EXHIBIT 1_1
EXECUTION COPY
CALIFORNIA INFRASTRUCTURE AND ECONOMIC DEVELOPMENT
BANK SPECIAL PURPOSE TRUST PG&E-1
RATE REDUCTION CERTIFICATES
PG&E FUNDING LLC
PACIFIC GAS AND ELECTRIC COMPANY
UNDERWRITING AGREEMENT
New York, New York
November 25, 1997
To the Representatives
named in Schedule I
hereto of the Under-
writers named in
Schedule II hereto
Ladies and Gentlemen:
1. Introduction. California Infrastructure and Economic Development
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Bank Special Purpose Trust PG&E-1 (the "Trust") proposes to sell to the
underwriters named in Schedule II hereto (the "Underwriters"), for whom you (the
"Representatives") are acting as representatives, the principal amount of the
certificates identified in Schedule I hereto (the "Certificates"). If the firm
or firms listed in Schedule II hereto include only the firm or firms listed in
Schedule I hereto, then the terms "Underwriters" and "Representatives", as used
herein, shall each be deemed to refer to such firm or firms.
The Trust was formed pursuant to a declaration and agreement of trust
dated as of November 1, 1997, between the California Infrastructure and Economic
Development Bank (the "Infrastructure Bank") and Bankers Trust (Delaware), a
Delaware banking corporation, as Delaware trustee (the "Delaware Trustee"), and
the Certificates will be issued pursuant to an amended and restated declaration
and agreement of trust dated as of December 8, 1997, as
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supplemented by a first supplemental agreement of trust (and as further amended
and supplemented from time to time, the "Trust Agreement"), among the
Infrastructure Bank, the Delaware Trustee and Bankers Trust Company of
California, N.A., a national banking association, as certificate trustee (the
"Certificate Trustee"). The assets of the Trust will consist solely of the PG&E
Funding LLC Notes, Series 1997-1 (the "Notes"), issued by PG&E Funding LLC, a
Delaware limited liability company (the "Note Issuer"), and the proceeds thereof
and the Trust's rights under any Swap Agreement (as defined below). The Notes
will be issued pursuant to an indenture dated as of December 8, 1997 (as amended
and supplemented from time to time, including any Series Supplement, the
"Indenture"), between the Note Issuer and Bankers Trust Company of California,
N.A., a national banking association, as note trustee (the "Note Trustee"), and
purchased by the Certificate Trustee, on behalf of the Trust, pursuant to a note
purchase agreement dated as of December 8, 1997 (the "Note Purchase Agreement"),
between the Note Issuer and the Certificate Trustee. Each Class of Certificates
will correspond to a Class of Notes and will represent fractional undivided
beneficial interests in such underlying Class of Notes, the proceeds thereof and
payments pursuant to any related interest rate exchange agreement executed
solely to permit the issuance of variable rate Certificates (a "Swap Agreement")
between the Trust and the swap counterparty thereunder (the "Swap
Counterparty"). The Notes will be secured primarily by the Transition Property
described in the related Issuance Advice Letter. Such Transition Property will
be sold to the Note Issuer by Pacific Gas and Electric Company, a California
corporation (the "Company"), pursuant to a transition property purchase and sale
agreement dated as of December 8, 1997 (the "Sale Agreement"), between the
Company, as seller, and the Note Issuer. Other Transition Property may be sold
to the Note Issuer by the Company pursuant to an agreement substantially similar
to the Sale Agreement. The Transition Property will be serviced pursuant to a
transition property servicing agreement dated as of December 8, 1997 (as amended
and supplemented from time to time, the "Servicing Agreement"), between the
Company, as servicer, and the Note Issuer.
Capitalized terms used and not otherwise defined herein shall have the
meanings given to them in the Indenture.
2. Representations and Warranties. Each of the Company and the Note
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Issuer represents and warrants to, and agrees with, each Underwriter as set
forth below in this Section 2. Certain terms used in this Section 2 are defined
in paragraph (c) hereof.
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(a) If the offering of the Certificates is a Delayed Offering (as
specified in Schedule I hereto), paragraph (i) below is applicable and, if
the offering of the Certificates is a Non-Delayed Offering (as so
specified), paragraph (ii) below is applicable.
(i) The Note Issuer and the Notes and the Certificates meet the
requirements for the use of Form S-3 under the Securities Act of 1933
(the "Act"), and the Note Issuer has filed with the Securities and
Exchange Commission (the "SEC") a registration statement (the file
number of which is set forth in Schedule I hereto) on such Form,
including a basic prospectus, for registration under the Act of the
offering and sale of the Certificates. The Note Issuer may have filed
one or more amendments thereto, and may have used a Preliminary Final
Prospectus, each of which has previously been furnished to you. Such
registration statement, as so amended, has become effective. The
offering of the Certificates is a Delayed Offering and, although the
Basic Prospectus may not include all the information with respect to
the Certificates and the offering thereof required by the Act and the
rules thereunder to be included in the Final Prospectus, the Basic
Prospectus includes all such information required by the Act and the
rules thereunder to be included therein as of the Effective Date. The
Note Issuer will next file with the SEC pursuant to Rules 415 and
424(b)(2) or (5) a final supplement to the form of prospectus included
in such registration statement relating to the Certificates and the
offering thereof. As filed, such final prospectus supplement shall
include all required information with respect to the Certificates and
the offering thereof and, except to the extent the Representatives
shall agree in writing to a modification, shall be in all substantive
respects in the form furnished to you prior to the Execution Time or,
to the extent not completed at the Execution Time, shall contain only
such specific additional information and other changes (beyond that
contained in the Basic Prospectus and any Preliminary Final
Prospectus) as the Note Issuer has advised you, prior to the Execution
Time, will be included or made therein.
(ii) The Note Issuer and the Notes and the Certificates meet the
requirements for the use of Form S-3 under the Act and the Note Issuer
has filed with the SEC a registration statement (the
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file number of which is set forth in Schedule I hereto) on such Form,
including a basic prospectus, for registration under the Act of the
offering and sale of the Certificates. The Note Issuer may have filed
one or more amendments thereto, including a Preliminary Final
Prospectus, each of which has previously been furnished to you. The
Company will next file with the SEC either (x) a final prospectus
supplement relating to the Certificates in accordance with Rules 430A
and 424(b)(1) or (4), or (y) prior to the effectiveness of such
registration statement, an amendment to such registration statement,
including the form of final prospectus supplement. In the case of
clause (x), the Note Issuer has included in such registration
statement, as amended at the Effective Date, all information (other
than Rule 430A Information) required by the Act and the rules
thereunder to be included in the Final Prospectus with respect to the
Certificates and the offering thereof. As filed, such final prospectus
supplement or such amendment and form of final prospectus supplement
shall contain all Rule 430A Information, together with all other such
required information, with respect to the Certificates and the
offering thereof and, except to the extent the Representatives shall
agree in writing to a modification, shall be in all substantive
respects in the form furnished to you prior to the Execution Time or,
to the extent not completed at the Execution Time, shall contain only
such specific additional information and other changes (beyond that
contained in the Basic Prospectus and any Preliminary Final
Prospectus) as the Note Issuer has advised you, prior to the Execution
Time, will be included or made therein.
(b) On the Effective Date, the Registration Statement did or will,
and when the Final Prospectus is first filed (if required) in accordance
with Rule 424(b) and on the Closing Date, the Final Prospectus (and any
supplement thereto) will, comply in all material respects with the
applicable requirements of the Act, the Securities Exchange Act of 1934
(the "Exchange Act") and the Trust Indenture Act of 1939 (the "Trust
Indenture Act") and the respective rules thereunder; on the Effective Date,
the Registration Statement did not or will not contain any untrue statement
of a material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein not
misleading; on the Effective Date and on the Closing
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Date the Indenture and the Trust Agreement did or will comply in all
material respects with the requirements of the Trust Indenture Act and the
rules thereunder; and, on the Effective Date, the Final Prospectus, if not
filed pursuant to Rule 424(b), did not or will not, and on the date of any
filing pursuant to Rule 424(b) and on the Closing Date, the Final
Prospectus (together with any supplement thereto) will not, include any
untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided,
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however, that neither the Note Issuer nor the Company makes any
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representations or warranties as to (i) that part of the Registration
Statement which shall constitute the Statements of Eligibility and
Qualification (Forms T-1) under the Trust Indenture Act of the Note Trustee
and the Certificate Trustee or (ii) the information contained in or omitted
from the Registration Statement or the Final Prospectus (or any supplement
thereto) in reliance upon and in conformity with information furnished in
writing to the Note Issuer by or on behalf of any Underwriter through the
Representatives specifically for inclusion in the Registration Statement or
the Final Prospectus (or any supplement thereto).
(c) The terms which follow, when used in this Agreement, shall have
the meanings indicated. The term "the Effective Date" shall mean each date
that the Registration Statement and any post-effective amendment or
amendments thereto became or become effective and each date after the date
hereof on which a document incorporated by reference in the Registration
Statement is filed. "Execution Time" shall mean the date and time that this
Agreement is executed and delivered by the parties hereto. "Basic
Prospectus" shall mean the prospectus referred to in paragraph (a) above
contained in the Registration Statement at the Effective Date including, in
the case of a Non-Delayed Offering, any Preliminary Final Prospectus.
"Preliminary Final Prospectus" shall mean any preliminary prospectus
supplement to the Basic Prospectus which describes the Certificates and the
offering thereof and is used prior to filing of the Final Prospectus.
"Final Prospectus" shall mean the prospectus supplement relating to the
Certificates that is first filed pursuant to Rule 424(b) after the
Execution Time, together with the Basic Prospectus or, if, in the case of a
Non-Delayed Offering, no filing pursuant to Rule 424(b) is required, shall
mean the form of final prospectus relating to the Certificates, including
the Basic
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Prospectus, included in the Registration Statement at the Effective Date.
