Exhibit 1.1
RATE REDUCTION BONDS, SERIES 2002-1
PSNH FUNDING LLC 2
PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE
UNDERWRITING AGREEMENT
New York, New York
January 16, 2002
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc.,
as Underwriter
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
1. Introduction. PSNH Funding LLC 2, a Delaware limited liability
company (the "Issuer"), will sell to you, as underwriter (the "Underwriter"),
the principal amount of $50,000,000 Rate Reduction Bonds, Series 2002-1
identified in Schedule I hereto (the "Bonds").
The Bonds will be issued pursuant to an Indenture, dated as of January
30, 2002 (the "Indenture"), between the Issuer and The Bank of New York, as
Trustee (the "Trustee"). The Bonds will be secured primarily by, and will be
payable from, the RRB Property described in the Issuance Advice Letter. Such RRB
Property will be sold to the Issuer by Public Service Company of New Hampshire,
a New Hampshire corporation (the "Company"), pursuant to a Purchase and Sale
Agreement, dated as of January 30, 2002 (the "Sale Agreement"), between the
Company, as Seller, and the Issuer. The RRB Property will be serviced pursuant
to a Servicing Agreement, dated as of January 30, 2002 (as amended and
supplemented from time to time, the "Servicing Agreement"), between the Company,
as Servicer, and the Issuer.
Capitalized terms used and not otherwise defined herein shall have the
respective meanings given to them in the Indenture.
2. Representations and Warranties.
(a) Each of the Company and the Issuer represents and warrants
to, and agrees with, the Underwriter as set forth below in this Section
2(a). Certain terms used in this Underwriting Agreement are defined in
paragraph (iii) below.
(i) The Issuer and the Bonds meet the requirements
for the use of Form S-3 under the Act and the Issuer has filed
with the Securities and Exchange Commission (the "SEC") a
registration statement (file number 333-76040) on
such Form, including a basic prospectus, for registration
under the Act of the offering and sale of the Bonds. The
Issuer may have filed one or more amendments thereto,
including a Preliminary Final Prospectus in accordance with
Rule 424(a), each of which has previously been furnished to
you. The Issuer will next file with the SEC either (x) a final
prospectus supplement relating to the Bonds in accordance with
Rules 430A and 424(b)(1) or (4), or (y) prior to the
effectiveness of such registration statement, an amendment to
such registration statement, including the form of final
prospectus supplement. In the case of clause (x), the Issuer
has included in such registration statement, as amended at the
Effective Date, all information (other than Rule 430A
Information) required by the Act and the rules thereunder to
be included in the Final Prospectus with respect to the Bonds
and the offering thereof. As filed, such final prospectus
supplement or such amendment and form of final prospectus
supplement shall contain all Rule 430A Information, together
with all other such required information, with respect to the
Bonds and the offering thereof and, except to the extent the
Underwriter shall agree in writing to a modification, shall be
in all substantive respects in the form furnished to you prior
to the Execution Time or, to the extent not completed at the
Execution Time, shall contain only such specific additional
information and other changes (beyond that contained in the
Basic Prospectus and any Preliminary Final Prospectus) as the
Issuer has advised you, prior to the Execution Time, will be
included or made therein.
(ii) 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, as amended (the "Exchange Act") and the Trust
Indenture Act of 1939, as amended (the "Trust Indenture Act")
and the respective rules thereunder; on the Effective Date,
the Registration Statement did not or will not contain any
untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in
order to make the statements therein not misleading; on the
Effective Date and on the Closing Date the Indenture did or
will comply in all material respects with the requirements of
the Trust Indenture Act and the rules and regulations
thereunder; and, on the Effective Date, the Final Prospectus,
if not filed pursuant to Rule 424(b), did not or will not, and
on the date of any filing pursuant to Rule 424(b) and on the
Closing Date, the Final Prospectus (together with any
supplement thereto) will not, include any untrue statement of
a material fact or omit to state a material fact necessary in
order to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
provided, however, that neither the Issuer nor the Company
makes any representations or warranties as to (i) that part of
the Registration Statement which shall constitute the
Statements of Eligibility and Qualification (Form T-1) under
the Trust Indenture Act of the Trustee or (ii) the information
contained in or omitted from the Registration Statement or the
Final Prospectus (or any supplement thereto) in reliance upon
and in conformity
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with information furnished in writing to the Issuer by or on
behalf of the Underwriter specifically for inclusion in the
Registration Statement or the Final Prospectus (or any
supplement thereto), as specified in Section 8(b) of this
Agreement. No stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for
that purpose have been instituted.
(iii) The terms which follow, when used in this
Agreement, shall have the meanings indicated. The term
"Effective Date" shall mean each date that the Registration
Statement and any post-effective amendment or amendments
thereto became or become 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)(i) 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 Bonds and the offering thereof and is used
prior to filing of the Final Prospectus. "Final Prospectus"
shall mean the prospectus supplement relating to the Bonds
that is first filed pursuant to Rule 424(b) after the
Execution Time, together with the Basic Prospectus or, if, in
the case of a Non-Delayed Offering, no filing pursuant to Rule
424(b) is required, shall mean the form of final prospectus
relating to the Bonds, including the Basic Prospectus,
included in the Registration Statement at the Effective Date.
"Registration Statement" shall mean the registration statement
referred to in paragraph (a)(i) above, including all
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 424," "Rule 430A" and
"Regulation S-K" refer to such rules or regulation under the
Act. "Rule 430A Information" means information with respect to
the Bonds and the offering thereof permitted to be omitted
from the Registration Statement when it becomes effective
pursuant to Rule 430A. Any reference herein to the
Registration Statement, the Basic Prospectus, any Preliminary
Final Prospectus or the Final Prospectus shall be deemed to
refer to and include the documents incorporated by reference
therein pursuant to Item 12 of Form S-3 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
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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 Bonds which is intended to commence promptly after
the effective date of a registration statement, with the
result that, pursuant to Rule 430A, all information (other
than Rule 430A Information) with respect to the Bonds so
offered must be included in such registration statement at the
effective date thereof.
(iv) The Issuer has been duly organized and is
validly existing in good standing as a limited liability
company under the laws of the State of Delaware, has the power
and authority to conduct its business as presently conducted
and as described in the Basic Prospectus, any Preliminary
Final Prospectus and the Final Prospectus and is duly
qualified as a foreign corporation to do business and in good
standing in every jurisdiction in which the nature of the
business conducted or property owned by it makes such
qualification necessary and in which the failure to so qualify
would have a materially adverse effect on the Issuer; and the
Issuer has all requisite power and authority to issue the
Bonds and purchase the RRB Property as described in the Basic
Prospectus, any Preliminary Final Prospectus and the Final
Prospectus.
(v) The Company is a validly existing corporation in
good standing under the laws of the State of New Hampshire;
the Company has all requisite power and authority and all
franchises, licenses and permits necessary to own and occupy
its properties and carry on its business as presently
conducted and as described in the Basic Prospectus, any
Preliminary Final Prospectus and the Final Prospectus and as
may be necessary to execute, deliver and perform its
obligations under this Agreement, the Sale Agreement, the
Servicing Agreement and the Administration Agreement.
(vi) Each of the Basic Documents to which the Company
or the Issuer is a party has been duly authorized by the
Company or the Issuer, as applicable, and when executed and
delivered by the Issuer or the Company, as applicable, will
constitute a valid and binding obligation of the Company or
the Issuer, as applicable, enforceable in accordance with its
terms, subject to bankruptcy, insolvency, reorganization,
moratorium and similar laws of general applicability relating
to or affecting creditor's rights and to general equity
principles.
