EXHIBIT 1.1
Sempra Energy Capital Trust II
Sempra Energy Capital Trust III
Preferred Securities
guaranteed to the extent set forth in the Guarantees by
Sempra Energy
__________________________
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 Capital Trust II or Sempra Energy
Capital Trust III, each a statutory business trust created under the Business
Trust Act (the "Delaware Act") of the State of Delaware (Chapter 38, Title 12,
of the Delaware Code, 12 Del. C. ((S)) 3801 et seq.) (each a "Trust" and
collectively the "Trusts"), and Sempra Energy, a California corporation (the
"Company"), as sponsor of each Trust and as guarantor, propose 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, that the
Trust identified in the applicable Pricing Agreement (such Trust being the
"Designated Trust" with respect to such Pricing Agreement) 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 preferred securities (the
"Securities") representing undivided beneficial interests in the assets of the
Designated Trust. The Securities specified in such Pricing Agreement are
referred to as the "Firm Designated Securities" with respect to such Pricing
Agreement. If specified in such Pricing Agreement, the Designated Trust may
grant the Underwriters the right to purchase at their election an additional
number of Securities, for the sole purpose of covering over-allotments, if any,
in the sale of the Firm Designated Securities, specified as provided in such
Pricing Agreement as provided in Section 3 hereof (the "Optional Designated
Securities"). The Firm Designated Securities and any Optional Designated
Securities are collectively called the "Designated Securities." The proceeds of
the sale of the Designated Securities to the public and of common securities of
the Designated Trust (the "Common Securities") to the Company concurrently with
the sale of the Designated Securities are to be invested in subordinated
deferrable interest debentures of the Company (the "Subordinated Debentures")
identified in the Pricing Agreement with respect to such Designated Securities
(with respect to such Pricing Agreement, the "Designated Subordinated
Debentures"), to be issued pursuant to a subordinated indenture to be dated as
of _________, 2000 (as supplemented or amended from time to time, the
"Subordinated Indenture") between the Company and U.S. Bank Trust National
Association, as trustee (the "Indenture Trustee"). The Designated Securities
will be guaranteed by the Company to the extent set forth in a Preferred
Securities Guarantee Agreement between the Company and U.S. Bank Trust National
Association, as trustee, with respect to such Designated Securities (the
"Designated Guarantee") (all such Designated Guarantees together, the
"Guarantees").
The terms and rights of any particular issuance of Designated
Securities shall be as specified in the Pricing Agreement relating thereto and
in or pursuant to the amended and restated declaration of trust identified in
such Pricing Agreement (with respect to such Pricing Agreement, the "Trust
Agreement").
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 any Trust to sell any of the
Securities or as an obligation of any of the Underwriters to purchase any of the
Securities. The obligation of any Trust 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
liquidation amount of Firm Designated Securities, the maximum aggregate
liquidation amount of Optional Designated Securities, if any, the initial public
offering price of such Firm Designated Securities and Optional Designated
Securities or the manner of determining such price, the terms of the Designated
Securities, including the terms on which and terms of the securities into which
the Designated Securities will be exchangeable, 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 number of such Designated Securities to be purchased by
each Underwriter and the commission, if any, payable to the Underwriters with
respect thereto and shall set forth the date, time and manner of delivery of
such Firm Designated Securities and such Optional Designated Securities, if any,
and payment therefor. The Pricing Agreement shall also specify (to the extent
not set forth in the Trust Agreement and the registration statement and
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 and the Designated Trust, jointly and severally, represent
and warrant to, and agree 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, the Subordinated
Debentures and the Guarantees and certain other securities has been filed with
the Securities and Exchange
-2-
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, the Subordinated Debentures and the Guarantees, 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
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) Based solely upon oral advice from the staff of the Commission,
the Trusts are not required to file reports or proxy or information statements
pursuant to Section 13(a), 13(c), 14 or 15(c) of the Exchange Act. The documents
incorporated by reference in the Prospectus, when they became effective or were
filed with the Commission, as the case may be,
-3-
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 Registration
Statement conforms, and any further amendments or supplements to the
Registration Statement will conform, in all material respects to the
requirements of the Trust Indenture Act of 1939, as amended (the "Trust
Indenture Act"), and the rules and regulations of the Commission thereunder and
do not and will not, as of the applicable effective date as to the Registration
Statement and any amendment thereto and as of the applicable filing date 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) Neither the Designated Trust nor the Company and any of its
subsidiaries (other than the Designated Trust) taken as a whole, have 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 long-term debt of the Designated Trust, the
Company or any of its subsidiaries (other than the Designated Trust) 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 Designated Trust
or the Company and its subsidiaries (other than the Designated Trust), taken as
a whole, otherwise than as set forth or contemplated in the Prospectus;
-4-
(e) The Designated Trust has been duly created and is validly
existing as a business trust in good standing under the laws of the State of
Delaware and all filings required under the laws of the State of Delaware with
respect to the creation and valid existence of the Designated Trust as a
business trust have been made;
(f) The Designated Trust has the power and authority to conduct its
business as described in the Prospectus;
(g) 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;
(h) 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; the Designated Trust has an authorized capitalization as described in
the Prospectus, and all the outstanding beneficial interests in the Designated
Trust have been duly and validly authorized and issued, are fully paid and non-
assessable and conform in all material respects to the descriptions thereof
contained in the Prospectus;
(i) 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 and, in the
case of any Optional Designated Securities, pursuant to an Over-allotment Option
(as defined in Section 3 hereof) with respect to such Designated Securities,
such Designated Securities will be duly and validly issued and will be fully
paid and non-assessable beneficial interests in the Designated Trust entitled to
the benefits provided by the applicable Trust Agreement; the issuance of the
Designated Securities will not be subject to preemptive or other similar rights;
and the Designated Securities will conform in all material respects to the
description thereof contained in the Prospectus as amended or supplemented with
respect to such Designated Securities;
(j) The holders of the Designated Securities (the "Securityholders")
will be entitled to the same limitation of personal liability extended to
stockholders of private corporations for profit organized under the General
Corporation Law of the State of Delaware;
-5-
(k) The Common Securities of the Designated Trust have been duly
authorized, and, when the Common Securities of the Designated Trust are issued
and delivered pursuant to the applicable Trust Agreement, such Common Securities
will be duly and validly issued and will be fully paid beneficial interests in
the Designated Trust entitled to the benefits provided by the applicable Trust
Agreement and will conform in all material respects to the description thereof
contained in the Prospectus; the issuance of the Common Securities of the
Designated Trust will not be subject to preemptive or other similar rights; and
