EXHIBIT 1.1
FORM OF UNDERWRITING AGREEMENT
FORM OF UNDERWRITING AGREEMENT
PP&L TRANSITION BOND COMPANY LLC TRANSITION BONDS, SERIES 1999-[__]
PP&L TRANSITION BOND COMPANY LLC
New York, New York
[date]
To the Representative
named in Schedule I hereto
of the Underwriters named in
Schedule II hereto
Ladies and Gentlemen:
1. Introduction. PP&L Transition Bond Company LLC (the
"ISSUER") proposes to sell to the underwriters named in Schedule II hereto
(the "UNDERWRITERS"), for whom you (the "REPRESENTATIVE") are acting as
representative, the principal amount of the PP&L Transition Bond Company
LLC Transition Bonds, Series 1999-[__] (the "BONDS"), identified in
Schedule I hereto. If the firm or firms listed in Schedule II hereto
include only the firm or firms listed in Schedule I hereto, then the terms
"Underwriters" and "Representative", as used herein, shall each be deemed
to refer to such firm or firms.
The Bonds will be issued pursuant to a base indenture dated as of
[date], as supplemented by the Series 1999-[__] Supplemental Indenture
thereto (as so supplemented, the "INDENTURE"), between the Issuer and The
Bank of New York, as bond trustee (the "TRUSTEE"). The Bonds will be
secured primarily by Transferred Intangible Transition Property sold to the
Issuer by CEP Securities Co. LLC, a Delaware limited liability company (the
"SELLER"). The sole member and owner of the entire equity interest in the
Seller is CEP Reserves, Inc., a Delaware corporation ("RESERVES"). All the
issued and outstanding capital stock of Reserves is owned by CEP Group,
Inc., a Pennsylvania corporation ("GROUP"). All the issued and outstanding
capital stock of Group is owned by PP&L, Inc., an operating electric
utility incorporated under the laws of the Commonwealth of Pennsylvania
(the "COMPANY"). The Seller acquired the Intangible Transition Property
pursuant to an Intangible Transition Property Contribution Agreement among
the Company, Group, Reserves and the Seller dated May 13, 1999 (as amended
and supplemented from time to time, the "CONTRIBUTION AGREEMENT"). The
Seller's sale of Transferred Intangible Transition Property to the Issuer
will occur pursuant to a Sale Agreement between the Seller and the Issuer,
dated as of [date] (the "SALE AGREEMENT"). The Transferred Intangible
Transition Property will be serviced pursuant to a Servicing Agreement,
dated as of [date], between the Company, as servicer, and the Issuer, as
owner of the Transferred Intangible Transition Property (as amended and
supplemented from time to time, the "SERVICING AGREEMENT").
Capitalized terms used and not otherwise defined in this Underwriting
Agreement shall have the meanings given to them in the Indenture.
2. Representations and Warranties. I. Each of the Company and
the Issuer represents and warrants to, and agrees with, each Underwriter as
set forth below in this Section 2.I. Certain terms used in this
Underwriting Agreement are defined in Section 2.I(c) below.
(a) If the offering of the Bonds is a Delayed Offering (as
specified in Schedule I hereto), paragraph (i) below is applicable
and, if the offering of the Bonds is a Non-Delayed Offering (as so
specified), paragraph (ii) below is applicable.
(i) The Issuer and the Bonds meet the requirements for the
use of Form S-3 under the Securities Act of 1933 (the "ACT"), and
the Issuer has filed with the Securities and Exchange Commission
(the "SEC") a registration statement (the file number of which is
set forth in Schedule I hereto) on such Form, including a basic
prospectus, for registration under the Act of the offering and
sale of the Bonds. The Issuer may have filed one or more
amendments thereto, and may have used a Preliminary Final
Prospectus, each of which has previously been furnished to you.
Such registration statement, as so amended, has become effective.
The offering of the Bonds is a Delayed Offering and, although the
Basic Prospectus may not include all the information with respect
to the Bonds and the offering thereof required by the Act and the
rules thereunder to be included in the Final Prospectus, the
Basic Prospectus includes all such information required by the
Act and the rules thereunder to be included therein as of the
Effective Date. The Issuer will next file with the SEC pursuant
to Rules 415 and 424(b)(2) or (5) a final supplement to the form
of prospectus included in such registration statement relating to
the Bonds and the offering thereof. As filed, such final
prospectus supplement shall include all required information with
respect to the Bonds and the offering thereof and, except to the
extent the Representative shall agree in writing to a
modification, shall be in all substantive respects in the form
furnished to you prior to the Execution Time or, to the extent
not completed at the Execution Time, shall contain only such
specific additional information and other changes (beyond that
contained in the Basic Prospectus and any Preliminary Final
Prospectus) as the Issuer has advised you, prior to the Execution
Time, will be included or made therein.
(ii) The Issuer and the Bonds meet the requirements for the
use of Form S-3 under the Act and the Issuer has filed with the
SEC a registration statement (the file number of which is set
forth in Schedule I hereto) on such Form, including a basic
prospectus, for registration under the Act of the offering and
sale of the Bonds. The Issuer may have filed one or more
amendments thereto, including a Preliminary Final Prospectus,
each of which has previously been furnished to you. The Issuer
will next file with the SEC either (x) a final prospectus
supplement relating to the Bonds in accordance with Rules 430A
and 424(b)(1) or (4), or (y) prior to the effectiveness of such
registration statement, an amendment to such registration
statement, including the form of final prospectus supplement. In
the case of clause (x), the Issuer has included in such
registration statement, as amended at the Effective Date, all
information (other than Rule 430A Information) required by the
Act and the rules thereunder to be included in the Final
Prospectus with respect to the Bonds and the offering thereof.
As filed, such final prospectus supplement or such amendment and
form of final prospectus supplement shall contain all Rule 430A
Information, together with all other such required information,
with respect to the Bonds and the offering thereof and, except to
the extent the Representative shall agree in writing to a
modification, shall be in all substantive respects in the form
furnished to you prior to the Execution Time or, to the extent
not completed at the Execution Time, shall contain only such
specific additional information and other changes (beyond that
contained in the Basic Prospectus and any Preliminary Final
Prospectus) as the Issuer has advised you, prior to the Execution
Time, will be included or made therein.
(b) On the Effective Date, the Registration Statement did or
will, and when the Final Prospectus is first filed (if required) in
accordance with Rule 424(b) and on the Closing Date, the Final
Prospectus (and any supplement thereto) will, comply in all material
respects with the applicable requirements of the Act, the Securities
Exchange Act of 1934 (the "EXCHANGE ACT") and the Trust Indenture Act
of 1939 (the "TRUST INDENTURE ACT") and the respective rules
thereunder; on the Effective Date, the Registration Statement did not
or will not contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary in
order to make the statements therein not misleading; on the Effective
Date and on the Closing Date the Indenture did or will comply in all
material respects with the requirements of the Trust Indenture Act and
the rules thereunder; and, on the Effective Date, the Final
Prospectus, if not filed pursuant to Rule 424(b), did not or will not,
and on the date of any filing pursuant to Rule 424(b) and on the
Closing Date, the Final Prospectus (together with any supplement
thereto) will not, include any untrue statement of a material fact or
omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading; provided, however, that neither the Issuer,
the Seller nor the Company makes any representations or warranties as
to (i) that part of the Registration Statement that shall constitute
the Statement of Eligibility and Qualification (Forms T-1) under the
Trust Indenture Act of the Trustee or (ii) the information contained
in or omitted from the Registration Statement or the Final Prospectus
(or any supplement thereto) in reliance upon and in conformity with
information furnished in writing to the Issuer by or on behalf of any
Underwriter through the Representative specifically for inclusion in
the Registration Statement or the Final Prospectus (or any supplement
thereto).
(c) The terms that follow, when used in this Underwriting
Agreement, shall have the meanings indicated. The term the "EFFECTIVE
DATE" shall mean each date that the Registration Statement and any
post-effective amendment or amendments thereto became or become
effective and each date after the date hereof on which a document
incorporated by reference in the Registration Statement is filed.
"EXECUTION TIME" shall mean the date and time that this Underwriting
Agreement is executed and delivered by the parties hereto. "BASIC
PROSPECTUS" shall mean the prospectus referred to in paragraph (a)
above contained in the Registration Statement at the Effective Date
including, in the case of a Non-Delayed Offering, any Preliminary
Final Prospectus. "PRELIMINARY FINAL PROSPECTUS" shall mean any
preliminary prospectus supplement to the Basic Prospectus that
describes the Bonds and the offering thereof and is used prior to
filing of the Final Prospectus. "FINAL PROSPECTUS" shall mean the
prospectus supplement relating to the Bonds that is first filed
pursuant to Rule 424(b) after the Execution Time, together with the
Basic Prospectus or, if, in the case of a Non-Delayed Offering, no
filing pursuant to Rule 424(b) is required, shall mean the form of
final prospectus relating to the Bonds, including the Basic
Prospectus, included in the Registration Statement at the Effective
Date. "REGISTRATION STATEMENT" shall mean the registration statement
referred to in paragraph (a) above, including incorporated documents,
exhibits and financial statements, as amended at the Execution Time
(or, if not effective at the Execution Time, in the form in which it
shall become effective) and, in the event any post-effective amendment
thereto becomes effective prior to the Closing Date (as hereinafter
defined), shall also mean such registration statement as so amended.
Such term shall include any Rule 430A Information deemed to be
included therein at the Effective Date as provided by Rule 430A.
"Rule 415", "Rule 424", "Rule 430A" and "Regulation S-K" refer to such
rules or regulation under the Act. "Rule 430A Information" means
information with respect to the Bonds and the offering thereof
permitted to be omitted from the Registration Statement when it
becomes effective pursuant to Rule 430A. Any reference herein to the
Registration Statement, the Basic Prospectus, any Preliminary Final
Prospectus or the Final Prospectus shall be deemed to refer to and
include the documents incorporated by reference therein pursuant to
Item 12 of Form S-3 that were filed under the Exchange Act on or
before the Effective Date of the Registration Statement or the issue
date of the Basic Prospectus, any Preliminary Final Prospectus or the
Final Prospectus, as the case may be; and any reference herein to the
terms "amend", "amendment" or "supplement" with respect to the
Registration Statement, the Basic Prospectus, any Preliminary Final
Prospectus or the Final Prospectus shall be deemed to refer to and
include the filing of any document under the Exchange Act after the
Effective Date of the Registration Statement or the issue date of the
Basic Prospectus, any Preliminary Final Prospectus or the Final
Prospectus, as the case may be, deemed to be incorporated therein by
reference. A "NON-DELAYED OFFERING" shall mean an offering of
securities which is intended to commence promptly after the effective
date of a registration statement, with the result that, pursuant to
Rules 415 and 430A, all information (other than Rule 430A Information)
with respect to the securities so offered must be included in such
registration statement at the effective date thereof. A "DELAYED
OFFERING" shall mean an offering of securities pursuant to Rule 415
that does not commence promptly after the effective date of a
registration statement, with the result that only information required
pursuant to Rule 415 need be included in such registration statement
at the effective date thereof with respect to the securities so
offered. Whether the offering of the Bonds is a Non-Delayed Offering
or a Delayed Offering shall be set forth in Schedule I hereto.
