ONCOR ELECTRIC DELIVERY TRANSITION BOND COMPANY LLC
ONCOR ELECTRIC DELIVERY COMPANY
$500,000,000 TRANSITION BONDS, SERIES 2003-1
UNDERWRITING AGREEMENT
August 14, 2003
To the Representatives named in Schedule I hereto
of the Underwriters named in Schedule II hereto
Ladies and Gentlemen:
1. Introduction. Oncor Electric Delivery Transition Bond Company LLC,
a Delaware limited liability company (the "Issuer"), proposes to issue and sell
up to $500,000,000 aggregate principal amount of its transition bonds, series
2003-1 (the "Series 2003 Bonds"), identified in Schedule I hereto. The Issuer
and Oncor Electric Delivery Company, a Texas corporation and the Issuer's direct
parent (the "Company"), hereby confirm their agreement with the several
Underwriters (as defined below) as set forth herein.
The term "Underwriters" as used herein shall be deemed to mean the
entity or several entities named in Schedule II hereto and any underwriter
substituted as provided in Section 7 hereof and the term "Underwriter" shall be
deemed to mean any one of such Underwriters. If the entity or entities listed in
Schedule I hereto (the "Representatives") are the same as the entity or entities
listed in Schedule II hereto, then the terms "Underwriters" and
"Representatives", as used herein, shall each be deemed to refer to such entity
or entities. All obligations of the Underwriters hereunder are several and not
joint. If more than one entity is named in Schedule I hereto, any action under
or in respect of this underwriting agreement ("Underwriting Agreement") may be
taken by such entities jointly as the Representatives or by one of the entities
acting on behalf of the Representatives and such action will be binding upon all
the Underwriters.
Capitalized terms used and not otherwise defined in this Underwriting
Agreement shall have the meanings given to them in the Indenture (as defined
below).
2. Description of the Series 2003 Bonds. The Series 2003 Bonds will be
issued pursuant to an indenture to be dated on or about August 21, 2003,
supplemented by a Series Supplement thereto to be dated on or about August 21,
2003 (as so supplemented and as it may be further supplemented from time to
time, the "Indenture"), between the Issuer and The Bank of New York, as
indenture trustee (the "Indenture Trustee"), in substantially the form
heretofore delivered to you. The Series 2003 Bonds will be secured primarily by
Transition Property ("Series 2003 Transition Property"), sold to the Issuer by
the Company pursuant to the Series 2003-1 Transition Property Purchase and Sale
Agreement, to be dated on or about August 21, 2003, between the Company and the
Issuer (the "Sale Agreement"). The Series 2003 Transition Property securing the
Series 2003 Bonds will be serviced pursuant to the Series 2003-1 Transition
Property Servicing Agreement, to be dated on or about August 21, 2003, between
the Company, as servicer, and the Issuer, as owner of the Series 2003 Transition
Property sold to it pursuant to the Sale Agreement (the "Servicing Agreement").
3. Representations and Warranties of the Issuer. The Issuer represents
and warrants to the several Underwriters that:
(a) The Issuer has filed with the Securities and Exchange Commission
(the "Commission") a registration statement on Form S-3 on December 1, 1999
(Registration No. 333-91935), as amended by Amendment No. 1 and Amendment
No. 2 thereto, including a prospectus, for the registration under the
Securities Act of 1933, as amended (the "Securities Act"), of
$1,300,000,000 aggregate principal amount of its transition bonds. Such
registration statement, as amended ("Registration Statement No.
333-91935"), has been declared effective by the Commission and no stop
order suspending such effectiveness has been issued under the Securities
Act and no proceedings for that purpose have been instituted or are pending
or, to the knowledge of the Issuer, threatened by the Commission. None of
the $1,300,000,000 aggregate principal amount of transition bonds
registered with the Commission under the Securities Act pursuant to
Registration Statement No. 333-91935 has been previously issued. References
herein to the term "Registration Statement" as of any date shall be deemed
to refer to Registration Statement No. 333-91935, as amended or
supplemented to such date, including all documents incorporated by
reference therein as of such date pursuant to Item 12 of Form S-3
("Incorporated Documents"); provided that if the Issuer files a
registration statement with respect to the transition bonds registered
under Registration Statement No. 333-91935 with the Commission pursuant to
Rule 462(b) under the Securities Act (the "Rule 462(b) Registration
Statement"), then after such filing, all references to "Registration
Statement" shall be deemed to include the Rule 462(b) Registration
Statement. References herein to the term "Prospectus" as of any given date
shall be deemed to refer to the prospectus, including any preliminary
prospectus, forming a part of Registration Statement No. 333-91935, as
supplemented by a prospectus supplement relating to be the Series 2003
Bonds proposed to be filed pursuant to Rule 424 of the general rules and
regulations of the Securities Act ("Rule 424") and as further amended and
supplemented as of such date (other than amendments or supplements relating
to securities other than the Series 2003 Bonds), including all Incorporated
Documents. References herein to the term "Effective Date" shall be deemed
to refer to the later of the time and date the Registration Statement was
declared effective or the time and date of the filing thereafter of the
Issuer's most recent Annual Report on Form 10-K if such filing is made
prior to the Closing Date, as hereinafter defined. The Issuer will not file
any amendment to the Registration Statement or supplement to the Prospectus
on or after the date of this Underwriting Agreement, without prior notice
to the Underwriters, or to which Pillsbury Winthrop LLP, who are acting as
counsel for the Underwriters ("Counsel for the Underwriters"), shall
reasonably object in writing. For the purpose of this Underwriting
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Agreement, any Incorporated Document filed with the Commission on or after
the date of this Underwriting Agreement and prior to the Closing Date, as
hereinafter defined, shall be deemed an amendment or supplement to the
Registration Statement and the Prospectus.
(b) The Registration Statement at the Effective Date fully complied,
and the Prospectus, both on the date it is filed with the Commission
pursuant to Rule 424 (such date, the "424 Date") and at the Closing Date,
and the Registration Statement and the Indenture, at the Closing Date, will
fully comply, in all material respects with the applicable provisions of
the Securities Act, the Trust Indenture Act of 1939, as amended ("Trust
Indenture Act"), respectively, and, in each case, the applicable
instructions, rules and regulations of the Commission thereunder; the
Registration Statement, at the Effective Date, did not, and at the Closing
Date, will not, contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make
the statements therein not misleading; the Prospectus, both on the 424 Date
and at the Closing Date, will not contain an 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; and on said dates the Incorporated Documents, taken
together as a whole, fully complied or will fully comply in all material
respects with the applicable provisions of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), and the applicable rules and
regulations of the Commission thereunder, and, when read together with the
Prospectus on said dates did not and will not contain an untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided that the
foregoing representations and warranties in this paragraph (b) shall not
apply to statements or omissions made in reliance upon information
furnished in writing to the Issuer or the Company by, or on behalf of, any
Underwriter through the Representatives expressly for use in connection
with the preparation of the Registration Statement or the Prospectus or to
any statements in or omissions from any Statements of Eligibility on Form
T-1 (or amendments thereto) of the Indenture Trustee under the Indenture
filed as exhibits to the Registration Statement or to any statements or
omissions made in the Registration Statement or the Prospectus relating to
The Depository Trust Company ("DTC") Book-Entry System that are based
solely on information contained in published reports of the DTC.
(c) The Issuer has been duly formed and is validly existing as a
limited liability company in good standing under the Limited Liability
Company Act of the State of Delaware, as amended, with full limited
liability company power and authority to execute, deliver and perform its
obligations under this Underwriting Agreement, the Series 2003 Bonds, the
Sale Agreement, the Servicing Agreement, the Indenture, the LLC Agreement,
the Intercreditor Agreement, any Swap Agreement, the Administration
Agreement and the other agreements and instruments contemplated by the
Prospectus (collectively, the "Issuer Documents") and to own its properties
and conduct its business as described in the Prospectus; the Issuer has
been duly qualified as a foreign limited liability company for the
transaction of business and is in good standing under the laws of each
other jurisdiction in which it owns or leases properties or conducts any
business so as to require such qualification, except where failure to so
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qualify or to be in good standing would not have a material adverse effect
on the business, properties or financial condition of the Issuer; the
Issuer has conducted and will conduct no business in the future that would
be inconsistent with the description of the Issuer set forth in the
Prospectus; the Issuer is not a party to or bound by any agreement or
instrument other than the Issuer Documents; the Issuer has no liabilities
or obligations other than those arising out of the transactions
contemplated by the Issuer Documents and as described in the Prospectus;
the Company is the beneficial owner of all of the limited liability company
membership interests of the Issuer; and based on current law, the Issuer is
not classified as an association taxable as a corporation for United States
federal income tax purposes.