at each Time of Delivery (as defined in Section 4 hereof), all of the issued and
outstanding Common Securities of the Designated Trust will be directly owned by
the Company free and clear of any security interest, mortgage, pledge, lien,
encumbrance, claim or equity;
(l) The Designated Guarantee, the Trust Agreement for the Designated
Trust, the Designated Subordinated Debentures and the Subordinated Indenture
(the Designated Guarantee, such Trust Agreement, the Designated Subordinated
Debentures and the Subordinated Indenture being collectively referred to as the
"Company Agreements") have each been duly authorized by the Company and, when
executed and delivered by the Company and (i) in the case of the Designated
Guarantee, by the Preferred Guarantee Trustee (as defined in the Designated
Guarantee), (ii) in the case of the Trust Agreement, by the Trustees (as defined
in the Trust Agreement), (iii) in the case of the Subordinated Indenture, by the
Indenture Trustee, and (iv) in the case of the Designated Subordinated
Debentures, when authenticated and delivered by the Indenture Trustee and paid
for by the Designated Trust in accordance with the applicable Note Purchase
Agreement (the "Note Purchase Agreement") between the Company and the Designated
Trust, will be duly executed and delivered by the Company (and, in the case of
the Designated Subordinated Debentures, duly authenticated and issued) and will
constitute at each Time of Delivery valid and legally binding obligations of the
Company, enforceable in accordance with their respective terms (and, in the case
of the Designated Subordinated Debentures, entitled to the benefits of the
Subordinated Indenture), subject, as to enforcement, to bankruptcy, insolvency,
receivership, liquidation, fraudulent conveyance, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability relating to
or affecting creditors' rights and to general equity principles; the Trust
Agreement, the Subordinated Indenture and the Designated Guarantee have each
been duly qualified under the Trust Indenture Act; and the Company Agreements
will conform, to the descriptions thereof contained in the Prospectus as amended
or supplemented with respect to the Designated Securities, the Designated
Guarantee and the Designated Subordinated Debentures to which they relate;
(m) The Trust Agreement for the Designated Trust has been duly
authorized by the Designated Trust and, when executed and delivered by the
Designated Trust and by the Trustees (as defined in the Trust Agreement) will be
duly executed and delivered by the Designated Trust and will constitute at each
Time of Delivery valid and legally binding obligations of the Designated Trust,
enforceable in accordance with their respective terms, subject, as to
enforcement, to bankruptcy, insolvency, receivership, liquidation, fraudulent
conveyance, fraudulent transfer, reorganization, moratorium and similar laws of
general applicability relating to or affecting creditors' rights and to general
equity principles;
(n) The issue and sale of the Designated Securities and the Common
Securities by the Designated Trust, the compliance by the Designated Trust with
all of the provisions of this Agreement, any Pricing Agreement and each Over-
allotment Option, if any, the Designated Securities, the Common Securities of
such Designated Trust, and the Trust
-6-
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 such Designated Trust or the Company or
any of its Significant Subsidiaries is a party or by which such Designated Trust
or the Company or any of its Significant Subsidiaries is bound or to which any
of the material properties or assets of such Designated Trust or the Company or
any of its Significant Subsidiaries is subject, nor will such action result in
any violation of the provisions of the Certificate of Trust or Trust Agreement
of such Designated Trust or 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 such Designated Trust, 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 governmental agency or body is required for the issue and sale of
the Designated Securities and the Common Securities by such Designated Trust or
the consummation by such Designated Trust or the Company of the transactions
contemplated by this Agreement, any Pricing Agreement or any Over-allotment
Option, the Designated Securities, the Common Securities of such Designated
Trust, or the Trust Agreement, except such as have been obtained under the Act
and the Trust Indenture 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 Designated
Securities by the Underwriters;
(o) The issue by the Company of the Guarantees and the Subordinated
Debentures, the compliance by the Company with all of the provisions of this
Agreement, any Pricing Agreement, the Guarantees, the Subordinated Debentures,
the Trust Agreement and the Subordinated Indenture, 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 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; and no consent, approval,
authorization, order, registration or qualification of or with any such court or
governmental agency or body is required for the issue of the Guarantees or the
issue and sale of the Subordinated Debentures or the consummation by the Company
of the transactions contemplated by this Agreement, any Pricing Agreement, the
Guarantees, the Subordinated Debentures, the Trust Agreement or the Subordinated
Indenture, except such as have been obtained under the Act and the Trust
Indenture Act and such consents, approvals, authorizations, registrations or
qualifications as may be required under state securities or Blue Sky laws in
connection with the issuance by the Company of the Guarantees and the issue and
sale of the Subordinated Debentures;
(p) The statements set forth in the Prospectus as amended or
supplemented under the captions "Description of Securities", "Description of
Debt Securities", "Description of
-7-
Preferred Securities", "Description of Preferred Securities Guarantees" and
"Description of Debentures", insofar as they purport to constitute a summary of
the terms of the Securities, the Common Securities, the Subordinated Debentures,
the Guarantees and the Company Agreements and under the captions "Material
United States Federal Income Tax Considerations" (or similar caption), "Plan of
Distribution" and "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;
(q) Neither the Designated Trust, the Company nor any of its
Significant Subsidiaries is (i) in violation of the Trust Agreement for the
Designated Trust, the Certificate of Trust for the Designated Trust, the
Articles of Incorporation or By-Laws of the Company, or the charter or by-laws
of any of its Significant Subsidiaries, 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 either the Designated
Trust or the Company and its subsidiaries (other than the Designated Trust),
taken as a whole;
(r) Other than as set forth in the Prospectus, there are no legal or
governmental proceedings pending to which the Designated Trust, the Company or
any of its subsidiaries (other than the Designated Trust) is a party or of which
any of their properties is the subject which, if determined adversely to the
Designated Trust, the Company or any of its subsidiaries (other than the
Designated Trust), 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 either the Designated Trust or
the Company and its subsidiaries (other than the Designated Trust), taken as a
whole; and, to the best of the Designated Trust's and the Company's knowledge,
no such proceedings are threatened or contemplated by governmental authorities
or threatened by others;
(s) Neither the Designated Trust nor the Company is or, after giving
effect to the offering and sale of the Designated Securities and the Designated
Guarantee, will be, an "investment company", as such term is defined in the
Investment Company Act of 1940, as amended (the "Investment Company Act");
(t) Deloitte & Touche LLP, who have certified certain financial
statements of the Company and its subsidiaries, are independent public
accountants as required by the Act and the rules and regulations of the
Commission thereunder;
(u) 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 conformity with generally accepted accounting principles in the
United States applied on a consistent basis;
-8-
(v) 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;
(w) 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;
(x) 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; and
(y) The Designated Subordinated Debentures will be classified for
United States federal income tax purposes as indebtedness of the Company.
