EXHIBIT 1.1
Southern California Gas Company
First Mortgage Bonds
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Underwriting Agreement
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____________, 200_
To the Representatives of the
several Underwriters named in
the respective Pricing Agreements
hereinafter described
Ladies and Gentlemen:
From time to time, Southern California Gas Company, a California
corporation (the "Company"), proposes to enter into one or more Pricing
Agreements (each a "Pricing Agreement") in the form of Annex I hereto, with such
additions and deletions as the parties thereto may determine, and, subject to
the terms and conditions stated herein and therein, to issue and sell to the
firms named in Schedule I to the applicable Pricing Agreement (such firms
constituting the "Underwriters" with respect to such Pricing Agreement and the
securities specified therein) certain of its first mortgage bonds (the "First
Mortgage Bonds") specified in Schedule II to such Pricing Agreement (with
respect to such Pricing Agreement, the "Designated Bonds").
The terms and rights of any particular issuance of Designated Bonds shall
be as specified in the Pricing Agreement relating thereto and in or pursuant to
the indenture (the "Indenture") identified in such Pricing Agreement.
1. Particular sales of Designated Bonds may be made from time to time to
the Underwriters of such First Mortgage Bonds, for whom the firms designated as
representatives of the Underwriters of such First Mortgage Bonds in the Pricing
Agreement relating thereto will act as representatives (the "Representatives").
The term "Representatives" also refers to a single firm acting as sole
representative of the Underwriters and to an Underwriter or Underwriters who act
without any firm being designated as its or their representatives. This
Underwriting Agreement shall not be construed as an obligation of the Company to
sell any of the First Mortgage Bonds or as an obligation of any of the
Underwriters to purchase any of the First Mortgage Bonds. The obligation of the
Company to issue and sell any of the First Mortgage Bonds and the obligation of
any of the Underwriters to purchase any of the First Mortgage Bonds shall be
evidenced by the Pricing Agreement with respect to the Designated Bonds
specified therein. Each Pricing Agreement shall specify the aggregate principal
amount of such Designated Bonds, the initial public offering price of such
Designated Bonds, the purchase price to the Underwriters of such Designated
Bonds, the names of the Underwriters of such Designated Bonds, the names of the
Representatives of such Underwriters and the principal
amount of such Designated Bonds to be purchased by each Underwriter and shall
set forth the date, time and manner of delivery of such Designated Bonds and
payment therefor. The Pricing Agreement shall also specify (to the extent not
set forth in the Indenture and the registration statement and prospectus with
respect thereto) the terms of such Designated Bonds. A Pricing Agreement shall
be in the form of an executed writing (which may be in counterparts), and may be
evidenced by an exchange of telegraphic communications or any other rapid
transmission device designed to produce a written record of communications
transmitted. The obligations of the Underwriters under this Agreement and each
Pricing Agreement shall be several and not joint.
2. The Company represents and warrants to, and agrees with, each of the
Underwriters that:
(a) Registration statements on Form S-3 (Files No. 33-59404 and 333-
70654) (including any amendments thereto, the "Initial Registration Statements")
in respect of the First Mortgage Bonds have been filed with the Securities and
Exchange Commission (the "Commission"); the Initial Registration Statements and
any post-effective amendment thereto subsequent to the date hereof, each in the
form heretofore delivered or to be delivered to the Representatives and,
excluding exhibits to the Initial Registration Statements, but including all
documents incorporated by reference in the prospectus with respect to such
Initial Registration Statements filed pursuant to Rule 429 under the Securities
Act of 1933, as amended (the "Act"), to the Representatives for each of the
other Underwriters, have been declared effective by the Commission in such form;
other than a registration statement, if any, increasing the size of the offering
(a "Rule 462(b) Registration Statement"), filed pursuant to Rule 462(b) under
the Act, which, if so filed, became effective upon filing, no other document
with respect to the Initial Registration Statements or any document incorporated
by reference therein has heretofore been filed or transmitted for filing with
the Commission (other than documents filed after the filing date of the Initial
Registration Statements under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), and prospectuses filed pursuant to Rules 424(b) and 429 of
the rules and regulations of the Commission under the Act, each in the form
heretofore delivered to the Representatives); and no stop order suspending the
effectiveness of the Initial Registration Statements, any post-effective
amendment thereto or the Rule 462(b) Registration Statement, if any, has been
issued and no proceeding for that purpose has been initiated or threatened by
the Commission (any preliminary prospectus with respect to the Initial
Registration Statements pursuant to Rule 429 under the Act or filed with the
Commission pursuant to Rule 424(a) under the Act, is hereinafter called a
"Preliminary Prospectus"; the various parts of the Initial Registration
Statements, any post-effective amendment thereto and the Rule 462(b)
Registration Statement, if any, including all exhibits thereto and the documents
incorporated by reference in the prospectus with respect to the Initial
Registration Statements pursuant to Rule 429 under the Act at the time such part
of the Initial Registration Statements became effective but excluding any Form
T-1, each as amended at the time such part of the Initial Registration
Statements became effective or such part of the Rule 462(b) Registration
Statement, if any, became or hereafter becomes effective, are hereinafter
collectively called the "Registration Statement"; the prospectus relating to the
First Mortgage Bonds, in the form in which it has most recently been filed, or
transmitted for filing, with the Commission pursuant to Rule 429 under the Act
on or prior to the date of this Agreement, being hereinafter called the
"Prospectus"; any reference herein to any Preliminary Prospectus or the
Prospectus shall be deemed to refer to and include the documents incorporated by
reference therein pursuant to the applicable form under the Act, as of the date
of such Preliminary Prospectus or Prospectus, as the case may be; any reference
to any
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amendment or supplement to any Preliminary Prospectus or the Prospectus shall be
deemed to refer to and include any documents filed after the date of such
Preliminary Prospectus or Prospectus, as the case may be, under the Exchange
Act, and incorporated by reference in such Preliminary Prospectus or Prospectus,
as the case may be, as of the date of filing of such document; any reference to
any amendment to the Initial Registration Statements shall be deemed to refer to
and include any annual report of the Company filed pursuant to Sections 13(a) or
15(d) of the Exchange Act after the effective date of the Initial Registration
Statements that is incorporated by reference in the Registration Statement; and
any reference to the Prospectus shall be deemed to refer to the Prospectus as
amended or supplemented in relation to the applicable Designated Bonds in the
form in which it is filed with the Commission pursuant to Rule 424(b) under the
Act in accordance with Section 5(a) hereof, including any documents incorporated
by reference therein as of the date of such filing;
(b) The documents incorporated by reference in the Prospectus, when
they became effective or were filed with the Commission, as the case may be,
conformed in all material respects to the requirements of the Act or the
Exchange Act, as applicable, and the rules and regulations of the Commission
thereunder, and none of such documents contained 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 under which they were
made, not misleading; and any further documents so filed and incorporated by
reference in the Prospectus or any further amendment or supplement thereto, when
such documents become effective or are filed with the Commission, as the case
may be, will conform in all material respects to the requirements of the Act or
the Exchange Act, as applicable, and the rules and regulations of the Commission
thereunder and will not contain an untrue statement of a material fact or omit
to state a material fact necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading; provided,
however, that this representation and warranty shall not apply to any statements
or omissions made in reliance upon and in conformity with information furnished
in writing to the Company by an Underwriter of Designated Bonds through the
Representatives expressly for use in the Prospectus as amended or supplemented
relating to such First Mortgage Bonds;
(c) The Registration Statement and the Prospectus conform, and any
further amendments or supplements to the Registration Statement or the
Prospectus will conform, in all material respects to the requirements of the Act
and the rules and regulations of the Commission thereunder and the Registration
Statement conforms, and any further amendments or supplements to the
Registration Statement will conform, in all material respects to the
requirements of the Trust Indenture Act of 1939, as amended (the "Trust
Indenture Act"), and the rules and regulations of the Commission thereunder and
do not and will not, as of the applicable effective date as to the Registration
Statement and any amendment thereto and as of the applicable filing date and the
applicable time of delivery as to the Prospectus and any amendment or supplement
thereto, contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading; provided, however, that this representation and warranty shall not
apply to any statements or omissions made in reliance upon and in conformity
with information furnished in writing to the Company by an Underwriter of
Designated Bonds through the Representatives expressly for use in the Prospectus
as amended or supplemented relating to such First Mortgage Bonds;
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(d) The Company has not sustained since the date of the latest
audited financial statements included or incorporated by reference in the
Prospectus any material loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by insurance, or from
any labor dispute or court or governmental action, order or decree, otherwise
than as set forth or contemplated in the Prospectus; and, since the date as of
which information is given in the Registration Statement and the Prospectus,
there has not been any material change in the capital stock or long-term debt of
the Company or any material adverse change, or any development involving a
prospective material adverse change, in or affecting the general affairs,
management, financial position, shareholders' equity or results of operations of