(d) The issuance and sale of the Bonds by the Issuer, the purchase of
the Transition Property by the Issuer from the Company and the consummation
of the transactions herein contemplated by the Issuer, and the fulfillment
of the terms hereof on the part of the Issuer to be fulfilled, will not
result in a breach of any of the terms or provisions of, or constitute a
default under the Issuer's certificate of formation or limited liability
company agreement (collectively, the "Issuer Charter Documents"), or any
indenture, mortgage, deed of trust or other agreement or instrument to
which the Issuer is now a party.
(e) This Underwriting Agreement has been duly authorized, executed and
delivered by the Issuer which has the necessary limited liability company
power and authority to execute, deliver and perform its obligations under
this Underwriting Agreement.
(f) The Issuer (i) is not in violation of the Issuer Charter
Documents, (ii) is not in default and no event has occurred which, with
notice or lapse of time or both, would constitute such a default, in the
due performance or observance of any term, covenant or condition contained
in any indenture, mortgage, deed of trust or other agreement or instrument
to which it is a party or by which it is bound or to which any of its
properties is subject, except for any such defaults that would not,
individually or in the aggregate, have a material adverse effect on its
business, property or financial condition, and (iii) is not in violation of
any law, ordinance, governmental rule, regulation or court decree to which
it or its property may be subject, except for any such violations that
would not, individually or in the aggregate, have a material adverse effect
on its business, property or financial condition.
(g) The Indenture has been duly authorized by the Issuer, and, on the
Closing Date, will have been duly executed and delivered by the Issuer and
will be a valid and binding instrument, enforceable against the Issuer in
accordance with its terms, except as the enforceability thereof may be
limited by bankruptcy, insolvency, reorganization, receivership, moratorium
or other similar laws relating to or affecting creditors' rights generally
and by general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law). On the
Closing Date, the Indenture will (i) comply as to form with the
requirements of the Trust Indenture Act and (ii) conform to the description
thereof in the Registration Statement.
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(h) The Series 2003 Bonds have been duly authorized by the Issuer for
issuance and sale to the Underwriters pursuant to this Underwriting
Agreement and, when executed by the Issuer and authenticated by the
Indenture Trustee in accordance with the Indenture and delivered to the
Underwriters against payment therefor in accordance with the terms of this
Underwriting Agreement, will constitute valid and binding obligations of
the Issuer entitled to the benefits of the Indenture and enforceable
against the Issuer in accordance with their terms, except as the
enforceability thereof may be limited by bankruptcy, insolvency,
reorganization, receivership, moratorium or other similar laws relating to
or affecting creditors' rights generally and by general principles of
equity (regardless of whether such enforceability is considered in a
proceeding in equity or at law), and the Series 2003 Bonds conform to the
description thereof in the Registration Statement. The Issuer has all
requisite limited liability company power and authority to issue, sell and
deliver the Series 2003 Bonds in accordance with and upon the terms and
conditions set forth in this Underwriting Agreement and in the Registration
Statement.
(i) Other than as set forth or contemplated in the Prospectus and
Docket No. 25230 before the PUCT entitled "Joint Application for Approval
of Stipulation regarding TXU Electric Company Transition Competition
Issues," there is no litigation or governmental proceeding to which the
Issuer is a party or to which any property of the Issuer is subject or
which is pending or, to the knowledge of the Issuer, threatened against the
Issuer that could reasonably be expected to, individually or in the
aggregate, result in a material adverse effect on the Issuer's business,
property or financial condition.
(j) Other than any necessary action of the PUCT, any filings required
under the Restructuring Act or Financing Order or as otherwise set forth or
contemplated in the Prospectus, no approval, authorization, consent or
order of any public board or body (except such as have been already
obtained and other than in connection or in compliance with the provisions
of applicable blue-sky laws or securities laws of any state, as to which
the Issuer makes no representations or warranties), is legally required for
the issuance and sale by the Issuer of the Series 2003 Bonds.
(k) The Issuer is not an "investment company" within the meaning of
the Investment Company Act of 1940, as amended (the "1940 Act").
(l) The financial statements, together with the related notes,
included in the Prospectus present fairly in all material respects the
financial position, results of operations and member's equity of the Issuer
as of the respective dates and for the respective periods specified and,
except as otherwise stated in the Prospectus, such financial statements
have been prepared in conformity with generally accepted accounting
principles in the United States applied on a consistent basis during the
periods involved.
(m) Deloitte & Touche LLP, who have certified financial statements of
the Issuer, are independent public accountants as required by the
Securities Act and the rules and regulations of the Commission thereunder.
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(n) Each of the Sale Agreement, Servicing Agreement, Intercreditor
Agreement, the Administration Agreement and LLC Agreement has been duly
authorized by the Issuer, and when executed and delivered by the Issuer and
the other parties thereto, will constitute a valid and legally binding
obligation of the Issuer enforceable against the Issuer in accordance with
its terms, except as the enforceability thereof may be limited by
bankruptcy, insolvency, reorganization, receivership, moratorium or other
similar laws relating to or affecting creditors' rights generally and by
general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law).
4. Representations and Warranties of the Company. The Company
represents and warrants to the several Underwriters that:
(a) The Issuer has filed with the Commission Registration Statement
No. 333-91935 for the registration under the Securities Act of
$1,300,000,000 aggregate principal amount of its transition bonds.
Registration Statement No. 333-91935 has been declared effective by the
Commission and no stop order suspending such effectiveness has been issued
under the Securities Act and no proceedings for that purpose have been
instituted or are pending or, to the knowledge of the Company, threatened
by the Commission. None of the $1,300,000,000 aggregate principal amount of
transition bonds registered with the Commission under the Securities Act
pursuant to Registration Statement No. 333-91935 has been previously
issued.
(b) The Registration Statement at the Effective Date fully complied,
and the Prospectus, both on the 424 Date and at the Closing Date, and the
Registration Statement and the Indenture, at the Closing Date, will fully
comply, in all material respects with the applicable provisions of the
Securities Act and the Trust Indenture Act, respectively, and, in each
case, the applicable instructions, rules and regulations of the Commission
thereunder; the Registration Statement, at the Effective Date, did not, and
at the Closing Date the Registration Statement will not, contain any untrue
statement of a material fact, or omit to state a material fact required to
be stated therein or necessary to make the statements therein not
misleading; the Prospectus, both on the 424 Date and at the Closing Date,
will not include any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements contained therein,
in the light of the circumstances under which they were made, not
misleading; provided, that the foregoing representations and warranties in
this paragraph (b) shall not apply to statements or omissions made in
reliance upon and in conformity with information furnished in writing to
the Issuer or the Company by, or on behalf of, any Underwriter through the
Representatives expressly for use in connection with the preparation of the
Registration Statement or the Prospectus, or to any statements in or
omissions from any Statement of Eligibility on Form T-1, or amendments
thereto, of the Indenture Trustee under the Indenture filed as exhibits to
the Registration Statement or to any statements or omissions made in the
Registration Statement or Prospectus relating to the DTC Book-Entry-Only
System that are based solely on information contained in published reports
of DTC.
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(c) The Company has been incorporated and is validly existing as a
corporation and is in good standing under the laws of the jurisdiction of
its incorporation, has the corporate power and authority to own, lease and
operate its properties and to conduct its business as presently conducted
and as set forth in or contemplated by the Prospectus, and is qualified as
a foreign corporation to transact business and is in good standing in each
jurisdiction in which such qualification is required, whether by reason of
the ownership or leasing of property or the conduct of business, except
where the failure to so qualify or be in good standing would not have a
material adverse effect on the business, property or financial condition of
the Company and its subsidiaries considered as a whole. The Company is the
beneficial owner of all of the limited liability company membership
interests of the Issuer.
(d) The Company has no significant subsidiaries within the meaning of
Rule 1-02(w) of Regulation S-X.
(e) The transfer by the Company of all of its rights and interests
under the Financing Order to the Issuer and the consummation of the
transactions herein contemplated by the Company, and the fulfillment of the
terms hereof on the part of the Company to be fulfilled, will not result in
a breach of any of the terms or provisions of, or constitute a default
under, the Company's Articles of Incorporation (the "Company Charter"), or
by-laws, or any indenture, mortgage, deed of trust or other agreement or
instrument to which the Company is now a party.
(f) This Underwriting Agreement has been duly authorized, executed and
delivered by the Company which has the necessary power and authority to
execute, deliver and perform its obligations under this Underwriting
Agreement.
(g) The Company (i) is not in violation of the Company Charter, (ii)
is not in default and no event has occurred which, with notice or lapse of
time or both, would constitute such a default, in the due performance or
observance of any term, covenant or condition contained in any indenture,
mortgage, deed of trust or other agreement or instrument to which it is a
party or by which it is bound or to which any of its properties is subject,
except for any such defaults that would not, individually or in the
aggregate, have a material adverse effect on the business, property or
financial condition of the Company and its subsidiaries considered as a
whole, or (iii) is not in violation of any law, ordinance, governmental
rule, regulation or court decree to which it or its property may be
subject, except for any such violations that would not, individually or in
the aggregate, have a material adverse effect on the business, property or
financial condition of the Company and its subsidiaries considered as a
whole.
