Exhibit 1.1
Execution Version
AEP TEXAS CENTRAL TRANSITION FUNDING
II LLC
AEP TEXAS CENTRAL COMPANY
$1,739,700,000 SENIOR SECURED
TRANSITION BONDS, SERIES A
UNDERWRITING AGREEMENT
October 4, 2006
To the Representatives named in
Schedule I hereto
of the Underwriters named in
Schedule II hereto
Ladies and Gentlemen:
1. Introduction . AEP Texas
Central Transition Funding II LLC, a Delaware limited liability
company (the “Issuer”), proposes to issue and sell
$1,739,700,000 aggregate principal amount of its Senior Secured
Transition Bonds, Series A (the “Bonds”), identified in
Schedule I hereto. The Issuer and AEP Texas Central Company, a
Texas corporation and the Issuer’s direct parent
(“TCC”), hereby confirm their agreement with the
several Underwriters (as defined below) as set forth
herein.
The term “Underwriters”
as used herein shall be deemed to mean the entity or several
entities named in Schedule II hereto and any underwriter
substituted as provided in Section 7 hereof and the term
“Underwriter” shall be deemed to mean any one of such
Underwriters. If the entity or entities listed in Schedule I hereto
(the “Representatives”) are the same as the entity or
entities listed in Schedule II hereto, then the terms
“Underwriters” and “Representatives”, as
used herein, shall each be deemed to refer to such entity or
entities. All obligations of the Underwriters hereunder are several
and not joint. If more than one entity is named in Schedule I
hereto, any action under or in respect of this underwriting
agreement (“Underwriting Agreement”) may be taken by
such entities jointly as the Representatives or by one of the
entities acting on behalf of the Representatives and such action
will be binding upon all the Underwriters.
Capitalized terms used and not
otherwise defined in this Underwriting Agreement shall have the
meanings given to them in the Indenture (as defined
below).
2. Description of the Bonds .
The Bonds will be issued pursuant to an indenture to be dated as of
October 11, 2006, as supplemented by one or more series
supplements thereto (as so supplemented, the
“Indenture”), between the Issuer and The Bank of New
York, as indenture trustee (the “Indenture Trustee”).
The Bonds will be senior secured obligations of the Issuer and will
be supported by transition property (as more fully described in the
Financing Order relating to the Bonds, “Series A Transition
Property”), to be sold to the Issuer by TCC pursuant to the
Transition Property Sale Agreement, to be dated on or
about
October 11, 2006, between TCC and the
Issuer (the “Sale Agreement”). The Series A Transition
Property securing the Bonds will be serviced pursuant to the Series
A Transition Property Servicing Agreement, to be dated on or about
October 11, 2006, between TCC, as servicer, and the Issuer, as
owner of the Series A Transition Property sold to it pursuant to
the Sale Agreement (the “Servicing
Agreement”).
