Exhibit 10.3
NOTE PURCHASE AGREEMENT
This Note Purchase Agreement (this "Agreement"), dated as of December
16, 1997, is made by and between SDG&E Funding LLC, a Delaware limited liability
company (the "Note Issuer"), and the California Infrastructure and Economic
Development Bank Special Purpose Trust SDG&E-1, a not-for-profit business trust
organized under the laws of the State of Delaware (the "Trust"), pursuant to
that certain Amended and Restated Declaration and Agreement of Trust (the "Trust
Agreement"), dated as of December 16, 1997 among Bankers Trust (Delaware), as
Delaware Trustee, Bankers Trust Company of California, N.A., a national banking
association, as certificate trustee (in such capacity, the "Certificate
Trustee") and the California Infrastructure and Economic Development Bank (the
"Infrastructure Bank"), as Originator.
RECITALS
A. Capitalized terms used herein without definition shall have the
meanings ascribed to them in that certain Indenture (the "Note Indenture"),
dated as of December 16, 1997, between Note Issuer and Bankers Trust Company of
California, N.A., a national banking association, as trustee (the "Note
Trustee"), which is incorporated herein by this reference.
B. On the Closing Date, and on the terms set forth herein, the Note
Issuer has agreed to sell to the Trust and the Trust has agreed to purchase from
the Note Issuer $658,000,000 in principal amount of SDG&E Funding LLC Notes,
Series 1997-1 (the "Notes"), issued pursuant to the Note Indenture.
AGREEMENT
NOW, THEREFORE, on the terms and conditions set forth below and for
good and valuable consideration, the receipt and adequacy of which is hereby
acknowledged, the Note Issuer and the Trust agree as follows:
1. Sale of Notes
a. Authorization of Notes.
On or before the Closing Date, the Note Issuer shall have caused
to be authorized pursuant to the Note Indenture the issuance of a series of
Notes in such classes and principal amounts as set forth in Schedule 1(a)
attached hereto and incorporated herein by this reference.
Issuance and Purchase.
On the basis of the representations, warranties and covenants
contained in this Agreement and in the Note Indenture (collectively, the
"Note Purchase Documents"), and subject to the terms and conditions of the
Note Purchase Documents, the Note Issuer agrees to issue and sell to the
Trust, and the Trust agrees to purchase from the Note Issuer, the Notes set
forth in Schedule 1(a) hereto. The purchase price of each class of Notes
is set forth in Schedule 1(a) attached hereto, and the aggregate purchase
price of the Notes shall be an amount equal to the proceeds to the Trust
set forth in Schedule I to the Underwriting Agreement dated as of December
4, 1997 (the "Underwriting Agreement"), among San Diego Gas & Electric
Company, the Note Issuer, the Trust, the California Infrastructure and
Economic Development Bank, the California State Treasurer's Office and the
underwriters named therein, for whom Xxxxxx Xxxxxxx Co. Incorporated and
Xxxxxx Brothers Inc. are acting as representatives.
c. Delivery.
Delivery of, and payment of the purchase price for the Notes
shall be made by federal wire transfer of immediately available funds as
early as possible after 6:00 a.m. (P.S.T.) on the Closing Date to an
account designated by the Note Issuer not later than the Business Day prior
to the Closing Date.
2. Conditions Precedent
The obligations of the Trust to purchase the Notes under this
Agreement are subject to the satisfaction of each of the following conditions:
a. All the representations and warranties of the Note Issuer
contained in this Agreement shall be true and correct on the Closing Date
with the same force and effect as if made on and as of the Closing Date.
b. Neither the Notes nor the Certificates shall have received a
lower rating by any Rating Agency than that on which the Notes or the
Certificates, respectively, were marketed.
c. The Certificate Trustee, on behalf of the Trust, shall have
received on the Closing Date an Officer's Certificate dated the Closing
Date confirming the matters set forth in Sections 2(a) and 2(b).
d. The Certificate Trustee, on behalf of the Trust, shall have
received a copy of the executed Note Indenture (certified by an Authorized
Officer of the Note Issuer) which shall have been entered into by the Note
Issuer and the Note Trustee.
e. The Note Issuer shall not have failed at or prior to the
Closing Date to perform or comply in any material respect with any of the
agreements herein contained and required to be performed or complied with
by the Note Issuer at or prior to the Closing Date.
