Exhibit 1.1
Sempra Energy
Debt Securities
__________________________
Underwriting Agreement
----------------------
February 17, 2000
To the Representatives of the
several Underwriters named in
the respective Pricing Agreements
hereinafter described
Ladies and Gentlemen:
From time to time, Sempra Energy, a California corporation (the "Company"),
proposes to enter into one or more Pricing Agreements (each a "Pricing
Agreement") in the form of Annex I hereto, with such additions and deletions as
the parties thereto may determine, and, subject to the terms and conditions
stated herein and therein, to issue and sell to the firms named in Schedule I to
the applicable Pricing Agreement (such firms constituting the "Underwriters"
with respect to such Pricing Agreement and the securities specified therein)
certain of its debt securities (the "Securities") specified in Schedule II to
such Pricing Agreement (with respect to such Pricing Agreement, the "Designated
Securities").
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 indenture (the "Indenture") identified in such Pricing
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 the Company to sell any of the
Securities or as an obligation of any of the Underwriters to purchase any of the
Securities. The obligation of the Company to issue and sell any of the
Securities and the obligation of any of the Underwriters to purchase any of the
Securities shall be evidenced by the Pricing Agreement with respect to the
Designated Securities specified therein. Each Pricing Agreement shall specify
the aggregate principal amount of such Designated Securities, the initial public
offering price of such Designated Securities, the purchase price to the
Underwriters of such Designated Securities, the names of the Underwriters of
such Designated Securities, the names of the Representatives of such
Underwriters and the principal amount of such Designated Securities to be
purchased by
each Underwriter and shall set forth the date, time and manner of delivery of
such Designated Securities and payment therefor. The Pricing Agreement shall
also specify (to the extent not set forth in the Indenture 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 represents and warrants to, and agrees with, each of the
Underwriters that:
(a) A registration statement on Form S-3 (File No. 333-77843) (the
"Initial Registration Statement") in respect of the Securities and certain
other securities has been filed with the Securities and Exchange Commission
(the "Commission"); the Initial Registration Statement and any post-
effective amendment thereto, each in the form heretofore delivered or to be
delivered to the Representatives and, excluding exhibits to the Initial
Registration Statement, but including all documents incorporated by
reference in the prospectus contained therein, to the Representatives for
each of the other Underwriters, have been declared effective by the
Commission in such form; other than a registration statement, if any,
increasing the size of the offering (a "Rule 462(b) Registration
Statement"), filed pursuant to Rule 462(b) under the Securities Act of
1933, as amended (the "Act"), which , if so filed, became effective upon
filing, no other document with respect to the Initial Registration
Statement or any document incorporated by reference therein has heretofore
been filed or transmitted for filing with the Commission (other than
documents filed after the filing date of the Initial Registration Statement
under the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
and prospectuses filed pursuant to Rule 424(b) of the rules and regulations
of the Commission under the Act, each in the form heretofore delivered to
the Representatives); and no stop order suspending the effectiveness of the
Initial Registration Statement, any post-effective amendment thereto or the
Rule 462(b) Registration Statement, if any, has been issued and no
proceeding for that purpose has been initiated or threatened by the
Commission (any preliminary prospectus included in the Initial Registration
Statement or filed with the Commission pursuant to Rule 424(a) under the
Act, is hereinafter called a "Preliminary Prospectus"; the various parts of
the Initial Registration Statement, any post-effective amendment thereto
and the Rule 462(b) Registration Statement, if any, including all exhibits
thereto and the documents incorporated by reference in the prospectus
contained in the Initial Registration Statement at the time such part of
the Initial Registration Statement became effective but excluding any Form
T-1, each as amended at the time such part of the Initial Registration
Statement became effective or such part of the Rule 462(b) Registration
Statement, if any, became or hereafter becomes effective, are hereinafter
collectively called the "Registration Statement"; the prospectus relating
to the Securities, in the form in which it has most recently been filed, or
transmitted for filing, with the Commission on or prior to the date of this
Agreement, being hereinafter called the "Prospectus"; any reference herein
to any Preliminary Prospectus or the Prospectus shall be deemed to refer to
and include the documents incorporated by reference therein pursuant to the
applicable form under the Act, as of the
2
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) The documents incorporated by reference in the Prospectus, when
they became effective or were filed with the Commission, as the case may
be, conformed in all material respects to the requirements of the Act or
the Exchange Act, as applicable, and the rules and regulations of the
Commission thereunder, and none of such documents contained an untrue
statement of a material fact or omitted to state a material fact necessary
in order to make the statements therein, in the light of the circumstances
under which they were made, not misleading; and any further documents so
filed and incorporated by reference in the Prospectus or any further
amendment or supplement thereto, when such documents become effective or
are filed with the Commission, as the case may be, will conform in all
material respects to the requirements of the Act or the Exchange Act, as
applicable, and the rules and regulations of the Commission thereunder and
will not contain an untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided,
however, that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Company by an Underwriter of
Designated Securities through the Representatives expressly for use in the
Prospectus as amended or supplemented relating to such Securities;
(c) The Registration Statement and the Prospectus conform, and any
further amendments or supplements to the Registration Statement or the
Prospectus will conform, in all material respects to the requirements of
the Act and the rules and regulations of the Commission thereunder and the
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
3
any statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Company by an Underwriter of
Designated Securities through the Representatives expressly for use in the
Prospectus as amended or supplemented relating to such Securities;
(d) The Company and its subsidiaries taken as a whole, have not
sustained since the date of the latest audited financial statements
included or incorporated by reference in the Prospectus any material loss
or interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor dispute or
court or governmental action, order or decree, otherwise than as set forth
or contemplated in the Prospectus; and, since the respective dates as of
which information is given in the Registration Statement and the
Prospectus, there has not been any material change in the capital stock or
long-term debt of the Company or any of its subsidiaries or any material
adverse change, or any development involving a prospective material adverse
change, in or affecting the general affairs, management, financial
position, shareholders' equity or results of operations of the Company and
its subsidiaries, taken as a whole, otherwise than as set forth or
contemplated in the Prospectus;
(e) The Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the State of California,
with power and authority (corporate and other) to own its properties and
conduct its business as described in the Prospectus, and has been duly
qualified as a foreign corporation for the transaction of business and is
in good standing under the laws of each other jurisdiction in which it owns
or leases properties or conducts any business so as to require such
qualification, except where the failure to be so qualified would not
subject it to material liability or disability; and each of Southern
California Gas Company, a California corporation ("SCGC"), San Diego Gas &
Electric Company, a California corporation ("SDG&E"), Pacific Enterprises,
a California corporation ("PE"), and Enova Corporation, a California
corporation ("Enova") (collectively, SCGC, SDG&E, PE and Enova are referred
to herein as the "Significant Subsidiaries") has been duly incorporated and
is validly existing as a corporation in good standing under the laws of its
jurisdiction of incorporation;
(f) The Company has an authorized capitalization as set forth in the
Prospectus, and all of the issued shares of capital stock of the Company
have been duly and validly authorized and issued and are fully paid and
non-assessable; and all of the issued shares of capital stock of each
Significant Subsidiary have been duly and validly authorized and issued,
are fully paid and non-assessable and, except for the outstanding preferred
stock of SCGC and PE and outstanding preferred and preference stock of
SDG&E, are owned directly or indirectly by the Company, free and clear of
all liens, encumbrances, equities or claims;
(g) The Securities have been duly authorized, and, when Designated
