EXHIBIT 1.2
SAN DIEGO GAS & ELECTRIC COMPANY
FIRST MORTGAGE BONDS
UNDERWRITING AGREEMENT
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To the Underwriters named in San Diego, California
Schedule I hereof.
Dear Sirs:
The undersigned, San Diego Gas & Electric Company, a California
corporation (the "Company"), hereby confirms its agreement with the Underwriters
named in Schedule I hereto, as follows:
1. Underwriters and Representatives. The term "Underwriters" as used
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herein shall mean the one or more persons, firms and corporations named in
Schedule I hereto (including the representatives, if any, hereinafter mentioned
and any underwriter substituted in accordance with the provisions of paragraph 7
hereof), and the term "Representatives" as used herein shall mean the
representative or representatives, if any, designated in Schedule II hereto, who
by signing this agreement represents or represent that each has been authorized
by the Underwriters to execute this agreement on their behalf and to act for
them in the manner herein provided. If there are no such representatives, the
term "Representatives" as used herein shall refer to the Underwriters. All
obligations of the Underwriters hereunder are several and not joint.
2. Description of Bonds. The Company proposes to issue and sell its
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First Mortgage Bonds in the principal amount and with such series designation
and other terms as are set forth in Schedule II hereto (the "Bonds"), to be
issued under and secured by the Mortgage and Deed of Trust, dated as of July 1,
1940, as amended and supplemented to date (the "Indenture"), between the Company
and US Bank Trust National Association, as successor Trustee.
3. Representations and Warranties of the Company. The Company represents
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and warrants to the Underwriters and each person, if any, who controls any
Underwriter (other than a partner of any Underwriter firm or any person
controlling any Underwriter who may be an officer or director of the Company)
that:
(a) The Company meets the requirements for use of Form S-3 under the
Securities Act of 1933, as amended (the "Act"), has filed with the
Securities and Exchange Commission (the "Commission") one or more
registration statements (as specified in Schedule II hereto) on such Form
covering the registration of the Bonds under the Act and the qualification
of the Indenture under the Trust Indenture Act of 1939, as amended (the
"Indenture Act"), a reasonable number of
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copies of which have been delivered to the Representatives, and each such
registration statement has been declared effective by the Commission. Each such
registration statement, as amended at the date hereof, meets the requirements
set forth in Rule 415(a)(1)(x) under the Act and complies in all other material
respects with such Rule. The Company has filed or proposes to file with the
Commission a prospectus supplement specifically relating to the Bonds, a
reasonable number of copies of which have been or will be delivered to the
Representatives. Each registration statement, as amended at the date hereof,
including the prospectus included therein, all documents incorporated by
reference therein and all exhibits thereto, but excluding the Form T-1 statement
of the Trustee under the Indenture, is herein referred to as the "Registration
Statement." The prospectus, as supplemented to specifically refer to the final
terms and conditions of the Bonds, in the form first filed with the Commission
pursuant to Rule 424 under the Act, including all documents incorporated by
reference therein, is herein referred to as the "Prospectus," and any
preliminary form of the Prospectus is herein referred to as a "Preliminary
Prospectus."
(b) The Commission has not issued an order suspending the effectiveness of
the Registration Statement or preventing or suspending the use of any
Preliminary Prospectus; the Registration Statement as of its effective date
(including the date or dates any amendments thereto became effective), and each
Preliminary Prospectus, as of the issue date thereof, complied in all material
respects with the Act and the Indenture Act and the respective rules,
regulations and instructions of the Commission thereunder and neither the
Registration Statement, as of the aforesaid effective date, nor any Preliminary
Prospectus, as of its issue date, contained any untrue statement of a material
fact or omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; and as of the date
hereof and at all times subsequent hereto up to the Closing Date as hereinafter
defined, the Registration Statement and the Prospectus, and any amendments or
supplements thereto, comply and will comply in all material respects with the
provisions of the Act and the Indenture Act and the respective rules,
regulations and instructions of the Commission thereunder, and neither the
Registration Statement nor the Prospectus, nor any amendments or supplements
thereto, contain or will contain any untrue statement of a material fact or omit
or will omit to state a material fact required to be stated therein or necessary
to make the statements therein not misleading.
(c) The documents incorporated by reference in the Registration Statement,
in each Preliminary Prospectus and in the Prospectus, when they were filed with
the Commission, complied in all material respects with the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), and the rules, regulations and
instructions of the Commission thereunder, and any documents so filed and
incorporated by reference subsequent to the date hereof
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will, when they are filed with the Commission, comply in all material
respects with the requirements of the Exchange Act, and the rules,
regulations and instructions of the Commission thereunder, and none of such
documents includes or will include any untrue statement of a material fact
or omits or will omit to state any 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.
(d) Deloitte & Touche, who have examined the consolidated financial
statements included or incorporated by reference in the Registration
Statement, in each Preliminary Prospectus and in the Prospectus, and have
issued their opinion thereon, are independent public accountants within the
meaning of the Act and the rules and regulations of the Commission
thereunder.
(e) Subsequent to the respective dates as of which information is
given in the Registration Statement or in the Prospectus, and other than as
disclosed therein, (i) neither the Company nor any of its subsidiaries has,
and, on the Closing Date (as defined in paragraph 6 hereof), neither the
Company nor any of its subsidiaries will have, incurred, except in the
ordinary course of business, any liabilities or obligations, contingent or
otherwise, which are material in the aggregate to the Company and its
subsidiaries, taken as a whole, and (ii) there has been, and on the Closing
Date there will have been, no material adverse change in the condition or
results of operations, financial or otherwise, of the Company and its
subsidiaries, taken as a whole.