(h) Except as set forth or contemplated in the Prospectus and Docket
No. 25230 before the PUCT entitled "Joint Application for Approval of
Stipulation regarding TXU Electric Company Transition Competition Issues,"
there is no litigation or governmental proceeding to which the Company or
any of its subsidiaries is a party or to which any property of the Company
or any of its subsidiaries is subject or which is pending or, to the
knowledge of the Company, threatened against the Company or any of its
7
subsidiaries that could reasonably be expected to, individually or in the
aggregate, result in a material adverse effect on the Company and its
subsidiaries taken as a whole.
(i) Other than any necessary action of the PUCT, any filings required
under the Restructuring Act or Financing Order or as otherwise set forth or
contemplated in the Prospectus, no approval, authorization, consent or
order of any public board or body (except such as have been already
obtained and other than in connection or in compliance with the provisions
of applicable blue-sky laws or securities laws of any state, as to which
the Company makes no representations or warranties), is legally required
for the issuance and sale by the Issuer of the Series 2003 Bonds.
(j) The Company is not an "investment company" within the meaning of
the 1940 Act.
(k) Each of the Sale Agreement, Servicing Agreement, Administration
Agreement and Intercreditor Agreement has been duly and validly authorized
by the Company, and when executed and delivered by the Company and the
other parties thereto will constitute a valid and legally binding
obligation of the Company enforceable against the Company in accordance
with its terms, except as the enforceability thereof may be limited by
bankruptcy, insolvency, reorganization, receivership, moratorium or other
similar laws relating to or affecting creditors' rights generally and by
general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law).
(l) There are no transfer taxes related to the transfer of the
Transition Property or the issuance and sale of the Series 2003 Bonds to
the Underwriters pursuant to this Underwriting Agreement required to be
paid at or prior to the Closing Date by the Company or the Issuer.
5. Representations and Warranties of the Underwriters. Each
Underwriter represents and warrants to the Company and the Issuer that:
(a) If and to the extent it has provided any prospective investors
with any Computational Materials or ABS Term Sheets (as such terms are
hereinafter defined) prior to the date hereof in connection with the
offering of the Bonds, all of the conditions set forth in Section 8A hereof
have been satisfied with respect thereto.
(b) [Reserved]
6. Purchase and Sale. On the basis of the representations and
warranties herein contained, and subject to the terms and conditions herein set
forth, the Issuer shall sell to each of the Underwriters, and each Underwriter
shall purchase from the Issuer, at the time and place herein specified,
severally and not jointly, at the purchase price set forth in Schedule I hereto,
the principal amount of the Series 2003 Bonds set forth opposite such
Underwriter's name in Schedule II hereto. The Underwriters agree to make a
public offering of the Series 2003 Bonds. The Issuer shall pay to the
Underwriters a commission equal to $2,399,350.
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7. Time and Place of Closing. Delivery of the Series 2003 Bonds
against payment of the aggregate purchase price therefor by wire transfer in
federal funds shall be made at the place, on the date and at the time specified
in Schedule I hereto, or at such other place, time and date as shall be agreed
upon in writing by the Issuer and the Representatives. The hour and date of such
delivery and payment are herein called the "Closing Date". The Series 2003 Bonds
shall be delivered to DTC or to The Bank of New York, as custodian for DTC, in
fully registered global form registered in the name of Cede & Co., for the
respective accounts specified by the Representatives not later than the close of
business on the business day preceding the Closing Date or such other time as
may be agreed upon by the Representatives. The Issuer agrees to make the Series
2003 Bonds available to the Representatives for checking purposes not later than
1:00 P.M. New York Time on the last business day preceding the Closing Date at
the place specified for delivery of the Series 2003 Bonds in Schedule I hereto,
or at such other place as the Issuer may specify.
If any Underwriter shall fail or refuse (otherwise than for some
reason sufficient to justify, in accordance with the terms hereof, the
cancellation or termination of its obligations hereunder) to purchase and pay
for the aggregate principal amount of Series 2003 Bonds that such Underwriter
has agreed to purchase and pay for hereunder, the Issuer shall immediately give
notice to the other Underwriters of the default of such Underwriter, and the
other Underwriters shall have the right within 24 hours after the receipt of
such notice to determine to purchase, or to procure one or more others, who are
members of the National Association of Securities Dealers, Inc. ("NASD") (or, if
not members of the NASD, who are not eligible for membership in the NASD and who
agree (i) to make no sales within the United States, its territories or its
possessions or to persons who are citizens thereof or residents therein and (ii)
in making sales to comply with the NASD's Conduct Rules) and satisfactory to the
Issuer, to purchase, upon the terms herein set forth, the aggregate principal
amount of Series 2003 Bonds that the defaulting Underwriter had agreed to
purchase. If any non-defaulting Underwriter or Underwriters shall determine to
exercise such right, such Underwriter or Underwriters shall give written notice
to the Issuer of the determination in that regard within 24 hours after receipt
of notice of any such default, and thereupon the Closing Date shall be postponed
for such period, not exceeding three business days, as the Issuer shall
determine. If in the event of such a default no non-defaulting Underwriter shall
give such notice, then this Underwriting Agreement may be terminated by the
Issuer, upon like notice given to the non-defaulting Underwriters, within a
further period of 24 hours. If in such case the Issuer shall not elect to
terminate this Underwriting Agreement it shall have the right, irrespective of
such default:
(a) to require each non-defaulting Underwriter to purchase and pay for
the respective aggregate principal amount of Series 2003 Bonds that it had
agreed to purchase hereunder as hereinabove provided and, in addition, the
aggregate principal amount of Series 2003 Bonds that the defaulting
Underwriter shall have so failed to purchase up to aggregate principal
amount of Series 2003 Bonds equal to one-ninth (1/9) of the aggregate
principal amount of Series 2003 Bonds that such non-defaulting Underwriter
has otherwise agreed to purchase hereunder, and/or
(b) to procure one or more persons, reasonably acceptable to the
Representatives, who are members of the NASD (or, if not members of the
NASD, who are not eligible for membership in the NASD and who agree (i) to
make no sales within the United States, its territories or its possessions
9
or to persons who are citizens thereof or residents therein and (ii) in
making sales to comply with the NASD's Conduct Rules), to purchase, upon
the terms herein set forth, either all or a part of the aggregate principal
amount of Series 2003 Bonds that such defaulting Underwriter had agreed to
purchase or that portion thereof that the remaining Underwriters shall not
be obligated to purchase pursuant to the foregoing clause (a).
In the event the Issuer shall exercise its rights under (a) and/or (b)
above, the Issuer shall give written notice thereof to the non-defaulting
Underwriters within such further period of 24 hours, and thereupon the Closing
Date shall be postponed for such period, not exceeding three business days, as
the Company shall determine.
In the computation of any period of 24 hours referred to in this
Section 7, there shall be excluded a period of 24 hours in respect of each
Saturday, Sunday or legal holiday that would otherwise be included in such
period of time.
Any action taken by the Issuer under this Section 7 shall not relieve
any defaulting Underwriter from liability in respect of any default of such
Underwriter under this Underwriting Agreement. Termination by the Issuer under
this Section 7 shall be without any liability on the part of the Issuer or any
non-defaulting Underwriter, except as otherwise provided in Sections 8(a)(vii)
and 11 hereof.
8. Covenants.
(a) Covenants of the Issuer. The Issuer covenants and agrees with the
several Underwriters that:
(i) The Issuer will promptly deliver to the Representatives and
Counsel to the Underwriters a signed copy of the Registration
Statement as originally filed or, to the extent a signed copy is not
available, a conformed copy, certified by an officer of the Issuer to
be in the form as originally filed, including all Incorporated
Documents and exhibits and of all amendments thereto.
(ii) The Issuer will deliver to the Underwriters, as soon as
practicable after the date hereof, as many copies of the Prospectus as
of such date as they may reasonably request.
(iii) The Issuer will cause the Prospectus to be filed with the
Commission pursuant to Rule 424 as soon as practicable and advise the
Underwriters of any stop order suspending the effectiveness of the
Registration Statement or the institution of any proceeding therefor
of which Issuer shall have received notice. The Issuer 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.