Securities are issued and delivered pursuant to this Agreement and the
Pricing Agreement with respect to such Designated Securities, such
Designated Securities will have been duly executed, authenticated, issued
and delivered and will constitute valid and legally binding obligations of
the Company entitled to the benefits provided by the Indenture; the
Indenture has been duly authorized and duly qualified under the Trust
Indenture Act and,
4
at the Time of Delivery for such Designated Securities (as defined in
Section 4 hereof), the Indenture will constitute a valid and legally
binding instrument, enforceable in accordance with its terms, subject, as
to enforcement, to bankruptcy, insolvency, receivership, liquidation,
fraudulent conveyance, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or affecting creditors'
rights and to general equity principles; and the Indenture conforms, and
the Designated Securities will conform, to the descriptions thereof
contained in the Prospectus as amended or supplemented with respect to such
Designated Securities;
(h) The issue and sale of the Securities and the compliance by the
Company with all of the provisions of the Securities, the Indenture, this
Agreement and any Pricing Agreement, and the consummation of the
transactions herein and therein contemplated will not conflict with or
result in a breach or violation of any of the terms or provisions of, or
constitute a default under, any material contract, indenture, mortgage,
deed of trust, loan agreement, note, lease or other agreement or instrument
to which the Company or any of its Significant Subsidiaries is a party or
by which the Company or any of its Significant Subsidiaries is bound or to
which any of the material properties or assets of the Company or any of its
Significant Subsidiaries is subject, nor will such action result in any
violation of the provisions of the Articles of Incorporation or By-laws of
the Company or any of its Significant Subsidiaries or any statute or any
order, rule or regulation of any court or governmental agency or body
having jurisdiction over the Company or any of its Significant Subsidiaries
or any of their 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 Securities or the consummation by the Company of the transactions
contemplated by this Agreement or any Pricing Agreement or the Indenture,
except such as have been obtained under the Act 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 Securities by the
Underwriters;
(i) The statements set forth in the Prospectus as amended or
supplemented under the captions "Description of Debt Securities" and
"Description of [Notes] [Debentures]" (or similar caption), insofar as they
purport to constitute a summary of the terms of the Securities or the
Indenture, and under the captions "Plan of Distribution" and
"Underwriting", (i) insofar as they purport to describe the provisions of
the laws and documents referred to therein, are accurate, complete and fair
in all material respects;
(j) Neither the Company nor any of its Significant Subsidiaries is (i)
in violation of its Articles of Incorporation or By-laws or (ii) in default
in the performance or observance of any material obligation, agreement,
covenant or condition contained in any contract, indenture, mortgage, deed
of trust, loan agreement, note, lease or other agreement or instrument to
which it is a party or by which it or any of its properties may be bound,
except in the case of clause (ii) for such defaults which, individually or
in the aggregate, would not reasonably be expected to have a material
adverse effect on the consolidated financial position, shareholders' equity
or results of operations of the Company and its subsidiaries, taken as a
whole;
5
(k) Other than as set forth in the Prospectus, there are no legal or
governmental proceedings pending to which the Company or any of its
subsidiaries is a party or of which any property of the Company or any of
its subsidiaries is the subject which, if determined adversely to the
Company or any of its subsidiaries, would individually or in the aggregate
have a material adverse effect on the current or future consolidated
financial position, shareholders' equity or results of operations of the
Company and its subsidiaries, taken as a whole; and, to the best of the
Company's knowledge, no such proceedings are threatened or contemplated by
governmental authorities or threatened by others;
(l) The Company is not and after giving effect to the offering and
sale of the Securities, will not be, an "investment company", as such term
is defined in the Investment Company Act of 1940, as amended (the
"Investment Company Act");
(m) Deloitte & Touche LLP, who have certified certain financial
statements of the Company and its subsidiaries taken as a whole, are
independent public accountants as required by the Act and the rules and
regulations of the Commission thereunder;
(n) The financial statements of the Company and its consolidated
subsidiaries included or incorporated by reference in the Registration
Statement and Prospectus present fairly in all material respects the
consolidated financial position of the Company and its consolidated
subsidiaries as of the dates indicated and the consolidated results of
their operations for the periods specified; and, except as stated therein,
such financial statements have been prepared in conformity with generally
accepted accounting principles in the United States applied on a consistent
basis;
(o) The Company has reviewed its operations and that of its
subsidiaries and any third parties with which the Company and its
subsidiaries, taken as a whole, have a material relationship, to evaluate
the extent to which the business or operations of the Company and its
subsidiaries, taken as a whole, have been or will be affected by the Year
2000 Problem. As a result of such review, the Company has no reason to
believe, and does not believe, that the Year 2000 Problem has had or could
reasonably be expected to have a material adverse effect on the current or
future consolidated financial position, business prospects, shareholders'
equity or results of operations of the Company and its subsidiaries, taken
as a whole, or has resulted or will result in any material loss or
interference with the business or operations of the Company and its
subsidiaries, taken as a whole. The "Year 2000 Problem" as used herein
means any significant risk that computer hardware or software used by the
Company or any of its subsidiaries in the receipt, transmission,
processing, manipulation, storage, retrieval, retransmission or other
utilization of data or in the operation of mechanical or electrical systems
of any kind is not functioning or will not function, in the case of dates
or time periods occurring after December 31, 1999, at least as effectively
as in the case of dates or time periods occurring prior to January 1, 2000;
(p) 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;
6
(q) The Company and its subsidiaries possess such certificates,
authorities or permits issued by the appropriate state, federal, local or
foreign regulatory agencies or bodies necessary to conduct the businesses
now operated by them, except where the failure to possess such
certificates, authorities or permits, individually or in the aggregate,
would not have a material adverse effect on the current or future
consolidated financial position, shareholders' equity or results of
operations of the Company and its subsidiaries, taken as a whole; and
neither the Company nor any of its subsidiaries has received any notice of
proceedings relating to the revocation or modification of any such
certificate, authority or permit which, individually or in the aggregate,
if the subject of an unfavorable decision, ruling or finding, would have a
material adverse affect on the current or future consolidated financial
position, shareholders' equity or results of operations of the Company and
its subsidiaries, taken as a whole; and
(r) The Company and its subsidiaries are in compliance with, and
conduct their respective businesses in conformity with, all applicable
state, federal, local and foreign laws and regulations relating to the
operation and ownership of a public utility, including, without limitation,
those relating to the distribution and transmission of natural gas, except
to the extent that any failure so to comply or conform would not
individually or in the aggregate have a material adverse effect on the
current or future consolidated financial position, shareholders' equity or
results of operations of the Company and its subsidiaries, taken as a
whole.
3. Upon the execution of the Pricing Agreement applicable to any
Designated Securities and authorization by the Representatives of the release of
such Securities, the several Underwriters propose to offer such Securities for
sale upon the terms and conditions set forth in the Prospectus as amended or
supplemented.
4. Designated Securities to be purchased by each Underwriter pursuant to
the Pricing Agreement relating thereto, in the form specified in such Pricing
Agreement, and in such authorized denominations and registered in such names as
the Representatives may request upon at least forty-eight hours' prior notice to
the Company, shall be delivered by or on behalf of the Company to the
Representatives for the account of such Underwriter, against payment by such
Underwriter or on its behalf of the purchase price therefor by wire transfer of
Federal (same-day) funds to the account specified by the Company to the
Representatives at least forty-eight hours in advance or at such other place and
time and date as the Representatives and the Company may agree upon in writing,
such time and date being herein called the "Time of Delivery" for such
Securities.