3. Representations and Warranties
of the Issuer . The Issuer represents and warrants to the
several Underwriters that:
(a) The Issuer and the Bonds meet
the requirements for the use of Form S-3 under the Securities Act
of 1933, as amended (the “Securities Act”), and TCC, in
its capacity as sponsor for the Issuer, has filed with the
Securities and Exchange Commission (the “Commission”) a
registration statement on such form on June 27, 2006
(Registration No. 333-136787), as amended by Amendment
No. 1 thereto dated September 5, 2006, including a
prospectus and a form of prospectus supplement, for the
registration under the Securities Act of up to $1,747,975,174
aggregate principal amount of the Bonds. Such registration
statement, as amended (“Registration Statement
No. 333-136787”), has been declared effective by the
Commission and no stop order suspending such effectiveness has been
issued under the Securities Act and no proceedings for that purpose
have been instituted or are pending or, to the knowledge of the
Issuer, threatened by the Commission. No transition bonds
registered with the Commission under the Securities Act pursuant to
Registration Statement No. 333-136787 have been previously
issued. References herein to the term “Registration
Statement” shall be deemed to refer to Registration Statement
No. 333-136787, including any amendment thereto, all documents
incorporated by reference therein pursuant to Item 12 of Form
S-3 (“Incorporated Documents”) and any information in a
prospectus or a prospectus supplement deemed or retroactively
deemed to be a part thereof pursuant to Rule 430B (“Rule
430B”) or 430C (“Rule 430C”) under the Securities
Act that has not been superseded or modified. “Registration
Statement” without reference to a time means the Registration
Statement as of the Applicable Time (as defined below), which the
parties agree is the time of the first Contract of Sale (as used in
Rule 159) for the Bonds, and shall be considered the
“Effective Date” of the Registration Statement relating
to the Bonds. For purposes of this definition, information
contained in a form of prospectus or prospectus supplement that is
deemed retroactively to be a part of the Registration Statement
pursuant to Rule 430B or 430C shall be considered to be included in
the Registration Statement as of the time specified in Rule 430B or
430C as appropriate. The final prospectus and the final prospectus
supplement relating to the Bonds, as filed with the Commission
pursuant to Rule 424(b) under the Securities Act, are referred to
herein as the “Final Prospectus;” and the most recent
preliminary prospectus and prospectus supplement that omitted
information to be included upon pricing in a form of prospectus
filed with the Commission pursuant to Rule 424(b) under the
Securities Act and that was used after the initial effectiveness of
the Registration Statement and prior to the Applicable Time (as
defined below) is referred to herein as the “Pricing
Prospectus.”
(b) (i) At the earliest time after
the filing of the Registration Statement that the Issuer or another
offering participant made a bona fide offer (within the
meaning of Rule
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164(h)(2) of the Securities Act) of
the Bonds and (ii) at the date hereof, each of the Issuer and
TCC was not and is not an “ineligible issuer,” as
defined in Rule 405 under the Securities Act.
(c) At the time the Registration
Statement initially became effective, at the time of each amendment
thereto for the purposes of complying with Section 10(a)(3) of
the Securities Act (whether by post-effective amendment,
incorporated report or form of prospectus) and on the Effective
Date relating to the Bonds, the Registration Statement, and the
Indenture, at the Closing Date, fully complied and will fully
comply in all material respects with the applicable requirements of
the Securities Act, the Trust Indenture Act of 1939 (the
“Trust Indenture Act”) and, in each case, the
applicable instructions, rules and regulations of the Commission
thereunder; the Registration Statement, at each of the
aforementioned dates, did not and will not include any untrue
statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements
therein, in light of the circumstances in which they were made, not
misleading. As of the Applicable Time and as of the Closing Date
(as defined below), the Registration Statement and the Final
Prospectus fully complied and will fully comply in all material
respects with the applicable requirements of the Securities Act,
the Trust Indenture Act and the applicable rules and regulations of
the Commission thereunder, and neither of such documents includes
any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order
to make the statements therein, in the light of the circumstances
in which they were made, not misleading; and on said dates the
Incorporated Documents, taken together as a whole, fully complied
or will fully comply in all material respects with the applicable
provisions of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”), and the applicable rules and
regulations of the Commission thereunder; provided that the
foregoing representations and warranties in this paragraph
(c) shall not apply to statements or omissions made in
reliance upon information furnished in writing to the Issuer or TCC
by, or on behalf of, any Underwriter through the Representatives
expressly for use in connection with the preparation of the
Registration Statement or the Final Prospectus or to any statements
in or omissions from any Statements of Eligibility on Form T-1 (or
amendments thereto) of the Indenture Trustee under the Indenture
filed as exhibits to the Registration Statement or Incorporated
Documents or to any statements or omissions made in the
Registration Statement or the Final Prospectus relating to The
Depository Trust Company (“DTC”) Book-Entry System that
are based solely on information contained in published reports of
the DTC.