(iv) If, during such period of time (not exceeding nine months)
after the Prospectus has been filed with the Commission pursuant to
Rule 424 as in the opinion of Counsel for the Underwriters a
prospectus covering the Series 2003 Bonds is required by law to be
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delivered in connection with sales by an Underwriter or dealer, any
event relating to or affecting the Issuer, the Series 2003 Bonds or
the Series 2003 Transition Property or of which the Issuer shall be
advised in writing by the Representatives shall occur that in the
Issuer's reasonable opinion after consultation with Counsel for the
Underwriters should be set forth in a supplement to, or an amendment
of, the Prospectus in order to make the Prospectus not misleading in
the light of the circumstances when it is delivered to a purchaser,
the Issuer will, at its expense, amend or supplement the Prospectus by
either (A) preparing and furnishing to the Underwriters at the
Issuer's expense a reasonable number of copies of a supplement or
supplements or an amendment or amendments to the Prospectus or (B)
making an appropriate filing pursuant to Section 13 of the Exchange
Act, which will supplement or amend the Prospectus so that, as
supplemented or amended, it will not contain any untrue statement of a
material fact or omit to state any material fact necessary in order to
make the statements therein, in the light of the circumstances when
the Prospectus is delivered to a purchaser, not misleading; provided
that should such event relate solely to the activities of any of the
Underwriters, then such Underwriters shall assume the expense of
preparing and furnishing any such amendment or supplement. In case any
Underwriter is required to deliver a prospectus after the expiration
of nine months from the 424 Date, the Issuer, upon such Underwriter's
request, will furnish to such Underwriter, at the expense of such
Underwriter, a reasonable quantity of a supplemental prospectus or
supplements to the Prospectus complying with Section 10(a) of the
Securities Act.
(v) The Issuer will make generally available to its security
holders, as soon as practicable, an earnings statement (which need not
be audited) covering a period of at least twelve months beginning not
earlier than the first day of the month next succeeding the month in
which occurred the effective date of the Registration Statement as
defined in Rule 158 under the Securities Act.
(vi) The Issuer will furnish such proper information as may be
lawfully required and otherwise cooperate in qualifying the Series
2003 Bonds for offer and sale under the blue-sky laws of such
jurisdictions as the Representatives may designate; provided that the
Issuer shall not be required to qualify as a foreign limited liability
company or dealer in securities, to file any consents to service of
process under the laws of any jurisdiction, or meet any other
requirements deemed by the Issuer to be unduly burdensome.
(vii) The Issuer will, except as herein provided, pay all
expenses and taxes (except transfer taxes) in connection with (i) the
preparation and filing by it of the Registration Statement, (ii) the
issuance and delivery of the Series 2003 Bonds as provided in Section
7 hereof (including, without limitation, fees and disbursements of
Counsel for the Underwriters and all trustee, rating agency and PUCT
financial advisor fees), (iii) the qualification of the Series 2003
Bonds under blue-sky laws (including counsel fees not to exceed
$7,500), and (iv) the printing and delivery to the Underwriters of
reasonable quantities of the Registration Statement and, except as
provided in Section 8(iv) hereof, of the Prospectus. The Issuer shall
11
not, however, be required to pay any amount for any expenses of the
Underwriters, except that, if this Underwriting Agreement shall be
terminated in accordance with the provisions of Section 7, 9 or 13
hereof, the Issuer will reimburse the Underwriters for the fees and
disbursements of Counsel for the Underwriters, and will reimburse the
Underwriters for their reasonable out-of-pocket expenses, in an
aggregate amount not exceeding $10,000, incurred in contemplation of
the performance of this Underwriting Agreement. The Issuer shall not
in any event be liable to any of the several Underwriters for damages
on account of loss of anticipated profits.
(viii) During the period from the date of this Underwriting
Agreement to the date that is five days after the Closing Date, the
Issuer will not, without the prior written consent of the
Representatives, offer, sell or contract to sell, or otherwise dispose
of, directly or indirectly, or announce the offering of, any
asset-backed securities (other than the Series 2003 Bonds).
(ix) To the extent, if any, that any rating necessary to satisfy
the condition set forth in Section 9(y) 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 hereinafter defined) 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
hereinafter defined); 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 8A
hereof, and the Issuer must receive, prior to the Closing Date, a
letter from Ernst & Young, 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 said
Section 8A and this Section 8(a)(xi), 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 8A
hereof as soon as practicable following receipt thereof.
(xi) For a period from the date of this Underwriting Agreement
until the retirement of the Series 2003 Bonds or until such time as
the Underwriters shall cease to maintain a secondary market in the
Series 2003 Bonds, whichever occurs first, the Issuer shall file with
the Commission, and make available on the website associated with the
Issuer' parent, such periodic reports, if any, as are required
12
(without regard to the number of holders of Series 2003 Bonds to the
extent permitted by and consistent with the Issuer's obligations under
applicable law) from time to time under Section 13 or Section 15(d) of
the Exchange Act, and the Issuer shall not voluntarily suspend or
terminate its filing obligations with the Commission. The Issuer shall
also, to the extent permitted by and consistent with the Issuer's
obligations under applicable law, include in the periodic and other
reports to be filed with the Commission as provided above, such
information as required by Section 3.07(h) of the Indenture with
respect to the Series 2003 Bonds.
(b) Covenants of the Company. The Company covenants and agrees with
the several Underwriters that, to the extent that the Issuer has not
already performed such act pursuant to Section 8(a):
(i) To the extent permitted by the Basic Documents, the Company
will use its reasonable best efforts to cause the Issuer to comply
with the covenants set forth in Section 8(a) hereof.
(ii) The Company will use its reasonable best efforts to prevent
the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement and, if issued, to obtain
as soon as possible the withdrawal thereof.
(iii) If, during such period of time (not exceeding nine months)
after the Prospectus has been filed with the Commission pursuant to
Rule 424 as in the opinion of Counsel for the Underwriters a
prospectus covering the Series 2003 Bonds is required by law to be
delivered in connection with sales by an Underwriter or dealer, any
event relating to or affecting the Company, the Series 2003 Bonds or
the Series 2003 Transition Property or of which the Company shall be
advised in writing by the Representatives shall occur that in the
Company's reasonable opinion after consultation with Counsel for the
Underwriters should be set forth in a supplement to, or an amendment
of, the Prospectus in order to make the Prospectus not misleading in
the light of the circumstances when it is delivered to a purchaser,
the Company will cause the Issuer, at the Company's expense, to amend
or supplement the Prospectus by either (A) preparing and furnishing to
the Underwriters at the Company's expense a reasonable number of
copies of a supplement or supplements or an amendment or amendments to
the Prospectus or (B) making an appropriate filing pursuant to Section
13 of the Exchange Act, which will supplement or amend the Prospectus
so that, as supplemented or amended, it will not contain any untrue
statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances when the Prospectus is delivered to a purchaser, not
misleading; provided that should such event relate solely to the
activities of any of the Underwriters, then such Underwriters shall
assume the expense of preparing and furnishing any such amendment or
supplement. In case any Underwriter is required to deliver a
prospectus after the expiration of nine months from the 424 Date, the
Company will cause to the Issuer to, upon such Underwriter's request,
13
furnish to such Underwriter, at the expense of such Underwriter, a
reasonable quantity of a supplemental prospectus or supplements to the
Prospectus complying with Section 10(a) of the Securities Act.
(iv) During the period from the date of this Underwriting
Agreement to the date that is five days after the Closing Date, the
Company will not, without the prior written consent of the
Representatives, offer, sell or contract to sell, or otherwise dispose
of, directly or indirectly, or announce the offering of, any
asset-backed securities (other than the Series 2003 Bonds).
(v) To cause the proceeds for the issuance and sale of the Series
2003 Bonds to be applied for the purposes described in the Prospectus
and in compliance with the Restructuring Act and the Financing Order
and to furnish or cause to be furnished to the Representatives copies
of all reports required by Rule 463 under the Securities Act.
(vi) To the extent, if any, that any rating necessary to satisfy
the condition set forth in Section 9(y) 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.
8A. Obligations of Underwriters Relating to Computational Materials
and Terms Sheets. In connection with the offering of the Series 2003 Bonds, each
Underwriter may prepare and provide to prospective investors (x) 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 no-action letter of
February 17, 1995 issued by the Commission to the Public Securities Association
(the "PSA Letter") (collectively, the "No-Action Letters") and (y) items similar
to ABS term sheets ("ABS Term Sheets") as defined in the PSA Letter, subject to
the following conditions:
(a) 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 Schedule III. 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 Section 8A(a) will
be satisfied if all Computational Materials and ABS Term Sheets referred to
herein bear a legend in a form previously approved by the Issuer.
(b) 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
14
Underwriter shall provide to the Issuer, for filing on Form 8-K as provided
in Section 8(a)(x) hereof, 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.
Such 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 Section 8A(b) must be
provided to the Issuer no 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 Series 2003 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 Section 8A(b) (other than copies of Computational
Materials or ABS Term Sheets previously submitted to the Issuer in
accordance with this Section 8A(b) for filing pursuant to Section 8(a)(x)
hereof), unless such Computational Materials or ABS Term Sheets are
preceded or accompanied by the delivery of a Prospectus to such investor or
prospective investor.