the Company, otherwise than as set forth or contemplated in the Prospectus;
(e) The Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the State of California, with
power and authority (corporate and other) to own its properties and conduct its
business as described in the Prospectus, and has been duly qualified as a
foreign corporation 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 the
failure to be so qualified would not subject it to material liability or
disability;
(f) The Company has an authorized capitalization as set forth in the
Prospectus, and all of the issued shares of capital stock of the Company have
been duly and validly authorized and issued and are fully paid and non-
assessable;
(g) The First Mortgage Bonds have been duly authorized, and, when
Designated Bonds are issued and delivered pursuant to this Agreement and the
Pricing Agreement with respect to such Designated Bonds, such Designated Bonds
will have been duly executed, authenticated, issued and delivered and will
constitute valid and legally binding obligations of the Company entitled to the
benefits provided by the Indenture; the Indenture has been duly authorized and
duly qualified under the Trust Indenture Act and, at the Time of Delivery for
such Designated Bonds (as defined in Section 4 hereof), the Indenture will
constitute a valid and legally binding instrument, enforceable in accordance
with its terms, subject, as to enforcement, to bankruptcy, insolvency,
receivership, liquidation, fraudulent conveyance, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability relating to
or affecting creditors' rights and to general equity principles; and the
Indenture conforms, and the Designated Bonds will conform, to the descriptions
thereof contained in the Prospectus as amended or supplemented with respect to
such Designated Bonds;
(h) The issue and sale of the First Mortgage Bonds and the compliance
by the Company with all of the provisions of the First Mortgage Bonds, the
Indenture, this Agreement and any Pricing Agreement, and the consummation of the
transactions herein and therein contemplated will not conflict with or result in
a breach or violation of any of the terms or provisions of, or constitute a
default under, any material contract, indenture, mortgage, deed of trust, loan
agreement, note, lease or other agreement or instrument to which the Company is
a party or by which the Company is bound or to which any of the material
properties or assets of the Company is subject, nor will such action result in
any violation of the provisions of the Articles of Incorporation or By-laws of
the Company or any statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Company or
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any of its material properties; and no consent, approval, authorization, order,
registration or qualification of or with any such court or governmental agency
or body is required for the issue and sale of the First Mortgage Bonds or the
consummation by the Company of the transactions contemplated by this Agreement
or any Pricing Agreement or the Indenture, except such as have been obtained
under the Act, the Trust Indenture Act and from the Public Utilities
Commission of the State of California and such consents, approvals,
authorizations, registrations or qualifications as may be required under state
securities or Blue Sky laws in connection with the purchase and distribution of
the First Mortgage Bonds by the Underwriters;
(i) The statements set forth in the Prospectus as amended or
supplemented under the captions "Description of First Mortgage Bonds," insofar
as they purport to constitute a summary of the terms of the First Mortgage Bonds
or the Indenture, and under the caption "Plan of Distribution" insofar as they
purport to describe the provisions of the laws and documents referred to
therein, are accurate, complete and fair in all material respects;
(j) The Company is not (i) in violation of its Articles of
Incorporation or By-laws or (ii) in default in the performance or observance of
any material obligation, agreement, covenant or condition contained in any
contract, indenture, mortgage, deed of trust, loan agreement, note, lease or
other agreement or instrument to which it is a party or by which it or any of
its properties may be bound, except in the case of clause (ii) for such defaults
which, individually or in the aggregate, would not reasonably be expected to
have a material adverse effect on the financial position, shareholders' equity
or results of operations of the Company;
(k) Other than as set forth in the Prospectus, there are no legal or
governmental proceedings pending to which the Company is a party or of which any
property of the Company is the subject which, if determined adversely to the
Company, would individually or in the aggregate have a material adverse effect
on the current or future financial position, shareholders' equity or results of
operations of the Company; and, to the best of the Company's knowledge, no such
proceedings are threatened or contemplated by governmental authorities or
threatened by others;
(l) The Company is not and after giving effect to the offering and
sale of the First Mortgage Bonds, will not be, an "investment company," as such
term is defined in the Investment Company Act of 1940, as amended (the
"Investment Company Act");
(m) Deloitte & Touche LLP, who have certified certain financial
statements of the Company, are independent public accountants as required by the
Act and the rules and regulations of the Commission thereunder;
(n) The financial statements of the Company included or incorporated
by reference in the Registration Statement and Prospectus present fairly in all
material respects the financial position of the Company as of the dates
indicated and the results of its operations for the periods specified; and,
except as stated therein, such financial statements have been prepared in
conformity with generally accepted accounting principles in the United States
applied on a consistent basis;
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(o) The Company has received an order from the Commission exempting
the Company from all of the provisions of the Public Utility Holding Company Act
of 1935, as amended (the "1935 Act"), except for Section 9(a)(2) thereof;
(p) The Company possesses such certificates, authorities or permits
issued by the appropriate state, federal, local or foreign regulatory agencies
or bodies necessary to conduct the business now operated by it, except where the
failure to possess such certificates, authorities or permits, individually or in
the aggregate, would not have a material adverse effect on the current or future
financial position, shareholders' equity or results of operations of the
Company; and the Company has not received any notice of proceedings relating to
the revocation or modification of any such certificate, authority or permit
which, individually or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, would have a material adverse affect on the current
or future financial position, shareholders' equity or results of operations of
the Company;
(q) The Company is in compliance with, and conducts its business in
conformity with, all applicable state, federal, local and foreign laws and
regulations relating to the operation and ownership of a public utility,
including, without limitation, those relating to the distribution and
transmission of natural gas, except to the extent that any failure so to comply
or conform would not individually or in the aggregate have a material adverse
effect on the current or future financial position, shareholders' equity or
results of operations of the Company;
(r) The Public Utilities Commission of the State of California has
duly authorized the issuance and sale of the Designated Bonds by the Company on
the terms set forth in the Prospectus and in this Agreement, such authorizations
are in full force and effect and no authorization of any other governmental
agency having regulatory jurisdiction over the Company is required for such
issuance and sale except such as may be required by the securities or blue sky
laws of any jurisdiction;
(s) The Company holds all franchises, certificates of public
convenience and necessity, permits, licenses and easements necessary to own,
operate and maintain its properties as described in the Prospectus subject only
to such defects, irregularities, restrictions, conditions and other matters as
are described in the Prospectus or which do not materially affect the right of
the Company to own, operate and maintain its properties and to conduct its
business as described therein;
(t) The Company has good and valid title to all the principal plants
and other important units of its property and to all other real estate and fixed
property (including plants, machinery and equipment) specifically described in
the Indenture as subject to the lien thereof (except property theretofore
retired or released from such lien in accordance with the terms of the
Indenture) subject only to Permissible Encumbrances (as defined in the
Indenture) and other liens and charges permitted by the Indenture and such
liens, charges, encumbrances, defects, qualifications, exceptions and other
matters affecting title, possession or use as are set forth or referred to in
the Prospectus or which do not materially affect the title of the Company to
such property or the security for the Designated Bonds;
(u) The indenture originally dated as of October 1, 1940 (the "Base
Indenture") between the Company and U.S. Bank Trust National Association, as
successor trustee as supplemented and amended by indentures supplemental
thereto and amendatory thereof (each a "Supplemental Indenture" and the Base
Indenture together with all Supplemental Indentures is referred to herein and
in the Pricing Agreement as the "Indenture") has been duly recorded in all
offices of county recorders or clerks of all counties in the State of California
in which any real property subject to the lien of the Indenture is located and
appropriate financing statements in respect of personal property and fixtures
have been filed in the Office of the Secretary of State of the State of
California and no other filing or recordation is necessary for the perfection
and preservation of the lien created thereby except for recordations required in
respect of after-acquired real property; and
(v) The Indenture constitutes, as security for the Designated Bonds,
a valid and subsisting lien to the extent that it purports to be such on all the
present properties of the Company (including plants, machinery, equipment, real
estate and fixed property described above), rights and franchises of the Company
(other than those properties excepted or released from the lien of the Indenture
by its terms) subject only to Permissible Encumbrances (as defined in the
Indenture) and other liens and charges permitted by the Indenture and such
liens, charges and encumbrances, defects, qualifications, exceptions and other
matters as are set forth or referred to in the Prospectus, or which do not
materially affect the security for the Designated Bonds, and upon acquisition
thereafter by the Company similar properties the Indenture will, subject to
liens existing thereon at the time of acquisition, create such lien thereon.