(d) As of its date, at the
Applicable Time (as defined below) and on the date of its filing,
if applicable, and on the Closing Date, the Pricing Prospectus and
each Issuer Free Writing Prospectus (as defined below) (other than
the Pricing Term Sheet, as defined in Section 5(c) below),
considered together, did not include any untrue statement of a
material fact or omit to state any material fact necessary in order
to make the statements therein, in the light of the circumstances
in which they were made, not misleading (except that (i) the
principal amount of the Bonds, the tranches, the initial principal
balances, the scheduled final payment dates, the final maturity
dates, the expected average lives, the Expected Amortization
Schedule and the Expected Sinking Fund Schedule described in the
Pricing Prospectus supersede any previously issued
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descriptions of such information and
(ii) the interest rate, price to the public and underwriting
discounts and commissions for each tranche was not included in the
Pricing Prospectus). The Pricing Term Sheet, as of its issue date
and at all subsequent times through the completion of the public
offer and sale of the Bonds, considered together with the Pricing
Prospectus and each other Issuer Free Writing Prospectus, did not
include any untrue statement of a material fact or omit to state
any material fact necessary in order to make the statements
therein, in the light of the circumstance in which they are made,
not misleading. The two preceding sentences do not apply to
statements in or omissions from the Pricing Prospectus, the Pricing
Term Sheet or any other Issuer Free Writing Prospectus in reliance
upon and in conformity with written information furnished to the
Issuer or TCC by any Underwriter through the Representatives
specifically for use therein, it being understood and agreed that
the only such information furnished by any Underwriter consists of
the information set forth in Schedule V hereto. “Issuer Free
Writing Prospectus” means any “issuer free writing
prospectus,” as defined in Rule 433(h), relating to the
Bonds, in the form filed or required to be filed with the
Commission or, if not required to be filed, in the form retained in
the Issuer’s records pursuant to Rule 433(g). References to
the term “Free Writing Prospectus” shall mean a free
writing prospectus, as defined in Rule 405 under the Securities
Act. References to the term “Applicable Time” mean
12:08 PM, eastern time, on the date hereof, except that if,
subsequent to such Applicable Time, the Issuer, TCC and the
Underwriters have determined that the information contained in the
Pricing Prospectus or any Issuer Free Writing Prospectus issued
prior to such Applicable Time included an untrue statement of a
material fact or omitted to state a material fact necessary in
order to make the statements therein, in the light of the
circumstances in which they were made, not misleading and have
terminated their old purchase contracts and entered into new
purchase contracts with purchasers of the Bonds, then
“Applicable Time” will refer to the first of such times
when such new purchase contracts are entered into. The Issuer
represents, warrants and agrees that it has treated and agrees that
it will treat each of the free writing prospectuses listed on
Schedule IV hereto as an Issuer Free Writing Prospectus, and that
each such Free Writing Prospectus has fully complied and will fully
comply with the applicable requirements of Rules 164 and 433,
including timely Commission filing where required, legending and
record keeping.
(e) Each Issuer Free Writing
Prospectus, as of its issue date and at all subsequent times
through the Closing Date or until any earlier date that the Issuer
notified or notifies the Representatives as described in the next
sentence, did not, does not and will not include any information
that conflicted, conflicts or will conflict with the information
then contained in the Registration Statement. If at any time
following issuance of an Issuer Free Writing Prospectus there
occurred or occurs an event or development as a result of which
such Issuer Free Writing Prospectus conflicted or would conflict
with the information then contained in the Registration Statement
or included or would include an untrue statement of a material fact
or omitted or would omit to state a material fact necessary in
order to make the statements therein, in the light of the
circumstances prevailing at that subsequent time, not misleading,
(i) TCC or the Issuer has promptly notified or will promptly
notify the Representatives and (ii) TCC or the Issuer has
promptly amended or will promptly amend or supplement such Issuer
Free Writing Prospectus to eliminate or correct such conflict,
untrue statement or omission.
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The foregoing two sentences do not
apply to statements in or omissions from any Issuer Free Writing
Prospectus in reliance upon and in conformity with written
information furnished to the Issuer or TCC by any Underwriter
through the Representatives specifically for use therein, it being
understood and agreed that the only such information furnished by
any Underwriter consists of the information set forth on Schedule V
hereto.