(d) PricewaterhouseCoopers LLP are independent certified public
accountants with respect to the Company, the Issuer and the Seller as
required by the Act and the rules and regulations of the Commission
thereunder.
(e) The Issuer has been duly organized and is validly existing
in good standing as a limited liability company under the laws of the
State of Delaware, has the power and authority to conduct its business
as presently conducted and as described in the Final Prospectus and is
duly qualified as a foreign corporation to do business and in good
standing in every jurisdiction in which the nature of the business
conducted or property owned by it makes such qualification necessary
and in which the failure to so qualify would have a materially adverse
effect on the Issuer; and the Issuer has all requisite power and
authority to issue the Bonds and purchase the Transferred Intangible
Transition Property as described in the Final Prospectus.
(f) The Company is a validly existing and subsisting corporation
under the laws of the Commonwealth of Pennsylvania; each of the
Company's subsidiaries is a validly existing corporation under the
laws of its jurisdiction of incorporation; the Company has all
requisite power and authority to own and occupy its properties and
carry on its business as presently conducted and as described in the
Final Prospectus and is duly qualified as a foreign corporation to do
business and in good standing in every jurisdiction in which the
nature of the business conducted or property owned by it makes such
qualification necessary and in which the failure to so qualify would
have a materially adverse effect on the Company.
(g) Each of the Basic Documents to which the Company or the
Issuer is a party has been duly authorized by the Company or the
Issuer, as applicable, and when executed and delivered by the Issuer
or the Company, as applicable, will constitute a valid and binding
obligation of the Company or the Issuer, as applicable, enforceable in
accordance with its terms, subject to bankruptcy, insolvency,
reorganization, moratorium and similar laws of general applicability
relating to or affecting creditor's rights and to general equity
principles.
(h) The Bonds have been duly authorized and executed by the
Issuer and will conform to the description thereof in the Prospectus;
and when the Bonds are authenticated by the Trustee and delivered to
the Underwriters and are paid for by the Underwriters in accordance
with the terms of this Underwriting Agreement, the Bonds will
constitute the legal, valid and binding obligations of the Issuer,
enforceable in accordance with their terms, subject to bankruptcy,
insolvency, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditor's rights and to
general principles of equity;
(i) The issue and sale of the Bonds by the Issuer, the
execution, delivery and compliance by the Issuer with all of the
provisions of each of this Underwriting Agreement and 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 of the Bonds or would have a material adverse
effect on the Issuer, nor will such action result in any violation of
the Issuer's Certificate of Formation or Limited Liability Company
Agreement or any statute, order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Issuer or its
properties.
(j) The assignment of the Transferred Intangible Transition
Property by the Company to the Seller, the execution, delivery and
compliance by the Company with all of the provisions of each of this
Underwriting Agreement and the Basic Documents to which the Company 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 Company is a
party or by which the Company is bound or to which any of the property
or assets of the Company 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 financial position or
results of operations of the Company, nor will such action result in
any violation of the provisions of the Articles of Incorporation or
Bylaws of the Company or any statute, order, rule or regulation of any
court or governmental agency or body having jurisdiction over the
Company or any of its properties.
(k) Except for:
(i) the order of the SEC making the Registration Statement
effective,
(ii) permits and similar authorizations required under the
securities or blue sky laws of any jurisdiction, and
(iii) the qualified rate order of the Pennsylvania
Public Utilities Commission dated August 27, 1998, as
supplemented by an order dated May 21, 1999 (collectively, the
"QRO"),
no consent, approval, authorization or other order of any governmental
authority is legally required for the execution, delivery and
performance of this Underwriting Agreement by the Issuer and the
Company and the consummation of the transactions contemplated hereby.
(l) This Underwriting Agreement has been duly authorized,
executed and delivered by the Issuer and the Company and constitutes a
valid and binding obligation of the Company and the Issuer,
enforceable in accordance with its terms, subject to bankruptcy,
insolvency, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditor's rights and to
general equity principles.
(m) [any other representations necessary to support assumptions
in opinions]
II. The Seller represents and warrants to each Underwriter as
set forth below in this Section 2.II.
(a) The Seller is a limited liability company duly organized and
in good standing under the laws of the State of Delaware, with power
and authority to own its properties and conduct its business as
currently owned or conducted, and is duly qualified as a foreign
corporation to do business and in good standing in every jurisdiction
in which the nature of the business conducted or property owned by it
makes such qualification necessary and in which the failure to so
qualify would have a materially adverse effect on the Seller. The
Seller had at all relevant times, and has, the requisite power,
authority and legal right to own the Intangible Transition Property
and to sell the Transferred Intangible Transition Property to the
Issuer as described in the Final Prospectus.
(b) This Underwriting Agreement has been duly authorized,
executed and delivered by the Seller and constitutes a valid and
binding obligation of the Seller enforceable in accordance with its
terms, subject to bankruptcy, insolvency, reorganization, moratorium
and similar laws of general applicability relating to or affecting
creditor's rights and to general equity principles.
(c) Each of the Basic Documents to which the Seller is a party
has been duly authorized by the Seller and when executed and delivered
by the Seller will constitute a valid and binding obligation of the
Seller enforceable in accordance with its terms, subject to
bankruptcy, insolvency, reorganization, moratorium and similar laws of
general applicability relating to or affecting creditor's rights and
to general equity principles.
(d) The sale of the Transferred Intangible Transition Property
by the Seller to the Issuer, the execution, delivery and compliance by
the Seller with this Underwriting Agreement and the Basic Documents to
which the Seller 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 Seller is a party or by which the Seller is bound or to
which any of the property or assets of the Seller is subject, which
conflict, breach, violation or default would be material to the issue
and sale of the Bonds, nor will such action result in any violation of
the provisions of the Seller's Certificate of Formation or Limited
Liability Company Agreement or any statute, order, rule or regulation
of any court or governmental agency or body having jurisdiction over
the Seller or any of its properties.
(e) No consent, approval, authorization or other order of any
governmental authority is legally required for the execution and
delivery of this Underwriting Agreement by the Seller.
III. The Company represents and warrants to each Underwriter as
set forth below in this Section 2.III.
(a) Group has been duly organized and is validly existing in
good standing as a corporation under the laws of the Commonwealth of
Pennsylvania, has the power and authority to conduct its business as
presently conducted and is duly qualified as a foreign corporation to
do business and in good standing in every jurisdiction in which the
nature of the business conducted or property owned by it makes such
qualification necessary and in which the failure to so qualify would
have a materially adverse effect on Group; and Group has all requisite
power and authority to enter into the Contribution Agreement.
(b) The Contribution Agreement has been duly authorized,
executed and delivered by Group and constitutes a valid and binding
obligation of Group enforceable in accordance with its terms, subject
to bankruptcy, insolvency, reorganization, moratorium and similar laws
of general applicability relating to or affecting creditor's rights
and to general equity principles.
(c) The execution and delivery by Group of the Contribution
Agreement 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 Group is a party
or by which Group is bound or to which any of the property or assets
of Group is subject, which conflict, breach, violation or default
would be material to the issue and sale of the Bonds, nor will such
action result in any violation of the provisions of the Articles of
Incorporation or Bylaws of Group or any statute, order, rule or
regulation of any court or governmental agency or body having
jurisdiction over Group or any of its properties.
(d) No consent, approval, authorization or other order of any
governmental authority is legally required for the execution and
delivery of the Contribution Agreement by Group.
IV. The Company represents and warrants to each Underwriter as
set forth below in this Section 2.IV.
(a) Reserves has been duly organized and is validly existing in
good standing as a corporation under the laws of the State of
Delaware, has the power and authority to conduct its business as
presently conducted and is duly qualified as a foreign corporation to
do business and in good standing in every jurisdiction in which the
nature of the business conducted or property owned by it makes such
qualification necessary and in which the failure to so qualify would
have a materially adverse effect on Reserves; and Reserves has all
requisite power and authority to enter into the Contribution
Agreement.
(b) The Contribution Agreement has been duly authorized,
executed and delivered by Reserves and constitutes a valid and binding
obligation of Reserves enforceable in accordance with its terms,
subject to bankruptcy, insolvency, reorganization, moratorium and
similar laws of general applicability relating to or affecting
creditor's rights and to general equity principles.
(c) The execution and delivery by Reserves of the Contribution
Agreement, 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 Reserves is a
party or by which Reserves is bound or to which any of the property or
assets of Reserves is subject, which conflict, breach, violation or
default would be material to the issue and sale of the Bonds, nor will
such action result in any violation of the provisions of the Articles
of Incorporation or Bylaws of Reserves or any statute, order, rule or
regulation of any court or governmental agency or body having
jurisdiction over Reserves or any of its properties.
(d) No consent, approval, authorization or other order of any
governmental authority is legally required for the execution and
delivery of the Contribution Agreement by Reserves.
V. Each of the several Underwriters represents and warrants to,
and agrees with, the Issuer, its directors and such of its officers as
shall have signed the Registration Statement, and to each other
Underwriter, that the information furnished in writing to the Issuer
by, or through the Representative on behalf of, such Underwriter
expressly for use in the Registration Statement or the Prospectus does
not contain an untrue statement of a material fact and does not omit
to state a material fact in connection with such information required
to be stated therein or necessary to make such information not
misleading.
3. Purchase and Sale. Subject to the terms and conditions and
in reliance upon the representations and warranties herein set forth, the
Issuer agrees to sell to each Underwriter, and each Underwriter agrees,
severally and not jointly, to purchase from the Issuer, at the purchase
price set forth in Schedule I hereto, the principal amount of the Bonds set
forth opposite such Underwriter's name in Schedule II hereto.
4. Delivery and Payment. Delivery of and payment for the Bonds
shall be made on the date and at the time specified in Schedule I hereto
(or such later date not later than five business days after such specified
date as the Representative shall designate), which date and time may be
postponed by agreement between the Representative and the Issuer or as
provided in Section 10 hereof (such date and time of delivery and payment
for the Bonds being herein called the "CLOSING DATE"). Delivery of the
Bonds shall be made to the Representative for the respective accounts of
the several Underwriters against payment by the several Underwriters
through the Representative of the purchase price thereof to the Issuer by
wire transfer of immediately available funds. Delivery of the Bonds shall
be made at such location as the Representative shall reasonably designate
at least one business day in advance of the Closing Date. The Bonds to be
so delivered initially shall be represented by Bonds registered in the name
of Cede & Co., as nominee of The Depository Trust Company ("DTC"). The
interests of beneficial owners of the Bonds will be represented by book
entries on the records of DTC and participating members thereof.
