UNDERWRITING AGREEMENT
Exhibit
1.1
Entergy
Texas, Inc.
$545,900,000
Senior
Secured Transition Bonds
October
29, 2009
|
|
To
the Representatives named in Schedule I hereto
of the Underwriters named in Schedule II
hereto
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Ladies
and Gentlemen:
1. Introduction.
Entergy
Texas Restoration Funding, LLC, a Delaware limited liability company (the “Issuer”), proposes,
subject to the terms and conditions stated herein, to issue and sell
$545,900,000 aggregate principal amount of its Senior Secured Transition Bonds
(the “Bonds”),
identified in Schedule I hereto, to the Underwriters named in Schedule II
hereto. The Issuer and Entergy Texas, Inc., a Texas corporation and
the Issuer’s direct parent (“ETI”), hereby confirm
their agreement with the several Underwriters (as defined below) as set forth
herein.
The term
“Underwriters”
as used herein shall be deemed to mean the entity or several entities named in
Schedule II hereto and any underwriter substituted as provided in
Section 7 hereof, and the term “Underwriter” shall be
deemed to mean any one of such Underwriters. If the entity or
entities listed in Schedule I hereto (the “Representatives”) are
the same as the entity or entities listed in Schedule II hereto, then the terms
“Underwriters” and “Representatives”, as used herein, shall each be deemed to
refer to such entity or entities. All obligations of the Underwriters
hereunder are several and not joint. If more than one entity is named
in Schedule I hereto as a Representative, any action under or in respect of this
underwriting agreement (this “Underwriting
Agreement”) may be taken by such entities jointly as the Representatives
or by one of the entities acting on behalf of the Representatives and such
action will be binding upon all the Underwriters.
Capitalized
terms used and not otherwise defined in this Underwriting Agreement shall have
the meanings given to them in the Indenture (as defined below).
2. Description of the
Bonds.
The
issuance of the Bonds is authorized by the Financing Order, Docket No. 37247
(the “Financing
Order”), issued by the Public Utility Commission of Texas
(the “PUCT”) on September
11, 2009 in accordance with Sections 36.401-36.406 of Subchapter I of Chapter 36
of the Texas Utilities Code (together with Sections 39.301-39.313 of Subchapter
G of Chapter 39 of the Texas Utilities Code, the “Financing
Act”). The Bonds will be issued pursuant to an indenture to be
dated as of November 6, 2009, as supplemented by a series supplement thereto
relating to the Bonds (as so supplemented, the “Indenture”), between
the Issuer and The Bank of New York Mellon, as indenture trustee (the “Indenture
Trustee”). The Bonds will be senior secured obligations of the
Issuer and will be secured by transition property (as more fully described in
the Financing Order, the “Transition Property”)
to be sold to the Issuer by ETI pursuant to the Transition Property Purchase and
Sale Agreement, to be dated on or about November 6, 2009, between ETI and the
Issuer (the “Sale
Agreement”). The Transition Property securing the Bonds will
be serviced pursuant to the Transition Property Servicing Agreement, to be dated
on or about November 6, 2009, between ETI, as servicer, and the Issuer, as owner
of the Transition Property sold to it pursuant to the Sale Agreement (the “Servicing
Agreement”).
3. Representations and
Warranties of the Issuer.
The
Issuer represents and warrants to the several Underwriters that:
(a) The
Issuer and the Bonds meet the requirements for the use of Form S-3 under the
Securities Act of 1933, as amended (the “Securities Act”), and
each of the Issuer and ETI, in its capacity as sponsor for the Issuer, has filed
with the Securities and Exchange Commission (the “Commission”) a registration
statement on such form on September 15, 2009 (Registration
Nos. 333-161911 and 333-161911-01), as amended by Amendment No. 1 thereto
filed on October 20, 2009, including a prospectus and a form of prospectus
supplement, for the registration under the Securities Act of up to $550,000,000
aggregate principal amount of the Bonds. Such registration statement,
as amended (“Registration Statement
No. 333-161911”), has been declared effective by the Commission and
no stop order suspending such effectiveness has been issued under the Securities
Act and no proceedings for that purpose have been instituted or are pending or,
to the knowledge of the Issuer, threatened by the Commission. No
transition bonds registered with the Commission under the Securities Act
pursuant to Registration Statement No. 333-161911 have been previously
issued. References herein to the term “Registration
Statement” shall be deemed to refer to Registration Statement
No. 333-161911, including any amendment thereto, all documents incorporated
by reference therein pursuant to Item 12 of Form S-3 (“Incorporated
Documents”), if any, and any information in a prospectus or a prospectus
supplement deemed or retroactively deemed to be a part thereof pursuant to Rule
430B (“Rule
430B”) or 430C (“Rule 430C”) under the
Securities Act that has not been superseded or modified. “Registration
Statement” without reference to a time means the Registration Statement
as of the Applicable Time (as defined below), which the parties agree is the
time of the first Contract of Sale (as used in Rule 159 under the Securities
Act) for the Bonds, and shall be considered the “Effective Date” of
the Registration Statement relating to the Bonds. For purposes of
this definition, information contained in a form of prospectus or prospectus
supplement that is deemed retroactively to be a part of the Registration
Statement pursuant to Rule 430B or Rule 430C shall be considered to be included
in the Registration Statement as of the time specified in Rule 430B or Rule 430C
as appropriate. The final prospectus and the final prospectus
supplement relating to the Bonds, as filed with the Commission pursuant to Rule
424(b) under the Securities Act, are referred to herein as the “Final Prospectus,”
and the most recent preliminary prospectus and prospectus supplement that
omitted information to be included upon pricing in a form of prospectus filed
with the Commission pursuant to Rule 424(b) under the Securities Act and that
was used after the initial effectiveness of the Registration Statement and prior
to the Applicable Time (as defined below) is referred to herein as the “Pricing
Prospectus.”
(b) (i) At
the earliest time after the filing of the Registration Statement that the Issuer
or another offering participant made a bona fide offer (within the meaning of
Rule 164(h)(2) under the Securities Act) of the Bonds and (ii) at the date
hereof, the Issuer was not and is not an “ineligible issuer,” as defined in Rule
405 under the Securities Act.
(c) At the
time the Registration Statement initially became effective, at the time of each
amendment thereto for the purposes of complying with Section 10(a)(3) of
the Securities Act (whether by post-effective amendment, incorporated report or
form of prospectus) and on the Effective Date, the Registration Statement, and
the Indenture, at the Closing Date (as defined below), fully complied and will
fully comply in all material respects with the applicable requirements of the
Securities Act, the Trust Indenture Act of 1939 (the “Trust Indenture Act”)
and, in each case, the applicable instructions, rules and regulations of the
Commission thereunder; the Registration Statement, at each of the aforementioned
dates, did not and will not include any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary to
make the statements therein not misleading. As of the Applicable Time
and as of the Closing Date (as defined below), the Registration Statement and
the Final Prospectus fully complied and will fully comply in all material
respects with the applicable requirements of the Securities Act, the Trust
Indenture Act and the applicable instructions, rules and regulations of the
Commission thereunder, and none of such documents include 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, in the light of
the circumstances under which they were made, not misleading; and on said dates
the Incorporated Documents, taken together as a whole, fully complied or will
fully comply in all material respects with the applicable provisions of the
Securities Exchange Act of 1934, as amended (the “Exchange Act”), and
the applicable instructions, rules and regulations of the Commission thereunder;
provided that the
foregoing representations and warranties in this paragraph (c) shall not apply
to statements or omissions made in reliance upon information furnished in
writing to the Issuer or ETI by, or on behalf of, any Underwriter through the
Representatives specifically for use in the Registration Statement or the Final
Prospectus, it being understood and agreed that the only such information
furnished by any Underwriter consists of the information set forth in Schedule
IV hereto, or to any statements in or omissions from any Statements of
Eligibility on Form T-1 (or amendments thereto) of the Indenture Trustee under
the Indenture filed as exhibits to the Registration Statement or Incorporated
Documents or to any statements or omissions made in the Registration Statement
or the Final Prospectus relating to The Depository Trust Company (“DTC”) Book-Entry
System that are based solely on information contained in published reports of
DTC.
(d) As of its
date, at the Applicable Time, on the date of its filing, if applicable, and on
the Closing Date, the Pricing Prospectus and each Issuer Free Writing Prospectus
(as defined below) (other than the Pricing Term Sheet, as defined in Section
5(b) below), considered together, did not include any untrue statement of a
material fact or omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading (except that the principal amount of the Bonds, the
tranches, the initial principal balances, the scheduled final payment dates, the
final maturity dates, the expected average lives, the Expected Amortization
Schedule, the Expected Sinking Fund Schedule, the interest rate, price to the
public and underwriting discounts and commissions for each tranche was not
included in the Pricing Prospectus). The Pricing Term Sheet, as of
its issue date and at all subsequent times through the completion of the public
offer and sale of the Bonds, considered together with the Pricing Prospectus and
each other Issuer Free Writing Prospectus, did not include any untrue statement
of a material fact or omit to state any material fact necessary in order to make
the statements therein, in the light of the circumstance under which they were
made, not misleading. The two preceding sentences do not apply to
statements in or omissions from the Pricing Prospectus, the Pricing Term Sheet
or any other Issuer Free Writing Prospectus in reliance upon and in conformity
with written information furnished to the Issuer or ETI by any Underwriter
through the Representatives specifically for use therein, it being understood
and agreed that the only such information furnished by any Underwriter consists
of the information set forth in Schedule IV hereto. “Issuer Free Writing
Prospectus” means any “issuer free writing prospectus,” as defined in
Rule 433(h) under the Securities Act, relating to the Bonds, in the form filed
or required to be filed with the Commission or, if not required to be filed, in
the form retained in the Issuer’s records pursuant to Rule 433(g) under the
Securities Act. References to the term “Free Writing
Prospectus” shall mean a free writing prospectus, as defined in Rule 405
under the Securities Act. References to the term “Applicable Time” mean
4:25 P.M., New York City time, on the date hereof, except that if, subsequent to
such Applicable Time, the Issuer, ETI and the Underwriters have determined that
the information contained in the Pricing Prospectus or any Issuer Free Writing
Prospectus issued prior to such Applicable Time included an untrue statement of
a material fact or omitted 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 and have terminated their old purchase contracts and
entered into new purchase contracts with purchasers of the Bonds, then
“Applicable Time” will refer to the first of such times when such new purchase
contracts are entered into. The Issuer represents, warrants and
agrees that it has treated and agrees that it will treat each Free Writing
Prospectus listed on Schedule III hereto as an Issuer Free Writing Prospectus,
and that each such Free Writing Prospectus has fully complied and will fully
comply with the applicable requirements of Rules 164 and 433 under the
Securities Act, including timely Commission filing where required, legending and
record keeping.
(e) Each
Issuer Free Writing Prospectus, as of its issue date and at all subsequent times
through the Closing Date or until any earlier date that the Issuer notified or
notifies the Representatives as described in the next sentence, did not, does
not and will not include any information that conflicted, conflicts or will
conflict with the information then contained in the Registration
Statement. If at any time following issuance of an Issuer Free
Writing Prospectus there occurred or occurs an event or development as a result
of which such Issuer Free Writing Prospectus conflicted or would conflict with
the information then contained in the Registration Statement or included or
would include an untrue statement of a material fact or omitted or would omit to
state a material fact necessary in order to make the statements therein, in the
light of the circumstances prevailing at that subsequent time, not misleading,
(i) ETI or the Issuer has promptly notified or will promptly notify the
Representatives and (ii) ETI or the Issuer has promptly amended or will promptly
amend or supplement such Issuer Free Writing Prospectus to eliminate or correct
such conflict, untrue statement or omission. The foregoing two
sentences do not apply to statements in or omissions from any Issuer Free
Writing Prospectus in reliance upon and in conformity with written information
furnished to the Issuer or ETI by any Underwriter through the Representatives
specifically for use therein, it being understood and agreed that the only such
information furnished by any Underwriter consists of the information set forth
in Schedule IV hereto.
(f) The
Issuer has been duly formed and is validly existing as a limited liability
company in good standing under the Limited Liability Company Act of the State of
Delaware, as amended, with full limited liability company power and authority to
execute, deliver and perform its obligations under this Underwriting Agreement,
the Bonds, the Sale Agreement, the Servicing Agreement, the Indenture, the LLC
Agreement, the Administration Agreement and the other agreements and instruments
contemplated by the Pricing Prospectus (collectively, the “Basic Documents”) and
to own its properties and conduct its business as described in the Pricing
Prospectus; the Issuer has been duly qualified as a foreign limited liability
company for the transaction of business and is in good standing under the laws
of each other jurisdiction in which it owns or leases properties or conducts any
business so as to require such qualification, except where failure to so qualify
or to be in good standing would not have a material adverse effect on the
business, properties or financial condition of the Issuer; the Issuer has
conducted and will conduct no business in the future that would be inconsistent
with the description of the Issuer’s business set forth in the Pricing
Prospectus; the Issuer is not a party to or bound by any agreement or instrument
other than the Basic Documents and other agreements or instruments incidental to
its formation; the Issuer has no material liabilities or obligations other than
those arising out of the transactions contemplated by the Basic Documents and as
described in the Pricing Prospectus; ETI is the beneficial owner of all of the
limited liability company interests of the Issuer; and based on current law, the
Issuer is not classified as an association taxable as a corporation for United
States federal income tax purposes.
(g) The
issuance and sale of the Bonds by the Issuer, the purchase of the Transition
Property by the Issuer from ETI, the execution, delivery and compliance by the
Issuer with all of the provisions of the Basic Documents to which the Issuer is
a party, and the consummation of the transactions herein and therein
contemplated will not conflict with or result in a breach or violation of any of
the terms or provisions of, or constitute a default under any trust agreement,
indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Issuer is a party or by which the Issuer is bound or to
which any of the property or assets of the Issuer is subject, which conflict,
breach, violation or default would be material to the issue and sale of the
Bonds or would have a material adverse effect on the general affairs,
management, prospects, financial position or results of operations of the Issuer
(an “Issuer Material
Adverse Effect”), nor will such action result in any violation of the
Issuer’s certificate of formation or the LLC Agreement (collectively, the “Issuer Charter
Documents”) or any statute, order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Issuer or any of its
properties.
(h) This
Underwriting Agreement has been duly authorized, executed and delivered by the
Issuer, which has the necessary limited liability company power and authority to
execute, deliver and perform its obligations under this Underwriting Agreement,
and constitutes a valid and binding obligation of the Issuer, enforceable
against the Issuer in accordance with its terms, except as the enforceability
thereof may be limited by bankruptcy, insolvency, reorganization, receivership,
moratorium or other similar laws relating to or affecting creditors’ or secured
parties’ rights generally and by general principles of equity (including
concepts of materiality, reasonableness, good faith and fair dealing),
regardless of whether considered in a proceeding in equity or at law; and
possible limitations on enforceability of rights to indemnification or
contribution by federal or state securities laws or regulations or by public
policy.
(i) The
Issuer (i) is not in violation of the Issuer Charter Documents,
(ii) is not in default and no event has occurred which, with notice or
lapse of time or both, would constitute such a default, in the due performance
or observance of any term, covenant or condition contained in any indenture,
mortgage, deed of trust or other agreement or instrument to which it is a party
or by which it is bound or to which any of its properties is subject, except for
any such defaults that would not, individually or in the aggregate, have an
Issuer Material Adverse Effect, and (iii) is not in violation of any law,
ordinance, governmental rule, regulation or court decree to which it or its
property may be subject, except for any such violations that would not,
individually or in the aggregate, have an Issuer Material Adverse
Effect.
(j) The
Indenture has been duly authorized by the Issuer, and, on the Closing Date, will
have been duly executed and delivered by the Issuer and will be a valid and
binding instrument, enforceable against the Issuer in accordance with its terms,
except as the enforceability thereof may be limited by bankruptcy, insolvency,
reorganization, receivership, moratorium or other similar laws relating to or
affecting creditors’ or secured parties’ rights generally and by general
principles of equity (including concepts of materiality, reasonableness, good
faith and fair dealing), regardless of whether considered in a
proceeding in equity or at law. On the Closing Date, the Indenture
will (i) comply as to form with the requirements of the Trust Indenture Act
and (ii) conform to the description thereof in the Pricing Prospectus and
the Final Prospectus.