(vii) The Bonds have been duly authorized by the
Issuer and will conform to the description thereof in the
Prospectus; and when the Bonds are executed and authenticated
by the Trustee and delivered to the Underwriter and are paid
for by the Underwriter in accordance with the terms of this
Agreement, the Bonds will constitute the legal, valid and
binding obligations of the Issuer, enforceable in accordance
with their terms, subject to bankruptcy, insolvency,
reorganization,
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moratorium and similar laws of general applicability relating
to or affecting creditor's rights and to general principles of
equity.
(viii) The issuance and sale of the Bonds by the
Issuer, the execution, delivery and compliance by the Issuer
with all of the provisions of the Basic Documents to which the
Issuer is a party, and the consummation of the transactions
herein and therein contemplated will not conflict with or
result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any trust
agreement, indenture, mortgage, deed of trust, loan agreement
or other agreement or instrument to which the Issuer is a
party or by which the Issuer is bound or to which any of the
property or assets of the Issuer is subject, which conflict,
breach, violation or default would be material to the issuance
of the Bonds or would have a material adverse effect on the
Issuer, nor will such action result in any violation of the
Issuer's Certificate of Formation or Limited Liability Company
Agreement (the "LLC Agreement") or any statute, order, rule or
regulation of any court or governmental agency or body having
jurisdiction over the Issuer or its properties.
(ix) The assignment of the RRB Property by the
Company to the Issuer, the execution, delivery and compliance
by the Company with all of the provisions of the Basic
Documents to which the Company is a party, and the
consummation of the transactions herein and therein
contemplated will not conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute
a default under, any trust agreement, indenture, mortgage,
deed of trust, loan agreement or other agreement or instrument
to which the Company is a party or by which the Company is
bound or to which any of the property or assets of the Company
is subject, which conflict, breach, violation or default would
be material to the issuance and sale of the Bonds or would
have a material adverse effect on the financial position or
results of operations of the Company, nor will such action
result in any violation of the provisions of the Articles of
Incorporation or Bylaws of the Company or any statute, order,
rule or regulation of any court or governmental agency or body
having jurisdiction over the Company or any of its properties.
(x) Except for:
(a) the order of the SEC making the
Registration Statement effective, and
(b) permits and similar authorizations
required under the securities or blue sky
laws of any jurisdiction,
no consent, approval, authorization or other order of any
governmental authority is legally required for the execution,
delivery and performance of this Agreement by the Issuer and
the Company and the consummation of the transactions
contemplated hereby, other than those that have been obtained.
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(b) The Underwriter represents and warrants to, and agrees
with, the Issuer, its directors and such of its officers as shall have
signed the Registration Statement, that the information furnished in
writing to the Issuer by or on behalf of the Underwriter expressly for
use in the Registration Statement or the Prospectus, as specified in
Section 8(b) of this Agreement, does not contain an untrue statement of
a material fact and does not omit to state a material fact in
connection with such information required to be stated therein or
necessary to make such information not misleading.
3. Purchase and Sale. Subject to the terms and conditions and in
reliance upon the representations and warranties herein set forth, the Issuer
will sell to the Underwriter, and the Underwriter agrees to purchase from the
Issuer, at the purchase price for the Bonds set forth in Schedule II hereto, the
principal amount of Bonds set forth opposite the name of the Underwriter on
Schedule II hereto.
4. Delivery and Payment. Delivery of and payment for the Bonds
shall be made at 9:00 AM (Eastern Daylight Time) on January 30, 2002 (or such
later date not later than five business days after such specified date as the
Underwriter shall designate), which date and time may be postponed by agreement
between the Underwriter and the Issuer (such date and time of delivery and
payment for the Bonds being herein called the "Closing Date"). Delivery of the
Bonds shall be made to the Underwriter against payment by the Underwriter of the
purchase price thereof to the Issuer by wire transfer of immediately available
funds in U.S. dollars. Delivery of the Bonds shall be made at such location as
the Underwriter shall reasonably designate at least one business day in advance
of the Closing Date. The Bonds to be so delivered shall be initially represented
by Bonds registered in the name of Cede & Co., as nominee of The Depository
Trust Company ("DTC"). The interests of beneficial owners of the Bonds will be
represented by book entries on the records of DTC and participating members
thereof. Definitive Bonds will be available only under limited circumstances
described in the Final Prospectus.
The Issuer will have the Bonds available for inspection, checking
and packaging by the Underwriter in New York, New York, not later than 1:00 PM
(Eastern Daylight Time) on the business day prior to the Closing Date.
5. Covenants.
(a) Covenants of the Issuer. The Issuer covenants and agrees with the
Underwriter that:
(i) The Issuer will use its best efforts to cause the
Registration Statement, if not effective at the Execution Time, and any
amendment thereto, to become effective. Prior to the termination of the
offering of the Bonds, the Issuer will not file any amendment of the
Registration Statement or supplement (including the Final Prospectus or
any Preliminary Final Prospectus) to the Basic Prospectus unless the
Issuer has furnished you a copy for your review prior to filing and
will not file any such proposed amendment or supplement to which you
reasonably object. Subject to the foregoing sentence, the Issuer will
cause the
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Final Prospectus, properly completed in a form approved by you, 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 Underwriter of such timely filing.
The Issuer will promptly advise the Underwriter (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 Bonds, any amendment to the Registration Statement
shall have been filed or become effective, (iv) of any request by the
SEC for any amendment of the Registration Statement or supplement to
the Final Prospectus or for any additional information, (v) of the
issuance by the SEC of any stop order suspending the effectiveness of
the Registration Statement or the institution or threatening of any
proceeding for that purpose and (vi) of the receipt by the Issuer of
any notification with respect to the suspension of the qualification of
the Bonds for sale in any jurisdiction or the initiation or threatening
of any proceeding for such purpose. The Issuer will use its best
efforts to prevent the issuance of any such stop order and, if issued,
to obtain as soon as possible the withdrawal thereof.
(ii) If, at any time when a prospectus relating to the Bonds
is required to be delivered under the Act, any event occurs as a result
of which the Final Prospectus as then supplemented would include any
untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein in the light of the
circumstances under which they were made not misleading, or if it shall
be necessary to amend the Registration Statement or supplement the
Final Prospectus to comply with the Act or the Exchange Act or the
respective rules thereunder, the Issuer promptly will (i) prepare and
file with the SEC, subject to the second sentence of paragraph (a)(i)
of this Section 5, an amendment or supplement which will correct such
statement or omission or effect such compliance and (ii) supply any
supplemented Prospectus to you in such quantities as you may reasonably
request.
(iii) As soon as practicable, the Issuer will make generally
available to the holders of the Bonds and the Underwriter an earnings
statement or statements of the Issuer which will satisfy the provisions
of Section 11(a) of the Act and Rule 158 under the Act.
(iv) The Issuer will furnish to the Underwriter and counsel
for the Underwriter, 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 Underwriter may reasonably
request. The Issuer shall furnish or cause to be furnished to the
Underwriter copies of all reports required by Rule 463 under the
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Act. The Issuer will pay the expenses of printing or other production
of all documents relating to the offering.
(v) The Issuer will arrange for the qualification of the Bonds
for sale under the laws of such jurisdictions as the Underwriter may
designate, will maintain such qualifications in effect so long as
required for the distribution of the Bonds or requested by the
Underwriter and will arrange for the determination of the legality of
the Bonds for purchase by institutional investors; provided, however,
that in no event shall the Issuer be obligated to qualify to do
business in any jurisdiction where it is not now so qualified or to
take any action that would subject it to service of process in suits,
other than those arising out of the offering or sale of the Bonds, in
any jurisdiction where it is not now so subject.
(vi) Until 90 days after the date hereof, the Issuer will not,
without the written consent of the Underwriter, 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 Bonds).
(vii) For a period from the date of this Agreement until the
retirement of the Bonds or until such time as the Underwriter shall
cease to maintain a secondary market in the Bonds, whichever occurs
first, the Issuer will deliver to the Underwriter the annual statements
of compliance and the annual independent auditor's servicing reports
furnished to the Issuer or the Trustee pursuant to the Servicing
Agreement or the Indenture, as applicable, as soon as such statements
and reports are furnished to the Issuer or the Trustee.