(f) The Issuer has been duly formed
and is validly existing as a limited liability company in good
standing under the Limited Liability Company Act of the State of
Delaware, as amended, with full limited liability company power and
authority to execute, deliver and perform its obligations under
this Underwriting Agreement, the Bonds, the Sale Agreement, the
Servicing Agreement, the Indenture, the Issuer LLC Agreement, the
Intercreditor Agreement, the Administration Agreement and the other
agreements and instruments contemplated by the Pricing Prospectus
(collectively, the “Issuer Documents”) and to own its
properties and conduct its business as described in the Pricing
Prospectus; the Issuer has been duly qualified as a foreign limited
liability company for the transaction of business and is in good
standing under the laws of each other jurisdiction in which it owns
or leases properties or conducts any business so as to require such
qualification, except where failure to so qualify or to be in good
standing would not have a material adverse effect on the business,
properties or financial condition of the Issuer; the Issuer has
conducted and will conduct no business in the future that would be
inconsistent with the description of the Issuer’s business
set forth in the Pricing Prospectus; the Issuer is not a party to
or bound by any agreement or instrument other than the Issuer
Documents and other agreements or instruments incidental to its
formation; the Issuer has no material liabilities or obligations
other than those arising out of the transactions contemplated by
the Issuer Documents and as described in the Pricing Prospectus;
TCC is the beneficial owner of all of the limited liability company
interests of the Issuer; and based on current law, the Issuer is
not classified as an association taxable as a corporation for
United States federal income tax purposes.
(g) The issuance and sale of the
Bonds by the Issuer, the purchase of the Series A Transition
Property by the Issuer from TCC and the consummation of the
transactions herein contemplated by the Issuer, and the fulfillment
of the terms hereof on the part of the Issuer to be fulfilled, will
not result in a breach of any of the terms or provisions of, or
constitute a default under the Issuer’s certificate of
formation or limited liability company agreement (collectively, the
“Issuer Charter Documents”), or any indenture,
mortgage, deed of trust or other agreement or instrument to which
the Issuer is now a party.
(h) This Underwriting Agreement has
been duly authorized, executed and delivered by the Issuer, which
has the necessary limited liability company power and authority to
execute, deliver and perform its obligations under this
Underwriting Agreement, and constitutes a valid and binding
obligation of the Issuer, enforceable against the Issuer in
accordance with its terms, except as the enforceability thereof may
be limited by bankruptcy, insolvency, reorganization, receivership,
moratorium or other similar laws relating to or affecting
creditors’ or secured parties’ rights generally and by
general principles of equity (including concepts of materiality,
reasonableness, good faith and fair dealing), regardless of whether
considered in a proceeding in equity or at law;
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and limitations on enforceability of
rights to indemnification or contribution by federal or state
securities laws or regulations or by public policy.
(i) The Issuer (i) is not in
violation of the Issuer Charter Documents, (ii) is not in
default and no event has occurred which, with notice or lapse of
time or both, would constitute such a default, in the due
performance or observance of any term, covenant or condition
contained in any indenture, mortgage, deed of trust or other
agreement or instrument to which it is a party or by which it is
bound or to which any of its properties is subject, except for any
such defaults that would not, individually or in the aggregate,
have a material adverse effect on its business, property or
financial condition, and (iii) is not in violation of any law,
ordinance, governmental rule, regulation or court decree to which
it or its property may be subject, except for any such violations
that would not, individually or in the aggregate, have a material
adverse effect on its business, property or financial
condition.
(j) The Indenture has been duly
authorized by the Issuer, and, on the Closing Date, will have been
duly executed and delivered by the Issuer and will be a valid and
binding instrument, enforceable against the Issuer in accordance
with its terms, except as the enforceability thereof may be limited
by bankruptcy, insolvency, reorganization, receivership, moratorium
or other similar laws relating to or affecting creditors’ or
secured parties’ rights generally and by general principles
of equity (including concepts of materiality, reasonableness, good
faith and fair dealing), regardless of whether considered in a
proceeding in equity or at law; and limitations on enforceability
of rights to indemnification by federal or state securities laws or
regulations or by public policy. On the Closing Date, the Indenture
will (i) comply as to form in all material respects with the
requirements of the Trust Indenture Act and (ii) conform in
all material respects to the description thereof in the Pricing
Prospectus and Final Prospectus.