(k) The Bonds
have been duly authorized by the Issuer for issuance and sale to the
Underwriters pursuant to this Underwriting Agreement and, when executed by the
Issuer and authenticated by the Indenture Trustee in accordance with the
Indenture and delivered to the Underwriters against payment therefor in
accordance with the terms of this Underwriting Agreement, will constitute valid
and binding obligations of the Issuer entitled to the benefits of the Indenture
and enforceable against the Issuer in accordance with their terms, except as the
enforceability thereof may be limited by bankruptcy, insolvency, reorganization,
receivership, moratorium or other similar laws relating to or affecting
creditors’ or secured parties’ rights generally and by general principles of
equity (including concepts of materiality, reasonableness, good faith and fair
dealing), regardless of whether considered in a proceeding in equity or at law,
and possible limitations on enforceability of rights to indemnification or
contribution by public policy; and the Bonds conform in all material respects to
the description thereof in the Pricing Prospectus and the Final
Prospectus. The Issuer has all requisite limited liability company
power and authority to issue, sell and deliver the Bonds in accordance with and
upon the terms and conditions set forth in this Underwriting Agreement and in
the Pricing Prospectus and the Final Prospectus.
(l) There is
no pending or threatened suit or proceeding before any court or governmental
agency, authority or body or any arbitration involving the Issuer, the
Transition Property or the Bonds required to be disclosed in the Pricing
Prospectus which is not adequately disclosed in the Pricing
Prospectus.
(m) Other
than any necessary action of the PUCT, any filings required under the Financing
Act or the Financing Order or as otherwise set forth or contemplated in the
Pricing Prospectus, no approval, authorization, consent or order of any public
board or body (except such as have been already obtained and other than in
connection or in compliance with the provisions of applicable blue-sky laws or
securities laws of any state, as to which the Issuer makes no representations or
warranties) is legally required for the issuance and sale by the Issuer of the
Bonds.
(n) Neither
the Issuer nor ETI is, and, after giving effect to the sale and issuance of the
Bonds, will not be, an “investment company” within the meaning of the Investment
Company Act of 1940, as amended (the “1940 Act”).
(o) Deloitte
& Touche LLP, who have performed certain agreed upon procedures with respect
to certain statistical and structural information contained in the Pricing
Prospectus and the Final Prospectus, are independent public accountants as
required by the Securities Act and the rules and regulations of the Commission
thereunder.
(p) Each of
the Sale Agreement, the Servicing Agreement, the Administration Agreement and
the LLC Agreement has been duly and validly authorized by the Issuer, and when
executed and delivered by the Issuer and the other parties thereto, will
constitute a valid and legally binding obligation of the Issuer, enforceable
against the Issuer in accordance with its terms, except as the enforceability
thereof may be limited by bankruptcy, insolvency, reorganization, receivership,
moratorium or other similar laws relating to or affecting creditors’ or secured
parties’ rights generally and by general principles of equity (including
concepts of materiality, reasonableness, good faith and fair dealing),
regardless of whether considered in a proceeding in equity or at law, and
possible limitations on enforceability of rights to indemnification or
contribution by public policy.
4. Representations and
Warranties of ETI.
ETI
represents and warrants to the several Underwriters that:
(a) ETI, in
its capacity as sponsor with respect to the Bonds, and jointly with the Issuer,
has filed with the Commission Registration Statement No. 333-161911 for the
registration under the Securities Act of up to $550,000,000 aggregate principal
amount of the Issuer’s transition bonds. Registration Statement
No. 333-161911 has been declared effective by the Commission and no stop
order suspending such effectiveness has been issued under the Securities Act and
no proceedings for that purpose have been instituted or are pending or, to the
knowledge of ETI, threatened by the Commission.
(b) (i) At
the earliest time after the filing of the Registration Statement that the Issuer
or another offering participant made a bona fide offer (within the
meaning of Rule 164(h)(2) under the Securities Act) of the Bonds and (ii) at the
date hereof, ETI was not and is not an “ineligible issuer,” as defined in Rule
405 under the Securities Act.
(c) At the
time the Registration Statement initially became effective, at the time of each
amendment thereto for the purposes of complying with Section 10(a)(3) of
the Securities Act (whether by post-effective amendment, incorporated report or
form of prospectus) and on the Effective Date, the Registration Statement, and
the Indenture, on the Closing Date, fully complied and will fully comply in all
material respects with the applicable requirements of the Securities Act, the
Trust Indenture Act and the applicable rules and regulations of the Commission
thereunder; the Registration Statement, at each of the aforementioned dates, did
not and will not include any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make the
statements therein not misleading. As of the Applicable Time and as
of the Closing Date, the Registration Statement and the Final Prospectus fully
complied and will fully comply in all material respects to the requirements of
the Securities Act, the Trust Indenture Act and the applicable instructions,
rules and regulations of the Commission thereunder, and none of such documents
include 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, in the light of the circumstances under which they were made, not
misleading; and on said dates the Incorporated Documents, taken together as a
whole, fully complied or will fully comply in all material respects with the
applicable provisions of the Exchange Act, and the applicable instructions,
rules and regulations of the Commission thereunder; provided, that the foregoing
representations and warranties in this paragraph (c) shall not apply to
statements or omissions made in reliance upon and in conformity with information
furnished in writing to the Issuer or ETI by, or on behalf of, any Underwriter
through the Representatives specifically for use in the Registration Statement
or the Final Prospectus, it being understood and agreed that the only such
information furnished by any Underwriter consists of the information set forth
in Schedule IV hereto, or to any statements in or omissions from any Statement
of Eligibility on Form T-1, or amendments thereto, of the Indenture Trustee
under the Indenture filed as exhibits to the Registration Statement or
Incorporated Documents or to any statements or omissions made in the
Registration Statement or Final Prospectus relating to the DTC Book-Entry-Only
System that are based solely on information contained in published reports of
DTC.
(d) As of its
date, at the Applicable Time, on the date of its filing, if applicable, and on
the Closing Date, the Pricing Prospectus and each Issuer Free Writing Prospectus
(other than the Pricing Term Sheet), considered together, did not include any
untrue statement of a material fact or omit to state any material fact necessary
in order to make the statements therein, in the light of the circumstances under
which they were made, not misleading (except that (i) the principal amount of
the Bonds, the tranches, the initial principal balances, the scheduled final
payment dates, the final maturity dates, the expected average lives, the
Expected Amortization Schedule and the Expected Sinking Fund Schedule described
in the Pricing Prospectus supersede any previously issued descriptions of such
information and (ii) the interest rate, price to the public and underwriting
discounts and commissions for each tranche was not included in the Pricing
Prospectus). The Pricing Term Sheet, as of its issue date and at all
subsequent times through the completion of the public offer and sale of the
Bonds, considered together with the Pricing Prospectus and each other Issuer
Free Writing Prospectus, did not include any untrue statement of a material fact
or omit to state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading. The two preceding sentences do not apply to statements in
or omissions from the Pricing Prospectus, the Pricing Term Sheet or any Issuer
Free Writing Prospectus in reliance upon and in conformity with written
information furnished to the Issuer or ETI by any Underwriter through the
Representatives specifically for use therein, it being understood and agreed
that the only such information furnished by any Underwriter consists of the
information set forth in Schedule IV hereto. ETI represents, warrants
and agrees that it has treated and agrees that it will treat each Free Writing
Prospectus listed on Schedule III hereto as an Issuer Free Writing Prospectus,
and that each such Issuer Free Writing Prospectus has fully complied and will
fully comply with the applicable requirements of Rules 164 and 433 under the
Securities Act, including timely Commission filing where required, legending and
record keeping
(e) Each
Issuer Free Writing Prospectus, as of its issue date and at all subsequent times
through the completion of the public offer and sale of the Bonds or until any
earlier date that the Issuer or ETI notified or notifies the Representatives as
described in the next sentence, did not, does not and will not include any
information that conflicted, conflicts or will conflict with the information
then contained in the Registration Statement. If at any time
following issuance of an Issuer Free Writing Prospectus there occurred or occurs
an event or development as a result of which such Issuer Free Writing Prospectus
conflicted or would conflict with the information then contained in the
Registration Statement or included or would include an untrue statement of a
material fact or omitted or would omit to state a material fact necessary in
order to make the statements therein, in the light of the circumstances
prevailing at that subsequent time, not misleading, (i) ETI or the Issuer has
promptly notified or will promptly notify the Representatives and (ii) ETI or
the Issuer has promptly amended or will promptly amend or supplement such Issuer
Free Writing Prospectus to eliminate or correct such conflict, untrue statement
or omission. The foregoing two sentences do not apply to statements
in or omissions from any Issuer Free Writing Prospectus in reliance upon and in
conformity with written information furnished to the Issuer or ETI by any
Underwriter through the Representatives specifically for use therein, it being
understood and agreed that the only such information furnished by any
Underwriter consists of the information set forth in Schedule IV
hereto.
(f) ETI has
been duly formed and is validly existing as a corporation in good standing under
the laws of the jurisdiction of its incorporation, has the corporate power and
authority to own, lease and operate its properties and to conduct its business
as presently conducted and as set forth in or contemplated by the Pricing
Prospectus, is qualified as a foreign corporation to transact business and is in
good standing in each jurisdiction in which such qualification is required,
whether by reason of the ownership or leasing of property or the conduct of
business, except where the failure to so qualify or be in good standing would
not have a material adverse effect on the business, property or financial
condition of ETI and its subsidiaries considered as a whole (an “ETI Material Adverse
Effect”), and has all requisite power and authority to sell the
Transition Property as described in the Pricing Prospectus and to otherwise
perform its obligations under any Basic Document to which it is a
party. ETI is the beneficial owner of all of the limited liability
company interests of the Issuer.
(g) ETI has
no significant subsidiaries within the meaning of Rule 1-02(w) of
Regulation S-X.
(h) The
transfer by ETI of all of its rights and interests under the Financing Order
relating to the Bonds to the Issuer, the execution, delivery and compliance by
ETI with all of the provisions of the Basic Documents to which ETI is a party,
and the consummation by the Issuer and ETI of the transactions herein and
therein contemplated will not conflict with or result in a breach or violation
of any of the terms or provisions of, or constitute a default under, any trust
agreement, indenture, mortgage, deed of trust, loan agreement or other agreement
or instrument to which ETI is a party or by which ETI is bound or to which any
of the property or assets of ETI is subject, which conflict, breach, violation
or default would be material to the issue and sale of the Bonds.
(i) This
Underwriting Agreement has been duly authorized, executed and delivered by ETI,
which has the necessary corporate power and authority to execute, deliver and
perform its obligations under this Underwriting Agreement, and
constitutes a valid and binding obligation of ETI, enforceable
against ETI in accordance with its terms, except as the enforceability thereof
may be limited by bankruptcy, insolvency, reorganization, receivership,
moratorium or other similar laws relating to or affecting creditors’ or secured
parties’ rights generally and by general principles of equity (including
concepts of materiality, reasonableness, good faith and fair dealing),
regardless of whether considered in a proceeding in equity or at law, and
possible limitations on enforceability of rights to indemnification or
contribution by federal or state securities laws or regulations or by public
policy.
(j) ETI
(i) is not in violation of its certificate of formation or bylaws,
(ii) is not in default and no event has occurred which, with notice or
lapse of time or both, would constitute such a default, in the due performance
or observance of any term, covenant or condition contained in any indenture,
mortgage, deed of trust or other agreement or instrument to which it is a party
or by which it is bound or to which any of its properties is subject which would
be material to the issue and sale of the Bonds, or (iii) is not in
violation of any law, ordinance, governmental rule, regulation or court decree
to which it or its property may be subject which would be material to the issue
and sale of the Bonds.
(k) There is
no pending or threatened suit or proceeding before any court or governmental
agency, authority or body or any arbitration involving ETI, the Transition
Property or the Bonds required to be disclosed in the Pricing Prospectus which
is not adequately disclosed in the Pricing Prospectus.
(l) Other
than any necessary action of the PUCT, any filings required under the Financing
Act or the Financing Order or as otherwise set forth or contemplated in the
Pricing Prospectus, no approval, authorization, consent or order of any public
board or body (except such as have been already obtained and other than in
connection or in compliance with the provisions of applicable blue-sky laws or
securities laws of any state, as to which ETI makes no representations or
warranties) is legally required for the issuance and sale by the Issuer of the
Bonds.
(m) Neither
ETI nor the Issuer is, and after giving effect to the sale and issuance of the
Bonds, neither ETI or the Issuer will be, an “investment company” within the
meaning of the 1940 Act.
(n) Each of
the Sale Agreement, the Servicing Agreement and the Administration Agreement has
been duly and validly authorized by ETI, and when executed and delivered by ETI
and the other parties thereto will constitute a valid and legally binding
obligation of ETI, enforceable against ETI in accordance with its terms, except
as the enforceability thereof may be limited by bankruptcy, insolvency,
reorganization, receivership, moratorium or other similar laws relating to or
affecting creditors’ or secured parties’ rights generally and by general
principles of equity (including concepts of materiality, reasonableness, good
faith and fair dealing), regardless of whether considered in a proceeding in
equity or at law, and possible limitations on enforceability of rights to
indemnification or contribution by public policy.
(o) There are
no Texas transfer taxes related to the transfer of the Transition Property or
the issuance and sale of the Bonds to the Underwriters pursuant to this
Underwriting Agreement required to be paid at or prior to the Closing Date by
ETI or the Issuer.
(p) Deloitte
& Touche LLP are independent public accountants with respect to ETI as
required by the Securities Act and the rules and regulations of the Commission
thereunder.
5. Investor
Communications.
(a) The
Issuer and ETI represent and agree that, unless they obtain the prior consent of
the Representatives, and each Underwriter represents and agrees that, unless it
obtains the prior consent of the Issuer and ETI and the Representatives, it has
not made and will not make any offer relating to the Bonds that would constitute
an Issuer Free Writing Prospectus, or that would otherwise constitute a Free
Writing Prospectus, required to be filed by the Issuer or ETI, as applicable,
with the Commission or retained by the Issuer or ETI, as applicable, under Rule
433 under the Securities Act; provided that the prior
consent of the parties hereto shall be deemed to have been given in respect of
the term sheets and each other Free Writing Prospectus identified in Schedule
III hereto.
(b) ETI and
the Issuer (or the Representatives at the direction of the Issuer) will prepare
a final pricing term sheet relating to the Bonds (the “Pricing Term Sheet”),
containing only information that describes the final pricing terms of the Bonds
and otherwise in a form consented to by the Representatives, and will file such
final pricing term sheet within the period required by Rule 433(d)(5)(ii) under
the Securities Act following the date such final terms have been established for
all tranches of the offering of the Bonds. The Pricing Term Sheet is
an Issuer Free Writing Prospectus for purposes of this Underwriting
Agreement.
(c) Each
Underwriter may provide to investors one or more of the Free Writing
Prospectuses, including the Term Sheets, subject to the following
conditions:
(i) Unless
preceded or accompanied by a prospectus satisfying the requirements of Section
10(a) of the Securities Act, an Underwriter shall not convey or deliver any
Written Communication (as defined below) to any person in connection with the
initial offering of the Bonds, unless such Written Communication (A) is made in
reliance on Rule 134 under the Securities Act, (B) constitutes a prospectus
satisfying the requirements of Rule 430B, (C) constitutes “ABS informational and
computational information” as defined in Item 1101 of Regulation AB, (D) is an
Issuer Free Writing Prospectus listed on Schedule III hereto or (E) is an
Underwriter Free Writing Prospectus (as defined below). “Written
Communication” has the same meaning as that term is defined in Rule 405
under the Securities Act.
An “Underwriter Free Writing
Prospectus” means any free writing prospectus that contains only
preliminary or final terms of the Transition Bonds and is not required to be
filed by ETI or the Issuer pursuant to Rule 433 under the Securities Act and
that contains information substantially the same as the information contained in
the Pricing Prospectus or the Pricing Term Sheet (including, without limitation,
(1) the class, size, rating, price, CUSIPs, coupon, yield, spread, benchmark,
status and/or legal maturity date of the Bonds, the weighted average life,
expected first and final payment dates, trade date, settlement date, transaction
parties, credit enhancement, logistical details related to the
location and timing of and access to the roadshow, ERISA eligibility, legal
investment status and payment window of one or more classes of Bonds and (2) a
column or other entry showing the status of the subscriptions for the Bonds,
both for the Bonds as a whole and for each Underwriter’s retention, and/or
expected pricing parameters of the Bonds).
(ii) Each
Underwriter shall comply with all applicable laws and regulations in connection
with the use of Free Writing Prospectuses and term sheets, including but not
limited to Rules 164 and 433 under the Securities Act.