(viii) So long as any of the Bonds are outstanding, the Issuer
will furnish to the Underwriter (i) as soon as available, a copy of
each report of the Issuer filed with the SEC under the Exchange Act, or
mailed to holders of the Bonds, (ii) a copy of any filings with the New
Hampshire Public Utilities Commission ("NHPUC") pursuant to the Finance
Order, including, but not limited to, any annual or more frequent
adjustment filings, and (iii) from time to time, any information
concerning the Company or the Issuer, as the Underwriter may reasonably
request.
(ix) To the extent, if any, that any rating necessary to
satisfy the condition set forth in Section 6(l) of this Agreement is
conditioned upon the furnishing of documents or the taking of other
actions by the Issuer on or after the Closing Date, the Issuer shall
furnish such documents and take such other actions.
(b) Covenants of the Company. The Company covenants and agrees with the
Underwriter that, to the extent that the Issuer has not already performed such
act pursuant to Section 5(a):
(i) The Company will use its best efforts to cause the
Registration Statement, if not effective at the Execution Time, and any
amendment thereto, to
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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) The Company will cause the proceeds from the sale of the
RRB Property to be applied for the purposes permitted by the Finance
Order and described in the Prospectus under the caption "Use of
Proceeds."
(iii) Until 90 days after the date hereof, the Company will
not, without the written consent of the Underwriter, 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 Bonds).
(iv) So long as any of the Bonds are outstanding and the
Company is the Servicer, the Company will furnish to the Underwriter
(i) as soon as available, a copy of each report of the Issuer filed
with the SEC under the Exchange Act, or mailed to holders of the Bonds,
(ii) a copy of any filings with the NHPUC pursuant to the Finance
Order, including, but not limited to, any annual or more frequent
adjustment filings, and (iii) from time to time, any information
concerning the Company or the Issuer, as the Underwriter may reasonably
request.
(v) To the extent, if any, that any rating necessary to
satisfy the condition set forth in Section 6(l) 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.
(vi) If, at any time when a prospectus relating to the Bonds
is required to be delivered under the Act, any event occurs as a result
of which the Final Prospectus as then supplemented would include any
untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein in the light of the
circumstances under which they were made not misleading, or if it shall
be necessary to amend the Registration Statement or supplement the
Final Prospectus to comply with the Act or the Exchange Act or the
respective rules thereunder, the Company at the Issuer's expense
promptly will (i) prepare and file with the SEC, subject to the second
sentence of paragraph (a)(i) of this Section 5, an amendment or
supplement which will correct such statement or omission or effect such
compliance and (ii) supply any supplemented Prospectus to you in such
quantities as you may reasonably request.
6. Conditions to the Obligations of the Underwriter. The
obligation of the Underwriter to purchase the Bonds shall be subject to the
accuracy of the representations and warranties on the part of the Issuer and the
Company contained herein as of the Execution Time and the Closing Date and on
the part of the Company contained in Article 3 of the Sale Agreement and in
Section 6.01 of the Servicing Agreement as of the Closing Date, to the
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accuracy of the statements of the Issuer and the Company made in any
certificates pursuant to the provisions hereof, to the performance by the Issuer
and the Company of their obligations hereunder to be performed on or prior to
the Closing Date and to the following additional conditions:
(a) If the Registration Statement has not become effective
prior to the Execution Time, unless the Underwriter agrees in writing
to a later time, the Registration Statement will become effective not
later than (i) 6:00 PM (Eastern Daylight Time), on the date of
determination of the public offering price, if such determination
occurred at or prior to 3:00 PM (Eastern Daylight Time) on such date,
or (ii) 12:00 Noon (Eastern Daylight Time) on the business day
following the day on which the public offering price was determined, if
such determination occurred after 3:00 PM (Eastern Daylight Time) on
such date; if filing of the Final Prospectus, or any supplement
thereto, is required pursuant to Rule 424(b), the Final Prospectus, and
any such supplement, shall have been filed in the manner and within the
time period required by Rule 424(b); and no stop order suspending the
effectiveness of the Registration Statement shall have been issued and
no proceedings for that purpose shall have been instituted or
threatened.
(b) The Underwriter shall have received opinions of counsel
for the Company, portions of which may be delivered by Day, ▇▇▇▇▇ &
▇▇▇▇▇▇ LLP, outside counsel for the Company, portions of which may be
delivered by ▇▇▇▇, ▇▇▇▇▇ and ▇▇▇▇▇▇▇▇▇▇, Professional Association,
outside counsel for the Company, and portions of which may be delivered
by in-house counsel for the Company, as the Underwriter may agree, each
dated the Closing Date, in form and substance reasonably satisfactory
to the Underwriter, to the effect that:
(i) the Company is a validly existing corporation in
good standing under the laws of the jurisdiction in which it
is chartered or organized and has all requisite corporate
power and authority to own its properties, conduct its
business as described in the Registration Statement and the
Prospectus, and to execute, deliver and perform its
obligations under this Agreement, the Sale Agreement, the
Servicing Agreement and the Administration Agreement;
(ii) the Sale Agreement, the Servicing Agreement and
the Administration Agreement have been duly authorized,
executed and delivered by, and constitute legal, valid and
binding instruments enforceable against, the Company in
accordance with their terms (subject to applicable bankruptcy,
reorganization, insolvency, moratorium or other laws or
equitable principles affecting creditors' rights generally
from time to time in effect); this Agreement has been duly
authorized, executed and delivered by the Company;
(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 affiliates or
challenging the Finance Order or the collection of the RRB
Charges or the use and enjoyment of RRB Property under the
Statute of a character required to be
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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 the Final
Prospectus, or to be filed as an exhibit to the Registration
Statement, which is not described or filed as required;
(iv) no consent, approval, authorization or order of
any court or governmental agency or body is required to be
obtained by the Company for the consummation of the
transactions contemplated herein, except such as have been
obtained in accordance with New Hampshire RSA Chapter 369-B
(the "Statute"), the NHPUC Regulations (as defined in Section
1.01 of the Servicing Agreement), the Public Utility Holding
Company Act of 1935, as amended (the "1935 Act") 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 Bonds by the Underwriter and such other approvals
(specified in such opinion) as have been obtained;
(v) neither the execution and delivery of this
Agreement, the Sale Agreement, the Servicing Agreement, the
Administration Agreement nor the consummation of the
transactions contemplated by this Agreement, the Sale
Agreement, the Servicing Agreement or the Administration
Agreement nor the fulfillment of the terms of this Agreement,
the Sale Agreement, the Servicing Agreement or the
Administration Agreement by the Company, will (A) conflict
with, result in any breach of any of the terms or provisions
of, or constitute (with or without notice or lapse of time) a
default under the articles of incorporation, bylaws or other
organizational documents of the Company, or conflict with or
breach any of the material terms or provisions of, or
constitute (with or without notice or lapse of time) a default
under, any indenture, material agreement or other material
instrument to which the Company is a party or by which the
Company is bound, (B) result in the creation or imposition of
any lien upon any properties of the Company pursuant to the
terms of any such indenture, agreement or other instrument
(other than as contemplated by the Basic Documents and RSA
369-B:7), or (C) violate any New Hampshire or federal law or
any order, rule or regulation applicable to the Company of any
New Hampshire or federal court or regulatory body,
administrative agency or other governmental instrumentality
having jurisdiction over the Company, or any of its
properties; and
(vi) upon the delivery of the fully executed Sale
Agreement to the Issuer and the payment of the purchase price
of the RRB Property by the Issuer to the Seller pursuant to
the Sale Agreement, then (A) the transfer of the RRB Property
by the Seller to the Issuer pursuant to the Sale Agreement
conveys the Seller's right, title and interest in the RRB
Property to the Issuer and will be treated under the laws of
the State of New Hampshire as an absolute transfer of all of
the Seller's right, title, and interest in the RRB Property,
other than for federal and state income tax purposes, (B) such
transfer of the RRB Property is perfected within the meaning
of RSA 369-B:6, VI, (C) assuming that the Issuer does not
11
have notice or knowledge of any conflicting assignment of the
RRB Property, such transfer has priority over any other
assignment or transfer of the RRB Property, and (D) the RRB
Property is free and clear of all liens created prior to its
transfer to the Issuer pursuant to the Sale Agreement; the
Seller's first mortgage indenture explicitly excludes accounts
receivables and contracts from its lien and, therefore, the
RRB Property is not subject to such lien;
(vii) no further action with respect to the recording
or filing of the Sale Agreement, any agreements supplemental
thereto, any financing statements, any continuation
statements, or any other documents or filings will be
necessary prior to March 31, 2003, to perfect the transfer of
the RRB Property by the Company to the Issuer pursuant to the
Sale Agreement; and
(viii) the Indenture is enforceable against the
Trustee in accordance with its terms (subject, as to
enforcement of remedies, to applicable bankruptcy,
reorganization, insolvency, moratorium or other similar laws
or equitable principles affecting creditors' rights generally
from time to time in effect).