5. The Company agrees with each of the Underwriters of any Designated
Securities:
(a) To prepare the Prospectus as amended or supplemented in relation
to the applicable Designated Securities in a form approved by the
Representatives and to file such Prospectus pursuant to Rule 424(b) under
the Act not later than the Commission's close of business on the second
business day following the execution and delivery of the Pricing Agreement
relating to the applicable Designated Securities or, if applicable, such
earlier time as may be required by Rule 424(b); to make no further
amendment or any supplement to the Registration Statement or Prospectus
amended or supplemented
7
after the date of the Pricing Agreement relating to such Securities and
prior to the Time of Delivery for such Securities which shall be
disapproved by the Representatives for such Securities promptly after
reasonable notice thereof; to advise the Representatives promptly of any
such amendment or supplement after such Time of Delivery and furnish the
Representatives with copies thereof; to file promptly all reports and any
definitive proxy or information statements required to be filed by the
Company with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d)
of the Exchange Act for so long as the delivery of a prospectus is required
in connection with the offering or sale of such Securities, and during such
same period to advise the Representatives, promptly after it receives
notice thereof, of the time when any amendment to the Registration
Statement has been filed or becomes effective or any supplement to the
Prospectus or any amended Prospectus has been filed with the Commission, of
the issuance by the Commission of any stop order or of any order preventing
or suspending the use of any prospectus relating to the Securities, of the
suspension of the qualification of such Securities for offering or sale in
any jurisdiction, of the initiation or threatening of any proceeding for
any such purpose, or of any request by the Commission for the amending or
supplementing of the Registration Statement or Prospectus or for additional
information; and, in the event of the issuance of any such stop order or of
any such order preventing or suspending the use of any prospectus relating
to the Securities or suspending any such qualification, to promptly use
commercially reasonable efforts to obtain the withdrawal of such order;
(b) Promptly from time to time to take such action as the
Representatives may reasonably request to qualify such Securities for
offering and sale under the securities laws of such jurisdictions as the
Representatives may request and to comply with such laws so as to permit
the continuance of sales and dealings therein in such jurisdictions for as
long as may be necessary to complete the distribution of such Securities,
provided that in connection therewith the Company shall not be required to
qualify as a foreign corporation or to file a general consent to service of
process in any jurisdiction;
(c) Prior to 10:00 a.m., New York City time, on the New York business
day next succeeding the date of any Pricing Agreement for such Designated
Securities, or such later time or date as agreed to by the Company and the
Representatives, and from time to time, to furnish the Underwriters with
copies of the Prospectus in New York City as amended or supplemented in
such quantities as the Representatives may reasonably request, and, if the
delivery of a prospectus is required at any time in connection with the
offering or sale of such Designated Securities and if at such time any
event shall have occurred as a result of which the Prospectus as then
amended or supplemented would include an untrue statement of a material
fact or omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made when such Prospectus is delivered, not misleading, or, if for any
other reason it shall be necessary during such same period to amend or
supplement the Prospectus or to file under the Exchange Act any document
incorporated by reference in the Prospectus in order to comply with the
Act, 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
8
amended Prospectus or a supplement to the Prospectus which will correct
such statement or omission or effect such compliance;
(d) To make generally available to its securityholders as soon as
practicable, but in any event not later than eighteen months after the
effective date of the Registration Statement (as defined in Rule 158(c)
under the Act), an earnings statement of the Company and its subsidiaries
(which need not be audited) complying with Section 11(a) of the Act and the
rules and regulations of the Commission thereunder (including, at the
option of the Company, Rule 158);
(e) During the period beginning from the date of the Pricing Agreement
for such Designated Securities and continuing to and including the later of
(i) the termination of trading restrictions for such Securities, as
notified to the Company by the Representatives and (ii) the Time of
Delivery for such Designated Securities, not to offer, sell, contract to
sell or otherwise dispose of any debt securities of the Company (other than
the subordinated debt securities of the Company which are being sold to
Sempra Energy Capital Trust I, a statutory business trust organized under
the Business Trust Act of the State of Delaware, concurrently with the
Designated Securities) 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) If the Company elects to rely upon Rule 462(b), the Company shall
file a Rule 462(b) Registration Statement with the Commission in compliance
with Rule 462(b) by 10:00 P.M., Washington, D.C. time, on the date of this
Agreement, and the Company shall at the time of filing either pay to the
Commission the filing fee for the Rule 462(b) Registration Statement or
give irrevocable instructions for the payment of such fee pursuant to Rule
111(b) under the Act; and
6. The Company covenants and agrees with the several Underwriters that the
Company will pay or cause to be paid the following: (i) the fees, disbursements
and expenses of the Company's counsel and accountants in connection with the
registration of the Securities under the Act and all other expenses in
connection with the preparation, printing and filing of the Registration
Statement, any Preliminary Prospectus and the Prospectus and amendments and
supplements thereto and the mailing and delivering of copies thereof to the
Underwriters and dealers; (ii) the cost of printing or producing any Agreement
among Underwriters, this Agreement, any Pricing Agreement, any Indenture, any
Blue Sky and Legal Investment Memoranda, closing documents (including any
compilations thereof) and any other documents in connection with the offering,
purchase, sale and delivery of the Securities; (iii) all expenses in connection
with the qualification of the Securities for offering and sale under state
securities laws as provided in Section 5(b) hereof, including the reasonable
fees and disbursements of counsel for the Underwriters in connection with such
qualification and in connection with the Blue Sky and Legal Investment Surveys;
(iv) any fees charged by securities rating services for rating the Securities;
(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
National Association of Securities Dealers, Inc. of the terms of the sale of the
Securities; (vi) the cost of
9
preparing the Securities; (vii) the fees and expenses of any Trustee and any
agent of any Trustee and the reasonable fees and disbursements of counsel for
any Trustee in connection with any Indenture and the Securities; (viii) any fees
and expenses in connection with listing the Securities and the cost of
registering the Securities under Section 12 of the Exchange Act; and (ix) all
other costs and expenses incident to the performance of its obligations
hereunder which are not otherwise specifically provided for in this Section. It
is understood, however, that, except as provided in this Section, and Sections 8
and 11 hereof, the Underwriters will pay all of their own costs and expenses,
including the fees of their counsel, transfer taxes on resale of any of the
Securities by them, and any advertising expenses connected with any offers they
may make.