3. Upon the execution of the Pricing Agreement applicable to any Firm
Designated Securities and authorization by the Representatives of the release of
such Firm Designated Securities, the several Underwriters propose to offer such
Firm Designated Securities for sale upon the terms and conditions set forth in
the Prospectus as amended or supplemented.
The Designated Trust may specify in the Pricing Agreement applicable
to any Designated Securities that the Designated Trust thereby grants to the
Underwriters the right (an "Over-allotment Option") to purchase at their
election up to the number of Optional Designated Securities set forth in such
Pricing Agreement, on the terms set forth therein, for the sole purpose of
covering over-allotments, if any, in the sale of the Firm Designated Securities.
Any such election to purchase Optional Designated Securities may be exercised by
written notice from the Representatives to the Designated Trust and the Company,
given within a period specified in the Pricing Agreement, setting forth the
aggregate number of Optional Designated Securities to be purchased and the date
on which such Optional Designated Securities are to be delivered, as determined
by the Representatives but in no event earlier than the First Time of Delivery
(as defined in Section 4 hereof) or, unless the Representatives, the Designated
Trust and the Company otherwise agree in writing, earlier than or later than the
respective number of business days after the date of such notice set forth in
such Pricing Agreement.
The number of Optional Designated Securities to be added to the number
of Firm Designated Securities to be purchased by each Underwriter as set forth
in Schedule I to the Pricing Agreement applicable to such Designated Securities
shall be, in each case, the number of
-9-
Optional Designated Securities which the Designated Trust and the Company have
been advised by the Representatives have been attributed to such Underwriter;
provided that, if the Designated Trust and the Company have not been so advised,
the number of Optional Designated Securities to be so added shall be, in each
case, that proportion of Optional Designated Securities which the number of Firm
Designated Securities to be purchased by such Underwriter under such Pricing
Agreement bears to the aggregate number of Firm Designated Securities (rounded
as the Representatives may determine to the nearest 100 securities). The total
number of Designated Securities to be purchased by all the Underwriters pursuant
to such Pricing Agreement shall be the aggregate number of Firm Designated
Securities set forth in Schedule I to such Pricing Agreement plus the aggregate
number of Optional Designated Securities which the Underwriters elect to
purchase.
As compensation to the Underwriters of the Designated Securities for
their commitments hereunder and under the Pricing Agreement, and in view of the
fact that the proceeds of the sale of the Designated Securities will be used by
the Designated Trust to purchase the Designated Subordinated Debentures of the
Company, the Company agrees to pay at each Time of Delivery to the
Representatives, for the accounts of the several Underwriters, the amount set
forth in the Pricing Agreement per Designated Security for the Designated
Securities to be delivered at each Time of Delivery.
4. Certificates for the Firm Designated Securities and the Optional
Designated Securities, if any, to be purchased by each Underwriter pursuant to
the Pricing Agreement relating thereto, in the form specified in the Trust
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 Designated Trust and the Company, shall be delivered by or on behalf of the
Designated Trust 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 Designated Trust, (i) with respect to the Firm Designated Securities, all
in the manner and at the place and time and date specified in such Pricing
Agreement or at such other place and time and date as the Representatives, the
Designated Trust and the Company may agree upon in writing, such time, date and
place being herein called the "First Time of Delivery" and (ii) with respect to
the Optional Designated Securities, if any, in the manner and at the place and
time and date specified by the Representatives in the written notice given by
the Representatives of the Underwriters' election to purchase such Optional
Designated Securities, or at such other place and time and date as the
Representatives, the Designated Trust and the Company may agree upon in writing,
such time, date and place, if not the First Time of Delivery, being herein
called the "Second Time of Delivery". Each such time and date for delivery is
herein called a "Time of Delivery".