"Registration Statement" shall mean the registration statement referred to
in paragraph (a) above, including incorporated documents, exhibits and
financial statements, as amended at the Execution Time (or, if not
effective at the Execution Time, in the form in which it shall become
effective) and, in the event any post-effective amendment thereto becomes
effective prior to the Closing Date (as hereinafter defined), shall also
mean such registration statement as so amended. Such term shall include any
Rule 430A Information deemed to be included therein at the Effective Date
as provided by Rule 430A. "Rule 415", "Rule 424", "Rule 430A" and
"Regulation S-K" refer to such rules or regulation under the Act. "Rule
430A Information" means information with respect to the Certificates and
the offering thereof permitted to be omitted from the Registration
Statement when it becomes effective pursuant to Rule 430A. Any reference
herein to the Registration Statement, the Basic Prospectus, any Preliminary
Final Prospectus or the Final Prospectus shall be deemed to refer to and
include the documents incorporated by reference therein pursuant to Item 12
of Form S-3 which were filed under the Exchange Act on or before the
Effective Date of the Registration Statement or the issue date of the Basic
Prospectus, any Preliminary Final Prospectus or the Final Prospectus, as
the case may be; and any reference herein to the terms "amend", "amendment"
or "supplement" with respect to the Registration Statement, the Basic
Prospectus, any Preliminary Final Prospectus or the Final Prospectus shall
be deemed to refer to and include the filing of any document under the
Exchange Act after the Effective Date of the Registration Statement or the
issue date of the Basic Prospectus, any Preliminary Final Prospectus or the
Final Prospectus, as the case may be, deemed to be incorporated therein by
reference. A "Non-Delayed Offering" shall mean an offering of securities
which is intended to commence promptly after the effective date of a
registration statement, with the result that, pursuant to Rules 415 and
430A, all information (other than Rule 430A Information) with respect to
the securities so offered must be included in such registration statement
at the effective date thereof. A "Delayed Offering" shall mean an offering
of securities pursuant to Rule 415 which does not commence promptly after
the effective date of a registration statement, with the result that only
information required pursuant to Rule 415 need be included in such
registration statement at the effective date thereof
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with respect to the securities so offered. Whether the offering of the
Certificates is a Non-Delayed Offering or a Delayed Offering shall be set
forth in Schedule I hereto.
3. Purchase and Sale. Subject to the terms and conditions and in
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reliance upon the representations and warranties herein set forth, the Trust
agrees to sell to each Underwriter, and each Underwriter agrees, severally and
not jointly, to purchase from the Trust, at the purchase price set forth in
Schedule I hereto the principal amount of the Certificates set forth opposite
such Underwriter's name in Schedule II hereto.
4. Delivery and Payment. Delivery of and payment for the
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Certificates shall be made on the date and at the time specified in Schedule I
hereto (or such later date not later than five business days after such
specified date as the Representatives shall designate), which date and time may
be postponed by agreement between the Representatives and the Note Issuer or as
provided in Section 9 hereof (such date and time of delivery and payment for the
Certificates being herein called the "Closing Date"). Delivery of the
Certificates shall be made to the Representatives for the respective accounts of
the several Underwriters against payment by the several Underwriters through the
Representatives of the purchase price thereof to the Trust by wire transfer of
immediately available funds. Delivery of the Certificates shall be made at such
location as the Representatives shall reasonably designate at least one business
day in advance of the Closing Date. The Certificates to be so delivered shall
be initially represented by Certificates registered in the name of Cede & Co.,
as nominee of The Depository Trust Company ("DTC"). The interests of beneficial
owners of the Certificates will be represented by book entries on the records of
DTC and participating members thereof. Definitive Certificates will be
available only under limited circumstances.
The Trust agrees to have the Certificates available for inspection,
checking and packaging by the Representatives in New York, New York, not later
than 1:00 PM on the business day prior to the Closing Date.
5. Covenants.
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(a) Covenants of the Note Issuer. The Note Issuer covenants and
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agrees with the several Underwriters that:
(i) The Note Issuer will use its best efforts to cause the
Registration Statement, if not effective at
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the Execution Time, and any amendment thereto, to become effective. Prior
to the termination of the offering of the Certificates, the Note Issuer
will not file any amendment of the Registration Statement or supplement
(including the Final Prospectus or any Preliminary Final Prospectus) to the
Basic Prospectus unless the Note Issuer has furnished you a copy for your
review prior to filing and will not file any such proposed amendment or
supplement to which you reasonably object. Subject to the foregoing
sentence, the Note Issuer will cause the Final Prospectus, properly
completed, and any supplement thereto to be filed with the SEC pursuant to
the applicable paragraph of Rule 424(b) within the time period prescribed
and will provide evidence satisfactory to the Representatives of such
timely filing. The Note Issuer will promptly advise the Representatives (i)
when the Registration Statement, if not effective at the Execution Time,
and any amendment thereto, shall have become effective, (ii) when the Final
Prospectus, and any supplement thereto, shall have been filed with the SEC
pursuant to Rule 424(b), (iii) when, prior to termination of the offering
of the Certificates, any amendment to the Registration Statement shall have
been filed or become effective, (iv) of any request by the SEC for any
amendment of the Registration Statement or supplement to the Final
Prospectus or for any additional information, (v) of the issuance by the
SEC of any stop order suspending the effectiveness of the Registration
Statement or the institution or threatening of any proceeding for that
purpose and (vi) of the receipt by the Note Issuer of any notification with
respect to the suspension of the qualification of the Certificates for sale
in any jurisdiction or the initiation or threatening of any proceeding for
such purpose. The Note Issuer will use its best efforts to prevent the
issuance of any such stop order and, if issued, to obtain as soon as
possible the withdrawal thereof.
(ii) If, at any time when a prospectus relating to the Certificates
is required to be delivered under the Act, any event occurs as a result of
which the Final Prospectus as then supplemented would include any untrue
statement of a material fact or omit to state any material fact necessary
to make the statements therein in the light of the circumstances under
which they were made not misleading, or if it shall be necessary to amend
the Registration Statement or supplement the Final Prospectus to comply
with the Act or the Exchange Act or the respective rules thereunder, the
Note Issuer promptly will (i) prepare and file with
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the SEC, subject to the second sentence of paragraph (a) of this Section 5,
an amendment or supplement which will correct such statement or omission or
effect such compliance and (ii) supply any supplemented Prospectus to you
in such quantities as you may reasonably request.
(iii) As soon as practicable, the Note Issuer will cause the Trust to
make generally available to the Certificateholders and to the
Representatives an earnings statement or statements of the Trust which will
satisfy the provisions of Section 11(a) of the Act and Rule 158 under the
Act.
(iv) The Note Issuer will furnish to the Representatives and counsel
for the Underwriters, without charge, copies of the Registration Statement
(including exhibits thereto) and, so long as delivery of a prospectus by an
Underwriter or dealer may be required by the Act, as many copies of any
Preliminary Final Prospectus and the Final Prospectus and any supplement
thereto as the Representatives may reasonably request. The Note Issuer
shall furnish or cause to be furnished to the Representatives copies of all
reports on Form SR required by Rule 463 under the Act. The Note Issuer
will pay the expenses of printing or other production of all documents
relating to the offering.
(v) The Note Issuer will arrange for the qualification of the
Certificates for sale under the laws of such jurisdictions as the
Representatives may designate, will maintain such qualifications in effect
so long as required for the distribution of the Certificates and will
arrange for the determination of the legality of the Certificates for
purchase by institutional investors; provided that in no event shall the
Note Issuer be obligated to qualify to do business in any jurisdiction
where it is not now so qualified or to take any action that would subject
it to service of process in suits, other than those arising out of the
offering or sale of the Certificates, in any jurisdiction where it is not
now so subject.
(vi) Until the business date set forth on Schedule I hereto, the Note
Issuer will not, without the 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 of a trust or other
special purpose vehicle (other than the Certificates).
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(vii) For a period from the date of this Agreement until the
retirement of the Certificates, or until such time as the Underwriters
shall cease to maintain a secondary market in the Certificates, whichever
occurs first, the Note Issuer will deliver to the Representatives the
annual statements of compliance and the annual independent auditor's
servicing reports furnished to the Note Issuer or the Note Trustee pursuant
to the Servicing Agreement or the Indenture, as applicable, as soon as such
statements and reports are furnished to the Note Issuer or the Note
Trustee.
(viii) So long as any of the Certificates are outstanding, the Note
Issuer will furnish to the Representatives (i) as soon as available, a copy
of each report of the Trust filed with the SEC under the Exchange Act, or
mailed to Certificateholders, (ii) a copy of any filings with the
California Public Utility Commission pursuant to the Financing Order,
including, but not limited to, any Advice Letters, and (iii) from time to
time, any information concerning the Company or the Note Issuer, and, to
the extent readily available, the Infrastructure Bank or the Trust, as the
Representatives may reasonably request.
(ix) To the extent, if any, that any rating necessary to satisfy the
condition set forth in Section 6(r) of this Agreement is conditioned upon
the furnishing of documents or the taking of other actions by the Note
Issuer on or after the Closing Date, the Note Issuer shall furnish such
documents and take such other actions.
(b) Covenants of the Company. The Company covenants and agrees with
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the several Underwriters that, to the extent that the Note Issuer has not
already performed such act pursuant to Section 5(a):
(i) The Company will use its best efforts to cause the Registration
Statement, if not effective at the Execution Time, and any amendment
thereto, to become effective. The Company will use its best efforts to
prevent the issuance by the SEC of any stop order suspending the
effectiveness of the Registration Statement and, if issued, to obtain as
soon as possible the withdrawal thereof.
(ii) Until the business date set forth on Schedule I hereto, the
Company will not, without the consent of the Representatives, offer, sell
or contract to sell, or otherwise dispose of, directly or
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indirectly, or announce the offering of, any asset-backed securities of a
trust or other special purpose vehicle (other than the Certificates).
