
sophisticated investors in order to assist them in determining whether they have
an interest in the type of security described herein. It has been prepared
solely for information purposes and is not an offer to buy or sell or a
solicitation of an offer to buy or sell any security or instrument or to
participate in any trading strategy. This material is based on information
provided by Atlantic City Electric Transition Funding LLC and Atlantic City
Electric Company with respect to the expected characteristics of the transition
property securing these securities. The actual characteristics and performance
of the transition property will differ from the assumptions used in preparing
these materials, which are hypothetical in nature. Changes in the assumptions
may have a material impact on the information set forth in these materials.
Xxxxxx Xxxxxxx & Co. Incorporated makes no representation or warranty with
respect to the appropriateness, usefulness, accuracy or completeness of the
information, or with respect to the terms of any future offer of securities
conforming to the terms hereof. Any such offer of securities would be made
pursuant to a definitive Prospectus and Prospectus Supplement prepared by the
issuer which could contain material information not contained herein and to
which the prospective purchasers are referred. In the event of any such
offering, this information shall be deemed superseded, amended and supplemented
in its entirety by such Prospectus and Prospectus Supplement. Such Prospectus
and Prospectus Supplement will contain all material information in respect of
any securities offered thereby and any decision to invest in such securities
should be made solely in reliance upon such Prospectus and Prospectus
Supplement. The information contained in this material may be based on
assumptions regarding market conditions and other matters as reflected therein
and is therefore subject to change. We make no representations regarding the
reasonableness of such assumptions or the likelihood that any of such
assumptions will coincide with actual market conditions or events, and this
material should not be relied on for such purposes. No representation is made
that any returns indicated will be achieved. Changes to the assumptions may have
a material impact on any returns detailed. Although the analyses herein may not
show a negative return on the securities referred to herein, such securities are
not principal protected and, in certain circumstances, investors in such
securities may suffer a complete or partial loss on their investment. Xxxxxx
Xxxxxxx & Co. Incorporated disclaims any and all liability relating to this
information, including without limitation any express or implied representations
or warranties for, statements contained in, and omissions from, this
information. Additional information is available upon request. Xxxxxx Xxxxxxx &
Co. Incorporated and others associated with it may have positions in, and may
effect transactions in, securities and instruments of issuers mentioned herein
and may also perform or seek to perform investment banking services for the
issuers of such securities and instruments. Past performance is not necessarily
indicative of future results. Price and availability are subject to change
without notice. Information contained in this material is current as of the date
appearing on this material only. Information in this material regarding any
assets backing any securities discussed herein supercedes all prior information
regarding such assets. Xxxxxx Xxxxxxx & Co. Incorporated is acting as the lead
underwriter and not acting as agent for the issuer or its affiliates in
connection with the proposed transaction. To our readers worldwide: In addition,
please note that this publication has been issued by Xxxxxx Xxxxxxx & Co.
Incorporated, approved by Xxxxxx Xxxxxxx International Limited, a member of The
Securities and Futures Authority, and by Xxxxxx Xxxxxxx Japan Ltd. We recommend
that such investors obtain the advice of their Xxxxxx Xxxxxxx & Co.
Incorporated, Xxxxxx Xxxxxxx International or Xxxxxx Xxxxxxx Japan Ltd.
representative about the investments concerned. Notwithstanding any other
express or implied agreement, arrangement, or understanding to the contrary,
Xxxxxx Xxxxxxx and each recipient hereof are deemed to agree that both Xxxxxx
Xxxxxxx and such recipient (and their respective employees, representatives, and
other agents) may disclose to any and all persons, without limitation of any
kind from the commencement of discussions, the U.S. federal income tax treatment
of the transaction ("tax treatment") and any fact that may be relevant to
understanding the tax treatment of the transaction described herein ("tax
structure") and all materials of any kind (including opinions or other tax
analyses) that are provided to such person relating to such tax treatment and
tax structure, except where confidentiality is reasonably necessary to comply
with securities laws (including, where applicable, confidentiality regarding the
identity of an issuer of securities or its affiliates, agents and advisors).
With respect to any UK recipients, this communication is directed only to those
persons who are marked counterparties or intermediate customers (as defined in
the UK Financial Services Authority's rules).
2
--------------------------------------------------------------------------------
Xxxxxx Xxxxxxx
ATLANTIC CITY ELECTRIC COMPANY DECEMBER 17, 2003 SECURITIZED PRODUCTS GROUP
--------------------------------------------------------------------------------
Credit Enhancement............ 1. Mandatory true-up mechanism: enables Transition Bond Charges ("TBCs") to be
adjusted to cover scheduled debt service, pay expenses, fund the
overcollateralization subaccount and replenish the capital subaccount
2. Capital subaccount: upfront deposit of 0.5% of initial aggregate principal
balance, corresponding to $760,000
3. Overcollateralization subaccount: 0.5% of initial aggregate principal balance,
initially $0 and funded ratably over life of Transition Bonds to reach an
aggregate balance of $760,000
4. Reserve subaccount: any collections in excess of the amounts necessary to pay
fees and expenses, scheduled interest and principal, and fund the capital
subaccount and the overcollateralization subaccount to its required levels
True-Up Adjustments........... Frequency Period
---------------------------------------------- ----------------------------------------------
Yearly October 2004 - October 2017
Quarterly October 2017 - October 2018
The BPU order also gives ACE, as servicer, the ability to apply for quarterly true-ups
over the life of the transaction, and to file for monthly true-ups beginning two years
before the expected maturity of the last class of transition bonds
Optional non-routine true-ups are also allowed to modify the true-up methodology to
more accurately project and generate adequate revenues
Optional Clean-up Call........ 5% of initial total principal balance
ERISA Eligibility............. Subject to applicable ERISA exemptions
Min. Denomination............. $1,000
Use of Proceeds............... Refinance or retire a portion of its debt or equity, or both
This information is furnished on a confidential basis and may not be reproduced
in whole or in part and is being delivered to a specific number of prospective
sophisticated investors in order to assist them in determining whether they have
an interest in the type of security described herein. It has been prepared
solely for information purposes and is not an offer to buy or sell or a
solicitation of an offer to buy or sell any security or instrument or to
participate in any trading strategy. This material is based on information
provided by Atlantic City Electric Transition Funding LLC and Atlantic City
Electric Company with respect to the expected characteristics of the transition
property securing these securities. The actual characteristics and performance
of the transition property will differ from the assumptions used in preparing
these materials, which are hypothetical in nature. Changes in the assumptions
may have a material impact on the information set forth in these materials.