5. The Designated Trust and the Company, jointly and severally, agree
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 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 as amended or supplemented after the date
of the Pricing
-10-
Agreement relating to such Securities and prior to the last 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 or the Designated Trust 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 Designated Securities or
the Designated Subordinated Debentures 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 Designated Securities or such Designated Subordinated
Debentures, provided that in connection therewith neither the Designated Trust
nor the Company shall 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 Designated Trust, 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 the Designated Securities or the Designated Subordinated
Debentures and if at such time any event shall have occurred as a result of
which the Prospectus as then amended or supplemented would include an untrue
statement of a material fact or omit to state any material fact necessary in
order to make the statements therein, in the light of the circumstances under
which they were made when such Prospectus is delivered, not misleading, or, if
for any other reason it shall be necessary during such same period to amend or
supplement the Prospectus or to file under the Exchange Act any document
incorporated by reference in the Prospectus in order to comply with the Act, the
Exchange Act or the Trust Indenture Act, to notify the Representatives and upon
their request to file such document and to prepare and furnish without charge to
each Underwriter and to any dealer in securities as many copies as the
Representatives may from time to time reasonably request of an amended
Prospectus or a supplement to the Prospectus which will correct such statement
or omission or effect such compliance;
-11-
(d) In the case of the Company, 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
consolidated subsidiaries and, if at such time, the Designated Trust is required
to file reports and proxy or information statements pursuant to Section 13(a),
13(c), 14 or 15(d) of the Exchange Act, of the Designated Trust (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 Designated
Securities, as notified to the Designated Trust and the Company by the
Representatives and (ii) 30 days after the last Time of Delivery for such
Designated Securities, not to offer, sell, contract to sell or otherwise dispose
of any Securities, any other beneficial interests in the assets of any Trust, or
any preferred securities or any other securities of any Trust or the Company, as
the case may be, 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, preferred securities or any such substantially similar securities of
any Trust or the Company, or any debt securities of the Company which mature
more than one year after such Time of Delivery (other than guarantees of
commercial notes offered from time to time by Sempra Energy Holdings pursuant to
its commercial paper program) and which are substantially similar to such
Designated Securities, without the prior written consent of the Representatives;
(f) In the case of the Company, to issue the Designated Guarantee
concurrently with the issue and sale of the Designated Securities as
contemplated herein or in the Pricing Agreement;
(g) To use its best efforts to list within 30 days following the
First Time of Delivery, subject to notice of issuance, the Designated Securities
on the New York Stock Exchange and, if the Company elects to dissolve the
Designated Trust and to distribute the Designated Subordinated Debentures to the
holders of the Designated Securities in liquidation of the Designated Trust, to
use its best efforts to list the Designated Subordinated Debentures on the New
York Stock Exchange prior to such distribution; and
(h) If the Designated Trust and the Company elect to rely upon Rule
462(b), the Designated Trust and 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
Designated Trust 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, the Guarantees and the
Subordinated Debentures 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
-12-
any Agreement among Underwriters, this Agreement, any Pricing Agreement, any
Company Agreement (including any amendment or supplement to the Subordinated
Indenture), the Securities, the Common Securities, the Subordinated Debentures,
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 and the Subordinated Debentures;
(iii) all expenses in connection with the qualification of the Securities and,
if necessary, the Subordinated Debentures, for offering and sale under state
securities laws as provided in Section 5(b) hereof, including the reasonable
fees and disbursements of counsel for the Underwriters in connection with such
qualification and in connection with the Blue Sky and Legal Investment Surveys;
(iv) any fees charged by securities rating services for rating the Securities
and the Subordinated Debentures; (v) any filing fees incident to, and the
reasonable fees and disbursements of counsel for the Underwriters in connection
with, any required review by the NASD Regulation, Inc. of the terms of the sale
of the Securities and the issuance of the Guarantees and the Subordinated
Debentures; (vi) the cost of preparing the Securities and the Subordinated
Debentures; (vii) the fees and expenses of any Indenture Trustee, Preferred
Guarantee Trustee (as defined in any Designated Guarantee) or other trustee
(including any trustee under any Trust Agreement), and any agent of any such
trustee and the reasonable fees and disbursements of counsel for any such
trustee in connection with any Trust Agreement, the Subordinated Indenture, any
Guarantee, the Securities and the Subordinated Debentures; (viii) any fees and
expenses in connection with listing the Securities and the Subordinated
Debentures and the cost of registering the Securities under Section 12 of the
Exchange Act; and (ix) all other costs and expenses incident to the performance
of its obligations hereunder and under any Over-allotment Options which are not
otherwise specifically provided for in this Section. It is understood, however,
that, except as provided in this Section, and Sections 8 and 11 hereof, the
Underwriters will pay all of their own costs and expenses, including the fees of
their counsel, transfer taxes on resale of any of the 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 Designated Trust and
the Company in or incorporated by reference in the Pricing Agreement relating to
such Designated Securities are, at and as of each Time of Delivery for such
Designated Securities, true and correct, the condition that the Designated Trust
and the Company shall have performed all of their respective 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 Designated Trust and the Company have 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;
-13-
(b) Counsel for the Underwriters shall have furnished to the
Representatives such written opinion or opinions, dated each 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 each 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 has been duly incorporated and is validly existing
as a corporation in good standing under the laws of its jurisdiction of
incorporation;
(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 Designated Trust, the Company or any of its
subsidiaries (other than the Designated Trust) is a party or of which any
property of the Designated Trust, the Company or any of its subsidiaries
(other than the Designated Trust) is the subject which, if determined
adversely to the Designated Trust, the Company or any of its subsidiaries
(other than the Designated Trust), 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 Designated Trust or the Company and its
subsidiaries (other than the Designated Trust), 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;
-14-
(v) The Company Agreements have each been duly authorized,
executed and delivered by the Company and when executed and delivered (i)
in the case of the Designated Guarantee, by the Preferred Guarantee Trustee
(as defined in the Designated Guarantee), (ii) in the case of the Trust
Agreement, by the Trustees (as defined in the Trust Agreement), (iii) in
the case of the Subordinated Indenture, by the Indenture Trustee, and (iv)
in the case of the Designated Subordinated Debentures, when authenticated
and delivered by the Indenture Trustee and paid for by the Designated Trust
in accordance with the applicable Note Purchase Agreement between the
Company and the Designated Trust, will constitute valid and legally binding
obligations of the Company, enforceable in accordance with their respective
terms (and, in the case of the Designated Subordinated Debentures, entitled
to the benefits of the Subordinated Indenture), subject, as to enforcement,
to bankruptcy, insolvency, receivership, liquidation, fraudulent
conveyance, fraudulent transfer, reorganization, moratorium and similar
laws of general applicability relating to or affecting creditors' rights
and to general equity principles; the Trust Agreement, the Subordinated