(iii) All Free
Writing Prospectuses provided to investors, whether or not filed with the
Commission, shall bear a legend including substantially the following
statement:
Issuer
has filed a registration statement (including a prospectus) with the SEC for the
offering to which this communication relates. Before you invest, you
should read the prospectus in that registration statement and other documents
Issuer has filed with the SEC for more complete information about Issuer and the
offering. You may get these documents for free by visiting XXXXX on
the SEC web site at xxx.xxx.xxx. Alternatively,
Issuer, any underwriter or any dealer participating in the offering will arrange
to send you the base prospectus if you request it by calling Xxxxxx
Xxxxxxx & Co. Incorporated toll-free at 1-866-718-1649 or Citigroup
Global Markets Inc. toll-free at 1-877-858-5407.
The
Issuer and the Representatives shall have the right to require additional
specific legends or notations to appear on any Free Writing Prospectus, the
right to require changes regarding the use of terminology and the right to
determine the types of information appearing therein with the approval of, in
the case of the Issuer, the Representatives and, in the case of the
Representatives, the Issuer (which in either case shall not be unreasonably
withheld).
(iv) Each
Underwriter covenants with the Issuer and ETI that after the Final Prospectus is
available such Underwriter
shall not distribute any written information concerning the Bonds to an investor
unless such information is preceded or accompanied by the Final Prospectus or by
notice to the investor that the Final Prospectus is available for free by
visiting XXXXX on the Commission’s website at xxx.xxx.xxx.
(v) Each
Underwriter agrees and covenants that if an Underwriter shall use an Underwriter
Free Writing Prospectus, the liability arising from its use shall be the sole
responsibility of the Underwriter using such Underwriter Free Writing Prospectus
unless such Underwriter Free Writing Prospectus was consented to in advance by
ETI; provided, however, that, for the
avoidance of doubt, (A) this clause (v) shall not be interpreted as tantamount
to the indemnification obligations contained in Section 11(b) hereof and (B) no
Underwriter shall be responsible for any errors or omissions in an Underwriter
Free Writing Prospectus to the extent that such error or omission related to or
was derived from any information provided by the Issuer or ETI.
6. Purchase and
Sale.
On
the basis of the representations and warranties herein contained, and subject to
the terms and conditions herein set forth, the Issuer shall sell to each of the
Underwriters, and each Underwriter shall purchase from the Issuer, at the time
and place herein specified, severally and not jointly, at the purchase price set
forth in Schedule I hereto, the principal amount of the Bonds set forth opposite
such Underwriter’s name in Schedule II hereto. The Underwriters agree
to make a public offering of the Bonds. The Issuer shall pay (in the
form of a discount to the principal amount of the offered Bonds) to the
Underwriters a commission equal to $2,183,600.
7. Time and Place of
Closing.
Delivery
of the Bonds against payment of the aggregate purchase price therefor by wire
transfer in federal funds shall be made at the place, on the date and at the
time specified in Schedule I hereto, or at such other place, time and date as
shall be agreed upon in writing by the Issuer and the
Representatives. The hour and date of such delivery and payment are
herein called the “Closing
Date”. Pursuant to Rule 15c6-1(d) of the Exchange Act
Regulations, the parties have agreed that the Closing Date will be not less
than six business days following the date hereof. The Bonds shall be
delivered to DTC or to the Indenture Trustee, as custodian for DTC, in fully
registered global form registered in the name of Cede & Co., for the
respective accounts specified by the Representatives not later than the close of
business on the business day preceding the Closing Date or such other time as
may be agreed upon by the Representatives. The Issuer agrees to make
the Bonds available to the Representatives for checking purposes not later than
1:00 P.M. New York Time on the last business day preceding the Closing Date at
the place specified for delivery of the Bonds in Schedule I hereto, or at such
other place as the Issuer may specify.
If any
Underwriter shall fail or refuse to purchase and pay for the aggregate principal
amount of Bonds that such Underwriter has agreed to purchase and pay for
hereunder, the Issuer shall immediately give notice to the other Underwriters of
the default of such Underwriter, and the other Underwriters shall have the right
within 24 hours after the receipt of such notice to determine to purchase, or to
procure one or more others, who are members of the Financial Industry Regulatory
Authority (“FINRA”) (or, if not
members of FINRA, who are not eligible for membership in FINRA and who agree
(i) to make no sales within the United States, its territories or its
possessions or to persons who are citizens thereof or residents therein and
(ii) in making sales to comply with FINRA’s Conduct Rules) and satisfactory
to the Issuer, to purchase, upon the terms herein set forth, the aggregate
principal amount of Bonds that the defaulting Underwriter had agreed to
purchase. If any non-defaulting Underwriter or Underwriters shall
determine to exercise such right, such Underwriter or Underwriters shall give
written notice to the Issuer of the determination in that regard within 24 hours
after receipt of notice of any such default, and thereupon the Closing Date
shall be postponed for such period, not exceeding three business days, as the
Issuer shall determine. If in the event of such a default no
non-defaulting Underwriter shall give such notice, then this Underwriting
Agreement may be terminated by the Issuer, upon like notice given to the
non-defaulting Underwriters, within a further period of 24 hours. If
in such case the Issuer shall not elect to terminate this Underwriting Agreement
it shall have the right, irrespective of such default:
(a) to
require each non-defaulting Underwriter to purchase and pay for the respective
aggregate principal amount of Bonds that it had agreed to purchase hereunder as
hereinabove provided and, in addition, the aggregate principal amount of Bonds
that the defaulting Underwriter shall have so failed to purchase up to an
aggregate principal amount of Bonds equal to one-tenth (1/10) of the aggregate
principal amount of Bonds that such non-defaulting Underwriter has otherwise
agreed to purchase hereunder, and/or
(b) to
procure one or more persons, reasonably acceptable to the Representatives, who
are members of FINRA (or, if not members of FINRA, who are not eligible for
membership in FINRA and who agree (i) to make no sales within the United
States, its territories or its possessions or to persons who are citizens
thereof or residents therein and (ii) in making sales to comply with
FINRA’s Conduct Rules), to purchase, upon the terms herein set forth, either all
or a part of the aggregate principal amount of Bonds that such defaulting
Underwriter had agreed to purchase or that portion thereof that the remaining
Underwriters shall not be obligated to purchase pursuant to the foregoing clause
(a).
In the
event the Issuer shall exercise its rights under (a) and/or (b) above, the
Issuer shall give written notice thereof to the non-defaulting Underwriters
within such further period of 24 hours, and thereupon the Closing Date shall be
postponed for such period, not exceeding three business days, as the Issuer
shall determine.
In the
computation of any period of 24 hours referred to in this Section 7, there shall
be excluded a period of 24 hours in respect of each Saturday, Sunday or legal
holiday that would otherwise be included in such period of time.
Any
action taken by the Issuer or ETI under this Section 7 shall not relieve any
defaulting Underwriter from liability in respect of any default of such
Underwriter under this Underwriting Agreement. Termination by the
Issuer under this Section 7 shall be without any liability on the part of the
Issuer, ETI or any non-defaulting Underwriter, except as otherwise provided in
Sections 8(a)(ii) and 11 hereof.
8. Covenants.
(a) Covenants of the
Issuer. The Issuer covenants and agrees with the several
Underwriters that:
(i) If,
during such period of time (not exceeding nine months) after the Final
Prospectus has been filed with the Commission pursuant to Rule 424 under the
Securities Act (“Rule
424”) as in the opinion of Counsel for the Underwriters (as defined
below) a prospectus covering the Bonds is required by law to be delivered in
connection with sales by an Underwriter or dealer (including in circumstances
where such requirement may be satisfied pursuant to Rule 172 under the
Securities Act), any event relating to or affecting the Issuer, the Bonds or the
Transition Property or of which the Issuer shall be advised in writing by the
Representatives shall occur that in the Issuer’s reasonable judgment after
consultation with Counsel for the Underwriters should be set forth in a
supplement to, or an amendment of, the Final Prospectus in order to make the
Final Prospectus not misleading in the light of the circumstances when it is
delivered to a purchaser (including in circumstances where such requirement may
be satisfied pursuant to Rule 172 under the Securities Act), the Issuer will
promptly notify the Representatives of such event and, at its expense, amend or
supplement the Final Prospectus by either (A) preparing and furnishing to
the Underwriters at the Issuer’s expense a reasonable number of copies of a
supplement or supplements or an amendment or amendments to the Final Prospectus
or (B) making an appropriate filing pursuant to Section 13 or Section 15 of
the Exchange Act, which will supplement or amend the Final Prospectus so that,
as supplemented or amended, it will not contain any untrue statement of a
material fact or omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances when the Final Prospectus
is delivered to a purchaser (including in circumstances where such requirement
may be satisfied pursuant to Rule 172 under the Securities Act), not misleading;
provided that should
such event relate solely to the activities of any of the Underwriters, then such
Underwriters shall assume the expense of preparing and furnishing any such
amendment or supplement.
(ii) The
Issuer or ETI will, except as herein provided, pay or cause to be paid, all
reasonable costs and expenses of the Issuer, the Indenture Trustee and the
Underwriters incident to the performance of the obligations hereunder,
including, without limiting the generality of the foregoing, (A) all costs,
taxes and expenses incident to the issue and delivery of the Bonds to the
Underwriters; (B) all costs and expenses incident to the preparation,
printing, reproduction and distribution of the Registration Statement as
originally filed with the Commission and each amendment or supplement thereto,
the Pricing Prospectus (including any amendments and supplements thereto), the
Final Prospectus (including any amendments and supplements thereto), and any
Issuer Free Writing Prospectuses; (C) all reasonable fees, disbursements
and expenses of (1) the Issuer’s counsel, (2) ETI’s counsel, (3) the Indenture
Trustee’s counsel, (4) Counsel for the Underwriters, (5) the Issuer’s
accountants and (6) ETI’s accountants; (D) all fees charged by the Rating
Agencies in connection with the rating of the Bonds; (E) all fees of DTC in
connection with the book-entry registration of the Bonds; (F) all costs and
expenses incurred in connection with the qualification of the Bonds for sale
under the laws of such jurisdictions in the United States as the Representatives
may designate, together with costs and expenses in connection with any filing
with FINRA with respect to the transactions contemplated hereby (including
counsel fees not to exceed $10,000); and (G) and all costs and expenses of
printing and distributing all of the documents in connection the
Bonds.
(iii) The
Issuer will cause the Pricing Prospectus and the Final Prospectus to be filed
with the Commission pursuant to Rule 424 as soon as practicable and advise the
Underwriters of any stop order suspending the effectiveness of the Registration
Statement or the institution of any proceeding therefor of which Issuer shall
have received notice. The Issuer has complied and will comply with
Rule 433 under the Securities Act in connection with the offering of the
Bonds.
(iv) If the
sale of the Bonds provided for herein is not consummated because any condition
set forth in Section 9 hereof is not satisfied, because of any termination
pursuant to Section 12 hereof or because of any refusal, inability or failure on
the part of ETI or the Issuer to perform any agreement herein or comply with any
provision hereof other than by reason of a default (including under Section 7)
by any of the Underwriters, ETI or the Issuer will reimburse the Underwriters
upon demand for the reasonable fees and disbursements of Counsel for the
Underwriters, and will reimburse the Underwriters for their reasonable
out-of-pocket expenses, in an aggregate amount not exceeding $200,000, incurred
by them in connection with the proposed purchase and sale of the
Bonds. The Issuer shall not in any event be liable to any of the
several Underwriters for damages on account of loss of anticipated
profits.
(v) During
the period from the date of this Underwriting Agreement to the date that is five
days after the Closing Date, the Issuer will not, without the prior written
consent of the Representatives, offer, sell or contract to sell, or otherwise
dispose of, directly or indirectly, or announce the offering of, any
asset-backed securities (other than the Bonds).
(vi) To the
extent, if any, that any rating necessary to satisfy the condition set forth in
Section 9(dd) of this Underwriting 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.
(vii) For a
period from the date of this Underwriting Agreement until the retirement of the
Bonds or until such time as the Underwriters shall cease to maintain a secondary
market in the Bonds, whichever occurs first, the Issuer shall file with the
Commission, and to the extent permitted by and consistent with the Issuer’s
obligations under applicable law, make available on the website associated with
the Issuer’s parent or affiliate, such periodic reports, if any, as are required
(without regard to the number of holders of Bonds to the extent permitted by and
consistent with the Issuer’s obligations under applicable law) from time to time
under Section 13 or Section 15(d) of the Exchange Act, and the Issuer shall
not voluntarily suspend or terminate its filing obligations with the
Commission. The Issuer shall also, to the extent permitted by and
consistent with the Issuer’s obligations under applicable law, include in the
periodic and other reports to be filed with the Commission as provided above,
such information as required by Section 3.07(g) of the Indenture with respect to
the Bonds. To the extent that the Issuer’s obligations are terminated
or limited by an amendment to Section 3.07(g) of the Indenture, or otherwise,
such obligations shall be correspondingly terminated or limited
hereunder.
(viii) The
Issuer will furnish to the Representatives and Counsel for the Underwriters,
without charge, copies of the Registration Statement (including exhibits
thereto), and as many copies of the Pricing Prospectus and the Final Prospectus
and any amendment or supplement thereto as the Representatives may reasonably
request.
(ix) So long
as any of the Bonds are outstanding, the Issuer will furnish to the
Representatives, if and to the extent not posted on the Issuer or its
affiliate’s website, (A) as soon as available, a copy of each report of the
Issuer filed with the Commission under the Exchange Act or mailed to Bondholders
(to the extent such reports are not publicly available on the Commission’s
website), (B) a copy of any filings with the PUCT pursuant to the Financing Act
and the Financing Order including, but not limited to, any Issuance Advice
Letter or any annual or more frequent True-Up Advice Letters, and (C) from time
to time, any information concerning the Issuer as the Representatives may
reasonably request.
(b) Covenants of
ETI. ETI covenants and agrees with the several Underwriters
that, to the extent that the Issuer has not already performed such act pursuant
to Section 8(a):
(i) The
Issuer will furnish to the Representatives and Counsel for the Underwriters,
without charge, copies of the Registration Statement (including exhibits
thereto), and as many copies of the Pricing Prospectus and the Final Prospectus
and any amendment or supplement thereto as the Representatives may reasonably
request.
(ii) ETI, in
its capacity as sponsor with respect to the Bonds, will cause the Pricing
Prospectus and the Final Prospectus to be filed with the Commission pursuant to
Rule 424 as soon as practicable and advise the Underwriters of any stop order
suspending the effectiveness of the Registration Statement or the institution of
any proceeding therefor of which Issuer shall have received notice.
(iii) As soon
as practicable, but not later than 16 months after the date hereof, ETI, in its
capacity as sponsor with respect to the Bonds, will make generally available to
its security holders, an earnings statement (which need not be audited) that
will satisfy the provisions of Section 11(a) of the Securities Act with respect
to the Bonds.
(iv) ETI, in
its capacity as sponsor with respect to the Bonds, will furnish such proper
information as may be lawfully required and otherwise cooperate in qualifying
the Bonds for offer and sale under the blue-sky laws of such jurisdictions as
the Representatives may designate and will maintain such qualifications in
effect so long as required for the distribution of the Bonds; provided that neither the
Issuer nor ETI shall be required to qualify as a foreign limited liability
company or foreign corporation or dealer in securities, file any consents to
service of process under the laws of any jurisdiction, or meet any other
requirements deemed by the Issuer or ETI, as applicable, to be unduly
burdensome.
(v) ETI, in
its capacity as sponsor with respect to the Bonds, will not file any amendment
to the Registration Statement or amendment or supplement to the Final Prospectus
during the period when a prospectus relating to the Bonds is required to be
delivered under the Securities Act, without prior notice to the Underwriters, or
to which Pillsbury Xxxxxxxx Xxxx Xxxxxxx LLP, who are acting as counsel for the
Underwriters (“Counsel
for the Underwriters”), shall reasonably object by written notice to ETI
and the Issuer.
(vi) To the
extent permitted by applicable law and the agreements and instruments that bind
ETI, ETI will use its reasonable best efforts to cause the Issuer to comply with
the covenants set forth in Section 8(a) hereof.
(vii) ETI will
use its reasonable best efforts to prevent the issuance by the Commission of any
stop order suspending the effectiveness of the Registration Statement and, if
issued, to obtain as soon as possible the withdrawal thereof.