(c) 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
information, whether in written or electronic format or otherwise,
regarding the Transition Property initially provided to the Underwriters by
or on behalf of the Company or the Issuer (the "Transition Property
Information") that differ from the final Transition Property Information in
any material respect or on Bond structuring terms that were revised in any
material respect prior to the printing of the Prospectus, the Underwriters
shall prepare revised Computational Materials or ABS Term Sheets, as the
case may be, based on the final Transition Property Information and
structuring assumptions, deliver with the 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 Series 2003 Bonds,
and include such revised Computational Materials and ABS Term Sheets
(marked "AS REVISED") in the materials delivered to the Issuer pursuant to
Section 8A(b) hereof. The expenses of each Underwriter relating to the
preparation and transmission of its Computational Material and ABS Term
Sheets, including, without limitation, fees and expenses of accountants,
shall be the responsibility of the Issuer.
(d) 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
15
which a prospectus relating to the Series 2003 Bonds is required to be
delivered under the Securities 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 Series 2003 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).
(e) 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 Section 8A(b) hereof, such Underwriter
did not provide any prospective investors with any information in written
or electronic form in connection with the offering of the Series 2003 Bonds
that is required to be filed with the Commission in accordance with the
No-Action Letters.
(f) In the event of any delay in the delivery by any Underwriter to
the Issuer of all Computational Materials and ABS Term Sheets required to
be delivered in accordance with Section 8A(b) hereof, or in the delivery of
the accountant's comfort letter in respect thereof pursuant to Section
8(a)(x) hereof, the Issuer shall have the right to delay the release of the
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
8(a)(x) hereof, to file the Computational Materials and ABS Term Sheets by
the time specified therein.
(g) 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 Series 2003 Bonds.
9. Conditions to the Obligations of the Underwriters. The obligations
of the Underwriters to purchase the Series 2003 Bonds shall be subject to the
accuracy of the representations and warranties on the part of the Issuer and the
Company contained in this Underwriting Agreement, on the part of the Company
contained in Article III of the Sale Agreement, and on the part of the Company
contained in Section 6.01 of the Servicing Agreement as of the Closing Date; to
the accuracy of the statements of the Issuer and the Company made in any
certificates pursuant to the provisions hereof, to the performance by the Issuer
and the Company of their obligations hereunder, and to the following additional
conditions:
16
(a) The Prospectus shall have been filed with the Commission pursuant
to Rule 424 prior to 5:30 P.M., New York time, on the second business day
after the date of this Underwriting Agreement, or such other time and date
as may be approved by the Underwriters.
(b) No stop order suspending the effectiveness of the Registration
Statement shall be in effect, and no proceedings for that purpose shall be
pending before, or threatened by, the Commission on the Closing Date; and
the Underwriters shall have received one or more certificates, dated the
Closing Date and signed by an officer of the Company and the Issuer, as
appropriate, to the effect that no such stop order is in effect and that no
proceedings for such purpose are pending before, or to the knowledge of the
Company or the Issuer, as the case may be, threatened by, the Commission.
(c) Pillsbury Winthrop LLP, counsel for the Underwriters, shall have
furnished to the Representatives their written opinion (substantially in
the form attached as Annex I (a) hereto), dated the Closing Date, with
respect to the issuance and sale of the Series 2003 Bonds, the Indenture,
the other Transaction Documents, the Registration Statement and other
related matters; and such counsel shall have received such papers and
information as they may reasonably request to enable them to pass upon such
matters.
(d) Xxxxxxxx, Xxxxxx & Finger, P.A., special Delaware counsel for the
Company and the Issuer, shall have furnished to the Representatives their
written opinion (substantially in the form attached as Annex I (b) hereto),
dated the Closing Date, to the effect that if properly presented to a
Delaware court, a Delaware court applying Delaware law, would conclude that
in order for a person to file a voluntary bankruptcy petition on behalf of
the Issuer, the prior affirmative vote of its Sole Member and of all of its
Managers (including the Independent Managers), as provided in Section 1.08
of the LLC Agreement is required.
(e) Xxxxxxxx, Xxxxxx & Finger, P.A., special Delaware counsel for the
Company and the Issuer, shall have furnished to the Representatives their
written opinion (substantially in the form attached as Annex I (c) hereto),
dated the Closing Date, as required by Sections 2.10(8)(q) - 2.10(8)(v),
2.10(8)(x)-2.10(8)(aa) and 2.10(8)(cc)-2.10(8)(ee) of the Indenture.
(f) Xxxxxxxx, Xxxxxx & Finger, P.A., special Delaware counsel for the
Company and the Issuer, shall have furnished to the Representatives their
written opinion (substantially in the form attached as Annex I (d) hereto),
dated the Closing Date, regarding certain security interest matters.
(g) Xxxxxx Xxxx & Priest LLP, counsel for the Issuer and the Company,
shall have furnished to the Representatives their written opinion
(substantially in the form attached as Annex I (e) hereto), dated the
Closing Date, regarding the Series 2003 Bonds and certain other matters.
17
(h) Xxxxxx Xxxx & Priest LLP, counsel for the Issuer and the Company,
shall have furnished to the Representatives their written opinion
(substantially in the form attached as Annex I (f) hereto), dated the
Closing Date, to the effect that a Federal court would not order the
substantive consolidation of the assets and liabilities of the Issuer with
those of the Company in the event of a bankruptcy, reorganization or other
insolvency proceeding involving the Company.
(i) Xxxxxx Xxxx & Priest LLP and Xxxxxxxx, Xxxxxx & Finger, P.A.,
counsel and special Delaware counsel, respectively, for the Issuer and the
Company, shall have furnished to the Representatives their written opinion
(substantially in the form attached as Annex I (g) hereto), dated the
Closing Date, to the effect that a bankruptcy court would follow applicable
state law and the LLC Agreement with respect to a bankruptcy filing by the
Issuer.
(j) Hunton & Xxxxxxxx LLP, counsel for the Issuer and the Company,
shall have furnished to the Representatives their written opinion
(substantially in the form attached as Annex I (h) hereto), dated the
Closing Date, regarding certain Federal constitutional matters relating to
the Series 2003 Transition Property.
(k) Xxxxxx Xxxx & Priest LLP, counsel for the Issuer and the Company,
shall have furnished to the Representatives their written opinion
(substantially in the form attached as Annex I (i) hereto), dated the
Closing Date, regarding certain Federal tax matters.
(l) Xxxxxx Xxxx & Priest LLP, counsel for the Issuer and the Company,
shall have furnished to the Representatives their written opinion
(substantially in the form attached as Annex I (j) hereto), dated the
Closing Date, as required by Sections 2.10(8)(a), 2.10(8)(i) and 2.10(8)(k)
of the Indenture.
(m) Hunton & Xxxxxxxx LLP, counsel for the Company and the Issuer,
shall have furnished to the Representatives their written opinion
(substantially in the form attached as Annex I (k) hereto), dated the
Closing Date, regarding the Series 2003 Bonds and certain other matters.
(n) Hunton & Xxxxxxxx LLP, counsel for the Issuer and the Company,
shall have furnished to the Representatives their written opinion
(substantially in the form attached as Annex I (l) hereto), dated the
Closing Date, with respect to the characterization of the transfer of the
Series 2003 Transition Property by the Company to the Issuer as a "true
sale" for Texas law purposes.
(o) Hunton & Xxxxxxxx LLP, counsel for the Issuer and the Company,
shall have furnished to the Representatives their written opinion
(substantially in the form attached as Annex I (m) hereto), dated the
Closing Date, regarding certain Texas and Federal constitutional matters
relating to the Series 2003 Transition Property.
(p) Xxxxxx Xxxx & Priest LLP and Hunton & Xxxxxxxx LLP, counsel for
the Issuer and the Company, shall have furnished to the Representatives
their written respective opinions (substantially in the form attached as
18
Annex I (n) hereto), dated the Closing Date, to the effect that the Series
2003 Transition Property is not subject to the lien of the Company's First
Mortgage Bond Indenture.
(q) Hunton & Xxxxxxxx LLP, counsel for the Issuer and the Company,
shall have furnished to the Representatives their written opinion
(substantially in the form attached as Annex I (o) hereto), dated the
Closing Date, as required by Sections 2.10(8)(i) - 2.10(8)(p) of the
Indenture.
(r) Hunton & Xxxxxxxx LLP, counsel for the Issuer and the Company,
shall have furnished to the Representatives their written opinion
(substantially in the form attached as Annex I (p) hereto), dated the
Closing Date, regarding certain Texas state tax matters.
(s) Xxxxxx & Xxxxxx LLP, counsel for the Indenture Trustee, shall have
furnished to the Representatives their written opinion (substantially in
the form attached as Annex I (q) hereto), dated the Time of Delivery, to
regarding certain matters relating to the Indenture Trustee.