Indenture and the Designated Guarantee have each been duly qualified under
the Trust Indenture Act; and the Company Agreements, the Designated
Securities and the Common Securities of the Designated Trust will conform
to the descriptions thereof in the Prospectus;
(vi) The issue and sale of the Designated Securities and the
Common Securities by the Designated Trust, the compliance by the Designated
Trust and the Company with all of the provisions of this Agreement, the
Pricing Agreement, the Designated Securities, the Common Securities of such
Designated Trust and the Trust 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 such Designated Trust or the Company or any of its Significant
Subsidiaries is a party or by which such Designated Trust or the Company or
any of its Significant Subsidiaries is bound or to which any of the
material properties or assets of such Designated Trust or the Company or
any of its Significant Subsidiaries is subject, nor will such action result
in any violation of the provisions of the Certificate of Trust of the
Designated Trust or 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 such Designated Trust or 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 governmental agency or body is required for the
consummation by the Company of the transactions contemplated by this
Agreement, the Pricing Agreement, the Designated Securities, the Common
Securities of such Designated Trust or the Company Agreements, except such
as have been obtained under the Act and the Trust Indenture 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 Designated Securities by the Underwriters;
(vii) The issue by the Company of the Guarantees and the issue
and sale of the Subordinated Debentures, the compliance by the Company with
all of the provisions of the Guarantees, the Subordinated Debentures and
the Subordinated
-15-
Indenture, and the consummation of the transactions 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 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; and no consent, approval, authorization, order,
registration or qualification of or with any such court or governmental
agency or body is required for the issue of the Guarantees or the issue and
sale of the Subordinated Debentures or the consummation by the Company of
the transactions contemplated by the Guarantees, the Subordinated
Debentures, or the Subordinated Indenture, except such as have been
obtained under the Act and the Trust Indenture Act and such consents,
approvals, authorizations, registrations or qualifications as may be
required under state securities or Blue Sky laws in connection with the
issue by the Company of the Guarantees and the issue and sale of the
Subordinated Debentures;
(viii) The statements set forth in the Prospectus as amended or
supplemented under the captions "Description of Securities", "Description
of Debt Securities", "Description of Preferred Securities", "Description of
Preferred Securities Guarantees" and "Description of Debentures" insofar as
they purport to constitute a summary of the terms of the Securities, the
Common Securities, the Subordinated Debentures, the Guarantees and the
Company Agreements and under the captions "Plan of Distribution" and
"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;
(ix) All of the issued and outstanding Common Securities of
the Designated Trust will be directly owned of record by the Company and,
to such counsel's knowledge, free and clear of any security interest,
mortgage, pledge, lien, encumbrance, claim or equity;
(x) 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;
(xi) Neither the Company nor the Designated Trust is, or after
giving effect to the offering and sale of the Designated Securities and the
Designated Guarantee, will be, an "investment company," as such term is
defined in the Investment Company Act;
-16-
(xii) Based solely upon oral advice from the staff of the
Commission, the Trusts are not required to file reports or proxy or
information statements pursuant to Section 13(a), 13(c), 14 or 15(c) of the
Exchange Act. 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;
(xiii) The Registration Statement and the Prospectus as amended
or supplemented and any further amendments and supplements thereto made by
the Company or the Designated Trust 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
requirements under the Trust Indenture Act and the rules and regulations of
the Commission thereunder, it being understood, however, that such counsel
expresses no opinion with respect to the financial statements, schedules or
other financial data included or incorporated by reference in, or omitted
from the Registration Statement or the Prospectus as amended or
supplemented or with respect to any Form T-1. In passing upon the
compliance as to form of the Registration Statement and the Prospectus as
amended or supplemented (in each case, excluding the documents incorporated
by reference therein), except for those statements referred to in the
opinion in subsection (viii) of this Section 7(c), such counsel has assumed
that the statements made and incorporated by reference therein are correct
and complete; and
(xiv) 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 and the Designated Trust 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) Each of the Trust Agreement and the Subordinated
Indenture constitutes a legally valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms;
-17-
(ii) The Designated Subordinated Debentures, when executed and
authenticated in accordance with the terms of the Subordinated Indenture
and delivered to and paid for by the Designated Trust in accordance with
the terms of the Note Purchase Agreement, will constitute legally valid and
binding obligations of the Company, enforceable against the Company in
accordance with their terms, and are entitled to the benefits of the
Subordinated Indenture;
(iii) The Designated Guarantee, upon due execution,
authentication and delivery of the Designated Securities, will constitute a
legally valid and binding obligation of the Company, enforceable against
the Company in accordance with its terms; and
(iv) The Registration Statement and the Prospectus as amended
or supplemented (in each case, excluding the documents incorporated by
reference therein) comply as to form in all material respects with the
requirements for registration statements on Form S-3 under the Act, and the
requirements under the Trust Indenture Act and the rules and regulations of
the Commission thereunder; it being understood, however, that such counsel
expresses no opinion with respect to the financial statements, schedules or
other financial data included or incorporated by reference in, or omitted
from, the Registration Statement or the Prospectus as amended or
supplemented or with respect to any Form T-1. In passing upon the
compliance as to form of the Registration Statement and the Prospectus as
amended or supplemented (in each case, excluding the documents incorporated
by reference therein), such counsel has assumed that the statements made
and incorporated by reference therein are correct and complete.
In addition, such counsel shall provide a statement to the effect that
such counsel has participated in telephone conferences with officers and other
representatives of the Company, the Designated Trust and representatives of the
Underwriters, at which the contents of the Registration Statement and the
Prospectus as amended or supplemented and related matters were discussed and,
although such counsel is not passing upon, and does not assume any
responsibility for, the accuracy, completeness or fairness of the statements
contained or incorporated by reference in the Registration Statement and the
Prospectus as amended or supplemented and has not made any independent check or
verification thereof, during the course of such participation, no facts came to
such counsel's attention that caused them to believe that the Registration
Statement, at the time it became effective, contained an untrue statement of
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) Special Delaware counsel to the Designated Trust and 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:
-18-
(i) The Designated Trust has been duly created and is validly
existing in good standing as a business trust under the laws of the State
of Delaware, and all filings required under the laws of the State of
Delaware with respect to the creation and valid existence of the Designated
Trust as a business trust have been made;
(ii) Under the Delaware Act and the Trust Agreement, the
Designated Trust has the trust power and authority to own property and
conduct its business, all as described in the Prospectus;
(iii) The Designated Securities have been duly authorized by the
Trust Agreement and are duly and validly issued, fully paid and, subject to
the qualifications set forth in this paragraph, non-assessable undivided
beneficial interests in the assets of the Designated Trust, and are
entitled to the benefits provided by the Trust Agreement. The holders of
Designated Securities (the "Preferred Security Holders"), as beneficial