(viii) If,
during such period of time (not exceeding nine months) after the Final
Prospectus has been filed with the Commission pursuant to Rule 424 as in the
opinion of Counsel for the Underwriters a prospectus covering the Bonds is
required by law to be delivered in connection with sales by an Underwriter or
dealer, any event relating to or affecting ETI, the Bonds or the Transition
Property or of which ETI shall be advised in writing by the Representatives
shall occur that in ETI’s reasonable judgment after consultation with Counsel
for the Underwriters should be set forth in a supplement to, or an amendment of,
the Final Prospectus in order to make the Final Prospectus not misleading in the
light of the circumstances when it is delivered to a purchaser, ETI will cause
the Issuer to promptly notify the Representatives of such event and, at ETI’s or
the Issuer’s expense, to amend or supplement the Final Prospectus by either
(A) preparing and furnishing to the Underwriters at ETI’s or the Issuer’s
expense a reasonable number of copies of a supplement or supplements or an
amendment or amendments to the Final Prospectus or (B) causing the Issuer
to make an appropriate filing pursuant to Section 13 or Section 15 of the
Exchange Act, which will supplement or amend the Final Prospectus so that, as
supplemented or amended, it will not contain any untrue statement of a material
fact or omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances when the Final Prospectus
is delivered to a purchaser, not misleading; provided that should such
event relate solely to the activities of any of the Underwriters, then such
Underwriters shall assume the expense of preparing and furnishing any such
amendment or supplement.
(ix) During
the period from the date of this Underwriting Agreement to the date that is five
days after the Closing Date, ETI will not, without the prior written consent of
the Representatives, offer, sell or contract to sell, or otherwise dispose of,
directly or indirectly, or announce the offering of, any asset-backed securities
(other than the Bonds).
(x) ETI will
cause the proceeds for the issuance and sale of the Bonds to be applied for the
purposes described in the Pricing Prospectus.
(xi) To the
extent, if any, that any rating necessary to satisfy the condition set forth in
Section 9(dd) of this Underwriting Agreement is conditioned upon the furnishing
of documents or the taking of other actions by ETI on or after the Closing Date,
ETI shall furnish such documents and take such other actions.
(xii) The
initial Transition Charge will be calculated in accordance with the Financing
Order.
9. Conditions to the
Obligations of the Underwriters.
The
obligations of the Underwriters to purchase the Bonds shall be subject to the
accuracy of the representations and warranties on the part of the Issuer and ETI
contained in this Underwriting Agreement, on the part of ETI contained in
Article III of the Sale Agreement, and on the part of ETI contained in Section
6.01 of the Servicing Agreement as of the Closing Date, to the accuracy of the
statements of the Issuer and ETI made in any certificates pursuant to the
provisions hereof, to the performance by the Issuer and ETI of their obligations
hereunder, and to the following additional conditions:
(a) The Final
Prospectus shall have been filed with the Commission pursuant to Rule 424 prior
to 5:30 P.M., New York time, on the second business day after the date of this
Underwriting Agreement. In addition, all material required to be
filed by the Issuer or ETI pursuant to Rule 433(d) under the Securities Act that
was prepared by either of them or that was prepared by any Underwriter with the
Issuer’s consent and timely provided to the Issuer or ETI shall have been filed
with the Commission within the applicable time period prescribed for such filing
by such Rule 433(d).
(b) No stop
order suspending the effectiveness of the Registration Statement shall be in
effect, and no proceedings for that purpose shall be pending before, or
threatened by, the Commission on the Closing Date; and the Underwriters shall
have received one or more certificates, dated the Closing Date and signed by an
officer of ETI and the Issuer, as appropriate, to the effect that no such stop
order is in effect and that no proceedings for such purpose are pending before,
or to the knowledge of ETI or the Issuer, as the case may be, threatened by, the
Commission.
(c) Pillsbury
Xxxxxxxx Xxxx Xxxxxxx LLP, as Counsel for the Underwriters, shall have furnished
to the Representatives their written opinion (substantially in the form attached
as Annex I (c) hereto), dated the Closing Date, with respect to the
issuance and sale of the Bonds, the Indenture, the other Basic Documents, the
Registration Statement and other related matters; and such counsel shall have
received such papers and information as they may reasonably request to enable
them to pass upon such matters.
(d) Xxxxxxxx,
Xxxxxx & Finger, P.A., special Delaware counsel for ETI and the Issuer,
shall have furnished to the Representatives their written opinion (substantially
in the form attached as Annex I (d) hereto), dated the Closing Date,
regarding the filing of a voluntary bankruptcy petition.
(e) Xxxxxxxx,
Xxxxxx & Finger, P.A., special Delaware counsel to ETI and the Issuer, shall
have furnished to the Representatives their written opinion (substantially in
the form attached as Annex I (e) hereto), dated the Closing Date, regarding
certain Delaware security interest matters.
(f) Sidley
Austin LLP, counsel for the Issuer and ETI, shall have furnished to the
Representatives their written opinion (substantially in the form attached as
Annex I (f) hereto), dated the Closing Date, regarding certain aspects of
the transactions contemplated by the Basic Documents, including the Indenture
and the Trustee’s security interest under the Uniform Commercial
Code.
(g) Sidley
Austin LLP, counsel for the Issuer and ETI, shall have furnished to the
Representatives their written opinion (substantially in the form attached as
Annex I (g) hereto), dated the Closing Date, regarding various issues
requested by the Representatives, including negative assurances and other
corporate matters.
(h) Sidley
Austin LLP, counsel for the Issuer and ETI, shall have furnished to the
Representatives their written opinion (substantially in the form attached as
Annex I (h) hereto), dated the Closing Date, regarding bankruptcy
issues.
(i) Xxxxx
Xxxxxx Xxxxxxx, a Professional Corporation, Texas counsel for the Issuer and
ETI, shall have furnished to the Representatives their written opinion
(substantially in the form attached as Annex I (i) hereto), dated the
Closing Date, regarding certain Texas constitutional matters relating to the
Transition Property.
(j) Sidley
Austin LLP, counsel for the Issuer and ETI, shall have furnished to the
Representatives their written opinion (substantially in the form attached as
Annex I (j) hereto), dated the Closing Date, regarding certain federal tax
matters.
(k) Xxxxx
Xxxxxx & Xxxxxxx, a Professional Corporation, Texas counsel for the Issuer
and ETI, and Sidley Austin LLP, counsel for the Issuer and ETI, each shall have
furnished to the Representatives their respective written opinions
(substantially in the forms attached as Annex I (k)(1) and Annex I (k)(2)
hereto, respectively) to the effect that, with respect to the opinion
of Xxxxx Xxxxxx & Xxxxxxx, a Professional Corporation, the
Transition Property is not subject to the lien of ETI’s Mortgage, Deed of Trust
and Security Agreement, dated as of December 31, 2007, as amended by the First
Amendment to Mortgage, Deed of Trust and Security Agreement, dated effective as
of March 20, 2008, as such amended Mortgage, Deed of Trust and Security
Agreement was supplemented and modified, and with respect to the opinion of
Sidley Austin LLP, the Transition Property is not subject to the lien of ETI’s
Indenture, Deed of Trust and Security Agreement, dated as of October 1, 2008, as
supplemented and modified.
(l) Xxxxx
Xxxxxx & Xxxxxxx, a Professional Corporation, Texas counsel for the Issuer
and ETI, shall have furnished to the Representatives their written opinion
(substantially in the form attached as Annex I (l) hereto), dated the
Closing Date, with respect to the characterization of the transfer of the
Transition Property by ETI to the Issuer as a “true sale” for Texas law
purposes.
(m) Sidley
Austin LLP, counsel for the Issuer and ETI, shall have furnished to the
Representatives their written opinion (substantially in the form attached as
Annex I (m) hereto), dated the Closing Date, regarding certain federal
constitutional matters relating to the Transition Property.
(n) Stradley,
Ronon, Xxxxxxx & Xxxxx LLP, counsel for the Indenture Trustee, shall have
furnished to the Representatives their written opinion (each substantially in
the form attached as Annex I (n) hereto), dated the Closing Date, regarding
certain matters relating to the Indenture Trustee.
(o) Xxxxx,
Xxxxxx & Xxxxxxx, a Professional Corporation, special regulatory counsel for
ETI and the Issuer, shall have furnished to the representatives their written
opinion (substantially in the form attached as Annex I (o) hereto), dated
the Closing Date, regarding certain Texas regulatory issues.
(p) Xxxxx,
Xxxxxx & Xxxxxxx, a Professional Corporation, special regulatory counsel for
ETI and the Issuer, shall have furnished to the representatives their written
opinion (substantially in the form attached as Annex I (p) hereto), dated
the Closing Date, with respect to the treatment of retail electric provider
payments as Transition Charges.
(q) Xxxxx,
Xxxxxx & Xxxxxxx, a Professional Corporation, counsel to ETI and the Issuer,
shall have furnished to the Representatives their written opinion (substantially
in the form attached as Annex I (q) hereto), dated the Closing Date,
regarding various issues requested by the Representatives, including
enforceability and certain Texas perfection and priority issues.
(r) Sidley
Austin LLP, counsel for the Issuer and ETI, shall have furnished to the
Representatives their written opinion (substantially in the form attached as
Annex I (r) hereto), dated the Closing Date, regarding certain bankruptcy
and creditors’ rights issues relating to the Issuer.
(s) Xxxxxxxx,
Xxxxxx & Finger, P.A., special Delaware counsel for the Issuer and ETI,
shall have furnished to the Representatives their written opinion (substantially
in the form attached as Annex I (s) hereto), dated the Closing Date,
regarding certain matters of Delaware law.
(t) Xxxxx,
Xxxxxx & Xxxxxxx, a Professional Corporation, Texas counsel for the Issuer
and ETI, shall have furnished to the Representatives their written opinion
(substantially in the form attached as Annex I (t) hereto), dated the
Closing Date, regarding the possibility and merits of an appeal or attack of the
Financing Act.
(u) Xxxxx,
Xxxxxx & Xxxxxxx, a Professional Corporation, Texas counsel for the Issuer
and ETI, shall have furnished to the Representatives their written opinion
(substantially in the form attached as Annex I (u) hereto), dated the
Closing Date, as to certain Texas tax matters.
(v) Xxxxx,
Xxxxxx & Xxxxxxx, a Professional Corporation, Texas counsel for the Issuer
and ETI, shall have furnished to the Representatives their written opinion
(substantially in the form attached as Annex I (v) hereto), dated the
Closing Date, as to the consequences of the abolishment of the PUCT or the
repeal of the Financing Act by operation of the Texas Sunset Act.
(w) Xxxxx,
Xxxxxx & Xxxxxxx, a Professional Corporation, Texas counsel for the Issuer
and ETI, shall have furnished to the Representatives their written opinion
(substantially in the form attached as Annex I (w) hereto), dated the
Closing Date, with respect to additional corporate matters.
(x) Xxxx X.
Abuso, Esq., Senior Counsel—Corporate and Securities of Entergy Services, Inc.,
shall have furnished to the Representatives her written opinion (substantially
in the form attached as Annex I (x) hereto), dated the Closing Date, with
respect to additional corporate matters.
(y) Reserved.
(z) On or
prior to the date of this Underwriting Agreement and on or before the Closing
Date, Deloitte & Touche LLP shall have furnished to the Representatives one
or more agreed upon procedure reports regarding certain calculations and
computations relating to the Bonds, contained in the Pricing Prospectus, the
Final Prospectus or any Free Writing Prospectus, in form or substance reasonably
satisfactory to the Representatives, in each case in respect of which the
Representatives shall have made specific requests therefor and shall have
provided acknowledgment or similar letters to Deloitte & Touche LLP
reasonably necessary in order for Deloitte & Touche LLP to issue such
reports.
(aa) Subsequent
to the respective dates as of which information is given in each of the
Registration Statement, the Pricing Prospectus and the Final Prospectus, there
shall not have been any change specified in the Rating Agency letters required
by subsection (dd) of this Section 9 which is, in the judgment of the
Representatives, so material and adverse as to make it impracticable or
inadvisable to proceed with the offering or the delivery of the Bonds as
contemplated by the Registration Statement and the Pricing
Prospectus.
(bb) The LLC
Agreement, the Administration Agreement, the Sale Agreement, the Servicing
Agreement and the Indenture and any amendment or supplement to any of the
foregoing shall have been executed and delivered.
(cc) Since the
respective dates as of which information is given in each of the Registration
Statement and the Pricing Prospectus, and as of the Closing Date, there shall
have been no (i) material adverse change in the business, property or
financial condition of ETI and its subsidiaries, taken as a whole, whether or
not in the ordinary course of business, or the Issuer or (ii) adverse
development concerning the business or assets of ETI and its subsidiaries, taken
as a whole, or the Issuer which would be reasonably likely to result in a
material adverse change in the prospective business, property or financial
condition of ETI and its subsidiaries, taken as a whole, whether or not in the
ordinary course of business, or the Issuer or (iii) development which would
be reasonably likely to result in a material adverse change in the Transition
Property, the Bonds or the Financing Order.
(dd) At the
Closing Date, (i) the Bonds shall be rated at least “Aaa”, “AAA”, and “AAA”
by Xxxxx’x Investors Service, Inc. (“Moody’s”), Standard
& Poor’s, a division of the XxXxxx-Xxxx Companies, Inc. (“S&P”), and Fitch,
Inc. (“Fitch”),
respectively, and the Issuer shall have delivered to the Underwriters a letter
from each such Rating Agency, or other evidence satisfactory to the
Underwriters, confirming that the Bonds have such ratings, and (ii) none of
Xxxxx’x, S&P and Fitch shall have, since the date of this Underwriting
Agreement, downgraded or publicly announced that it has under surveillance or
review, with possible negative implications, its ratings of the
Bonds.
(ee) The
Issuer and ETI shall have furnished or caused to be furnished to the
Representatives at the Closing Date certificates of officers of ETI and the
Issuer, reasonably satisfactory to the Representatives, as to the accuracy of
the representations and warranties of the Issuer and ETI herein, in the Sale
Agreement, the Servicing Agreement and the Indenture at and as of the Closing
Date, as to the performance by the Issuer and ETI of all of their obligations
hereunder to be performed at or prior to such Closing Date, as to the matters
set forth in subsections (b) and (cc) of this Section 9 and as to such other
matters as the Representatives may reasonably request.
(ff) An
issuance advice letter, in a form consistent with the provisions of the
Financing Order, shall have been filed with the PUCT and shall have become
effective.
(gg) On or
prior to the Closing Date, the Issuer shall have delivered to the
Representatives evidence, in form and substance reasonably satisfactory to the
Representatives, that appropriate filings have been or are being made in
accordance with the Financing Act, the Financing Order and other applicable law
reflecting the grant of a security interest by the Issuer in the collateral
relating to the Bonds to the Indenture Trustee, including the filing of the
requisite notices in the office of the Secretary of State of the State of
Texas.
(hh) On or
prior to the Closing Date, ETI shall have funded the capital subaccount of the
Issuer with cash in an amount equal to $2,729,500.
(ii) The
Issuer and ETI shall have furnished or caused to be furnished or agree to
furnish to the Rating Agencies at the Closing Date such opinions and
certificates as the Rating Agencies shall have reasonably requested prior to
such Closing Date.
(jj) On or
prior to the Closing Date, the Issuer shall have delivered to the
Representatives evidence, in form and substance reasonably satisfactory to the
Representatives, of (i) a certificate that attaches a true, correct and complete
copy of the Financing Order and certifies such copy to be the act and deed of
the PUCT and (ii) a certificate that states the Financing Order has not been
altered, rescinded, amended, modified, revoked, or supplemented as of the
Closing Date.
Any
opinion letters delivered on the Closing Date to the Rating Agencies beyond
those being delivered to the Underwriters above shall either (i) include the
Underwriters as addressees or (ii) be accompanied by reliance letters addressed
to the Underwriters referencing such letters.
If any of
the conditions specified in this Section 9 shall not have been fulfilled in all
material respects when and as provided in this Underwriting Agreement, or if any
of the opinions and certificates mentioned above or elsewhere in this
Underwriting Agreement shall not be in all material respects reasonably
satisfactory in form and substance to the Representatives and Counsel for the
Underwriters, this Underwriting Agreement and all obligations of the
Underwriters hereunder may be canceled at, or at any time prior to, the Closing
Date by the Representatives. Notice of such cancellation shall be
given to the Issuer in writing or by telephone or facsimile confirmed in
writing.
10. Conditions of Issuer’s
Obligations.
The
obligation of the Issuer to deliver the Bonds shall be subject to the conditions
that no stop order suspending the effectiveness of the Registration Statement
shall be in effect at the Closing Date and no proceeding for that purpose shall
be pending before, or threatened by, the Commission at the Closing Date and the
issuance advice letter described in Section 9(ff) shall have become
effective. In case these conditions shall not have been fulfilled,
this Underwriting Agreement may be terminated by the Issuer upon notice thereof
to the Underwriters. Any such termination shall be without liability
of any party to any other party except as otherwise provided in Sections
8(a)(ii) and 11 hereof.