3. Upon the execution of the Pricing Agreement applicable to any
Designated Bonds and authorization by the Representatives of the release of such
First Mortgage Bonds, the several Underwriters propose to offer such First
Mortgage Bonds for sale upon the terms and conditions set forth in the
Prospectus as amended or supplemented.
4. Designated Bonds to be purchased by each Underwriter pursuant to the
Pricing Agreement relating thereto, in the form specified in such Pricing
Agreement, and in such authorized denominations and registered in such names as
the Representatives may request upon at least forty-eight hours prior notice to
the Company, shall be delivered by or on behalf of the Company to the
Representatives for the account of such Underwriter, against payment by such
Underwriter or on its behalf of the purchase price therefor by wire transfer of
Federal (same-day) funds to the account specified by the Company to the
Representatives at least forty-eight hours in advance or at such other place and
time and date as the Representatives and the Company may agree upon in writing,
such time and date being herein called the "Time of Delivery" for such First
Mortgage Bonds.
5. The Company agrees with each of the Underwriters of any Designated
Bonds:
(a) To prepare the Prospectus as amended or supplemented in relation
to the applicable Designated Bonds in a form approved by the Representatives and
to file such Prospectus pursuant to Rule 424(b) under the Act not later than the
Commission's close of business on the second business day following the
execution and delivery of the Pricing Agreement relating to the applicable
Designated Bonds or, if applicable, such earlier time as may be required by Rule
424(b); to make no further amendment or any supplement to the Registration
Statement or Prospectus amended or supplemented after the date of the Pricing
Agreement
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relating to such First Mortgage Bonds and prior to the Time of Delivery for such
First Mortgage Bonds which shall be disapproved by the Representatives for such
First Mortgage Bonds promptly after reasonable notice thereof; to advise the
Representatives promptly of any such amendment or supplement after such Time of
Delivery and furnish the Representatives with copies thereof; to file promptly
all reports and any definitive proxy or information statements required to be
filed by the Company with the Commission pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act for so long as the delivery of a prospectus is
required in connection with the offering or sale of such First Mortgage Bonds,
and during such same period to advise the Representatives, promptly after it
receives notice thereof, of the time when any amendment to the Registration
Statement has been filed or becomes effective or any supplement to the
Prospectus or any amended Prospectus has been filed with the Commission, of the
issuance by the Commission of any stop order or of any order preventing or
suspending the use of any prospectus relating to the First Mortgage Bonds, of
the suspension of the qualification of such First Mortgage Bonds for offering or
sale in any jurisdiction, of the initiation or threatening of any proceeding for
any such purpose, or of any request by the Commission for the amending or
supplementing of the Registration Statement or Prospectus or for additional
information; and, in the event of the issuance of any such stop order or of any
such order preventing or suspending the use of any prospectus relating to the
First Mortgage Bonds or suspending any such qualification, to promptly use
commercially reasonable efforts to obtain the withdrawal of such order;
(b) Promptly from time to time to take such action as the
Representatives may reasonably request to qualify such First Mortgage Bonds for
offering and sale under the securities laws of such jurisdictions as the
Representatives may request and to comply with such laws so as to permit the
continuance of sales and dealings therein in such jurisdictions for as long as
may be necessary to complete the distribution of such First Mortgage Bonds,
provided that in connection therewith 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;
(c) Prior to 10:00 a.m., New York City time, on the New York business
day next succeeding the date of any Pricing Agreement for such Designated Bonds,
or such later time or date as agreed to by the Company and the Representatives,
and from time to time, to furnish the Underwriters with copies of the Prospectus
in New York City as amended or supplemented in such quantities as the
Representatives may reasonably request, and, if the delivery of a prospectus is
required at any time in connection with the offering or sale of such Designated
Bonds and if at such time any event shall have occurred as a result of which the
Prospectus as then amended or supplemented would include an 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 under which they were
made when such Prospectus is delivered, not misleading, or, if for any other
reason it shall be necessary during such same period to amend or supplement the
Prospectus or to file under the Exchange Act any document incorporated by
reference in the Prospectus in order to comply with the Act, the Exchange Act or
the Trust Indenture Act, to notify the Representatives and upon their request to
file such document and to prepare and furnish without charge to each Underwriter
and to any dealer in securities as many copies as the Representatives may from
time to time reasonably request of an amended Prospectus or a supplement to the
Prospectus which will correct such statement or omission or effect such
compliance;
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(d) To make generally available to its securityholders as soon as
practicable, but in any event not later than eighteen months after the effective
date of the Registration Statement (as defined in Rule 158(c) under the Act), an
earnings statement of the Company (which need not be audited) complying with
Section 11(a) of the Act and the rules and regulations of the Commission
thereunder (including, at the option of the Company, Rule 158);
(e) During the period beginning from the date of the Pricing
Agreement for such Designated Bonds and continuing to and including the later of
(i) the termination of trading restrictions for such First Mortgage Bonds, as
notified to the Company by the Representatives and (ii) the Time of Delivery for
such Designated Bonds, not to offer, sell, contract to sell or otherwise dispose
of any debt securities of the Company which mature more than one year after such
Time of Delivery and which are substantially similar to such Designated Bonds,
without the prior written consent of the Representatives; and
(f) If the Company elects to rely upon Rule 462(b), the Company shall
file a Rule 462(b) Registration Statement with the Commission in compliance with
Rule 462(b) by 10:00 P.M., Washington, D.C. time, on the date of this Agreement,
and the Company shall at the time of filing either pay to the Commission the
filing fee for the Rule 462(b) Registration Statement or give irrevocable
instructions for the payment of such fee pursuant to Rule 111(b) under the Act.
6. The Company covenants and agrees with the several Underwriters that
the Company will pay or cause to be paid the following: (i) the fees,
disbursements and expenses of the Company's counsel and accountants in
connection with the registration of the First Mortgage Bonds under the Act and
all other expenses in connection with the preparation, printing and filing of
the Registration Statement, any Preliminary Prospectus and the Prospectus and
amendments and supplements thereto and the mailing and delivering of copies
thereof to the Underwriters and dealers; (ii) the cost of printing or producing
any Agreement among Underwriters, this Agreement, any Pricing Agreement, any
Indenture, any Blue Sky and Legal Investment Memoranda, closing documents
(including any compilations thereof) and any other documents in connection with
the offering, purchase, sale and delivery of the First Mortgage Bonds; (iii) all
expenses in connection with the qualification of the First Mortgage Bonds for
offering and sale under state securities laws as provided in Section 5(b)
hereof, including the reasonable fees and disbursements of counsel for the
Underwriters in connection with such qualification and in connection with the
Blue Sky and Legal Investment Surveys; (iv) any fees charged by securities
rating services for rating the First Mortgage Bonds; (v) any filing fees
incident to, and the reasonable fees and disbursements of counsel for the
Underwriters in connection with, any required review by the NASD Regulation,
Inc. of the terms of the sale of the First Mortgage Bonds; (vi) the cost of
preparing the First Mortgage Bonds; (vii) the fees and expenses of any Trustee
and any agent of any Trustee and the reasonable fees and disbursements of
counsel for any Trustee in connection with any Indenture and the First Mortgage
Bonds; (viii) any fees and expenses in connection with listing the First
Mortgage Bonds and the cost of registering the First Mortgage Bonds under
Section 12 of the Exchange Act; and (ix) all other costs and expenses incident
to the performance of its obligations hereunder which are not otherwise
specifically provided for in this Section. It is understood, however, that
except as provided in this Section, and Sections 8 and 11 hereof, the
Underwriters will pay all of their own costs and expenses, including the fees of
their counsel, transfer taxes on resale of any of the First
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Mortgage Bonds by them and any advertising expenses connected with any
offers they may make.