(f) Except as set forth in the Registration Statement or in the
Prospectus there are no material legal proceedings to which the Company or
any subsidiary is a party or of which property of the Company or any
subsidiary is subject and, to the best of the Company's knowledge, no such
proceedings are contemplated by governmental authorities or others.
(g) This agreement has been duly authorized, executed and delivered
on behalf of the Company and assuming that it has been duly authorized,
executed and delivered by or on behalf of the Underwriters, is a valid and
binding agreement of the Company enforceable in accordance with its terms;
the Company has or will have, prior to the Closing Date, full corporate
power and lawful authority to issue and sell the Bonds on the terms and
conditions herein contemplated and such issue and sale shall have been duly
authorized by such orders of the Commission as are required under the laws
administered by it and by order of the Public Utilities Commission of the
State of California, and (subject to compliance with applicable blue sky
laws of states and other jurisdictions) no other approval of any public
body is or will, on the Closing Date, be necessary in connection with the
issue and sale of the Bonds to the Underwriters.
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(h) The consummation of the transactions herein contemplated and the
fulfillment of the terms hereof will not result in a breach of any of the
terms or provisions of, or constitute a default under, the Company's
Articles of Incorporation, its by-laws, or any indenture, mortgage, deed of
trust or other agreement or instrument to which the Company is a party or
by which it is bound.
Notwithstanding anything herein contained, the Company makes no
warranties (i) as to any statement in or omission from the Form T-1 statement
signed by the Trustee under Indenture or (ii) to any Underwriter as to untrue
statements, or omissions from, the Registration Statement, any Preliminary
Prospectus or the Prospectus made solely in reliance upon information furnished
herein or in writing to the Company by any Underwriter, directly or through the
Representatives, for use in the Registration Statement, any Preliminary
Prospectus or the Prospectus.
4. Purchase and Sale of Bonds. On the basis of the representations and
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warranties herein contained and subject to the terms and conditions of this
agreement, the Company agrees to issue and sell to each of the Underwriters,
severally and not jointly, and each of the Underwriters agrees, severally and
not jointly, to purchase from the Company, the principal amount of the Bonds set
forth after the name of such Underwriter in Schedule I hereto, at the purchase
price set forth in Schedule II hereto.
5. Public Offering. The Underwriters agree that as soon as practicable,
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in the judgment of the Representative, they will make a bona fide public
offering of their respective portions of the Bonds, at the initial public
offering price set forth in the Prospectus, with such concessions and discounts
to dealers as may be set forth therein. It is understood that after the initial
such offering of the Bonds the Underwriters reserve the right to vary the
offering price and any concessions or discounts to dealers and to withdraw,
cancel or modify such offering without notice.
6. Times and Places of Closing. The Bonds in the form of one or more
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original certificates shall be delivered at the office of the Company, 000 Xxx
Xxxxxx, Xxx Xxxxx, Xxxxxxxxxx, 00000 on the date and the time specified in
Schedule II hereto, or on such other date and at such other time and place as
the Representatives and the Company may agree upon in writing or on such other
date and at such other time as shall be fixed pursuant to paragraph 7 hereof
(such date and time being herein called the "Closing Date"), to or on the order
of the Representatives, but for the respective accounts of the Underwriters
purchasing the same, against payment for the account of the Company of the
aggregate purchase price in Federal funds, or other funds immediately available
in San Diego, California, by certified or official bank check or checks payable
upon the order of the Company or by bank wire to an account designated by the
Company. Additional certificated for the Bonds shall be available on the
Closing Date for delivery in New
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York, New York, to or on the order of the Representatives against cancellation
of the original certificate or certificates. The Company agrees to have such
additional certificates available for inspection, checking and packaging by the
Representatives in New York, New York, not later than 10:00 A.M., New York Time,
one full business day prior to the Closing Date. Such certificates shall be
registered in such names and in such denominations as the Representatives may
request not less than five days in advance of the Closing Date. The Bonds shall
be transferable without charge by the Company other than to cover taxes or other
governmental charges.
It is understood that the Representatives, individually and not as
representatives of the Underwriters, may (but shall not be obligated to) make
payment to the Company for the Bonds to be purchased by any Underwriter or
Underwriters whose check or checks shall not have been received by the
Representatives at the time of closing as aforesaid, for the account of such
Underwriter or Underwriters. Any such payment by the Representatives shall not
relieve such Underwriter or Underwriters from any of its or their obligations
hereunder.