(t) Hunton & Xxxxxxxx LLP, counsel for the Company and the Issuer,
shall have furnished to the representatives their opinion (substantially in
the form attached as Annex I (r) hereto), dated the Closing Date, regarding
certain Texas regulatory issues.
(u) On the Closing Date, Deloitte & Touche LLP shall have furnished to
the Representatives (i) a letter or letters, dated as of the Closing Date,
in form and substance satisfactory to the Representatives, confirming that
they are independent accountants within the meaning of the Securities Act
and the Exchange Act and the respective applicable published rules and
regulations thereunder and stating that in effect that they have performed
certain specified procedures as a result of which they have determined that
certain information of an accounting, financial or statistical nature set
forth in the Registration Statement and the Prospectus agrees with the
accounting records of the Issuer and the Company, excluding any questions
of legal interpretation.
(v) Subsequent to the respective dates as of which information is
given in each of the Registration Statement and the Prospectus, there shall
not have been any change specified in the letters required by subsection
(u) of this Section 9 which is, in the judgment of the Representatives, so
material and adverse as to make it impracticable or inadvisable to proceed
with the offering or the delivery of the Series 2003 Bonds as contemplated
by the Registration Statement and the Prospectus.
(w) The LLC Agreement, the Administrative Agreement, the Intercreditor
Agreement, the Sale Agreement, the Servicing Agreement and the Indenture
and any amendment or supplement to any of the foregoing shall have been
executed and delivered, in each case in a form reasonably satisfactory to
the Representatives.
(x) Since the respective dates as of which information is given in
each of the Registration Statement and in the Prospectus as amended prior
to the Closing Date there shall have been no (i) material adverse change in
the business, property or financial condition of the Company and its
subsidiaries, taken as a whole, whether or not in the ordinary course of
19
business, or the Issuer or (ii) adverse development concerning the business
or assets of the Company and its subsidiaries, taken as a whole, or the
Issuer which would result in a material adverse change in the prospective
business, property or financial condition of the Company and its
subsidiaries, taken as a whole, whether or not in the ordinary course of
business, or the Issuer or (iii) development which would result in a
material adverse change, in the Transition Property, the Series 2003 Bonds,
the Financing Order, or the Restructuring Act.
(y) At the Closing Date, (i) the Series 2003 Bonds shall be rated at
least "AAA", "Aaa" and "AAA" by Xxxxx'x Investor Service, Inc. ("Moody's"),
Standard & Poor's Ratings Group, a division of XxXxxx-Xxxx Companies, Inc.
("S&P") and Fitch Inc. ("Fitch"), respectively, and the Issuer shall have
delivered to the Underwriters a letter from each such rating agency, or
other evidence satisfactory to the Underwriters, confirming that the Series
2003 Bonds have such ratings, and (ii) neither Moody's, S&P nor Fitch shall
have, since the date of this Underwriting Agreement, downgraded or publicly
announced that it has under surveillance or review, with possible negative
implications, its ratings of the Series 2003 Bonds or any securities of the
Issuer which are of the same class as the Series 2003 Bonds.
(z) The Issuer and the Company shall have furnished or caused to be
furnished to the Representatives at the Closing Date certificates of
officers of the Company and the Issuer, satisfactory to the
Representatives, as to the accuracy of the representations and warranties
of the Issuer and the Company herein, in the Sale Agreement, Servicing
Agreement and the Indenture at and as of the Closing Date, as to the
performance by the Issuer and the Company of all of their obligations
hereunder to be performed at or prior to such Closing Date, as to the
matters set forth in subsections (b) and (x) of this Section and as to such
other matters as the Representatives may reasonably request.
(aa) The Issuance Advice Letter, in a form satisfactory to the
Representatives, shall have been filed with the PUCT and shall have become
effective.
(bb) On or prior to the Closing Date, the Issuer shall have delivered
to the Representatives evidence, in form and substance reasonably
satisfactory to the Representatives, that appropriate filings have been or
are being made in accordance with the Restructuring Act, the Financing
Order and other applicable law reflecting the grant of a security interest
by the Issuer in the Collateral to the Indenture Trustee, including the
filing of the requisite notices in the office of the Secretary of State of
the State of Texas.
(cc) On or prior to the Closing Date, the Company shall have funded
the Capital Subaccount with cash in an amount equal to $2,500,000.
(dd) The Issuer and the Company shall have furnished or caused to be
furnished to the Rating Agencies at the Closing Date such opinions and
certificates as the Rating Agencies may reasonably request.
20
(ee) On or prior to the Closing Date, the Issuer and the Company shall
have furnished to the Underwriters such further certificates as the
Underwriters may reasonably request, including such certificates as the
Representatives may reasonably request to evidence the enforceability of
any interest rate swap agreement entered into in connection with any class
of floating rate Series 2003 Bonds and the qualification or listing of any
floating rate Series 2003 Bonds as contemplated by the Prospectus.
10. Conditions of Issuer's Obligations. The obligation of the Issuer
to deliver the Series 2003 Bonds shall be subject to the conditions that the
Prospectus shall have been filed with the Commission pursuant to Rule 424 prior
to 5:30 P.M., New York time, on the second business day after the date of this
Underwriting Agreement or such other time and date as may be approved by the
Issuer, and no stop order suspending the effectiveness of the Registration
Statement shall be in effect at the Closing Date and no proceedings for that
purpose shall be pending before, or threatened by, the Commission at the Closing
Date. In case these conditions shall not have been fulfilled, this Underwriting
Agreement may be terminated by the Issuer upon notice thereof to the
Underwriters. Any such termination shall be without liability of any party to
any other party except as otherwise provided in Sections 8(a)(vii) and 11
hereof.
11. Indemnification and Contribution.
(a) The Company and the Issuer, jointly and severally, shall
indemnify, defend and hold harmless each Underwriter, each Underwriter's
officers and directors and each person who controls any Underwriter within
the meaning of Section 15 of the Securities Act from and against any and
all losses, claims, damages or liabilities, joint or several, to which they
or any of them may become subject under the Securities Act or any other
statute or common law and shall reimburse each such Underwriter, and
controlling person for any legal or other expenses (including, to the
extent hereinafter provided, reasonable counsel fees) as and when incurred
by them in connection with investigating any such losses, claims, damages
or liabilities or in connection with defending any actions, insofar as such
losses, claims, damages, liabilities, expenses or actions arise out of or
are based upon any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement or the Prospectus (or
any amendment or supplement thereto), or the omission or alleged omission
to state therein a material fact required to be stated therein or necessary
to make the statements therein, in the light of the circumstances under
which they were made, not misleading; provided, however, that the indemnity
agreement contained in this Section 11 shall not apply to any such losses,
claims, damages, liabilities, expenses or actions arising out of, or based
upon, any such untrue statement or alleged untrue statement, or any such
omission or alleged omission, if such statement or omission was made in
reliance upon and in conformity with information furnished in writing to
the Issuer or Company by any Underwriter, through the Representatives,
expressly for use in connection with the preparation of the Registration
Statement or the Prospectus or any amendment or supplement to either
thereof, or arising out of, or based upon, statements in or omissions from
that part of the Registration Statement that shall constitute the Statement
of Eligibility under the Trust Indenture Act of the Indenture Trustee with
respect to any indenture qualified pursuant to the Registration Statement;
and provided further, that the indemnity agreement contained in this
Section 11 shall not inure to the benefit of any Underwriter (or of any
21
officer or director of such Underwriter or of any person controlling such
Underwriter) on account of any such losses, claims, damages, liabilities,
expenses or actions arising from the sale of the Series 2003 Bonds to any
person if a copy of the Prospectus (including any amendment or supplement
thereto if any amendments or supplements thereto shall have been furnished
to the Underwriters at or prior to the time of written confirmation of the
sale involved) (exclusive of the Incorporated Documents) shall not have
been given or sent to such person by or on behalf of such Underwriter with
or prior to the written confirmation of the sale involved unless the
alleged omission or alleged untrue statement was not corrected in the
Prospectus at the time of such written confirmation. The indemnity
agreement of the Company and Issuer contained in this Section 11 and the
representations and warranties of the Issuer and Company contained in
Sections 3 and 4 hereof shall remain operative and in full force and effect
regardless of any termination of this Underwriting Agreement or of any
investigation made by or on behalf of any Underwriter, its officers or its
directors or any such controlling person, and shall survive the delivery of
the Series 2003 Bonds.