Xxxxxx Xxxxxxx & Co. Incorporated makes no representation or warranty with
respect to the appropriateness, usefulness, accuracy or completeness of the
information, or with respect to the terms of any future offer of securities
conforming to the terms hereof. Any such offer of securities would be made
pursuant to a definitive Prospectus and Prospectus Supplement prepared by the
issuer which could contain material information not contained herein and to
which the prospective purchasers are referred. In the event of any such
offering, this information shall be deemed superseded, amended and supplemented
in its entirety by such Prospectus and Prospectus Supplement. Such Prospectus
and Prospectus Supplement will contain all material information in respect of
any securities offered thereby and any decision to invest in such securities
should be made solely in reliance upon such Prospectus and Prospectus
Supplement. The information contained in this material may be based on
assumptions regarding market conditions and other matters as reflected therein
and is therefore subject to change. We make no representations regarding the
reasonableness of such assumptions or the likelihood that any of such
assumptions will coincide with actual market conditions or events, and this
material should not be relied on for such purposes. No representation is made
that any returns indicated will be achieved. Changes to the assumptions may have
a material impact on any returns detailed. Although the analyses herein may not
show a negative return on the securities referred to herein, such securities are
not principal protected and, in certain circumstances, investors in such
securities may suffer a complete or partial loss on their investment. Xxxxxx
Xxxxxxx & Co. Incorporated disclaims any and all liability relating to this
information, including without limitation any express or implied representations
or warranties for, statements contained in, and omissions from, this
information. Additional information is available upon request. Xxxxxx Xxxxxxx &
Co. Incorporated and others associated with it may have positions in, and may
effect transactions in, securities and instruments of issuers mentioned herein
and may also perform or seek to perform investment banking services for the
issuers of such securities and instruments. Past performance is not necessarily
indicative of future results. Price and availability are subject to change
without notice. Information contained in this material is current as of the date
appearing on this material only. Information in this material regarding any
assets backing any securities discussed herein supercedes all prior information
regarding such assets. Xxxxxx Xxxxxxx & Co. Incorporated is acting as the lead
underwriter and not acting as agent for the issuer or its affiliates in
connection with the proposed transaction. To our readers worldwide: In addition,
please note that this publication has been issued by Xxxxxx Xxxxxxx & Co.
Incorporated, approved by Xxxxxx Xxxxxxx International Limited, a member of The
Securities and Futures Authority, and by Xxxxxx Xxxxxxx Japan Ltd. We recommend
that such investors obtain the advice of their Xxxxxx Xxxxxxx & Co.
Incorporated, Xxxxxx Xxxxxxx International or Xxxxxx Xxxxxxx Japan Ltd.
representative about the investments concerned. Notwithstanding any other
express or implied agreement, arrangement, or understanding to the contrary,
Xxxxxx Xxxxxxx and each recipient hereof are deemed to agree that both Xxxxxx
Xxxxxxx and such recipient (and their respective employees, representatives, and
other agents) may disclose to any and all persons, without limitation of any
kind from the commencement of discussions, the U.S. federal income tax treatment
of the transaction ("tax treatment") and any fact that may be relevant to
understanding the tax treatment of the transaction described herein ("tax
structure") and all materials of any kind (including opinions or other tax
analyses) that are provided to such person relating to such tax treatment and
tax structure, except where confidentiality is reasonably necessary to comply
with securities laws (including, where applicable, confidentiality regarding the
identity of an issuer of securities or its affiliates, agents and advisors).
With respect to any UK recipients, this communication is directed only to those
persons who are marked counterparties or intermediate customers (as defined in
the UK Financial Services Authority's rules).
3
--------------------------------------------------------------------------------
Xxxxxx Xxxxxxx
ATLANTIC CITY ELECTRIC COMPANY DECEMBER 17, 2003 SECURITIZED PRODUCTS GROUP
--------------------------------------------------------------------------------
Scheduled Amortization
Projected Securitization Bond Amortization Schedule
--------------------------------------------------------------------------------
Payment Date Class A-1 Class A-2 Class A-3
($) ($) ($)
--------------------------------------------------------------------------------
12/23/2003 46,000,000 52,000,000 54,000,000
--------------------------------------------------------------------------------
10/20/2004 39,359,305 52,000,000 54,000,000
--------------------------------------------------------------------------------
01/20/2005 36,992,574 52,000,000 54,000,000
--------------------------------------------------------------------------------
04/20/2005 35,182,991 52,000,000 54,000,000
--------------------------------------------------------------------------------
07/20/2005 33,613,320 52,000,000 54,000,000
--------------------------------------------------------------------------------
10/20/2005 31,280,217 52,000,000 54,000,000
--------------------------------------------------------------------------------
01/20/2006 29,286,569 52,000,000 54,000,000
--------------------------------------------------------------------------------
04/20/2006 27,301,275 52,000,000 54,000,000
--------------------------------------------------------------------------------
07/20/2006 25,540,136 52,000,000 54,000,000
--------------------------------------------------------------------------------
10/20/2006 22,974,188 52,000,000 54,000,000
--------------------------------------------------------------------------------
01/20/2007 20,870,898 52,000,000 54,000,000
--------------------------------------------------------------------------------
04/20/2007 18,842,623 52,000,000 54,000,000
--------------------------------------------------------------------------------
07/20/2007 17,039,225 52,000,000 54,000,000
--------------------------------------------------------------------------------
10/20/2007 14,427,339 52,000,000 54,000,000
--------------------------------------------------------------------------------
01/20/2008 12,266,994 52,000,000 54,000,000
--------------------------------------------------------------------------------
04/20/2008 10,178,774 52,000,000 54,000,000
--------------------------------------------------------------------------------
07/20/2008 8,314,310 52,000,000 54,000,000