3. Representations and Warranties
To induce the Trust to enter into this Agreement and to purchase the
Notes, the Note Issuer represents and warrants to the Trust on the date of this
Agreement that the following statements are true, correct and complete:
a. The Note Issuer has been duly formed and is validly existing
in good standing as a limited liability company under the laws of the State
of Delaware and has the organizational power and authority to carry on its
business as described in the Registration Statement covering the Notes (the
"Registration Statement") and to own, lease and operate its properties, and
is registered to transact intrastate business in the State of California.
b. This Agreement has been duly authorized, executed and
delivered by the Note Issuer.
c. The Note Indenture has been duly authorized by the Note
Issuer and, on the Closing Date, will have been validly executed and
delivered by the Note Issuer. When the Note Indenture has been duly
executed and delivered by the Note Issuer, the Note Indenture will be a
valid and binding agreement of the Note Issuer, enforceable against the
Note Issuer in accordance with its terms except as (i) the enforceability
thereof may be limited by bankruptcy, insolvency or similar laws affecting
creditors' rights generally and (ii) rights of acceleration and the
availability of equitable remedies may be limited by equitable principles
of general applicability. On the Closing Date, the Note Indenture will
conform in all material respects to the requirements of the Trust Indenture
Act, and the rules and regulations of the Commission applicable to an
indenture which is qualified thereunder.
d. The Notes have been duly authorized and, on the Closing
Date, will have been validly executed and delivered by the Note Issuer.
When the Notes have been issued, executed and authenticated in accordance
with the provisions of the Note Indenture and delivered to and paid for by
the Trust in accordance with the terms of this Agreement, the Notes will be
entitled to the benefits of the Note Indenture and will be valid and
binding obligations of the Note Issuer, enforceable in accordance with
their terms except as (i) the enforceability thereof may be limited by
bankruptcy, insolvency or similar laws affecting creditors' rights
generally and (ii) rights of acceleration and the availability of equitable
remedies may be limited by equitable principles of general applicability.
e. No Default or Event of Default under the Note Indenture
has occurred, is occurring or would reasonably occur as a result of the
sale of the Notes pursuant to the terms hereof.
f. The execution, delivery and performance of this Agreement
and the other Basic Documents by the Note Issuer, compliance by the Note
Issuer with all provisions hereof and thereof and the consummation of the
transactions contemplated hereby and thereby will not (i) require any
consent, approval, authorization or other order of, or qualification with,
any court or governmental body or agency (except such as may be required
under the California Government Code, the PU Code, the Securities Act of
1933, as amended (the "Securities Act"), or the securities or Blue Sky laws
of the various states), (ii) conflict with or constitute a breach of any of
the terms or provisions of, or a default under, the limited liability
company agreement of the Note Issuer, (iii) violate or conflict with any
applicable law or any rule, regulation, judgment, order or decree of any
court or any governmental body or agency having jurisdiction over the Note
Issuer or its property, (iv) result in the imposition or creation of (or
the obligation to create or impose) a lien under, any agreement or
instrument to which the Note Issuer is a party or by which the Note Issuer
or its respective property is bound, except under the Basic Documents and
any statutory lien under Section 843(g) of the PU Code and under that
certain Mortgage Deed of Trust dated July 1, 1940, executed by San Diego
Gas & Electric Company, as supplemented and amended to date hereof, in
favor of First Trust of California, N.A. as successor trustee, as Trustee
(which lien shall be released on the Closing Date contemporaneously with
the purchase price of the notes).
g. To the best knowledge of the Note Issuer, there are no legal
or governmental proceedings pending or threatened to which the Note Issuer
is or reasonably could be a party or to which any of its property is or
reasonably could be subject, which might result, singly or in the
aggregate, in a material adverse effect on the value of the Notes.
h. The Note Issuer is not and, after giving effect to the
offering and sale of the Notes and the application of the net proceeds
thereof as described in the Registration Statement, will not be, an
"investment company," as such term is defined in the Investment Company Act
of 1940, as amended.
i. The Note Issuer is not and, after giving effect to the
offering and sale of the Notes and the application of the net proceeds
thereof as described in the Registration Statement, will not be, a "holding
company," as such term is defined in the Public Utilities Holding Company
Act of 1935, as amended.
j. The Note Issuer has not taken any action that might cause
this Agreement or the issuance or sale of the Notes to violate Regulation G
(12 C.F.R. Part 207), Regulation T (12 C.F.R. Part 220), Regulation U (12
C.F.R. Part 221) or Regulation X (12 C.F.R. Part 224) of the Board of
Governors of the Federal Reserve System.