Definitive Bonds will be available only under limited circumstances.
The Issuer agrees to have the Bonds available for inspection,
checking and packaging by the Representative in New York, New York, not
later than 1:00 PM on the business day prior to the Closing Date.
5. Covenants.
(a) Covenants of the Issuer. The Issuer covenants and agrees
with the several Underwriters that:
(i) The Issuer will use its best efforts to cause the
Registration Statement, if not effective at the Execution Time,
and any amendment thereto, to become effective. Prior to the
termination of the offering of the Bonds, the Issuer will not
file any amendment of the Registration Statement or supplement
(including the Final Prospectus or any Preliminary Final
Prospectus) to the Basic Prospectus unless the Issuer has
furnished you a copy for your review prior to filing and will not
file any such proposed amendment or supplement to which you
reasonably object. Subject to the foregoing sentence, the Issuer
will cause the Final Prospectus, properly completed, and any
supplement thereto to be filed with the SEC pursuant to the
applicable paragraph of Rule 424(b) within the time period
prescribed and will provide evidence satisfactory to the
Representative of such timely filing. The Issuer will promptly
advise the Representative (A) when the Registration Statement, if
not effective at the Execution Time, and any amendment thereto,
shall have become effective, (B) when the Final Prospectus, and
any supplement thereto, shall have been filed with the SEC
pursuant to Rule 424(b), (C) when any amendment to the
Registration Statement shall have been filed or become effective,
(D) of any request by the SEC for any amendment of the
Registration Statement or supplement to the Final Prospectus or
for any additional information, (E) of the issuance by the SEC of
any stop order suspending the effectiveness of the Registration
Statement or the institution or threatening of any proceeding for
that purpose, (F) of the receipt by the Issuer of any
notification with respect to the suspension of the qualification
of the Bonds for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose and (G) of the
happening of any event during the period mentioned in
subparagraph (ii) below. The Issuer will use its best efforts to
prevent the issuance of any such stop order and, if issued, to
obtain as soon as possible the withdrawal thereof.
(ii) If at any time when a prospectus relating to the Bonds
is required to be delivered under the Act in connection with
sales by an Underwriter or dealer, any event occurs as a result
of which the Final Prospectus as then amended or supplemented
would include an untrue statement of a material fact, or omit to
state any material fact necessary to make the statements therein,
in the light of the circumstances under which they were made, not
misleading, or if it is necessary at any time to amend the
Registration Statement or supplement the Final Prospectus to
comply with the Act in connection with sales by an Underwriter or
dealer, the Issuer agrees to advise you of such event or
necessity, as the case may be, and, promptly upon request made by
you, to prepare and file with the Commission an amendment or
supplement which will correct such statement or omission or an
amendment which will effect such compliance, provided that the
expense of preparing and filing any such amendment or supplement
(A) which is necessary in connection with such a delivery of a
prospectus more than nine months after the date of this
Underwriting Agreement or (B) which relates solely to the
activities of any Underwriter shall be borne by the Underwriter
or Underwriters or the dealer or dealers requiring the same; and
provided further that you shall, upon inquiry by the Company,
advise the Company whether or not any Underwriter or dealer which
shall have been selected by you retains any unsold Bonds and, for
the purposes of this subsection (ii), the Company shall be
entitled to assume that the distribution of the Bonds has been
completed when it is advised by you that no Underwriter or such
dealer retains any Bonds.
(iii) As soon as practicable, the Issuer will make
generally available to the Bondholders and to the Representative
an earnings statement or statements of the Issuer which will
satisfy the provisions of Section 11(a) of the Act and Rule 158
under the Act.
(iv) The Issuer will furnish to the Representative and
counsel for the Underwriters, without charge, copies of the
Registration Statement (including exhibits thereto) and, so long
as delivery of a prospectus by an Underwriter or dealer may be
required by the Act, as many copies of any Preliminary Final
Prospectus and the Final Prospectus and any supplement thereto as
the Representative may reasonably request. The Issuer will pay
the expenses of printing or other production of all documents
relating to the offering.
(v) The Issuer will arrange for the qualification of the
Bonds for sale under the laws of such jurisdictions as the
Representative may designate, will maintain such qualifications
in effect so long as required for the distribution of the Bonds
and will arrange for the determination of the legality of the
Bonds for purchase by institutional investors; provided that in
no event shall the Issuer be obligated to qualify to do business
in any jurisdiction where it is not now so qualified or to take
any action that would subject it to service of process in suits,
other than those arising out of the offering or sale of the
Bonds, in any jurisdiction where it is not now so subject or meet
any other requirement in connection with this clause (v) deemed
by the Issuer to be unduly burdensome.
(vi) Until the business date set forth on Schedule I hereto,
the Issuer will not, without the consent of the Representative,
offer, sell or contract to sell, or otherwise dispose of,
directly or indirectly, or announce the offering of, any asset-
backed securities (other than the Bonds).
(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 will deliver to the
Representative the annual statements of compliance and the annual
independent auditor's servicing reports furnished to the Issuer
or the Trustee pursuant to the Servicing Agreement or the
Indenture, as applicable, as soon as such statements and reports
are furnished to the Issuer or the Trustee.
(viii) So long as any of the Bonds are outstanding,
the Issuer will furnish to the Representative (A) as soon as
available, a copy of each report of the Issuer filed with the SEC
under the Exchange Act, or mailed to Bondholders, (B) a copy of
any filings with the Pennsylvania Public Utility Commission
pursuant to the QRO including, but not limited to, any annual or
more frequent adjustment filings, and (C) from time to time, any
information concerning the Company or the Issuer as the
Representative may reasonably request.
(ix) To the extent, if any, that any rating necessary to
satisfy the condition set forth in Section 7(l) 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.
(x) The Issuer will file with the Commission a report on
Form 8-K setting forth all Computational Materials and ABS Term
Sheets (as such terms are defined in Section 6) provided to the
Issuer by any Underwriter and identified by it as such within the
time period allotted for such filing pursuant to the No-Action
Letters (as defined in Section 6); provided, however, that prior
to any filing of the Computational Materials and ABS Term Sheets
by the Issuer, such Underwriter must comply with its obligations
pursuant to Section 6 and the Issuer must receive a letter from
PricewaterhouseCoopers LLP, certified public accountants,
satisfactory in form and substance to the Issuer and such
Underwriter, to the effect that such accountants have performed
specified procedures, all of which have been agreed to by the
Issuer and such Underwriter, as a result of which they have
determined that the information included in the Computational
Materials and ABS Term Sheets (if any), provided by such
Underwriter to the Issuer for filing on Form 8-K pursuant to
Section 6 and this subsection (x), and which the accountants have
examined in accordance with such agreed upon procedures, is
accurate except as to such matters that are not deemed by the
Issuer and such Underwriter to be material. The Issuer shall
file any corrected Computational Materials or ABS Terms Sheets
described in Section 6(a)(iv) as soon as practicable following
receipt thereof.
(b) Covenants of the Seller: The Seller covenants and agrees
with the several Underwriters that, to the extent that the Issuer has
not already performed such act pursuant to Section 5(a), to the
extent, if any, that any rating necessary to satisfy the condition set
forth in Section 7(l) of this Underwriting Agreement is conditioned
upon the furnishing of documents or the taking of other actions by the
Seller on or after the Closing Date, the Seller shall furnish such
documents and take such other actions.
(c) Covenants of the Company. The Company covenants and agrees
with the several Underwriters that, to the extent that the Issuer or
the Seller has not already performed such act pursuant to Section 5(a)
or Section 5(b):
(i) the Company will use its best efforts to cause the
Registration Statement, if not effective at the Execution Time,
and any amendment thereto, to become effective. The Company will
use its best efforts to prevent the issuance by the SEC of any
stop order suspending the effectiveness of the Registration
Statement and, if issued, to obtain as soon as possible the
withdrawal thereof. If, at any time when a prospectus relating
to the Bonds is required to be delivered under the Act, any event
occurs as a result of which the Final Prospectus as then
supplemented would include any untrue statement of a material
fact or omit to state any material fact necessary to make the
statements therein in the light of the circumstances under which
they were made not misleading, or if it shall be necessary to
amend the Registration Statement or supplement the Final
Prospectus to comply with the Act or the Exchange Act or the
respective rules thereunder, the Company will, or will cause the
Issuer to (A) prepare and file with the SEC, subject to the
second sentence of paragraph (a) of this Section 5, an amendment
or supplement which will correct such statement or omission or
effect such compliance and (B) supply any supplemented Prospectus
to you in such quantities as you may reasonably request.
(ii) until the business date set forth on Schedule I hereto,
the Company will not, without the consent of the Representative,
offer, sell or contract to sell, or otherwise dispose of,
directly or indirectly, or announce the offering of, any asset-
backed securities (other than the Bonds).
(iii) so long as any of the Bonds are outstanding and the
Company is the Servicer, the Company will furnish to the
Representative (A) as soon as available, a copy of each report of
the Issuer filed with the SEC under the Exchange Act, or mailed
to Bondholders, (B) a copy of any filings with the Pennsylvania
Public Utility Commission pursuant to the QRO, including, but not
limited to, any annual or more frequent adjustment filings, and
(C) from time to time, any information concerning the Company,
the Seller, and the Issuer as the Representative may reasonably
request.
(iv) to the extent, if any, that any rating necessary to
satisfy the condition set forth in Section 7(l) of this
Underwriting Agreement is conditioned upon the furnishing of
documents or the taking of other actions by the Company on or
after the Closing Date, the Company shall furnish such documents
and take such other actions.
6. Offering by Underwriters.
(a) In connection with the offering of the Bonds, each
Underwriter may prepare and provide to prospective investors (i) items
similar to computational materials ("COMPUTATIONAL MATERIALS") as
defined in the no-action letter of May 20, 1994 issued by the
Commission to Xxxxxx, Xxxxxxx Acceptance Corporation I, Xxxxxx,
Peabody & Co. Incorporated and Xxxxxx Structured Asset Corporation, as
made applicable to other issuers and underwriters by the Commission in
response to the request of the Public Securities Association dated May
24, 1994, as well as the PSA Letter referred to below (collectively,
the "NO-ACTION LETTERS") and (ii) items similar to ABS term sheets
("ABS TERM SHEETS") as defined in the no-action letter of February 17,
1995 issued by the Commission to the Public Securities Association,
subject to the following conditions:
(i) All Computational Materials and ABS Term Sheets
provided to prospective investors that are required to be filed
pursuant to the No-Action Letters shall bear a legend
substantially in the form attached hereto as Exhibit A. The
Issuer shall have the right to require additional specific
legends or notations to appear on any Computational Materials or
ABS Term Sheets, the right to require changes regarding the use
of terminology and the right to determine the types of
information appearing therein. Notwithstanding the foregoing,
this subsection (i) will be satisfied if all Computational
Materials and ABS Term Sheets referred to herein bear a legend in
a form previously approved in writing by the Issuer.