--------------------------------------------------------------------------------
10/20/2008 5,633,531 52,000,000 54,000,000
--------------------------------------------------------------------------------
01/20/2009 3,525,100 52,000,000 54,000,000
--------------------------------------------------------------------------------
04/20/2009 1,431,109 52,000,000 54,000,000
--------------------------------------------------------------------------------
07/20/2009 - 51,322,822 54,000,000
--------------------------------------------------------------------------------
10/20/2009 48,584,749 54,000,000
--------------------------------------------------------------------------------
01/20/2010 46,263,512 54,000,000
--------------------------------------------------------------------------------
04/20/2010 44,081,538 54,000,000
--------------------------------------------------------------------------------
07/20/2010 41,934,950 54,000,000
--------------------------------------------------------------------------------
10/20/2010 39,163,259 54,000,000
--------------------------------------------------------------------------------
01/20/2011 36,756,714 54,000,000
--------------------------------------------------------------------------------
04/20/2011 34,462,263 54,000,000
--------------------------------------------------------------------------------
07/20/2011 32,200,951 54,000,000
--------------------------------------------------------------------------------
10/20/2011 29,312,058 54,000,000
--------------------------------------------------------------------------------
This information is furnished on a confidential basis and may not be reproduced
in whole or in part and is being delivered to a specific number of prospective
sophisticated investors in order to assist them in determining whether they have
an interest in the type of security described herein. It has been prepared
solely for information purposes and is not an offer to buy or sell or a
solicitation of an offer to buy or sell any security or instrument or to
participate in any trading strategy. This material is based on information
provided by Atlantic City Electric Transition Funding LLC and Atlantic City
Electric Company with respect to the expected characteristics of the transition
property securing these securities. The actual characteristics and performance
of the transition property will differ from the assumptions used in preparing
these materials, which are hypothetical in nature. Changes in the assumptions
may have a material impact on the information set forth in these materials.
Xxxxxx Xxxxxxx & Co. Incorporated makes no representation or warranty with
respect to the appropriateness, usefulness, accuracy or completeness of the
information, or with respect to the terms of any future offer of securities
conforming to the terms hereof. Any such offer of securities would be made
pursuant to a definitive Prospectus and Prospectus Supplement prepared by the
issuer which could contain material information not contained herein and to
which the prospective purchasers are referred. In the event of any such
offering, this information shall be deemed superseded, amended and supplemented
in its entirety by such Prospectus and Prospectus Supplement. Such Prospectus
and Prospectus Supplement will contain all material information in respect of
any securities offered thereby and any decision to invest in such securities
should be made solely in reliance upon such Prospectus and Prospectus
Supplement. The information contained in this material may be based on
assumptions regarding market conditions and other matters as reflected therein
and is therefore subject to change. We make no representations regarding the
reasonableness of such assumptions or the likelihood that any of such
assumptions will coincide with actual market conditions or events, and this
material should not be relied on for such purposes. No representation is made
that any returns indicated will be achieved. Changes to the assumptions may have
a material impact on any returns detailed. Although the analyses herein may not
show a negative return on the securities referred to herein, such securities are
not principal protected and, in certain circumstances, investors in such
securities may suffer a complete or partial loss on their investment. Xxxxxx
Xxxxxxx & Co. Incorporated disclaims any and all liability relating to this
information, including without limitation any express or implied representations
or warranties for, statements contained in, and omissions from, this
information. Additional information is available upon request. Xxxxxx Xxxxxxx &
Co. Incorporated and others associated with it may have positions in, and may
effect transactions in, securities and instruments of issuers mentioned herein
and may also perform or seek to perform investment banking services for the
issuers of such securities and instruments. Past performance is not necessarily
indicative of future results. Price and availability are subject to change
without notice. Information contained in this material is current as of the date
appearing on this material only. Information in this material regarding any
assets backing any securities discussed herein supercedes all prior information
regarding such assets. Xxxxxx Xxxxxxx & Co. Incorporated is acting as the lead
underwriter and not acting as agent for the issuer or its affiliates in
connection with the proposed transaction. To our readers worldwide: In addition,
please note that this publication has been issued by Xxxxxx Xxxxxxx & Co.
Incorporated, approved by Xxxxxx Xxxxxxx International Limited, a member of The
Securities and Futures Authority, and by Xxxxxx Xxxxxxx Japan Ltd. We recommend
that such investors obtain the advice of their Xxxxxx Xxxxxxx & Co.
Incorporated, Xxxxxx Xxxxxxx International or Xxxxxx Xxxxxxx Japan Ltd.
representative about the investments concerned. Notwithstanding any other
express or implied agreement, arrangement, or understanding to the contrary,
Xxxxxx Xxxxxxx and each recipient hereof are deemed to agree that both Xxxxxx
Xxxxxxx and such recipient (and their respective employees, representatives, and
other agents) may disclose to any and all persons, without limitation of any
kind from the commencement of discussions, the U.S. federal income tax treatment
of the transaction ("tax treatment") and any fact that may be relevant to
understanding the tax treatment of the transaction described herein ("tax
structure") and all materials of any kind (including opinions or other tax
analyses) that are provided to such person relating to such tax treatment and
tax structure, except where confidentiality is reasonably necessary to comply
with securities laws (including, where applicable, confidentiality regarding the
identity of an issuer of securities or its affiliates, agents and advisors).
With respect to any UK recipients, this communication is directed only to those
persons who are marked counterparties or intermediate customers (as defined in
the UK Financial Services Authority's rules).