7. The obligations of the Underwriters of any Designated Securities under
the Pricing Agreement relating to such Designated Securities shall be subject,
in the discretion of the Representatives, to the condition that all
representations and warranties and other statements of the Company in or
incorporated by reference in the Pricing Agreement relating to such Designated
Securities are, at and as of the Time of Delivery for such Designated
Securities, true and correct, the condition that the Company shall have
performed all of its obligations hereunder theretofore to be performed, and the
following additional conditions:
(a) The Prospectus as amended or supplemented in relation to the
applicable Designated Securities shall have been filed with the Commission
pursuant to Rule 424(b) within the applicable time period prescribed for such
filing by the rules and regulations under the Act and in accordance with Section
5(a) hereof; if the Company has elected to rely upon Rule 462(b), the Rule
462(b) Registration Statement shall have become effective by 10:00 P.M.,
Washington, D.C. time, on the date of the applicable Pricing Agreement; no stop
order suspending the effectiveness of the Registration Statement or any part
thereof shall have been issued and no proceeding for that purpose shall have
been initiated or threatened by the Commission; and all requests for additional
information on the part of the Commission shall have been complied with to the
Representatives' reasonable satisfaction;
(b) Counsel for the Underwriters shall have furnished to the
Representatives such written opinion or opinions, dated the Time of Delivery for
such Designated Securities, with respect to the Registration Statement and the
Prospectus as amended or supplemented, as well as such other related matters as
the Representatives may reasonably request, and such counsel shall have received
such papers and information as they may reasonably request to enable them to
pass upon such matters;
(c) Gary W. Kyle, Chief Corporate Counsel of the Company, shall have
furnished to the Representatives a written opinion or opinions, dated the Time
of Delivery for such Designated Securities, in form and substance satisfactory
to the Representatives, to the effect that:
(i) The Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the State of California,
with power and authority (corporate and other) to own its properties and
conduct its business as described in the Prospectus, and has been duly
qualified as a foreign corporation for the transaction of business and is
in good standing under the laws of each other jurisdiction in which it owns
or leases properties or conducts any business so as to require such
qualification,
10
except where the failure to be so qualified would not subject it to
material liability or disability; and each Significant Subsidiary of the
Company has been duly incorporated and is validly existing as a corporation
in good standing under the laws of its jurisdiction of incorporation;
(ii) The Company has an authorized capitalization as set forth in the
Prospectus and all of the issued shares of capital stock of the Company
have been duly and validly authorized and issued and are fully paid and
non-assessable; and all of the issued shares of capital stock of each
Significant Subsidiary have been duly and validly authorized and issued,
are fully paid and non-assessable and , except for the outstanding
preferred stock of SCGC and PE and the outstanding preferred and preference
stock of SDG&E, are owned of record directly or indirectly by the Company
and, to such counsel's knowledge, free and clear of all liens,
encumbrances, equities or claims;
(iii) To the best of such counsel's knowledge and other than as set
forth in the Prospectus, there are no legal or governmental proceedings
pending to which the Company or any of its subsidiaries is a party or of
which any property of the Company or any of its subsidiaries is the subject
which, if determined adversely to the Company or any of its subsidiaries,
would reasonably be expected individually or in the aggregate to have a
material adverse effect on the current or future consolidated financial
position, shareholders' equity or results of operations of the Company and
its subsidiaries, taken as a whole; and, to the best of such counsel's
knowledge, no such proceedings are threatened or contemplated by
governmental authorities or threatened by others;
(iv) This Agreement and the Pricing Agreement with respect to the
Designated Securities have been duly authorized, executed and delivered by
the Company;
(v) The Designated Securities have been duly authorized, executed,
authenticated, issued and delivered and the Designated Securities
constitute valid and legally binding obligations of the Company entitled to
the benefits provided by the Indenture; and the Designated Securities and
the Indenture conform to the descriptions thereof in the Prospectus;
(vi) The Indenture has been duly authorized, executed and delivered by
the parties thereto and constitutes a valid and legally binding instrument,
enforceable in accordance with its terms, subject, as to enforcement, to
bankruptcy, insolvency, receivership, liquidation, fraudulent conveyance,
fraudulent transfer, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights and to general
equity principles; and the Indenture has been duly qualified under the
Trust Indenture Act;
(vii) The issue and sale of the Designated Securities and the
compliance by the Company with all of the provisions of the Designated
Securities, the Indenture, this Agreement and the Pricing Agreement with
respect to the Designated Securities and the consummation of the
transactions herein and therein contemplated will not conflict with or
result in a breach or violation of any of the terms or provisions of, or
constitute a default under, any material contract, indenture, mortgage,
deed of trust, loan agreement,
11
note, lease or other agreement or instrument to which the Company or any of
its Significant Subsidiaries is a party or by which the Company or any of
its Significant Subsidiaries is bound or to which any of their material
properties or assets is subject, nor will such actions result in any
violation of the provisions of the Articles of Incorporation or By-laws of
the Company and its Significant Subsidiaries or any statute or any order,
rule or regulation of any court or governmental agency or body having
jurisdiction over the Company or any of its Significant Subsidiaries or any
of their material properties;
(viii) 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 or the
consummation by the Company of the transactions contemplated by this
Agreement or such Pricing Agreement or the Indenture, except such as have
been obtained under the Act and the Trust Indenture Act and such consents,
approvals, authorizations, orders, registrations or qualifications as may
be required under state securities or Blue Sky laws in connection with the
purchase and distribution of the Designated Securities by the Underwriters;
(ix) 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;
(x) The statements set forth in the Prospectus as amended or
supplemented under the captions "Description of Debt Securities" and
"Description of [Notes] [Debentures]" (or similar caption), insofar as they
purport to constitute a summary of the terms of the Securities or the
Indenture, 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;
(xi) The Company is not, and after giving effect to the offering and
sale of the Designated Securities, with not be, an "investment company", as
such term is defined in the Investment Company Act;
(xii) 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
12
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 ommitted
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 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 the form of the Registration Statement and the Prospectus
as amended or supplemented (in each case, excluding the documents
incorporated by reference therein), except for those statements referred to
in the opinion in subsection (x) of this Section 7(c), such counsel has
assumed that the statements made and incorporated by reference therein are
correct and complete; and
(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 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) The Indenture constitutes a legally valid and binding obligation
of the Company, enforceable against the Company in accordance with its
terms;
(ii) The Designated Securities, when executed and authenticated in
accordance with the terms of the Indenture and delivered to and paid for by
the Underwriters in accordance with the terms of the Pricing Agreement,
will constitute legally valid and binding obligations of the Company,
enforceable against the Company in accordance with their terms, and are
entitled to the benefits of the Indenture; and
(iii) The Registration Statement and the Prospectus as amended or
supplemented (in each case, excluding the documents incorporated by
reference therein) comply as to form in all material respects with the
requirements for registration statements on Form S-3 under the Act, and the
requirements under the Trust Indenture Act and the rules and regulations of
the Commission thereunder; it being understood,
13
however, that such counsel expresses no opinion with respect to the
financial statements, schedules or other financial data included or
incorporated by reference in, or omitted from, the Registration Statement
or the Prospectus as amended or supplemented or with respect to any Form T-
1. In passing upon the compliance as to form of the Registration Statement
and the Prospectus as amended or supplemented (in each case, excluding the
documents incorporated by reference therein), such counsel has assumed that
the statements made and incorporated by reference therein are correct and
complete.
In addition, such counsel shall provide a statement to the effect that such
counsel has participated in telephone conferences with officers and other
representatives of the Company, and representatives of the Underwriters, at
which the contents of the Registration Statement and the Prospectus as amended
or supplemented and related matters were discussed and, although such counsel is
not passing upon, and does not assume any responsibility for, the accuracy,
completeness or fairness of the statements contained or incorporated by
reference in the Registration Statement and the Prospectus as amended or
supplemented and has not made any independent check or verification thereof,
during the course of such participation, no facts came to such counsel's
attention that caused them to believe that the Registration Statement, at the
time it became effective, contained an untrue statement of a material fact or
ommitted to state a material fact required to be stated therein or necessary to
make the statements therein not misleading, or that the Prospectus as amended or
supplemented (including the documents incorporated by reference), as of its date
and as of the date of such opinion, contained or contains an untrue statement of
a material fact or omitted or omits to state a material fact necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading; it being understood that such counsel expresses no belief
with respect to the financial statements or other financial data included or
incorporated by reference in, or omitted from, the Registration Statement or
Prospectus as amended or supplemented.