(iii) So long as any of the Certificates are outstanding and the
Company is the Servicer, the Company will furnish to the Representatives
(i) as soon as available, a copy of each report of the Trust filed with the
SEC under the Exchange Act, or mailed to Certificateholders, (ii) a copy of
any filings with the California Public Utility Commission pursuant to the
Financing Order, including, but not limited to, any Advice Letters, and
(iii) from time to time, any information concerning the Company and, to the
extent readily available, the Note Issuer, the Infrastructure Bank or the
Trust, as the Representatives may reasonably request.
(iv) To the extent, if any, that any rating necessary to satisfy the
condition set forth in Section 6(r) of this Agreement is conditioned upon
the furnishing of documents or the taking of other actions by the Company
on or after the Closing Date, the Company shall furnish such documents and
take such other actions.
6. Conditions to the Obligations of the Underwriters. The
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obligations of the Underwriters to purchase the Certificates shall be subject to
the accuracy of the representations and warranties on the part of the Note
Issuer and the Company contained herein and on the part of the Company contained
in Article III of the Sale Agreement and in Section 6.01 of the Servicing
Agreement as of the Execution Time and the Closing Date, to the accuracy of the
statements of the Note Issuer, the Company and the Trust made in any
certificates pursuant to the provisions hereof, to the performance by the Note
Issuer, the Company and the Trust of their obligations hereunder and to the
following additional conditions:
(a) If the Registration Statement has not become effective prior to
the Execution Time, unless the Representatives agree in writing to a later
time, the Registration Statement will become effective not later than (i)
6:00 PM New York City time, on the date of determination of the public
offering price, if such determination occurred at or prior to 3:00 PM New
York City time on such date, or (ii) 12:00 Noon on the business day
following the day on which the public offering price was determined, if
such determination occurred after 3:00 PM New York City time on such date;
if filing of the Final Prospectus, or any supplement
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thereto, is required pursuant to Rule 424(b), the Final Prospectus, and any
such supplement, shall have been filed in the manner and within the time
period required by Rule 424(b); and no stop order suspending the
effectiveness of the Registration Statement shall have been issued and no
proceedings for that purpose shall have been instituted or threatened.
(b) The Representatives, the Infrastructure Bank, the California
State Treasurer's Office, as agent for sale (the "STO"), the Trust, the
Note Trustee and the Certificate Trustee shall have received opinions of
counsel for the Company, portions of which may be delivered by ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ LLP, outside counsel for the Company, portions of
which may be delivered by ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇, Esq., in-house counsel for
the Company, and portions of which may be delivered by ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ &
Finger, P.A., special Delaware counsel for the Company, each dated the
Closing Date, in form and substance reasonably satisfactory to the
Representatives, to the effect that:
(i) the Company (a) has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
jurisdiction in which it is chartered or organized, (b) has all
requisite corporate power and authority to own its properties, conduct
its business as presently conducted and execute, deliver and perform
its obligations under this Agreement, the Sale Agreement and the
Servicing Agreement, and (c) is duly qualified to do business in all
jurisdictions (and is in good standing under the laws of all such
jurisdictions) to the extent that such qualification and good standing
is or shall be necessary to protect the validity and enforceability of
this Agreement, the Basic Documents to which the Company is party and
each other instrument or agreement necessary or appropriate to the
proper administration of this Agreement and the transactions
contemplated hereby;
(ii) the Sale Agreement and the Servicing Agreement have been
duly authorized, executed and delivered, and constitute legal, valid
and binding instruments enforceable against the Company in accordance
with their terms (subject, as to enforcement of remedies, to
applicable bankruptcy, reorganization, insolvency, moratorium or other
similar laws or equitable principles affecting
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creditors' rights generally from time to time in effect);
(iii) to the knowledge of such counsel, there is no pending or
threatened action, suit or proceeding before any court or governmental
agency, authority or body or any arbitrator involving the Company or
any of its subsidiaries of a character required to be disclosed in the
Registration Statement which is not adequately disclosed in the Final
Prospectus, and there is no franchise, contract or other document of a
character required to be described in the Registration Statement or
Final Prospectus, or to be filed as an exhibit, which is not described
or filed as required;
(iv) this Agreement has been duly authorized, executed and
delivered by the Company;
(v) no consent, approval, authorization or order of any court or
governmental agency or body is required for the consummation of the
transactions contemplated herein, except such as have been obtained
under the California Government Code, the PU Code and the Act and such
as may be required under the blue sky laws of any jurisdiction in
connection with the purchase and distribution of the Certificates by
the Underwriters and such other approvals (specified in such opinion)
as have been obtained;
(vi) neither the execution and delivery of this Agreement, the
Sale Agreement, the Servicing Agreement, nor the consummation of the
transactions contemplated by this Agreement, the Sale Agreement or the
Servicing Agreement, nor the fulfillment of the terms of this
Agreement, the Sale Agreement or the Servicing Agreement by the
Company, will (A) conflict with, result in any breach of any of the
terms or provisions of, or constitute (with or without notice or lapse
of time) a default under the articles of incorporation, bylaws or
other organizational documents of the Company, or conflict with or
breach any of the material terms or provisions of, or constitute (with
or without notice or lapse of time) a default under, any indenture,
material agreement or other material instrument to which the Company
is a party or by which the Company is bound, (B) result in the
creation or imposition of any lien upon any properties of the Company
pursuant to the terms of any such indenture,
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agreement or other instrument (other than as contemplated by the Basic
Documents and Section 843(g) of the PU Code and other than the lien of
that certain First and Refunding Mortgage dated December 1, 1920,
executed by Pacific Gas and Electric Company, as supplemented and
amended to the date hereof, in favor of BNY Western Trust Company,
successor by acquisition to ▇▇▇▇▇ Fargo Bank, N.A., successor by
merger to First Interstate Bank of California, as Trustee (the
"Company Mortgage"), which lien shall be released on the Closing Date
contemporaneously with the payment of the purchase price of the
Notes), or (C) violate any law or any order, rule or regulation
applicable to the Company of any court or of any federal or state
regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over the Company, or any of its
properties; and
(vii) upon the delivery of the fully executed Sale Agreement to
the Note Issuer and the payment of the purchase price of the
Transition Property by the Note Issuer to the Seller pursuant to the
Sale Agreement, then (A) the transfer of the Transition Property by
the Seller to the Note Issuer pursuant to the Sale Agreement conveys
the Seller's right, title and interest in the Transition Property to
the Note Issuer and will be treated as an absolute transfer of all of
the Seller's right, title, and interest in the Transition Property,
other than for federal and state income and franchise tax purposes,
(B) such transfer of the Transition Property is perfected, (C) such
transfer has priority over any other assignment of the Transition
Property, and (D) the Transition Property is free and clear of all
liens created prior to its transfer to the Note Issuer pursuant to the
Sale Agreement.
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than the State
of California or the United States, to the extent deemed proper and
specified in such opinion, upon the opinion of other counsel of good
standing believed to be reliable and who are satisfactory to counsel for
the Underwriters and (B) as to matters of fact, to the extent deemed
proper, on certificates of responsible officers of the Company. References
to the Final Prospectus in this paragraph (b) include any supplements
thereto at the Closing Date.