7. The obligations of the Underwriters of any Designated Bonds under the
Pricing Agreement relating to such Designated Bonds shall be subject, in the
discretion of the Representatives, to the condition that all representations and
warranties and other statements of the Company in or incorporated by reference
in the Pricing Agreement relating to such Designated Bonds are, at and as of the
Time of Delivery for such Designated Bonds, true and correct, the condition that
the Company shall have performed all of its obligations hereunder theretofore to
be performed, and the following additional conditions:
(a) The Prospectus as amended or supplemented in relation to the
applicable Designated Bonds shall have been filed with the Commission pursuant
to Rule 424(b) within the applicable time period prescribed for such filing by
the rules and regulations under the Act and in accordance with Section 5(a)
hereof; if the Company has elected to rely upon Rule 462(b), the Rule 462(b)
Registration Statement shall have become effective by 10:00 P.M., Washington,
D.C. time, on the date of the applicable Pricing Agreement; no stop order
suspending the effectiveness of the Registration Statement or any part thereof
shall have been issued and no proceeding for that purpose shall have been
initiated or threatened by the Commission; and all requests for additional
information on the part of the Commission shall have been complied with to the
Representatives' reasonable satisfaction;
(b) Counsel for the Underwriters shall have furnished to the
Representatives such written opinion, dated the Time of Delivery for such
Designated Bonds, with respect to the Registration Statement and the Prospectus
as amended or supplemented, as well as such other related matters as the
Representatives may reasonably request, and such counsel shall have received
such papers and information as they may reasonably request to enable them to
pass upon such matters;
(c) Xxxx X. Xxxx, Chief Corporate Counsel of Sempra Energy, a
California corporation and the ultimate parent of the Company, shall have
furnished to the Representatives a written opinion, dated the Time of Delivery
for such Designated Bonds, in form and substance satisfactory to the
Representatives, to the effect that:
(i) The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of California,
with power and authority (corporate and other) to own its properties and
conduct its business as described in the Prospectus, and has been duly
qualified as a foreign corporation 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 the failure to be so qualified would not
subject it to material liability or disability;
(ii) The Company has an authorized capitalization as set forth in the
Prospectus and all of the issued shares of capital stock of the Company
have been duly and validly authorized and issued and are fully paid and
non-assessable;
9
(iii) To the best of such counsel's knowledge and other than as set
forth in the Prospectus, there are no legal or governmental proceedings
pending to which the Company is a party or of which any property of the
Company is the subject which, if determined adversely to the Company,
would reasonably be expected individually or in the aggregate to have a
material adverse effect on the current or future financial position,
shareholders' equity or results of operations of the Company; and, to the
best of such counsel's knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by others;
(iv) This Agreement and the Pricing Agreement with respect to the
Designated Bonds have been duly authorized, executed and delivered by the
Company;
(v) The Designated Bonds have been duly authorized, executed,
authenticated, issued and delivered and the Designated Bonds and the
Indenture conform to the descriptions thereof in the Prospectus;
(vi) The Indenture has been duly authorized, executed and delivered by
the parties thereto; and the Indenture has been duly qualified under the
Trust Indenture Act;
(vii) The Public Utilities Commission of the State of California has
duly authorized the issuance and sale of the Designated Bonds by the
Company on the terms set forth in the Prospectus and in this
Agreement, such authorizations are in full force and effect and no
authorization of any other governmental agency having regulatory
jurisdiction over the Company is required for such issuance and sale
except such as may be required by the securities or blue sky laws of any
jurisdiction;
(viii) The Company holds all franchises, certificates of public
convenience and necessity, permits, licenses and easements necessary to
own, operate and maintain its properties as described in the Prospectus
subject only to such defects, irregularities, restrictions, conditions and
other matters as are described in the Prospectus or which do not, in such
counsel's opinion, materially affect the right of the Company to own,
operate and maintain its properties and to conduct its business as
described therein;
(ix) The Base Indenture and each Supplemental Indenture has been duly
recorded in all offices of county recorders or clerks of all counties in
the State of California in which any real property subject to the lien of
the Indenture is located and appropriate financing
10
statements in respect of personal property and fixtures have been filed in
the Office of the Secretary of State of the State of California and no
other filing or recordation is necessary for the perfection and
preservation of the lien created thereby except for recordations required
in respect of after-acquired real property;
(x) The Indenture constitutes, as security for the Designated Bonds, a
valid and subsisting lien to the extent that it purports to be such
on all the present properties of the Company (including plants, machinery,
equipment, real estate and fixed property described above), rights and
franchises of the Company (other than those properties excepted or
released from the lien of the Indenture by its terms) subject only to
Permissible Encumbrances (as defined in the Indenture) and other liens and
charges permitted by the Indenture and such liens, charges and
encumbrances, defects, qualifications, exceptions and other matters as are
set forth or referred to in the Prospectus, or which do not, in such
counsel's opinion, materially affect the security for the Designated
Bonds, and upon acquisition thereafter by the Company similar properties
the Indenture will, subject to liens existing thereon at the time of
acquisition, create such lien thereon;
(xi) The issue and sale of the Designated Bonds and the compliance by
the Company with all of the provisions of the Designated Bonds, the
Indenture, this Agreement and the Pricing Agreement with respect to the
Designated Bonds and the consummation of the transactions herein and
therein contemplated will not conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute a default
under, any material contract, indenture, mortgage, deed of trust, loan
agreement, note, lease or other agreement or instrument to which the
Company is a party or by which the Company is bound or to which any of its
material properties or assets is subject, nor will such actions result in
any violation of the provisions of the Articles of Incorporation or By-
laws of the Company or any statute or any order, rule or regulation of any
court or governmental agency or body having jurisdiction over the Company
or any of its material properties;
(xii) No consent, approval, authorization, order, registration or
qualification of or with any such court or governmental agency or body is
required for the issue and sale of the Designated Bonds or the
consummation by the Company of the transactions contemplated by this
Agreement or such Pricing Agreement or the Indenture, except such as have
been obtained under the Act, the Trust Indenture Act and from the Public
Utilities Commission of the State of California and such consents,
approvals, authorizations, orders, registrations or qualifications as may
be required under state securities or Blue Sky laws in connection with the
purchase and distribution of the Designated Bonds by the Underwriters;
(xiii) The Company is not (i) in violation of its By-laws or Articles of
Incorporation or (ii) in default in the performance or observance of any
material obligation, agreement, covenant or condition contained in any
contract, indenture, mortgage, deed of trust, loan agreement, note, lease
or other agreement or instrument to which it is a party or by which it or
any of its properties may be bound, except in the case of clause (ii) for
such defaults which, individually or in the aggregate, would not
reasonably be expected to have a material adverse effect on the financial
position, shareholders' equity or results of operations of the Company;
11
(xiv) The statements set forth in the Prospectus as amended or
supplemented under the captions "Description of First Mortgage Bonds"
insofar as they purport to constitute a summary of the terms of the First
Mortgage Bonds or the Indenture, and under the caption "Plan of
Distribution" insofar as they purport to describe the provisions of the
laws and documents referred to therein, are accurate, complete and fair in
all material respects;
(xv) The Company is not, and after giving effect to the offering and
sale of the Designated Bonds, will not be, an "investment company," as
such term is defined in the Investment Company Act;
(xvi) The documents incorporated by reference in the Prospectus as
amended or supplemented (other than the financial statements and related
schedules therein, as to which such counsel need express no opinion), when
they became effective or were filed with the Commission, as the case may
be, complied as to form in all material respects with the requirements of
the Act or the Exchange Act, as applicable, and the rules and regulations
of the Commission thereunder, and such counsel has no reason to believe
that any of such documents, when they became effective or were so filed,
as the case may be, contained, in the case of a registration statement
which became effective under the Act, an 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, or, in the case
of other documents which were filed under the Act or the Exchange Act with
the Commission, 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 under which they were made when such documents
were so filed, not misleading; it being understood that such counsel
expresses no belief with respect to the financial statements or other
financial data included or incorporated by reference in, or omitted from,
the Prospectus as amended or supplemented;
(xvii) The Registration Statement and the Prospectus as amended or
supplemented and any further amendments and supplements thereto made by
the Company prior to the Time of Delivery for the Designated Bonds (in
each case, excluding the documents incorporated by reference therein)
comply as to form in all material respects with the requirements for
registration statements on Form S-3 under the Act, and the requirements
under the Trust Indenture Act and the rules and regulations of the
Commission thereunder, it being understood, however, that such counsel
expresses no opinion with respect to the financial statements, schedules
or other financial data included or incorporated by reference in, or
omitted from the Registration Statement or the Prospectus as amended or
supplemented or with respect to any Form T-1. In passing upon the
compliance as to the form of the Registration Statement and the Prospectus
as amended or supplemented (in each case, excluding the documents
incorporated by reference therein), except for those statements referred
to in the opinion in subsection (xiv) of this Section 7(c), such counsel
has assumed that the statements made and incorporated by reference therein
are correct and complete; and
(xviii) The Company has received an order from the Commission exempting
the Company from all of the provisions of the 1935 Act, except for Section
9(a)(2) thereof;
12
(d) Counsel for the Company satisfactory to the Representatives shall
have furnished to the Representatives their written opinion or opinions, dated
each Time of Delivery for such Designated Bonds, in form and substance
satisfactory to the Representatives, to the effect that:
(i) The Indenture constitutes a legally valid and binding obligation of
the Company, enforceable against the Company in accordance with its terms;
(ii) The Designated Bonds, when executed and authenticated in accordance
with the terms of the Indenture, and when delivered to and paid for by the
Underwriters in accordance with the terms of this Agreement and the
Pricing Agreement, will constitute legally valid and binding obligations
of the Company, enforceable against the Company in accordance with their
terms, and are entitled to the benefits of the Indenture; and
(iii) The Registration Statement and the Prospectus as amended or
supplemented (in each case, excluding the documents incorporated by
reference therein) comply as to form in all material respects with the
requirements for registration statements on Form S-3 under the Act, and
the requirements under the Trust Indenture Act and the rules and
regulations of the Commission thereunder; it being understood, however,
that such counsel expresses no opinion with respect to the financial
statements, schedules or other financial data included or incorporated by
reference in, or omitted from, the Registration Statement or the
Prospectus as amended or supplemented or with respect to any Form T-1. In
passing upon the compliance as to form of the Registration Statement and
the Prospectus as amended or supplemented (in each case, excluding the
documents incorporated by reference therein), such counsel has assumed
that the statements made and incorporated by reference therein are correct
and complete.