(e) On the date of the Pricing Agreement for such Designated Securities at
a time prior to the execution of the Pricing Agreement with respect to such
Designated Securities and at the Time of Delivery for such Designated
Securities, the independent accountants of the Company who have certified the
financial statements of the Company and its subsidiaries included or
incorporated by reference in the Registration Statement shall have furnished to
the Representatives a letter, dated the date of the Pricing Agreement to the
effect set forth in Annex II hereto, and a letter dated such Time of Delivery
reaffirming the statements made in their letter dated the date of the Pricing
Agreement, except that the specified date referred to in such letter delivered
on such Time of Delivery shall be a date not more than three days prior to the
Time of Delivery, and with respect to such letter dated such Time of Delivery,
as to such other matters as the Representatives may reasonably request and in
form and substance satisfactory to the Representatives;
(f) (i) The Company and its subsidiaries taken as a whole shall have not
sustained since the date of the latest audited financial statements included or
incorporated by reference in the Prospectus as amended prior to the date of the
Pricing Agreement relating to the Designated Securities any loss or interference
with its business from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or governmental action,
order or decree, otherwise than as set forth or contemplated in the Prospectus
as amended prior to the date of the Pricing Agreement relating to the Designated
Securities, and (ii) since the
14
respective dates as of which information is given in the Prospectus as amended
prior to the date of the Pricing Agreement relating to the Designated Securities
there shall not have been any change in the capital stock or long-term debt of
the Company or any of its subsidiaries or any change, or any development
involving a prospective change, in or affecting the general affairs, management,
financial position, shareholders' equity or results of operations of the Company
or any of its subsidiaries, otherwise than as set forth or contemplated in the
Prospectus as amended prior to the date of the Pricing Agreement relating to the
Designated Securities, the effect of which, in any such case described in clause
(i) or (ii), is in the judgment of the Representatives so material and adverse
to the Company and its subsidiaries, taken as a whole, as to make it
impracticable or inadvisable to proceed with the public offering or the delivery
of the Designated Securities on the terms and in the manner contemplated in the
Prospectus as first amended or supplemented relating to the Designated
Securities;
(g) On or after the date of the Pricing Agreement relating to the
Designated Securities (i) no downgrading shall have occurred in the rating
accorded the Company's debt securities or preferred stock by any "nationally
recognized statistical rating organization", as that term is defined by the
Commission for purposes of Rule 436(g)(2) under the Act, and (ii) no such
organization shall have publicly announced that it has under surveillance or
review, with possible negative implications, its rating of any of the Company's
debt securities or preferred stock;
(h) On or after the date of the Pricing Agreement relating to the
Designated Securities there shall not have occurred any of the following: (i) a
suspension or material limitation in trading in securities generally on the New
York Stock Exchange; (ii) a suspension or material limitation in trading in the
Company's securities on the New York Stock Exchange; (iii) a general moratorium
on commercial banking activities declared by either Federal or New York or
California State authorities; or (iv) the outbreak or escalation of hostilities
involving the United States or the declaration by the United States of a
national emergency or war, if the effect of any such event specified in this
clause (iv) in the judgment of the Representatives makes it impracticable or
inadvisable to proceed with the public offering or the delivery of the
Designated Securities on the terms and in the manner contemplated in the
Prospectus as first amended or supplemented relating to the Designated
Securities;
(i) The Company shall have complied with the provisions of Section 5(c)
hereof with respect to the furnishing of prospectuses on the New York business
day next succeeding the date of any Pricing Agreement for such Designated
Securities; and
(j) The Company shall have furnished or caused to be furnished to the
Representatives at the Time of Delivery for the Designated Securities a
certificate of officers of the Company satisfactory to the Representatives as to
the accuracy of the representations and warranties of the Company herein at and
as of such Time of Delivery, as to the performance by the Company of all of its
obligations hereunder to be performed at or prior to such Time of Delivery, as
to the matters set forth in subsections (a) and (f) of this Section and as to
such other matters as the Representatives may reasonably request.
8. (a) The Company will indemnify and hold harmless each Underwriter
against any losses, claims, damages or liabilities, joint or several, to which
such Underwriter may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities
15
(or actions in respect thereof) arise out of or are based upon an untrue
statement or alleged untrue statement of a material fact contained in any
Preliminary Prospectus, any preliminary prospectus supplement, the Registration
Statement, the Prospectus as amended or supplemented and any other prospectus
relating to the Securities, or any amendment or supplement thereto, or arise out
of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, and will reimburse each Underwriter for any legal or
other expenses reasonably incurred by such Underwriter in connection with
investigating or defending any such action or claim as such expenses are
incurred; provided, however, that the Company shall not be liable in any such
case to the extent that any such loss, claim, damage or liability arises out of
or is based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in any Preliminary Prospectus, any preliminary prospectus
supplement, the Registration Statement, the Prospectus as amended or
supplemented and any other prospectus relating to the Securities, or any such
amendment or supplement in reliance upon and in conformity with written
information furnished to the Company by any Underwriter of Designated Securities
through the Representatives expressly for use in the Prospectus as amended or
supplemented relating to such Designated Securities.
(b) Each Underwriter will indemnify and hold harmless the Company against
any losses, claims, damages or liabilities to which the Company may become
subject, under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in any
Preliminary Prospectus, any preliminary prospectus supplement, the Registration
Statement, the Prospectus as amended or supplemented and any other prospectus
relating to the Securities, or any amendment or supplement thereto, or arise out
of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, in each case to the extent, but only to the extent, that
such untrue statement or alleged untrue statement or omission or alleged
omission was made in any Preliminary Prospectus, any preliminary prospectus
supplement, the Registration Statement, the Prospectus as amended or
supplemented and any other prospectus relating to the Securities, or any such
amendment or supplement in reliance upon and in conformity with written
information furnished to the Company by such Underwriter through the
Representatives expressly for use therein; and will reimburse the Company for
any legal or other expenses reasonably incurred by the Company in connection
with investigating or defending any such action or claim as such expenses are
incurred.
(c) Promptly after receipt by an indemnified party under subsection (a) or
(b) above of notice of the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under such subsection, notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify the indemnifying party shall
not relieve it from any liability which it may have to any indemnified party
otherwise than under such subsection. In case any such action shall be brought
against any indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate
therein and, to the extent that it shall wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel satisfactory to such indemnified party (who shall not, except with the
consent of the indemnified party, be counsel to the indemnifying party), and,
after notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying
16
party shall not be liable to such indemnified party under such subsection for
any legal expenses of other counsel or any other expenses, in each case
subsequently incurred by such indemnified party, in connection with the defense
thereof other than reasonable costs of investigation. No indemnifying party
shall, without the written consent of the indemnified party, effect the
settlement or compromise of, or consent to the entry of any judgment with
respect to, any pending or threatened action or claim in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified party is an actual or potential party to such action or claim)
unless such settlement, compromise or judgment (i) includes an unconditional
release of the indemnified party from all liability arising out of such action
or claim and (ii) does not include a statement as to or an admission of fault,
culpability or a failure to act, by or on behalf of any indemnified party.
(d) If the indemnification provided for in this Section 8 is unavailable to
or insufficient to hold harmless an indemnified party under subsection (a) or
(b) above in respect of any losses, claims, damages or liabilities (or actions
in respect thereof) referred to therein, then each indemnifying party shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages or liabilities (or actions in respect thereof)
in such proportion as is appropriate to reflect the relative benefits received
by the Company on the one hand and the Underwriters of the Designated Securities
on the other from the offering of the Securities to which such loss, claim,
damage or liability (or action in respect thereof) relates. If, however, the
allocation provided by the immediately preceding sentence is not permitted by
applicable law or if the indemnified party failed to give the notice required
under subsection (c) above, then each indemnifying party shall contribute to
such amount paid or payable by such indemnified party in such proportion as is
appropriate to reflect not only such relative benefits but also the relative
fault of the Company on the one hand and the Underwriters of the Designated
Securities on the other in connection with the statements or omissions which
resulted in such losses, claims, damages or liabilities (or actions in respect
thereof), as well as any other relevant equitable considerations. The relative
benefits received by the Company on the one hand and such Underwriters on the
other shall be deemed to be in the same proportion as the total net proceeds
from such offering (before deducting expenses) received by the Company bear to
the total underwriting discounts and commissions received by such Underwriters.