owners of the Designated Trust, will be entitled to the same limitation of
personal liability extended to stockholders of private corporations for
profit organized under the General Corporation Law of the State of
Delaware. We note that the Preferred Security Holders may be obligated,
pursuant to the Trust Agreement, (a) to provide indemnity and security in
connection with and pay taxes or governmental charges arising from
transfers of certificates evidencing the Designated Securities and the
issuance of replacement certificates, and (b) to provide security and
indemnity in connection with requests of or directions to the Property
Trustee (as defined in the Trust Agreement) to exercise its rights and
remedies under the Trust Agreement;
(iv) The Trust Agreement constitutes a valid and binding
obligation of the Company and the trustees of the Designated Trust, and is
enforceable against the Company and the trustees of the Designated Trust,
in accordance with its terms, subject, as to enforcement, to the effect
upon the Trust Agreement of (i) bankruptcy, insolvency, reorganization,
moratorium, receivership, liquidation, fraudulent transfer and conveyance,
and other similar laws relating to or affecting the rights and remedies of
creditors generally, (ii) principles of equity, including applicable law
relating to fiduciary duties (regardless of whether considered and applied
in a proceeding in equity or at law), and (iii) the effect of applicable
public policy on the enforceability of provisions relating to
indemnification or contribution;
(v) The issue and sale by the Designated Trust of the
Designated Securities and the Common Securities of the Designated Trust,
the compliance by the Designated Trust of this Agreement, the Pricing
Agreement, the Designated Securities, the Common Securities of the
Designated Trust and the Trust Agreement, and the consummation by the
Designated Trust of the transactions herein and therein contemplated do not
violate (a) any provisions of the Certificate of Trust of the Designated
Trust (as amended to date) or the Trust Agreement, or (b) any applicable
Delaware law or administrative regulation;
(vi) Under the Delaware Act and the Trust Agreement, the
Designated Trust has the requisite trust power and authority to (a)
execute, deliver and perform its obligations under this Agreement and the
Pricing Agreement, (b) issue and perform its obligations under the
Designated Securities and the Common Securities of the Designated Trust,
and (c) to purchase and hold the Designated Subordinated Debentures;
-19-
(vii) The Common Securities of the Designated Trust have been
duly authorized and are validly issued and fully paid undivided beneficial
interests in the assets of the Designated Trust and are entitled to the
benefits provided by the Trust Agreement;
(viii) Under the Delaware Act and the Trust Agreement, the
issuance of the Designated Securities and the Common Securities of the
Designated Trust is not subject to preemptive rights;
(ix) No consent, approval, authorization, order or registration
with or qualification of or with any Delaware court or Delaware
governmental authority or Delaware agency is required to be obtained by the
Designated Trust solely in connection with the issue and sale of the
Designated Securities and the Common Securities of the Designated Trust or
the consummation of the transactions contemplated by this Agreement or the
Pricing Agreement;
(x) Under the Delaware Act and the Trust Agreement, the
execution and delivery by the Designated Trust of this Agreement and the
Pricing Agreement, and the performance by the Designated Trust of its
obligations hereunder and thereunder, have been duly authorized by the
requisite trust action on the part of the Designated Trust; and
(xi) Assuming that the Designated Trust derives no income from
or connected with sources within the State of Delaware and has no assets,
activities (other than maintaining the Delaware Trustee (as defined in the
Trust Agreement) and the filing of documents with the Secretary of State of
the State of Delaware) or employees in the State of Delaware and assuming
that the Designated Trust is treated as a grantor trust for federal income
tax purposes, the holders of the Designated Securities (other than those
holders who reside or are domiciled in the State of Delaware) will have no
liability for income taxes imposed by the State of Delaware solely as a
result of their participation in the Designated Trust, and the Designated
Trust will not be liable for any income tax imposed by the State of
Delaware.
(f) Tax counsel for the Designated Trust and the Company satisfactory
to the Representatives shall have furnished to the Representatives their written
opinion (a draft of such opinion is attached as Xxxxx XXX(a) hereto), dated each
Time of Delivery for such Designated Securities, in form and substance
satisfactory to the Representatives, to the effect that such firm confirms its
opinion set forth in the Prospectus as amended or supplemented under the caption
"Material United States Federal Income Tax Considerations" and that the
Designated Subordinated Debentures will be classified for United States federal
income tax purposes as indebtedness of the Company;
(g) Counsel for the Indenture Trustee, the Property Trustee (as such
term is defined in the Trust Agreement for the Designated Trust) and the
Preferred Guarantee Trustee satisfactory to the Representatives shall have
furnished to the Representatives their written opinion (a draft of such opinion
is attached as Xxxxx XXX (b) hereto), dated each Time of Delivery for such
Designated Securities, in form and substance satisfactory to the
Representatives, with respect to the trust powers, organization, valid existence
and good standing of each such trustee, the corporate power and authority of
each such trustee to execute, deliver and perform its
-20-
obligations under the Trust Agreement for the Designated Trust, the Designated
Guarantee and the Subordinated Indenture (the Trust Agreement for the Designated
Trust, the Designated Guarantee and the Subordinated Indenture being
collectively referred to as the "QUIPS Documents"), as the case may be, the due
authorization, execution and delivery by each such trustee, as the case may be,
of the QUIPS Documents, the validity and enforceability against each such
trustee, as the case may be, of the QUIPS Documents, that execution, delivery
and performance by each such trustee of the QUIPS Documents does not conflict
with or constitute a breach of the charter or by-laws of each such trustee, that
no consent, approval, authorization of, or registration with, or any notice to
any banking authority is required for the execution, delivery and performance by
each such trustee of the QUIPS Documents or such other matters as the
Representatives may reasonably request;
(h) 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 each 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 each 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 such
Time of Delivery, and with respect to such letter dated each such Time of
Delivery, as to such other matters as the Representatives may reasonably request
and in form and substance satisfactory to the Representatives;
(i) Neither the Designated Trust nor the Company and any of its
subsidiaries (other than the Designated Trust) taken as a whole, shall have
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 Designated Trust or the Company or any of its
subsidiaries (other than the Designated Trust) 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
Designated Trust or the Company or any of its subsidiaries (other than the
Designated Trust), 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
Designated Trust or 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 Firm Designated Securities or Optional Designated Securities or
both on the terms and in the manner contemplated in the Prospectus as first
amended or supplemented relating to the Designated Securities;
-21-
(j) 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 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;
(k) 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 Firm
Designated Securities or Optional Designated Securities or both on the terms and
in the manner contemplated in the Prospectus as first amended or supplemented
relating to the Designated Securities;
(l) 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
(m) The Designated Trust and the Company shall have furnished or
caused to be furnished to the Representatives at each Time of Delivery for the
Designated Securities a joint and several certificate of officers of the
Designated Trust and the Company satisfactory to the Representatives as to the
accuracy of the representations and warranties of the Designated Trust and the
Company herein at and as of such Time of Delivery, as to the performance by the
Designated Trust and the Company of all of their respective obligations
hereunder to be performed at or prior to such Time of Delivery, as to the
matters set forth in subsections (a) and (i) of this Section and as to such
other matters as the Representatives may reasonably request.
