EXHIBIT 1.4
Sempra Energy
Equity Securities
__________________________
Underwriting Agreement
__________________________
___________, 2000
To the Representatives of the
several Underwriters named in
the respective Pricing Agreements
hereinafter described
Ladies and Gentlemen:
From time to time, Sempra Energy, 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 equity securities (the "Securities") specified
in Schedule II to such Pricing Agreement (with respect to such Pricing
Agreement, the "Designated Securities").
1. Particular sales of Designated Securities may be made from time to
time to the Underwriters of such Securities, for whom the firms designated as
representatives of the Underwriters of such Securities 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
Securities or as an obligation of any of the Underwriters to purchase any of the
Securities. The obligation of the Company to issue and sell any of the
Securities and the obligation of any of the Underwriters to purchase any of the
Securities shall be evidenced by the Pricing Agreement with respect to the
Designated Securities specified therein. Each Pricing Agreement shall specify
the aggregate principal amount of such Designated Securities, the initial public
offering price of such Designated Securities, the purchase price to the
Underwriters of such Designated Securities, the names of the Underwriters of
such Designated Securities, the names of the Representatives of such
Underwriters and the principal amount of such Designated Securities to be
purchased by each Underwriter and shall set forth the date, time and manner of
delivery of such Designated Securities and payment therefor. The Pricing
Agreement shall also specify (to the extent not set forth in the prospectus with
respect thereto) the terms of such Designated Securities. 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) A registration statement on Form S-3 (File No. _________) (the
"Initial Registration Statement") in respect of the Securities and certain other
securities has been filed with the Securities and Exchange Commission (the
"Commission"); the Initial Registration Statement and any post-effective
amendment thereto, each in the form heretofore delivered or to be delivered to
the Representatives and, excluding exhibits to the Initial Registration
Statement, but including all documents incorporated by reference in the
prospectus contained therein, 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
Securities Act of 1933, as amended (the "Act"), which , if so filed, became
effective upon filing, no other document with respect to the Initial
Registration Statement 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 Statement
under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and
prospectuses filed pursuant to Rule 424(b) 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 Statement, 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 included in the Initial Registration Statement 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
Statement, 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 contained in the Initial Registration Statement
at the time such part of the Initial Registration Statement became effective but
excluding any Form T-1, each as amended at the time such part of the Initial
Registration Statement 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 Securities, in the form in which it has most recently been
filed, or transmitted for filing, with the Commission 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 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 Statement shall be deemed
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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 Statement 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 Securities 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 Securities through the
Representatives expressly for use in the Prospectus as amended or supplemented
relating to such Securities;
(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 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 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 Securities through the Representatives expressly for
use in the Prospectus as amended or supplemented relating to such Securities;
(d) The Company and its subsidiaries taken as a whole, have 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 respective dates 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
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long-term debt of the Company or any of its subsidiaries 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 and its subsidiaries, taken as a
whole, 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; and each of Southern California Gas Company, a California
corporation ("SCGC"), San Diego Gas & Electric Company, a California corporation
("SDG&E"), Pacific Enterprises, a California corporation ("PE"), and Enova
Corporation, a California corporation ("Enova") (collectively, SCGC, SDG&E, PE
and Enova are referred to herein as the "Significant Subsidiaries") has been
duly incorporated and is validly existing as a corporation in good standing
under the laws of its jurisdiction of incorporation;
(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; and all of the issued shares of capital stock of each Significant
Subsidiary have been duly and validly authorized and issued, are fully paid and
non-assessable and, except for the outstanding preferred stock of SCGC and PE
and outstanding preferred and preference stock of SDG&E, are owned directly or
indirectly by the Company, free and clear of all liens, encumbrances, equities
or claims;
(g) The Securities have been duly authorized, and, when Designated
Securities are issued and delivered pursuant to this Agreement and the Pricing
Agreement with respect to such Designated Securities, such Designated Securities
will be validly issued, fully paid and non-assessable, and the issuance of such
Designated Securities will not be subject to any preemptive or similar rights;
(h) The issue and sale of the Securities and the compliance by the
Company with all of the provisions of the Securities, 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 or any of its Significant
Subsidiaries is a party or by which the Company or any of its Significant
Subsidiaries is bound or to which any of the material properties or assets of
the Company or any of its Significant Subsidiaries 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 of its Significant Subsidiaries
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 Significant
Subsidiaries or any of their respective material properties; and no consent,
approval, authorization, order, registration or qualification of or with any
