Pacific Gas and Electric Company $250,000,000 Aggregate Principal Amount of 3.50% Senior Notes due October 1, 2020 $250,000,000 Aggregate Principal Amount of 5.40% Senior Notes due January 15, 2040 Underwriting Agreement
Exhibit 1.1
Execution Version
Pacific Gas and Electric Company
$250,000,000 Aggregate Principal Amount
of 3.50% Senior Notes due October 1, 2020
of 3.50% Senior Notes due October 1, 2020
$250,000,000 Aggregate Principal Amount
of 5.40% Senior Notes due January 15, 2040
of 5.40% Senior Notes due January 15, 2040
| To | the Representatives named in Schedules I-A and I-B hereto of the several Underwriters named in Schedule II hereto |
Ladies and Gentlemen:
Pacific Gas and Electric Company, a corporation organized under the laws of California (the
“Company”), proposes to sell to the several underwriters named in Schedule II hereto (the
“Underwriters”), for whom you (the “Representatives”) are acting as representatives, (i)
$250,000,000 aggregate principal amount of 3.50% Senior Notes due October 1, 2020 having the terms
set forth in Schedule I-A hereto (the “2020 Notes”) and (ii) $250,000,000 aggregate principal
amount of 5.40% Senior Notes due January 15, 2040 having the terms set forth in Schedule I-B hereto
(the “2040 Notes” and together with the 2020 Notes, the “Securities”) to be issued under an
indenture, amended and restated as of April 22, 2005, as supplemented by the Seventh Supplemental
Indenture thereto dated as of June 11, 2009, the Eighth Supplemental Indenture dated as of November
18, 2009 (with respect to the 2040 Notes) and the Tenth Supplemental Indenture dated as of
September 15, 2010 (with respect to the 2020 Notes) (the “Base Indenture”) and as further
supplemented by the Twelfth Supplemental Indenture, to be dated as of November 18, 2010 (with
respect to the Securities) (the “Supplemental Indenture” and together with the Base Indenture, the
“Indenture”), between the Company and The Bank of New York Mellon Trust Company, N.A., as trustee
(the “Trustee”). To the extent there are no additional Underwriters listed on Schedules I-A and
I-B other than you, the term Representatives as used herein shall mean you, as Underwriters, and
the terms Representatives and Underwriters shall mean either the singular or plural as the context
requires. Any reference herein to the Registration Statement, the Base Prospectus, any Preliminary
Prospectus or the Final Prospectus shall be deemed to refer to and include the documents
incorporated by reference therein pursuant
to Item 12 of Form S-3 which were filed under the Exchange Act on or before the Effective Date
of the Registration Statement or the issue date of the Base Prospectus, any Preliminary Prospectus
or the Final Prospectus, as the case may be, and any reference herein to the terms “amend,”
“amendment” or “supplement” with respect to the Registration Statement, the Base Prospectus, any
Preliminary Prospectus or the Final Prospectus shall be deemed to refer to and include the filing
of any document under the Exchange Act after the Effective Date of the Registration Statement or
the issue date of the Base Prospectus, any Preliminary Prospectus or the Final Prospectus, as the
case may be, deemed to be incorporated therein by reference. Certain terms used herein are defined
in Section 20 hereof.
The 2020 Notes will be part of the same series of notes as the $550,000,000 principal amount
of 3.50% Senior Notes due October 1, 2020, offered and sold by the prospectus supplement dated
September 8, 2010 and the accompanying prospectus. The 2040 Notes will be part of the same series
of notes as the $550,000,000 principal amount of 5.40% Senior Notes due January 15, 2040, offered
and sold by the prospectus supplement dated November 10, 2009 and the accompanying prospectus.
1. Representations and Warranties. The Company represents and warrants to, and agrees
with, each Underwriter as set forth below in this Section 1.
(a) The Company meets the requirements for use of Form S-3 under the Act and has
prepared and filed with the Commission an automatic shelf registration statement, as defined
in Rule 405 (the file number of which is set forth in Schedules I-A and I-B hereto) on Form
S-3, including a related Base Prospectus, for registration under the Act of the offering and
sale of the Securities. Such Registration Statement, including any amendments thereto filed
prior to the Execution Time, became effective upon filing. The Company may have filed with
the Commission, as part of an amendment to the Registration Statement or pursuant to Rule
424(b), one or more preliminary prospectus supplements relating to the Securities, each of
which has previously been furnished to you. The Company will file with the Commission a
final prospectus supplement relating to the Securities in accordance with Rule 424(b). As
filed, such final prospectus supplement shall contain all information required by the Act
and the rules thereunder, and, except to the extent the Representatives shall agree in
writing to a modification, shall be in all substantive respects in the form furnished to you
prior to the Execution Time or, to the extent not completed at the Execution Time, shall
contain only such specific additional information and other changes (beyond that contained
in the Base Prospectus and any Preliminary Prospectus) as the Company has advised you, prior
to the Execution Time, will be included or made therein. The Registration Statement, at the
Execution Time, meets the requirements set forth in Rule 415(a)(1)(x). The Company agrees to
pay the fees required by the Commission relating to the Securities within the time required
by Rule 456(b)(1) without regard to the proviso therein and otherwise in accordance with
Rules 456(b) and 457(r).