7. Partial Default by Underwriters. If one or more Underwriters shall
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default in its or their obligation (otherwise than for some reason sufficient to
justify the cancellation or termination of this agreement) to purchase and pay
for the Bonds which it or they have agreed to purchase and pay for under this
agreement, and if the aggregate principal amount of such Bonds:
(a) does not exceed 10% of the aggregate principal amount of the
Bonds, the non-defaulting Underwriters shall have the right and become
obligated severally to take up and pay for (in addition to the amount of
Bonds set opposite their respective names in Schedule I attached hereto)
the Bonds agreed to be purchased by all such defaulting Underwriters as
nearly as possible in the respective proportions which the amounts set
opposite the names of such non-defaulting Underwriters in Schedule I
attached hereto bear to the aggregate of the amounts so set opposite the
names of all such non-defaulting Underwriters, provided, however, that in
no event shall any non-defaulting Underwriter be obligated under this
paragraph 7(a) to take up and pay for more than one-ninth of the amount of
Bonds set opposite its name in Schedule I hereto. The Representatives, for
the accounts of the several non-defaulting Underwriters, may take up and
pay for all or any part of such additional amount of Bonds to be purchased
by each such Underwriter under this paragraph 7(a), or the Representatives
may find one or more substitute underwriters to purchase such Bonds or one
or more of the remaining Underwriters may agree to purchase such Bonds in
such proportions as may be approved by the Representatives, in each case
upon the terms herein set forth. In any such event, the Representatives may
postpone the time for delivery of the Bonds to a later time on the day of
the Closing Date or on the next following business day; or
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(b) exceeds 10% of the aggregate principal amount of the Bonds, the
Representatives, at any time within 24 hours following the Closing Date,
may arrange for a person or persons satisfactory to the Company (who may be
or may include one or more of the non-defaulting Underwriters) to take up
and pay for, in such proportions as the Representatives may determine, the
principal amount of the Bonds agreed to be purchased by all such defaulting
Underwriters and, if such arrangements are so made, the time for delivery
of the Bonds may be postponed by the Representatives to a later time on
said date or until any time prior to 10:00 A.M., California Time, and the
fourth succeeding business day and, in such event, the Company agrees to
file promptly with the Commission any amendment to the Registration
Statement or supplement to the Prospectus as may, in the opinion of
Underwriters' counsel ("Counsel for the Underwriters"), be required, and
the delivery of the Bonds shall be subject to the condition that such
amendment shall have become effective or such supplement shall have been
filed. If the Bonds which any defaulting Underwriter or Underwriters agreed
to purchase and pay for shall not be purchased by non-defaulting or
substituted Underwriters as above provided, such default shall not relieve
any Underwriter from its obligation to purchase and pay for the principal
amount of Bonds set opposite its name in Schedule I hereto, and the Company
in such event may elect within a further 24-hour period either (i) to
terminate this agreement without liability on the part of the Company or
any non-defaulting Underwriter, or (ii) to proceed with the sale and
delivery hereunder of less than all of the Bonds. If the Company shall so
elect to proceed, it shall notify the Representatives within such further
24-hour period and may postpone the time for delivery of the Bonds to a
later time on the day of the Closing Date or may postpone the Closing Date
to any day within the next seven days after the day originally specified
for the Closing Date.
Any action under this paragraph 7 shall not relieve any defaulting
Underwriter from liability in respect of any default of such Underwriter under
this agreement.
8. Certain Covenants of the Company. The Company agrees:
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(a) To file or mail for filing with the Commission in the manner
prescribed by Rule 424 under the Act copies of the Prospectus in the form
approved by the Representatives and to make no further amendments or
supplements to the Registration Statement or Prospectus after the date
hereof and prior to the Closing Date without the prior consent of the
Representatives which will not unreasonably be withheld:
(b) To use its best efforts to qualify the Bonds and to assist in the
qualification of the Bonds by or on behalf of the Representatives for offer
and sale under the blue sky laws of such states and other jurisdictions as
the Representatives may designate
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and to reimburse the Representatives for fees and out-of-pocket expenses
paid by them or on their behalf to so qualify the Bonds for offer and sale;
provided that the Company shall not be required to qualify as a foreign
corporation or to file a general consent to service of process in any
jurisdiction or pay or reimburse the Representatives for such fees and
expenses in an amount aggregating in excess of $12,000; and to prepare and
file, from time to time, such statements and reports as are or may be
required of it as the issuer of the Bonds to continue such qualifications
under such blue sky laws in effect for so long a period as the
Representatives may reasonably request;
(c) To furnish to each Representative one signed copy of the
Registration Statement and of all amendments thereto (including all
exhibits except those incorporated by reference), one signed copy (which
may be included in the Registration Statement or amendments thereto) of
each consent and certificate or opinion of independent public accountants
and of each other person whose profession gives authority to statements
made by him and who is named in the Registration Statement as having
prepared, certified or reviewed any part thereof, and to furnish the
Representatives sufficient unsigned copies of the foregoing (other than
exhibits) for distribution of one such copy to itself and each of the other
Underwriters;
(d) To deliver to the Underwriters without charge, as soon as
practicable after the date hereof, and from time to time for period of nine
months thereafter, as many copies of the Prospectus (and any amendments or
supplements thereto) as the respective Underwriters or the Representatives
may reasonably request for the purposes contemplated by the Act;
(e) To advise the Representatives promptly (confirming such advice in
writing) of any official request made by the Commission for amendments or
supplements to the Registration Statement or Prospectus or for additional
information with respect thereto and of official notice of institution of
proceedings for, or the entry of, a stop order suspending the effectiveness
of the Registration Statement, or any order preventing or suspending the