such court or
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governmental agency or body is required for the issue and sale of the Securities
or the consummation by the Company of the transactions contemplated by this
Agreement or any Pricing Agreement, except such as have been obtained under the
Act 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 Securities by the
Underwriters;
(i) The statements set forth in the Prospectus as amended or
supplemented under the captions "Description of Capital Stock", "Description of
Common Stock" or "Description of Preferred Stock" (or similar caption), insofar
as they purport to constitute a summary of the terms of the Securities, and
under the caption "Underwriting", 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) Neither the Company nor any of its Significant Subsidiaries is
(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 consolidated
financial position, shareholders' equity or results of operations of the Company
and its subsidiaries, taken as a whole;
(k) Other than as set forth in the Prospectus, there are no legal or
governmental proceedings pending to which the Company or any of its subsidiaries
is a party or of which any property of the Company or any of its subsidiaries is
the subject which, if determined adversely to the Company or any of its
subsidiaries, would individually or in the aggregate have a material adverse
effect on the current or future consolidated financial position, shareholders'
equity or results of operations of the Company and its subsidiaries, taken as a
whole; 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 Securities, 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 and its subsidiaries taken as a whole, 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 and its consolidated
subsidiaries included or incorporated by reference in the Registration Statement
and Prospectus present fairly in all material respects the consolidated
financial position of the Company and its consolidated subsidiaries as of the
dates indicated and the consolidated results of their operations for the periods
specified; and, except as stated therein, such financial statements have been
prepared in
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conformity with generally accepted accounting principles in the United States
applied on a consistent basis;
(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 and its subsidiaries possess such certificates,
authorities or permits issued by the appropriate state, federal, local or
foreign regulatory agencies or bodies necessary to conduct the businesses now
operated by them, 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 consolidated financial
position, shareholders' equity or results of operations of the Company and its
subsidiaries, taken as a whole; and neither the Company nor any of its
subsidiaries has 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
consolidated financial position, shareholders' equity or results of operations
of the Company and its subsidiaries, taken as a whole; and
(q) The Company and its subsidiaries are in compliance with, and
conduct their respective businesses 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 consolidated financial
position, shareholders' equity or results of operations of the Company and its
subsidiaries, taken as a whole.
3. Upon the execution of the Pricing Agreement applicable to any
Designated Securities and authorization by the Representatives of the release of
such Securities, the several Underwriters propose to offer such Securities for
sale upon the terms and conditions set forth in the Prospectus as amended or
supplemented.
4. Designated Securities 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
Securities.
5. The Company agrees with each of the Underwriters of any Designated
Securities:
(a) To prepare the Prospectus as amended or supplemented in relation
to the applicable Designated Securities in a form approved by the
Representatives and to file such
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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
Securities 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 relating to such Securities and prior to the Time of Delivery for such
Securities which shall be disapproved by the Representatives for such Securities
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 Securities, 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 Securities, of the suspension of the qualification of such
Securities 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 Securities 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 Securities 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 Securities, 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
Securities, 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 Securities 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 or the Exchange Act, to notify the Representatives and upon their
request to file such document and to prepare and furnish without
7
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;
(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 and its subsidiaries (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 Securities and continuing to and including the
later of (i) the termination of trading restrictions for such Securities, as
notified to the Company by the Representatives and (ii) thirty days after the
last Time of Delivery for such Designated Securities, not to offer, sell,
contract to sell or otherwise dispose of any Securities that are substantially
similar to such Designated Securities (including any guarantee of such
Securities) or any securities that are convertible into or exchangeable for, or
that represent the right to receive, Securities or any such substantially
similar securities of the Company, 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 Securities 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
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 Securities; (iii) all expenses in connection
with the qualification of the Securities 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 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 Securities; (v) the cost of
preparing the Securities; (vi) any fees and expenses in connection with listing
the Securities and the cost of registering the Securities under Section 12 of
the Exchange Act; and (vii) all other costs and expenses incident to the
performance of its obligations hereunder which are not otherwise
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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 Securities by them, and
any advertising expenses connected with any offers they may make.