(b) On each Effective Date, the Registration Statement did, and when the Final
Prospectus is first filed in accordance with Rule 424(b) and on the Closing Date (as defined
herein), the Final Prospectus (and any supplement thereto) will, comply in all material
respects with the applicable requirements of the Act, the Exchange Act and the
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Trust Indenture Act and the respective rules thereunder; on each Effective Date and at
the Execution Time, the Registration Statement did not and will not contain any untrue
statement of a material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein not misleading; on the
Effective Date and on the Closing Date the Indenture did or will comply in all material
respects with the applicable requirements of the Trust Indenture Act and the rules
thereunder; and on the date of any filing pursuant to Rule 424(b) and on the Closing Date,
the Final Prospectus (together with any supplement thereto) will not include any untrue
statement of a material fact or omit 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; provided, however, that the Company makes no representations or
warranties as to (i) that part of the Registration Statement which shall constitute the
Statement of Eligibility and Qualification (Form T-1) under the Trust Indenture Act of the
Trustee or (ii) the information contained in or omitted from the Registration Statement or
the Final Prospectus (or any supplement thereto) in reliance upon and in conformity with
information furnished in writing to the Company by or on behalf of any Underwriter through
the Representatives specifically for inclusion in the Registration Statement or the Final
Prospectus (or any supplement thereto), it being understood and agreed that the only such
information furnished by or on behalf of any Underwriter consists of the information
described as such in Section 8 hereof.
(c) As of the Execution Time and the Closing Date, (i) the Disclosure Package and (ii)
each electronic road show, if any, when taken together as a whole with the Disclosure
Package, did not and will not contain any 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, not misleading. The preceding sentence does
not apply to statements in or omissions from the Disclosure Package based upon and in
conformity with written information furnished to the Company by any Underwriter through the
Representatives specifically for use therein, it being understood and agreed that the only
such information furnished by or on behalf of any Underwriter consists of the information
described as such in Section 8 hereof.
(d) (i) At the time of filing the Registration Statement, (ii) at the time of the most
recent amendment thereto for the purposes of complying with Section 10(a)(3) of the Act
(whether such amendment was by post-effective amendment, incorporated report filed pursuant
to Sections 13 or 15(d) of the Exchange Act or form of prospectus), (iii) at the time the
Company or any person acting on its behalf (within the meaning, for this clause only, of
Rule 163(c)) made any offer relating to the Securities in reliance on the exemption in Rule
163, and (iv) at the Execution Time (with such date being used as the determination date for
purposes of this clause (iv)), the Company was or is (as the case may be) a “well-known
seasoned issuer” as defined in Rule 405.
(e) (i) At the earliest time after the filing of the Registration Statement that the
Company or another offering participant made a bona fide offer (within the meaning of Rule
164(h)(2)) of the Securities and (ii) as of the Execution Time (with such date being used as
the determination date for purposes of this clause (ii)), the Company was not and is not an
Ineligible Issuer (as defined in Rule 405), without taking account of any
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determination by the Commission pursuant to Rule 405 that it is not necessary that the
Company be considered an Ineligible Issuer.
(f) The Issuer Free Writing Prospectuses and the final term sheets prepared and filed
pursuant to Section 5(b) hereto did not, as of their issue dates, and do not include any
information that conflicts with the information contained in the Registration Statement,
including any document incorporated therein by reference and any prospectus supplement
deemed to be a part thereof that has not been superseded or modified. The foregoing
sentence does not apply to statements in or omissions from any Issuer Free Writing
Prospectus based upon and in conformity with written information furnished to the Company by
any Underwriter through the Representatives specifically for use therein, it being
understood and agreed that the only such information furnished by or on behalf of any
Underwriter consists of the information described as such in Section 8 hereof.
(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 full corporate power and
authority to own or lease, as the case may be, and to operate its properties and conduct its
business as described in the Disclosure Package and the Final Prospectus, and is duly
qualified to do business as a foreign corporation and is in good standing under the laws of
each jurisdiction which requires such qualification, except where the failure to be so
qualified or be in good standing would not, individually or in the aggregate, have a
material adverse effect on the condition (financial or otherwise), earnings, business or
properties of the Company and its subsidiaries, taken as a whole (a “Material Adverse
Effect”).
(h) This Agreement has been duly authorized, executed and delivered by the Company.
(i) The Indenture has been duly authorized by the Company; and the Base Indenture has
been, and at the Closing Date the Supplemental Indenture will have been, duly executed and
delivered by the Company; and the Base Indenture constitutes and, at the Closing Date,
assuming due authorization, execution and delivery by the Trustee, the Supplemental
Indenture will constitute, a valid and binding obligation of the Company, enforceable
against the Company in accordance with its terms, except as enforcement thereof may be
limited by laws and principles of equity affecting the enforcement of creditors’ rights,
including, without limitation, bankruptcy, reorganization, insolvency arrangement,
fraudulent conveyance, moratorium, receivership, assignment for the benefit of creditors
laws; and the Base Indenture has been duly qualified under the Trust Indenture Act and the
Supplemental Indenture will be qualified under the Trust Indenture Act as of the Closing
Date.