use of any Preliminary Prospectus or the Prospectus, and if any such order
should be entered by the Commission, to make every reasonable effort to
obtain the lifting or removal thereof as soon as possible;
(f) To advise the Representative promptly of any order or action of
any court or the Commission and of any order or communication of a public
authority addressed to the Company suspending, or threatening to suspend,
the qualification of any of the Bonds for sale and, in the event of any
order preventing the offering or sale of any of the Bonds promptly to use
its best efforts to obtain the withdrawal of such order;
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(g) To apply an amount equal to the net proceeds from the sale of the
Bonds for the purposes set forth in the Prospectus;
(h) As long as any of the Bonds shall remain outstanding, to furnish
the Representative and each of the other Underwriters on its request, as
soon as practicable, (i) copies of any published reports of the Company,
including the annual report and quarterly reports of the Company to its
shareholders, and (ii) copies of earnings statements of the Company after
the end of each of the first three quarters of the fiscal year;
(i) As soon as practicable, to make generally available to its
security holders and deliver to each of the Underwriters, on request, a
copy of an earning statement covering a period of at least twelve months
beginning after the effective date of the Registration Statement (as that
term is defined in Rule 158 under the Act), which earning statement shall
be in such form and of such substance as may be necessary to condition the
right of recovery as provided in the last paragraph of Section 11(a) of the
Act;
(j) So long as the Act requires the use of a prospectus in connection
with the sale of the Bonds, but not longer than nine months after the date
hereof, if any event shall have occurred as a result of which the
Prospectus, as then amended or supplemented, would include any untrue
statement of a material fact or omit to state any material fact necessary
in order to make the statements, in light of the circumstances under which
they are made, not misleading, the Company will notify the Representatives
and, upon the request of the Representatives (if made within such period),
will forthwith prepare and furnish to each Underwriter and to any dealer in
securities, a supplement to the Prospectus or an amended prospectus which
will correct such statement or omission. After nine months from the date
hereof, any prospectus or supplement thereto or amended prospectus required
by any Underwriter will be supplied by the company at the request of such
Underwriter but only at the expense of such Underwriter;
(k) To pay all expenses, fees and taxes in connection with (i) the
preparation and filing of the Registration Statement and the printing of
the copies of the Registration Statement, each Preliminary Prospectus, the
Prospectus and this agreement (including any attached and related
agreements) required by the Underwriters, (ii) the issue and delivery of
the Bonds to the Underwriters, (iii) the qualification of the Bonds under
the blue sky laws as aforesaid (subject to the limits on such expenses and
fees specified in subparagraph (b) of this paragraph 8) and all
registrations and listings of the Bonds, and (iv) the furnishing of the
opinions of counsel to the Company, certificates and letters of the
independent public accountants and the certificates referred to in
paragraph 9 hereof;
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(l) To pay the fees and expenses of Counsel for the Underwriters and
to reimburse the Underwriters for their reasonable out-of-pocket expenses
incurred in contemplation of the performance of this agreement in the event
that the Underwriters hereunder do no take up and pay for any of the Bonds
for a reason expressly permitted by the terms of this agreement, the
Underwriters agreeing to pay such fees and expenses in any other event,
except as herein otherwise specifically provided;
(m) Between the date hereof and the Closing Date, not to offer or
sell any securities under the Indenture, other than pursuant to the terms
of this agreement; and
(n) That the Board of Directors of the Company will adopt prior to
the Closing Date resolutions in form and contents satisfactory to Counsel
for the Underwriters creating the terms and authorizing the issuance of the
Bonds pursuant to the Indenture.
9. Conditions of Underwriters' Obligations. The several obligations of
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the Underwriters hereunder shall be subject to the condition that all
representations, warranties, and other statements of the Company herein, or made
pursuant to this agreement, are true and correct, except for immaterial details,
the condition that the Company performs all its obligations hereunder, except
for immaterial delays, and the following additional conditions precedent;
(a) The Registration Statement shall at the Closing Date remain in
effect and no stop order suspending the effectiveness of the Registration
Statement or other order preventing or suspending the use of the Prospectus
shall have been issued and no proceedings for such purposes shall be
pending or threatened by the Commission, and all requests for additional
information on the part of the Commission shall have been complied with by
the Company to the satisfaction of the Commission and Counsel for the
Underwriters; and no legal action shall have been commenced seeking to
enjoin the issuance or sale of any of the Bonds or otherwise challenging
the legality or enforceability of any of the Bonds or the transactions
contemplated hereby.
(b) Prior to the Closing Date, (i) the Board of Directors of the
Company shall have adopted resolutions in form and content satisfactory to
Counsel for the Underwriters creating the terms and authorizing the
issuance of the Bonds pursuant to the Indenture, (ii) the Public Utilities
Commission of the State of California and the Commission shall have
entered such orders as are required to permit the issue and sale of the
Bonds on the terms set forth in the Prospectus and in this agreement, (iii)
any other public bodies having jurisdiction over the issue and sale of the
Bonds to the Underwriters shall have entered such orders as may be
necessary in this connection, and (iv) all such resolutions and orders
shall be
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in full force and effect, and all conditions precedent contained therein
shall have been fully complied with.
(c) The Representatives shall have been received from Counsel for the
Underwriters an opinion satisfactory to the Representatives with respect to
the validity of the Indenture and the Bonds and the sufficiency of all
corporate proceedings relating thereto and with respect to such other legal
matters relating to this agreement, the Registration Statement and the
Prospectus as the Representatives may reasonably require.
(d) The Company shall have furnished to Counsel for the Underwriters
such documents and information as the Representatives or Counsel for the
Underwriters may reasonably request for the purpose of enabling them to
pass upon the legal matters referred to above.