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 New Hampshire 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 Underwriter 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.
(c) The Underwriter shall have received opinions of counsel
for the Issuer and the Company, portions of which may be delivered by
Day, ▇▇▇▇▇ & ▇▇▇▇▇▇ LLP, outside counsel for the Issuer and the
Company, portions of which may be delivered by ▇▇▇▇, Young and
Pignatelli, Professional Association, outside counsel for the Issuer
and the Company, and portions of which may be delivered by in-house
counsel, as the Underwriter may agree, and portions of which may be
delivered by ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & Finger, P.A., special Delaware counsel
for the Issuer, each dated the Closing Date, in form and substance
reasonably satisfactory to the Underwriter, to the effect that:
(i) the Issuer has been duly formed and is validly
existing in good standing as a limited liability company under
the laws of the State of Delaware, with all necessary limited
liability company power and authority to execute, deliver and
perform its obligations under this Agreement, the Sale
Agreement, the Servicing Agreement, the Indenture, the
Administration Agreement, the Fee and Indemnity Agreement and
the Bonds and is registered as a foreign limited liability
company and is in good standing in the State of New Hampshire;
(ii) the Sale Agreement, the Servicing Agreement, the
Indenture, the Administration Agreement and the Fee and
Indemnity Agreement have been duly authorized, executed and
delivered by, and constitute legal, valid and binding
12
instruments enforceable against, the Issuer in accordance with
their terms (subject to applicable bankruptcy, reorganization,
insolvency, moratorium or other laws or equitable principles
affecting creditors' rights generally from time to time in
effect); and the Bonds have been duly authorized and when
executed and authenticated in accordance with the provisions
of the Indenture and delivered to and paid for by the
Underwriter in accordance with the terms of this Agreement,
will constitute legal, valid and binding obligations of the
Issuer entitled to the benefits of the Indenture (subject to
applicable bankruptcy, reorganization, insolvency, moratorium
or other laws or equitable principles affecting creditors'
rights generally from time to time in effect); this Agreement
has been duly authorized, executed and delivered by the
Issuer;
(iii) to the extent described in the Final
Prospectus, the Sale Agreement, the Servicing Agreement, the
Indenture, the Administration Agreement, the Fee and Indemnity
Agreement, the LLC Agreement and the Bonds conform to the
descriptions thereof contained therein;
(iv) the Indenture has been duly qualified under the
Trust Indenture Act;
(v) to the knowledge of such counsel, after having
made inquiry of officers of the Issuer, but without having
made any other investigation, there is no pending or
threatened action, suit or proceeding before any court or
governmental agency, authority or body or any arbitrator
involving the Issuer or challenging the Bonds, the Finance
Order, the settlement order issued by the NHPUC on September
8, 2000 (the "Settlement Order") or the collection of the RRB
Charge or the use and enjoyment of RRB 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 relating to the Issuer, the Bonds, the Statute
or the Finance Order of a character required to be described
in the Registration Statement or Final Prospectus, or to be
filed as an exhibit to the Registration Statement, which is
not described or filed as required; and the statements
included in the Final Prospectus under the headings "Risk
Factors -- Bondholders could experience payment delays or
losses as a result of amendment, repeal or invalidation of the
securitization statute or breach of the state pledge," "Energy
Deregulation and New Market Structure in New Hampshire," (to
the extent the Statute, the Finance Order, the Settlement
Order, or the Agreement to Settle PSNH Restructuring between
the Governor of New Hampshire, the Company, the NHPUC and the
other parties named therein, dated August 2, 1999, and such
agreement as revised and conformed in compliance with NHPUC
Order No. 23,549 (together, the "Settlement Agreement") is
described), "The Issuer," "Servicing" (to the extent the
Servicing Agreement or the Finance Order is described),
"Description of the Bonds," "The Seller and Servicer" (other
than under the subheading "Billing and Collections," as to
which such counsel need express no opinion), "Description of
the RRB Property," "ERISA Considerations" and "Risk Factors -
Bankruptcy and
13
Creditors' Rights Issues" (read together with "Description of
the RRB Property - Bankruptcy and Creditors' Rights Issues"),
to the extent that they constitute matters of New Hampshire or
federal law or legal conclusions with respect thereto, 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) have 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
including the notes thereto or other financial data contained
in the Final Prospectus 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 shall confirm, on the basis of certain
assumptions, that at the Effective Date no facts have come to
such counsel's attention which would cause such counsel to
believe that the Registration Statement contained any untrue
statement of a material fact or omitted to state any material
fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under
which they were made, not misleading or that the Final
Prospectus as of its date and the Closing Date includes any
untrue statement of a material fact or omits to state a
material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not
misleading (other than the financial statements including the
notes thereto and other financial data contained in the Final
Prospectus as to which such counsel need express no opinion);
(vii) no consent, approval, authorization or order of
any New Hampshire, Delaware or federal court or governmental
agency or body is required to be obtained by the Issuer for
the issuance of the Bonds or the consummation by the Issuer of
the transactions contemplated herein, except such as have been
obtained under the Statute, the NHPUC Regulations, the 1935
Act 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 Bonds by the Underwriter and such other
approvals (specified in such opinion) as have been obtained;
(viii) neither the execution and delivery of this
Agreement, the Sale Agreement, the Servicing Agreement, the
Indenture, the Administration Agreement or the Fee and
Indemnity Agreement, nor the issuance and sale of the Bonds,
nor the consummation of the transactions contemplated by this
Agreement, the Sale Agreement, the Servicing Agreement, the
Indenture, the Administration Agreement or the Fee and
Indemnity Agreement, nor the fulfillment of the terms of this
Agreement, the Sale Agreement, the Servicing Agreement, the
Indenture, the Administration Agreement or the Fee and
14
Indemnity Agreement by the Issuer, will (A) conflict with,
result in any breach of any of the terms or provisions of, or
constitute (with or without notice or lapse of time) a default
under the LLC Agreement of the 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 Issuer is a party or by which
the Issuer is bound, (B) result in the creation or imposition
of any lien upon any properties of the Issuer pursuant to the
terms of any such indenture, agreement or other instrument
(other than as contemplated by the Basic Documents and RSA
369-B:7), or (C) violate any New Hampshire, Delaware or
federal law or any order, rule or regulation applicable to the
Issuer of any New Hampshire, Delaware or federal court,
regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over the Issuer, or any of
its properties;
(ix) the Issuer is not, and after giving effect to
the offering and sale of the Bonds and the application of the
proceeds thereof as described in the Final Prospectus, will
not be an "investment company" or under the "control" of an
"investment company" as such terms are defined under the
Investment Company Act of 1940, as amended;
(x) [reserved];
(xi) (A) under RSA 369-B:7, II, the provisions of the
Indenture create in favor of the Trustee to secure payment of
the Secured Obligations a security interest in all right,
title and interest, whether now owned or hereafter acquired,
of the Issuer in the RRB Property; (B) the Finance Order
authorizes the RRB Charge included in the RRB Property; (C)
the aforesaid security interest in the RRB Property under the
Indenture has attached to the RRB Property or (in the case of
any after acquired property) will attach as it comes into
existence; (D) a financing statement which describes the RRB
Property by reference to the Finance Order has been presented
for filing in the office of the Secretary of the State of New
Hampshire, and all filing fees required in connection
therewith have been paid, in accordance with Part 5 of Article
9 of the New Hampshire UCC; and (E) such security interest in
the RRB Property granted by the Issuer under the Indenture is