11. Indemnification and
Contribution.
(a) ETI and
the Issuer, jointly and severally, will indemnify and hold harmless each
Underwriter, and its directors and officers, and each person who controls any
Underwriter within the meaning of either Section 15 of the Securities Act or
Section 20 of 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 Financing Act, the Securities 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 (i) any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement as
originally filed or in any amendment or supplement thereof, (ii) any untrue
statement or alleged untrue statement of a material fact contained in the
Pricing Prospectus, the Final Prospectus, the Issuer Free Writing Prospectuses
or in any amendment thereof or amendment or supplement thereto, (iii) the
omission or alleged omission to state in the Registration Statement, the Pricing
Prospectus, the Final Prospectus or the Issuer Free Writing Prospectuses a
material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, or (iv) any information prepared by or on behalf of the Issuer or
ETI and provided to the Underwriters, and will reimburse each such indemnified
party, as incurred, for any legal or other expenses reasonably incurred by them
in connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that neither the
Issuer nor ETI 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 ETI by or on behalf any Underwriter
through the Representatives specifically for inclusion therein it being
understood and agreed that the only such information furnished by any
Underwriter consists of the information set forth in Schedule IV hereto, or
arises out of, or based upon, statements in or omissions from that part of the
Registration Statement that shall constitute the Statement of Eligibility under
the Trust Indenture Act of the Indenture Trustee with respect to any indenture
qualified pursuant to the Registration Statement; and provided further, that the
indemnity agreement contained in this Section 11 shall not inure to the
benefit of any Underwriter (or of any officer or director of such Underwriter or
of any person controlling such Underwriter within the meaning of Section 15 of
the Securities Act or Section 20 of the Exchange Act) on account of any such
losses, claims, damages, liabilities, expenses or actions, joint or several,
arising from the sale of the Bonds to any person if a copy of the Pricing
Prospectus (including any amendment or supplement thereto if any amendments or
supplements thereto shall have been furnished to the Underwriters at or prior to
the time of entry into the contract for such sale of the Bonds) (exclusive of
the Incorporated Documents) shall not have been given or sent to such person by
or on behalf of such Underwriter with or prior to the entry into the contract
for the sale of the Bonds to such person, unless the alleged omission or alleged
untrue statement was not corrected in the Pricing Prospectus (including any
amendment or supplement thereto if any amendments or supplements thereto shall
have been furnished to the Underwriters at or prior to the time of entry into
the contract for such sale of the Bonds) at the time of entry into the contract
for such sale of the Bonds.
(b) Each
Underwriter severally agrees to indemnify and hold harmless ETI and
the Issuer, each of their directors, officers and managers, each of their
officers, directors or managers who signs the Registration Statement, and each
person who controls ETI or the Issuer within the meaning of Section
15 of the Securities Act or Section 20 of 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 Financing Act, the Securities 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, (i) any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement as originally filed or in any amendment or supplement
thereof, (ii) any untrue statement or alleged untrue statement of a material
fact contained in the Pricing Prospectus, the Final Prospectus, the Issuer Free
Writing Prospectuses or in any amendment thereof or amendment or supplement
thereto, (iii) the omission or alleged omission to state in the Registration
Statement, the Pricing Prospectus, the Final Prospectus or the Issuer Free
Writing Prospectuses a material fact required to be stated therein or necessary
to make the statements therein, in the light of the circumstances under which
they were made, not misleading, but only with reference to written information
relating to such Underwriter furnished to the Issuer or ETI by or on
behalf of such Underwriter through the Representatives specifically for
inclusion in the documents referred to in the foregoing indemnity it being
understood and agreed that the only such information furnished by any
Underwriter consists of the information set forth in Schedule IV
hereto. This indemnity agreement will be in addition to any liability
that any Underwriter may otherwise have.
(c) ETI and
the several Underwriters each shall, upon the receipt of notice of the
commencement of any action against it or any person controlling it as aforesaid,
in respect of which indemnity may be sought on account of any indemnity
agreement contained herein, promptly give written notice of the commencement
thereof to the party or parties against whom indemnity shall be sought under (a)
or (b) above, but the failure to notify such indemnifying party or parties of
any such action shall not relieve such indemnifying party or parties from any
liability hereunder to the extent such indemnifying party or parties is/are not
materially prejudiced as a result of such failure to notify and in any event
shall not relieve such indemnifying party or parties from any liability which it
or they may have to the indemnified party otherwise than on account of such
indemnity agreement. In case such notice of any such action shall be
so given, such indemnifying party shall be entitled to participate at its own
expense in the defense, or, if it so elects, to assume (in conjunction with any
other indemnifying parties) the defense of such action, in which event such
defense shall be conducted by counsel chosen by such indemnifying party or
parties and reasonably satisfactory to the indemnified party or parties who
shall be defendant or defendants in such action, and such defendant or
defendants shall bear the fees and expenses of any additional counsel retained
by them; but if the indemnifying party shall elect not to assume the defense of
such action, such indemnifying party will reimburse such indemnified party or
parties for the reasonable fees and expenses of any counsel retained by them;
provided, however, that if the
defendants in any such action (including impleaded parties) include both the
indemnified party and the indemnifying party and counsel for the indemnifying
party shall have reasonably concluded that there may be a conflict of interest
involved in the representation by a single counsel of both the indemnifying
party and the indemnified party, the indemnified party or parties shall have the
right to select separate counsel, satisfactory to the indemnifying party, whose
reasonable fees and expenses shall be paid by such indemnifying party, to
participate in the defense of such action on behalf of such indemnified party or
parties (it being understood, however, that the indemnifying party shall not be
liable for the fees and expenses of more than one separate counsel (in addition
to local counsel) representing the indemnified parties who are parties to such
action). Each of ETI, the Issuer and the several Underwriters agrees
that without the other party’s prior written consent, which consent shall not be
unreasonably withheld, it will not settle, compromise or consent to the entry of
any judgment in any claim in respect of which indemnification may be sought
under the indemnification provisions of this Underwriting Agreement, unless such
settlement, compromise or consent (i) includes an unconditional release of
such other party from all liability arising out of such claim and (ii) does
not include a statement as to or an admission of fault, culpability or a failure
to act by or on behalf of such other party.
(d) In the
event that the indemnity provided in paragraph (a) or (b) of this
Section 11 is unavailable to or insufficient to hold harmless an
indemnified party for any reason, ETI , 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 ETI,
on the one hand, and by such Underwriter, on the other hand, from the offering
of the Bonds . If the allocation provided by the immediately
preceding sentence is unavailable for any reason, ETI, 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 ETI, the Issuer
and the applicable Underwriter respectively in connection with the statements or
omissions that resulted in such Losses as well as any other relevant equitable
considerations. Relative fault shall be determined by reference to
whether any alleged untrue statement or omission relates to information provided
by ETI, the Issuer or such Underwriter, as the case may be. ETI, 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 that does not take account of the equitable considerations referred
to above. Notwithstanding the provisions of this paragraph (d), no
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. For purposes
of this Section 11, each person who controls an Underwriter within the meaning
of either the Securities Act or the Exchange Act and each director or officer of
an Underwriter shall have the same rights to contribution as such Underwriter,
and each person who controls the Issuer or ETI within the meaning of
either the Securities Act or the Exchange Act, each director, officer or manager
of the Issuer or ETI who shall have signed the Registration Statement
and each director, officer or manager of the Issuer or ETI shall have
the same rights to contribution as the Issuer or ETI , subject in each case to
the applicable terms and conditions of this paragraph (d). The
Underwriters’ obligations in this Section 11 to contribute are several in
proportion to the respective principal amounts of Bonds set forth opposite their
names in Schedule II hereto and not joint. Notwithstanding the
provisions of this Section 11, no Underwriter shall be required to contribute in
excess of the amount equal to the excess of (i) the total underwriting
fees, discounts and commissions received by it, over (ii) the amount of any
damages which such Underwriter has otherwise been required to pay by reason of
any such untrue or alleged untrue statement or omission or alleged
omission.
12. Termination.
This
Underwriting Agreement shall be subject to termination in the absolute
discretion of the Representatives, by written notice given to ETI and the Issuer
prior to delivery of and payment for the 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 ETI or (B) the Transition Property, the
Bonds, the Financing Order or the Financing Act, the effect of which, in either
case and in the reasonable judgment of the Representatives, materially impairs
the investment quality of the Bonds or makes it impractical or
inadvisable to market the Bonds, (ii) 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, State of New York or State of Texas
authorities, (iv) there shall have occurred a material disruption in securities
settlement, payment or clearing systems, (v) there shall have occurred any
outbreak or escalation of hostilities, declaration by the United States of a
national emergency or war or (vi) there shall have occurred any
terrorist act in the United States or any other calamity (including any natural
calamity, such as an earthquake) or crisis or any change in financial, political
or economic condition in the United States or elsewhere, if the effect of any
such event specified in clause (v) or (vi), in the reasonable judgment of the
Representatives, makes it impracticable or inadvisable to proceed with the
offering or delivery of the Bonds as contemplated by the Final
Prospectus (exclusive of any amendment or supplement thereto).
13. Absence of Fiduciary
Relationship.
Each
of the Issuer and ETI acknowledges and agrees that the Issuer and
ETI, respectively, each have arm’s length business relationships with Xxxxxx
Xxxxxxx & Co. Incorporated, Citigroup Global Markets Inc., Xxxxxxx, Sachs
& Co., RBS Securities Inc. and Loop Capital Markets, LLC, and their
respective affiliates, that create no fiduciary duty on the part of Xxxxxx
Xxxxxxx & Co. Incorporated, Citigroup Global Markets Inc., Xxxxxxx, Sachs
& Co., RBS Securities Inc. and Loop Capital Markets, LLC, and their
respective affiliates, in connection with all aspects of the transactions
contemplated by this Underwriting Agreement, and each such party expressly
disclaims any fiduciary relationship. Nothing in this Section is
intended to modify in any way the Underwriters’ obligations expressly set forth
in the Underwriting Agreement. Notwithstanding any other provision of
this Underwriting Agreement, immediately upon commencement of discussions with
respect to the transactions contemplated hereby, the Issuer and
ETI (and each employee, representative or other agent of the Issuer
or ETI , as the case may be) may disclose to any and all persons, without
limitation of any kind, the tax treatment and tax structure of the transactions
contemplated by this Agreement and all materials of any kind (including opinions
or other tax analyses) that are provided to the Issuer or
ETI relating to such tax treatment and tax structure. For
purposes of the foregoing, the term “tax treatment” is the purported or claimed
federal, state or local income tax treatment of the sale of the transition
property, the collection of the transition charges or the payment on the Bonds,
and the term “tax structure” includes any fact that may be relevant to
understanding the purported or claimed federal, state or local income tax
treatment of the transactions contemplated hereby.
14. Notices.
Unless
otherwise specifically provided herein, all notices, directions, consents and
waivers required under the terms and provisions of this Underwriting Agreement
shall be in English and in writing, and any such notice, direction, consent or
waiver may be given by United States first class mail, reputable overnight
courier service, facsimile transmission or electronic mail (confirmed by
telephone, United States first class mail or reputable overnight courier service
in the case of notice by facsimile transmission or electronic mail) or any other
customary means of communication, and any such notice, direction, consent or
waiver shall be effective when delivered or transmitted, or if mailed, three
days after deposit in the United States mail with proper first class postage
prepaid, at the addresses specified below until otherwise provided, in writing,
by the respective parties:
|
If
to the Representatives:
|
c/o
Morgan Xxxxxxx & Co. Incorporated
0000
Xxxxxxxx
Xxx
Xxxx, Xxx Xxxx 00000
Attention: Investment
Banking Division
Facsimile: 000-000-0000
Citigroup
Global Markets Inc.
000
Xxxxxxxxx Xxxxxx
Xxx
Xxxx, Xxx Xxxx 00000
Attention: General
Counsel
Facsimile: 000-000-0000
|
|
If
to ETI:
|
Entergy
Texas, Inc.
000
Xxxx Xxxxxx
Xxxxxxxx,
Xxxxx 00000
Attention:
Treasurer
|
|
If
to the Issuer:
|
Capital
Center
000
Xxxxxxxx Xxxxxx, Xxxxx 000-X
Xxxxxx,
Xxxxx 00000
Attention:
Secretary
|
15. Successors.
This
Underwriting 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 11 hereof, and no other
person will have any right or obligation hereunder.
16. Applicable
Law.
This
Underwriting Agreement will be governed by and construed in accordance with the
laws of the State of New York.
17. Counterparts.
This
Underwriting 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.
18. Integration.
This
Underwriting Agreement supersedes all prior agreements and understandings
(whether written or oral) among the Issuer, ETI and the Underwriters, or any of
them, with respect to the subject matter hereof.
[Signature page
follows]
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 ETI, the Issuer and the
several Underwriters.
Very
truly yours,
Entergy
Texas, Inc
By:
__/s/ Xxxxx
Williford_______________
Name: Xxxxx
Xxxxxxxxx
Title: Assistant
Treasurer
By:
___/s/ Xxxxxx X.
McNeal___________
Name: Xxxxxx
X. XxXxxx
Title: Vice
President and Treasurer
The
foregoing Underwriting Agreement
is hereby
confirmed and accepted by the
Representatives
on behalf of the
Underwriters
named in Schedule II hereto:
|
|
By: Xxxxxx Xxxxxxx & Co.
Incorporated
|
By: /s/ Xxxxxxx X.
Xxxxxx
Name: Xxxxxxx X. Xxxxxx
Title: Executive
Director
|
|
By: Citigroup Global Markets
Inc.
|
By: /s/ Xxxxxx
Xxxxxxxx
Name: Xxxxxx
Xxxxxxxx
Title: Director
SCHEDULE
I
Underwriting
Agreement dated October 29, 2009
Registration
Statement Nos.: 333- 161911 and 000-000000-00
Representatives:
|
Xxxxxx
Xxxxxxx & Co. Incorporated
|
|
|
Citigroup
Global Markets Inc.
|
|
|
c/o
Morgan Xxxxxxx & Co. Incorporated
0000
Xxxxxxxx
Xxx
Xxxx, Xxx Xxxx 00000
Attention: Investment
Banking Division
Facsimile: 000-000-0000
Citigroup
Global Markets Inc.