4
--------------------------------------------------------------------------------
Xxxxxx Xxxxxxx
ATLANTIC CITY ELECTRIC COMPANY DECEMBER 17, 2003 SECURITIZED PRODUCTS GROUP
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
01/20/2012 26,792,671 54,000,000
--------------------------------------------------------------------------------
04/20/2012 24,387,011 54,000,000
--------------------------------------------------------------------------------
07/20/2012 22,013,352 54,000,000
--------------------------------------------------------------------------------
10/20/2012 19,010,980 54,000,000
--------------------------------------------------------------------------------
01/20/2013 16,376,214 54,000,000
--------------------------------------------------------------------------------
04/20/2013 13,853,559 54,000,000
--------------------------------------------------------------------------------
07/20/2013 11,361,579 54,000,000
--------------------------------------------------------------------------------
10/20/2013 8,239,544 54,000,000
--------------------------------------------------------------------------------
01/20/2014 5,483,841 54,000,000
--------------------------------------------------------------------------------
04/20/2014 2,838,927 54,000,000
--------------------------------------------------------------------------------
07/20/2014 223,316 54,000,000
--------------------------------------------------------------------------------
10/20/2014 - 50,976,265
--------------------------------------------------------------------------------
01/20/2015 48,089,600
--------------------------------------------------------------------------------
04/20/2015 45,307,918
--------------------------------------------------------------------------------
07/20/2015 42,549,833
--------------------------------------------------------------------------------
10/20/2015 39,154,571
--------------------------------------------------------------------------------
01/20/2016 36,117,474
--------------------------------------------------------------------------------
04/20/2016 33,183,447
--------------------------------------------------------------------------------
07/20/2016 30,271,079
--------------------------------------------------------------------------------
10/20/2016 26,719,570
--------------------------------------------------------------------------------
01/20/2017 23,524,237
--------------------------------------------------------------------------------
04/20/2017 20,429,961
--------------------------------------------------------------------------------
07/20/2017 17,355,305
--------------------------------------------------------------------------------
10/20/2017 13,639,442
--------------------------------------------------------------------------------
01/20/2018 10,297,629
--------------------------------------------------------------------------------
04/20/2018 7,065,720
--------------------------------------------------------------------------------
07/20/2018 3,851,645
--------------------------------------------------------------------------------
10/20/2018 -
--------------------------------------------------------------------------------
This information is furnished on a confidential basis and may not be reproduced
in whole or in part and is being delivered to a specific number of prospective
sophisticated investors in order to assist them in determining whether they have
an interest in the type of security described herein. It has been prepared
solely for information purposes and is not an offer to buy or sell or a
solicitation of an offer to buy or sell any security or instrument or to
participate in any trading strategy. This material is based on information
provided by Atlantic City Electric Transition Funding LLC and Atlantic City
Electric Company with respect to the expected characteristics of the transition
property securing these securities. The actual characteristics and performance
of the transition property will differ from the assumptions used in preparing
these materials, which are hypothetical in nature. Changes in the assumptions
may have a material impact on the information set forth in these materials.
Xxxxxx Xxxxxxx & Co. Incorporated makes no representation or warranty with
respect to the appropriateness, usefulness, accuracy or completeness of the
information, or with respect to the terms of any future offer of securities
conforming to the terms hereof. Any such offer of securities would be made
pursuant to a definitive Prospectus and Prospectus Supplement prepared by the
issuer which could contain material information not contained herein and to
which the prospective purchasers are referred. In the event of any such
offering, this information shall be deemed superseded, amended and supplemented
in its entirety by such Prospectus and Prospectus Supplement. Such Prospectus
and Prospectus Supplement will contain all material information in respect of
any securities offered thereby and any decision to invest in such securities
should be made solely in reliance upon such Prospectus and Prospectus
Supplement. The information contained in this material may be based on
assumptions regarding market conditions and other matters as reflected therein
and is therefore subject to change. We make no representations regarding the
reasonableness of such assumptions or the likelihood that any of such
assumptions will coincide with actual market conditions or events, and this
material should not be relied on for such purposes. No representation is made
that any returns indicated will be achieved. Changes to the assumptions may have
a material impact on any returns detailed. Although the analyses herein may not
show a negative return on the securities referred to herein, such securities are
not principal protected and, in certain circumstances, investors in such
securities may suffer a complete or partial loss on their investment. Xxxxxx
Xxxxxxx & Co. Incorporated disclaims any and all liability relating to this
information, including without limitation any express or implied representations
or warranties for, statements contained in, and omissions from, this
information. Additional information is available upon request. Xxxxxx Xxxxxxx &
Co. Incorporated and others associated with it may have positions in, and may
effect transactions in, securities and instruments of issuers mentioned herein
and may also perform or seek to perform investment banking services for the
issuers of such securities and instruments. Past performance is not necessarily
indicative of future results. Price and availability are subject to change
without notice. Information contained in this material is current as of the date
appearing on this material only. Information in this material regarding any
assets backing any securities discussed herein supercedes all prior information
regarding such assets. Xxxxxx Xxxxxxx & Co. Incorporated is acting as the lead
underwriter and not acting as agent for the issuer or its affiliates in
connection with the proposed transaction. To our readers worldwide: In addition,
please note that this publication has been issued by Xxxxxx Xxxxxxx & Co.
Incorporated, approved by Xxxxxx Xxxxxxx International Limited, a member of The
Securities and Futures Authority, and by Xxxxxx Xxxxxxx Japan Ltd. We recommend
that such investors obtain the advice of their Xxxxxx Xxxxxxx & Co.
Incorporated, Xxxxxx Xxxxxxx International or Xxxxxx Xxxxxxx Japan Ltd.
representative about the investments concerned. Notwithstanding any other
express or implied agreement, arrangement, or understanding to the contrary,
Xxxxxx Xxxxxxx and each recipient hereof are deemed to agree that both Xxxxxx
Xxxxxxx and such recipient (and their respective employees, representatives, and
other agents) may disclose to any and all persons, without limitation of any
kind from the commencement of discussions, the U.S. federal income tax treatment
of the transaction ("tax treatment") and any fact that may be relevant to
understanding the tax treatment of the transaction described herein ("tax
structure") and all materials of any kind (including opinions or other tax
analyses) that are provided to such person relating to such tax treatment and
tax structure, except where confidentiality is reasonably necessary to comply
with securities laws (including, where applicable, confidentiality regarding the
identity of an issuer of securities or its affiliates, agents and advisors).
With respect to any UK recipients, this communication is directed only to those
persons who are marked counterparties or intermediate customers (as defined in
the UK Financial Services Authority's rules).