valid and enforceable against the Issuer, and is perfected or
(in the case of any after acquired property) will be valid,
enforceable and perfected as such property comes into
existence, subject in each case to (x) the rights of any third
parties holding security interests in the RRB Property
perfected in the manner described in RSA 369-B:7 prior to
perfection by filing of the security interest granted under
the Indenture (which is addressed in paragraph (xv) below) and
(y) rights arising under the first priority lien arising under
RSA 369-B:7, VIII described in paragraph (xii) below);
(xii) (A) the Statute creates a Statutory Lien on the
RRB Property securing all obligations, then existing or
subsequently arising, to the holders of the Bonds in respect
of the Bonds and all Secured Obligations, then
15
existing or subsequently arising, to the Trustee in its
capacity as such; (B) such Statutory Lien is valid, perfected
and enforceable against the Issuer and all third parties
without any further public notice; and (C) the Statute
provides that conflicting Statutory Liens on RRB Property
arising under RSA 369-B:7, VIII rank in order of time of
perfection;
(xiii) (A) the provisions of the Indenture create in
favor of the Trustee a security interest in the right, title
and interest, whether now owned or hereafter acquired, of the
Issuer in respect of the Collateral; (B) such security
interest will attach to the Collateral as it comes into
existence; (C) such security interest in the Sale Agreement,
the Servicing Agreement, the Administration Agreement and all
accounts, general intangibles, equipment and inventory (as
such terms are defined in the New Hampshire UCC) of the Issuer
and all other Collateral in which a security interest can be
perfected by the filing of financing statements under the New
Hampshire UCC granted by the Issuer under the Indenture is
valid and enforceable against the Issuer and is perfected (or
in the case of after acquired property will be valid,
enforceable and perfected as such property comes into
existence); and (D) under the New Hampshire UCC, the
perfection and priority of the security interest in Collateral
subject to the New Hampshire UCC is governed by the local law
of Delaware, except for Collateral subject to the exceptions
set forth in Sections 9-301(2)-(4) and 9-303 through 9-306 in
the New Hampshire UCC;
(xiv) the provisions of the Indenture create in favor
of the Trustee a security interest in the Collection Account
(including all subaccounts thereof) and all amounts on deposit
therein and all investments credited thereto in accordance
with the provisions of the Indenture, and such security
interest is perfected;
(xv) the Search Reports set forth the proper filing
offices and the proper debtor names necessary to identify
those Persons who under the New Hampshire and Delaware Uniform
Commercial Code or the Statute might have on file effective
financing statements against the Company or the Issuer
covering the Collateral (including the RRB Property), or a
portion thereof; the Search Reports identify no Person who has
filed in any of such filing offices a financing statement
describing the Collateral (including the RRB Property), or a
portion thereof;
(xvi) (A) the Finance Order has been duly issued and
authorized by the NHPUC and the Finance Order, giving effect
to the Issuance Advice Letter, is effective; (B) the Issuer is
a "financing entity" under RSA 369-B:2, VI and the Bonds are
"rate reduction bonds" under RSA 369-B:2, X; (C) the Bonds are
entitled to the protections provided in the Statute and the
Finance Order; (D) the Finance Order is no longer subject to
appeal by any person in state courts of the State of New
Hampshire; and (E) the Servicer is authorized to file through
the legal final maturity date periodic RRB Charge adjustments
to the extent necessary to ensure the timely recovery of
revenues sufficient to provide for the payment of
16
an amount equal to the sum of the periodic Bond payment
requirements for the upcoming adjustment period, which
includes indemnity obligations under the Basic Documents,
subject to the limitation on the Company's "stranded cost
recovery charge" described in RSA 369-B:3, IV(b)(9) and the
Finance Order;
(xvii) the Statute does not violate the United States
Constitution or the Constitution of the State of New Hampshire
in any way that would have a material adverse effect on the
Bonds, the Indenture, the RRB Property, the other Collateral
or the protection of Bondholder rights;
(xviii) under the Taking Clause of the United States
Constitution, the State of New Hampshire in the exercise of
its executive, administrative or legislative powers, could not
repeal or amend the Statute or the Finance Order or take any
other action in contravention of its pledge contained in RSA
369-B:6, II without paying just compensation to the
Bondholders, as determined by a court of competent
jurisdiction, if doing so would constitute a permanent
appropriation of a substantial property interest of the
Bondholders in the RRB Property and deprive the Bondholders of
their reasonable expectations arising from their investments
in the Bonds;
(xix) absent a demonstration that a deprivation is
necessary to accomplish a legitimate public purpose, under the
takings clauses of the New Hampshire Constitution, the State
of New Hampshire, in the exercise of its executive,
administrative or legislative powers, could not repeal or
amend the Securitization Statute or the Finance Order or take
any other action in contravention of the pledge contained in
RSA 369-B:6, II without paying just compensation to the
Bondholders, as determined by a court of competent
jurisdiction, if doing so would constitute a permanent
appropriation of a substantial property interest of the
Bondholders in the RRB Property and deprive the Bondholders of
their reasonable expectations arising from their investments
in the Bonds;
(xx) under the Contracts Clauses of the United States
and New Hampshire Constitutions, absent a demonstration by the
State of New Hampshire that an impairment is narrowly-tailored
and is necessary to advance an important public interest, such
as responding to the concerns of a "great public calamity,"
the State of New Hampshire could not repeal or amend the
Statute or take any legislative action, or refuse to take any
legislative action required of the State of New Hampshire
under its pledge contained in RSA 369-B:6, II with the
Bondholders, if such repeal or amendment, or such action or
inaction, would substantially impair the rights of the
Bondholders;
(xxi) with the possible exception of the business
profits tax imposed under the provisions of RSA Chapter 77-A
and the business enterprise tax imposed under the provisions
of RSA Chapter 77-E, the Issuer is not subject to any other
taxes imposed by the State of New Hampshire;
17
(xxii) the descriptions of those material federal and
New Hampshire tax consequences to holders of the Bonds
contained in the Final Prospectus under "Federal Income Tax
Consequences" and "New Hampshire Taxation of Bondholders" are
accurate in all material respects;
(xxiii) the New Hampshire Constitution prohibits
enactment of law pursuant to voter initiatives or referenda on
a ballot in any election in the State of New Hampshire;
(xxiv) RSA 369-B:9 provides that the Statute is
severable; the invalidation of any provision of the Statute
that is not integral or essential to the Bonds, the Indenture,
the RRB Property and the protection of Bondholder rights would
not cause the invalidation of any provision of the Statute
that is integral or essential to the Bonds, the Indenture, the
RRB Property and the protection of Bondholder rights;
(xxv) any attempt by the State of New Hampshire (the
"State"), the NHPUC or any other agency or instrumentality of
the State to repeal or amend the Statute or the Finance Order
or to take other action in a manner that substantially impairs
the rights of the Bondholders would be subject to preliminary
injunction if a New Hampshire court hearing a request therefor
finds (i) that the party requesting such injunctive relief has
a likelihood of success on the merits, (ii) that such party
will suffer irreparable harm if the preliminary injunctive
relief is not granted, (iii) that no adequate, alternative
remedy at law exists and (iv) that the issuance of such
injunctive relief would not adversely affect the public
interest; further, upon final adjudication of the challenged
repeal, amendment or other action, the alleged wrongful
conduct would be subject to a permanent injunction if the
petitioning party succeeds on the merits and the court hearing
a request therefor makes the findings set forth in clauses
(ii) through (iv); and
(xxvi) no further action with respect to the
recording or filing of the Indenture, any indentures
supplemental thereto, any financing statements, any
continuation statements, or any other documents or filings
will be necessary prior to March 31, 2003, to perfect the
security interest in the RRB Property, the other Collateral as
defined in the Indenture, and the proceeds thereof created by
the Indenture in favor of the Trustee.