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(c) The Representatives, the Infrastructure Bank, the STO, the Trust
and the Note Trustee shall have received opinions of counsel for the Note
Issuer, portions of which may be delivered by ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ &
Sutcliffe LLP, outside counsel for the Note Issuer, portions of which may
be delivered by ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇, Esq., in-house counsel for the Note
Issuer, and portions of which may be delivered by ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ &
Finger, P.A., special Delaware counsel for the Note Issuer, each dated the
Closing Date, in form and substance reasonably satisfactory to the
Representatives, to the effect that:
(i) the Note Issuer has been duly formed and is validly existing
as a single member limited liability company and is in good standing
under the laws of the State of Delaware, with full power and authority
to execute, deliver and perform its obligations under this Agreement,
the Sale Agreement, the Servicing Agreement, the Indenture, the Note
Purchase Agreement and the Notes;
(ii) the Sale Agreement, the Servicing Agreement, the Indenture
and the Note Purchase Agreement have been duly authorized, executed
and delivered, and constitute legal, valid and binding instruments
enforceable against the Note Issuer in accordance with their terms
(subject, as to enforcement of remedies, to applicable bankruptcy,
reorganization, insolvency, moratorium or other similar laws or
equitable principles affecting creditors' rights generally from time
to time in effect); and the Notes have been duly authorized and
executed, and when authenticated in accordance with the provisions of
the Indenture and delivered to and paid for by the Trust in accordance
with the terms of the Note Purchase Agreement, will constitute legal,
valid and binding obligations of the Note Issuer entitled to the
benefits of the Indenture and any related Series Supplement (subject,
as to enforcement of remedies, to applicable bankruptcy,
reorganization, insolvency, moratorium or other similar laws or
equitable principles affecting creditors' rights generally from time
to time in effect);
(iii) the Notes, the Indenture, the Sale Agreement and the Note
Purchase Agreement conform to the descriptions thereof contained in
the Final Prospectus;
16
(iv) the Indenture has been duly qualified under the Trust
Indenture Act;
(v) to the knowledge of such counsel, there is no pending or
threatened action, suit or proceeding before any court or governmental
agency, authority or body or any arbitrator involving the Note Issuer,
or relating to the Notes, the Financing Order or the collection of FTA
Payments or the use and enjoyment of transition property under the
Statute of a character required to be disclosed in the Registration
Statement which is not adequately disclosed in the Final Prospectus,
and there is no franchise, contract or other document of a character
required to be described in the Registration Statement or Final
Prospectus, or to be filed as an exhibit, which is not described or
filed as required; and the statements included or incorporated in the
Final Prospectus under the headings "Energy Deregulation and New
California Market Structure" (to the extent the Statute is described),
"Description of the Transition Property", "The Note Issuer",
"Servicing" (to the extent the Servicing Agreement is described) and
"Description of the Notes" fairly summarize the matters described
therein;
(vi) the Registration Statement has become effective under the
Act; any required filing of the Basic Prospectus, any Preliminary
Final Prospectus and the Final Prospectus, and any supplements
thereto, pursuant to Rule 424(b) has been made in the manner and
within the time period required by Rule 424(b); to the knowledge of
such counsel, no stop order suspending the effectiveness of the
Registration Statement has been issued, no proceedings for that
purpose have been instituted or threatened, and the Registration
Statement and the Final Prospectus (other than the financial
statements and other financial and statistical information contained
therein as to which such counsel need express no opinion) comply as to
form in all material respects with the applicable requirements of the
Act, the Exchange Act and the Trust Indenture Act and the respective
rules thereunder; and such counsel has no reason to believe that at
the Effective Date the Registration Statement contained any untrue
statement of a material fact or omitted to state any material fact
required to be stated therein or necessary to make the
17
statements therein, in the light of the circumstances under which they
were made, not misleading or that the Final Prospectus as of its date
and the Closing Date includes any untrue statement of a material fact
or omits to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they were made,
not misleading (other than the financial statements and other
financial and statistical information contained therein as to which
such counsel need express no opinion);
(vii) this Agreement has been duly authorized, executed and
delivered by the Note Issuer;
(viii) no consent, approval, authorization or order of any court
or governmental agency or body is required for the consummation of the
transactions contemplated herein, except such as have been obtained
under the California Government Code, the PU Code and the Act and such
as may be required under the blue sky laws of any jurisdiction in
connection with the purchase and distribution of the Certificates by
the Underwriters and such other approvals (specified in such opinion)
as have been obtained;
(ix) neither the execution and delivery of this Agreement, the
Sale Agreement, the Servicing Agreement, the Indenture or the Note
Purchase Agreement, nor the issue and sale of the Notes, nor the
consummation of the transactions contemplated by this Agreement, the
Sale Agreement, the Servicing Agreement, the Indenture or the Note
Purchase Agreement, nor the fulfillment of the terms of this
Agreement, the Sale Agreement, the Servicing Agreement, the Indenture
or the Note Purchase Agreement by the Note Issuer, will (A) conflict
with, result in any breach of any of the terms or provisions of, or
constitute (with or without notice or lapse of time) a default under
the Amended and Restated Limited Liability Company Agreement of the
Note Issuer, or conflict with or breach any of the material terms or
provisions of, or constitute (with or without notice or lapse of time)
a default under, any indenture, agreement or other instrument known to
such counsel and to which the Note Issuer is a party or by which the
Note Issuer is bound, (B) result in the creation or imposition of any
lien upon any properties of the Note Issuer pursuant to the terms of
any such indenture,
18
agreement or other instrument (other than as contemplated by the Basic
Documents and Section 843(g) of the PU Code), or (C) violate any law
or any order, rule or regulation applicable to the Note Issuer of any
court or of any federal or state regulatory body, administrative
agency or other governmental instrumentality having jurisdiction over
the Note Issuer, or any of its properties;
(x) (A) to the extent that the provisions of Section 843 of the
PU Code apply to the grant of a security interest by the Note Issuer
in the Collateral pursuant to the Indenture, then upon the giving of
value by the Note Trustee to the Note Issuer with respect to the
Collateral, (I) the Indenture creates in favor of the Note Trustee a
security interest in the rights of the Note Issuer in the Collateral,
(II) such security interest is valid and enforceable against the Note
Issuer and third parties (subject to the rights of any third parties
holding security interests in such Collateral perfected in the manner
described in Section 843 of the PU Code), and has attached, (III) such
security interest is perfected, and (IV) such perfected security
interest is of first priority. (B) To the extent that the provisions
of Section 843 of the PU Code do not apply to the grant of a security
interest by the Note Issuer in the Collateral pursuant to the
Indenture, then upon the giving of value by the Note Trustee to the
Note Issuer with respect to the Collateral, (I) the Indenture creates
in favor of the Note Trustee a security interest in the rights of the
Note Issuer in the Collateral, and such security interest is
enforceable against the Note Issuer with respect to such Collateral,
(II) such security interest is perfected, and (III) such perfected
security interest is of first priority; and
(xi) the Note Issuer is not an "investment company" or under the
"control" of an "investment company" as such terms are defined under
the Investment Company Act of 1940, as amended.
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than the State
of California or the United States, to the extent deemed proper and
specified in such opinion, upon the opinion of other counsel of good
standing believed to be reliable and
19
who are satisfactory to counsel for the Underwriters and (B) as to matters
of fact, to the extent deemed proper, on certificates of responsible
officers of the Note Issuer and public officials. References to the Final
Prospectus in this paragraph (c) include any supplements thereto at the
Closing Date.
(d) The Representatives, the Note Issuer, the Company, the
Infrastructure Bank, the STO, the Trust and the Certificate Trustee shall
have received opinions of counsel for the Trust and the Infrastructure
Bank, portions of which may be delivered by ▇▇▇▇▇ & ▇▇▇▇ LLP, outside
counsel for the Trust and the Infrastructure Bank, portions of which may be
delivered by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, in-house counsel for the Infrastructure Bank,
and portions of which may be delivered by ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & Finger, P.A.,
special Delaware counsel for the Trust, each dated the Closing Date, in
form and substance reasonably satisfactory to the Representatives, to the
effect that:
(i) the Certificates and the Trust Agreement conform to the
descriptions thereof contained in the Final Prospectus;
(ii) the Trust has been duly formed and is validly existing as a
Delaware business trust and is in good standing under the laws of the
State of Delaware, with full power and authority to execute, deliver
and perform its obligations under this Agreement and the Certificates;
(iii) the Infrastructure Bank has been duly formed and is validly
existing as a public body established within the state government of
the State of California, with full power and authority to execute,
deliver and perform its obligations under the Trust Agreement and the
IED Bank Issuance Resolution (as defined in the Sale Agreement);
(iv) the Trust Agreement has been duly authorized, executed and
delivered by the Infrastructure Bank and constitutes a legal, valid
and binding instrument enforceable against the Infrastructure Bank in
accordance with its terms (subject, as to enforcement of remedies, to
applicable bankruptcy, reorganization, insolvency, moratorium or other
similar laws or equitable principles affecting creditors' rights
generally from time to time in effect);
20
(v) the Certificates have been duly authorized and executed and,
when authenticated in accordance with the provisions of the Trust
Agreement and delivered to and paid for by the Underwriters pursuant
to this Agreement, will be duly issued and entitled to the benefits of
the Trust Agreement;
(vi) the Note Purchase Agreement constitutes a legal, valid and
binding instrument enforceable against the Trust in accordance with
its terms (subject, as to enforcement of remedies, to applicable
bankruptcy, reorganization, insolvency, moratorium or other similar
laws or equitable principles affecting creditors' rights generally
from time to time in effect);
(vii) the IED Bank Issuance Resolution has been duly and validly
adopted by the Infrastructure Bank, in compliance with all applicable
laws, rules and regulations, and is in full force and effect, not
having been amended, altered or repealed since November 10, 1997;
(viii) pursuant to the IED Bank Issuance Resolution, the
Infrastructure Bank has validly authorized and approved the formation
of the Trust, the issuance of the Certificates and all other
transactions and actions contemplated by the Basic Documents; such
authorizations and approvals are valid and in full force and effect;
the Certificates qualify as "rate reduction bonds" under Section
840(e) of the PU Code;
(ix) the Trust Agreement has been duly qualified under the Trust
Indenture Act;
(x) to the knowledge of such counsel, there is no pending or
threatened action, suit or proceeding before any court or governmental
agency, authority or body or any arbitrator challenging the validity
or enforceability of the IED Bank Issuance Resolution or actions taken
by the Infrastructure Bank in connection therewith or otherwise
involving the Infrastructure Bank or relating to the Certificates or
the Trust of a character required to be disclosed in the Registration
Statement which is not adequately disclosed in the Final Prospectus,
and there is no franchise, contract or other document relating to the
Infrastructure Bank, the Certificates or the Trust of a character
required to be described in
21
the Registration Statement or Final Prospectus, or to be filed as an
exhibit, which is not described or filed as required; and the
statements included or incorporated in the Final Prospectus under the
headings "Description of the Certificates," "The Trust," and "The
Infrastructure Bank" fairly summarize the matters described therein
and the statements included or incorporated in the Final Prospectus
under the headings "Certain Federal Income Tax Consequences", "State
Taxation" and "ERISA Considerations", to the extent that they
constitute matters of California, Delaware or federal law or legal
conclusions with respect thereto, provide a fair and accurate summary
of such law or conclusions;
(xi) to the knowledge of such counsel, the Registration Statement
and the Final Prospectus (other than (A) the financial statements and
other financial and statistical information contained therein and (B)
information contained under the captions "The Note Issuer" and "The
Seller and Servicer", in each case as to which such counsel need
express no opinion) comply as to form in all material respects with
the applicable requirements of the Act, the Exchange Act and the Trust
Indenture Act and the respective rules thereunder, and such counsel
has no reason to believe that at the Effective Date the Registration
Statement contained any untrue statement of a material fact or omitted
to state any material fact required to be stated therein or necessary
to make the statements therein, in the light of the circumstances
under which they were made, not misleading or that the Final
Prospectus as of its date and the Closing Date includes any untrue
statement of a material fact or omits to state a material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading (other than
(A) the financial statements and other financial and statistical
information contained therein and (B) information contained under the
captions "The Note Issuer" and "The Seller and Servicer", in each case
as to which such counsel need express no opinion);
(xii) this Agreement has been duly authorized, executed and
delivered by the Trust;
(xiii) no consent, approval, authorization or order of any court
or governmental agency or body
22
is required for the issuance of the Certificates, except such as have
been obtained under the California Government Code, the PU Code and
the Act and such as may be required under the blue sky laws of any
jurisdiction in connection with the purchase and distribution of the
Certificates by the Underwriters and such other approvals (specified
in such opinion) as have been obtained;
(xiv) neither the execution and delivery of this Agreement or the
Trust Agreement, nor the issue and sale of the Certificates, nor the
consummation of the transactions contemplated by this Agreement or the
Trust Agreement, nor the fulfillment of the terms of this Agreement or
the Trust Agreement by the Infrastructure Bank will (A) conflict with,
result in any breach of any of the terms or provisions of, or
constitute (with or without notice or lapse of time) a default under
the bylaws or procedural documents of the Infrastructure Bank, or
conflict with or breach any of the material terms or provisions of, or
constitute (with or without notice or lapse of time) a default under,
any indenture, agreement or other instrument known to such counsel and
to which the Infrastructure Bank is a party or by which the
Infrastructure Bank is bound, (B) result in the creation or imposition
of any lien upon any properties of the Infrastructure Bank pursuant to
the terms of any such indenture, agreement or other instrument, or (C)
violate any law or any order, rule or regulation applicable to the
Infrastructure Bank of any court or of any federal or state regulatory
body, administrative agency or other governmental instrumentality
having jurisdiction over the Infrastructure Bank, or any of its
properties; and
(xv) the Trust is not an "investment company" or under the
"control" of an "investment company" as such terms are defined under
the Investment Company Act of 1940, as amended.