(ii) Such Underwriter shall provide to the Issuer, for
approval by the Issuer, representative forms of all Computational
Materials and ABS Term Sheets prior to their first use, to the
extent such forms have not previously been approved by the Issuer
for use by such Underwriter. Such Underwriter shall provide to
the Issuer, for filing on Form 8-K as provided in Section
5(a)(x), copies (in such format as required by the Issuer) of all
Computational Materials and ABS Term Sheets that are required to
be filed with the Commission pursuant to the No-Action Letters.
The Underwriter may provide copies of the foregoing in a
consolidated or aggregated form including all information
required to be filed if filing in such format is permitted by the
No-Action Letters. All Computational Materials and ABS Term
Sheets described in this subsection (ii) must be provided to the
Issuer not later than 10:00 a.m. New York City time one business
day before filing thereof is required pursuant to the terms of
this Underwriting Agreement. Such Underwriter shall not provide
to any investor or prospective investor in the Bonds any
Computational Materials or ABS Term Sheets on or after the day on
which Computational Materials or ABS Term Sheets are required to
be provided to the Issuer pursuant to this paragraph (ii) (other
than copies of Computational Materials or ABS Term Sheets
previously submitted to the Issuer in accordance with this
paragraph (ii) for filing pursuant to Section 5(a)(x)), unless
such Computational Materials or ABS Term Sheets are preceded or
accompanied by the delivery of a Final Prospectus to such
investor or prospective investor.
(iii) All information included in the Computational
Materials and ABS Term Sheets shall be generated based on
substantially the same methodology and assumptions that are used
to generate the information in the Registration Statement as set
forth therein. However, the Computational Materials and ABS Term
Sheets may include information based on alternative methodologies
or assumptions if specified therein. If any Computational
Materials or ABS Term Sheets are based on assumptions with
respect to the Transferred Intangible Transition Property that
differ from the final Transferred Intangible Transition Property
Information (as defined in Section 8(a) in any material respect
or on Bond structuring terms that were revised in any material
respect prior to the printing of the Final Prospectus, the
Underwriters shall prepare revised Computational Materials or ABS
Term Sheets, as the case may be, based on the final Transferred
Intangible Transition Property Information and structuring
assumptions, deliver with the Final Prospectus such revised
Computational Materials and ABS Term Sheets to each recipient of
the preliminary versions thereof that indicated orally to any
Underwriter that such recipient would purchase all or any portion
of the Bonds, and include such revised Computational Materials
and ABS Term Sheets (marked, "AS REVISED") in the materials
delivered to the Issuer pursuant to paragraph (ii) above. The
expenses of each Underwriter relating to the preparation and
transmission of its Computational Materials and ABS Term Sheets,
including without limitation fees and expenses of accountants,
shall be the responsibility of the Issuer.
(iv) The Issuer shall not be obligated to file any
Computational Materials or ABS Term Sheets that have been
determined to contain any material error or omission, provided
that, at the request of any Underwriter, the Issuer will file
Computational Materials or ABS Term Sheets that contain a
material error or omission if clearly marked "SUPERSEDED BY
MATERIALS DATED _________" and accompanied by corrected
Computational Materials or ABS Term Sheets that are marked,
"MATERIAL PREVIOUSLY DATED ___________, AS CORRECTED." If,
within the period during which a prospectus relating to the Bonds
is required to be delivered under the Act, any Computational
Materials or ABS Term Sheets are determined, in the reasonable
judgment of the Issuer or such Underwriter, to contain a material
error or omission, such Underwriter shall prepare a corrected
version of such Computational Materials or ABS Term Sheets, shall
circulate such corrected Computational Materials or ABS Term
Sheets to all recipients of the prior versions thereof that
either indicated orally to such Underwriter they would purchase
all or any portion of the Bonds, or actually purchased all or any
portion thereof, and shall deliver copies of such corrected
Computational Materials or ABS Term Sheets (marked, "AS
CORRECTED") to the Issuer for filing with the Commission in a
subsequent Form 8-K submission (subject to the Issuer's obtaining
an accountant's comfort letter in respect of such corrected
Computational Materials and ABS Term Sheets, which the parties
acknowledge shall be at the expense of the Issuer).
(v) Each Underwriter shall be deemed to have represented,
as of the Closing Date, that, except for Computational Materials
and ABS Term Sheets provided to the Issuer pursuant to subsection
(ii) above, such Underwriter did not provide any prospective
investors with any information in written or electronic form in
connection with the offering of the Bonds that is required to be
filed with the Commission in accordance with the No-Action
Letters.
(vi) In the event any delay in the delivery by any
Underwriter to the Issuer of all Computational Materials and ABS
Term Sheets required to be delivered in accordance with
subsection (ii) above, or in the delivery of the accountant's
comfort letter in respect thereof pursuant to Section 5(a)(x),
the Issuer shall have the right to delay the release of the Final
Prospectus to investors or to any Underwriter, to delay the
Closing Date and to take other appropriate actions in each case
set forth in Section 5(a)(x) to file the Computational Materials
and ABS Term Sheets by the time specified therein.
(vii) Each Underwriter represents that it has in place, and
covenants that it shall maintain, internal controls and
procedures that it reasonably believes to be sufficient to ensure
full compliance with all applicable legal requirements of the No-
Action Letters with respect to the generation and use of
Computational Materials and ABS Term Sheets in connection with
the offering of the Bonds.
(b) Each Underwriter further represents and warrants that, if
and to the extent it has provided any prospective investors with any
Computational Materials or ABS Term Sheets prior to the date hereof in
connection with the offering of the Bonds, all of the conditions set
forth in clause (a) above have been satisfied with respect thereto.
7. 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, the Seller, Group, Reserves and the Company contained in this
Underwriting Agreement, on the part of the Seller contained in Article III
of the Sale Agreement, and on the part of the Company contained in Section
5.01 of the Servicing Agreement and in Article III of the Contribution
Agreement as of the Execution Time and the Closing Date; to the accuracy of
the statements of the Issuer, the Seller, Group, Reserves and the Company
made in any certificates pursuant to the provisions hereof, to the
performance by the Issuer, the Seller, Group, Reserves and the Company of
their obligations hereunder, and to the following additional conditions:
(a) If the Registration Statement has not become effective prior
to the Execution Time, unless the Representative agrees in writing to
a later time, the Registration Statement will become effective not
later than (i) 6:00 PM New York City time, on the date of
determination of the public offering price, if such determination
occurred at or prior to 3:00 PM New York City time on such date, or
(ii) 12:00 Noon on the business day following the day on which the
public offering price was determined, if such determination occurred
after 3:00 PM New York City time on such date; if filing of the Final
Prospectus, or any supplement thereto, is required pursuant to Rule
424(b), the Final Prospectus, and any such supplement, shall have been
filed in the manner and within the time period required by Rule
424(b); and no stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceedings for
that purpose shall have been instituted or threatened.
(b) The Representative shall have received from Xxxxxxx X.
XxXxxxx, Esq., Senior Counsel, or such other counsel for the Company
as may be acceptable to the Representative, an opinion, dated the
Closing Date, to the effect that:
(i) the Company has been duly incorporated and is validly
existing as a corporation in good standing under laws of the
Commonwealth of Pennsylvania, with power and authority (corporate
and others) to own to its properties and conduct its businesses
as described in the Registration Statement and the Final
Prospectus, and is duly qualified to do business in all
jurisdictions (and is in good standing under the laws of all such
jurisdictions) to the extent that such qualification and good
standing is or shall be necessary to protect the validity and
enforceability of this Underwriting Agreement, the Contribution
Agreement, the Servicing Agreement, the Administration Agreement
and each other instrument or agreement necessary or appropriate
to the proper administration of this Underwriting Agreement and
the transactions contemplated hereby;
(ii) this Underwriting Agreement, the Contribution
Agreement, the Servicing Agreement, the Administration Agreement
and each of the other Basic Documents to which the Company is a
party, has been duly authorized, executed and delivered, and
constitutes a valid and legally binding obligation of the Company
enforceable according to its terms (except to the extent limited
by bankruptcy, insolvency, or reorganization laws or laws
relating to or affecting the enforcement of creditors' rights and
by general equity principles); and no authorization, notice,
consent or action by the holders of any of the outstanding shares
of capital stock of the Company is necessary with respect
thereto;
(iii) such counsel does not know of any legal or
governmental proceedings required to be described in the
Registration Statement or Final Prospectus which are not
described, or of any franchises, contracts or documents of a
character required to be described in the Registration Statement
or the Final Prospectus or to be filed as exhibits to the
Registration Statement which are not described and filed as
required; it being understood that such counsel need express no
opinion as to the financial statements and other financial data
contained in the Registration Statement or the Final Prospectus;
(iv) except as described in the Registration Statement and
the Final Prospectus, the Company holds all franchises,
certificates of public convenience, licenses and permits
necessary to carry on the utility business in which it is
engaged; and
(v) neither the execution and delivery of this Underwriting
Agreement, the Servicing Agreement, the Administration Agreement
nor the consummation of the transactions contemplated by this
Underwriting Agreement, the Contribution Agreement or the
Servicing Agreement, the Administration Agreement nor the
fulfillment of the terms of this Underwriting Agreement, the Sale
Agreement, the Contribution Agreement, the Administration
Agreement or the Servicing Agreement by the Company, will (A)
conflict with, result in any breach of any of the terms or
provisions of, or constitute (with or without notice or lapse of
time) a default under the articles of incorporation, bylaws or
other organizational documents of the Company, or conflict with
or breach any of the material terms or provisions of, or
constitute (with or without notice or lapse of time) a default
under, any indenture, agreement or other instrument to which the
Company is a party or by which the Company is bound, (B) result
in the creation or imposition of any lien upon any properties of
the Company pursuant to the terms of any such indenture,
agreement or other instrument (other than as contemplated by the
Indenture), or (C) violate any law or any order, rule or
regulation promulgated by the United States or the Commonwealth
of Pennsylvania applicable to the Company of any court or of any
federal or state regulatory body, administrative agency or other
governmental instrumentality having jurisdiction over the
Company, or any of its properties.