5
--------------------------------------------------------------------------------
Xxxxxx Xxxxxxx
ATLANTIC CITY ELECTRIC COMPANY DECEMBER 17, 2003 SECURITIZED PRODUCTS GROUP
--------------------------------------------------------------------------------
Scheduled Amortization
Decrement Table to Maturity
--------------------------------------------------------------------------------
Payment Date Class A-1 Class A-2 Class A-3
(%) (%) (%)
--------------------------------------------------------------------------------
12/23/2003 100 100 100
--------------------------------------------------------------------------------
10/20/2004 86 100 100
--------------------------------------------------------------------------------
01/20/2005 80 100 100
--------------------------------------------------------------------------------
04/20/2005 76 100 100
--------------------------------------------------------------------------------
07/20/2005 73 100 100
--------------------------------------------------------------------------------
10/20/2005 68 100 100
--------------------------------------------------------------------------------
01/20/2006 64 100 100
--------------------------------------------------------------------------------
04/20/2006 59 100 100
--------------------------------------------------------------------------------
07/20/2006 56 100 100
--------------------------------------------------------------------------------
10/20/2006 50 100 100
--------------------------------------------------------------------------------
01/20/2007 45 100 100
--------------------------------------------------------------------------------
04/20/2007 41 100 100
--------------------------------------------------------------------------------
07/20/2007 37 100 100
--------------------------------------------------------------------------------
10/20/2007 31 100 100
--------------------------------------------------------------------------------
01/20/2008 27 100 100
--------------------------------------------------------------------------------
04/20/2008 22 100 100
--------------------------------------------------------------------------------
07/20/2008 18 100 100
--------------------------------------------------------------------------------
10/20/2008 12 100 100
--------------------------------------------------------------------------------
01/20/2009 8 100 100
--------------------------------------------------------------------------------
04/20/2009 3 100 100
--------------------------------------------------------------------------------
07/20/2009 - 99 100
--------------------------------------------------------------------------------
10/20/2009 93 100
--------------------------------------------------------------------------------
01/20/2010 89 100
--------------------------------------------------------------------------------
04/20/2010 85 100
--------------------------------------------------------------------------------
07/20/2010 81 100
--------------------------------------------------------------------------------
10/20/2010 75 100
--------------------------------------------------------------------------------
01/20/2011 71 100
--------------------------------------------------------------------------------
04/20/2011 66 100
--------------------------------------------------------------------------------
07/20/2011 62 100
--------------------------------------------------------------------------------
10/20/2011 56 100
--------------------------------------------------------------------------------
This information is furnished on a confidential basis and may not be reproduced
in whole or in part and is being delivered to a specific number of prospective
sophisticated investors in order to assist them in determining whether they have
an interest in the type of security described herein. It has been prepared
solely for information purposes and is not an offer to buy or sell or a
solicitation of an offer to buy or sell any security or instrument or to
participate in any trading strategy. This material is based on information
provided by Atlantic City Electric Transition Funding LLC and Atlantic City
Electric Company with respect to the expected characteristics of the transition
property securing these securities. The actual characteristics and performance
of the transition property will differ from the assumptions used in preparing
these materials, which are hypothetical in nature. Changes in the assumptions
may have a material impact on the information set forth in these materials.
Xxxxxx Xxxxxxx & Co. Incorporated makes no representation or warranty with
respect to the appropriateness, usefulness, accuracy or completeness of the
information, or with respect to the terms of any future offer of securities
conforming to the terms hereof. Any such offer of securities would be made
pursuant to a definitive Prospectus and Prospectus Supplement prepared by the
issuer which could contain material information not contained herein and to
which the prospective purchasers are referred. In the event of any such
offering, this information shall be deemed superseded, amended and supplemented
in its entirety by such Prospectus and Prospectus Supplement. Such Prospectus
and Prospectus Supplement will contain all material information in respect of
any securities offered thereby and any decision to invest in such securities
should be made solely in reliance upon such Prospectus and Prospectus
Supplement. The information contained in this material may be based on
assumptions regarding market conditions and other matters as reflected therein
and is therefore subject to change. We make no representations regarding the
reasonableness of such assumptions or the likelihood that any of such
assumptions will coincide with actual market conditions or events, and this
material should not be relied on for such purposes. No representation is made
that any returns indicated will be achieved. Changes to the assumptions may have
a material impact on any returns detailed. Although the analyses herein may not
show a negative return on the securities referred to herein, such securities are
not principal protected and, in certain circumstances, investors in such
securities may suffer a complete or partial loss on their investment. Xxxxxx
Xxxxxxx & Co. Incorporated disclaims any and all liability relating to this
information, including without limitation any express or implied representations
or warranties for, statements contained in, and omissions from, this
information. Additional information is available upon request. Xxxxxx Xxxxxxx &
Co. Incorporated and others associated with it may have positions in, and may
effect transactions in, securities and instruments of issuers mentioned herein
and may also perform or seek to perform investment banking services for the
issuers of such securities and instruments. Past performance is not necessarily
indicative of future results. Price and availability are subject to change
without notice. Information contained in this material is current as of the date
appearing on this material only. Information in this material regarding any
assets backing any securities discussed herein supercedes all prior information
regarding such assets. Xxxxxx Xxxxxxx & Co. Incorporated is acting as the lead
underwriter and not acting as agent for the issuer or its affiliates in
connection with the proposed transaction. To our readers worldwide: In addition,
please note that this publication has been issued by Xxxxxx Xxxxxxx & Co.
Incorporated, approved by Xxxxxx Xxxxxxx International Limited, a member of The
Securities and Futures Authority, and by Xxxxxx Xxxxxxx Japan Ltd. We recommend
that such investors obtain the advice of their Xxxxxx Xxxxxxx & Co.
Incorporated, Xxxxxx Xxxxxxx International or Xxxxxx Xxxxxxx Japan Ltd.
representative about the investments concerned. Notwithstanding any other
express or implied agreement, arrangement, or understanding to the contrary,
Xxxxxx Xxxxxxx and each recipient hereof are deemed to agree that both Xxxxxx
Xxxxxxx and such recipient (and their respective employees, representatives, and
other agents) may disclose to any and all persons, without limitation of any
kind from the commencement of discussions, the U.S. federal income tax treatment
of the transaction ("tax treatment") and any fact that may be relevant to
understanding the tax treatment of the transaction described herein ("tax
structure") and all materials of any kind (including opinions or other tax
analyses) that are provided to such person relating to such tax treatment and
tax structure, except where confidentiality is reasonably necessary to comply
with securities laws (including, where applicable, confidentiality regarding the
identity of an issuer of securities or its affiliates, agents and advisors).