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than the State
of California or the United States, to the extent deemed proper and
specified in such opinion, upon the opinion of other counsel of good
standing believed to be reliable and who are satisfactory to counsel for
the Underwriters, (B) as to matters relating to actions taken by the
Company, the Note Issuer, the Note Trustee, the CPUC
23
and the Servicer, upon opinions rendered by counsel to such parties
hereunder or under the Basic Documents, and (C) as to matters of fact, to
the extent deemed proper, on certificates of responsible officers of the
Trust, the Infrastructure Bank and public officials. References to the
Final Prospectus in this paragraph (d) include any supplements thereto at
the Closing Date.
(e) The Representatives, the Trust, the Infrastructure Bank and the
STO shall have received an opinion of ▇▇▇▇▇▇ & ▇▇▇▇▇▇, counsel to the Note
Trustee, dated the Closing Date, in form and substance reasonably
satisfactory to the Representatives, to the effect that:
(i) the Note Trustee is validly existing as a national banking
association in good standing under the federal laws of the United
States of America;
(ii) the Indenture has been duly authorized, executed and
delivered, and constitutes a legal, valid and binding instrument
enforceable against the Note Trustee in accordance with its terms
(subject, as to enforcement of remedies, to applicable bankruptcy,
reorganization, insolvency, moratorium or other similar laws or
equitable principles affecting creditors' rights generally from time
to time in effect); and
(iii) the Notes have been duly authenticated by the Note Trustee.
(f) The Representatives, the Trust, the Infrastructure Bank and the
STO shall have received an opinion of ▇▇▇▇▇▇ & ▇▇▇▇▇▇, counsel to the
Certificate Trustee, dated the Closing Date, in form and substance
reasonably satisfactory to the Representatives, to the effect that:
(i) the Certificate Trustee is validly existing as a national
banking association in good standing under the federal laws of the
United States of America;
(ii) the Trust Agreement and, on behalf of the Trust, the Note
Purchase Agreement have been duly authorized, executed and delivered
by the Certificate Trustee, and the Trust Agreement constitutes a
legal, valid and binding instrument enforceable against the
Certificate Trustee in
24
accordance with its terms (subject, as to enforcement of remedies, to
applicable bankruptcy, reorganization, insolvency, moratorium or other
similar laws or equitable principles affecting creditors' rights
generally from time to time in effect); and
(iii) the Certificate Trustee has duly executed, authenticated
and delivered the Certificates issued on the Closing Date on behalf of
the Trust;
(g) The Representatives, the Trust, the Infrastructure Bank, the STO
and the Certificate Trustee shall have received an opinion of ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇ & Finger, P.A., counsel to the Delaware Trustee, dated the Closing
Date, in form and substance reasonably satisfactory to the Representatives,
to the effect that:
(i) the Delaware Trustee is duly incorporated and is validly
existing as a banking corporation in good standing under the laws of
the State of Delaware, with full corporate trust power and authority
to enter into and perform its obligations under the Trust Agreement;
and
(ii) the Trust Agreement has been duly authorized, executed and
delivered by the Delaware Trustee, and constitutes a legal, valid and
binding instrument enforceable against the Delaware Trustee in
accordance with its terms (subject, as to enforcement of remedies, to
applicable bankruptcy, reorganization, insolvency, moratorium or other
similar laws or equitable principles affecting creditors' rights
generally from time to time in effect);
(h) The Representatives shall have received from Cravath, Swaine &
▇▇▇▇▇, counsel for the Underwriters, such opinion or opinions, dated the
Closing Date, with respect to the issuance and sale of the Notes and the
Certificates, the Indenture, the Trust Agreement, the Registration
Statement, the Final Prospectus (together with any supplement thereto) and
other related matters as the Representatives may reasonably require, and
the Company, the Note Issuer and the Trust shall have furnished to such
counsel such documents as they request for the purpose of enabling them to
pass upon such matters.
(i) The Representatives, the Infrastructure Bank,
25
the STO and the Note Trustee shall have received a certificate of the Note
Issuer, signed by the Chairman of the Board or the President and the
principal financial or accounting officer of the Note Issuer, dated the
Closing Date, to the effect that the signers of such certificate have
carefully examined the Registration Statement, the Final Prospectus, any
supplement to the Final Prospectus and this Agreement and that:
(i) the representations and warranties of the Note Issuer in this
Agreement and in the Indenture are true and correct in all material
respects on and as of the Closing Date with the same effect as if made
on the Closing Date, and the Note Issuer has complied with all the
agreements and satisfied all the conditions on its part to be
performed or satisfied at or prior to the Closing Date;
(ii) no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that
purpose have been instituted or, to the Note Issuer's knowledge,
threatened; and
(iii) since the dates as of which information is given in the
Final Prospectus (exclusive of any supplement thereto), there has been
no material adverse change in (x) the condition (financial or other),
prospects, earnings, business or properties of the Note Issuer,
whether or not arising from transactions in the ordinary course of
business, or (y) the Transition Property, except as set forth in or
contemplated in the Final Prospectus (exclusive of any supplement
thereto).
(j) The Representatives, the Infrastructure Bank, the STO, the Note
Trustee and the Certificate Trustee shall have received a certificate of
the Company, signed by the President and the principal financial or
accounting officer of the Company, dated the Closing Date, to the effect
that the signers of such certificate have carefully examined the
Registration Statement, the Final Prospectus, any supplement to the Final
Prospectus and this Agreement and that:
(i) the representations and warranties of the Company in this
Agreement, the Sale Agreement and the Servicing Agreement are true and
correct in all material respects on and as of the Closing Date with
the same effect as if made on the
26
Closing Date, and the Company has complied with all the agreements and
satisfied all the conditions on its part to be performed or satisfied
at or prior to the Closing Date;
(ii) no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that
purpose have been instituted or, to the Company's knowledge,
threatened; and
(iii) since the dates as of which information is given in the
Final Prospectus (exclusive of any supplement thereto), there has been
no material adverse change in (x) the condition (financial or other),
prospects, earnings, business or properties of the Company and its
subsidiaries taken as a whole, whether or not arising from
transactions in the ordinary course of business, or (y) the Transition
Property, except as set forth in or contemplated in the Final
Prospectus (exclusive of any supplement thereto).
(k) At the Closing Date, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP shall have furnished to
the Representatives (i) a letter or letters (which may refer to letters
previously delivered to one or more of the Representatives), 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 Act and the Exchange Act and the respective applicable
published rules and regulations thereunder and stating in effect that they
have performed certain specified procedures as a result of which they
determined that certain information of an accounting, financial or
statistical nature (which is limited to accounting, financial or
statistical information derived from the general accounting records of the
Company and its subsidiaries) set forth in the Registration Statement and
the Final Prospectus, including information specified by the Underwriters
and set forth under the captions "Prospectus Summary," "Description of the
Transition Property," "The Seller and the Servicer," "Description of the
Notes," and "Description of the Certificates" in the Final Prospectus,
agrees with the accounting records of the Company and its subsidiaries,
excluding any questions of legal interpretation, and (ii) the opinion or
certificate, dated as of the Closing Date, in form and substance
satisfactory to the Representatives, satisfying the requirements of Section
2.10(7) of the Indenture.
27
References to the Final Prospectus in this paragraph (k) include any
supplement thereto at the date of the letter.
In addition, except as provided in Schedule I hereto, at the Execution
Time, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP shall have furnished to the Representatives a
letter or letters, dated as of the Execution Time, in form and substance
satisfactory to the Representatives, to the effect set forth above.
(l) Subsequent to the Execution Time or, if earlier, the dates as of
which information is given in the Registration Statement (exclusive of any
amendment thereof) and the Final Prospectus (exclusive of any supplement
thereto), there shall not have been any change, or any development
involving a prospective change, in or affecting either (i) the business,
properties or financial condition of the Company, the Note Issuer or the
Infrastructure Bank or (ii) the Transition Property, the Notes, the
Certificates, the Financing Order or the Statute, the effect of which is,
in the judgment of the Representatives, so material and adverse as to make
it impractical or inadvisable to proceed with the offering or delivery of
the Notes or the Certificates as contemplated by the Registration Statement
(exclusive of any amendment thereof) and the Final Prospectus (exclusive of
any supplement thereto).
(m) The Representatives, the Trust, the Infrastructure Bank and the
STO shall have received on the Closing Date an opinion letter or letters of
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, LLP, counsel to the Company and the Note
Issuer, dated the Closing Date, in form and substance reasonably
satisfactory to the Representatives, (i) with respect to the
characterization of the transfer of the Transition Property by the Company
to the Note Issuer as a "true sale" for bankruptcy purposes and (ii) to the
effect that a court would not order the substantive consolidation of the
assets and liabilities of the Note Issuer with those of the Company in the
event of a bankruptcy, reorganization or other insolvency proceeding
involving the Company.