(c) The Representative shall have received an opinion, portions
of which shall be rendered by Xxxxxx, Xxxxx & Xxxxxxx LLP, counsel for
the Company, the Seller, Group, Reserves and the Issuer, portions of
which may be rendered by Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP,
special counsel for the Issuer, portions of which may be rendered by
Xxxxxx, Xxxx & Priest LLP, special counsel for the Company, and
portions of which may be rendered by Xxxxxxx & Associates, special
counsel for Reserves and the Seller, each such opinion dated the
Closing Date, in form and substance reasonably satisfactory to the
Representative, to the effect that:
(i) Each of the Issuer, the Seller, Group and Reserves has
been duly organized and is validly existing as a limited
liability company or corporation under the laws of the State of
Delaware or the Commonwealth of Pennsylvania, as applicable, with
power and authority to own its properties and conduct its
businesses as described in the Registration Statement and the
Final Prospectus and contemplated by the Contribution Agreement,
and is duly qualified to do business in all jurisdictions (and is
in good standing under the laws of all jurisdictions) to the
extent that such qualification and good standing is or shall be
necessary to protect the validity and enforceability of this
Underwriting Agreement, the Contribution Agreement, the Sale
Agreement, and each other instrument or agreement necessary or
appropriate to the proper administration of this Underwriting
Agreement and the transactions contemplated herein.
(ii) The Sale Agreement and the Contribution Agreement have
been duly authorized, executed and delivered by, and constitute
valid and legally binding obligations of, the Seller, Group
and/or Reserves, as applicable, enforceable according to their
terms (except to the extent limited by bankruptcy, insolvency, or
reorganization laws or laws relating to or affecting the
enforcement of creditors' rights and by general equity
principles); and no authorization, notice, consent or action by
the holders of any outstanding equity interest in the Seller,
Group or Reserves, as applicable, is necessary with respect
thereto.
(iii) This Underwriting Agreement, the Contribution
Agreement, the Servicing Agreement and all other Basic Documents
to which the Company is a party, have been duly authorized,
executed and delivered by the Company, and constitute valid and
legally binding obligations of the Company, enforceable according
to their terms (except to the extent limited by bankruptcy,
insolvency or reorganization laws or by laws relating to or
affecting the enforcement of creditors' rights and by general
equity principles) and no authorization, notice, consent or
actions by the holders of any outstanding capital stock of the
Company is necessary with respect thereto.
(iv) This Underwriting Agreement, the Sale Agreement, the
Servicing Agreement, the Bonds, the Indenture, and all other
Basic Documents to which the Issuer is a party have been duly
authorized, executed and delivered by the Issuer, and constitute
valid and legally binding obligations of the Issuer, enforceable
according to their terms (except to the extent limited by
bankruptcy, insolvency or reorganization laws or by laws relating
to or affecting the enforcement of creditors' rights and by
general equity principles); and no authorization, notice, consent
or action by the holders of any outstanding equity interest in
the Issuer is necessary with respect thereto.
(v) No consent, approval, authorization or order of any
court or governmental agency or body is required for the
consummation of the transactions contemplated herein, except such
as have been obtained under Pennsylvania law and such as may be
required under the blue sky laws of any jurisdiction in
connection with the purchase and distribution of the Bonds by the
Underwriters and such other approvals (specified in such opinion)
as have been obtained.
(vi) Sections 2804 and 2812 of the Competition Act are
authorized by and validly enacted pursuant to the Pennsylvania
Constitution.
(vii) The QRO has been duly authorized and issued by the
Pennsylvania Public Utility Commission in accordance with the
Competition Act; and the QRO and the process by which it was
issued comply with all applicable laws, rules and regulations,
and the QRO is in full force and effect.
(viii) The Bonds are "transition bonds" within the
meaning of the Competition Act, the Bonds are entitled to the
protections provided in Section 2812(c) of the Competition Act,
and the issuance and sale of the Bonds and the consummation of
the transactions contemplated by the Basic Documents comply in
all respects with the requirements of the Competition Act and the
QRO.
(ix) The Commonwealth Pledge set forth in Section 2812(c) of
the Competition Act is enforceable according to its terms
pursuant to Pennsylvania and federal law, and cannot be defeated
or modified to the detriment of holders of Bonds by any
subsequent law or other action by the Commonwealth of
Pennsylvania or by its agencies or instrumentalities.
(x) Under Section 2812(b)(3) of the Competition Act,
neither the QRO nor the intangible transition charges authorized
to be imposed and collected pursuant to the QRO may be revoked,
reduced, postponed, impaired or terminated by any subsequent
action of the Pennsylvania Public Utility Commission.
(xi) Under the Taking Clauses of the United States and
Commonwealth of Pennsylvania Constitutions, the Commonwealth of
Pennsylvania could not repeal or amend the Competition Act or
take any action in contravention of the pledge set forth in
Section 2812(c)(2) of the Competition Act without paying just
compensation to the holders of the Bonds if so doing would
constitute a permanent appropriation of the property interest of
the holders of the Bonds in the Transferred Intangible Transition
Property and would deprive the holders of the Bonds of their
reasonable expectations arising from their investment in the
Bonds, as described in the Final Prospectus.
(xii) Under the Contract Clauses of the United States and
Commonwealth of Pennsylvania Constitutions, the Commonwealth of
Pennsylvania could not repeal or amend the Competition Act or
take any other action that substantially impairs the rights of
holders of the Bonds, without making adequate compensation by law
pursuant to Section 2812(c)(2) of the Competition Act, unless
such action is a reasonable exercise of the sovereign powers of
the Commonwealth of Pennsylvania and is of a character
appropriate to the public purpose justifying such action. A
court would not hold that the Commonwealth of Pennsylvania could
reduce, modify, alter or take any other action with respect to
the Transferred Intangible Transition Property that would
substantially impair the rights of holders of the Bonds unless
this action is reasonable and appropriate to further a legitimate
public purpose.
(xiii) The Seller is an "assignee" within the
meaning of Section 2812(g) of the Competition Act and the
transfer of the Intangible Transition Property from the Company
to the Seller pursuant to the Contribution Agreement, and from
the Seller to the Issuer pursuant to the Sale Agreement, have
been effected in compliance with the Competition Act.
(xiv) Holders of the Bonds are entitled to the protections
provided in the first sentence of Section 2812(c)(2) of the
Competition Act. The QRO authorizes the issuance of up to $2.85
billion aggregate principal amount of transition bonds, the
transfer of Intangible Transition Property to the Issuer, the
imposition of Intangible Transition Charges, and the collection
thereof from consumers of electricity within the Company's
historic electric service area who receive electric distribution
or transmission service from the Company or its successor, annual
adjustments to the Intangible Transition Charges and, in the last
twelve months preceding the scheduled maturity of the latest
maturing Class of Bonds, monthly or quarterly adjustments, in
order to ensure full recovery of Intangible Transition Charges
and the appointment of the Company as servicer for a specified
contractual fee. The sections of the QRO authorizing the
preceding matters have been declared irrevocable and are entitled
to the protection of Section 2812(b)(3) of the Competition Act,
which prohibits the PUC from reducing, postponing, impairing or
terminating such an order or the Intangible Transition Charges
authorized to be imposed and collected under such an order by its
subsequent action.
(xv) No subsequent failure to satisfy any condition imposed
by the Competition Act with respect to the recovery of stranded
costs will adversely affect the creation, transfer or sale under
the Contribution Agreement and the Sale Agreement of the
Transferred Intangible Transition Property or the right to
collect Intangible Transition Charges in respect of the
Transferred Intangible Transition Property.
(xvi) The Issuer will not be subject to utility gross
receipts taxes or any other taxes imposed by the Commonwealth of
Pennsylvania or by any of its agencies, instrumentalities or
political subdivisions, other than franchise taxes in respect of
the capital stock value of the Issuer.
(xvii) The descriptions of both federal and
Pennsylvania tax consequences to holders of the Bonds set forth
in the Final Prospectus under "Material Income Tax Matters for
the Transition Bondholders" are accurate and complete in all
material respects.
(xviii) The transfer of the Intangible Transition
Property by the Company to the Seller pursuant to the
Contribution Agreement and the Assignment was an absolute
transfer of the entire right, title and interest in (as in a
"true sale" of) the Intangible Transition Property by the Company
directly to the Seller; this transfer of the Intangible
Transition Property is perfected; such transfer has priority over
any other assignment of the Intangible Transition Property; and
immediately prior to the execution and delivery of the Sale
Agreement, the Seller owns all right, title and interest in and
to the Intangible Transition Property.
(xix) Either (1) (A) the transfer of the Transferred
Intangible Transition Property by the Seller to the Issuer
pursuant to the Sale Agreement is an absolute transfer of the
entire right, title and interest of the Seller in (as in a "true
sale" of) the Transferred Intangible Transition Property, (B)
such transfer is perfected, and (C) such transfer has priority
over any other transfer by the Seller of the Transferred
Intangible Transition Property; or (2) (A) the Sale Agreement
creates in favor of the Issuer a security interest in the rights
of the Seller in the Transferred Intangible Transition Property,
(B) such security interest is valid and enforceable against the
Seller and third parties and has attached, (C) such security
interest is perfected, and (D) such perfected security interest
is of first priority.
(xx) A court would not order the substantive consolidation
of the assets and liabilities of the Issuer with those of the
Company in the event of a bankruptcy, reorganization or other
insolvency proceeding involving the Company.
(xxi) A court would not order the substantive consolidation
of the assets and liabilities of the Seller with those of Reserves
in the event of a bankruptcy, reorganization or other insolvency
proceeding involving Reserves.
(xxii) Neither the Intangible Transition Property
nor any interest therein would become property of the estate of
Group or Reserves under 11 U.S.C. section 541(a)(1) or (6) as a
result of the Contribution Agreement or the Assignment in a case
under the Bankruptcy Code in which Group or Reserves was the
debtor and the automatic stay of 11 U.S.C. section 362(a) would
not apply to prevent the collections of Intangible Transition
Charges from being applied as provided in the Basic Documents.
(xxiii) The Bonds have been duly authorized and
executed, and when authenticated in accordance with the
provisions of the Indenture and delivered to and paid for by the
Underwriters in accordance with the terms hereof, will constitute
legal, valid and binding obligations of the Issuer entitled to
the benefits of the Indenture (subject, as to enforcement of
remedies, to applicable bankruptcy, reorganization, insolvency,
moratorium or other similar laws or equitable principles
affecting creditors' rights generally from time to time in
effect).
(xxiv) The Bonds, the Indenture, the Servicing
Agreement, this Underwriting Agreement, the Contribution
Agreement and the Sale Agreement conform to the descriptions
thereof contained in the Registration Statement and the Final
Prospectus.
(xxv) The Indenture has been duly qualified under the Trust
Indenture Act, and the Contribution Agreement, the Sale Agreement
and the Servicing Agreement are not required to be registered
under the Trust Indenture Act.