In addition, such counsel shall provide a statement to the effect that
such counsel has participated in telephone conferences with officers and other
representatives of the Company, and representatives of the Underwriters, at
which the contents of the Registration Statement and the Prospectus as amended
or supplemented and related matters were discussed and, although such counsel is
not passing upon, and does not assume any responsibility for, the accuracy,
completeness or fairness of the statements contained or incorporated by
reference in the Registration Statement and the Prospectus as amended or
supplemented and has not made any independent check or verification thereof,
during the course of such participation, no facts came to such counsel's
attention that caused them to believe that the Registration Statement, at the
time it became effective, contained an 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, or that the Prospectus as amended or
supplemented (including the documents incorporated by reference), as of its date
and as of the date of such opinion, contained or contains an untrue statement of
a material fact or omitted or omits to state a material fact necessary to make
the statements therein, in the light of the circumstances under which they were
made, not misleading; it being understood that such counsel expresses no belief
with respect to the financial statements or other financial data included or
incorporated by reference in, or omitted from, the Registration Statement or
Prospectus as amended or supplemented;
13
(e) On the date of the Pricing Agreement for such Designated Bonds at a
time prior to the execution of the Pricing Agreement with respect to such
Designated Bonds, and at the Time of Delivery for such Designated Bonds, the
independent accountants of the Company who have certified the financial
statements of the Company included or incorporated by reference in the
Registration Statement shall have furnished to the Representatives a letter,
dated the date of the Pricing Agreement to the effect set forth in Annex II
hereto, and a letter dated such Time of Delivery reaffirming the statements made
in their letter dated the date of the Pricing Agreement, except that the
specified date referred to in such letter delivered on such Time of Delivery
shall be a date not more than three days prior to the Time of Delivery, and with
respect to such letter dated such Time of Delivery, as to such other matters as
the Representatives may reasonably request and in form and substance
satisfactory to the Representatives;
(f) (i) The Company shall have not sustained since the date of the latest
audited financial statements included or incorporated by reference in the
Prospectus as amended prior to the date of the Pricing Agreement relating to the
Designated Bonds any loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by insurance, or from
any labor dispute or court or governmental action, order or decree, otherwise
than as set forth or contemplated in the Prospectus as amended prior to the date
of the Pricing Agreement relating to the Designated Bonds, and (ii) since the
respective dates as of which information is given in the Prospectus as amended
prior to the date of the Pricing Agreement relating to the Designated Bonds
there shall not have been any change in the capital stock or long-term debt of
the Company or any change, or any development involving a prospective change, in
or affecting the general affairs, management, financial position, shareholders'
equity or results of operations of the Company, otherwise than as set forth or
contemplated in the Prospectus as amended prior to the date of the Pricing
Agreement relating to the Designated Bonds, the effect of which, in any such
case described in clause (i) or (ii), is in the judgment of the Representatives
so material and adverse to the Company as to make it impracticable or
inadvisable to proceed with the public offering or the delivery of the
Designated Bonds on the terms and in the manner contemplated in the Prospectus
as first amended or supplemented relating to the Designated Bonds;
(g) On or after the date of the Pricing Agreement relating to the
Designated Bonds (i) no downgrading shall have occurred in the rating accorded
the Company's debt securities or preferred stock by any "nationally recognized
statistical rating organization," as that term is defined by the Commission for
purposes of Rule 436(g)(2) under the Act, and (ii) no such organization shall
have publicly announced that it has under surveillance or review, with possible
negative implications, its rating of any of the Company's debt securities or
preferred stock;
(h) On or after the date of the Pricing Agreement relating to the
Designated Bonds there shall not have occurred any of the following: (i) a
suspension or material limitation in trading in securities generally on the New
York Stock Exchange; (ii) a suspension or material limitation in trading in the
Company's securities on the New York Stock Exchange; (iii) a general moratorium
on commercial banking activities declared by either Federal or New York or
California State authorities; or (iv) the outbreak or escalation of hostilities
involving the United States or the declaration by the United States of a
national emergency or war, if the effect of any such event specified in this
clause (iv) in the judgment of the Representatives makes it impracticable or
inadvisable to proceed with the public offering or the delivery of the
Designated
14
Bonds on the terms and in the manner contemplated in the Prospectus as first
amended or supplemented relating to the Designated Bonds;
(i) The Company shall have complied with the provisions of Section
5(c) hereof with respect to the furnishing of prospectuses on the New York
business day next succeeding the date of any Pricing Agreement for such
Designated Bonds; and
(j) The Company shall have furnished or caused to be furnished to the
Representatives at the Time of Delivery for the Designated Bonds a certificate
of officers of the Company satisfactory to the Representatives as to the
accuracy of the representations and warranties of the Company herein at and as
of such Time of Delivery, as to the performance by the Company of all of its
obligations hereunder to be performed at or prior to such Time of Delivery, as
to the matters set forth in subsections (a) and (f) of this Section and as to
such other matters as the Representatives may reasonably request.
8. (a) The Company will indemnify and hold harmless each Underwriter
against any losses, claims, damages or liabilities, joint or several, to which
such Underwriter 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 an untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Prospectus, any preliminary
prospectus supplement, the Registration Statement, the Prospectus as amended or
supplemented and any other prospectus relating to the First Mortgage Bonds, or
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 for any legal or other expenses reasonably
incurred by such Underwriter in connection with investigating or defending any
such action or claim as such expenses are incurred; provided, however, that the
Company shall not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission made in any Preliminary
Prospectus, any preliminary prospectus supplement, the Registration Statement,
the Prospectus as amended or supplemented and any other prospectus relating to
the First Mortgage Bonds, or any such amendment or supplement in reliance upon
and in conformity with written information furnished to the Company by any
Underwriter of Designated Bonds through the Representatives expressly for use in
the Prospectus as amended or supplemented relating to such Designated Bonds.
(b) Each Underwriter will indemnify and hold harmless the Company
against any losses, claims, damages or liabilities to which the Company 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 an untrue statement or alleged untrue statement of a material fact
contained in any Preliminary Prospectus, any preliminary prospectus supplement,
the Registration Statement, the Prospectus as amended or supplemented and any
other prospectus relating to the First Mortgage Bonds, or 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, 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 any Preliminary
Prospectus, any preliminary prospectus
15
supplement, the Registration Statement, the Prospectus as amended or
supplemented and any other prospectus relating to the First Mortgage Bonds, or
any such amendment or supplement in reliance upon and in conformity with written
information furnished to the Company by such Underwriter through the
Representatives expressly for use therein; and will reimburse the Company for
any legal or other expenses reasonably incurred by the Company in connection
with investigating or defending any such action or claim as such expenses are
incurred.