(b) Each Underwriter shall severally indemnify, defend and hold
harmless the Company and the Issuer, each the Company's and Issuer's
officers, directors, and managers, and each person who controls the Issuer
or Company within the meaning of Section 15 of the Securities Act, from and
against any and all losses, claims, damages or liabilities, joint or
several, to which they or any of them may become subject under the
Securities Act or any other statute or common law and shall reimburse each
of them for any legal or other expenses (including, to the extent
hereinafter provided, reasonable counsel fees) as and when incurred by them
in connection with investigating any such losses, claims, damages or
liabilities or in connection with defending any actions, insofar as such
losses, claims, damages, liabilities, expenses or actions arise out of or
are based upon any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement or the Prospectus, or
the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading, if
such statement or omission was made in reliance upon and in conformity with
information furnished in writing to the Company or Issuer by such
Underwriter, through the Representatives, expressly for use in connection
with the preparation of the Registration Statement or the Prospectus or any
amendment or supplement to either thereof. The only information furnished
to the Company by the Underwriters in writing expressly for use in the
Prospectus are the following: (i) the offering price of the Series 2003
Bonds set forth on the cover page of the Prospectus Supplement; (ii) the
penultimate full paragraph on the cover page of the Prospectus Supplement;
(iii) under the heading "Underwriting the Series 2003-1 Bonds": (w) the
first and second paragraphs (including the table) under the caption "The
Underwriters' Sales Price for the Series 2003-1 Bonds"; (x) the third
sentence under the caption "No Assurance as to Resale Price or Resale
Liquidity for the Series 2003-1 Bonds"; (y) the entire first full paragraph
under the caption "Various Types of Underwriter Transactions Which May
Affect the Price of the Series 2003-1 Bonds" (except the last sentence
thereof); and (z) the last sentence of the second full paragraph under the
caption "Various Types of Underwriter Transactions Which May Affect the
Price of the Series 2003-1 Bonds"; and (iv) under the heading "Other Risks
Associated With an Investment in the Transition Bonds", the first sentence
22
under the caption "Absence of a Secondary Market for Transition Bonds Could
Limit Your Ability to Resell Transition Bonds." The indemnity agreement of
the respective Underwriters contained in this Section 11 shall remain
operative and in full force and effect regardless of any termination of
this Underwriting Agreement or of any investigation made by or on behalf of
the Company or the Issuer, its directors, managers or its officers, any
such Underwriter, or any such controlling person, and shall survive the
delivery of the Series 2003 Bonds.
(c) The Company and the several Underwriters each shall, upon the
receipt of notice of the commencement of any action against it or any
person controlling it as aforesaid, in respect of which indemnity may be
sought on account of any indemnity agreement contained herein, promptly
give written notice of the commencement thereof to the party or parties
against whom indemnity shall be sought under (a) or (b) above, but the
failure to notify such indemnifying party or parties of any such action
shall not relieve such indemnifying party or parties from any liability
hereunder to the extent such indemnifying party or parties is/are not
materially prejudiced as a result of such failure to notify and in any
event shall not relieve such indemnifying party or parties from any
liability which it or they may have to the indemnified party otherwise than
on account of such indemnity agreement. In case such notice of any such
action shall be so given, such indemnifying party shall be entitled to
participate at its own expense in the defense, or, if it so elects, to
assume (in conjunction with any other indemnifying parties) the defense of
such action, in which event such defense shall be conducted by counsel
chosen by such indemnifying party or parties and satisfactory to the
indemnified party or parties who shall be defendant or defendants in such
action, and such defendant or defendants shall bear the fees and expenses
of any additional counsel retained by them; but if the indemnifying party
shall elect not to assume the defense of such action, such indemnifying
party will reimburse such indemnified party or parties for the reasonable
fees and expenses of any counsel retained by them; provided, however, if
the defendants in any such action (including impleaded parties) include
both the indemnified party and the indemnifying party and counsel for the
indemnifying party shall have reasonably concluded that there may be a
conflict of interest involved in the representation by a single counsel of
both the indemnifying party and the indemnified party, the indemnified
party or parties shall have the right to select separate counsel,
satisfactory to the indemnifying party, whose reasonable fees and expenses
shall be paid by such indemnifying party, to participate in the defense of
such action on behalf of such indemnified party or parties (it being
understood, however, that the indemnifying party shall not be liable for
the fees and expenses of more than one separate counsel (in addition to
local counsel) representing the indemnified parties who are parties to such
action). Each of the Company, Issuer and the several Underwriters agrees
that without the other party's prior written consent, which consent shall
not be unreasonably withheld, it will not settle, compromise or consent to
the entry of any judgment in any claim in respect of which indemnification
may be sought under the indemnification provisions of this Underwriting
Agreement, unless such settlement, compromise or consent (i) includes an
unconditional release of such other party from all liability arising out of
such claim and (ii) does not include a statement as to or an admission of
fault, culpability or a failure to act by or on behalf of such other party.
23
(d) If the indemnification provided for in subparagraph (a) or (b)
above shall be unenforceable under applicable law by an indemnified party,
each indemnifying party agrees to contribute to such indemnified party with
respect to any and all losses, claims, damages, liabilities and expenses
for which each such indemnification provided for in subparagraph (a) or (b)
above shall be unenforceable, in such proportion as shall be appropriate to
reflect (i) the relative benefits received by the Company and the Issuer on
the one hand and the Underwriters on the other hand from the offering of
the Series 2003 Bonds pursuant to this Underwriting Agreement or (ii) if an
allocation solely on the basis provided by clause (i) is not permitted by
applicable law or is inequitable or against public policy, in such
proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of each
indemnifying party on the one hand and the indemnified party on the other
in connection with the statements or omissions which have resulted in such
losses, claims, damages, liabilities and expenses and (iii) any other
relevant equitable considerations; provided, however, that no indemnified
party guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any
indemnifying party not guilty of such fraudulent misrepresentation.
Relative fault shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to
information supplied by such indemnifying party or the indemnified party
and each such party's relative intent, knowledge, access to information and
opportunity to correct or prevent such untrue statement or omission. The
Company, the Issuer and each of the Underwriters agree that it would not be
just and equitable if contributions pursuant to this subparagraph (d) were
to be determined by pro rata allocation or by any other method of
allocation which does not take account of the equitable considerations
referred to above. Notwithstanding the provisions of this Section 11, no
Underwriter shall be required to contribute in excess of the amount equal
to the excess of (i) the total price at which the Series 2003 Bonds
underwritten by it were offered to the public, over (ii) the amount of any
damages which such Underwriter has otherwise been required to pay by reason
of any such untrue or alleged untrue statement or omission or alleged
omission. The obligations of each Underwriter to contribute pursuant to
this Section 11 are several and not joint and shall be in the same
proportion as such Underwriter's obligation to underwrite Series 2003 Bonds
is to the total number of Series 2003 Bonds set forth in Schedule II
hereto.
12. Termination. This Underwriting Agreement may be terminated, at any
time prior to the Closing Date with respect to the Series 2003 Bonds by the
Representatives by written notice to the Issuer if after the date hereof and at
or prior to the Closing Date (a) there shall have occurred any suspension or
material limitation of trading of any of the Issuer's securities on the New York
Stock Exchange, Inc. ("NYSE") or any general suspension of trading in securities
on the NYSE, the American Stock Exchange, Inc. ("AMEX") or the NASDAQ Stock
Market, Inc. ("NASDAQ") or there shall have been established by the NYSE, AMEX
or NASDAQ or by the Commission or by any federal or state agency or by the
decision of any court, any general limitation on prices for such trading or any
general restrictions on the distribution of securities, or a general banking
moratorium declared by New York or federal authorities or a material disruption
in commercial banking or securities settlement or clearance services in the
United States, or (b) there shall have occurred any (i) material outbreak of
24
hostilities (including, without limitation, an act of terrorism) or (ii)
material other national or international calamity or crisis, or any material
adverse change in financial, political or economic conditions affecting the
United States, including, but not limited to, an escalation of hostilities that
existed prior to the date of this Underwriting Agreement or (iii) material
adverse change in the financial markets in the United States, and the effect of
any such event specified in clause (a) or (b) above on the financial markets of
the United States shall be such as to make it impracticable or inadvisable, in
the reasonable judgment of the Representatives, to proceed with the public
offering or the delivery of the Series 2003 Bonds on the terms and in the manner
contemplated by the Prospectus. This Underwriting Agreement may also be
terminated any time prior to the Closing Date with respect to the Series 2003
Bonds by the Representatives if, in their reasonable judgment, the subject
matter of any amendment or supplement to the Registration Statement or the
Prospectus (other than an amendment or supplement relating solely to the
activity of any Underwriter or Underwriters) prepared and issued by the Issuer
or the Company after the effectiveness of this Underwriting Agreement shall have
disclosed a material adverse change in the business, property or financial
condition of the Issuer or the Company and its subsidiaries, considered as a
whole, whether or not in the ordinary course of business, or in the Transition
Property that has materially impaired the marketability of the Series 2003
Bonds. Any termination hereof pursuant to this Section 12 shall be without
liability of any party to any other party except as otherwise provided in
Sections 8(a)(vii) and 11 hereof.