(xxvi) There is no pending or threatened action,
suit or proceeding before any court or governmental agency,
authority or body or any arbitrator involving the Issuer, or
relating to the Bonds, the QRO or the collection of Intangible
Transition Charges or the use and enjoyment of Intangible
Transition Property under the Competition Act of a character
required to be disclosed in the Registration Statement that is
not adequately disclosed in the Final Prospectus, and there is no
franchise, contract or other document of a character required to
be described in the Registration Statement or Final Prospectus,
or to be filed as an exhibit, that is not described or filed as
required; and the statements included or incorporated in the
Final Prospectus in the base prospectus under the headings "Risk
Factors -- Legal, Legislative or Regulatory Action that May
Adversely Affect Your Investment," "Risk Factors -- Unusual
Nature of Intangible Transition Property," "The Competition Act,"
"PP&L's Restructuring Plan," "The PUC Order and the Intangible
Transition Charges," "Prior Legal Challenges to the Competition
Act or the PUC Order," "The Transition Bonds," "The Contribution
Agreement," "The Sale Agreement," "The Servicing Agreement," "The
Indenture," "Material Income Tax Matters for the Transition
Bondholders," and "ERISA Considerations" and in the prospectus
supplement under the headings "The Series 1999-[__] Bonds," and
"Description of Intangible Transition Property" fairly summarize
the matters described therein.
(xxvii) The Registration Statement has become
effective under the Act; any required filing of the Basic
Prospectus, any Preliminary Final Prospectus and the Final
Prospectus, and any supplements thereto, pursuant to Rule 424(b)
has been made in the manner and within the time period required
by Rule 424(b); no stop order suspending the effectiveness of the
Registration Statement has been issued, no proceedings for that
purpose have been instituted or threatened, and the Registration
Statement and the Final Prospectus comply as to form in all
material respects with the applicable requirements of the Act,
the Exchange Act and the Trust Indenture Act and the respective
rules thereunder; all portions of the Registration Statement and
the Final Prospectus that describe Pennsylvania law are accurate
in all material respects, including (but not limited to)
descriptions of the Competition Act, the QRO, Intangible
Transition Property and the Intangible Transition Charges; and
such counsel has no reason to believe that at the Effective Date
the Registration Statement contained any untrue statement of a
material fact or omitted to state any material fact required to
be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not
misleading or that the Final Prospectus as of its date and the
Closing Date includes any untrue statement of a material fact or
omits to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they were
made, not misleading.
(xxviii) No consent, approval, authorization or order
of any court or governmental agency or body is required for the
consummation of the transactions contemplated herein, except such
as have been obtained under Pennsylvania law and such as may be
required under the blue sky laws of any jurisdiction in
connection with the purchase and distribution of the Bonds by the
Underwriters and such other approvals (specified in such opinion)
as have been obtained.
(xxix) Neither the execution and delivery of this
Underwriting Agreement, the Contribution Agreement, the Sale
Agreement, the Servicing Agreement, the Indenture, nor the
issuance and sale of the Bonds, nor the consummation of the
transactions contemplated by this Underwriting Agreement, the
Contribution Agreement, the Sale Agreement, the Servicing
Agreement and the Indenture, nor the fulfillment of the terms of
this Underwriting Agreement, the Contribution Agreement, the Sale
Agreement, the Servicing Agreement and the Indenture, will (A)
conflict with, result in any breach of any of the terms or
provisions of, or constitute (with or without notice or lapse of
time) a default under the Amended and Restated Limited Liability
Company Agreement of the Issuer, or under the Amended and
Restated Limited Liability Company Agreement of the Seller, or
conflict with or breach any of the material terms or provisions
of, or constitute (with or without notice or lapse of time) a
default under, any indenture, agreement or other instrument to
which the Issuer or the Seller is a party or by which the Issuer
or the Seller is bound, (B) result in the creation or imposition
of any lien upon any properties of the Issuer or the Seller
pursuant to the terms of any such indenture, agreement or other
instrument (other than as contemplated by the Indenture), or (C)
violate any law or any order, rule or regulation promulgated by
the United States, the State of Delaware, or the Commonwealth of
Pennsylvania applicable to the Issuer or the Seller of any court
or of any federal or state regulatory body, administrative agency
or other governmental instrumentality having jurisdiction over
the Issuer, or any of its properties.
(xxx) (A) The Indenture creates in favor of the Trustee a
security interest in the rights of the Issuer in the Collateral,
(B) such security interest is valid and enforceable against the
Issuer and third parties and has attached, (C) such security
interest is perfected, and (D) such perfected security interest
is of first priority.
(xxxi) The Issuer is not, and after giving effect to
the offering and sale of the Bonds and the application of the
proceeds thereof as described in the Final Prospectus, will not
be an "investment company" or under the "control" of an
"investment company" as such terms are defined under the
Investment Company Act of 1940, as amended.
(xxxii) Unless adequate compensation is made by law
for the protection of holders of the Bonds, the Competition Act
and other applicable law require the Commonwealth of Pennsylvania
and the PUC to require the imposition of intangible transition
charges at times and in amounts that are designed to ensure the
collection of intangible transition charge revenues sufficient to
discharge the Bonds in accordance with their terms.
(xxxiii) The Intangible Transition Property and the
other Collateral are not subject to the lien created by the
Mortgage Indenture, and the transfer of the Intangible Transition
Property to the Seller on May 13, 1999 pursuant to the terms and
conditions of the Contribution Agreement was, and the transfer of
other Collateral to the Issuer on the date of issuance of the
Bonds, is free and clear of the lien created by the Mortgage
Indenture.
(xxxiv) [other opinions to come as appropriate].
In rendering such opinions, such counsel may rely (A) as to
matters involving the application of laws of any jurisdiction other
than the Commonwealth of Pennsylvania, the State of Delaware, the
State of New York, the State of Nevada or the federal laws of the
United States of America, to the extent deemed proper and specified in
such opinion, upon the opinion of other counsel of good standing
believed to be reliable and who are satisfactory to counsel for the
Underwriters, and (B) as to matters of fact, to the extent deemed
proper, on certificates of responsible officers of the Issuer, the
Seller, Group, Reserves, the Company and public officials. References
to the Final Prospectus in this paragraph (c) include any supplements
thereto at the Closing Date.
(d) The Representative shall have received an opinion of counsel
to the Trustee, dated the Closing Date, in form and substance
reasonably satisfactory to the Representative, to the effect that:
(i) the Trustee is validly existing as a national banking
association in good standing under the federal laws of the United
States of America; and
(ii) the Indenture has been duly authorized, executed and
delivered, and constitutes a legal, valid and binding instrument
enforceable against the Trustee in accordance with its terms
(subject, as to enforcement of remedies, to applicable
bankruptcy, reorganization, insolvency, moratorium or other
similar laws or equitable principles affecting creditors' rights
generally from time to time in effect); and
(iii) the Bonds have been duly authenticated by the
Trustee.
(e) The Representative shall have received from Xxxxxx,
Xxxxxxxxxx & Sutcliffe LLP, counsel for the Underwriters, such opinion
or opinions, dated the Closing Date, with respect to the issuance and
sale of the Bonds, the Indenture, the Registration Statement, the
Final Prospectus (together with any supplement thereto) and other
related matters as the Representative may reasonably require, and the
Company, the Seller, and the Issuer shall have furnished to such
counsel such documents as they request for the purpose of enabling
them to pass upon such matters.
(f) The Representative shall have received a certificate of the
Issuer, signed by a duly authorized manager of the Issuer, dated the
Closing Date, to the effect that the signers of such certificate have
carefully examined the Registration Statement, the Final Prospectus,
any supplement to the Final Prospectus and this Underwriting Agreement
and that:
(i) the representations and warranties of the Issuer in
this Underwriting Agreement and in the Indenture are true and
correct in all material respects on and as of the Closing Date
with the same effect as if made on the Closing Date, and the
Issuer has complied with all the agreements and satisfied all the
conditions on its part to be performed or satisfied at or prior
to the Closing Date;
(ii) no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for
that purpose have been instituted or threatened; and
(iii) since the dates as of which information is given in
the Final Prospectus (exclusive of any supplement thereto), there
has been no material adverse change in (A) the condition
(financial or other), prospects, business or properties of the
Issuer, whether or not arising from transactions in the ordinary
course of business, or (B) the Transferred Intangible Transition
Property, except as set forth in or contemplated in the Final
Prospectus (exclusive of any supplement thereto).
(g) The Representative shall have received a certificate of the
Company, signed by the President and the principal financial or
accounting officer of the Company, dated the Closing Date, to the
effect that the signers of such certificate have carefully examined
the Registration Statement, the Final Prospectus, any supplement to
the Final Prospectus and this Underwriting Agreement and that:
(i) the representations and warranties of the Company in
this Underwriting Agreement, the Contribution Agreement, the Sale
Agreement and the Servicing Agreement are true and correct in all
material respects on and as of the Closing Date with the same
effect as if made on the Closing Date, and the Company has
complied with all the agreements and satisfied all the conditions
on its part to be performed or satisfied at or prior to the
Closing Date;
(ii) no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for
that purpose have been instituted or, to the Company's knowledge,
threatened; and
(iii) since the dates as of which information is given in
the Final Prospectus (exclusive of any supplement thereto), there
has been no material adverse change in (A) the Company's
financial position or results of operation, or (B) the
Transferred Intangible Transition Property.
(h) The Representative shall have received a certificate of the
Seller, signed by a duly authorized manager of the Seller, dated the
Closing Date, to the effect that the signers of such certificate have
carefully examined the Registration Statement, the Final Prospectus,
any supplement to the Final Prospectus and this Underwriting Agreement
and that:
(i) the representations and warranties of the Seller in
this Underwriting Agreement, the Contribution Agreement and the
Sale Agreement are true and correct in all material respects on
and as of the Closing Date with the same effect as if made on the
Closing Date, and the Seller has complied with all the agreements
and satisfied all the conditions on its part to be performed or
satisfied at or prior to the Closing Date; and
(ii) since the dates as of which information is given in the
Final Prospectus (exclusive of any supplement thereto), there has
been no material adverse change in the Seller's financial
position or results of operation.
(i) The Representative shall have received a certificate of the
Company, signed by the President and the principal financial or
accounting officer of the Company, dated the Closing Date, to the
effect that:
(i) the representations and warranties of Group and
Reserves in this Underwriting Agreement and in the Contribution
Agreement are true and correct in all material respects on and as
of the Closing Date with the same effect as if made on the
Closing Date, and Group and Reserves have complied with all the
agreements and satisfied all the conditions on their part to be
performed or satisfied at or prior to the Closing Date; and
(ii) since the dates as of which information is given in the
Final Prospectus (exclusive of any supplement thereto), there has
been no material adverse change in the condition (financial or
other), prospects, earnings, business or properties of Group or
Reserves, whether or not arising from transactions in the
ordinary course of business.