(n) The Representatives, the Trust, the Infrastructure Bank and the
STO shall have received on the Closing Date an opinion letter of ▇▇▇▇▇ &
Wood LLP, outside counsel to the Infrastructure Bank and the Trust, dated
the Closing Date, in form and substance reasonably satisfactory to the
Representatives, to the
28
effect that a court would not order the substantive consolidation of the
assets and liabilities of the Infrastructure Bank with those of the Trust.
(o) The Representatives, the Trust, the Infrastructure Bank and the
STO shall have received on the Closing Date an opinion letter or letters of
counsel for the Company, portions of which may be delivered by ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ LLP, outside counsel for the Company, and portions
of which may be delivered by ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇, Esq., in-house counsel
for the Company, each dated the Closing Date, in form and substance
reasonably satisfactory to the Representatives, to the effect that: (i)
subject to the ultimate outcome of any Petition to the California Supreme
Court for Writ of Review filed by The Utility Reform Network, the Financing
Order has been duly authorized and adopted by the CPUC and the Financing
Order, giving effect to the Issuance Advice Letter, is in full force and
effect; in reliance on the opinion of ▇▇▇▇▇ & ▇▇▇▇ LLP that the
Certificates are "rate reduction bonds" under Section 840(e) of the PU
Code, as of the issuance of the Certificates, the Certificates are entitled
to the protections provided in the first sentences of PU Code Sections
841(c) and 842(d); (ii) no person may challenge the Financing Order in
California state courts other than in a proceeding pursuant to a Petition
for Writ of Review brought by The Utility Reform Network to the California
Supreme Court; (iii) the likelihood of any outcome of any Petition to the
California Supreme Court for Writ of Review filed by The Utility Reform
Network having a material adverse effect on the payment of principal and
interest on the Certificates on the dates and in the amounts set forth in
the Final Prospectus is remote; and (iv) the True-Up Adjustments (as
defined in the Servicing Agreement) are entitled under the Statute to take
into account in determining the amount of FTA Charges for future periods
any reduction in the amount of FTA Payments deposited in the Collection
Account from the amount collected from Customers ("Customer Collections")
as a result of (x) any default by the Servicer or an ESP (as defined in the
Servicing Agreement) under the Servicing Agreement or an ESP Service
Agreement (as defined in the Servicing Agreement) to turn over any or all
of such Customer Collections to the Collection Account or (y) as a result
of any surcharge, fee, offset, charge or other deduction imposed by a
bankruptcy court in a case in which the Company is the debtor. In
addition, the Representatives, the Trust, the Infrastructure Bank and the
STO shall have received on the Closing Date an opinion letter of counsel
for the Company, dated the Closing Date, in form and substance reasonably
satisfactory to the Representatives, to the effect that (i) the legal
requirements for The Utility Reform Network to obtain a stay as requested
in its Petition for Writ of Review to the California Supreme Court
29
include that the proponent of the stay show that (A) great or irreparable
damage would otherwise result to the proponent of the stay and (B) the harm
that would be caused from granting the stay does not outweigh the harm
which would result from not granting the stay and (ii) the general legal
standards for obtaining such a stay would also include a requirement that
the proponent show that it is likely to prevail on the merits of the
underlying claim (such opinion may note that the court has broad equitable
discretion in granting or denying such a stay).
(p) The Representatives, the Infrastructure Bank and the STO shall
have received on the Closing Date an opinion letter or letters of counsel
for the Infrastructure Bank and the Trust, portions of which may be
delivered by ▇▇▇▇▇ & Wood LLP, outside counsel for the Infrastructure Bank
and the Trust, and portions of which may be delivered by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇,
in-house counsel for the Infrastructure Bank, each dated the Closing Date,
in form and substance reasonably satisfactory to the Representatives, to
the effect that: (i) Proposition 218 of the initiative provisions of the
Constitution of California does not apply to AB 1890; and (ii) any state
action (whether by legislative, CPUC, initiative or otherwise) to revoke or
limit the Financing Order, the Issuance Advice Letters, the Transition
Property or the Fixed Transition Amounts in a manner which would
substantially impair the rights of Certificateholders would be subject to a
successful constitutional contracts clause defense.
(q) The Representatives, the Trust, the Infrastructure Bank, the STO
and the Note Trustee shall have received on the Closing Date an opinion
letter or letters of ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & Finger, P.A., special Delaware
counsel to the Note Issuer, dated the Closing Date, in form and substance
reasonably satisfactory to the Representatives, to the effect that: (i) if
properly presented to a Delaware court, a Delaware court applying Delaware
law, would conclude that (x) in order for a person to file a voluntary
bankruptcy petition on behalf of the Note Issuer, the prior unanimous
written consent of the Member and the Board of Directors (including the
Independent Director), as provided in Section 9(j)(iii) of the Amended and
Restated Limited Liability Company Agreement of the Note Issuer (the "LLC
Agreement"), is required, and (y) such provision, contained in Section
9(j)(iii) of the LLC Agreement, that requires the unanimous written consent
of the Member and the Board of Directors (including the Independent
Director) in order for a person to file a voluntary bankruptcy petition on
behalf of the Note Issuer, constitutes a legal, valid and binding agreement
of the Member and is enforceable against the Member, in accordance with its
terms; and (ii) the LLC Agreement constitutes a legal, valid and
30
binding agreement of the Member thereunder, and is enforceable against the
Member in accordance with its terms.
(r) The Notes and the Certificates shall have been rated in the
highest long-term rating category by each of the Rating Agencies.
(s) On or prior to the Closing Date, the Note 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 PU Code and other applicable law
reflecting the grant of a security interest by the Note Issuer in the
Collateral to the Note Trustee, including the filing of the UCC financing
statements in the office of the Secretary of State of California.
(t) On or prior to the Closing Date, the Note Issuer shall have
delivered to the Representatives evidence, in form and substance
satisfactory to the Representatives, of the California Public Utility
Commission's issuance of the Financing Order relating to the Transition
Property and the related Issuance Advice Letters.
(u) On or prior to the Closing Date, the Company shall have delivered
to the Representatives, the Trust, the Infrastructure Bank and the STO
evidence, in form and substance reasonably satisfactory to the
Representatives, that the Company has obtained a release of the Transition
Property from the lien of the Company Mortgage.
(v) Prior to the Closing Date, the Note Issuer, the Company and the
Trust shall have furnished to the Representatives such further information,
certificates, opinions and documents as the Representatives may reasonably
request.
If any of the conditions specified in this Section 6 shall not have
been fulfilled in all material respects when and as provided in this Agreement,
or if any of the opinions and certificates mentioned above or elsewhere in this
Agreement shall not be in all material respects reasonably satisfactory in form
and substance to the Representatives and counsel for the Underwriters, this
Agreement and all obligations of the Underwriters hereunder may be canceled at,
or at any time prior to, the Closing Date by the Representatives. Notice of
such cancelation shall be given to the Note Issuer and the Trust in writing or
by telephone or telegraph confirmed in writing.
The documents required to be delivered by this Section 6 shall be
delivered at the office of ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ LLP, Old Federal
Reserve Bank Building, 400 Sansome Street, San Francisco, CA, on the Closing
Date.
31
7. Reimbursement of Underwriters' Expenses. If the sale of the
---------------------------------------
Certificates provided for herein is not consummated because any condition to the
obligations of the Underwriters set forth in Section 6 hereof is not satisfied,
because of any termination pursuant to Section 10 hereof or because of any
refusal, inability or failure on the part of the Company or the Note Issuer or
the Trust to perform any agreement herein or comply with any provision hereof
other than by reason of a default (including under Section 9) by any of the
Underwriters, the Company and the Note Issuer will, jointly and severally,
reimburse the Underwriters upon demand for all out-of-pocket expenses (including
reasonable fees and disbursements of counsel) that shall have been incurred by
them in connection with the proposed purchase and sale of the Certificates.
8. Indemnification and Contribution. (a) The Company and the Note
--------------------------------
Issuer will, jointly and severally, indemnify and hold harmless each
Underwriter, the Infrastructure Bank and the STO, the directors, officers,
members, employees and agents of each Underwriter, the Infrastructure Bank and
the STO and each person who controls any Underwriter, the Infrastructure Bank
and the STO within the meaning of either the Act or the Exchange Act against any
and all losses, claims, damages or liabilities, joint or several, to which they
or any of them may become subject under the Act, the Exchange Act or other
Federal or state statutory law or regulation, at common law or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged untrue
statement of a material fact contained in the registration statement for the
registration of the Certificates as originally filed or in any amendment
thereof, or in the Basic Prospectus, any Preliminary Final Prospectus or the
Final Prospectus, or in any amendment thereof or supplement thereto, or arise
out of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading, and will reimburse each such indemnified party, as incurred, for any
legal or other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage, liability or action;
provided, however, that neither the Company nor the Note Issuer will be liable
-------- -------
in any such case to the extent that any such loss, claim, damage or liability
arises out of or is based upon any such untrue statement or alleged untrue
statement or omission or alleged omission made therein in reliance upon and in
conformity with written information furnished to the Note Issuer or the Company
by or on behalf of any Underwriter through the Representatives specifically for
inclusion therein; provided further, that with respect to any untrue statement
----------------
or omission of material fact made in any Preliminary Final Prospectus, the
indemnity agreement contained in this Section 8(a) shall not inure to the
benefit of any Underwriter or any person controlling such
32
Underwriter from whom the person asserting any such loss, claim, damage or
liability purchased the Certificates that are the subject thereof, to the extent
that any such loss, claim, damage or liability of such Underwriter occurs under
the circumstance where it shall have been determined by a court of competent
jurisdiction by final and nonappealable judgment that (w) the Company or the
Note Issuer had previously furnished copies of the Final Prospectus to the
Representatives, (x) delivery of the Final Prospectus was required by the Act to
be made to such person, (y) the untrue statement or omission of a material fact
contained in the Preliminary Final Prospectus was corrected in the Final
Prospectus and (z) there was not sent or given to such person, at or prior to
the written confirmation of the sale of such Certificates to such person, a copy
of the Final Prospectus. This indemnity agreement will be in addition to any
liability which the Company and the Note Issuer may otherwise have.