With respect to any UK recipients, this communication is directed only to those
persons who are marked counterparties or intermediate customers (as defined in
the UK Financial Services Authority's rules).
6
--------------------------------------------------------------------------------
Xxxxxx Xxxxxxx
ATLANTIC CITY ELECTRIC COMPANY DECEMBER 17, 2003 SECURITIZED PRODUCTS GROUP
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
01/20/2012 52 100
--------------------------------------------------------------------------------
04/20/2012 47 100
--------------------------------------------------------------------------------
07/20/2012 42 100
--------------------------------------------------------------------------------
10/20/2012 37 100
--------------------------------------------------------------------------------
01/20/2013 31 100
--------------------------------------------------------------------------------
04/20/2013 27 100
--------------------------------------------------------------------------------
07/20/2013 22 100
--------------------------------------------------------------------------------
10/20/2013 16 100
--------------------------------------------------------------------------------
01/20/2014 11 100
--------------------------------------------------------------------------------
04/20/2014 5 100
--------------------------------------------------------------------------------
07/20/2014 - 100
--------------------------------------------------------------------------------
10/20/2014 94
--------------------------------------------------------------------------------
01/20/2015 89
--------------------------------------------------------------------------------
04/20/2015 84
--------------------------------------------------------------------------------
07/20/2015 79
--------------------------------------------------------------------------------
10/20/2015 73
--------------------------------------------------------------------------------
01/20/2016 67
--------------------------------------------------------------------------------
04/20/2016 61
--------------------------------------------------------------------------------
07/20/2016 56
--------------------------------------------------------------------------------
10/20/2016 49
--------------------------------------------------------------------------------
01/20/2017 44
--------------------------------------------------------------------------------
04/20/2017 38
--------------------------------------------------------------------------------
07/20/2017 32
--------------------------------------------------------------------------------
10/20/2017 25
--------------------------------------------------------------------------------
01/20/2018 19
--------------------------------------------------------------------------------
04/20/2018 13
--------------------------------------------------------------------------------
07/20/2018 7
--------------------------------------------------------------------------------
10/20/2018 -
--------------------------------------------------------------------------------
This information is furnished on a confidential basis and may not be reproduced
in whole or in part and is being delivered to a specific number of prospective
sophisticated investors in order to assist them in determining whether they have
an interest in the type of security described herein. It has been prepared
solely for information purposes and is not an offer to buy or sell or a
solicitation of an offer to buy or sell any security or instrument or to
participate in any trading strategy. This material is based on information
provided by Atlantic City Electric Transition Funding LLC and Atlantic City
Electric Company with respect to the expected characteristics of the transition
property securing these securities. The actual characteristics and performance
of the transition property will differ from the assumptions used in preparing
these materials, which are hypothetical in nature. Changes in the assumptions
may have a material impact on the information set forth in these materials.
Xxxxxx Xxxxxxx & Co. Incorporated makes no representation or warranty with
respect to the appropriateness, usefulness, accuracy or completeness of the
information, or with respect to the terms of any future offer of securities
conforming to the terms hereof. Any such offer of securities would be made
pursuant to a definitive Prospectus and Prospectus Supplement prepared by the
issuer which could contain material information not contained herein and to
which the prospective purchasers are referred. In the event of any such
offering, this information shall be deemed superseded, amended and supplemented
in its entirety by such Prospectus and Prospectus Supplement. Such Prospectus
and Prospectus Supplement will contain all material information in respect of
any securities offered thereby and any decision to invest in such securities
should be made solely in reliance upon such Prospectus and Prospectus
Supplement. The information contained in this material may be based on
assumptions regarding market conditions and other matters as reflected therein
and is therefore subject to change. We make no representations regarding the
reasonableness of such assumptions or the likelihood that any of such
assumptions will coincide with actual market conditions or events, and this
material should not be relied on for such purposes. No representation is made
that any returns indicated will be achieved. Changes to the assumptions may have
a material impact on any returns detailed. Although the analyses herein may not
show a negative return on the securities referred to herein, such securities are
not principal protected and, in certain circumstances, investors in such
securities may suffer a complete or partial loss on their investment. Xxxxxx
Xxxxxxx & Co. Incorporated disclaims any and all liability relating to this
information, including without limitation any express or implied representations
or warranties for, statements contained in, and omissions from, this
information. Additional information is available upon request. Xxxxxx Xxxxxxx &
Co. Incorporated and others associated with it may have positions in, and may
effect transactions in, securities and instruments of issuers mentioned herein
and may also perform or seek to perform investment banking services for the
issuers of such securities and instruments. Past performance is not necessarily
indicative of future results. Price and availability are subject to change
without notice. Information contained in this material is current as of the date
appearing on this material only. Information in this material regarding any
assets backing any securities discussed herein supercedes all prior information
regarding such assets. Xxxxxx Xxxxxxx & Co. Incorporated is acting as the lead
underwriter and not acting as agent for the issuer or its affiliates in
connection with the proposed transaction. To our readers worldwide: In addition,
please note that this publication has been issued by Xxxxxx Xxxxxxx & Co.
Incorporated, approved by Xxxxxx Xxxxxxx International Limited, a member of The
Securities and Futures Authority, and by Xxxxxx Xxxxxxx Japan Ltd. We recommend
that such investors obtain the advice of their Xxxxxx Xxxxxxx & Co.