The relative fault shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company on the one hand or such Underwriters on the other and
the parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission. The Company and the
Underwriters agree that it would not be just and equitable if contribution
pursuant to this subsection (d) were determined by pro rata allocation (even if
the Underwriters were treated as one entity for such purpose) or by any other
method of allocation which does not take account of the equitable considerations
referred to above in this subsection (d). The amount paid or payable by an
indemnified party as a result of the losses, claims, damages or liabilities (or
actions in respect thereof) referred to above in this subsection (d) shall be
deemed to include any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such action
or claim. Notwithstanding the provisions of this subsection (d), no Underwriter
shall be required to contribute any amount in excess of the amount by which the
total price at which the applicable Designated Securities underwritten by it and
distributed to the public were offered to the public exceeds the amount of any
damages which such Underwriter has otherwise been required to pay
17
by reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. The obligations of the
Underwriters of Designated Securities in this subsection (d) to contribute are
several in proportion to their respective underwriting obligations with respect
to such Securities and not joint.
(e) The obligations of the Company under this Section 8 shall be in
addition to any liability which the Company may otherwise have and shall extend,
upon the same terms and conditions, to each person, if any, who controls any
Underwriter within the meaning of the Act; and the obligations of the
Underwriters under this Section 8 shall be in addition to any liability which
the respective Underwriters may otherwise have and shall extend, upon the same
terms and conditions, to each officer and director of the Company and to each
person, if any, who controls the Company within the meaning of the Act.
9. (a) If any Underwriter shall default in its obligation to purchase the
Designated Securities which it has agreed to purchase under the Pricing
Agreement relating to such Designated Securities, the Representatives may in
their discretion arrange for themselves or another party or other parties to
purchase such Designated Securities on the terms contained herein. If within
thirty-six hours after such default by any Underwriter the Representatives do
not arrange for the purchase of such Designated Securities, then the Company
shall be entitled to a further period of thirty-six hours within which to
procure another party or other parties satisfactory to the Representatives to
purchase such Designated Securities on such terms. In the event that, within the
respective prescribed period, the Representatives notify the Company that they
have so arranged for the purchase of such Designated Securities, or the Company
notifies the Representatives that it has so arranged for the purchase of such
Designated Securities, the Representatives or the Company shall have the right
to postpone the Time of Delivery for such Designated Securities for a period of
not more than seven days, in order to effect whatever changes may thereby be
made necessary in the Registration Statement or the Prospectus as amended or
supplemented, or in any other documents or arrangements, and the Company agrees
to file promptly any amendments or supplements to the Registration Statement or
the Prospectus which in the opinion of the Representatives may thereby be made
necessary. The term "Underwriter" as used in this Agreement shall include any
person substituted under this Section with like effect as if such person had
originally been a party to the Pricing Agreement with respect to such Designated
Securities.
(b) If, after giving effect to any arrangements for the purchase of the
Designated Securities of a defaulting Underwriter or Underwriters by the
Representatives and the Company as provided in subsection (a) above, the
aggregate principal amount of such Designated Securities which remains
unpurchased does not exceed one-eleventh of the aggregate principal amount of
the Designated Securities, then the Company shall have the right to require each
non-defaulting Underwriter to purchase the principal amount of Designated
Securities which such Underwriter agreed to purchase under the Pricing Agreement
relating to such Designated Securities and, in addition, to require each non-
defaulting Underwriter to purchase its pro rata share (based on the principal
amount of Designated Securities which such Underwriter agreed to purchase under
such Pricing Agreement) of the Designated Securities of such defaulting
18
Underwriter or Underwriters for which such arrangements have not been made; but
nothing herein shall relieve a defaulting Underwriter from liability for its
default.
(c) If, after giving effect to any arrangements for the purchase of the
Designated Securities of a defaulting Underwriter or Underwriters by the
Representatives and the Company as provided in subsection (a) above, the
aggregate principal amount of Designated Securities which remains unpurchased
exceeds one-eleventh of the aggregate principal amount of the Designated
Securities, as referred to in subsection (b) above, or if the Company shall not
exercise the right described in subsection (b) above to require non-defaulting
Underwriters to purchase Designated Securities of a defaulting Underwriter or
Underwriters, then the Pricing Agreement relating to such Designated Securities
shall thereupon terminate, without liability on the part of any non-defaulting
Underwriter or the Company, except for the expenses to be borne by the Company
and the Underwriters as provided in Section 6 hereof and the indemnity and
contribution agreements in Section 8 hereof; but nothing herein shall relieve a
defaulting Underwriter from liability for its default.
10. The respective indemnities, agreements, representations, warranties and
other statements of the Company and the several Underwriters, as set forth in
this Agreement or made by or on behalf of them, respectively, pursuant to this
Agreement, shall remain in full force and effect, regardless of any
investigation (or any statement as to the results thereof) made by or on behalf
of any Underwriter or any controlling person of any Underwriter, or the Company
or any officer or director or controlling person of the Company, and shall
survive delivery of and payment for the Securities.
11. If any Pricing Agreement shall be terminated pursuant to Section 9
hereof, the Company shall not then be under any liability to any Underwriter
with respect to the Designated Securities covered by such Pricing Agreement
except as provided in Sections 6 and 8 hereof; but, if for any other reason
Designated Securities are not delivered by or on behalf of the Company as
provided herein, the Company will reimburse the Underwriters through the
Representatives for all out-of-pocket expenses approved in writing by the
Representatives, including fees and disbursements of counsel, reasonably
incurred by the Underwriters in making preparations for the purchase, sale and
delivery of such Designated Securities, but the Company shall then be under no
further liability to any Underwriter with respect to such Designated Securities
except as provided in Sections 6 and 8 hereof.
12. In all dealings hereunder, the Representatives of the Underwriters of
Designated Securities shall act on behalf of each of such Underwriters, and the
parties hereto shall be entitled to act and rely upon any statement, request,
notice or agreement on behalf of any Underwriter made or given by such
Representatives jointly or by such of the Representatives, if any, as may be
designated for such purpose in the Pricing Agreement.
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Underwriters shall be delivered or sent by mail, telex or
facsimile transmission to the address of the Representatives as set forth in the
Pricing Agreement; and if to the Company shall be delivered or sent by mail,
telex or facsimile transmission to the address of the Company set forth in the
Registration Statement, Attention: Secretary; provided, however, that any notice
to an Underwriter pursuant to Section 8(c) hereof shall be delivered or sent by
mail, telex or facsimile
19
transmission to such Underwriter at its address set forth in its Underwriters'
Questionnaire, or telex constituting such Questionnaire, which address will be
supplied to the Company by the Representatives upon request. Any such
statements, requests, notices or agreements shall take effect upon receipt
thereof.
13. This Agreement and each Pricing Agreement shall be binding upon, and
inure solely to the benefit of, the Underwriters, the Company and, to the extent
provided in Sections 8 and 10 hereof, the officers and directors of the Company
and each person who controls the Company or any Underwriter, and their
respective heirs, executors, administrators, successors and assigns, and no
other person shall acquire or have any right under or by virtue of this
Agreement or any such Pricing Agreement. No purchaser of any of the Securities
from any Underwriter shall be deemed a successor or assign by reason merely of
such purchase.
14. Time shall be of the essence of each Pricing Agreement. As used herein,
"business day" shall mean any day when the Commission's office in Washington,
D.C. is open for business.
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.
20
If the foregoing is in accordance with your understanding, please sign and
return to us one for the Company and for each of the Representatives plus one
for each counsel counterparts hereof.
Very truly yours,
Sempra Energy
By: /s/ Charles A. McMonagle
-----------------------------------
Name: Charles A. McMonagle
Title: Vice President and Treasurer
Accepted as of the date hereof:
Goldman, Sachs & Co.
Credit Suisse First Boston Corporation
Morgan Stanley & Co. Incorporated
Salomon Smith Barney Inc.
By: /s/ Goldman, Sachs & Co.