(e) The Company shall have furnished to the Representatives the
opinions, dated as of the Closing Date, of the General Counsel of the
Company and of outside Counsel for the Company, to the effect that;
(i) the Company is a corporation duly incorporated, validly
existing, in good standing and authorized to exercise its corporate
powers, rights and privileges under the laws of the State of
California, and has the authorized capitalization as set forth in the
Registration Statement and the Prospectus;
(ii) each of the active subsidiaries owned directly by the
Company is a corporation duly incorporated, validly existing and
authorized to exercise its corporate powers, rights and privileges
under the laws of the jurisdiction in which it was incorporated, and
is duly qualified as a foreign corporation in all other jurisdictions
wherein the character of the properties owned or the nature of the
business transacted makes such qualification necessary;
(iii) the statements of law and legal conclusions contained in
the Registration Statement and the Prospectus, and any supplement or
amemdment or amendment thereto, have been reviewed by such counsel and
are accurate and fairly present the information required to be
presented with respect thereto; and the statements in the Prospectus
under "The Bonds" and in any supplement or amendment to the Prospectus
specifically relating to the Bonds, insofar as such statements
constitute as summary of the Indenture and the Bonds, fairly present
the information called for with respect to such documents;
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(iv) subject to the lien of the Indenture, the Company has good
title to all properties possessed by it, free and clear of all liens and
encumbrances, except as permitted by the Indenture, tax liens and other
matters affecting some of the properties which in the opinion of such
counsel do not affect the Company's title to or right to use said
properties in conduct of its business; and all of said properties are
covered by and subject to the Indenture, except as set forth in the
Registration Statement and the Prospectus and as provided in or permitted
by the Indenture; and the statements made with respect to the lien of the
Indenture in the Registration Statement and the Prospectus are accurate and
fairly present the information required to be presented with respect
thereto;
(v) the Public Utilities Commission of the State of California and
the Commission have entered such orders as are required to permit the issue
and sale of the Bonds on the terms set forth in the Registration Statement,
the Prospectus and this agreement; and (subject to compliance with
applicable blue sky laws of states and other jurisdictions) no other
approval or authorization of any public body is necessary in connection
with the issue and sale of the Bonds to the Underwriters;
(vi) the Indenture has been duly authorized, executed and delivered
by the Company; the Indenture is a valid and binding instrument of the
Company enforceable in accordance with its terms and, although subject to
possible nonenforceability as to certain specific remedies set forth
therein, is adequately enforceable, except as such opinion as to validity
or enforceability may be limited by bankruptcy, insolvency, reorganization
or other laws of general application relating to the enforcement of
creditors' rights or by the application of general equitable principles
when equitable remedies are sought, and with respect to the Company's
interest in atomic energy facilities, such opinion as to enforceability
may be limited by the provisions of the Atomic Energy Act of 1954, as
amended, and the regulations thereunder; the Indenture has been duly
recorded in California where required; and all requisite steps have been
taken to perfect the security interest of the Indenture in such of the
personal property of the Company specified in the Indenture and the
Indenture constitutes a lien of record on the property of the Company of
the nature and to the extent set forth in the Registration Statement and
the Prospectus;
(vii) the Bonds have been duly authorized, executed and
authenticated, issued, sold and delivered and are valid and binding
instruments of the Company enforceable in accordance with their terms,
except to the extent limited under paragraph (vi) above;
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(viii) the Registration Statement and the Prospectus (other than the
financial statements included therein, as to which no option need be
rendered), and any supplement or amendment thereto, as of their
respective effective or issue dates and as of the Closing Date, complied
and comply as to form in all material respects with the provisions of
the Act and the Indenture Act and the respective rules, regulations and
instructions of the Commission thereunder and, as of such respective
dates, such counsel does not know of any untrue statement of a material
fact in the Registration Statement, the Prospectus, or such supplement
or amendment, or of the omission to state in the Registration Statement
or the Prospectus, or such supplement or amendment, a material fact
required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which made, not misleading;
(ix) this agreement has been duly authorized, executed and
delivered on behalf of the Company and assuming that it has been duly
authorized, executed and delivered by or on behalf of the Underwriters,
is a valid and binding agreement of the Company enforceable in
accordance with its terms except that rights to indemnity hereunder may
be limited under applicable laws;
(x) the performance by the Company of this agreement will not
contravene any provision of applicable law (subject to compliance with
applicable blue sky laws of states and other jurisdictions) or the
Articles of Incorporation or by-laws of the Company or to the knowledge
of such counsel, any agreement or other instrument binding upon the
Company;
(xi) subject to compliance with applicable blue sky laws of states
and other jurisdictions and Section 5(b) of the Act, the Bonds may be
marketed in interstate commerce on the terms set forth in the
Registration Statement and Prospectus and any supplement or amendment
thereto; and
(xii) the Indenture has been duly qualified under the Indenture Act.
In rendering such opinion, the General Counsel may rely upon the opinion of
outside counsel to the Company as to all matters pertaining to title to
property and the lien of the Indenture.
(f) The Company shall have furnished to the Representatives a
certificate dated as of the Closing Date of an officer of the Company
satisfactory to the Representatives that as of the Closing Date he does not
know of any proceeding instituted or threatened of a character required to
be disclosed in the Registration Statement or in the Prospectus which is
not disclosed therein; that he does not know of any contracts which are
required to be referred to in
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the Registration Statement or in the Prospectus or filed as exhibits to the
Registration Statement which are not referred to therein or so filed
exhibits; that to the best of his knowledge since the respective dates as
of which information is given in the Registration Statement or in the
Prospectus except to the extent disclosed therein; that neither the Company
nor any of its subsidiaries has incurred, except in the ordinary course of
business, any liabilities or obligations, contingent or otherwise, which
are material in the aggregate to the Company and its subsidiaries taken as
a whole, and there has been no material adverse change in the condition or
results or operations, financial or otherwise, of the Company and its
subsidiaries taken as a whole; that there has been no document required to
be filed under the Exchange Act and the rules and regulations thereunder
and which upon such filing would be deemed to be incorporated by reference
in the Registration Statement or in the Prospectus, which has not been so
filed; and that no stop order suspending the effectiveness of the
Registration Statement or other order preventing or suspending the use of
the Prospectus has been issued and no proceedings for such purposes are
pending before or to the knowledge of the Company threatened by the
Company.