Incorporated, Xxxxxx Xxxxxxx International or Xxxxxx Xxxxxxx Japan Ltd.
representative about the investments concerned. Notwithstanding any other
express or implied agreement, arrangement, or understanding to the contrary,
Xxxxxx Xxxxxxx and each recipient hereof are deemed to agree that both Xxxxxx
Xxxxxxx and such recipient (and their respective employees, representatives, and
other agents) may disclose to any and all persons, without limitation of any
kind from the commencement of discussions, the U.S. federal income tax treatment
of the transaction ("tax treatment") and any fact that may be relevant to
understanding the tax treatment of the transaction described herein ("tax
structure") and all materials of any kind (including opinions or other tax
analyses) that are provided to such person relating to such tax treatment and
tax structure, except where confidentiality is reasonably necessary to comply
with securities laws (including, where applicable, confidentiality regarding the
identity of an issuer of securities or its affiliates, agents and advisors).
With respect to any UK recipients, this communication is directed only to those
persons who are marked counterparties or intermediate customers (as defined in
the UK Financial Services Authority's rules).
7
--------------------------------------------------------------------------------
Xxxxxx Xxxxxxx
ATLANTIC CITY ELECTRIC COMPANY DECEMBER 17, 2003 SECURITIZED PRODUCTS GROUP
--------------------------------------------------------------------------------
Average Life Sensitivity
The following table highlights the sensitivity of the average lives (in years)
of the various tranches to decreases in forecasted energy consumption. There can
be no assurance that the weighted average lives of the transition bonds will be
as shown in this table.
------------------- ----------------- ---------------------------------------------------------------------
Targeted Annual Declines in Forecasted Energy Consumption
Class Avg. Life (5)% (10)% (15)%
------------------- ----------------- ----------------------- ---------------------- ----------------------
A-1 2.97 2.97 3.03 3.13
------------------- ----------------- ----------------------- ---------------------- ----------------------
A-2 8.24 8.24 8.29 8.38
------------------- ----------------- ----------------------- ---------------------- ----------------------
A-3 12.90 12.90 12.92 12.97
------------------- ----------------- ----------------------- ---------------------- ----------------------
For the purposes of preparing this table, we have assumed, among other things,
that:
o The Series 2003-1 bonds are issued on December 23, 2003
o Payments on the Series 2003-1 bonds are made on each payment date,
commencing on October 20, 2004
o The aggregate per annum servicing fee for the Series 2002-1 bonds and the
Series 2003-1 bonds equals 0.10% of the aggregate initial principal balance
of the Series 2002-1 bonds and the Series 2003-1 bonds, payable monthly
o There are no net earnings on amounts on deposit in the collection account
o Per annum operating expenses for the Series 2003-1 bonds and the Series
2002-1 bonds, including all fees, costs and charges of the issuer, the
trustee, the administrator and the independent managers, equals $400,000 in
the aggregate, accruing in 12 equal monthly payments
o All transition bond charge collections are received in accordance with
ACE's forecasts and deposited in the collection account
This information is furnished on a confidential basis and may not be reproduced
in whole or in part and is being delivered to a specific number of prospective
sophisticated investors in order to assist them in determining whether they have
an interest in the type of security described herein. It has been prepared
solely for information purposes and is not an offer to buy or sell or a
solicitation of an offer to buy or sell any security or instrument or to
participate in any trading strategy. This material is based on information
provided by Atlantic City Electric Transition Funding LLC and Atlantic City
Electric Company with respect to the expected characteristics of the transition
property securing these securities. The actual characteristics and performance
of the transition property will differ from the assumptions used in preparing
these materials, which are hypothetical in nature. Changes in the assumptions
may have a material impact on the information set forth in these materials.
Xxxxxx Xxxxxxx & Co. Incorporated makes no representation or warranty with
respect to the appropriateness, usefulness, accuracy or completeness of the
information, or with respect to the terms of any future offer of securities
conforming to the terms hereof. Any such offer of securities would be made
pursuant to a definitive Prospectus and Prospectus Supplement prepared by the
issuer which could contain material information not contained herein and to
which the prospective purchasers are referred. In the event of any such
offering, this information shall be deemed superseded, amended and supplemented
in its entirety by such Prospectus and Prospectus Supplement. Such Prospectus
and Prospectus Supplement will contain all material information in respect of
any securities offered thereby and any decision to invest in such securities
should be made solely in reliance upon such Prospectus and Prospectus
Supplement. The information contained in this material may be based on
assumptions regarding market conditions and other matters as reflected therein
and is therefore subject to change. We make no representations regarding the
reasonableness of such assumptions or the likelihood that any of such
assumptions will coincide with actual market conditions or events, and this
material should not be relied on for such purposes. No representation is made
that any returns indicated will be achieved. Changes to the assumptions may have
a material impact on any returns detailed. Although the analyses herein may not
show a negative return on the securities referred to herein, such securities are
not principal protected and, in certain circumstances, investors in such
securities may suffer a complete or partial loss on their investment. Xxxxxx
Xxxxxxx & Co. Incorporated disclaims any and all liability relating to this
information, including without limitation any express or implied representations
or warranties for, statements contained in, and omissions from, this
information. Additional information is available upon request. Xxxxxx Xxxxxxx &
Co. Incorporated and others associated with it may have positions in, and may
effect transactions in, securities and instruments of issuers mentioned herein
and may also perform or seek to perform investment banking services for the
issuers of such securities and instruments. Past performance is not necessarily
indicative of future results. Price and availability are subject to change
without notice. Information contained in this material is current as of the date
appearing on this material only. Information in this material regarding any
assets backing any securities discussed herein supercedes all prior information
regarding such assets. Xxxxxx Xxxxxxx & Co. Incorporated is acting as the lead
underwriter and not acting as agent for the issuer or its affiliates in
connection with the proposed transaction. To our readers worldwide: In addition,
please note that this publication has been issued by Xxxxxx Xxxxxxx & Co.
Incorporated, approved by Xxxxxx Xxxxxxx International Limited, a member of The
Securities and Futures Authority, and by Xxxxxx Xxxxxxx Japan Ltd. We recommend
that such investors obtain the advice of their Xxxxxx Xxxxxxx & Co.