(k) The Bonds have been duly
authorized by the Issuer for issuance and sale to the Underwriters
pursuant to this Underwriting Agreement and, when executed by the
Issuer and authenticated by the Indenture Trustee in accordance
with the Indenture and delivered to the Underwriters against
payment therefor in accordance with the terms of this Underwriting
Agreement, will constitute valid and binding obligations of the
Issuer entitled to the benefits of the Indenture and enforceable
against the Issuer in accordance with their terms, except as the
enforceability thereof may be limited by bankruptcy, insolvency,
reorganization, receivership, moratorium or other similar laws
relating to or affecting creditors’ or secured parties’
rights generally and by general principles of equity (including
concepts of materiality, reasonableness, good faith and fair
dealing), regardless of whether considered in a proceeding in
equity or at law; and limitations on enforceability of rights to
indemnification by federal or state securities laws or regulations
or by public policy, and the Bonds conform in all material respects
to the description thereof in the Pricing Prospectus and Final
Prospectus. The Issuer has all requisite limited liability company
power and authority to issue, sell and deliver the Bonds in
accordance with and upon the terms and conditions set forth in this
Underwriting Agreement and in the Pricing Prospectus and Final
Prospectus.
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(l) Other than as set forth or
contemplated in the Pricing Prospectus, there is no litigation or
governmental proceeding to which the Issuer is a party or to which
any property of the Issuer is subject or which is pending or, to
the knowledge of the Issuer, threatened against the Issuer that
would reasonably be expected to, individually or in the aggregate,
result in a material adverse effect on the Issuer’s business,
property or financial condition.
(m) Other than any necessary action
of the PUCT, any filings required under the Restructuring Act or
Financing Order or as otherwise set forth or contemplated in the
Pricing Prospectus, no approval, authorization, consent or order of
any public board or body (except such as have been already obtained
and other than in connection or in compliance with the provisions
of applicable blue-sky laws or securities laws of any state, as to
which the Issuer makes no representations or warranties), is
legally required for the issuance and sale by the Issuer of the
Bonds.
(n) Neither the Issuer nor TCC is,
and, after giving effect to the sale and issuance of the Bonds,
will not be an “investment company” within the meaning
of the Investment Company Act of 1940, as amended (the “1940
Act”).
(o) Deloitte & Touche LLP,
who have performed certain agreed upon procedures with respect to
certain statistical and structural information contained in the
Pricing Prospectus and the Final Prospectus, are independent public
accountants as required by the Securities Act and the rules and
regulations of the Commission thereunder.
(p) Each of the Sale Agreement, the
Servicing Agreement, the Intercreditor Agreement, the
Administration Agreement and Issuer LLC Agreement has been duly
authorized by the Issuer, and when executed and delivered by the
Issuer and the other parties thereto, will constitute a valid and
legally binding obligation of the Issuer, enforceable against the
Issuer in accordance with its terms, except as the enforceability
thereof may be limited by bankruptcy, insolvency, reorganization,
receivership, moratorium or other similar laws relating to or
affecting creditors’ or secured parties’ rights
generally and by general principles of equity (including concepts
of materiality, reasonableness, good faith and fair dealing),
regardless of whether considered in a proceeding in equity or at
law, and limitations on enforceability of rights to indemnification
by federal or state securities laws or regulations or by public
policy.
4. Representations and Warranties
of TCC . TCC represents and warrants to the several
Underwriters that:
(a) TCC, in its capacity as sponsor
with respect to the Bonds, has filed with the Commission
Registration Statement No. 333-136787 for the registration
under the Securities Act of up to $1,747,975,174 aggregate
principal amount of its transition bonds. Registration Statement
No. 333-136787 has been declared effective by the Commission
and no stop order suspending such effectiveness has been issued
under the Securities Act and no proceedings for that purpose have
been instituted or are pending or, to the knowledge of TCC,
threatened by the Commission.