(c) Promptly after receipt by an indemnified party under subsection
(a) or (b) above of notice of the commencement of any action, such indemnified
party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify the indemnifying party in
writing of the commencement thereof; but the omission so to notify the
indemnifying party shall not relieve it from any liability which it may have to
any indemnified party otherwise than under such subsection. 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 shall be
entitled to participate therein and, to the extent that it shall wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party (who shall not,
except with the consent of the indemnified party, be counsel to the indemnifying
party), and, after notice from the indemnifying party to such indemnified party
of its election so to assume the defense thereof, the indemnifying party shall
not be liable to such indemnified party under such subsection for any legal
expenses of other counsel or any other expenses, in each case subsequently
incurred by such indemnified party, in connection with the defense thereof other
than reasonable costs of investigation. No indemnifying party shall, without the
written consent of the indemnified party, effect the settlement or compromise
of, or consent to the entry of any judgment with respect to, any pending or
threatened action or claim in respect of which indemnification or contribution
may be sought hereunder (whether or not the indemnified party is an actual or
potential party to such action or claim) unless such settlement, compromise or
judgment (i) includes an unconditional release of the indemnified party from all
liability arising out of such action or claim and (ii) does not include a
statement as to or an admission of fault, culpability or a failure to act, by or
on behalf of any indemnified party.
(d) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities (or
actions in respect thereof) in such proportion as is appropriate to reflect the
relative benefits received by the Company on the one hand and the Underwriters
of the Designated Bonds on the other from the offering of the First Mortgage
Bonds to which such loss, claim, damage or liability (or action in respect
thereof) relates. If, however, the allocation provided by the immediately
preceding sentence is not permitted by applicable law or if the indemnified
party failed to give the notice required under subsection (c) above, then each
indemnifying party shall contribute to such amount paid or payable by such
indemnified party in such proportion as is appropriate to reflect not only such
relative benefits but also the relative fault of the Company on the one hand and
the Underwriters of the Designated Bonds on the other in connection with the
statements or omissions which resulted in such losses, claims, damages or
liabilities (or actions in respect thereof), as well as any other relevant
equitable considerations. The relative benefits received by the Company on
16
the one hand and such Underwriters on the other shall be deemed to be in the
same proportion as the total net proceeds from such offering (before deducting
expenses) received by the Company bear to the total underwriting discounts and
commissions received by such Underwriters. The relative fault shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company on the one hand
or such Underwriters on the other and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission. The Company and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this subsection (d) were determined by pro
rata allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to above in this subsection (d). The amount
paid or payable by an indemnified party as a result of the losses, claims,
damages or liabilities (or actions in respect thereof) referred to above in this
subsection (d) shall be deemed to include any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating or defending
any such action or claim. Notwithstanding the provisions of this subsection (d),
no Underwriter shall be required to contribute any amount in excess of the
amount by which the total price at which the applicable Designated Bonds
underwritten by it and distributed to the public were offered to the public
exceeds the amount of any damages which such Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. The
obligations of the Underwriters of Designated Bonds in this subsection (d) to
contribute are several in proportion to their respective underwriting
obligations with respect to such First Mortgage Bonds and not joint.
(e) The obligations of the Company under this Section 8 shall be in
addition to any liability which the Company may otherwise have and shall extend,
upon the same terms and conditions, to each person, if any, who controls any
Underwriter within the meaning of the Act; and the obligations of the
Underwriters under this Section 8 shall be in addition to any liability which
the respective Underwriters may otherwise have and shall extend, upon the same
terms and conditions, to each officer and director of the Company and to each
person, if any, who controls the Company within the meaning of the Act.
9. (a) If any Underwriter shall default in its obligation to purchase
the Designated Bonds which it has agreed to purchase under the Pricing Agreement
relating to such Designated Bonds, the Representatives may in their discretion
arrange for themselves or another party or other parties to purchase such
Designated Bonds on the terms contained herein. If within thirty-six hours after
such default by any Underwriter the Representatives do not arrange for the
purchase of such Designated Bonds, then the Company shall be entitled to a
further period of thirty-six hours within which to procure another party or
other parties satisfactory to the Representatives to purchase such Designated
Bonds on such terms. In the event that, within the respective prescribed period,
the Representatives notify the Company that they have so arranged for the
purchase of such Designated Bonds, or the Company notifies the Representatives
that it has so arranged for the purchase of such Designated Bonds, the
Representatives or the Company shall have the right to postpone the Time of
Delivery for such Designated Bonds for a period of not more than seven days, in
order to effect whatever changes
17
may thereby be made necessary in the Registration Statement or the Prospectus as
amended or supplemented, or in any other documents or arrangements, and the
Company agrees to file promptly any amendments or supplements to the
Registration Statement or the Prospectus which in the opinion of the
Representatives may thereby be made necessary. The term "Underwriter" as used in
this Agreement shall include any person substituted under this Section with like
effect as if such person had originally been a party to the Pricing Agreement
with respect to such Designated Bonds.
(b) If, after giving effect to any arrangements for the purchase of
the Designated Bonds of a defaulting Underwriter or Underwriters by the
Representatives and the Company as provided in subsection (a) above, the
aggregate principal amount of such Designated Bonds which remains unpurchased
does not exceed one-eleventh of the aggregate principal amount of the Designated
Bonds, then the Company shall have the right to require each non-defaulting
Underwriter to purchase the principal amount of Designated Bonds which such
Underwriter agreed to purchase under the Pricing Agreement relating to such
Designated Bonds and, in addition, to require each non-defaulting Underwriter to
purchase its pro rata share (based on the principal amount of Designated Bonds
which such Underwriter agreed to purchase under such Pricing Agreement) of the
Designated Bonds of such defaulting Underwriter or Underwriters for which such
arrangements have not been made; but nothing herein shall relieve a defaulting
Underwriter from liability for its default.
(c) If, after giving effect to any arrangements for the purchase of
the Designated Bonds of a defaulting Underwriter or Underwriters by the
Representatives and the Company as provided in subsection (a) above, the
aggregate principal amount of Designated Bonds which remains unpurchased exceeds
one-eleventh of the aggregate principal amount of the Designated Bonds, as
referred to in subsection (b) above, or if the Company shall not exercise the
right described in subsection (b) above to require non-defaulting Underwriters
to purchase Designated Bonds of a defaulting Underwriter or Underwriters, then
the Pricing Agreement relating to such Designated Bonds shall thereupon
terminate, without liability on the part of any non-defaulting Underwriter or
the Company, except for the expenses to be borne by the Company and the
Underwriters as provided in Section 6 hereof and the indemnity and contribution
agreements in Section 8 hereof; but nothing herein shall relieve a defaulting
Underwriter from liability for its default.
10. The respective indemnities, agreements, representations, warranties
and other statements of the Company and the several Underwriters, as set forth
in this Agreement or made by or on behalf of them, respectively, pursuant to
this Agreement, shall remain in full force and effect, regardless of any
investigation (or any statement as to the results thereof) made by or on behalf
of any Underwriter or any controlling person of any Underwriter, or the Company
or any officer or director or controlling person of the Company, and shall
survive delivery of and payment for the First Mortgage Bonds.
11. If any Pricing Agreement shall be terminated pursuant to Section 9
hereof, the Company shall not then be under any liability to any Underwriter
with respect to the Designated Bonds covered by such Pricing Agreement except as
provided in Sections 6 and 8 hereof; but, if for any other reason Designated
Bonds are not delivered by or on behalf of the Company as provided herein, the
Company will reimburse the Underwriters through the Representatives for
18
all out-of-pocket expenses approved in writing by the Representatives, including
fees and disbursements of counsel, reasonably incurred by the Underwriters in
making preparations for the purchase, sale and delivery of such Designated
Bonds, but the Company shall then be under no further liability to any
Underwriter with respect to such Designated Bonds except as provided in Sections
6 and 8 hereof.
12. In all dealings hereunder, the Representatives of the Underwriters of
Designated Bonds shall act on behalf of each of such Underwriters, and the
parties hereto shall be entitled to act and rely upon any statement, request,
notice or agreement on behalf of any Underwriter made or given by such
Representatives jointly or by such of the Representatives, if any, as may be
designated for such purpose in the Pricing Agreement.
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Underwriters shall be delivered or sent by mail, telex or
facsimile transmission to the address of the Representatives as set forth in the
Pricing Agreement; and if to the Company shall be delivered or sent by mail,
telex or facsimile transmission to the address of the Company set forth in the
Registration Statement, Attention: Secretary; provided, however, that any notice
to an Underwriter pursuant to Section 8(c) hereof shall be delivered or sent by
mail, telex or facsimile transmission to such Underwriter at its address set
forth in its Underwriters' Questionnaire, or telex constituting such
Questionnaire, which address will be supplied to the Company by the
Representatives upon request. Any such statements, requests, notices or
agreements shall take effect upon receipt thereof.
13. This Agreement and each Pricing Agreement shall be binding upon, and
inure solely to the benefit of, the Underwriters, the Company and, to the extent
provided in Sections 8 and 10 hereof, the officers and directors of the Company
and each person who controls the Company or any Underwriter, and their
respective heirs, executors, administrators, successors and assigns, and no
other person shall acquire or have any right under or by virtue of this
Agreement or any such Pricing Agreement. No purchaser of any of the First
Mortgage Bonds from any Underwriter shall be deemed a successor or assign by
reason merely of such purchase.