(g) The Representatives shall have received from Deloitte & Touche a
letter, dated and delivered to the Representatives on the Closing Date,
confirming that they are independent accountants with respect to the
Company within the meaning of the Act and the applicable published rules
and regulations of the Commission thereunder and stating in effect that;
(i) in their opinion, the consolidated financial statements and
schedules examined by them and incorporated by reference in the
Registration Statement and the Prospectus comply in form in all
material respects with the applicable accounting requirements of the
Act and the Exchange Act and the related published rules and
regulations of the Commission thereunder;
(ii) on the basis of a reading of the latest available interim
financial statements of the Company, inquiries of officials of the
Company who have responsibility for financial and accounting matters
and other specified procedures, nothing came to their attention that
caused them to believe that;
(A) if unaudited condensed consolidated financial
statements are included or incorporated by reference in the
Registration Statement and the Prospectus the unaudited condensed
consolidated financial statements included or incorporated by
reference in the Registration Statement and the Prospectus do not
comply in form in all material respects with the applicable
accounting requirements of the Act and the Exchange Act and the
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related published rules and regulations of the Commission
thereunder or are not in conformity with generally accepted
accounting principles applied on a basis substantially consistent
with that of the audited consolidated financial statements
included or incorporated by reference in the Registration
Statement and the Prospectus;
(B) if the latest available unaudited consolidated
financial statements are not included or incorporated by
reference in the Registration Statement and the Prospectus,
there were any decreases during the period of such latest
available unaudited consolidated financial statements as compared
with the corresponding period in the preceding year in operating
revenues, net income, or in the total or per share amounts of
earnings applicable to common shares or there was any decrease in
common stock equity during such period, other than as occasioned
by the declaration of dividends as compared with the
corresponding amount shown in the most recent balance sheet
included or incorporated by reference in the Registration
Statement and the Prospectus;
(C) at a specified date not more than five days prior to
the Closing Date there was any decrease in common stock equity,
other than as occasioned by the declaration of dividends, as
compared with the amount shown in the most recent balance sheet
included or incorporated by reference in the Registration
Statement and the Prospectus or there were any significant events
from the date of the latest available unaudited consolidated
financial statements through a specified date not more than five
days prior to the Closing Date that would decrease operating
revenues, net income, earnings available for common stock or
earnings per common share in the month in which such specified
date occurs and the prior month not included in the latest
available unaudited consolidated financial statements, as
compared to the same period in the prior year; and
(iii) they have compared specified dollar amounts (or percentages
derived from such dollar amounts) and other financial information
included or incorporated by reference in the Registration Statement and
the Prospectus (in each case to the extent that such dollar amounts,
percentages and other financial information are derived from the general
accounting records of the Company and its subsidiaries subject to the
internal controls of the Company's accounting system or are derived
directly from such records by analysis or computation) with the results
obtained from inquiries, a reading of such
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general accounting records and other procedures specified in such
letter and have found such dollar amounts, percentages and other
financial information to be in agreement with such results, except as
otherwise specified in such letter.
(h) The Company shall have furnished to the Representatives such
other affidavits and certificates as to the accuracy and completeness of
any statement in the Registration Statement or in the Prospectus as of the
Closing Date as the Representatives may reasonably request, upon timely
notice.
All opinions, letters and certificates above mentioned shall be deemed
to be in compliance with this paragraph 9 only if they shall be in form and
substance satisfactory to Counsel for the Underwriters; and there shall be
delivered to the Representatives sufficient copies of the above mentioned legal
opinions and letters for each of the Underwriters.
In case any of the conditions specified above in this paragraph 9
shall not have been fulfilled, this agreement may be terminated by the
Representatives upon notice thereof to the Company. Any such termination shall
be without liability of any party to any other party except as provided in
subparagraphs (b), (k) and (l) of paragraph 8 hereof.
10. Conditions of Company's Obligations. The obligations of the Company to
-----------------------------------
sell and deliver the Bonds are subject to the following Conditions:
(a) At the Closing Date, the order of the Public Utilities Commission
of the State of California and all requisite orders of the Commission permitting
the issue and sale of the Bonds shall have been entered in, none of such orders
shall contain any conditions deemed by the Company to be unduly burdensome of it
(it being understood that any such order in effect as of the date hereof
contains no such burdensome conditions), and no stop order suspending the
effectiveness of the Registration Statement or other orders preventing or
suspending the use of the Prospectus shall be in effect and no proceedings
therefor shall be pending before or threatened by the Commission; and
(b) Concurrently with the delivery of the Bonds to the
Representatives at the Closing Date, the Company shall receive the full purchase
price of the Bonds so delivered.
In case either of the conditions specified above in this paragraph 10
shall not have been fulfilled, this agreement may be terminated by the Company,
upon notice thereof to the Representatives. Any such termination shall be
without liability of any party to any other party except as provided in
subparagraphs (b), (k), and (l) of paragraph 8 hereof.
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11. Indemnification and Contribution.