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(b) At the time the Registration
Statement initially became effective, at the time of each amendment
thereto for the purposes of complying with Section 10(a)(3) of
the Act (whether by post-effective amendment, incorporated report
or form of prospectus) and on the Effective Date relating to the
Bonds, the Registration Statement, and the Indenture, on the
Closing Date, fully complied and will fully comply in all material
respects with the applicable requirements of the Securities Act,
the Trust Indenture Act and the applicable rules and regulations of
the Commission thereunder; the Registration Statement, at each of
the aforementioned dates, did not and will not include any untrue
statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements
therein, in the light of the circumstances in which they were made,
not misleading. As of the Applicable Time and as of the Closing
Date, the Registration Statement and the Final Prospectus fully
complied and will fully comply in all material respects to the
requirements of the Securities Act, the Trust Indenture Act and the
applicable rules and regulations of the Commission thereunder, and
neither of such documents includes any untrue statement of a
material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements
therein, in the light of the circumstances in which they were made,
not misleading; provided, that the foregoing representations and
warranties in this paragraph (b) shall not apply to statements
or omissions made in reliance upon and in conformity with
information furnished in writing to the Issuer or TCC by, or on
behalf of, any Underwriter through the Representatives expressly
for use in connection with the preparation of the Registration
Statement or the Final Prospectus, or to any statements in or
omissions from any Statement of Eligibility on Form T-1, or
amendments thereto, of the Indenture Trustee under the Indenture
filed as exhibits to the Registration Statement or Incorporated
Documents or to any statements or omissions made in the
Registration Statement or Final Prospectus relating to the DTC
Book-Entry-Only System that are based solely on information
contained in published reports of DTC.
(c) As of its date, at the
Applicable Time (as defined below), on the date of its filing, if
applicable, and on the Closing Date, the Pricing Prospectus and
each Issuer Free Writing Prospectus (other than the Pricing Term
Sheet), considered together, did not include any untrue statement
of a material fact or omit to state any material fact necessary in
order to make the statements therein, in the light of the
circumstances in which they were made, not misleading (except that
(i) the principal amount of the Bonds, the tranches, the
initial principal balances, the scheduled final payment dates, the
final maturity dates, the expected average lives, the Expected
Amortization Schedule and the Expected Sinking Fund Schedule
described in the Pricing Prospectus supersede any previously issued
descriptions of such information and (ii) the interest rate,
price to the public and underwriting discounts and commissions for
each tranche was not included in the Pricing Prospectus). The
Pricing Term Sheet, as of its issue date and at all subsequent
times through the completion of the public offer and sale of the
Bonds, considered together with the Pricing Prospectus and each
other Issuer Free Writing Prospectus, did not include any untrue
statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in the light of
the circumstances in which they were made, not misleading. The two
preceding sentences do not apply to statements in or omissions from
the Pricing Prospectus, the Pricing Term Sheet or any Issuer Free
Writing Prospectus in reliance upon and in conformity with
written
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information furnished to the Issuer
or TCC by any Underwriter through the Representatives specifically
for use therein, it being understood and agreed that the only such
information furnished by any Underwriter consists of the
information set forth in Schedule V hereto. TCC represents,
warrants and agrees that it has treated and agrees that it will
treat each of the free writing prospectuses listed on Schedule IV
hereto as an Issuer Free Writing Prospectus, and that each such
Issuer Free Writing Prospectus has fully complied and will fully
comply with the applicable requirements of Rules 164 and 433,
including timely Commission filing where required, legending and
record keeping
(d) Each Issuer Free Writing
Prospectus, as of its issue date and at all subsequent times
through the completion of the public offer and sale of the Bonds or
until any earlier date that the Issuer or TCC notified or notifies
the Representatives as described in the next sentence, did not,
does not and will not include any information that conflicted,
conflicts or will conflict with the information then contained in
the Registration Statement. If at any time following issuance of an
Issuer Free Writing Prospectus there occurred or occurs an event or
development as a result of which such Issuer Free Writing
Prospectus conflicted or would conflict with the information then
contained in the Registration Statement or included or would
include an untrue statement of a material fact or omitted or would
omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances prevailing at
that subsequent time, not misleading, (i) TCC or the Issuer
has promptly notified or will promptly notify the Representatives
and (ii) TCC or the Issuer has promptly amended or will
promptly amend or supplement such Issuer Free Writing Prospectus to
eliminate or correct such conflict, untrue statement or omission.