14. Time shall be of the essence of each Pricing Agreement. As used
herein, "business day" shall mean any day when the Commission's office in
Washington, D.C. is open for business.
15. This Agreement and each Pricing Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
16. This Agreement and each Pricing Agreement may be executed by any one
or more of the parties hereto and thereto in any number of counterparts, each of
which shall be deemed to be an original, but all such respective counterparts
shall together constitute one and the same instrument.
(Signature Page Follows)
19
If the foregoing is in accordance with your understanding, please sign and
return to us one for the Company and for each of the Representatives plus one
for each counsel counterparts hereof.
Very truly yours,
Southern California Gas Company
By:______________________________
Name:
Title:
Accepted as of the date hereof:
[Underwriter]
By:____________________________
Name:
Title:
[Underwriter]
By:____________________________
Name:
Title:
S-1
ANNEX I
Pricing Agreement
-----------------
____________________________
As Representatives of the several
Underwriters named in Schedule I hereto,
_________________
_________________
_________________
__________ __, 200_
Ladies and Gentlemen:
Southern California Gas Company, a California corporation (the "Company"),
proposes, subject to the terms and conditions stated herein and in the
Underwriting Agreement, dated __________, 200_ (the "Underwriting Agreement")
between the Company on the one hand and _______, ________ and ________ on the
other hand, to issue and sell to the Underwriters named in Schedule I hereto
(the "Underwriters") the First Mortgage Bonds specified in Schedule II hereto
(the "Designated Bonds"). Each of the provisions of the Underwriting Agreement
is incorporated herein by reference in its entirety, and shall be deemed to be a
part of this Agreement to the same extent as if such provisions had been set
forth in full herein; and each of the representations and warranties set forth
therein shall be deemed to have been made at and as of the date of this Pricing
Agreement, except that each representation and warranty which refers to the
Prospectus in Section 2 of the Underwriting Agreement shall be deemed to be a
representation and warranty as of the date of the Underwriting Agreement in
relation to the Prospectus (as therein defined), and also a representation and
warranty as of the date of this Pricing Agreement in relation to the Prospectus
as amended or supplemented relating to the Designated Bonds which are the
subject of this Pricing Agreement. Each reference to the Representatives herein
and in the provisions of the Underwriting Agreement so incorporated by reference
shall be deemed to refer to you. Unless otherwise defined herein, terms defined
in the Underwriting Agreement are used herein as therein defined. The
Representatives designated to act on behalf of the Representatives and on behalf
of each of the Underwriters of the Designated Bonds pursuant to Section 12 of
the Underwriting Agreement and the address of the Representatives referred to in
such Section 12 are set forth at the end of Schedule II hereto.
An amendment to the Registration Statement, or a supplement to the
Prospectus, as the case may be, relating to the Designated Bonds, in the form
heretofore delivered to you is now proposed to be filed with the Commission.
Subject to the terms and conditions set forth herein and in the
Underwriting Agreement incorporated herein by reference, the Company agrees to
issue and sell to each of the Underwriters, and each of the Underwriters agrees,
severally and not jointly, to purchase from
Annex I-1
the Company, at the time and place and at the purchase price to the Underwriters
set forth in Schedule II hereto, the principal amount of Designated Bonds set
forth opposite the name of such Underwriter in Schedule I hereto.
If the foregoing is in accordance with your understanding, please sign and
return to us one for the Company and for each of the Representatives plus one
for each counsel counterparts hereof, and upon acceptance hereof by you, on
behalf of each of the Underwriters, this letter and such acceptance hereof,
including the provisions of the Underwriting Agreement incorporated herein by
reference, shall constitute a binding agreement between each of the
Underwriters, on the one hand, and the Company, on the other hand. It is
understood that your acceptance of this letter on behalf of each of the
Underwriters is or will be pursuant to the authority set forth in a form of
Agreement among Underwriters, the form of which shall be submitted to the
Company for examination upon request, but without warranty on the part of the
Representatives as to the authority of the signers thereof.
Very truly yours,
Southern California Gas Company
By:_________________________________
Name:
Title:
Accepted as of the date hereof:
___ ________________
By:_____________________________________
(_________________)
On behalf of each of the Underwriters
Annex I-2
SCHEDULE I
Principal Amount of
Designated Bonds
Underwriter to be Purchased
----------------------------------- ------------------------
[Names of Co-Representatives]...... $
[Names of other Underwriters]...... ----------------
Total......................... ----------------
Schedule I-1
SCHEDULE II
Title of Designated Bonds:
[____%] [Floating Rate] [Zero Coupon] [First Mortgage Bonds]
due 20__
Aggregate principal amount:
$_____
Price to Public:
______% of the principal amount of the Designated Bonds, plus accrued
interest[, if any,] from ___ to ____ [and accrued amortization[, if any,]
from ___ to ___]
Purchase Price by Underwriters:
______% of the principal amount of the Designated Bonds[, plus accrued
interest from __ to ___] [and accrued amortization[, if any,] from ___ to
___]
Form of Designated Bonds:
[Definitive form to be made available for checking and packaging at least
twenty-four hours prior to the Time of Delivery at the office of [The
Depository Trust Company or its designated custodian] [the
Representatives]]
[Book-entry only form represented by one or more global securities
deposited with The Depository Trust Company ("DTC") or its designated
custodian, to be made available for checking by the Representatives at
least twenty-four hours prior to the Time of Delivery at the office of
DTC.]
Specified funds for payment of purchase price:
Federal (same day) funds
Time of Delivery:
______a.m. (New York City time), _____, 200_
Indenture:
Indenture dated October 1, 1940, as amended and supplemented to date,
between the Company and U.S. Bank Trust National Association, as successor
trustee
Maturity:
_________
Schedule II-1
Interest Rate:
[_______%] [Zero Coupon] [See Floating Rate Provisions] [See Adjustable
Rate Provisions]
Interest Payment Dates:
[______ and ______, commencing _____, 200__]
Redemption Provisions:
[No provisions for redemption]
[The Designated Bonds may be redeemed, otherwise than through the sinking
fund, in whole or in part at the option of the Company, in the amount of
the greater of the following amounts: (a) 100% of the principal amount of
the Designated Bonds being redeemed on the date fixed for such redemption
(the "Redemption Date"); or (b) the sum of the present values of the
remaining scheduled payments of principal and interest (as adjusted for any
announced rating change as of the date of the notice of redemption, whether
or not effective) on the bonds being redeemed on that Redemption Date (not
including any portion of any payments of interest accrued to the Redemption
Date) discounted to the Redemption Date on a semiannual basis,]
[on or after ______ at the following redemption prices (expressed in
percentages of principal amount). If [redeemed on or before ___, ___%,
and if] redeemed during the 12-month period beginning ____,
Year Redemption Price
__.__
and thereafter at 100% of their principal amount, together in each case
with accrued interest to the redemption date.]
[on any interest payment date falling on or after _____, at the election of
the Company, at a redemption price equal to the principal amount thereof,
plus accrued interest to the date of redemption.]]
[Other possible redemption provisions, such as mandatory redemption upon
occurrence of certain events or redemption for changes in tax law]
[Restriction on refunding]
Sinking Fund Provisions:
[No sinking fund provisions]
[The Designated Bonds are entitled to the benefit of a sinking fund to
retire [$______] principal amount of Designated Bonds on _______ in each of
the years __ through __ at
Schedule II-2
100% of their principal amount plus accrued interest[, together with
[cumulative] [noncumulative] redemptions at the option of the Company to
retire an additional [$___] principal amount of Designated Bonds in the
years ___ through ___ at 100% of their principal amount plus accrued
interest.]
[If Designated Bonds are floating rate debt securities, insert--
Floating rate provisions:
Initial annual interest rate will be ___% through ____ [and thereafter will
be adjusted [monthly] [on each __, ___, and ] [to an annual rate of ___%
above the average rate for ____-year [month][securities][certificates of
deposit] issued by ___ and ___ [insert names of banks]____] [and the annual
interest rate [thereafter] [from ___ through ___] will be the interest
yield equivalent of the weekly average per annum market discount rate for
___-month Treasury bills plus ____% of Interest Differential (the excess,
if any, of (i) the then current weekly average per annum secondary market
yield for ___-month certificates of deposit over (ii) the then current
interest yield equivalent of the weekly average per annum market discount
rate for ___-month Treasury bills); [from ___ and thereafter the rate will
be the then current interest yield equivalent plus ___% of Interest
Differential].]