-------------------------------
(a) The Company shall indemnify and hold harmless each Underwriter
and each person, if any, who controls any Underwriter (other than a
director or officer of the Company) within the meaning of the Act or the
Exchange Act against any losses, claims, damages or liabilities, joint or
several, to which such Underwriter or any such controlling person may
become subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are
based upon (i) the failure of the Company to obtain any requisite order,
approval or authorization of any public body in connection with the issue
and sale of the Bonds to the Underwriters, or (ii) any untrue statement or
alleged untrue statement of any material fact included in the Registration
Statement, or in any Preliminary Prospectus or in the Prospectus, or in any
amendment 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 not
misleading; and will reimburse each Underwriter and each such controlling
person for any legal or other expenses reasonably incurred by such
Underwriter or such controlling person in connection with investigating or
defending any such loss, claim, damage, liability or action; provided,
however, that the Company will not be liable in any such case to the extent
that any such loss, claim, damage, liability or action (x) arises out of or
in based upon on untrue statement or alleged untrue statement or omission
or alleged omission made in the Registration Statement, or in any
Preliminary Prospectus or in the Prospectus, or in any amendment or
supplement thereto, in reliance upon and in conformity with written
information furnished to the Company by or on behalf of any Underwriter,
directly or through the Representatives specifically for use in the
preparation thereof, or (y) is caused by any statement in or omission from
the Form T-1 statement signed by the Trustee under the Indenture, or (z)
arises out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission made in any Preliminary
Prospectus but eliminated or remedied in the Prospectus, and the Bonds in
respect of which such loss, claim, damage, liability or action is asserted
shall have been delivered after sale without being accompanied or preceded
by a Prospectus (excluding documents incorporated by reference) at a time
when such delivery of such Prospectus is required by the Act. This
indemnity agreement will be in addition to any liability which the Company
may otherwise have.
(b) Each Underwriter will indemnify and hold harmless the Company,
each director and officer of the Company and each person, if any, who
controls the Company within the meaning of the Act or the Exchange Act
against any losses, claims, damages or liabilities to which the Company or
any such person may become subject, under the Act or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are
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based upon any untrue statement or alleged untrue statement of any material
fact contained in the Registration Statement, or in any Preliminary
Prospectus or in the Prospectus, or in any amendment or supplement thereto,
or arise out of or are based upon the omission or the alleged omission to
state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, in each case to the extent, but
only to the extent, that such untrue statement or alleged untrue statement
or omission or alleged omission was made in the Registration Statement or
in any Preliminary Prospectus or in the Prospectus, or in any amendment or
supplement thereto, in reliance upon and in conformity with written
information furnished to the Company by or on behalf of such Underwriter,
directly or through the Representatives, specifically for use in
preparation thereof, and will reimburse the Company and each person so
indemnified for any legal or other expenses reasonably incurred by the
Company or such person in connection with investigating or defending any
such loss, claim, damage, liability or action. This indemnity agreement
will be in addition to any liability which such Underwriter may otherwise
have.
(c) Promptly after receipt by an indemnified party under subparagraph
(a) or (b) or this paragraph II 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 such subparagraph, notify the
indemnifying party in writing of the commencement thereof, but the failure
so to notify the indemnifying party will not relieve it from any liability
which it may have to any indemnified party otherwise than under such
subparagraph. In case any such action shall be brought against any
indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party will be entitled to
participate in, and, to the extent that it may wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof with
counsel satisfactory to such indemnified party, and after notice from the
indemnifying party to such indemnified party of its election to assume the
defense thereof, the indemnifying party will not be liable to such
indemnified party under such subparagraph for any legal or other expenses
subsequently incurred by such indemnified party in connection with the
defense thereof other than reasonable costs of investigation. The
indemnified party shall have the right to employ its counsel in any such
action, but the fees and expenses of such counsel shall be at the expense
of such indemnified party unless (i) the employment of counsel by such
indemnified party has been authorized by the indemnifying party, (ii) the
indemnified party shall have reasonably concluded that there may be a
conflict of interest between the indemnifying party and the indemnified
party in the conduct of the defense of such action (in which case the
indemnifying party shall not have the right to direct the defense of such
action on behalf of the indemnified party) or (iii) the indemnifying party
shall not in fact have employed counsel to assume the defense of such
action.
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Except when the presence of conflicts of interests otherwise require, it
is understood that the indemnifying party shall not be liable for the fees
and expenses of more than one separate firm for all such indemnified
parties. An indemnifying party shall not be liable for any settlement of
any action or claim affected without its consent.
(d) If recovery is not available under the foregoing indemnification
provisions of this paragraph 11, for any reason other than as specified
therein, the parties entitled to indemnification by the terms thereof shall
be entitled to contribution for liabilities and expenses, except to the
extent that contribution is not permitted under Section II(f) of the Act.
In determinating the amount of contribution to which the respective parties
are entitled, there shall be considered the relative benefits received by
each party from the offering of the Bonds (taking into account the portion
of the proceeds of the offering realized by each), the parties' relative
knowledge and access to information concerning the matter with respect to
which the claim was asserted, the opportunity to correct and prevent any
statement or omission, and any other equitable considerations appropriate
under the circumstances. The Company and the Underwriters agree that it
would not be equitable if the amount of such contribution were determined
by pro rata or per capita allocation (even if the Underwriters were treated
as one entity for such purpose). No Underwriter or person controlling such
Underwriter shall be obligated to make contribution hereunder which in the
aggregate exceeds the total public offering price of the Bonds purchased by
such Underwriter under this agreement, less the aggregate amount of any
damages which such Underwriter and its controlling persons have otherwise
been required to pay in respect of the same claim or any substantially
similar claim. The Underwriters' obligations to contribute are several in
proportion to their respective underwriting obligations and not joint.