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 Representatives, to it at the address specified in Schedule I
hereto; and if sent to the Company, to it at 000 X. Xxxxx Xxxxxx, Xxxxxx,
Xxxxx,00000, Attention: Xxxx Xxxxx; and if sent to the Issuer, to it at Energy
Plaza, 0000 Xxxxx Xxxxxx, Xxxxx 0-00, Xxxxxx, Xxxxx, 00000, Attention: Xxxx X.
Xxxxxxx. 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.
25
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicate hereof, whereupon
this letter and your acceptance shall represent a binding agreement among the
Company, the Issuer and the several Underwriters.
Very truly yours,
ONCOR ELECTRIC DELIVERY COMPANY
By: /s/ Xxxx X. Xxxxxx
-------------------------------
Name: Xxxx X. Xxxxxx
Title: Treasurer and Assistant
Secretary
ONCOR ELECTRIC DELIVERY TRANSITION
BOND COMPANY LLC
By: /s/ Xxxx X. Xxxxxx
-------------------------------
Name: Xxxx X. Xxxxxx
Title: Manager
The foregoing Underwriting
Agreement is hereby confirmed
and accepted as of the date
specified in Schedule I hereto.
26
XXXXXX XXXXXXX & CO. INCORPORATED
By: /s/ Xxxxxxx Xxxxxxxxxx
-------------------------------
Name: Xxxxxxx Xxxxxxxxxx
Title: Managing Director
XXXXXX BROTHERS INC.
By: /s/ Xxxxxx Xxxxxx
-------------------------------
Name: Xxxxxx Xxxxxx
Title: Managing Director
XXXXXXX, XXXXX & CO.
By: /s/ Xxxxxxx, Sachs & Co.
-------------------------------
Name: Xxxxxxx, Xxxxx & Co.
Title:
XXXXXXX XXXXX & CO.
By: /s/ Xxxxxxxx X. Xxxx
-------------------------------
Name: Xxxxxxxx X. Xxxx
Title: Authorized Signatory
27
SCHEDULE I
Underwriting Agreement dated August 14, 2003
Registration Statement No. 333-91935
Representatives:
Xxxxxx Xxxxxxx & Co. Incorporated Xxxxxx Brothers Inc.
0000 Xxxxxxxx 000 0xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000 Xxx Xxxx, XX 00000
Attention: Xxxx Xxxxxx Attention: ABS Syndicate
(with a copy to the general counsel
at the same address)
Title, Purchase Price and Description of Series 2003 Bonds:
Title: Oncor Electric Delivery Transition Bond Company LLC Transition Bonds,
Series 2003-1
Underwriting
Total Principal Discounts and Proceeds to
Amount of Class Bond Rate Price to Public Commissions Issuer
--------------- --------- --------------- ------------- -----------
Per Class A-1 Bond $103,000,000 2.26% 99.98278% 0.350% $102,621,763
Per Class A-2 Bond $122,000,000 4.03% 99.98723% 0.430% $121,459,821
Per Class A-3 Bond $130,000,000 4.95% 99.96834% 0.490% $129,321,842
Per Class A-4 Bond $145,000,000 5.42% 99.97684% 0.605% $144,089,168
Total $500,000,000
Original Issue Discount (if any): None
Redemption provisions: At the Issuer's option when
the outstanding principal
balance of the Series 2003
Bonds has been reduced to
5% of the original
principal balance after the
last scheduled final payment
date.
Other provisions: None
Closing Date, Time and Location: August 21, 2003, 10:00 a.m.;
offices of Xxxxxx Xxxx &
Priest LLP,
000 Xxxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx 00000
I-1
SCHEDULE II
Principal Amount of Series 2003 Bonds to be Purchased (in thousands)
UNDERWRITER CLASS A-1 CLASS A-2 CLASS A-3 CLASS A-4 TOTAL
----------- --------- --------- --------- --------- -----
Xxxxxx Brothers Inc. $ 25,750,000 $ 30,500,000 $ 32,500,000 $ 36,250,000 $ 125,000,000
Xxxxxx Xxxxxxx & Co. Incorporated $ 25,750,000 $ 30,500,000 $ 32,500,000 $ 36,250,000 $ 125,000,000
Xxxxxxx, Sachs & Co. $ 25,750,000 $ 30,500,000 $ 32,500,000 $ 36,250,000 $ 125,000,000
Xxxxxxx Lynch, Pierce, Xxxxxx &
Xxxxx Incorporated $ 25,750,000 $ 30,500,000 $ 32,500,000 $ 36,250,000 $ 125,000,000
------------- -------------- ------------- ------------ ------------
Total $ 103,000,000 $ 122,000,000 $ 130,000,000 $145,000,000 $ 500,000,000
============= ============= ============= ============ =============
II-1
SCHEDULE III
All information in this Preliminary Term Sheet and Computational Materials,
whether regarding the assets backing any securities discussed herein or
otherwise, is preliminary and will be superseded by the information contained in
any final Prospectus and related Prospectus Supplement for any securities
actually sold to you. It has been prepared solely for information purposes and
is not an offer to buy or sell or a solicitation of an offer to buy or sell any
security or instrument or to participate in any trading strategy. This material
is based on information provided by Oncor Electric Delivery Transition Bond
Company LLC and Oncor Electric Delivery Company with respect to the expected
characteristics of the transition property securing these securities. The actual
characteristics and performance of the transition property will differ from the
assumptions used in preparing these materials, which are hypothetical in nature.
Changes in the assumptions may have a material impact on the information set
forth in these materials. Saber Partners, LLC, Xxxxxx Xxxxxxx & Co.
Incorporated, Xxxxxx Brothers Inc., Xxxxxxx, Xxxxx & Co., Xxxxxxx Xxxxx & Co.,
and their affiliates make no representation or warranty with respect to the
appropriateness, usefulness, accuracy or completeness of the information, or
with respect to the terms of any future offer of securities conforming to the
terms hereof. Any such Offer of securities would be made pursuant to a
definitive Prospectus and Prospectus Supplement prepared by the issuer which
could contain material information not contained herein and to which the
prospective purchasers are referred. In the event of any such offering, this
information shall be deemed superseded, amended and supplemented in its entirety
by such Prospectus and Prospectus Supplement. Such Prospectus and Prospectus
Supplement will contain all material information in respect of any securities
offered thereby and any decision to invest in such securities should be made
solely in reliance upon such Prospectus and Prospectus Supplement. The
information contained in this material may be based on assumptions regarding
market conditions and other matters as reflected therein and is therefore
subject to change. We make no representations regarding the reasonableness of
such assumptions or the likelihood that any of such assumptions will coincide
with actual market conditions or events, and this material should not be relied
on for such purposes. No representation is made that any returns indicated will
be achieved. Changes to the assumptions may have a material impact on any
returns detailed. Although the analyses herein may not show a negative return on
the securities referred to herein, such securities are not principal protected
and, in certain circumstances, investors in such securities may suffer a
complete or partial loss on their investment. Saber Partners, LLC, Xxxxxx
Xxxxxxx & Co. Incorporated, Xxxxxx Brothers Inc., Xxxxxxx, Xxxxx & Co. and
Xxxxxxx Xxxxx & Co. disclaim any and all liability relating to this information,
including without limitation any express or implied representations or
warranties for, statements contained in, and omissions from, this information.
Additional information is available upon request. Xxxxxx Xxxxxxx & Co.
Incorporated, Xxxxxx Brothers Inc., Xxxxxxx, Xxxxx & Co., Xxxxxxx Xxxxx & Co.,
and others associated with it may have positions in, and may effect transactions
in, securities and instruments of issuers mentioned herein and may also perform
or seek to perform investment banking services for the issuers of such
securities and instruments. Past performance is not necessarily indicative of
future results. Price and availability are subject to change without notice.
Information contained in this material is current as of the date appearing on
this material only. Information in this material regarding any assets backing
any securities discussed herein supercedes all prior information regarding such
assets. Xxxxxx Xxxxxxx & Co. Incorporated, Xxxxxx Brothers Inc., Xxxxxxx, Xxxxx
III-1
& Co. and Xxxxxxx Xxxxx & Co. are acting as underwriters and not acting as
agents for the issuer or its affiliates in connection with the proposed
transaction. To our readers worldwide: In addition, please note that this
publication has been issued by Xxxxxx Xxxxxxx & Co. Incorporated, approved by
Xxxxxx Xxxxxxx International Limited, a member of The Securities and Futures
Authority, and by Xxxxxx Xxxxxxx Japan Ltd. We recommend that such investors
obtain the advice of their Xxxxxx Xxxxxxx & Co. Incorporated, Xxxxxx Xxxxxxx
International or Xxxxxx Xxxxxxx Japan Ltd. representative about the investments
concerned. NOT FOR DISTRIBUTION TO PRIVATE CUSTOMERS AS DEFINED BY THE U.K.
SECURITIES AND FUTURES AUTHORITY.
III-2
ANNEX I
[Forms of Opinions Intentionally Omitted]
A-1