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 New Hampshire, the State of Delaware 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 Underwriter and (B) as to
matters of fact, to the extent deemed proper, on certificates of
responsible officers of the Issuer and public officials. References to
the Final Prospectus in this paragraph (c) include any supplements
thereto at the Closing Date.
18
(d) The Underwriter shall have received opinions of counsel to
the Trustee, portions of which may be delivered by ▇▇▇▇▇▇▇▇ Ronon
▇▇▇▇▇▇▇ & Young, LLP, counsel to the Trustee, and portions of which may
be delivered by ▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇, LLP, counsel to the Trustee,
each dated the Closing Date, in form and substance reasonably
satisfactory to the Underwriter, to the effect that:
(i) the Trustee is validly existing as a state
banking institution in good standing under the laws of the
State of New York;
(ii) the Trustee has the requisite power (including
corporate trust power) and authority to execute and deliver
the Indenture, and the Indenture has been duly authorized,
executed and delivered, and constitutes a legal, valid and
binding instrument enforceable against the Trustee in
accordance with its terms (subject, as to enforcement of
remedies, to applicable bankruptcy, reorganization,
insolvency, moratorium or other similar laws or equitable
principles affecting creditors' rights generally from time to
time in effect); and
(iii) the Bonds have been duly authenticated by the
Trustee.
(e) The Underwriter shall have received from ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ LLP, counsel for the Underwriter, such opinion
or opinions, dated the Closing Date, with respect to the issuance and
sale of the Bonds, the Indenture, the Registration Statement, the Final
Prospectus (together with any supplement thereto) and other related
matters as the Underwriter may reasonably require, and the Company and
the Issuer shall have furnished to such counsel such documents as they
request for the purpose of enabling them to pass upon such matters.
(f) The Underwriter shall have received a certificate of the
Issuer, signed by an officer of the Issuer, dated the Closing Date, to
the effect that the signer of such certificate has carefully examined
the Registration Statement, the Final Prospectus, any supplement to the
Final Prospectus and this Agreement and that:
(i) the representations and warranties of the Issuer
in this Agreement and in the Indenture are true and correct in
all material respects on and as of the Closing Date with the
same effect as if made on the Closing Date, and the Issuer has
complied with all the agreements and satisfied all the
conditions on its part to be performed or satisfied at or
prior to the Closing Date;
(ii) no stop order suspending the effectiveness of
the Registration Statement has been issued and no proceedings
for that purpose have been instituted or, to the Issuer's
knowledge, threatened; and
(iii) since the dates as of which information is
given in the Final Prospectus (including any supplement
thereto), there has been no material adverse change in (x) the
condition (financial or other), earnings, business or
properties of the Issuer, whether or not arising from
transactions in the ordinary course of
19
business, or (y) the RRB Property, except as set forth in or
contemplated in the Final Prospectus (including any supplement
thereto).
(g) The Underwriter shall have received a certificate of the
Company, signed by an executive officer of the Company, dated the
Closing Date, to the effect that the signer of such certificate has
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
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 (including any supplement
thereto), there has been no material adverse change in (x) the
condition (financial or other), 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 RRB Property, except
as set forth in or contemplated in the Final Prospectus
(including any supplement thereto).
(h) At the Closing Date, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP shall have
furnished to the Underwriter (i) a letter or letters (which may refer
to letters previously delivered to the Underwriter), dated as of the
Closing Date, in form and substance satisfactory to the Underwriter,
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, that they consent to the inclusion of
their report on the audited financial statements of the Issuer and the
reference to them as experts under the heading "Experts" in the Basic
Prospectus and the Final Prospectus, 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 the Issuer) set forth in the Registration Statement and
the Final Prospectus, including information specified by the
Underwriter and set forth under the captions "Prospectus Summary,"
"Description of the RRB Property," "The Seller and Servicer" and
"Description of the Bonds" in the Final Prospectus, agrees with the
accounting records of the Company and the Issuer, 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
Underwriter, satisfying the requirements of Section 2.10(g) of the
Indenture.
20
References to the Final Prospectus in this paragraph (h)
include any supplement thereto at the date of the letter.
In addition, at the Execution Time, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP shall
have furnished to the Underwriter a letter or letters, dated as of the
Execution Time, in form and substance satisfactory to the Underwriter,
to the effect set forth above.
(i) Subsequent to the Execution Time or, if earlier, the dates
as of which information is given in the Registration Statement
(exclusive of any amendment thereof) and the Final Prospectus
(including 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 or the Issuer or (ii) the RRB Property, the Bonds, the
Finance Order, the Settlement Order or the Statute, the effect of which
is, in the judgment of the Underwriter, so material and adverse as to
make it impractical or inadvisable to proceed with the offering or
delivery of the Bonds as contemplated by the Registration Statement
(including any amendment thereof) and the Final Prospectus (including
any supplement thereto).
(j) The Underwriter shall have received on the Closing Date an
opinion letter or letters of Day, ▇▇▇▇▇ & ▇▇▇▇▇▇ LLP, counsel to the
Company and the Issuer, dated the Closing Date, in form and substance
reasonably satisfactory to the Underwriter that, should the Company
become the debtor in case under the United States Bankruptcy Code, (i)
the transfer to the Issuer of the Company's right, title and interest
in and to the RRB Property and the proceeds thereof as set forth in the
Sale Agreement would constitute an absolute sale of such assets by the
Company to the Issuer, so that (a) such RRB Property (including the
collections thereon) would not be property of the bankruptcy estate of
the Company under Section 541(a) of the Bankruptcy Code, (b) the
bankruptcy court would not compel the turnover of such RRB Property or
the proceeds thereof to the Company under Section 542 of the Bankruptcy
Code, and (c) the Issuer's rights in the RRB Property and the proceeds
thereof would not be impaired by the operation of Section 362(a) of the
Bankruptcy Code; and (ii) neither the Issuer nor its assets and
liabilities would be substantively consolidated with the assets and
liabilities of the Company.