7. The obligations of the Underwriters of any Designated Securities under
the Pricing Agreement relating to such Designated Securities 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
Securities are, at and as of the Time of Delivery for such Designated
Securities, 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 Securities 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 or opinions, dated the Time of Delivery for
such Designated Securities, 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 the Company, shall have
furnished to the Representatives a written opinion or opinions, dated the Time
of Delivery for such Designated Securities, 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; and each
Significant Subsidiary of the Company has been duly incorporated and is
validly existing as a corporation in good standing under the laws of its
jurisdiction of incorporation;
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(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; and all of the issued shares of capital stock of each
Significant Subsidiary have been duly and validly authorized and issued,
are fully paid and non-assessable and , except for the outstanding
preferred stock of SCGC and PE and the outstanding preferred and preference
stock of SDG&E, are owned of record directly or indirectly by the Company
and, to such counsel's knowledge, free and clear of all liens,
encumbrances, equities or claims;
(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 or any of its subsidiaries is a party or of
which any property of the Company or any of its subsidiaries is the subject
which, if determined adversely to the Company or any of its subsidiaries,
would reasonably be expected individually or in the aggregate to have a
material adverse effect on the current or future consolidated financial
position, shareholders' equity or results of operations of the Company and
its subsidiaries, taken as a whole; 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 Securities have been duly authorized, executed and delivered
by the Company;
(v) The Designated Securities have been duly authorized and
when the Designated Securities are issued and delivered pursuant to this
Agreement and the Pricing Agreement with respect to such Designated
Securities, such Designated Securities will be validly issued, fully paid
and non-assessable, and the issuance of such Designated Securities will not
be subject to any preemptive or similar rights; and the Designated
Securities conform to the description thereof in the Prospectus;
(vi) The issue and sale of the Designated Securities and the
compliance by the Company with all of the provisions of the Designated
Securities, this Agreement and the Pricing Agreement with respect to the
Designated Securities 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 or any of its Significant Subsidiaries is a party or by which the
Company or any of its Significant Subsidiaries is bound or to which any of
their respective 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 and its Significant Subsidiaries 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
Significant Subsidiaries or any of their respective material properties;
(vii) No consent, approval, authorization, order, registration
or qualification of or with any such court or governmental agency or body
is required for the
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issue and sale of the Designated Securities or the consummation by the
Company of the transactions contemplated by this Agreement or such Pricing
Agreement, except such as have been obtained under the Act 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
Securities by the Underwriters;
(viii) Neither the Company nor any of its Significant
Subsidiaries is (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 consolidated financial
position, shareholders' equity or results of operations of the Company and
its subsidiaries, taken as a whole;
(ix) The statements set forth in the Prospectus as amended or
supplemented under the captions "Description of Capital Stock",
"Description of Common Stock" or "Description of Preferred Stock" (or
similar caption), insofar as they purport to constitute a summary of the
terms of the Securities, and under the caption "Underwriting", 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;
(x) The Company is not, and after giving effect to the
offering and sale of the Designated Securities, with not be, an "investment
company," as such term is defined in the Investment Company Act;
(xi) 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;
11
(xii) 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 Securities (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 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. 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 (x) of
this Section 7(c), such counsel has assumed that the statements made and
incorporated by reference therein are correct and complete; and
(xiii) 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.
(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 Securities, in form and substance
satisfactory to the Representatives, to the effect that:
(i) This Agreement and the Pricing Agreement have been duly
authorized, executed and delivered by the Company; and
(ii) 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
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. 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
12
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 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.
(e) On the date of the Pricing Agreement for such Designated
Securities at a time prior to the execution of the Pricing Agreement with
respect to such Designated Securities and at the Time of Delivery for such
Designated Securities, the independent accountants of the Company who have
certified the financial statements of the Company and its subsidiaries 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 and its subsidiaries taken as a whole 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 Securities 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 Securities, 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 Securities there shall
not have been any change in the capital stock or long-term debt of the Company
or any of its subsidiaries 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 or any of
its subsidiaries, otherwise than as set forth or contemplated in the Prospectus
as amended prior to the date of the Pricing Agreement relating to the Designated
Securities, 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 and its subsidiaries, taken as a whole, as to make it impracticable or
inadvisable to proceed with the public offering or the delivery of the
Designated Securities on the terms and in the manner contemplated in the
Prospectus as first amended or supplemented relating to the Designated
Securities;
(g) On or after the date of the Pricing Agreement relating to the
Designated Securities (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
13
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 Securities 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 Securities on the terms and in the manner contemplated in the
Prospectus as first amended or supplemented relating to the Designated
Securities;
(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 Securities; and
(j) The Company shall have furnished or caused to be furnished to the
Representatives at the Time of Delivery for the Designated Securities 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 Securities, 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 Securities, or any such amendment or supplement in reliance upon and in
conformity with written information furnished to the Company by any Underwriter
of Designated Securities through the Representatives expressly for use in the
Prospectus as amended or supplemented relating to such Designated Securities.
14
(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 Securities, 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 supplement, the Registration Statement, the Prospectus as amended or
supplemented and any other prospectus relating to the Securities, 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
15
such proportion as is appropriate to reflect the relative benefits received by
the Company on the one hand and the Underwriters of the Designated Securities on
the other from the offering of the Securities 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
Securities 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 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 Securities 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 Securities in this subsection (d) to contribute are several in
proportion to their respective underwriting obligations with respect to such
Securities 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 Securities which it has agreed to purchase under the Pricing
Agreement relating to
16
such Designated Securities, the Representatives may in their discretion arrange
for themselves or another party or other parties to purchase such Designated
Securities 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 Securities, 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
Securities 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 Securities, or the Company notifies the
Representatives that it has so arranged for the purchase of such Designated
Securities, the Representatives or the Company shall have the right to postpone
the Time of Delivery for such Designated Securities for a period of not more
than seven days, in order to effect whatever changes 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
Securities.