(j) At the Closing Date, PricewaterhouseCoopers LLP shall have
furnished to the Representative (i) a letter or letters (which may
refer to letters previously delivered to the Representative), dated as
of the Closing Date, in form and substance satisfactory to the
Representative, confirming that they are independent accountants
within the meaning of the Act and the Exchange Act and the respective
applicable published rules and regulations thereunder and stating in
effect that they have performed certain specified procedures as a
result of which they determined that certain information of an
accounting, financial or statistical nature set forth in the
Registration Statement and the Final Prospectus, agrees with the
accounting records of the Company and its subsidiaries, excluding any
questions of legal interpretation, and (ii) the opinion or
certificate, dated as of the Closing Date, in form and substance
satisfactory to the Representative, satisfying the requirements of
Section 2.10(7) of the Indenture.
In addition, except as provided in Schedule I hereto, at the
Execution Time, PricewaterhouseCoopers LLP shall have furnished to the
Representative a letter or letters, dated as of the Execution Time, in
form and substance satisfactory to the Representative, to the effect
set forth above.
(k) Subsequent to the Execution Time or, if earlier, the dates
as of which information is given in the Registration Statement
(exclusive of any amendment thereof) and the Final Prospectus
(exclusive of any supplement thereto), there shall not have occurred
any change, or any development involving a prospective change, in or
any event affecting either (i) the business, prospects, properties or
financial condition of the Company, the Seller or the Issuer, or (ii)
the Transferred Intangible Transition Property, the Bonds, the QRO or
the Competition Act, the effect of which is, in the judgment of the
Representative, so material and adverse as to make it impractical or
inadvisable to proceed with the offering or delivery of the Bonds as
contemplated by the Registration Statement (exclusive of any amendment
thereof) and the Final Prospectus (exclusive of any supplement
thereto).
(l) The Bonds shall have been rated in the highest long-term
rating category by each of the Rating Agencies.
(m) On or prior to the Closing Date, the Issuer shall have
delivered to the Representative evidence, in form and substance
reasonably satisfactory to the Representative, that appropriate
filings have been made in accordance with the Competition Act and
other applicable law reflecting (1) the sale of the Intangible
Transition Property by the Company directly to the Seller, including
the filing of notices with the PUC under the Competition Act and of
UCC financing statements in the office of the Secretary of the
Commonwealth of Pennsylvania, (2) the sale of the Transferred
Intangible Transition Property by the Seller to the Issuer, including
the filing of UCC financing statements in the office of the Secretary
of State of the State of Nevada, and (3) the grant of a security
interest by the Issuer in the Collateral to the Trustee, including the
filing of notices with the PUC under the Competition Act and of UCC
financing statements in the office of the Secretary of the
Commonwealth of Pennsylvania.
(n) On or prior to the Closing Date, the Issuer shall have
delivered to the Representative evidence, in form and substance
satisfactory to the Representative, of the Pennsylvania Public Utility
Commission's issuance of the QRO relating to the Transferred
Intangible Transition Property.
(o) Prior to the Closing Date, the Issuer, the Seller and the
Company shall have furnished to the Representative such further
information, certificates, opinions and documents as the
Representative may reasonably request.
If any of the conditions specified in this Section 7 shall not
have been fulfilled in all material respects when and as provided in this
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
Representative 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 Representative.
Notice of such cancellation shall be given to the Issuer in writing or by
telephone or facsimile confirmed in writing.
The documents required to be delivered by this Section 7 shall be
delivered at the office of Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP in the
City of New York on the Closing Date.
8. Indemnification and Contribution.
(a) The Company, the Seller and the Issuer will, jointly and
severally, indemnify and hold harmless each Underwriter, the
directors, officers, members, employees and agents of each Underwriter
and each person who controls any Underwriter within the meaning of
either the Act or the Exchange Act against any and all losses, claims,
damages or liabilities, joint or several, to which they or any of them
may become subject under the Act, the Exchange Act or other Federal or
state statutory law or regulation, at common law or otherwise, insofar
as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement or
alleged untrue statement of a material fact or any omission or alleged
omission to state therein a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, contained in
(i) the Transferred Intangible Transition Property Information and the
Computational Materials and ABS Term Sheets delivered to investors by
any Underwriter to the extent such loss, claim, damage or liability
arises from the Transferred Intangible Transition Property Information
and (ii) the Registration Statement for the registration of the Bonds
as originally filed or in any amendment thereof, or in the Basic
Prospectus, any Preliminary Final Prospectus or the Final Prospectus,
or in any amendment thereof or supplement thereto and, except as
hereinafter in this Section 8 provided, will reimburse each such
indemnified party 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 none of
the Company, the Seller or the Issuer will be liable in any such case
to the extent that any such loss, claim, damage or liability arises
out of or is based upon any such untrue statement or alleged untrue
statement or omission or alleged omission made therein in reliance
upon and in conformity with written information furnished to the
Issuer, the Seller or the Company by or on behalf of any Underwriter
through the Representative specifically for inclusion therein or Trust
Indenture Act statement of eligibility; provided further, that with
respect to any untrue statement or omission of material fact made in
any Preliminary Final Prospectus, the indemnity agreement contained in
this Section 8(a) shall not inure to the benefit of any Underwriter or
any person controlling such Underwriter from whom the person asserting
any such loss, claim, damage or liability purchased the Bonds that are
the subject thereof, to the extent that any such loss, claim, damage
or liability of such Underwriter occurs under the circumstance where
it shall have been determined by a court of competent jurisdiction by
final and nonappealable judgment that (i) the Company, the Seller or
the Issuer had previously furnished copies of the Final Prospectus to
the Representative, (ii) delivery of the Final Prospectus was required
by the Act to be made to such person, (iii) the untrue statement or
omission of a material fact contained in the Preliminary Final
Prospectus was corrected in the Final Prospectus and (iv) there was
not sent or given to such person, at or prior to the written
confirmation of the sale of such Bonds to such person, a copy of the
Final Prospectus. This indemnity agreement will be in addition to any
liability which the Company, the Seller and the Issuer otherwise may
have. As used herein, the term "TRANSFERRED INTANGIBLE TRANSITION
PROPERTY INFORMATION" means information, whether in written or
electronic format or otherwise, regarding the Transferred Intangible
Transition Property provided to the Underwriters by or on behalf of
the Company or the Issuer.
(b) Each Underwriter severally and not jointly agrees to
indemnify and hold harmless the Company, the Seller and the Issuer,
each of their directors, each of their officers who signs the
Registration Statement, and each person who controls the Company, the
Seller or the Issuer within the meaning of either the Act or the
Exchange Act, to the same extent as the foregoing indemnity from the
Company, the Seller and the Issuer to each Underwriter, but only with
reference to (i) written information relating to such Underwriter
furnished to the Issuer, the Seller or the Company by or on behalf of
such Underwriter through the Representative specifically for inclusion
in the documents referred to in the foregoing indemnity and (ii)
untrue statements or alleged untrue statements in the Computational
Materials or ABS Term Sheets delivered to the purchasers of the Bonds
by such Underwriter except to the extent that such losses, claims,
damages or other liabilities arise from factual errors in the
Transferred Intangible Transition Property Information. This
indemnity agreement will be in addition to any liability which any
Underwriter may otherwise have.
(c) Promptly after receipt by an indemnified party under this
Section 8 of notice of the commencement of any action, such
indemnified party will, if a claim in respect thereof is to be made
against the indemnifying party under this Section 8, notify the
indemnifying party in writing of the commencement thereof; but the
failure so to notify the indemnifying party (i) will not relieve it
from liability under paragraph (a) or (b) above unless and to the
extent it did not otherwise learn of such action and such failure
results in the forfeiture by the indemnifying party of substantial
rights and defenses and (ii) will not, in any event, relieve the
indemnifying party from any obligations to any indemnified party other
than the indemnification obligation provided in paragraph (a) or (b)
above. The indemnifying party shall be entitled to appoint counsel of
the indemnifying party's choice at the indemnifying party's expense to
represent the indemnified party in any action for which
indemnification is sought (in which case the indemnifying party shall
not thereafter be responsible for the fees and expenses of any
separate counsel retained by the indemnified party or parties except
as set forth below); provided, however, that such counsel shall be
reasonably satisfactory to the indemnified party. Notwithstanding the
indemnifying party's election to appoint counsel to represent the
indemnified party in an action, the indemnified party shall have the
right to employ separate counsel (including local counsel), and the
indemnifying party shall bear the reasonable fees, costs and expenses
of such separate counsel if (i) the use of counsel chosen by the
indemnifying party to represent the indemnified party would present
such counsel with a conflict of interest, or (ii) the indemnifying
party shall authorize the indemnified party to employ separate counsel
at the expense of the indemnifying party. An indemnifying party will
not, without the prior written consent of the indemnified parties,
settle or compromise or consent to the entry of any judgment with
respect to any pending or threatened claim, action, suit or proceeding
in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified parties are actual or
potential parties to such claim or action) unless such settlement,
compromise or consent includes an unconditional release of each
indemnified party from all liability arising out of such claim,
action, suit or proceeding.
(d) In the event that the indemnity provided in paragraph (a) or
(b) of this Section 8 is unavailable to or insufficient to hold
harmless an indemnified party for any reason, the Company, the Seller,
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 by the Underwriters from the offering of the Bonds. If the
allocation provided by the immediately preceding sentence is
unavailable for any reason, the Company, the Issuer, the Seller and
the Underwriters shall contribute in such proportion as is appropriate
to reflect not only such relative benefits but also the relative fault
of the Company, the Issuer, the Seller and of the Underwriters in
connection with the statements or omissions which 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 the
Company, the Issuer, the Seller or the Underwriters. The Company, the
Issuer, the Seller and the Underwriters agree that it would not be
just and equitable if contribution were determined by pro rata
allocation or any other method of allocation which does not take
account of the equitable considerations referred to above.
Notwithstanding the provisions of this paragraph (d), no person guilty
of fraudulent misrepresentation (within the meaning of Section 11(f)
of the Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation. For purposes of this
Section 8(d), each person who controls an Underwriter within the
meaning of either the Act or the Exchange Act and each director,
officer, employee and agent of an Underwriter shall have the same
rights to contribution as such Underwriter, and each person who
controls the Issuer, the Seller or the Company within the meaning of
either the Act or the Exchange Act, each officer of the Issuer, the
Seller or the Company who shall have signed the Registration Statement
and each director of the Issuer, the Seller or the Company shall have
the same rights to contribution as the Issuer, the Seller or the
Company, subject in each case to the applicable terms and conditions
of this paragraph (d). The Underwriters' obligations to contribute
pursuant to this Section 8 are several in proportion to the respective
principal amounts of Bonds set forth opposite their names in Schedule
II hereto and not joint.