(b) Each Underwriter severally agrees to indemnify and hold harmless
the Company, the Note Issuer, the Infrastructure Bank, the STO, each of their
directors (and in the case of the Infrastructure Bank or the STO, their
respective members, employees, officers or agents), each of their officers who
signs the Registration Statement, and each person who controls the Company or
the Note Issuer within the meaning of either the Act or the Exchange Act, to the
same extent as the foregoing indemnity from the Company and the Note Issuer to
each Underwriter, but only with reference to written information relating to
such Underwriter furnished to the Note Issuer or the Company by or on behalf of
such Underwriter through the Representatives specifically for inclusion in the
documents referred to in the foregoing indemnity. This indemnity agreement will
be in addition to any liability which any Underwriter may otherwise have. The
Note Issuer and the Company acknowledge that the statements set forth in the
last paragraph of the cover page, under the heading "Underwriting" or "Plan of
Distribution" in any Preliminary Final Prospectus or the Final Prospectus
constitute the only information furnished in writing by or on behalf of the
several Underwriters for inclusion in the documents referred to in the foregoing
indemnity, and you, as the Representatives, confirm that such statements are
correct.
(c) Promptly after receipt by an indemnified party under this Section
8 of notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under this
Section 8, notify the indemnifying party in writing of the commencement thereof;
but the failure so to notify the indemnifying party (i) will not relieve it from
liability under paragraph (a) or (b) above unless and to the extent it did not
otherwise learn of such action and such failure results in the forfeiture by the
indemnifying party of substantial rights and defenses and (ii) will not, in any
event, relieve the indemnifying party from any obligations to any indemnified
party other than the indemnification
33
obligation provided in paragraph (a) or (b) above. The indemnifying party shall
be entitled to appoint counsel of the indemnifying party's choice at the
indemnifying party's expense to represent the indemnified party in any action
for which indemnification is sought (in which case the indemnifying party shall
not thereafter be responsible for the fees and expenses of any separate counsel
retained by the indemnified party or parties except as set forth below);
provided, however, that such counsel shall be reasonably satisfactory to the
-------- -------
indemnified party. Notwithstanding the indemnifying party's election to appoint
counsel to represent the indemnified party in an action, the indemnified party
shall have the right to employ separate counsel (including local counsel), and
the indemnifying party shall bear the reasonable fees, costs and expenses of
such separate counsel if (i) the use of counsel chosen by the indemnifying party
to represent the indemnified party would present such counsel with a conflict of
interest, (ii) the actual or potential defendants in, or targets of, any such
action include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be legal
defenses available to it and/or other indemnified parties which are different
from or additional to those available to the indemnifying party, (iii) the
indemnifying party shall not have employed counsel reasonably satisfactory to
the indemnified party to represent the indemnified party within a reasonable
time after notice of the institution of such action or (iv) the indemnifying
party shall authorize the indemnified party to employ separate counsel at the
expense of the indemnifying party. An indemnifying party will not, without the
prior written consent of the indemnified parties, settle or compromise or
consent to the entry of any judgment with respect to any pending or threatened
claim, action, suit or proceeding in respect of which indemnification or
contribution may be sought hereunder (whether or not the indemnified parties are
actual or potential parties to such claim or action) unless such settlement,
compromise or consent includes an unconditional release of each indemnified
party from all liability arising out of such claim, action, suit or proceeding.
(d) In the event that the indemnity provided in paragraph (a) or (b)
of this Section 8 is unavailable to or insufficient to hold harmless an
indemnified party for any reason, the Company, the Note Issuer and the
Underwriters agree to contribute to the aggregate losses, claims, damages and
liabilities (including legal or other expenses reasonably incurred in connection
with investigating or defending same) (collectively "Losses") to which the Note
Issuer and one or more of the Underwriters may be subject in such proportion as
is appropriate to reflect the relative benefits received by the Note Issuer and
by the Underwriters from the offering of the Certificates and the Notes;
provided, however, that in no case shall any Underwriter (except as may be
-------- -------
provided in any agreement among underwriters relating to the offering of the
Certificates) be responsible for any amount in excess of the underwriting
34
discount or commission applicable to the Certificates purchased by such
Underwriter hereunder. If the allocation provided by the immediately preceding
sentence is unavailable for any reason, the Company, the Note Issuer and the
Underwriters shall contribute in such proportion as is appropriate to reflect
not only such relative benefits but also the relative fault of the Note Issuer
and of the Underwriters in connection with the statements or omissions which
resulted in such Losses as well as any other relevant equitable considerations.
Benefits received by the Note Issuer shall be deemed to be equal to the total
net proceeds from the offering (before deducting expenses) of the Certificates
(which shall be equal to the net proceeds from the sale of the Notes to the
Trust (before deducting expenses)), and benefits received by the Underwriters
shall be deemed to be equal to the total underwriting discounts and commissions,
in each case as set forth on the cover page of the Final Prospectus. Relative
fault shall be determined by reference to whether any alleged untrue statement
or omission relates to information provided by the Note Issuer or the
Underwriters. The Company, the Note Issuer and the Underwriters agree that it
would not be just and equitable if contribution were determined by pro rata
allocation or any other method of allocation which does not take account of the
equitable considerations referred to above. Notwithstanding the provisions of
this paragraph (d), no person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. For purposes of
this Section 8, each person who controls an Underwriter within the meaning of
either the Act or the Exchange Act and each director, officer, employee and
agent of an Underwriter shall have the same rights to contribution as such
Underwriter, and each person who controls the Note Issuer or the Company within
the meaning of either the Act or the Exchange Act, each officer of the Note
Issuer or the Company who shall have signed the Registration Statement and each
director of the Note Issuer or the Company shall have the same rights to
contribution as the Note Issuer or the Company, subject in each case to the
applicable terms and conditions of this paragraph (d).
9. Default by an Underwriter. If any one or more Underwriters shall
--------------------------
fail to purchase and pay for any of the Certificates agreed to be purchased by
such Underwriter or Underwriters hereunder and such failure to purchase shall
constitute a default in the performance of its or their obligations under this
Agreement, the nondefaulting Underwriters shall be obligated severally to take
up and pay for (in the respective proportions which the amount of Certificates
set forth opposite their names in Schedule II hereto bears to the aggregate
amount of Certificates set forth opposite the names of all the remaining
Underwriters) the Certificates which the defaulting Underwriter or Underwriters
agreed but failed to purchase; provided, however, that in the event that the
-------- -------
aggregate amount of Certificates which the defaulting Underwriter or
35
Underwriters agreed but failed to purchase shall exceed 10% of the aggregate
amount of Certificates set forth in Schedule II hereto, the nondefaulting
Underwriters shall have the right to purchase all, but shall not be under any
obligation to purchase any, of the Certificates, and if such nondefaulting
Underwriters do not purchase all the Certificates, this Agreement will terminate
without liability to any nondefaulting Underwriter, the Note Issuer or the
Company. In the event of a default by any Underwriter as set forth in this
Section 9, the Closing Date shall be postponed for such period, not exceeding
seven days, as the Representatives shall determine in order that the required
changes in the Registration Statement and the Final Prospectus or in any other
documents or arrangements may be effected. Nothing contained in this Agreement
shall relieve any defaulting Underwriter of its liability, if any, to the Note
Issuer and the Company and any nondefaulting Underwriter for damages occasioned
by its default hereunder.
10. Termination. This Agreement shall be subject to termination in
------------
the absolute discretion of the Representatives, by notice given to the Note
Issuer and the Trust prior to delivery of and payment for the Certificates, if
prior to such time (i) there shall have occurred any change, or any development
involving a prospective change, in or affecting either (A) the business,
properties or financial condition of the Note Issuer, the Infrastructure Bank or
the Company or (B) the Transition Property, the Notes, the Certificates, the
Financing Order or the Statute, the effect of which, in the judgment of the
Representatives, materially impairs the investment quality of the Certificates
or makes it impractical or inadvisable to market the Certificates, (ii) trading
in the Company's Common Stock shall have been suspended by the SEC or the New
York Stock Exchange or trading in securities generally on the New York Stock
Exchange shall have been suspended or limited or minimum prices shall have been
established on such Exchange, (iii) a banking moratorium shall have been
declared either by Federal, New York State or California State authorities or
(iv) there shall have occurred any outbreak or escalation of hostilities,
declaration by the United States of a national emergency or war or other
calamity or crisis the effect of which on financial markets is such as to make
it, in the judgment of the Representatives, impracticable or inadvisable to
proceed with the offering or delivery of the Certificates as contemplated by the
Final Prospectus (exclusive of any supplement thereto).
11. Representations and Warranties of Infrastructure Bank. The
------------------------------------------------------
Infrastructure Bank represents and warrants to, and agrees with, each
Underwriter, the Company and the Note Issuer that the information under the
caption "The Infrastructure Bank" in the Basic Prospectus, any Preliminary Final
Prospectus or the Final Prospectus, or in any amendment thereof or supplement
thereto does not contain any untrue statement of a material fact or omission of
a material fact required to be stated therein or necessary to
36
make the statements therein, in light of the circumstances under which they were
made, not misleading.
12. Computational Materials and ABS Term Sheets.
--------------------------------------------
(a) Each Underwriter severally represents and warrants to the Note
Issuer, the Company, the Infrastructure Bank and the STO that is has not and
will not use any information that constitutes "Computational Materials," as
defined in the SEC's No-Action Letter, dated May 20, 1994, addressed to ▇▇▇▇▇▇,
▇▇▇▇▇▇▇ Acceptance Corporation I, ▇▇▇▇▇▇ Peabody & Co. Incorporated and ▇▇▇▇▇▇
Structured Asset Corporation (as made generally applicable to registrants,
issuers and underwriters by the SEC's response to the request of the Public
Securities Association dated May 27, 1994), with respect to the offering of the
Certificates.