8. (a) The Designated Trust and the Company, jointly and severally, 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 Designated 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 neither the Designated Trust nor the Company
shall 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
-22-
as amended or supplemented and any other prospectus relating to the Designated
Securities, or any such amendment or supplement, in reliance upon and in
conformity with written information furnished to the Designated Trust and 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.
(b) Each Underwriter will indemnify and hold harmless the Designated
Trust and the Company against any losses, claims, damages or liabilities to
which the Designated Trust 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 Designated
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 Designated Securities, or any such amendment or supplement in
reliance upon and in conformity with written information furnished to the
Designated Trust and the Company by such Underwriter through the Representatives
expressly for use therein; and will reimburse the Designated Trust and the
Company for any legal or other expenses reasonably incurred by the Designated
Trust or 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
-23-
not include a statement as to or an admission of fault, culpability or a failure
to act, by or on behalf of any indemnified party.
(d) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities (or
actions in respect thereof) in such proportion as is appropriate to reflect the
relative benefits received by the Designated Trust and the Company on the one
hand and the Underwriters of the Designated Securities on the other from the
offering of the Designated 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 Designated Trust and 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 Designated Trust
and 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 Designated Trust and 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 Designated Trust and 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 Designated Trust, 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. The obligations of the Designated Trust and the Company in this
subsection (d) to contribute are joint and several.
-24-
(e) The obligations of the Designated Trust and the Company under
this Section 8 shall be in addition to any liability which the Designated Trust
or 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
trustee, officer and director of the Designated Trust or the Company and to each
person, if any, who controls the Designated Trust or the Company within the
meaning of the Act.
9. (a) If any Underwriter shall default in its obligation to purchase
the Firm Designated Securities or Optional Designated Securities which it has
agreed to purchase under the Pricing Agreement relating to 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 Firm
Designated Securities or Optional Designated Securities, as the case may be,
then the Designated Trust and 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 Designated Trust and the Company that they have so
arranged for the purchase of such Designated Securities, or the Designated Trust
and the Company notify the Representatives that it has so arranged for the
purchase of such Designated Securities, the Representatives or the Designated
Trust and the Company shall have the right to postpone a 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 Designated Trust and the Company agree 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 Firm Designated Securities or Optional Designated Securities, as the case
may be, of a defaulting Underwriter or Underwriters by the Representatives and
the Designated Trust and the Company as provided in subsection (a) above, the
aggregate number of such Designated Securities which remains unpurchased does
not exceed one-eleventh of the aggregate number of the Firm Designated
Securities or Optional Designated Securities, as the case may be, to be
purchased at the respective Time of Delivery, then the Designated Trust shall
have the right to require each non-defaulting Underwriter to purchase the number
of Firm Designated Securities or Optional Designated Securities, as the case may
be, 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 number of
Firm Designated Securities or Optional Designated Securities, as the case may
be, which such Underwriter agreed to purchase under such Pricing Agreement) of
the Firm Designated Securities or Optional Designated Securities, as the case
may be, 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.
-25-
(c) If, after giving effect to any arrangements for the purchase of
the Firm Designated Securities or Optional Designated Securities, as the case
may be, of a defaulting Underwriter or Underwriters by the Representatives and
the Designated Trust and the Company as provided in subsection (a) above, the
aggregate number of Firm Designated Securities or Optional Designated
Securities, as the case may be, which remains unpurchased exceeds one- eleventh
of the aggregate number of the Firm Designated Securities or Optional Designated
Securities, as the case may be, to be purchased at the respective Time of
Delivery, as referred to in subsection (b) above, or if the Designated Trust and
the Company shall not exercise the right described in subsection (b) above to
require non-defaulting Underwriters to purchase Firm Designated Securities or
Optional Designated Securities, as the case may be, of a defaulting Underwriter
or Underwriters, then the Pricing Agreement relating to such Firm Designated
Securities or the Over-allotment Option relating to such Optional Designated
Securities, as the case may be, shall thereupon terminate, without liability on
the part of any non- defaulting Underwriter, the Designated Trust or the
Company, except for the expenses to be borne by the Designated Trust and 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 Designated Trust and the Company and the several
Underwriters, as set forth in this Agreement or made by or on behalf of them,
respectively, pursuant to this Agreement, shall remain in full force and effect,
regardless of any investigation (or any statement as to the results thereof)
made by or on behalf of any Underwriter or any controlling person of any
Underwriter, or the Designated Trust or the Company, or any trustee, officer or
director or controlling person of the Designated Trust or the Company, and shall
survive delivery of and payment for the Securities.
11. If any Pricing Agreement or Over-allotment Option shall be terminated
pursuant to Section 9 hereof, neither the Designated Trust nor the Company shall
then be under any liability to any Underwriter with respect to the Firm
Designated Securities or Optional Designated Securities with respect to which
such Pricing Agreement or Over-allotment Option, as the case may be, shall have
been terminated 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
Designated Trust or 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 neither the
Designated Trust nor the Company shall then be under 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
-26-
set forth in the Pricing Agreement; and if to the Designated Trust or 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 Designated Trust and 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, each Designated Trust, the
Company and, to the extent provided in Sections 8 and 10 hereof, the trustees,
officers and directors of each Designated Trust and the Company and each person
who controls any Designated Trust or 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.
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.
Very truly yours,
Sempra Energy
By: ______________________
Name:
Title:
Sempra Energy Capital Trust II
By: ______________________
Name:
Title:
Sempra Energy Capital Trust III
-27-
By: ______________________
Name:
Title:
Accepted as of the date hereof:
[NAMES OF REPRESENTATIVES]
By: __________________
(__________________)
-28-
ANNEX I
Pricing Agreement
[ ],
As Representatives of the several
Underwriters named in Schedule I hereto,
c/x Xxxxxxx, Xxxxx & Co.