-----------------------------------
(Goldman, Sachs & Co.)
21
ANNEX I
Pricing Agreement
-----------------
Goldman, Sachs & Co.
.
.
.
As Representatives of the several
Underwriters named in Schedule I hereto,
c/o Goldman, Sachs & Co.
85 Broad Street,
New York, New York 10004
., 2000
Ladies and Gentlemen:
Sempra Energy, a California corporation (the "Company"), proposes, subject to
the terms and conditions stated herein and in the Underwriting Agreement, dated
February 17, 2000 (the "Underwriting Agreement") between the Company on the one
hand and Goldman, Sachs & Co. and ., . and . on the other hand, to issue and
sell to the Underwriters named in Schedule I hereto (the "Underwriters") the
Securities specified in Schedule II hereto (the "Designated Securities"). Each
of the provisions of the Underwriting Agreement is incorporated herein by
reference in its entirety, and shall be deemed to be a part of this Agreement to
the same extent as if such provisions had been set forth in full herein; and
each of the representations and warranties set forth therein shall be deemed to
have been made at and as of the date of this Pricing Agreement, except that each
representation and warranty which refers to the Prospectus in Section 2 of the
Underwriting Agreement shall be deemed to be a representation and warranty as of
the date of the Underwriting Agreement in relation to the Prospectus (as therein
defined), and also a representation and warranty as of the date of this Pricing
Agreement in relation to the Prospectus as amended or supplemented relating to
the Designated Securities which are the subject of this Pricing Agreement. Each
reference to the Representatives herein and in the provisions of the
Underwriting Agreement so incorporated by reference shall be deemed to refer to
you. Unless otherwise defined herein, terms defined in the Underwriting
Agreement are used herein as therein defined. The Representatives designated to
act on behalf of the Representatives and on behalf of each of the Underwriters
of the Designated Securities pursuant to Section 12 of the Underwriting
Agreement and the address of the Representatives referred to in such Section 12
are set forth at the end of Schedule II hereto.
An amendment to the Registration Statement, or a supplement to the
Prospectus, as the case may be, relating to the Designated Securities, in the
form heretofore delivered to you is now proposed to be filed with the
Commission.
Subject to the terms and conditions set forth herein and in the
Underwriting Agreement incorporated herein by reference, the Company agrees to
issue and sell to each of the Underwriters, and each of the Underwriters agrees,
severally and not jointly, to purchase from the Company, at the time and place
and at the purchase price to the Underwriters set forth in
Schedule II hereto, the principal amount of Designated Securities set forth
opposite the name of such Underwriter in Schedule I hereto.
2
If the foregoing is in accordance with your understanding, please sign and
return to us one for the Company and for each of the Representatives plus one
for each counsel counterparts hereof, and upon acceptance hereof by you, on
behalf of each of the Underwriters, this letter and such acceptance hereof,
including the provisions of the Underwriting Agreement incorporated herein by
reference, shall constitute a binding agreement between each of the
Underwriters, on the one hand, and the Company, on the other hand. It is
understood that your acceptance of this letter on behalf of each of the
Underwriters is or will be pursuant to the authority set forth in a form of
Agreement among Underwriters, the form of which shall be submitted to the
Company for examination upon request, but without warranty on the part of the
Representatives as to the authority of the signers thereof.
Very truly yours
Sempra Energy
By:______________________________________
Name:
Title:
Accepted as of the date hereof:
Goldman, Sachs & Co.
.
.
.
By:________________________________
(Goldman, Sachs & Co.)
On behalf of each of the Underwriters
3
SCHEDULE I
Principal
Amount of
Designated
Securities
to be
Underwriter Purchased
----------- ----------
Goldman, Sachs & Co.................................................. $.
[Names of Co-Representatives]........................................ .
[Names of other Underwriters]........................................ .
--------------
Total........................................................ $.
==============
4
SCHEDULE II
Title of Designated Securities:
[.%] [Floating Rate] [Zero Coupon] [Notes]
[Debentures] due ., .
Aggregate principal amount:
$.
Price to Public:
.% of the principal amount of the Designated Securities, plus accrued
interest[, if any,] from . to . [and accrued amortization[, if any,] from .
to .]
Purchase Price by Underwriters:
.% of the principal amount of the Designated Securities[, plus accrued
interest from .to .] [and accrued amortization[, if any,] from . to .]
Form of Designated Securities:
[Definitive form to be made available for checking and packaging at least
twenty-four hours prior to the Time of Delivery at the office of [The
Depository Trust Company or its designated custodian] [the
Representatives]]
[Book-entry only form represented by one or more global securities
deposited with The Depository Trust Company ("DTC") or its designated
custodian, to be made available for checking by the Representatives at
least twenty-four hours prior to the Time of Delivery at the office of
DTC.]
Specified funds for payment of purchase price:
Federal (same day) funds
Time of Delivery:
. a.m. (New York City time), ., 2000
Indenture:
Indenture dated ., 2000, between the Company and U.S. Bank Trust National
Association, as Trustee
Maturity:
.
5
Interest Rate:
[.%] [Zero Coupon] [See Floating Rate Provisions]
Interest Payment Dates:
[. and ., commencing ., 200.]
Redemption Provisions:
[No provisions for redemption]
[The Designated Securities may be redeemed, otherwise than through the
sinking fund, in whole or in part at the option of the Company, in the
amount of $. or an integral multiple thereof,
[on or after . at the following redemption prices (expressed in percentages
of principal amount). If [redeemed on or before ., .%, and if] redeemed
during the 12-month period beginning .,
Redemption
Year Price
---- -----
and thereafter at 100% of their principal amount, together in each case
with accrued interest to the redemption date.]
[on any interest payment date falling on or after ., at the election of the
Company, at a redemption price equal to the principal amount thereof, plus
accrued interest to the date of redemption.]]
[Other possible redemption provisions, such as mandatory redemption upon
occurrence of certain events or redemption for changes in tax law]
[Restriction on refunding]
Sinking Fund Provisions:
[No sinking fund provisions]
[The Designated Securities are entitled to the benefit of a sinking fund to
retire [$.] principal amount of Designated Securities on . in each of the
years . through . at 100% of their principal amount plus accrued interest[,
together with [cumulative] [noncumulative] redemptions at the option of the
Company to retire an additional [$.]
6
principal amount of Designated Securities in the years . through . at 100%
of their principal amount plus accrued interest.]
[If Designated Securities are extendable debt securities, insert--
Extendable provisions:
Designated Securities are repayable on . [insert date and years], at the
option of the holder, at their principal amount with accrued interest. The
initial annual interest rate will be .%, and thereafter the annual interest
rate will be adjusted on . and . to a rate not less than .% of the
effective annual interest rate on U.S. Treasury obligations with .-year
maturities as of the [insert date 15 days prior to maturity date] prior to
such [insert maturity date].]
[If Designated Securities are floating rate debt securities, insert--
Floating rate provisions:
Initial annual interest rate will be .% through . [and thereafter will be
adjusted [monthly] [on each ., ., . and ] [to an annual rate of .% above
the average rate for .-year [month][securities][certificates of deposit]
issued by . and . [insert names of banks].] [and the annual interest rate
[thereafter] [from . through .] will be the interest yield equivalent of
the weekly average per annum market discount rate for .-month Treasury
bills plus .% of Interest Differential (the excess, if any, of (i) the then
current weekly average per annum secondary market yield for .-month
certificates of deposit over (ii) the then current interest yield
equivalent of the weekly average per annum market discount rate for .-month
Treasury bills); [from . and thereafter the rate will be the then current
interest yield equivalent plus .% of Interest Differential].]
Defeasance provisions:
.
Closing location for delivery of Designated Securities:
.