000
Xxxxxxxxx Xxxxxx
Xxx
Xxxx, Xxx Xxxx 00000
Attention: General
Counsel
Facsimile: 000-000-0000
|
Title,
Purchase Price and Description of Bonds:
|
|
Title:
|
Entergy
Texas Restoration Funding, LLC Senior Secured Transition
Bonds
|
|
Total
Principal Amount of Tranche
|
Bond
Rate
|
Price
to Public
|
|
|
Tranche
A-1
|
$ 182,500,000
|
2.12%
|
99.99329%
|
|
Tranche
A-2
|
144,800,000
|
3.65%
|
99.97042%
|
|
Tranche
A-3
|
218,600,000
|
4.38%
|
99.92491%
|
|
Total
|
$ 545,900,000
|
|
Aggregate
price to be paid to the Issuer by the Underwriters for the
Bonds:
|
$543,497,176
|
|
Underwriters’
fees:
|
$2,183,600
|
|
Original
Issue Discount (if any):
|
$219,224
|
|
Redemption
provisions:
|
None
|
|
Other
provisions:
|
None
|
|
Closing
Date and Time:
|
November
6, 2009, 10:00 a.m., New York City time
|
|
Closing
Location:
|
Offices
of:
Sidley
Austin LLP
000
Xxxxxxx Xxxxxx
Xxx
Xxxx, Xxx Xxxx 00000
|
SCHEDULE
II
Principal Amount of Bonds to
be Purchased
|
Name of
Underwriters
|
Tranche
X-0
|
Xxxxxxx
X-0
|
Xxxxxxx
X-0
|
Total
|
|
Xxxxxx
Xxxxxxx & Co. Incorporated
|
$ 73,000,000
|
$ 57,920,000
|
$ 87,440,000
|
$218,360,000
|
|
Citigroup
Global Markets Inc.
|
45,625,000
|
36,200,000
|
54,650,000
|
136,475,000
|
|
Xxxxxxx,
Sachs & Co.
|
22,812,500
|
18,100,000
|
27,325,000
|
68,237,500
|
|
RBS
Securities Inc.
|
22,812,500
|
18,100,000
|
27,325,000
|
68,237,500
|
|
Loop
Capital Markets, LLC
|
18,250,000
|
14,480,000
|
21,860,000
|
54,590,000
|
|
TOTAL
|
$182,500,000
|
$144,800,000
|
$218,600,000
|
$545,900,000
|
SCHEDULE
III
Schedule of Issuer Free
Writing Prospectuses
A. Free Writing Prospectuses
not required to be filed with the Commission
Electronic Road Show
B. Free Writing Prospectuses
Required to be filed with the Commission pursuant to Rule 433 of the Securities
Act
|
·
|
Preliminary
Term Sheet, dated October 23, 2009, as filed with the Commission on
October 23, 2009
|
|
·
|
Pricing
Term Sheet, dated October 29, 2009, as filed with the Commission on
October 30, 2009
|
SCHEDULE
IV
DESCRIPTIVE LIST OF
UNDERWRITER PROVIDED INFORMATION
|
A: Pricing
Prospectus:
|
|
(a)under
the heading “UNDERWRITING THE BONDS”:
|
|
(i)the
third sentence under the caption “No Assurance as to Resale Price or
Resale Liquidity for the Bonds”,
|
|
(ii)the
entire first full paragraph under the caption “Various Types of
Underwriter Transactions That May Affect the Price of the Bonds” (except
the last sentence thereof),
|
|
(iii)the
last sentence of the second full paragraph under the caption “Various
Types of Underwriter Transactions That May Affect the Price of the Bonds”,
and
|
|
(iv)the
last sentence of the fifth full paragraph under the caption “Various Types
of Underwriter Transactions That May Affect the Price of the Bonds”;
and
|
|
(b)under
the heading “OTHER RISKS ASSOCIATED WITH AN INVESTMENT IN THE TRANSITION
BONDS”, the first sentence under the caption “The absence of a secondary
market for a series of transition bonds might limit your ability to resell
your transition bonds”.
|
|
B. Final
Prospectus:
|
|
(a)under
the heading “UNDERWRITING THE BONDS”:
|
|
(i)the
third sentence under the caption “No Assurance as to Resale Price or
Resale Liquidity for the Bonds”,
|
|
(ii)the
entire first full paragraph under the caption “Various Types of
Underwriter Transactions That May Affect the Price of the Bonds” (except
the last sentence thereof),
|
|
(iii)the
last sentence of the second full paragraph under the caption “Various
Types of Underwriter Transactions That May Affect the Price of the Bonds”,
and
|
|
(iv)the
last sentence of the fifth full paragraph under the caption “Various Types
of Underwriter Transactions That May Affect the Price of the Bonds”;
and
|
|
(b)under
the heading “OTHER RISKS ASSOCIATED WITH AN INVESTMENT IN THE TRANSITION
BONDS”, the first sentence under the caption “The absence of a secondary
market for a series of transition bonds might limit your ability to resell
your transition bonds”.
|
Annex
I(c)
Opinion of Pillsbury
Xxxxxxxx Xxxx Xxxxxxx LLP regarding the issuance and sale of the Bonds, the
Indenture, the other Basic Documents, the Registration Statement and other
related matters
|
1.
|
The
Indenture constitutes a valid and legally binding agreement of the Issuer,
enforceable against the Issuer in accordance with its
terms.
|
|
2.
|
The
Bonds, upon execution and authentication thereof in accordance with the
Indenture and delivery and payment therefor pursuant to the Agreement,
will constitute valid and legally binding obligations of the Issuer,
enforceable against the Issuer in accordance with their
terms.
|
|
3.
|
The
statements set forth in the Preliminary Prospectus and the Final
Prospectus under the captions “The Bonds” and “Description of the
Transition Bonds,” to the extent that such statements purport to
constitute summaries of the terms of the Bonds and the Indenture, are
accurate in all material respects.
|
|
4.
|
To
our knowledge, the Registration Statement has been declared effective
under the Securities Act and no stop order with respect thereto has been
issued, and no proceedings therefor are pending or threatened, under
Section 8 of the Securities Act and the Indenture has been qualified under
the Trust Indenture Act of 1939.
|
This
opinion letter will also include (i) an opinion as to compliance as to form with
respect to the Registration Statement and Final Prospectus and (ii) a negative
assurance statement with respect to the Registration Statement, the Pricing
Prospectus and Final Prospectus.
Annex
I(d)
Opinion of Xxxxxxxx, Xxxxxx
& Finger, P.A. regarding filing of a voluntary bankruptcy
petition
A federal
bankruptcy court would hold that Delaware law, and not federal law, governs the
determination of what persons or entities have authority to file a voluntary
bankruptcy petition on behalf of the Company.
Annex
I(e)
Opinion of Xxxxxxxx, Xxxxxx
& Finger, P.A., regarding certain Delaware security interest
matters
|
1.
|
The
Financing Statement is in an appropriate form for filing in the State of
Delaware under Section 9-501(a) and 9-516 of the Uniform Commercial Code
as in effect in the State of Delaware on the date hereof (the “Delaware
UCC”) and has been duly filed in the appropriate filing office in the
State of Delaware and the fees and documents taxes, if any, payable in
connection with the said filing of the Financing Statement have been paid
in full.
|
|
2.
|
Insofar
as Article 9 of the Delaware UCC is applicable (without regard to conflict
of laws principles), the Trustee has a perfected security interest in the
Company’s rights in that portion of the Transition Bond Collateral that
may be perfected by the filing of a UCC financing statement with the
Division (the “Filing Collateral”) and the proceeds thereof (as defined in
Section 9-102(a)(64) of the Delaware UCC), and such security interest will
be prior to any other security interest in the Transition Bond Collateral
granted by the Company that is perfected solely by the filing of financing
statements with the Division under the Delaware UCC. Insofar as
Article 9 of the Delaware UCC is applicable (without regard to conflict of
laws principles), the Division is the appropriate office in which to file
a financing statement to perfect a security interest in collateral except
(i) if the collateral is as-extracted collateral or timber to be cut (as
described in Section 9-501(a)(1)(A) of the Delaware UCC) or (ii) the
financing statement is filed as a fixture filing and the collateral is
goods that are or are to become fixtures (as described in Section
9-501(a)(1)(B) of the Delaware
UCC).
|
|
3.
|
The
Search Report sets forth the proper filing office and the proper debtor
necessary to identify those Persons who under the Delaware UCC have on
file financing statements against the Company covering the Filing
Collateral as of the Effective Time. The Search Report
identifies no secured party who has filed with the Division a financing
statement naming the Company as debtor and describing the Filing
Collateral prior to the Effective
Time.
|
|
4.
|
Insofar
as Article 9 of the Delaware UCC is applicable (without regard to conflict
of laws principles), the provisions of the Indenture are sufficient to
constitute authorization by the Company of the filing of the Financing
Statement for purposes of Section 9-509 of the Delaware
UCC.
|
|
5.
|
Insofar
as Article 9 of the Delaware UCC is applicable (without regard to conflict
of laws principles), for purposes of the Delaware UCC, the Company is a
“registered organization” (as defined in Section 9-102(a)(70) of the
Delaware UCC).
|
|
|
Annex
I(f)
|
Opinion of Sidley Austin LLP
regarding certain aspects of the transactions contemplated by the Basic
Documents, including the Indenture and the Trustee’s security interest under the
Uniform
Commercial
Code
|
1.
|
The
Indenture has been duly qualified under the Trust Indenture Act and no
qualification of the Series Supplement is necessary under the Trust
Indenture Act.
|
|
2.
|
All
instruments furnished to the Indenture Trustee pursuant to the Indenture
and Series Supplement conform to the requirements set forth in the
Indenture and Series Supplement and constitute all of the documents
required to be delivered under the Indenture and Series Supplement for the
Indenture Trustee to authenticate and deliver the Bonds. All
conditions precedent provided for in Sections 2.03 and 2.10 of the
Indenture and Section 6 of the Series Supplement relating to the
authentication and delivery of the Bonds have been complied
with.
|
|
3.
|
The
Bonds have been duly executed and delivered by the Issuer and, when duly
authenticated by the Indenture Trustee in accordance with the provisions
of the Indenture and delivered against payment of the purchase price
therefor, as provided in the Underwriting Agreement, the Bonds will
constitute legal, valid and binding obligations of the Issuer entitled to
the benefits provided by the Indenture and the Series Supplement and the
Bonds will be enforceable against the Issuer in accordance with their
terms, except to the extent enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance or other
laws of general applicability relating to or affecting the enforcement of
creditors’ rights and by the effect of general principles of equity
(regardless of whether enforceability is considered in a proceeding in
equity or at law).
|
|
4.
|
Each
of the Indenture, the Series Supplement, the Administration Agreement, the
Sale Agreement and the Servicing Agreement has been duly authorized,
executed and delivered by the Issuer. Each of the Indenture,
the Series Supplement, the Administration Agreement, the Sale Agreement
and the Servicing Agreement is a legal, valid and binding agreement of the
Issuer, enforceable against the Issuer in accordance with its terms,
except to the extent enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance or other
laws of general applicability relating to or affecting the enforcement of
creditors’ rights and by the effect of general principles of equity
(regardless of whether such enforceability is considered in a proceeding
in equity or at law). Each of the Administration Agreement, the
Sale Agreement and the Servicing Agreement is a legal, valid and binding
agreement of ETI, enforceable against ETI in accordance with its terms,
except to the extent enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance or other
laws of general applicability relating to or affecting the enforcement of
creditors’ rights and by the effect of general principles of equity
(regardless of whether such enforceability is considered in a proceeding
in equity or at law).
|
|
5.
|
(a) The
Indenture, together with the Series Supplement, creates in favor of the
Indenture Trustee for the benefit of the Secured Parties a valid security
interest under Article 9 of the NY UCC to secure the payment of the
Secured Obligations in the Issuer’s rights in the Collateral (to the
extent such Collateral is of a type in which a security interest can be
created under Article 9 of the NY UCC). Insofar as Section
9-509 of the NY UCC is applicable, the Indenture Trustee is authorized to
file the Financing Statement.
|
|
|
(b) Under
Section 9-305(a)(3) of the NY UCC, the local law of the Securities
Intermediary’s jurisdiction as specified in Section 8-110(e) of the NY UCC
governs perfection, the effect of perfection or nonperfection and priority
of a security interest in the Securities Account and Security
Entitlements. Under the Indenture, for purposes of Section
8-110(e) of the NY UCC, the jurisdiction of the Securities Intermediary is
the State of New York.
|
|
|
(c) To
the extent that the Collection Account is a Securities Account, the
provisions of the Indenture are effective to perfect the security interest
of the Indenture Trustee, for the benefit of the Secured Parties, in the
Collection Account and the Security Entitlements and, subject to and to
the extent provided in Section 9-315 of the NY UCC and the Federal
Book-Entry Regulations, identifiable cash proceeds
thereof. Such security interest in the Collection Account and
the Security Entitlements will have priority over any security interest in
the Collection Account and Security Entitlements created by the Issuer
under the NY UCC in favor of any other creditor of the Issuer and
perfected by a means other than “control” (within the meaning of Section
9-106 of the NY UCC).
|
|
|
(d) Insofar
as Article 9 of the NY UCC is applicable, (i) pursuant to Section 9-301 of
the NY UCC, the law of the location of the debtor governs the perfection
by filing of a financing statement of the Indenture Trustee’s security
interest in the Collateral; (ii) pursuant to Section 9-307 of the NY UCC,
a registered organization that is organized under the law of a State is
deemed to be located in that State for purposes of Section 9-301 of the NY
UCC; (iii) the Issuer is a “registered organization” as defined in Section
9-102(a)(70) of the NY UCC organized in the State of Delaware; and (iv)
therefore, the law of the State of Delaware governs the perfection by
filing of the Indenture Trustee’s security interest in the
Collateral.
|
|
6.
|
The
Registration Statement covering the Bonds has become effective under the
Securities Act; and, to our knowledge, no stop order suspending the
effectiveness of the Registration Statement has been issued under the
Securities Act and no proceedings for that purpose have been initiated or
are pending or threatened by the
SEC.
|
|
7.
|
Neither
the Issuer nor ETI is now and, assuming that the Issuer uses the net
proceeds of the sale of the Bonds for the purpose of acquiring Transition
Property in accordance with the terms of the Sale Agreement following the
sale of the Bonds to the Underwriters pursuant to the Underwriting
Agreement, neither the Issuer nor ETI will be required to be registered
under the Investment Company Act of 1940, as
amended.
|
|
8.
|
No
authorization, approval or consent of any federal governmental body or
bodies having jurisdiction in the premises is required for the valid
issuance, authentication and delivery of the Bonds and for the valid
execution and delivery by the Issuer of each of the Basic Documents except
for such authorizations, approvals or consents of federal governmental
bodies that have been obtained.
|
|
9.
|
No
consent, approval, authorization or other order of, or filing or
registration with, any New York State or federal governmental regulatory
body under any Applicable Law, other than those already obtained or
made, is required for the consummation by ETI and the Issuer of
the transactions contemplated by the Basic Documents and the Underwriting
Agreement or in connection with the execution, delivery and performance by
ETI or the Issuer of the Basic Documents to which it is a party and the
Underwriting Agreement.
|
|
10.
|
The
issue and sale of the Bonds by the Issuer, the execution and delivery by
the Issuer of each of the Basic Documents and the Underwriting Agreement
and the performance by the Issuer of its obligations under each of the
foregoing, each in accordance with its terms, will not (A) result in the
breach or violation of, or constitute a default under, to our knowledge,
any indenture, mortgage, deed of trust, or other agreement or instrument
to which the Issuer is a party to or by which it is bound or to which its
property is subject, or (B) result in a violation of any provision of any
Applicable Law or, to our knowledge, any judgment, decree or order of any
New York State or federal governmental body or agency or court
specifically directed to the Issuer, in any manner which, in the case of
this clause (B), would have a material adverse effect on the business of
the Issuer or the transactions contemplated by the Underwriting Agreement
and the Basic Documents.
|
|
11.
|
The
execution and delivery by ETI of, and performance by ETI of its
obligations under, each of the Basic Documents to which ETI is a party and
the Underwriting Agreement, each in accordance with its terms, will not
result in a violation of any provision of any Applicable Law or, to our
knowledge, any judgment, decree or order of any New York State or federal
governmental body or agency or court specifically directed to ETI, in any
manner that would have a material adverse effect on the business of ETI or
the transactions contemplated by the Underwriting Agreement and the Basic
Documents.
|
Annex
I(g)
Opinion of Sidley Austin
LLP, regarding various issues requested by the Representatives, including
negative assurances and other corporate matters
[Form of
Opinion to be agreed to by the Representatives and Counsel for the
Underwriters]
Annex
I(h)
Opinion of Sidley Austin LLP
regarding bankruptcy issues
If ETI
were to become a Debtor (regardless of whether the Issuer is also a Debtor) a
United States Bankruptcy Court would hold that the sale of the Transition
Property in the manner contemplated under the Sale Agreement constitutes a true
sale or other absolute transfer of such Transition Property rather than a
borrowing by ETI secured by the Transition Property, and therefore would also
hold that (a) the Transition Property (including the revenues and collections
thereon) is not property of the estate of ETI under Section 541(a)(1) or
541(a)(6) of the Bankruptcy Code and (b) Section 362(a) of the Bankruptcy Code
would not apply to prevent ETI in its capacity as Servicer from paying TC
Collections to the Issuer and its assigns.
Annex
I(i)
Opinion of Xxxxx Xxxxxx
Xxxxxxx, a Professional Corporation regarding certain Texas constitutional
matters relating to the Transition Property
It is our
opinion that a reviewing court, in a properly prepared and presented
case:
|
|
1.
|
would
uphold the validity of the State
Pledge;
|
|
|
2.
|
would
conclude that the Texas Constitution does not provide for the amendment or
repeal of Subchapter I of Chapter 36 and Subchapter G of Chapter 39 of
PURA by citizen initiative or
referendum;
|
|
|
3.
|
(a)
would conclude that the Bondholders (or the Indenture Trustee acting on
their behalf) could successfully challenge under the Texas Contract Clause
the constitutionality of State Impairment Legislation (other than a law
passed by the Legislature in the valid exercise of the State's police
power necessary to safeguard the public safety and
welfare);
|
|
|
(b)
would conclude that PUCT Impairment Action would be treated in the same
manner as State Impairment Legislation under the Texas Takings Clause;
and
|
|
|
(c)
should conclude that Bondholders are entitled to permanent injunctive
relief under state law to prevent implementation of State Impairment
Legislation or PUCT Impairment Action hereafter passed by the Legislature
or otherwise taken in violation of the Texas Contract Clause; and although
sound and substantial arguments support the granting of preliminary
injunctive relief, the decision to do so will be in the discretion of the
court requested to take such action, which will be exercised on the basis
of the considerations discussed in subpart (5) of Part C below;
and
|
|
|
4.
|
would
find a compensable taking under the Texas Takings Clause if (a) it
concludes that the Transition Property is property of a type protected by
the Texas Takings Clause and (b) the State takes action that, without
paying just compensation to the Bondholders, (i) permanently
appropriates the Transition Property or denies all economically productive
use of the Transition Property; (ii) destroys the Transition Property,
other than in response to emergency conditions; or (iii) substantially
reduces, alters or impairs the value of the Transition Property, if the
action unduly interferes with the Bondholders' reasonable investment
backed expectations; provided that, the court's conclusion that a
compensable taking had occurred would depend upon its resolution of the
issues discussed in Part D below.
|
We are of
the opinion that a reviewing Texas state court would find a compensable taking
under the Texas Takings Clause if (a) it concludes that the Transition Property
is property of a type protected by the Texas Takings Clause and (b) the State
takes action that, without paying just compensation to the Bondholders, (i)
permanently appropriates the Transition Property or denies all economically
productive use of the Transition Property; or (ii) destroys the Transition
Property, other than in response to emergency conditions; or (iii) substantially
reduces, alters or impairs the value of the Transition Property, if the action
unduly interferes with the Bondholders’ reasonable investment backed
expectations.