00 Xxxxx Xxxxxx Xxx Xxxx, Xxx Xxxx 00000
__________________, 2000
Ladies and Gentlemen:
Sempra Energy Capital Trust [II] [III], a statutory business trust
created under the Business Trust Act of the State of Delaware (Chapter 38, Title
12, of the Delaware Code, 12 Del. C. ((S)) 3801 et seq.) (the "Designated
Trust"), and Sempra Energy, a California corporation (the "Company"), as sponsor
of the Designated Trust and as guarantor, propose, subject to the terms and
conditions stated herein and in the Underwriting Agreement, dated _____________,
2000 (the "Underwriting Agreement") between the Designated Trust and 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" [consisting of Firm
Designated Securities and any Optional Designated Securities the Underwriters
may elect to purchase]). The principal asset of the Designated Trust consists
of debt securities of the Company ("Subordinated Debentures"), as specified in
Schedule II to this Agreement. The Designated Securities will be guaranteed by
the Company to the extent set forth in the Designated Guarantee with respect to
such Designated Securities (the "Guarantee"). 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.
Annex I -- 1
Subject to the terms and conditions set forth herein and in the
Underwriting Agreement incorporated herein by reference, [(a)] the Designated
Trust agrees to issue and sell to each of the Underwriters, and each of the
Underwriters agrees, severally and not jointly, to purchase from the Designated
Trust, at the time and place and at the purchase price to the Underwriters set
forth in Schedule II hereto, the number of [Firm] Designated Securities set
forth opposite the name of such Underwriter in Schedule I hereto[, and (b) in
the event and to the extent that the Underwriters shall exercise the election to
purchase Optional Designated Securities, as provided below, the Designated Trust
agrees to issue and sell to each of the Underwriters, and each of the
Underwriters agrees, severally and not jointly, to purchase from the Designated
Trust at the purchase price to the Underwriters set forth in Schedule II hereto
that portion of the number of Optional Designated Securities as to which such
election shall have been exercised.]
[The Designated Trust hereby grants to each of the Underwriters the
right to purchase at their election up to the number of Optional Designated
Securities set forth opposite the name of such Underwriter in Schedule I hereto
on the terms referred to in the paragraph above for the sole purpose of covering
over- allotments in the sale of the Firm Designated Securities. Any such
election to purchase Optional Designated Securities may be exercised by written
notice from the Representatives to the Designated Trust and the Company given
within a period of 30 calendar days after the date of this Pricing Agreement,
setting forth the aggregate number of Optional Designated Securities to be
purchased and the date on which such Optional Designated Securities are to be
delivered, as determined by the Representatives, but in no event earlier than
the First Time of Delivery or, unless the Representatives and the Company and
the Designated Trust otherwise agree in writing, no earlier than ten or later
than ten business days after the date of such notice.]
If the foregoing is in accordance with your understanding, please sign
and return to us one for the Designated Trust, 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 Designated Trust 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 Designated Trust and the Company for
Annex I -- 2
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: Regular Trustee
Sempra Energy Capital Trust [II] [III]
By: _____________________________________
Name:
Title: Regular Trustee
Accepted as of the date hereof:
[ ]
By:_____________________________
(__________________)
On behalf of each of the underwriters
Annex I -- 3
SCHEDULE I
Principal Amount of
Designated Securities to
Underwriter be Purchased
-------------------------------------------------- -------------------------
[Names of Co-Representatives]..................... $
[Names of other Underwriters].....................
-------
Total................................... $
=======
SCHEDULE I -- 1
SCHEDULE II
Designated Trust:
Sempra Energy Capital Trust [II] [III]
Title of Designated Securities:
______% Cumulative Quarterly Income Preferred Securities, Series
(QUIPS/(SM))
Aggregate liquidation amount:
Firm Designated Securities:
$______ Optional Designated Securities:
[up to a minimum of $______ [none]
Price to public:
$______ per Designated Security or ______% of the liquidation amount of
the Designated Securities
Purchase price to Underwriters:
$______ per Designated Security or ______% of the liquidation amount of
the Designated Securities
Underwriters' compensation:
As compensation to the Underwriters for their commitments hereunder, and in
view of the fact that the proceeds of the sale of the Designated Securities
will be used by the Designated Trust to purchase the Subordinated
Debentures of the Company, the Company hereby agrees to pay at each Time of
Delivery to [the Representatives], for the accounts of the several
Underwriters, an amount equal to $______ per Designated Security for the
Designated Securities to be delivered at each Time of Delivery.
Specified funds for payment of purchase price:
Federal (same day) funds
Time of Delivery:
______a.m. (New York City time), ______, 2000
Trust Agreement:
Amended and Restated Declaration of Trust dated as of ______, 2000 among
the Company, as Depositor, ______, as Property Trustee, ______, as Delaware
Trustee, the Regular Trustees named therein and the several Holders of
Trust Securities
Designated Guarantee:
SCHEDULE II -- 1
Preferred Securities Guarantee Agreement dated as of ______, 2000 between
the Company and ______, as Trustee
Designated Subordinated Debentures:
[$______ aggregate principal amount of ______% Subordinated Deferrable
Interest Debentures, Series______, due______]
Maturity:
______ [(subject to (i) extension to a date not later than ______ and (ii)
shortening to a date not earlier than ______)]
Interest Rate:
______%
Interest Payment Dates:
______, ______, ______ and ______ of each year, commencing on ______
Extension period:
[______ quarters] [______ semi-annual periods]
Redemption provisions:
[Set forth in Section ______ of the Trust Agreement]
Sinking fund provisions:
No sinking fund provisions
Exchange for Designated Securities:
[The Subordinated Debentures may be delivered in exchange for the
Designated Securities as provided in the Trust Agreement]
Closing location for delivery of Designated Securities:
______
Names and addresses of Representatives:
Designated Representatives:
Address for Notices, etc.:
[Other Terms]:
SCHEDULE II -- 2
ANNEX II
Pursuant to Section 7(h) 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 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
ANNEX II -- 1
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;
(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;
ANNEX II -- 2
(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. 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 each Time of Delivery for such Designated Securities.
ANNEX II -- 3