Additional Closing Conditions:
Names and addresses of Representatives:
Designated Representatives:
Address for Notices, etc.:
[Other Terms]:
7
ANNEX II
Pursuant to Section 7(e) of the Underwriting Agreement, the accountants
shall furnish letters to the Underwriters to the effect that:
(i) They are independent certified public accountants with respect
to the Company and its subsidiaries within the meaning of the Act and the
applicable rules and regulations adopted by the Commission;
(ii) In their opinion, the financial statements and any supplementary
financial information and schedules audited (and, if applicable, financial
forecasts and/or pro forma financial information) by them and included or
incorporated by reference in the Registration Statement or the Prospectus
comply as to form in all material respects with the applicable accounting
requirements of the Act or the Exchange Act, as applicable, and the related
rules and regulations; and, if applicable, they have made a review in
accordance with standards established by the American Institute of
Certified Public Accountants of the consolidated interim financial
statements, selected financial data, pro forma financial information,
financial forecasts and/or condensed financial statements derived from
audited financial statements of the Company for the periods specified in
such letter, as indicated in their reports thereon, copies of which have
been furnished to the representative or representatives of the Underwriters
(the "Representatives") such term to include an Underwriter or Underwriters
who act without any firm being designated as its or their representatives
and are attached to such letters;
(iii) They have made a review in accordance with standards established
by the American Institute of Certified Public Accountants of the unaudited
statements of consolidated income, consolidated balance sheets and
condensed statements of consolidated cash flows included in the Company's
Quarterly Reports on Form 10-Q incorporated by reference into the
Prospectus as indicated in their reports thereon copies of which are
attached to such letters; and on the basis of specified procedures
including inquiries of officials of the Company who have responsibility for
financial and accounting matters regarding whether the unaudited condensed
consolidated financial statements referred to in paragraph (vi)(A)(i) below
comply as to form in all material respects with the applicable accounting
requirements of the Act and the Exchange Act and the related rules and
regulations, nothing came to their attention that caused them to believe
that the unaudited condensed consolidated financial statements do not
comply as to form in all material respects with the applicable accounting
requirements of the Act and the Exchange Act and the related rules and
regulations adopted by the Commission;
(iv) The unaudited selected financial information with respect to the
consolidated results of operations and financial position of the Company
for the five most recent fiscal years included in the Prospectus and
included or incorporated by reference in Item 6 of the Company's Annual
Report on Form 10-K for the most recent fiscal year agrees with the
corresponding amounts (after restatement where applicable) in the audited
consolidated financial statements for five such fiscal years included or
1
incorporated by reference in the Company's Annual Reports on Form 10-K for
such fiscal years;
(v) They have compared the information in the Prospectus under
selected captions with the disclosure requirements of Regulation S-K and on
the basis of limited procedures specified in such letter nothing came to
their attention as a result of the foregoing procedures that caused them to
believe that this information does not conform in all material respects
with the disclosure requirements of Items 301, 302, 402 and 503(d),
respectively, of Regulation S-K;
(vi) On the basis of limited procedures, not constituting an
examination in accordance with generally accepted auditing standards,
consisting of a reading of the unaudited financial statements and other
information referred to below, a reading of the latest available interim
financial statements of the Company and its subsidiaries, inspection of the
minute books of the Company and its subsidiaries since the date of the
latest audited financial statements included or incorporated by reference
in the Prospectus, inquiries of officials of the Company and its
subsidiaries responsible for financial and accounting matters and such
other inquiries and procedures as may be specified in such letter, nothing
came to their attention that caused them to believe that:
(A) (i)the unaudited statements of consolidated income,
consolidated balance sheets and condensed statements of consolidated
cash flows included in the Company's Quarterly Reports on Form 10-Q
incorporated by reference in the Prospectus do not comply as to form in
all material respects with the applicable accounting requirements of
the Exchange Act and the published rules and regulations adopted by the
Commission, or (ii) any material modifications should be made to the
unaudited statements of consolidated income, consolidated balance
sheets and condensed statements of consolidated cash flows included in
the Company's Quarterly Reports on Form 10-Q incorporated by reference
in the Prospectus for them to be in conformity with generally accepted
accounting principles;
(B) any other unaudited income statement data and balance sheet
items included in the Prospectus do not agree with the corresponding
items in the unaudited consolidated financial statements from which
such data and items were derived, and any such unaudited data and items
were not determined on a basis substantially consistent with the basis
for the corresponding amounts in the audited consolidated financial
statements included or incorporated by reference in the Company's
Annual Report on Form 10-K for the most recent fiscal year;
(C) the unaudited financial statements which were not included in
the Prospectus but from which were derived the unaudited condensed
financial statements referred to in clause (A) and any unaudited income
statement data and balance sheet items included in the Prospectus and
referred to in clause (B) were not determined on a basis substantially
consistent with the basis for the audited financial statements included
or incorporated by reference in the Company's Annual Report on Form 10-
K for the most recent fiscal year;
2
(D) any unaudited pro forma consolidated condensed financial
statements included or incorporated by reference in the Prospectus do
not comply as to form in all material respects with the applicable
accounting requirements of the Act and the rules and regulations
adopted by the Commission thereunder or the pro forma adjustments have
not been properly applied to the historical amounts in the compilation
of those statements;
(E) as of a specified date not more than five days prior to the
date of such letter, there have been any changes in the consolidated
capital stock (other than issuances of capital stock upon exercise of
options and stock appreciation rights, upon earn-outs of performance
shares and upon conversions of convertible securities, in each case
which were outstanding on the date of the latest balance sheet included
or incorporated by reference in the Prospectus) or any increase in the
consolidated long-term debt of the Company and its subsidiaries, or any
decreases in consolidated current assets or shareholders' equity or
other items specified by the Representatives, or any increases in any
items specified by the Representatives, in each case as compared with
amounts shown in the latest balance sheet included or incorporated by
reference in the Prospectus, except in each case for changes, increases
or decreases which the Prospectus discloses have occurred or may occur
or which are described in such letter; and
(F) for the period from the date of the latest financial
statements included or incorporated by reference in the Prospectus to
the specified date referred to in clause (E) there were any decreases
in consolidated revenues or income before interest and income taxes or
the total or per share amounts of consolidated net income or other
items specified by the Representatives, or any increases in any items
specified by the Representatives, in each case as compared with the
comparable period of the preceding year and with any other period of
corresponding length specified by the Representatives, except in each
case for increases or decreases which the Prospectus discloses have
occurred or may occur or which are described in such letter; and
(vii) In addition to the audit referred to in their report(s)
incorporated by reference in the Prospectus and the limited procedures,
inspection of minute books, inquiries and other procedures referred to in
paragraphs (iii) and (vi) above, they have carried out certain specified
procedures, not constituting an audit in accordance with generally accepted
auditing standards, with respect to certain amounts, percentages and financial
information specified by the Representatives which are derived from the general
accounting records of the Company and its subsidiaries, which appear in the
Prospectus (excluding documents incorporated by reference), or in Part II of, or
in exhibits and schedules to, the Registration Statement specified by the
Representatives or in documents incorporated by reference in the Prospectus
specified by the Representatives, and have compared certain of such amounts,
percentages and financial information with the accounting records of the Company
and its subsidiaries and have found them to be in agreement.
3
All references in this Annex II to the Prospectus shall be deemed to refer
to the Prospectus (including the documents incorporated by reference therein) as
defined in the Underwriting Agreement as of the date of the letter delivered on
the date of the Pricing Agreement for purposes of such letter and to the
Prospectus as amended or supplemented (including the documents incorporated by
reference therein) in relation to the applicable Designated Securities for
purposes of the letter delivered at the Time of Delivery for such Designated
Securities.
4