(e) Notwithstanding the provisions of this Section 8, no
Underwriter shall be required to contribute any amount in excess of
the amount by which the total price of the Bonds underwritten by it
and distributed to the public exceeds the amount of any damages which
such Underwriter has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission.
9. Reimbursement of Expenses. If the sale of the Bonds
provided for herein is not consummated because any condition to the
obligations of the Underwriters set forth in Section 6 hereof is not
satisfied, because of any termination pursuant to Section 10 hereof or
because of any refusal, inability or failure on the part of the Company,
the Seller or the Issuer to perform any agreement herein or comply with any
provision hereof other than by reason of a default (including under Section
10) by any of the Underwriters, the Company, the Seller and the Issuer
will, jointly and severally, reimburse the Underwriters upon demand for all
out-of-pocket expenses (including reasonable fees and disbursements of
counsel) that shall have been incurred by them in connection with the
proposed purchase and sale of the Bonds; provided, however, that the
reimbursement of fees and expenses of counsel to the Underwriters shall be
subject to the engagement letter dated [date], between the Company and the
Representative.
10. Default by an Underwriter. If any Underwriter or
Underwriters defaults in their obligations under this Underwriting
Agreement, the non-defaulting Underwriters may make arrangements
satisfactory to the Issuer and the Company for the purchase of such Bonds
by other persons, including any of the Underwriters, but if no such
arrangement are made by the Closing Date, the other Underwriters shall be
obligated, severally in the proportion that their respective commitments in
Schedule II hereto bear to the total commitment of the non-defaulting
Underwriters set forth opposite the names of all the remaining
Underwriters, to purchase the Bonds that the defaulting Underwriter or
Underwriters agreed but failed to purchase. In the event that any
Underwriter or Underwriters defaults in their obligations to purchase Bonds
hereunder, the Company may by prompt written notice to the non-defaulting
Underwriters postpone the Closing Date for a period of not more than seven
full business days to effect whatever changes may thereby be made necessary
in the Registration Statement and the Final Prospectus or in any other
documents, and the Company will promptly file any amendments to the
Registration Statement or supplements to the Final Prospectus that may
thereby be necessary. As used in this Underwriting Agreement, the term
"Underwriter" includes any person substituted for an Underwriter under this
Section. Nothing contained in this Underwriting Agreement shall relieve
any defaulting Underwriter of its liability, if any, to the Issuer, the
Seller and the Company and any non-defaulting Underwriter for damages
occasioned by its default hereunder.
11. Termination. This Underwriting Agreement shall be subject
to termination, in the absolute discretion of the Representative, by notice
given to the Issuer prior to delivery of and payment for the Bonds, if
prior to such time (i) there shall have occurred any change, or any
development involving a prospective change, in or any event affecting
either (A) the business, prospects, properties or financial condition of
the Issuer, the Seller, or the Company or (B) the Transferred Intangible
Transition Property, the Bonds, the QRO or the Competition Act, the effect
of which, in the judgment of the Representative, materially impairs the
investment quality of the Bonds or makes it impractical or inadvisable to
market the Bonds, (ii) trading in the Common Stock of PP&L Resources, Inc.
shall have been suspended by the SEC or the New York Stock Exchange or
trading in securities generally on the New York Stock Exchange shall have
been suspended or limited or minimum prices shall have been established on
such Exchange, (iii) a banking moratorium shall have been declared either
by Federal, New York State or Pennsylvania State authorities or (iv) there
shall have occurred any outbreak or escalation of hostilities, declaration
by the United States of a national emergency or war or other calamity or
crisis the effect of which on financial markets is such as to make it, in
the judgment of the Representative, impracticable or inadvisable to proceed
with the offering or delivery of the Bonds as contemplated by the Final
Prospectus (exclusive of any supplement thereto) and the Representative
shall have made a similar determination with respect to all other
underwritings of stranded cost asset-backed securities in which it is
participating and has the contractual right to make such a determination.
12. Representations and Indemnities to Survive. The respective
agreements, representations, warranties, indemnities and other statements
of the Company or its officers, the Issuer or its officers, Group or its
officers, Reserves or its officers, the Seller or its officers, and of the
Underwriters set forth in or made pursuant to this Underwriting Agreement
will remain in full force and effect, regardless of any investigation made
by or on behalf of any Underwriter or of the Company, the Issuer, Group,
Reserves, the Seller or any of the officers, directors or controlling
persons referred to in Section 8 hereof, and will survive delivery of and
payment for the Bonds. The provisions of Sections 7 and 8 hereof shall
survive the termination or cancellation of this Underwriting Agreement.
13. Notices. All communications hereunder will be in writing
and may be given by United States mail, courier service, telecopy, telefax
or facsimile (confirmed by telephone or in writing in the case of notice by
telecopy, telefax or facsimile) or any other customary means of
communication, and any such communication shall be effective when
delivered, or if mailed, three days after deposit in the United States mail
with proper postage for ordinary mail prepaid, and if sent to the
Representative, to it at the address specified in Schedule I hereto; and if
sent to the Company, to it at Xxx Xxxxx Xxxxx Xxxxxx, Xxxxxxxxx, XX 00000,
Attention: [_________]; if sent to the Seller to it at 0000 Xxxxxx Xxxxxx
Xxxxxxx, Xxxxx 000 Xxxxx, Xxx Xxxxx, Xxxxxx 00000, Attention: [________];
and if sent to the Issuer, to it at Two North Ninth Street, XXXX 9-2,
Room 3, Xxxxxxxxx, XX 00000, Attention: [_________]. The parties hereto,
by notice to the others, may designate additional or different addresses
for subsequent communications.
14. 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 8 hereof, and no other person will have any right or
obligation hereunder.
15. Applicable Law. This Underwriting Agreement will be
governed by and construed in accordance with the laws of the State of New
York.
16. 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.
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicate hereof,
whereupon this letter and your acceptance shall represent a binding
agreement among the Company, the Seller, the Issuer and the several
Underwriters.
Very truly yours,
PP&L, INC.
By: _______________________________
Name:
Title:
PP&L TRANSITION BOND COMPANY LLC
By: _________________________________
Name:
Title:
CEP SECURITIES CO. LLC
By: _________________________________
Name:
Title:
The foregoing Underwriting Agreement is
hereby confirmed and accepted
as of the date specified in Schedule I hereto.
XXXXXX XXXXXXX & CO. INCORPORATED
By: _________________________________
Name:
Title:
For itself and the other
several Underwriters, if any,
named in Schedule II to the
foregoing Underwriting Agreement.
SCHEDULE I
Underwriting Agreement dated:
Registration Statement No. 333-75369
Representative:
Xxxxxx Xxxxxxx & Co. Incorporated
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Title, Purchase Price and Description of Bonds:
Title: PP&L Transition Bond Company LLC Transition Bonds, Series
1999-[__]
Principal amount, Price to
Public, Underwriting Discounts
and Commissions and Proceeds
to Issuer:
Underwriting
Total Principal Discounts and
Amount of Class Price to Public Commissions Proceeds to Issuer
---------------- --------------- ------------- ------------------
$ % % %
$ % % %
$ % % %
$ % % %
$ % % %
$ % % %
$ % % %
$ % % %
$ % % %
Plus, the Underwriters will be
reimbursed by the Issuer for:
$[_________] of expenses,
consisting of $[________]
of out-of-pocket expenses and
$[________] for Underwriters Counsel
Original Issue Discount (if any): $[___________]
Redemption provisions: At the Issuer's option when the outstanding
principal balance of the Bonds has been
reduced to 5% of the original principal
balance.
Other provisions: [None]
Closing Date, Time and Location:
Type of Offering: Delayed Offering
Date referred to in Section 5(a)(vi) and Section 5(b)(ii) after which the
Company, the Seller and the Issuer may offer or sell asset-backed
securities without the consent of the Representative:
SCHEDULE II
Principal Amount of Bonds to be Purchased (in thousands)
--------------------------------------------------------
EXHIBIT A
This information has been prepared in connection with the issuance of the
securities described herein, and is based on information provided by PP&L,
Inc. with respect to the expected characteristics of the intangible
transition property securing these securities. The actual characteristics
and performance of the intangible transition property will differ from the
assumptions used in preparing these materials, which are hypothetical in
nature. Changes in the assumptions may have a material impact on the
information set forth in these materials. No representation is made that
any performance or return indicated herein will be achieved. This
information may not be used or otherwise disseminated in connection with
the offer or sale of these or any other securities, except in connection
with the initial offer or sale of these securities to you to the extent set
forth below. NO REPRESENTATION IS MADE AS TO THE APPROPRIATENESS,
USEFULNESS, ACCURACY OR COMPLETENESS OF THESE MATERIALS OR THE ASSUMPTIONS
ON WHICH THEY ARE BASED. The underwriters disclaim any and all liability
relating to this information, including without limitation any express or
implied representations and warranties for, statements contained in, and
omissions from this information. Additional information is available upon
request. These materials do not constitute an offer to buy or sell or a
solicitation of an offer to buy or sell any security or instrument or to
participate in any particular trading strategy. ANY SUCH OFFER TO BUY OR
SELL ANY SECURITY WOULD BE MADE PURSUANT TO A DEFINITIVE PROSPECTUS AND
PROSPECTUS SUPPLEMENT PREPARED BY THE ISSUER WHICH WOULD CONTAIN MATERIAL
INFORMATION NOT CONTAINED IN THESE MATERIALS. SUCH PROSPECTUS AND
PROSPECTUS SUPPLEMENT WILL CONTAIN ALL MATERIAL INFORMATION IN RESPECT OF
ANY SUCH SECURITY OFFERED THEREBY AND ANY DECISION TO INVEST IN SUCH
SECURITIES SHOULD BE MADE SOLELY IN RELIANCE UPON SUCH PROSPECTUS AND
PROSPECTUS SUPPLEMENT. ANY CAPITALIZED TERMS USED BUT NOT DEFINED HEREIN
ARE TO BE READ IN CONJUNCTION WITH SUCH PROSPECTUS AND PROSPECTUS
SUPPLEMENT. In the event of any such offering, these materials, including
any description of the intangible transition property contained herein,
shall be deemed superseded, amended and supplemented in their entirety by
such Prospectus and Prospectus Supplement. To Our Readers Worldwide: In
addition, please note that this information has been provided by Xxxxxx
Xxxxxxx & Co., Incorporated and approved by Xxxxxx Xxxxxxx & Co.
International Limited, a member of the Securities and Futures Authority,
and Xxxxxx Xxxxxxx Japan Ltd. We recommend that investors obtain the
advice of their Xxxxxx Xxxxxxx & Co. International Limited or Xxxxxx
Xxxxxxx Japan Ltd. representative about the investment concerned. NOT FOR
DISTRIBUTION TO PRIVATE CUSTOMERS AS DEFINED BY THE U.K. SECURITIES AND
FUTURES AUTHORITY.