Annex
I(j)
Opinion of Sidley Austin LLP
regarding certain federal tax matters
We are of
the opinion that for federal income tax purposes: (i) ETI will not be treated as
recognizing gross income upon the issuance of the Transition Bonds, (ii) the
Issuer will not be subject to federal income tax as an entity separate from ETI
(the Issuer’s sole member) and (iii) the Transition Bonds will constitute the
indebtedness of ETI.
Annex
I(k)(1)
Opinion of Xxxxx Xxxxxx
& Xxxxxxx, a Professional Corporation, regarding ETI’s Mortgage, Deed of
Trust and Security Agreement
We are of
the opinion that: (1) the Transition Property is not subject to either of the
Texas Mortgage Lien or the UCC Lien; (2) ETI is able to sell the Transition
Property to the Issuer under the Sale Agreement free and clear of the Texas
Mortgage Lien and UCC Lien; and (3) when acquired by the Issuer pursuant to the
Sale Agreement, the Transition Property will be of a kind in which a security
interest and lien may be created, free and clear of the Texas Mortgage Lien and
UCC Lien, in favor of the Bond Trustee.
Annex
I(k)(2)
Opinion of Sidley Austin LLP
regarding ETI’s Indenture, Deed of Trust and Security
Agreement
We are of
the opinion that, under New York law, (1) Transition Property is not subject to
the lien of the Mortgage, and (2) ETI may sell the Transition Property to the
Issuer without any limitations, restrictions or requirements imposed by the
Mortgage.
It is
further our opinion that ETI’s sale of the Transition Property to the Issuer
pursuant to the Sale Agreement will not conflict with, or result in a default
under, the Credit Agreement or the Assumption Agreement.
Annex
I(l)
Opinion of Xxxxx Xxxxxx
& Xxxxxxx, a Professional Corporation, with respect to the characterization
of the transfer of the Transition Property by ETI to the Issuer as a “true sale”
for Texas law purposes
We are of
the opinion that, under the governing law of the State of Texas, ETI’s transfer
of the Transition Property to the Issuer will upon such transfer be treated as a
true sale and not as a secured transaction or other financing arrangement and
upon such transfer title, legal and equitable, in the Transition Property will
pass to the Issuer as provided in Section 39.308 of PURA.
Annex
I(m)
Opinion of Sidley Austin LLP
regarding certain federal constitutional matters relating to the Transition
Property
Contracts
Clause
It is our
opinion that a reviewing court of competent jurisdiction, in a
properly prepared and presented case:
|
|
(i)
|
would
conclude that the State Pledge constitutes a contractual relationship
between the Bondholders and the
State;
|
|
|
(ii)
|
would
conclude that, absent a demonstration by the State that an Impairment is
necessary to further a significant and legitimate public purpose, the
Bondholders (or the Indenture Trustee acting on their behalf) could
successfully challenge under the Federal Contract Clause the
constitutionality of any Legislative Action determined by such court to
limit, alter, impair or reduce the value of the Transition Property or the
Charges so as to cause an Impairment prior to the time that the Bonds are
fully paid and discharged;
|
|
|
(iii)
|
should
conclude that permanent injunctive relief is available under federal law
to prevent implementation of Legislative Action hereafter taken and
determined by such court to limit, alter, impair or reduce the value of
the Transition Property or the Charges so as to cause an Impairment in
violation of the Federal Contract Clause; and although sound and
substantial arguments support the granting of preliminary injunctive
relief, the decision to do so will be in the discretion of the court
requested to take such action, which will be exercised on the basis of the
considerations discussed in subpart B of Part II below;
and
|
|
|
(iv)
|
would
conclude that the State would be required to pay just compensation to
Bondholders if the State’s repeal or amendment of the Securitization Law
or taking of any other action in contravention of the State Pledge (a)
constituted a permanent appropriation of a substantial property interest
of the Bondholders in the Transition Property or denied all economically
productive use of the Transition Property; (b) destroyed the Transition
Property other than in response to emergency conditions; or (c)
substantially reduced, altered or impaired the value of the Transition
Property so as to unduly interfere with the reasonable expectations of the
Bondholders arising from their investments in the
Bonds.
|
Takings
Clause
It is our
opinion, subject to all of the qualifications, limitations and assumptions set
forth in this letter, that, under the Federal Takings Clause, a reviewing court
would hold that the State would be required to pay just compensation to
Bondholders if the State’s repeal or amendment of the Securitization Law or
taking of any other action by the State in contravention of the State Pledge (a)
constituted a permanent appropriation of a substantial property interest of the
Bondholders in the Transition Property or denied all economically productive use
of the Transition Property; (b) destroyed the Transition Property other than in
response to emergency conditions; or (c) substantially reduced, altered or
impaired the value of the Transition Property so as to unduly interfere with the
reasonable expectations of the Bondholders arising from their investments in the
Bonds. As noted earlier, in determining what is an undue
interference, a court would consider the nature of the governmental action and
weigh the public purpose served thereby against the degree to which it
interferes with the legitimate property interests and distinct investment-backed
expectations of the Bondholders. There can be no assurance, however,
that any such award of just compensation would be sufficient to pay the full
amount of principal of and interest on the Bonds.
Annex
I(n)
Opinion of Stradley, Ronon,
Xxxxxxx & Xxxxx LLP regarding certain matters relating to the Indenture
Trustee.
|
1.
|
The
Trustee is, as of the date of the Good Standing Certificate, validly
existing as a banking corporation in good standing under the banking law
of the State of New York.
|
|
2.
|
The
Indenture has been duly authorized, executed and delivered by the
Trustee.
|
|
3.
|
The
Indenture constitutes a legal, valid and binding instrument enforceable
against the Trustee in accordance with its
terms.
|
|
4.
|
The
Transition Bonds have been duly authenticated and delivered by the
Trustee.
|
Annex
I(o)
Opinion of Xxxxx, Xxxxxx
& Xxxxxxx, a Professional Corporation, regarding certain Texas regulatory
issues
|
1.
|
The
Financing Order has been duly authorized and issued by the PUCT in
accordance with all applicable Texas laws, rules and regulations
(including Subchapter I of Chapter 36 of the Texas Public Utility
Regulatory Act (“PURA”), which is also known as, and hereafter referred to
as the “Financing Act”); the Financing Order and process by which it was
issued comply with all applicable Texas laws, rules and regulations,
including the Financing Act; and the Financing Order is in full force and
effect, is not presently being appealed, and is final and
non-appealable.
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2.
|
The
Financing Act was duly enacted by the Legislature of the State of Texas in
accordance with all applicable Texas laws and is in full force and
effect. The validity of the Financing Act (insofar as it
relates to the transactions contemplated in the Documents) is not the
subject of any pending appeal or litigation. In June 2001, the
Supreme Court of Texas in City of Corpus Xxxxxxx x.
Public Utility Commission of Texas, 51 S.W.3d 231 (Tex. 2001),
unanimously upheld the constitutionality of the provisions of PURA Chapter
39, Subchapter G, as incorporated by the Financing Act, which are relevant
to the transactions contemplated by the Documents under the Texas
Constitution. There has been no challenge to the
constitutionality of the Financing Act under the United States
Constitution.
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3.
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The
Financing Order authorizes (i) the issuance of the Transition Bonds, (ii)
the transfer of the Transition Property (“Transition Property” as defined
in Appendix A to the Indenture) to the Issuer, (iii) the imposition of the
Transition Charges (“Transition Charges” as defined in Appendix A to the
Indenture), and (iv) the periodic adjustments of the Transition Charges,
and the sections of the Financing Order authorizing the foregoing are
irrevocable.
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4.
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The
Company has contract rights under the Financing Order, including the right
to impose, collect, and receive Transition Charges authorized in the
Financing Order, that are transferable to Issuer by means of an agreement
and become Transition Property when they are first transferred to Issuer
in connection with the issuance of the Transition
Bonds.
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5.
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Under
the Financing Act, neither the State, the PUCT nor any other Texas
governmental entity has the authority, directly or indirectly, legally or
equitably, to take or permit any action that impairs the value of the
Transition Property, or, except for periodic adjustments required to be
made pursuant to the true-up mechanism required by Section 39.307 of PURA,
as incorporated in the Financing Act, and specified in the Financing
Order, reduce, alter, or impair the Transition Charges until the
principal, interest and premium and any other charges incurred and
contracts to be performed in connection with the Transition Bonds have
been paid and performed in full.
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6.
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The
Original Transition Property (“Original Transition Property,” as defined
in the Sale Agreement) conveyed to the Issuer in the Sale Agreement and
the Xxxx of Sale, including the irrevocable right to impose, collect and
receive Transition Charges and the revenues and collections from the
Transition Charges, is “transition property” within the meaning of
Sections 39.302(8) and 39.304 of PURA Chapter 39, Subchapter G, as
incorporated in the Financing Act.
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7.
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Under
the Financing Act, the provisions of that statute are severable, such that
if any provision of the Financing Act or its application to any person or
circumstance is held invalid by any court of competent jurisdiction, the
invalidity will not affect any other provision or the applications of the
statute which can be given effect without the invalid provision or
application.
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8.
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The
descriptions of provisions of the Financing Act, including the
incorporated provisions of PURA Chapter 39, Subchapter G, contained in the
Prospectus dated October 23, 2009 and the related Prospectus Supplement
dated October 29, 2009 (such Prospectus and related Prospectus Supplement
being hereinafter referred to collectively as the “Prospectus”) accurately
describe the scope and application of the Financing Act to the
transactions contemplated in the
Documents.
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Annex
I(p)
Opinion of Xxxxx, Xxxxxx
& Xxxxxxx, a Professional Corporation, with respect to
the treatment of retail
electric provider payments as Transition Charges
It is our
opinion that the overall structure and language of PURA Chapter 36, Subchapter I
and PURA Chapter 39, Subchapter G, the terms of the Financing Order, the terms
of Schedule SRC and the language used by the Texas Supreme Court in City of Corpus Christi would
lead a court to determine that, if retail choice is implemented in ETI’s service
area, the portion of the amounts collected from retail customers by retail
electric providers that is attributable to Transition Charges billed to the
retail electric providers pursuant to Schedule SRC are “[t]ransition charges”
within the meaning of PURA Chapter 36, Subchapter I and PURA Chapter 39,
Subchapter G and that the amounts paid by the retail electric providers to the
Servicer pursuant to Schedule SRC are also “[t]ransition charges” within the
meaning of PURA Chapter 36, Subchapter I and PURA Chapter 39, Subchapter
G.
Annex
I(q)
Opinion of Xxxxx, Xxxxxx
& Xxxxxxx, a Professional Corporation, regarding various issues, including
enforceability and certain Texas perfection and priority
issues
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1.
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Each
of the Texas Transaction Documents constitutes the legal, valid, and
binding obligation of each Transaction Party that is a party thereto,
enforceable against such Transaction Party in accordance with its
terms.
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2.
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In
accordance with the Securitization Law, (A) the rights and interests of
ETI under the Financing Order, including the right to impose, collect, and
receive the transition charges authorized in the Financing Order, are
assignable and shall become “transition property” within the meaning of
the Securitization Law when they are first transferred to the Issuer in
connection with the issuance of Bonds; (B) upon the transfer by ETI of the
Transition Property to the Issuer, the Issuer shall have all of the rights
of ETI with respect to such Transition Property, including, without
limitation, the right to exercise any and all rights and remedies with
respect thereto, including such rights to impose, collect, and receive any
amounts payable by any Customer in respect of the Transition Property; (C)
the Financing Order approves the issuance by the Issuer of the Bonds in an
aggregate principal amount that equals or exceeds the initial Outstanding
Amount of the Bonds; and (D) the Bonds are “transition bonds” within the
meaning of Section 39.302(6) and Section 36.403(e) of the Securitization
Law.
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3.
|
No
Governmental Approvals (defined below) are required for the valid
issuance, authentication, and delivery of the Bonds or the performance by
any Transaction Party of its respective obligations under each Transaction
Document to which such Transaction Party is a party, except for (i) the
Financing Order and the Governmental Approvals expressly contemplated
therein, each of which has been obtained on or prior to the date hereof,
and (ii) the filings contemplated by paragraphs 6 and 8
below.
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4.
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A
Texas state court, or a federal court applying Texas conflict-of-law
rules, would give effect to the choice of the laws of New York (to the
extent so stated therein) as the governing law in the New York Transaction
Documents.
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5.
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Under
the terms of Section 39.309(c) of the Securitization Law, the transfer of
the Transition Property by ETI to the Issuer is perfected under Section
39.309(c) of the Securitization Law against all third parties, including
subsequent judicial or other lien
creditors.
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6.
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A
valid and enforceable lien and security interest in the Transition
Property has been created and has attached in favor of the Indenture
Trustee, on behalf of the Secured Parties, by the Financing Order and the
execution and delivery of a security agreement, being the Indenture (as
supplemented by the Series Supplement) by the Issuer in connection with
the issuance and funding of the Bonds. Such lien has been
perfected in accordance with Section 39.309(b) of the Securitization Law
and in accordance with the Financing Order. Such lien has
priority in the order of filing and takes precedence over any subsequent
judicial or other lien creditor. Based on the Search
Certificates and our review on the date hereof of an electronic search of
the applicable filing records maintained by the Texas Secretary of State,
such lien is first priority.
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7.
|
The
Search Certificates identify no secured party who has filed with the Texas
Secretary of State naming ETI or the Issuer as debtor and describing any
of the Transition Bond Collateral for the
Bonds.
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8.
|
The
Transition Property Notices are in appropriate form for filing pursuant to
Section 39.309 of the Securitization Law and pursuant to the TPN Rules
with respect to the Transition
Property.
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9.
|
All
filings, including filings with the PUCT and the Texas Secretary of State,
that are necessary under the Securitization Law to fully preserve, protect
and perfect the Liens of the Indenture Trustee in the Transition Property
have been authorized, executed and
filed.
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Annex
I(r)
Opinion of Sidley Austin
LLP, regarding certain bankruptcy and creditors’ rights issues relating to the
Issuer
We are of
the opinion that in a properly presented and argued case, as a legal matter, and
based upon existing law, a bankruptcy court would follow applicable state law
(in this case Delaware law) and the terms of the LLC Agreement and (A) hold that
(i) the bankruptcy or dissolution of ETI would not, by itself, cause the Issuer
to be dissolved or its affairs to be wound up, (ii) a judgment creditor of ETI
may not satisfy its claims against ETI by asserting those claims directly
against the assets of the Issuer, and (iii) the Issuer is a separate legal
entity and its existence as a separate legal entity will continue until the
cancellation of its Certificate of Formation and (B) dismiss a voluntary
petition on behalf of the Issuer upon a showing that it was filed without proper
authority under Delaware state law.
Annex
I(s)
Opinion of Xxxxxxxx, Xxxxxx
& Finger, P.A., regarding certain matters of Delaware
law
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1
|
The
Company has been duly formed and is validly existing in good standing as a
limited liability company under the laws of the State of
Delaware.
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2.
|
The
LLC Agreement constitutes a legal, valid and binding agreement of the
Member, and is enforceable against the Member, in its capacity as member
of the Company, in accordance with its
terms.