(k) The Underwriter shall have received on the Closing Date an
opinion letter or letters of ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & Finger, P.A., special
Delaware counsel to the Issuer, dated the Closing Date, in form and
substance reasonably satisfactory to the Underwriter, to the effect
that: (i) if properly presented to a Delaware court, a Delaware court
applying Delaware law, would conclude that (x) in order for a person to
file a voluntary bankruptcy petition on behalf of the Issuer, the
affirmative vote of the Issuer's Sole Member (as defined the LLC
Agreement) and the affirmative vote of all of the Directors (including
the Independent Directors (as defined in the LLC Agreement)), as
provided in Section 2.07(b) of the LLC Agreement of the Issuer, is
required, and (y) such provision, contained in Section 2.07(b) of the
LLC Agreement, that requires the affirmative vote of the Issuer's Sole
Member and the affirmative vote of all of the Directors (including the
Independent Directors) in order for a person to file a voluntary
bankruptcy petition on behalf of the Issuer, constitutes a legal, valid
and binding agreement of the Sole Member
21
and is enforceable against the Sole Member, in accordance with its
terms; (ii) the LLC Agreement constitutes a legal, valid and binding
agreement of the Sole Member thereunder, and is enforceable against the
Sole Member in accordance with its terms; (iii) under the provisions of
Article 9 of the Delaware UCC ("Delaware Article 9"), the security
interest in the RRB Property, the other Collateral, and the proceeds
thereof created by the Indenture in favor of the Trustee is perfected;
(iv) the UCC search report described in such opinion sets forth the
proper filing office(s) and the proper debtors necessary to identify
those persons who under Delaware Article 9 have on file financing
statements against the Issuer covering the RRB Property, the other
Collateral, or the proceeds thereof as of the search date set forth in
such UCC search report; the UCC search report identifies no person who
has filed with the filing offices set forth in such UCC search report a
financing statement describing the RRB Property, the other Collateral,
or the proceeds thereof prior to the search date set forth in such UCC
search report; and (v) no further action with respect to the recording
or filing of the Indenture, any indentures supplemental thereto, any
financing statements, any continuation statements, or any other
documents or filings will be necessary under Delaware Article 9 prior
to March 31, 2003, to perfect the security interest in the RRB
Property, the other Collateral, and the proceeds thereof created by the
Indenture in favor of the Trustee.
(l) The Bonds shall have been rated in the highest long-term
rating category by each of the Rating Agencies.
(m) On or prior to the Closing Date, the Company shall have
delivered to the Underwriter evidence, in form and substance reasonably
satisfactory to the Underwriter, (i) that appropriate filings have been
made in accordance with the Statute and other applicable law to perfect
the transfer of the RRB Property by the Company to the Issuer pursuant
to the Sale Agreement, including any necessary filings with the NHPUC
and the filing of the UCC financing statements in the office of the
Secretary of the State of New Hampshire, and (ii) that appropriate
filings have been made in accordance with the Statute and applicable
law to perfect the security interest in the RRB Property, the other
Collateral, and the proceeds thereof created by the Indenture in favor
of the Trustee, including any necessary filings with the NHPUC and the
filing of the UCC financing statements in the office of the Secretary
of the State of New Hampshire and the office of the Secretary of State
of the State of Delaware.
(n) On or prior to the Closing Date, the Issuer shall have
delivered to the Underwriter copies of the UCC search reports referred
to in Sections 6 (c)(xv), and 6 (k)(iv) of this Agreement, along with
copies of all filings referenced in such search reports.
(o) On or prior to the Closing Date, the Issuer shall have
delivered to the Underwriter copies, certified to the satisfaction of
the Underwriter, of the NHPUC's issuance of the Finance Order relating
to the RRB Property and the Issuance Advice Letter.
22
(p) On or prior to the Closing Date, the Issuer and the
Company shall have furnished or caused to be furnished to the State
Treasurer copies of the certificates, opinions and documents required
to be delivered to the Underwriter under this Agreement, including
being included as an addressee of, or receiving a letter entitling the
State Treasurer to rely on, each legal opinion addressed to the rating
agencies or the parties to the transactions and each related
certificate, if any, other than the opinion of counsel for the
Underwriter.
(q) Prior to the Closing Date, the Issuer and the Company
shall have furnished to the Underwriter such further information,
certificates, opinions and documents as the Underwriter 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 Underwriter and counsel for the
Underwriter, this Agreement and all obligations of the Underwriter hereunder may
be canceled at, or at any time prior to, the Closing Date by the Underwriter.
Notice of such cancellation shall be given to the Issuer in writing or by
telephone or electronic mail confirmed in writing.
The documents required to be delivered by this Section 6 shall
be delivered at the office of Day, ▇▇▇▇▇ & ▇▇▇▇▇▇, Hartford, Connecticut, on the
Closing Date.
7. Expenses. Upon the sale of the Bonds, the Issuer will pay
or cause to be paid all costs and expenses incident to the performance of the
obligations of the Company, the Issuer and the Underwriter hereunder and under
the Basic Documents and of the office of the State Treasurer in accordance with
the Statute, including, without limiting the generality of the foregoing, all
costs, taxes and expenses incident to the issuance and delivery of the Bonds to
the Underwriter, all fees, disbursements and expenses of the Company's, the
Issuer's, the State Treasurer's and the Underwriter's counsel and accountants,
and the State Treasurer's financial advisors, all costs and expenses incident to
the preparation, printing and filing of the Registration Statement (including
all exhibits thereto), any preliminary prospectus, the Basic Prospectus, any
Preliminary Final Prospectus, the Final Prospectus and any amendments thereof or
supplements thereto, all costs and expenses incurred in connection with blue sky
qualifications, examining the legality of the Bonds for the investment and the
rating of the Bonds, all costs and expenses of the Trustee, all costs and
expenses incurred in the acquisition or preparation of documents required to be
delivered by the Company or the Issuer in connection with the closing of the
transactions contemplated hereby, all costs and expenses required in connection
with any filing with the National Association of Securities Dealers in
connection with the transactions contemplated hereby, and all costs and expenses
of the printing and distribution of all documents in connection with the Bonds.
If the sale of the Bonds provided for herein is not
consummated because any condition to the obligations of the Underwriter set
forth in Section 6 hereof is not satisfied, because of any termination pursuant
to Section 10 hereof or because of any refusal, inability or failure on the part
of the Company or the Issuer to perform any agreement herein or comply with
23
any provision hereof other than by reason of a default by the Underwriter, the
Company and the Issuer will, jointly and severally, reimburse the Underwriter
upon demand for all out-of-pocket expenses (including reasonable fees and
disbursements of counsel) that shall have been incurred by the Underwriter in
connection with the proposed purchase and sale of the Bonds.
8. Indemnification and Contribution.
(a) The Company and the Issuer will, jointly and severally,
indemnify and hold harmless the Underwriter, the directors, officials,
officers, members, consultants, counsel, employees and agents of the
State Treasurer and the State of New Hampshire, the Underwriter and
each person who controls the Underwriter within the meaning of either
the Act or the Exchange Act against any and all losses, claims, damages
or liabilities, joint or several, to which they or any of them may
become subject under the Act, the Exchange Act or other Federal or
state statutory law or regulation, at common law or otherwise, insofar
as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of a material fact contained in the Registration
Statement for the registration of the Bonds as originally filed or in
any amendment thereof, or any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, any untrue statement or
alleged untrue statement of a material fact contained 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 Issuer will be liable in any such case to the extent
that any such loss, claim, damage or liability arises out of or is
based upon any such untrue statement or alleged untrue statement or
omission or alleged omission made therein in reliance upon and in
conformity with written information furnished to the Issuer or the
Company by or on behalf of the Underwriter specifically for inclusion
therein. This indemnity agreement will be in addition to any liability
which the Company and the Issuer may otherwise have.
(b) The Underwriter agrees to indemnify and hold harmless the
Company, the Issuer, the State Treasurer and the State of New
Hampshire, each of their directors, officials and employees, each of
their officers (if any) who signs the Registration Statement, and each
person who controls the Company or the Issuer within the meaning of
either the Act or the Exchange Act, to the same extent as the foregoing
indemnity from the Company and the Issuer to the Underwriter, but only
with reference to written information relating to the Underwriter
furnished to the Issuer or the Company by or on behalf of the
Underwriter specifically for inclusion in the documents referred to in
the foregoing indemnity. This indemnity agreement will be in addition
to any liability which the Underwriter may otherwise have. The Issuer
and the Company acknowledge that the statements set forth in the second
full paragraph, the third sentence of the fourth full
24
paragraph and the fifth full paragraph under the heading "Underwriting"
and the third full paragraph (other than the last sentence thereof)
under the heading "Plan of Distribution" in any Preliminary Final
Prospectus or the Final Prospectus constitute the only information
furnished in writing by or on behalf of the Underwriter for inclusion
in the documents referred to in the foregoing indemnity, and you, as
the Underwriter, confirm that such statements are correct in all
material respects.