k. Since the date as of which information is given in the
Registration Statement and other than as set forth in the Registration
Statement (exclusive of any amendments or supplements thereto subsequent to
the date of this Agreement), (i) there has not occurred any material
adverse change or any development involving a prospective material adverse
change in the condition, financial or otherwise, or the earnings, business,
management or operations of the Note Issuer and (ii) the Note Issuer has
not incurred any material liability or obligation, direct or contingent.
l. No Rating Agency has indicated to the Note Issuer that it
has assigned (or is considering assigning) a lower rating to the Notes or
the Certificates than that on which the Notes or the Certificates,
respectively, were marketed.
m. Each certificate signed by any officer of the Note Issuer
and delivered to the Certificate Trustee, as the representative of the
Trust, or counsel for the Certificate Trustee shall be deemed to be a
representation and warranty by the Note Issuer to the Trust as to the
matters covered thereby.
4. Covenants
The Note Issuer covenants and agrees that, until payment in full of
the Notes, unless the Certificate Trustee, on behalf of the Trust, shall
otherwise give prior written consent, the Note Issuer shall perform all
covenants in this Section 4.
a. To advise the Certificate Trustee, as the representative of
the Trust, promptly and, if requested by the Certificate Trustee, on behalf
of the Trust, confirm such advice in writing, of the issuance by the
Commission or any state securities commission of any stop order suspending
the qualification or exemption from qualification of any Note or
Certificate for offering or sale in any jurisdiction in which the
Certificates have been offered or the initiation of any proceeding by the
Commission, any state securities commission or any other federal or state
regulatory authority for such purpose. The Note Issuer shall use its best
efforts to prevent the issuance of any stop order or order suspending the
qualification or exemption of any Note or Certificate under the Securities
Act, or any state securities or Blue Sky laws and, if at any time the
Commission or any state securities commission or other federal or state
regulatory authority shall issue an order suspending the qualification or
exemption of any Note or Certificate under the Securities Act, or any state
securities or Blue Sky laws, the Note Issuer shall use its best efforts to
obtain the withdrawal or lifting of such order at the earliest possible
time.
b. Not to claim voluntarily the benefit of any usury laws
against the holders of any Notes. To resist actively any attempts to claim
the benefit of any usury laws against the holders of any Notes.
c. To use its best efforts to do and perform all things
required or necessary to be done and performed under this Agreement by it
prior to the Closing Date and to satisfy all conditions precedent to the
delivery of the Notes.
d. At the written request of the Certificate Trustee, on behalf
of the Trust, or the Infrastructure Bank, to provide, or cause to be
provided, to the Certificate Trustee, as the representative of the Trust,
or the Infrastructure Bank, as applicable, a copy of any requested
certificate, notice, opinion or other document delivered to the Note
Trustee pursuant to the terms of the Note Indenture.
5. Miscellaneous
a. Fees
If for any reason the Notes are not delivered by or on behalf of
the Note Issuer as provided herein (other than as a result of any
termination of this Agreement pursuant to the terms hereof), the Note
Issuer agrees to reimburse the Trust for all out-of-pocket expenses
(including the reasonable fees and disbursements of counsel) reasonably
incurred by it. The Note Issuer also agrees to reimburse the Trust, the
Certificate Trustee, the Delaware Trustee and the Infrastructure Bank and
their respective officers, directors and each person, if any, who controls
the Trust, the Certificate Trustee, the Delaware Trustee or the
Infrastructure Bank within the meaning of Section 15 of the Securities Act
or Section 20 of the Exchange Act for any and all fees and expenses
(including without limitation the reasonable fees and expenses of counsel)
reasonably incurred by them in connection with enforcing their rights under
this Agreement (including without limitation its rights under this Section
5(a)), provided, however, that the Note Issuer's obligations pursuant to
this Section 5(a) shall be treated as operating expenses under the Note
Indenture and shall be payable only to the extent that funds are available
for such operating expenses in the priority set forth in Section 8.02(d) of
the Note Indenture.