12. Survival of Warranties, etc. The indemnity and contribution
----------------------------
agreements contained in paragraph II hereof and the representations, warranties
and other statements of the Company in this agreement, or made pursuant to this
agreement, shall remain in full force and effect regardless of (i) any
termination of this agreement, (ii) any investigation made by or on behalf of
any Underwriter or controlling person or by or on behalf of the Company, or any
of the officers, directors or controlling persons and (iii) acceptance of and
payment for the Bonds hereunder.
13. Effective Date of this Agreement, Termination. This agreement shall
---------------------------------------------
become effective upon release by the Representatives of the Bonds for sale to
the public. For purposes of this paragraph 13 the Bonds shall be deemed to have
been released for sale to the public upon release by the Representatives of a
newspaper advertisement relating to the Bonds or upon release by the
Representatives of telegrams, or other equivalent standard form of
telecommunication, offering the Bonds for
-18-
sale to securities dealers, whichever shall first occur. Until such time this
agreement may be terminated by the Company by notice to the Representatives, or
by the Representatives by notice to the Company.
In addition to the foregoing provisions and to the applicable
provisions contained in paragraphs 7, 9, and 10 hereof, this agreement may also
be terminated at any time prior to the Closing Date by the Representatives if
at or prior to the Closing Date (i) trading on the New York or American Stock
Exchanges shall have been suspended by the Commission or other governmental
authority or by either such Exchange (other than in connection with program
trading), or a banking moratorium shall have been declared by New York or United
States governmental authorities; (ii) there shall have been an outbreak or
escalation of war or other major hostilities involving the United States which
in the judgment of the Representatives makes it impracticable or inadvisable
to offer or sell the Bonds; (iii) the Company shall have sustained a material
and substantial loss by fire, flood, accident, earthquake or other calamity,
whether or not said loss shall have been insured; (iv) any change (or announced
intention to consider any change) lowering the rating for the long term debt
securities of the Company by either Xxxxx'x Investment Services, Inc., or
Standard & Poor's Corp., or (v) there shall have occurred any other condition of
termination set forth in Schedule II hereto. If the Representatives elect to
terminate this agreement, as provided in this paragraph 13, the Company and each
other Underwriter shall be notified promptly by telephone, telegraph or other
equivalent standard form telecommunication confirmed in writing.
If this agreement shall be terminated for any reason permitted under
this agreement, or if the sale of the Bonds to the Underwriters as herein
contemplated shall not be carried out because the Company is not able to comply
with the terms hereof, the Company shall not be under any obligation under this
agreement and shall not be liable to any Underwriter or to any member of any
selling group for the loss of anticipated profits from the transactions
contemplated in this agreement (except that the Company shall remain liable to
the extent provided in subparagraphs (b), (k) and (l) of paragraph 8 hereof)
and the Underwriters, other than a defaulting Underwriter, if any, shall be
under no liability to the Company nor be under any liability to one another
under this agreement.
14. Notices. All statements, requests, notices and agreements hereunder
-------
shall be in writing, or by telegram or other equivalent standard form of
telecommunication, and if to the Underwriters or the Representatives, shall be
sufficient in all respects if delivered or sent to the Representatives at the
address specified in Schedule II hereto, and, if to the Company, attention
Corporate Secretary, at 0000 Xxxxxxx Xxxx Xxxxx, Xxx Xxxxx, Xxxxxxxxxx 00000
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15. Parties in Interest. This agreement shall inure solely to the benefit
-------------------
of the Company and the Underwriters and, to the extent provided in paragraph 11
hereof, to any officer or director of the Company or to any person who controls
the Company or any Underwriter, and their respective successors. No other
person, partnership, association or corporation shall acquire or have any right
under or by virtue of this agreement. The term "successors" shall not include
any purchaser of any of the Bonds from any Underwriter merely because of such
purchase.
16. Applicable Law. This agreement shall be governed by and construed in
--------------
accordance with the laws of the State of California.
17. Counterpart Originals. This Agreement may be executed in two or more
---------------------
counterparts (and any party hereto may execute any counterpart), each of which,
when executed and delivered shall be deemed an original, and all of the
counterparts when taken together shall be deemed to be one and the same
instrument.
Please confirm that the foregoing correctly sets forth the agreement
between us by signing in the space provided below for that purpose. Whereupon
this letter shall constitute a binding agreement between the Company and the
Underwriters in accordance with its terms.
Very truly yours,
SAN DIEGO GAS & ELECTRIC COMPANY
By
------------------------------
Name:___________________________
Its:
-------------------------
Confirmed as of the date of this
agreement specified in Schedule II
hereto:
__________________________________
__________________________________
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SCHEDULE I
Principal
Underwriter Amount
----------- ---------
------------------------ $ ____________________
------------------------
------------------------
Total $ ____________________
SCHEDULE II
Description of Bonds and Other Terms
Designation: First Mortgage Bonds, Series __ due _________
Principal Amount: $
Maturity Date:
Interest Rate:
Interest Payment Dates:
Purchase Price:
Other Terms:
Settlement:
Sinking Fund:
Bid Date:
Date and Time
of Closing:
Names of
Representatives:
(with address
for notices)
Date of
Underwriting Agreement:
Registration Statement:
Redemption Provisions:
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