(c) Promptly after receipt by an indemnified party under this
Section 8 of notice of the commencement of any action, such indemnified
party will, if a claim in respect thereof is to be made against the
indemnifying party under this Section 8, notify the indemnifying party
in writing of the commencement thereof; but the failure so to notify
the indemnifying party (i) will not relieve it from liability under
paragraph (a) or (b) above unless and to the extent it did not
otherwise learn of such action and such failure results in the
forfeiture by the indemnifying party of substantial rights and defenses
and (ii) will not, in any event, relieve the indemnifying party from
any obligations to any indemnified party other than the indemnification
obligation provided in paragraph (a) or (b) above. The indemnifying
party shall be entitled to appoint counsel of the indemnifying party's
choice at the indemnifying party's expense to represent the indemnified
party in any action for which indemnification is sought (in which case
the indemnifying party shall not thereafter be responsible for the fees
and expenses of any separate counsel retained by the indemnified party
or parties except as set forth below); provided, however, that such
counsel shall be reasonably satisfactory to the indemnified party.
Notwithstanding the indemnifying party's election to appoint counsel to
represent the indemnified party in an action, the indemnified party
shall have the right to employ separate counsel (including local
counsel), and the indemnifying party shall bear the reasonable fees,
costs and expenses of such separate counsel if (i) the use of counsel
chosen by the indemnifying party to represent the indemnified party
would present such counsel with a conflict of interest, (ii) the actual
or potential defendants in, or targets of, any such action include both
the indemnified party and the indemnifying party and the 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, without any admission of fault.
(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
25
reason, the Company, the Issuer and the Underwriter 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
Company, the Issuer and the Underwriter may be subject in such
proportion as is appropriate to reflect the relative benefits received
by the Company, Issuer and the Underwriter, respectively, from the
offering of the Bonds. If the allocation provided by the immediately
preceding sentence is unavailable for any reason, the Company, the
Issuer and the Underwriter shall contribute in such proportion as is
appropriate to reflect not only such relative benefits but also the
relative fault of the Company, the Issuer and of the Underwriter in
connection with the statements or omissions which resulted in such
Losses as well as any other relevant equitable considerations. In no
case shall the Underwriter be responsible for any amount in excess of
the underwriting discount or commission applicable to the Bonds
purchased by the Underwriter hereunder. The relative benefits received
by the Company or the Issuer shall be deemed to be equal to the total
net proceeds from the offering (before deducting expenses) of the
Bonds, and benefits received by the Underwriter 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 Company,
the Issuer or the Underwriter. The Company, the Issuer and the
Underwriter 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, 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 the
Underwriter, and each person who controls the Issuer or the Company
within the meaning of either the Act or the Exchange Act, each officer
of the Issuer or the Company who shall have signed the Registration
Statement and each director of the Issuer or the Company shall have the
same rights to contribution as the Issuer or the Company, subject in
each case to the applicable terms and conditions of this paragraph.
9. [Reserved].
10. Termination. This Agreement shall be subject to
termination in the absolute discretion of the Underwriter, by notice given to
the Company and the Issuer prior to delivery of and payment for the Bonds, if
prior to such time there shall have occurred (i) any change, or any development
involving a prospective change, in or affecting (A) the business, properties or
financial condition of the Company or the Issuer, (B) the RRB Property, the
Bonds, the Finance Order or the Statute, the effect of which, in the judgment of
the Underwriter, materially impairs the investment quality of the Bonds or makes
it impractical or inadvisable to market the Bonds; (ii) a suspension or material
limitation in trading in securities generally on the New York Stock Exchange;
(iii) a suspension or material limitation in trading in the securities of the
Company; (iv) a general moratorium on commercial banking activities shall have
been
26
declared either by Federal, New York state or New Hampshire state authorities;
or (v) any outbreak or escalation of hostilities involving the United States or
the 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 Underwriter, impracticable or inadvisable to proceed
with the offering or delivery of the Bonds as contemplated by the Final
Prospectus (exclusive of any supplement thereto).
11. Representations and Indemnities to Survive. The respective
agreements, representations, warranties, indemnities and other statements of the
Company or its officers, the Issuer or its officers and of the Underwriter 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 the Underwriter
or of the Company, the Issuer or any of the officers, directors or controlling
persons referred to in Section 8 hereof, and will survive delivery of and
payment for the Bonds. The provisions of Sections 7 and 8 hereof shall survive
the termination or cancellation of this Agreement.
12. Notices. All communications hereunder shall be in English
and in writing, and any such notice, direction, consent or waiver may be given
by United States mail, courier service, facsimile transmission or electronic
mail (confirmed by telephone, United States mail or courier service in the case
of notice by facsimile transmission or electronic mail) or any other customary
means of communication, and any such notice, direction, consent or waiver shall
be effective when delivered, or if mailed, three days after deposit in the
United States mail with proper postage for ordinary mail prepaid, and if sent to
the Underwriter, to it at the address specified on the first page hereto; and if
sent to the Company, to it at Public Service Company of New Hampshire, ▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇.▇. ▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ (if prior to April 1,
2002) and ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ (if
on or after April 1, 2002), Attention: Assistant Treasurer - Finance; and if
sent to the Issuer, to it at PSNH Funding LLC 2, ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, P.O. Box 330,
Manchester, New Hampshire 03105, Attention: President. The parties hereto, by
notice to the others, may designate additional or different addresses for
subsequent communications.
13. 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.
14. Applicable Law. This Agreement will be governed by and
construed in accordance with the laws of the State of New York.
15. Counterparts. This Agreement may be signed in any number
of counterparts, each of which shall be deemed an original, which taken together
shall constitute one and the same instrument.
16. Miscellaneous. Time shall be of the essence of this
Agreement. As used herein, the term "business day" shall mean any day when the
SEC's office in Washington, D.C. is open for business.
27
If the foregoing is in accordance with your understanding of
our agreement, please sign and return to us the enclosed duplicate hereof,
whereupon this letter and your acceptance shall represent a binding agreement
among the Company, the Issuer and the Underwriter.
Very truly yours,
PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Assistant Treasurer -- Finance
PSNH FUNDING LLC 2
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President
CONFIRMED AND ACCEPTED
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ INC.,
as Underwriter
By: ▇▇▇▇ ▇▇▇▇▇▇▇▇
(▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc.)
SCHEDULE I TO THE
UNDERWRITING AGREEMENT
Underwriting Agreement dated January 16, 2002
Registration Statement No. 333-76040
Underwriter:
▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Title: PSNH Funding LLC 2
$50,000,000 PSNH Funding LLC Bonds, Series 2002-1
Principal amount, Price to Public, Underwriting Discounts and Commissions and
Proceeds to Issuer:
TOTAL PRICE TO UNDERWRITING PROCEEDS TO SCHEDULED FINAL MATURITY
PRINCIPAL PUBLIC DISCOUNTS AND ISSUER MATURITY DATE
AMOUNT OF COMMISSIONS DATE
CLASS
PER CLASS A $50,000,000 99.972162% 0.407% 99.565162% February 1, February 1, 2010
BOND 2008
Original Issue Discount (if any): $13,919
Redemption provisions: Optional Redemption and Mandatory Redemption
as set forth in Article X of the Indenture
Closing Date, Time and Location: January 30, 2002
9:00 a.m., Eastern Daylight Time
Hartford, Connecticut
Type of Offering: Non-Delayed Offering
3
SCHEDULE II TO THE
UNDERWRITING AGREEMENT
Class A
UNDERWRITER Bonds
Salomon ▇▇▇▇▇ ▇▇▇▇▇▇ Inc. $50,000,000
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4