(b) If, after giving effect to any arrangements for the purchase of
the Designated Securities 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 Securities which remains
unpurchased does not exceed one-eleventh of the aggregate principal amount of
the Designated Securities, then the Company shall have the right to require each
non-defaulting Underwriter to purchase the principal amount of Designated
Securities which such Underwriter agreed to purchase under the Pricing Agreement
relating to such Designated Securities and, in addition, to require each non-
defaulting Underwriter to purchase its pro rata share (based on the principal
amount of Designated Securities which such Underwriter agreed to purchase under
such Pricing Agreement) of the Designated Securities 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 Securities of a defaulting Underwriter or Underwriters by the
Representatives and the Company as provided in subsection (a) above, the
aggregate principal amount of Designated Securities which remains unpurchased
exceeds one-eleventh of the aggregate principal amount of the Designated
Securities, 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 Securities of a defaulting Underwriter or
Underwriters, then the Pricing Agreement relating to such Designated Securities
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
17
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 Securities.
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 Securities covered by such Pricing Agreement
except as provided in Sections 6 and 8 hereof; but, if for any other reason
Designated Securities are not delivered by or on behalf of the Company as
provided herein, the Company will reimburse the Underwriters through the
Representatives for 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 Securities, but the Company shall then be under no
further liability to any Underwriter with respect to such Designated Securities
except as provided in Sections 6 and 8 hereof.
12. In all dealings hereunder, the Representatives of the Underwriters of
Designated Securities 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 Securities
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.
18
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,
Sempra Energy
By: __________________________________
Name:
Title:
Accepted as of the date hereof:
[NAMES OF REPRESENTATIVES]
_____________________
_____________________
_____________________
By: ______________________________
(_________________)
20
ANNEX I
Pricing Agreement
-----------------
_____________________
As Representatives of the several
Underwriters named in Schedule I hereto,
_________________
_________________
_________________
__________ __, 2000
Ladies and Gentlemen:
Sempra Energy, a California corporation (the "Company"), proposes,
subject to the terms and conditions stated herein and in the Underwriting
Agreement, dated _____________, 2000 (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 Securities specified in Schedule II hereto (the "Designated
Securities"). 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 Securities 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 Securities 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 Securities, 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 Securities
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,
Sempra Energy
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 Securities
Underwriter to be Purchased
---------------------------------------------- -----------------------
[Names of Co-Representatives]................ $
[Names of other Underwriters]................ -----
Total $
=====
Schedule I -- 1
SCHEDULE II
Title of Designated Securities:
[Common Stock] [Preferred Stock]
Aggregate principal amount:
$_____
Price to Public:
______% of the principal amount of the Designated Securities
Purchase Price by Underwriters:
______% of the principal amount of the Designated Securities
Specified funds for payment of purchase price:
Federal (same day) funds
Time of Delivery:
______a.m. (New York City time), _____, 2000
Closing location for delivery of Designated Securities:
Additional Closing Conditions:
Names and addresses of Representatives:
Designated Representatives:
Address for Notices, etc.:
Schedule II -- 1
[Other Terms]:
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 and its subsidiaries 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 consolidated 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 consolidated income, consolidated balance
sheets and condensed statements of consolidated 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
consolidated 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 consolidated 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
consolidated 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
consolidated financial statements for five such fiscal years included or
Annex II -- 1
incorporated by reference in the Company's Annual Reports on Form 10-K for
such fiscal years;
(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 and its subsidiaries, inspection of the
minute books of the Company and its subsidiaries since the date of the
latest audited financial statements included or incorporated by reference
in the Prospectus, inquiries of officials of the Company and its
subsidiaries 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 consolidated income,
consolidated balance sheets and condensed statements of consolidated
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 consolidated income, consolidated balance
sheets and condensed statements of consolidated 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 consolidated 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 consolidated
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;
Annex II -- 2
(D) any unaudited pro forma consolidated 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 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 consolidated
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 consolidated long-term debt of the Company and its
subsidiaries, or any decreases in consolidated 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 consolidated revenues or income before interest and income taxes or
the total or per share amounts of consolidated 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 and its subsidiaries,
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 its
subsidiaries and have found them to be in agreement.
Annex II -- 3
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 Designated
Securities for purposes of the letter delivered at the Time of Delivery for such
Designated Securities.
Annex II -- 4