(b) Each Underwriter severally represents and warrants to the Note
Issuer, the Company, the Infrastructure Bank and the STO that is has not and
will not use any information that constitutes "ABS Term Sheets," as defined in
the SEC's No-Action Letter, dated February 17, 1995, addressed to the Public
Securities Association, with respect to the offering of the Certificates.
13. Representations and Indemnities to Survive. The respective
-------------------------------------------
agreements, representations, warranties, indemnities and other statements of the
Company or its officers, the Note Issuer or its officers, the Trust or its
officers and of the Underwriters set forth in or made pursuant to this Agreement
will remain in full force and effect, regardless of any investigation made by or
on behalf of any Underwriter or of the Company, the Note Issuer, the Trust or
any of the officers, directors or controlling persons referred to in Section 8
hereof, and will survive delivery of and payment for the Certificates. The
provisions of Sections 7 and 8 hereof shall survive the termination or
cancelation of this Agreement.
14. Notices. All communications hereunder will be in writing and may
--------
be given by United States mail, courier service, telegram, telex, telemessage,
telecopy, telefax, cable or facsimile (confirmed by telephone or in writing in
the case of notice by telegram, telex, telemessage, telecopy, telefax, cable or
facsimile) or any other customary means of communication, and any such
communication shall be effective when delivered, or if mailed, three days after
deposit in the United States mail with proper postage for ordinary mail prepaid,
and if sent to the Representatives, to them at the address specified in Schedule
I hereto; and if sent to the Company, to it at ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇, Attention: Treasurer; and if sent to the Note Issuer, to it at ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: President; and if
sent to the Trust, to it c/o Bankers Trust Company of California, N.A., as
Certificate Trustee, c/o Bankers Trust Company, Corporate Trust and Agency
37
Services, at Four ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: Structured
Finance Group; and if sent to the Infrastructure Bank, to it c/o California
Trade and Commerce Agency, at ▇▇▇ ▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇,
Attention: Executive Director; and if sent to the STO, to it at ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇, ▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: Deputy Treasurer. The parties
hereto, by notice to the others, may designate additional or different addresses
for subsequent communications.
15. Successors. This Agreement will inure to the benefit of and be
-----------
binding upon the parties hereto and their respective successors and the officers
and directors and controlling persons referred to in Section 8 hereof, and no
other person will have any right or obligation hereunder.
16. Applicable Law. This Agreement will be governed by and construed
---------------
in accordance with the laws of the State of New York.
17. Counterparts. This Agreement may be signed in any number of
-------------
counterparts, each of which shall be deemed an
38
original, which taken together shall constitute one and the same instrument.
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicate hereof, whereupon
this letter and your acceptance shall represent a binding agreement among the
Company, the Note Issuer, the Trust, the several Underwriters, the
Infrastructure Bank and the STO.
Very truly yours,
PACIFIC GAS AND ELECTRIC COMPANY,
by
__________________________
Name:
Title:
PG&E FUNDING LLC,
by
__________________________
Name:
Title:
CALIFORNIA INFRASTRUCTURE AND
ECONOMIC DEVELOPMENT BANK
SPECIAL PURPOSE TRUST PG&E-1,
by California Infrastructure
and Economic Development
Bank, as Originator,
by
____________________
Name:
Title:
CALIFORNIA INFRASTRUCTURE AND
ECONOMIC DEVELOPMENT BANK,
by
________________________
Name:
Title:
▇▇
▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇
▇▇▇▇▇▇▇▇▇▇,
by
________________________
Name:
Title: Deputy Treasurer
The foregoing Agreement is
hereby confirmed and accepted
as of the date specified in
Schedule I hereto.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO. INCORPORATED
▇▇▇▇▇▇ BROTHERS INC.
by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO. INCORPORATED
by
__________________________
Name:
Title:
by ▇▇▇▇▇▇ BROTHERS INC.
by
_________________________
Name:
Title:
For themselves and the other
several Underwriters, if any,
named in Schedule II to the
foregoing Agreement.
SCHEDULE I
Underwriting Agreement dated November 25, 1997
Registration Statement No. 333-30715
Representative(s):
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ Brothers Inc.
Three World Financial Center
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Title, Purchase Price and Description of Certificates:
Title: California Infrastructure and Economic
Development Bank Special Purpose Trust PG&E-1
$2,901,000,000 Rate Reduction Certificates,
Series 1997-1
Principal amount, Price to
Public, Underwriting Discounts
and Commissions and Proceeds
to Trust:
Total Principal Price to Public Underwriting Proceeds to Trust
Amount of ------------------ Discounts and -------------------
----------- Commissions
Class -----------
------
Per Class A- $125,000,000 99.99656% 0.20939% 99.78717%
1
Certificate
Per Class A- $265,000,000 99.99664% 0.30000% 99.69664%
2
Certificate
Per Class A- $280,000,000 99.98875% 0.35000% 99.63875%
3
Certificate
Per Class A- $300,000,000 99.97709% 0.40000% 99.57709%
4
Certificate
Per Class A- $ 290,000,000 99.98630% 0.45000% 99.53630%
5
Certificate
Per Class A- $ 375,000,000 99.95817% 0.50000% 99.45817%
6
Certificate
Per Class A- $ 866,000,000 99.98876% 0.55000% 99.43876%
7
Certificate
Per Class A- $ 400,000,000 99.99358% 0.65000% 99.34358%
-------------- --------- -------- ---------
8
Certificate
-----------------------------------------------------------------------------------------
Total $2,901,000,000 $2,900,566,955.10 $13,779,737.50 $2,886,787,217.60
============== ================= ============== =================
Plus, the Underwriters will be
----
reimbursed by the Note Issuer for:
$430,850 of expenses,
consisting of $287,000
of out-of-pocket expenses and
$143,850 for Underwriters Counsel
Original Issue Discount (if any): $433,044.90
Redemption provisions: Optional Redemption and
Mandatory Redemption as set
forth in Article X of the
Indenture
Other provisions:
Closing Date, Time and Location: December 8, 1997, 6:00 a.m., Pacific Coast
Time, San Francisco, CA.
Type of Offering: Delayed Offering
Date referred to in Section 5(a)(vi) after which the Company and the Note Issuer
may offer or sell asset-backed securities in a trust or special purpose
vehicle without the consent of the Representative(s): December 15, 1997
SCHEDULE II
Principal Amount of Certificates to be Purchased (in thousands)
---------------------------------------------------------------------
Underwriters Class A-1 Class A-2 Class A-3 Class A-4 Class A-5 Class A-6
----------------------------- Certificates Certificates Certificates Certificates Certificates Certificates
------------ ------------ ------------ ------------ ------------ ------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. $ 68,750.0 $145,750.0 $154,000.0 $165,000.0 $159,500.0 $206,250.0
Incorporated
▇▇▇▇▇▇ Brothers Inc. $ 31,250.0 $ 66,250.0 $ 70,000.0 $ 75,000.0 $ 72,500.0 $ 93,750.0
Bear, ▇▇▇▇▇▇▇ & Co., Inc. $ 6,250.0 $ 13,250.0 $ 14,000.0 $ 15,000.0 $ 14,500.0 $ 18,750.0
▇. ▇. ▇▇▇▇▇▇ & Co. $ 6,250.0 $ 13,250.0 $ 14,000.0 $ 15,000.0 $ 14,500.0 $ 18,750.0
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co. $ 6,250.0 $ 13,250.0 $ 14,000.0 $ 15,000.0 $ 14,500.0 $ 18,750.0
Artemis Capital Group, Inc. $ 1,562.5 $ 3,312.5 $ 3,500.0 $ 3,750.0 $ 3,625.0 $ 4,687.5
▇▇▇▇▇▇▇▇ & Partners, L.P. $ 1,562.5 $ 3,312.5 $ 3,500.0 $ 3,750.0 $ 3,625.0 $ 4,687.5
Coast Partners Securities, $ 1,562.5 $ 3,312.5 $ 3,500.0 $ 3,750.0 $ 3,625.0 $ 4,687.5
Inc.
Redwood Securities Group, $ 1,562.5 $ 3,312.5 $ 3,500.0 $ 3,750.0 $ 3,625.0 $ 4,687.5
Inc. ---------- ---------- ---------- ---------- ---------- ----------
Total......................... $125,000.0 $265,000.0 $280,000.0 $300,000.0 $290,000.0 $375,000.0
========== ========== ========== ========== ========== ==========
Principal Amount of Certificates to be Purchased (in thousands)
---------------------------------------------------------------------
Underwriters Class A-7 Class A-8 Total
----------------------------- Certificates Certificates ------------
------------ ------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. $476,300.0 $220,000.0 $1,595,550.0
Incorporated
▇▇▇▇▇▇ Brothers Inc. $216,500.0 $100,000.0 $ 725,250.0
Bear, ▇▇▇▇▇▇▇ & Co., Inc. $ 43,300.0 $ 20,000.0 $ 145,050.0
▇. ▇. ▇▇▇▇▇▇ & Co. $ 43,300.0 $ 20,000.0 $ 145,050.0
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co. $ 43,300.0 $ 20,000.0 $ 145,050.0
Artemis Capital Group, Inc. $ 10,825.0 $ 5,000.0 $ 36,262.5
▇▇▇▇▇▇▇▇ & Partners, L.P. $ 10,825.0 $ 5,000.0 $ 36,262.5
Coast Partners Securities, $ 10,825.0 $ 5,000.0 $ 36,262.5
Inc.
Redwood Securities Group, $ 10,825.0 $ 5,000.0 $ 36,262.5
Inc. ---------- ---------- ------------
Total......................... $866,000.0 $400,000.0 $2,901,000.0
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