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3.
|
Under
the Delaware Limited Liability Company Act (6 Del. C. §
18-101, et seq.)(the "LLC
Act") and the LLC Agreement, the Company has the limited liability company
power and authority to execute and deliver the Transaction Documents and
the Transition Bonds and to perform its obligations
thereunder. Under the LLC Act and the LLC Agreement, the
execution and delivery by the Company of the Transaction Documents and the
Transition Bonds, and the performance by the Company of its obligations
thereunder, have been duly authorized by all necessary limited liability
company action on the part of the Company. Under the LLC Act
and the LLC Agreement, upon execution and delivery on behalf of the
Company by the Member, any Manager or any officer of the Company, acting
singly or collectively, of the Transaction Documents and the Transition
Bonds, the Transaction Documents and the Transition Bonds will be duly
executed and delivered by the
Company.
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4.
|
Neither
the execution or delivery by the Company or the Member of the Basic
Documents to which it is a party or the Transition Bonds nor the
compliance by the Company or the Member, as the case may be, with the
terms thereof, nor the consummation by the Company or the Member, as the
case may be, of any of the transactions contemplated thereby requires the
consent or approval of, the giving of notice to, the registration with, or
the taking of any other action with respect to any Delaware court, or
Delaware governmental or Delaware regulatory authority or Delaware agency
under the laws of the State of Delaware, except for the filing of the
Certificate with the Secretary of State, which Certificate has been duly
filed.
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5.
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Neither
the execution and delivery by the Company or the Member of the Basic
Documents to which it is a party or the Transition Bonds nor the
compliance by the Company or the Member, as the case may be, with the
terms thereof, nor the consummation by the Company or the Member, as the
case may be, of any of the transactions contemplated thereby conflicts
with or constitutes a breach of or default under the Certificate or the
LLC Agreement, or violates any law, governmental rule or regulation of the
State of Delaware.
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6.
|
Based
solely on an inquiry on November ___, 2009, limited to, and solely to the
extent reflected on the results of computer searches of, court dockets for
active cases of the Court of Chancery of the State of Delaware in and for
New Castle County, Delaware, of the Superior Court of the State of
Delaware in and for New Castle County, Delaware, and of the United States
District Court sitting in the State of Delaware, we are not aware of any
legal or governmental proceeding pending against the
Company.
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|
7.
|
If
properly presented to a Delaware court, a Delaware court applying Delaware
law would conclude that (i) in order for any Person to file a voluntary
bankruptcy petition on behalf of the Company, the affirmative vote of the
Member and the affirmative vote of all the Managers, including all of the
Independent Managers, as provided in Section 1.08(b) of the LLC Agreement,
is required and (ii) such provision, contained in Section 1.08(b) of the
LLC Agreement that requires the affirmative vote of the Member and the
affirmative vote of all the Managers, including all of the Independent
Managers, in order for a Person to file a voluntary bankruptcy petition on
behalf of the Company, constitutes a legal, valid and binding agreement of
the Member, and is enforceable against the Member, in accordance with its
terms.
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8.
|
Under
the LLC Act and the LLC Agreement, the Bankruptcy or dissolution of the
Member will not, by itself, cause the Company to be dissolved or its
affairs to be wound up.
|
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9.
|
While
under the LLC Act, on application to a court of competent jurisdiction, a
judgment creditor of the Member may be able to charge the Member's share
of any profits and losses of the Company and the Member's right to receive
distributions of the Company's assets (the "Member's Interest"), to the
extent so charged, the judgment creditor has only the right to receive any
distribution or distributions to which the Member would otherwise have
been entitled in respect of such Member's Interest. Under the
LLC Act, no creditor of the Member shall have any right to obtain
possession of, or otherwise exercise legal or equitable remedies with
respect to, the property of the Company. Thus, under the LLC
Act, a judgment creditor of the Member may not satisfy its claims against
the Member by asserting a claim against the assets of the
Company.
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10.
|
Under
the LLC Act (i) the Company is a separate legal entity, and (ii) the
existence of the Company as a separate legal entity shall continue until
the cancellation of the
Certificate.
|
Annex
I(t)
Opinion of Xxxxx, Xxxxxx
& Xxxxxxx, a Professional Corporation, regarding the possibility and merits
of an appeal or attack of the Financing Act
A court’s review and determination of
whether the securitization financing authorized by PURA Chapter 36, Subchapter I
and PURA Chapter 39, Subchapter G violates the United States Constitution would
ultimately depend on a court’s essentially ad hoc weighting of the various legal
and policy standards placed at issue by the various constitutional theories
discussed above. Nevertheless, in our opinion, PURA Chapter 36,
Subchapter I and PURA Chapter 39, Subchapter G would be able to withstand a
challenge based on an alleged violation of the United States
Constitution.
Annex
I(u)
Opinion of Xxxxx, Xxxxxx
& Xxxxxxx, a Professional Corporation, as to certain Texas tax
matters
|
1.
|
A
business entity that is not otherwise engaged in business in Texas for
Texas franchise tax purposes will not become subject to Texas franchise
tax merely as a result of holding the Transition Bonds. In this
connection, we are not opining whether any activities related to holding
the Transition Bonds that are undertaken in Texas by a bondholder, or an
employee, agent, or independent contractor on behalf of a bondholder,
would cause the bondholder to become subject to Texas franchise
tax. Such related activities include, but are not limited to,
making credit investigations of the Issuer, purchasing the Transition
Bonds or enforcing the Transition
Bonds.
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2.
|
The
Issuer will not be subject to income, franchise, gross receipts or any
similar tax imposed by the State of Texas with respect to the receipt and
ownership of the Transition Property (as defined in the Sale Agreement)
and the receipt of Transition Charges authorized under the Financing
Order. In this connection, we are not opining whether the
Issuer is exempt from such taxes in connection with the receipt of
earnings with respect to investing the Transition Charges and amounts held
in reserve accounts created pursuant to the
Indenture.
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Annex
I(v)
Opinion of Xxxxx, Xxxxxx
& Xxxxxxx, a Professional Corporation, as to the consequences of
the
abolishment of the PUCT or
the repeal of the Financing Act by operation of the Texas Sunset
Act
We are
not aware of any relevant judicial authority construing the provisions of PURA
or the Texas Sunset Act in circumstances analogous to those that potentially
could be involved in the event the abolishment of the PUCT or repeal of PURA by
operation of the Texas Sunset Act affected the bondholders’
rights. Subject to the qualifications, limitations and assumptions
set forth herein, it is our opinion that a reviewing court, in a properly
prepared and presented case, would conclude that Texas statutory law provides
remedies to protect the bondholders in the event that a portion of PURA is
repealed or the PUCT is abolished under the Texas Sunset Act.
Annex
I(w)
Opinion of Xxxxx, Xxxxxx
& Xxxxxxx, a Professional Corporation, with respect to additional corporate
matters
|
1.
|
The
Issuer is duly qualified to do business and is in good standing under the
laws of the State of Texas.
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2.
|
The
execution and delivery by ETI of, and performance by ETI of its
obligations under, each of the Subject Documents to which ETI is a party,
each in accordance with its terms, will not result in the breach or
violation of, or constitute a default under: (i) ETI’s Certificate of
Formation and ETI’s By-laws; (ii) the Mortgage, Deed of Trust and Security
Agreement, filed with the Texas Secretary of State on December 31, 2007
(filing no. 07-0043737546), dated effective as of December 31, 2007, by
ETI in favor of Entergy Gulf States Louisiana, Inc. (now Entergy Gulf
States Louisiana, L.L.C.), as amended by the First Amendment to Mortgage,
Deed of Trust and Security Agreement, filed with the Texas Secretary of
State on March 28, 2008 (filing no. 08-00116583), dated effective as of
March 20, 2008, by ETI in favor of Entergy Gulf States Louisiana, L.L.C.;
(iii) to the extent, if any, that the laws of the State of Texas would
control, the Mortgage and Security Agreement, filed in the State of
Louisiana with the Clerk of Court and Recorder of Pointe Coupee Parish, on
January 3, 2008 (Mortgage Book 412, Page 084), dated as of December 31,
2007, by ETI in favor of Entergy Gulf States Louisiana, Inc., as amended
by the Act of Correction to Mortgage and Security Agreement, filed in the
State of Louisiana with the Clerk of Court and Recorder of Pointe Coupee
Parish, on March 26, 2008 (Mortgage Book 415, Page 157), dated as of March
20, 2008, by ETI in favor of Entergy Gulf States Louisiana, L.L.C.; (iv)
to the extent, if any, that the laws of the State of Texas would control,
the Mortgage and Security Agreement, filed in the State of Louisiana with
the Clerk of Court and Recorder of Calcasieu Parish, on January 4, 2008
(Mortgage Book 3481, Page 599), dated as of December 31, 2007, by ETI in
favor of Entergy Gulf States Louisiana, Inc., as amended by the Act of
Correction to Mortgage and Security Agreement, filed in the State of
Louisiana with the Clerk of Court and Recorder of Calcasieu Parish, on
March 26, 2008 (Mortgage Book 3519, Page 673), dated as of March 20, 2008,
by ETI in favor of Entergy Gulf States Louisiana, L.L.C.; or (v) to our
knowledge, any law, order, rule or regulation of any court or governmental
agency or body of the State of Texas having jurisdiction over ETI or its
property, or, to our knowledge, any judgment, decree or order of any such
court or governmental agency or body of the State of Texas specifically
directed to ETI, in any manner that would have a material adverse effect
on the business of ETI or the transactions contemplated in the Subject
Documents.
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3.
|
The
execution, delivery and performance by ETI of each of the Subject
Documents to which ETI is a party and the consummation by ETI of the
transactions contemplated thereby have been duly authorized by all
necessary corporate action on the part of ETI, and each of the Subject
Documents to which ETI is a party has been duly executed and delivered by
ETI.
|
|
4.
|
The
issuance and sale of the Bonds by the Issuer, the execution and delivery
by the Issuer of each of the Subject Documents and the performance by the
Issuer of its obligations under each of the foregoing, each in accordance
with its terms, will not, to our knowledge, result in the breach or
violation of (i) any law, order, rule or regulation of any court or
governmental agency or body of the State of Texas having jurisdiction over
the Issuer or its property, or (ii) any judgment, decree or order of any
such court or governmental agency or body of the State of Texas
specifically directed to the Issuer, in any manner that would have a
material adverse effect on the business of the Issuer or the transactions
contemplated in the Subject
Documents.
|
|
5.
|
ETI
is a corporation, validly existing and in good standing under the laws of
the State of Texas. ETI is duly qualified to transact business
and is in good standing in each jurisdiction in which the conduct of its
business or its ownership or leasing of property requires such
qualification, except where the failure to be so qualified or be in good
standing would not have a material adverse effect on (i) the financial
condition, results of operations or business of ETI and its subsidiaries,
taken as a whole, or (ii) the ability of ETI to perform its obligations
under each of the Subject Documents to which it is a party (each of
clauses (i) and (ii), being a “Company Material
Adverse Effect”).
|
|
6.
|
ETI
is a public utility (as defined in the Public Utility Regulatory Act
(“PURA”)
of the State of Texas), duly authorized by its Certificate of Formation,
filed with the Secretary of State of the State of Texas on December 17,
2007 (with an effective date of December 31, 2007) to conduct the business
of generating and supplying gas, electric light and power, and steam to
the public. ETI is authorized under the laws of the State of
Texas to operate as an electric utility (as defined in PURA) in the areas
of the State of Texas in which it currently does so, except where the
failure to be so authorized would not have a Company Material Adverse
Effect.
|
|
7.
|
ETI
has valid and subsisting municipal franchises, licenses or permits
authorizing it to operate as an electric utility in all of the
municipalities listed in Exhibit A
attached hereto (which municipalities ETI has certified to us are all the
municipalities served by it from which ETI derives a material amount of
electric operating revenues) wherein such a franchise, license or permit
is required.
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8.
|
No
consent, approval, authorization or other order of, or filing or
registration with, any governmental regulatory body of the State of Texas
(other than those already obtained or made and other than those as may be
required under applicable state securities laws, as to which we do not
express an opinion) is required for the consummation by ETI and the Issuer
of the transactions contemplated by the Subject Documents or in connection
with the execution, delivery and performance by ETI and the Issuer of the
Subject Documents.
|
|
9.
|
To
our knowledge, based solely upon a certificate of a Senior Counsel of
Entergy Services, Inc., there are no legal or governmental proceedings
pending or threatened in the State of Texas involving or relating to the
Financing Order or the collection of the Transition Charges, in each case:
(i) asserting the invalidity of the applicable provisions of Chapter 36,
Subchapter I of the Texas Utilities Code, together with Chapter 39,
Subchapter G of the Texas Utilities Code (collectively, the “Securitization
Law”), the Financing Order, the Sale Agreement, the Bonds and the
Subject Documents; (ii) seeking to prevent the issuance of the Bonds or
the consummation of any of the transactions contemplated by the Sale
Agreement or by any of the other Subject Documents; (iii) seeking a
determination that could reasonably be expected to materially and
adversely affect the performance by the Issuer of its obligations under,
or the validity or enforceability of, the Securitization Law, the
Financing Order, the Bonds, the Sale Agreement or the other Subject
Documents; or (iv) seeking to adversely affect the federal income tax or
state income or franchise tax classification, if any, of the Bonds as
debt.
|
|
10.
|
Under
Section 9.102(71) of the Uniform Commercial Code as in effect in the State
of Texas (the “Texas UCC”), a
“registered organization” means an organization organized solely under the
law of a single state or the United States and as to which the state or
the United States must maintain a public record showing the organization
to have been organized. Under Section 9.307(e) of the Texas
UCC, a registered organization is located in its jurisdiction of
organization. We understand that the Issuer is a limited
liability company duly organized under the laws of the State of Delaware,
and, therefore, under Section 9.307 of the Texas UCC, the Issuer is a
registered organization located in the State of
Delaware.
|
Annex
I(x)
Opinion of Xxxx X. Abuso,
Esq., Senior Counsel—Corporate and Securities of Entergy
Services, Inc., with respect
to additional corporate matters
|
1.
|
ETI
(i) is duly organized and validly existing as a corporation in good
standing under the laws of the State of Texas, (ii) has due corporate
power and authority to conduct the business that it is presently
conducting as described in the Final Prospectus, to own and operate the
properties owned and operated by it in such business, and to execute,
deliver and perform its obligations under the Underwriting Agreement and
the other Basic Documents to which ETI is a party (collectively, the “ETI
Basic Documents”), and (iii) and is in good standing in each jurisdiction
in which the conduct of its business or its ownership or leasing of
property requires such qualification, except where the failure to be so
qualified or be in good standing would not have a material adverse effect
on (a) the financial condition, results of operations or business of ETI
and its subsidiaries, taken as a whole, or (b) the ability of ETI to
perform its obligations under each of the ETI Basic
Documents.
|
|
2.
|
The
execution, delivery and performance by ETI of each of the ETI Basic
Documents and the consummation by ETI of the transactions contemplated
thereby have been duly authorized by all necessary corporate action on the
part of ETI and each of the ETI Basic Documents has been duly executed and
delivered by ETI.
|
|
|
.
|
|
3.
|
To
my knowledge (having made due inquiry with respect thereto), there is no
pending or threatened action, suit or proceeding before any court or
governmental agency, authority or body or any arbitrator involving ETI or
any of its subsidiaries (including the Issuer), or relating to the Bonds,
the Financing Order or the collection of Transition Charges, of a
character required to be disclosed in the Registration Statement which is
not adequately disclosed in the Final Prospectus, and to my knowledge
(having made due inquiry with respect thereto), there is no franchise,
contract or other document, to or by which ETI or any of its subsidiaries
(including the Issuer) is a party or is bound, of a character required to
be described in the Registration Statement or the Final Prospectus, or to
be filed as an exhibit, which is not described or filed as
required.
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|
4.
|
Neither
the execution and delivery of any of the ETI Basic Documents, nor the
consummation of the transactions contemplated by the ETI Basic Documents
by ETI (A) violates or results in any breach of any of the terms or
provisions of, or constitutes (with or without notice or lapse of time) a
default under ETI’s Certificate of Formation, Bylaws or other
organizational documents of ETI, or violates or results in any breach of
any of the terms or provisions of, or constitutes (with or without notice
or lapse of time) a default under, any indenture, agreement or other
instrument known to me (having made due inquiry with respect thereto) to
which ETI is a party or by which ETI is bound, (B) results in the creation
or imposition of any lien upon any properties of ETI pursuant to the terms
of any such indenture, agreement or other instrument (other than as
contemplated by the Basic Documents and the Financing Act), or (C)
violates any provision of any law or regulation applicable to ETI or, to
my knowledge (having made due inquiry with respect thereto), any provision
of any order, writ, judgment or decree of any governmental instrumentality
applicable to ETI (except that various consents of, and filings with,
governmental authorities may be required to be obtained or made, as the
case may be, in connection or compliance with the provisions of the
securities or blue sky laws of any
jurisdiction).
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