Effective Date of Agreement
This Agreement shall become effective upon the execution and
delivery of this Agreement by the parties hereto. This Agreement shall
terminate automatically upon the termination of the Underwriting Agreement
prior to the Closing Date.
c. Survival of Representations and Agreements
All agreements, representations and warranties made herein shall
survive the execution and delivery of this Agreement and the purchase of
the Notes hereunder. Notwithstanding anything in this Agreement or implied
by law to the contrary, the agreements of the Note Issuer set forth in
Section 5(a) shall survive the payment of the Notes and the termination of
this Agreement.
d. Notice
Unless otherwise specifically provided herein, all notices,
directions, consents and waivers required under the terms and provisions of
this Agreement shall be in English and in writing, and any such notice,
direction, consent or waiver may be given by United States mail, courier
service, telegram, telex, telemessage, telecopy, telefax, cable or
facsimile (confirmed by telephone or in writing in the case of notice by
telegram, telex, telemessage, telecopy, telefax, cable or facsimile) or any
other customary means of communication, and any such notice, direction,
consent or waiver shall be effective when delivered, or if mailed, three
days after deposit in the United States mail with proper postage for
ordinary mail prepaid,
If to the Note Issuer, to:
SDG&E Funding LLC
000 Xxx Xxxxxx, Xxxx 000
Xxx Xxxxx, XX 00000
Attention: President
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
If to the Trust or the Certificate Trustee, to:
Bankers Trust Company of California, N.A.
c/o Bankers Trust Company
Corporate Trust and Agency Services
Four Xxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Structured Finance Group
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
if to the Delaware Trustee, to:
Bankers Trust (Delaware)
E.A. Delle Donne Corporate Center
Xxxxxxxxxx Building
0000 Xxxxxx Xxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxxx 00000-0000
Attention: M. Xxxx Xxxxxxx
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
(with a copy to the Certificate Trustee)
If to the Infrastructure Bank, to:
California Infrastructure and Economic Development Bank
c/o California Trade and Commerce Agency
000 X Xxxxxx, Xxxxx 0000
Xxxxxxxxxx, Xxxxxxxxxx 00000
Attention: Executive Director
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
e. Parties
Except as otherwise provided, this Agreement has been and is made
solely for the benefit of and shall be binding upon the Note Issuer, the
Trust, the Certificate Trustee, the Delaware Trustee, the Infrastructure
Bank, the directors and officers of each such entity, any controlling
persons referred to herein, the directors, officers and any manager of the
Note Issuer (not in their individual capacities but in their respective
capacities as directors, officers or manager of the Note Issuer) and their
respective successors and assigns, all as and to the extent provided in
this Agreement, and no other person shall acquire or have any right under
or by virtue of this Agreement, except as contemplated by the Trust
Agreement and the other Basic Documents. The term "successors and assigns"
shall not include a purchaser of any of the Notes from the Trust merely
because of such purchase.
f. Governing Law
This Agreement shall be governed by, and shall be construed and
enforced in accordance with, the internal laws of the State of California,
without regard to conflicts of laws or principles.
g. Severability
If any provision of this Agreement shall be prohibited or invalid
under applicable law, the Agreement shall be ineffective only to such
extent, without invalidating the remainder of the Agreement.
h. Further Assurances
The Note Issuer agrees to execute and deliver such instruments
and take such actions as the Certificate Trustee, on behalf of the Trust,
may, from time to time, reasonably request in order to effectuate the
purpose and to carry out the terms of this Agreement.
i. Headings
Section and subsection headings in this Agreement are included
herein for convenience of reference only and shall not constitute a part of
this Agreement for any other purpose or be given any substantive effect.
j. Counterparts
This Agreement may be signed in various counterparts which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the Note Issuer and the Trust have caused this
Note Purchase Agreement to be duly executed by their respective officer or
trustee, thereunto duly authorized, all as of the day and year first above
written.
SDG&E FUNDING LLC, a Delaware limited liability
company
By: /s/ Xxxxx X. Xxxxx
_________________________
Name: Xxxxx X. Xxxxx
Title: Chief Financial Officer, Chief Accounting
Officer and Treasurer
CALIFORNIA INFRASTRUCTURE AND ECONOMIC DEVELOPMENT
BANK SPECIAL PURPOSE TRUST SDG&E-1, a not-for-
profit business trust organized under the laws of
the State of Delaware
By: BANKERS TRUST COMPANY OF CALIFORNIA, N.A., a
national banking association, not in its
individual capacity, but solely as
Certificate Trustee
By: /s/ Xxxxx X. Xxxxxxx
_________________________
Name: Xxxxx X. Xxxxxxx
Title: Vice President
SCHEDULE 1(a)
NOTES
CLASS OF NOTE PRINCIPAL AMOUNT PURCHASE PRICE (%)
A-1 $ 65,800,000 99.74716%
A-2 $ 82,639,254 99.63666%
A-3 $ 66,230,948 99.58061%
A-4 $ 65,671,451 99.51564%
A-5 $ 96,537,839 99.49826%
A-6 $197,584,137 99.43005%
A-7 $ 83,536,371 99.28387%
Total: $658,000,000 $654,728,788.85
1(a)-1