The foregoing two sentences do not apply to statements in or
omissions from any Issuer Free Writing Prospectus in reliance upon
and in conformity with written information furnished to the Issuer
or TCC by any Underwriter through the Representatives specifically
for use therein, it being understood and agreed that the only such
information furnished by any Underwriter consists of the
information set forth on Schedule V hereto.
(e) TCC has been duly formed and is
validly existing as a corporation in good standing under the laws
of the jurisdiction of its formation, has the corporate power and
authority to own, lease and operate its properties and to conduct
its business as presently conducted and as set forth in or
contemplated by the Pricing Prospectus, and is qualified as a
foreign corporation to transact business and is in good standing in
each jurisdiction in which such qualification is required, whether
by reason of the ownership or leasing of property or the conduct of
business, except where the failure to so qualify or be in good
standing would not have a material adverse effect on the business,
property or financial condition of TCC and its subsidiaries
considered as a whole. TCC is the beneficial owner of all of the
limited liability company interests of the Issuer.
(f) TCC has no significant
subsidiaries within the meaning of Rule 1-02(w) of Regulation
S-X.
(g) The transfer by TCC of all of
its rights and interests under the Financing Order relating to the
Bonds to the Issuer and the consummation of the transactions herein
contemplated by TCC, and the fulfillment of the terms hereof on the
part of TCC to be
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fulfilled, will not result in a
breach of any of the terms or provisions of, or constitute a
default under, TCC’s articles of incorporation or bylaws
(collectively, the “TCC Charter Documents”), or in a
material breach of any of the terms of, or constitute a material
default under, any indenture, mortgage, deed of trust or other
agreement or instrument to which TCC is now a party.
(h) This Underwriting Agreement has
been duly authorized, executed and delivered by TCC, which has the
necessary corporate power and authority to execute, deliver and
perform its obligations under this Underwriting Agreement, and
constitutes a valid and binding obligation of TCC, enforceable
against TCC in accordance with its terms, except as the
enforceability thereof may be limited by bankruptcy, insolvency,
reorganization, receivership, moratorium or other similar laws
relating to or affecting creditors’ or secured parties’
rights generally and by general principles of equity (including
concepts of materiality, reasonableness, good faith and fair
dealing), regardless of whether considered in a proceeding in
equity or at law, and limitations on enforceability of rights to
indemnification or contribution by federal or state securities laws
or regulations or by public policy.
(i) TCC (i) is not in violation
of the TCC Charter Documents, (ii) is not in default and no
event has occurred which, with notice or lapse of time or both,
would constitute such a default, in the due performance or
observance of any term, covenant or condition contained in any
indenture, mortgage, deed of trust or other agreement or instrument
to which it is a party or by which it is bound or to which any of
its properties is subject, except for any such defaults that would
not, individually or in the aggregate, have a material adverse
effect on the business, property or financial condition of TCC and
its subsidiaries considered as a whole, or (iii) is not in
violation of any law, ordinance, governmental rule, regulation or
court decree to which it or its property may be subject, except for
any such violations that would not, individually or in the
aggregate, have a material adverse effect on the business, property
or financial condition of TCC and its subsidiaries considered as a
whole.
(j) Except as set forth or
contemplated in the Pricing Prospectus, there is no litigation or
governmental proceeding to which TCC or any of its subsidiaries is
a party or to which any property of TCC or any of its subsidiaries
is subject or which is pending or, to the knowledge of TCC,
threatened against TCC or any of its subsidiaries that would
reasonably be expected to, individually or in the aggregate, result
in a material adverse effect on the Issuer’s business,
property, or financial condition or on TCC’s ability to
perform its obligations under the Sale Agreement and the Servicing
Agreement.