Incorporated, Xxxxxx Xxxxxxx International or Xxxxxx Xxxxxxx Japan Ltd.
representative about the investments concerned. Notwithstanding any other
express or implied agreement, arrangement, or understanding to the contrary,
Xxxxxx Xxxxxxx and each recipient hereof are deemed to agree that both Xxxxxx
Xxxxxxx and such recipient (and their respective employees, representatives, and
other agents) may disclose to any and all persons, without limitation of any
kind from the commencement of discussions, the U.S. federal income tax treatment
of the transaction ("tax treatment") and any fact that may be relevant to
understanding the tax treatment of the transaction described herein ("tax
structure") and all materials of any kind (including opinions or other tax
analyses) that are provided to such person relating to such tax treatment and
tax structure, except where confidentiality is reasonably necessary to comply
with securities laws (including, where applicable, confidentiality regarding the
identity of an issuer of securities or its affiliates, agents and advisors).
With respect to any UK recipients, this communication is directed only to those
persons who are marked counterparties or intermediate customers (as defined in
the UK Financial Services Authority's rules).
8
--------------------------------------------------------------------------------
Xxxxxx Xxxxxxx
ATLANTIC CITY ELECTRIC COMPANY DECEMBER 17, 2003 SECURITIZED PRODUCTS GROUP
--------------------------------------------------------------------------------
o The forecast error stays constant over the life of the transition bonds and
is equal to 5%, 10% or 15% below the initial forecasted energy consumption
each year as stated in the table above. The servicer will true up the
transition bond charge so as to ensure the billing of transition bond
charges necessary to generate the collection of amounts sufficient to (a)
pay ongoing fees and expenses, (b) timely provide for all scheduled
payments of principal and interest, (c) fund the capital and
overcollateralization subaccounts to their required levels, and (d) return,
if necessary, the reserve subaccount to a zero balance by the related
payment date
o Periodic annual standard true-ups occur on a transaction year basis
o Quarterly standard true-ups occur one year before the expected final
payment date of the last class of the Series 2003-1 bonds
o No nonstandard true-ups have been modeled
o No optional redemption has been exercised
This information is furnished on a confidential basis and may not be reproduced
in whole or in part and is being delivered to a specific number of prospective
sophisticated investors in order to assist them in determining whether they have
an interest in the type of security described herein. It has been prepared
solely for information purposes and is not an offer to buy or sell or a
solicitation of an offer to buy or sell any security or instrument or to
participate in any trading strategy. This material is based on information
provided by Atlantic City Electric Transition Funding LLC and Atlantic City
Electric Company with respect to the expected characteristics of the transition
property securing these securities. The actual characteristics and performance
of the transition property will differ from the assumptions used in preparing
these materials, which are hypothetical in nature. Changes in the assumptions
may have a material impact on the information set forth in these materials.
Xxxxxx Xxxxxxx & Co. Incorporated makes no representation or warranty with
respect to the appropriateness, usefulness, accuracy or completeness of the
information, or with respect to the terms of any future offer of securities
conforming to the terms hereof. Any such offer of securities would be made
pursuant to a definitive Prospectus and Prospectus Supplement prepared by the
issuer which could contain material information not contained herein and to
which the prospective purchasers are referred. In the event of any such
offering, this information shall be deemed superseded, amended and supplemented
in its entirety by such Prospectus and Prospectus Supplement. Such Prospectus
and Prospectus Supplement will contain all material information in respect of
any securities offered thereby and any decision to invest in such securities
should be made solely in reliance upon such Prospectus and Prospectus
Supplement. The information contained in this material may be based on
assumptions regarding market conditions and other matters as reflected therein
and is therefore subject to change. We make no representations regarding the
reasonableness of such assumptions or the likelihood that any of such
assumptions will coincide with actual market conditions or events, and this
material should not be relied on for such purposes. No representation is made
that any returns indicated will be achieved. Changes to the assumptions may have
a material impact on any returns detailed. Although the analyses herein may not
show a negative return on the securities referred to herein, such securities are
not principal protected and, in certain circumstances, investors in such
securities may suffer a complete or partial loss on their investment. Xxxxxx
Xxxxxxx & Co. Incorporated disclaims any and all liability relating to this
information, including without limitation any express or implied representations
or warranties for, statements contained in, and omissions from, this
information. Additional information is available upon request. Xxxxxx Xxxxxxx &
Co. Incorporated and others associated with it may have positions in, and may
effect transactions in, securities and instruments of issuers mentioned herein
and may also perform or seek to perform investment banking services for the
issuers of such securities and instruments. Past performance is not necessarily
indicative of future results. Price and availability are subject to change
without notice. Information contained in this material is current as of the date
appearing on this material only. Information in this material regarding any
assets backing any securities discussed herein supercedes all prior information
regarding such assets. Xxxxxx Xxxxxxx & Co. Incorporated is acting as the lead
underwriter and not acting as agent for the issuer or its affiliates in
connection with the proposed transaction. To our readers worldwide: In addition,
please note that this publication has been issued by Xxxxxx Xxxxxxx & Co.
Incorporated, approved by Xxxxxx Xxxxxxx International Limited, a member of The
Securities and Futures Authority, and by Xxxxxx Xxxxxxx Japan Ltd. We recommend
that such investors obtain the advice of their Xxxxxx Xxxxxxx & Co.
Incorporated, Xxxxxx Xxxxxxx International or Xxxxxx Xxxxxxx Japan Ltd.
representative about the investments concerned. Notwithstanding any other
express or implied agreement, arrangement, or understanding to the contrary,
Xxxxxx Xxxxxxx and each recipient hereof are deemed to agree that both Xxxxxx
Xxxxxxx and such recipient (and their respective employees, representatives, and
other agents) may disclose to any and all persons, without limitation of any
kind from the commencement of discussions, the U.S. federal income tax treatment
of the transaction ("tax treatment") and any fact that may be relevant to
understanding the tax treatment of the transaction described herein ("tax
structure") and all materials of any kind (including opinions or other tax
analyses) that are provided to such person relating to such tax treatment and
tax structure, except where confidentiality is reasonably necessary to comply
with securities laws (including, where applicable, confidentiality regarding the
identity of an issuer of securities or its affiliates, agents and advisors).
With respect to any UK recipients, this communication is directed only to those
persons who are marked counterparties or intermediate customers (as defined in
the UK Financial Services Authority's rules).
9