Adjustable rate provisions:
Initial annual interest rate will be ___% [and in the event of a downgrade
in the senior unsecured long-term debt rating of the Company by Xxxxx'x
Investors Service, Inc. ("Moody's") or Standard & Poor's Rating Service
("S&P") below the specified ratings, and in the event of subsequent
upgrades or downgrades, the interest rate on the Designated Bonds will be
adjusted. Following an adjustment, the annual interest rate will be equal
to the initial interest rate of ___% plus the sum of the applicable Moody's
adjustment amount and the applicable S&P adjustment amount.
Beginning with the first Interest Payment Date for the Designated Bonds
after a rating change, the Designated Bonds will bear interest at an
adjusted interest rate. Subsequent interest rate adjustments, whether the
adjustment is up or down, will also become effective on the first Interest
Payment Date after such rating change. In no event will the annual interest
rate on the Designated Bonds be less than the initial rate of ___% or
greater than an annual interest rate of ___%.]
Defeasance provisions:
Closing location for delivery of Designated Bonds:
Additional Closing Conditions:
Names and addresses of Representatives:
Schedule II-3
Designated Representatives:
Address for Notices, etc.:
[Other Terms]:
Schedule II-4
ANNEX II
Pursuant to Section 7(e) of the Underwriting Agreement, the accountants
shall furnish letters to the Underwriters to the effect that:
(i) They are independent certified public accountants with respect to the
Company within the meaning of the Act and the applicable rules and
regulations adopted by the Commission;
(ii) In their opinion, the financial statements and any supplementary
financial information and schedules audited (and, if applicable, financial
forecasts and/or pro forma financial information) by them and included or
incorporated by reference in the Registration Statement or the Prospectus
comply as to form in all material respects with the applicable accounting
requirements of the Act or the Exchange Act, as applicable, and the related
rules and regulations; and, if applicable, they have made a review in
accordance with standards established by the American Institute of
Certified Public Accountants of the interim financial statements, selected
financial data, pro forma financial information, financial forecasts and/or
condensed financial statements derived from audited financial statements of
the Company for the periods specified in such letter, as indicated in their
reports thereon, copies of which have been furnished to the representative
or representatives of the Underwriters (the "Representatives") such term to
include an Underwriter or Underwriters who act without any firm being
designated as its or their representatives and are attached to such
letters;
(iii) They have made a review in accordance with standards established by
the American Institute of Certified Public Accountants of the unaudited
statements of income, balance sheets and condensed statements of cash flows
included in the Company's Quarterly Reports on Form 10-Q incorporated by
reference into the Prospectus as indicated in their reports thereon copies
of which are attached to such letters; and on the basis of specified
procedures including inquiries of officials of the Company who have
responsibility for financial and accounting matters regarding whether the
unaudited condensed financial statements referred to in paragraph
(vi)(A)(i) below comply as to form in all material respects with the
applicable accounting requirements of the Act and the Exchange Act and the
related rules and regulations, nothing came to their attention that caused
them to believe that the unaudited condensed financial statements do not
comply as to form in all material respects with the applicable accounting
requirements of the Act and the Exchange Act and the related rules and
regulations adopted by the Commission;
(iv) The unaudited selected financial information with respect to the
results of operations and financial position of the Company for the five
most recent fiscal years included in the Prospectus and included or
incorporated by reference in Item 6 of the Company's Annual Report on Form
10-K for the most recent fiscal year agrees with the corresponding amounts
(after restatement where applicable) in the audited financial statements
for five such fiscal years included or incorporated by reference in the
Company's Annual Reports on Form 10-K for such fiscal years;
Annex II-1
(v) They have compared the information in the Prospectus under selected
captions with the disclosure requirements of Regulation S-K and on the
basis of limited procedures specified in such letter nothing came to their
attention as a result of the foregoing procedures that caused them to
believe that this information does not conform in all material respects
with the disclosure requirements of Items 301, 302, 402 and 503(d),
respectively, of Regulation S-K;
(vi) On the basis of limited procedures, not constituting an examination in
accordance with generally accepted auditing standards, consisting of a
reading of the unaudited financial statements and other information
referred to below, a reading of the latest available interim financial
statements of the Company, inspection of the minute books of the Company
since the date of the latest audited financial statements included or
incorporated by reference in the Prospectus, inquiries of officials of the
Company responsible for financial and accounting matters and such other
inquiries and procedures as may be specified in such letter, nothing came
to their attention that caused them to believe that:
(A) (i) the unaudited statements of income, balance sheets and
condensed statements of cash flows included in the Company's Quarterly
Reports on Form 10-Q incorporated by reference in the Prospectus do
not comply as to form in all material respects with the applicable
accounting requirements of the Exchange Act and the published rules
and regulations adopted by the Commission, or (ii) any material
modifications should be made to the unaudited statements of income,
balance sheets and condensed statements of cash flows included in the
Company's Quarterly Reports on Form 10-Q incorporated by reference in
the Prospectus for them to be in conformity with generally accepted
accounting principles;
(B) any other unaudited income statement data and balance sheet
items included in the Prospectus do not agree with the corresponding
items in the unaudited financial statements from which such data and
items were derived, and any such unaudited data and items were not
determined on a basis substantially consistent with the basis for the
corresponding amounts in the audited financial statements included or
incorporated by reference in the Company's Annual Report on Form 10-K
for the most recent fiscal year;
(C) the unaudited financial statements which were not included in
the Prospectus but from which were derived the unaudited condensed
financial statements referred to in clause (A) and any unaudited
income statement data and balance sheet items included in the
Prospectus and referred to in clause (B) were not determined on a
basis substantially consistent with the basis for the audited
financial statements included or incorporated by reference in the
Company's Annual Report on Form 10-K for the most recent fiscal year;
(D) any unaudited pro forma condensed financial statements
included or incorporated by reference in the Prospectus do not comply
as to form in all material respects with the applicable accounting
requirements of the Act and the
Annex II-2
rules and regulations adopted by the Commission thereunder or the pro
forma adjustments have not been properly applied to the historical
amounts in the compilation of those statements;
(E) as of a specified date not more than five days prior to the
date of such letter, there have been any changes in the capital stock
(other than issuances of capital stock upon exercise of options and
stock appreciation rights, upon earn-outs of performance shares and
upon conversions of convertible securities, in each case which were
outstanding on the date of the latest balance sheet included or
incorporated by reference in the Prospectus) or any increase in the
long-term debt of the Company, or any decreases in current assets or
shareholders' equity or other items specified by the Representatives,
or any increases in any items specified by the Representatives, in
each case as compared with amounts shown in the latest balance sheet
included or incorporated by reference in the Prospectus, except in
each case for changes, increases or decreases which the Prospectus
discloses have occurred or may occur or which are described in such
letter; and
(F) for the period from the date of the latest financial
statements included or incorporated by reference in the Prospectus to
the specified date referred to in clause (E) there were any decreases
in revenues or income before interest and income taxes or the total or
per share amounts of net income or other items specified by the
Representatives, or any increases in any items specified by the
Representatives, in each case as compared with the comparable period
of the preceding year and with any other period of corresponding
length specified by the Representatives, except in each case for
increases or decreases which the Prospectus discloses have occurred or
may occur or which are described in such letter; and
(vii) In addition to the audit referred to in their report(s) incorporated
by reference in the Prospectus and the limited procedures, inspection of
minute books, inquiries and other procedures referred to in paragraphs (iii)
and (vi) above, they have carried out certain specified procedures, not
constituting an audit in accordance with generally accepted auditing
standards, with respect to certain amounts, percentages and financial
information specified by the Representatives which are derived from the
general accounting records of the Company, which appear in the Prospectus
(excluding documents incorporated by reference), or in Part II of, or in
exhibits and schedules to, the Registration Statement specified by the
Representatives or in documents incorporated by reference in the Prospectus
specified by the Representatives, and have compared certain of such amounts,
percentages and financial information with the accounting records of the
Company and have found them to be in agreement.
All references in this Annex II to the Prospectus shall be deemed to refer
to the Prospectus (including the documents incorporated by reference therein) as
defined in the Underwriting Agreement as of the date of the letter delivered on
the date of the Pricing Agreement for purposes of such letter and to the
Prospectus as amended or supplemented (including the documents incorporated by
reference therein) in relation to the applicable
Annex II-3
Designated Bonds for purposes of the letter delivered at the Time of Delivery
for such Designated Bonds.
Annex II-4