(k) Other than any necessary action
of the PUCT, any filings required under the Restructuring Act (as
such term is defined in the Pricing Prospectus) or Financing Order
or as otherwise set forth or contemplated in the Pricing
Prospectus, no approval, authorization, consent or order of any
public board or body (except such as have been already obtained and
other than in connection or in compliance with the provisions of
applicable blue-sky laws or securities laws of any state, as to
which TCC makes no representations or warranties), is legally
required for the issuance and sale by the Issuer of the
Bonds.
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(l) Neither TCC nor the Issuer is,
and after giving effect to the sale and issuance of the Bonds,
neither TCC or the Issuer will be, an “investment
company” within the meaning of the 1940 Act.
(m) Each of the Sale Agreement and
Servicing Agreement has been duly and validly authorized by TCC,
and when executed and delivered by TCC and the other parties
thereto will constitute a valid and legally binding obligation of
TCC, enforceable against TCC in accordance with its terms, except
as the enforceability thereof may be limited by bankruptcy,
insolvency, reorganization, receivership, moratorium or other
similar laws relating to or affecting creditors’ or secured
parties’ rights generally and by general principles of equity
(including concepts of materiality, reasonableness, good faith and
fair dealing), regardless of whether considered in a proceeding in
equity or at law, and limitations on enforceability of rights to
indemnification by federal or state securities laws or regulations
or by public policy. Each of the Administration Agreement and
Intercreditor Agreement has been duly authorized by TCC, and when
executed and delivered by TCC and other parties thereto will
constitute a valid and legally binding obligation of TCC,
enforceable against TCC in accordance with its terms, except as the
enforceability thereof may be limited by bankruptcy, insolvency,
reorganization, receivership, moratorium or other similar laws
relating to or affecting creditors’ or secured parties’
rights generally and by general principles of equity (including
concepts of materiality, reasonableness, good faith and fair
dealing), regardless of whether considered in a proceeding in
equity or at law, and limitations on enforceability of rights to
indemnification by federal or state securities laws or regulations
or by public policy.
(n) There are no Texas transfer
taxes related to the transfer of the Series A Transition Property
or the issuance and sale of the Bonds to the Underwriters pursuant
to this Underwriting Agreement required to be paid at or prior to
the Closing Date by TCC or the Issuer.
5. Investor Communications
.
(a) Issuer and TCC represent and
agree that, unless they obtain the prior consent of the
Representatives, and each Underwriter represents and agrees that,,
unless it obtains the prior consent of the Issuer and TCC and the
Representatives, it has not made and will not make any offer
relating to the Bonds that would constitute an Issuer Free Writing
Prospectus, or that would otherwise constitute a “free
writing prospectus,” required to be filed by the Issuer or
TCC, as applicable, with the Commission or retained by the Issuer
or TCC, as applicable, under Rule 433 under the Securities Act;
provided that the prior written consent of the parties hereto shall
be deemed to have been given in respect of the Term Sheets and each
other Free Writing Prospectus identified in Schedule IV
hereto.
(b) TCC and the Issuer (or the
Representatives at the direction of the Issuer) will prepare a
final pricing term sheet relating to the Bonds (the “Pricing
Term Sheet”), containing only information that describes the
final pricing terms of the Bonds and otherwise in a form consented
to by the Representatives, and will file such final pricing term
sheet within the period required by Rule 433(d)(5)(ii) following
the date such final
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terms have been established for all
classes of the offering of the Bonds. The Pricing Term Sheet is an
Issuer Free Writing Prospectus for purposes of this
Agreement.
(c) Each Underwriter may provide to
investors one or more of the Free Writing Prospectuses, including
the Term Sheets, subject to the following conditions:
(i) Unless preceded or accompanied
by a prospectus satisfying the requirements of Section 10(a)
of the Securities Act, an Underwriter shall not convey or
deliv