(j) The issuance and sale by the Company of the Securities pursuant to this Agreement
have been duly authorized by all necessary corporate action; and, when issued, authenticated
and delivered to the Underwriters pursuant to this Agreement against payment of the
consideration therefor specified herein, the Securities will be valid and binding
obligations of the Company, enforceable against the Company in accordance with their terms,
except as enforcement thereof may be limited by laws or principles of
4
equity affecting creditors’ rights, including, without limitation, bankruptcy,
reorganization, insolvency, arrangement, fraudulent conveyance, moratorium, receivership,
assignment for the benefit of creditors laws, and will be entitled to the benefits of the
Indenture.
(k) The Company is not and, after giving effect to the offering and sale of the
Securities and the application of the proceeds thereof as described in the Disclosure
Package and the Final Prospectus, will not be an “investment company” as defined in the
Investment Company Act of 1940, as amended (the “1940 Act”) or a company “controlled” by an
“investment company” within the meaning of the 1940 Act.
(l) No consent, approval, authorization, filing with or order of any court or
governmental agency or body is required in connection with the transactions contemplated
herein, except such as have been obtained from the California Public Utilities Commission
(the “CPUC”), under the Act, under the Trust Indenture Act or otherwise and such as may be
required under the blue sky laws of any jurisdiction in connection with the purchase and
distribution of the Securities by the Underwriters in the manner contemplated herein and in
the Disclosure Package and the Final Prospectus.
(m) Neither the Company nor any of its subsidiaries has received any notice of
proceedings relating to the revocation or modification of any licenses, certificates,
permits and other authorizations which, individually or in the aggregate, if the subject of
an unfavorable decision, ruling or finding, would have a Material Adverse Effect, whether or
not arising from transactions in the ordinary course of business, except as set forth in or
contemplated in the Registration Statement, Disclosure Package and the Final Prospectus
(exclusive of any supplement thereto).
(n) None of the issue and sale of the Securities, the consummation of any other of the
transactions herein contemplated or the performance by the Company of any of its obligations
set forth herein will conflict with or result in, a breach or violation of: (i) the charter,
bylaws or comparable constituent documents of the Company or any of its subsidiaries, (ii)
the terms of any indenture, contract, lease, mortgage, deed of trust, note agreement, loan
agreement or other agreement, obligation, condition, covenant or instrument to which the
Company or any of its subsidiaries is a party or bound or to which its or their property is
subject, or (iii) any statute, law, rule, regulation, judgment, order or decree applicable
to the Company or any of its subsidiaries of any court, regulatory body, administrative
agency, governmental body, arbitrator or other authority having jurisdiction over the
Company or any of its subsidiaries or any of its or their properties, except, in the case of
clauses (ii) and (iii) above, for such conflicts, breaches or violations which could not,
individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
(o) The consolidated historical financial statements and schedules of the Company and
its consolidated subsidiaries included in the Preliminary Prospectus, the Final Prospectus
and the Registration Statement present fairly in all material respects the financial
condition, results of operations and cash flows of the Company and its consolidated
subsidiaries as of the dates and for the periods indicated, comply as to form
5
with the applicable accounting requirements of the Act and have been prepared in
conformity with generally accepted accounting principles applied on a consistent basis
throughout the periods involved (except as otherwise noted therein).
(p) No action, suit or proceeding by or before any court or governmental agency,
authority or body or any arbitrator involving the Company or any of its subsidiaries or its
or their property is pending or, to the best knowledge of the Company, threatened that (i)
would reasonably be expected to have a material adverse effect on the performance of this
Agreement or the consummation of any of the transactions contemplated hereby or (ii) would
reasonably be expected to have a Material Adverse Effect, whether or not arising from
transactions in the ordinary course of business, except as set forth in or contemplated in
the Disclosure Package and the Final Prospectus (exclusive of any supplement thereto).
(q) Deloitte & Touche LLP, who have certified certain financial statements of the
Company and its consolidated subsidiaries and delivered their report with respect to the
audited consolidated financial statements and schedules included in the Registration
Statement, the Disclosure Package and the Final Prospectus, is an independent registered
public accounting firm with respect to the Company within the meaning of the Act and the
applicable published rules and regulations thereunder and of the Public Company Accounting
Oversight Board.
(r) Except as set forth or contemplated in the Registration Statement, Disclosure
Package and the Final Prospectus (exclusive of any supplement thereto), neither the Company
nor any of its subsidiaries is (i) in violation of any statute, rule, regulation, decision
or order of any governmental agency or body or any court, domestic or foreign, relating to
the use, disposal or release of hazardous or toxic substances or relating to the protection
or restoration of the environment or human exposure to hazardous or toxic substances
(collectively, “Environmental Laws”), (ii) owns or operates any real property contaminated
with any substance that is subject to any Environmental Laws, (iii) is liable for any
off-site disposal or contamination pursuant to any Environmental Laws, or (iv) is subject to
any claim relating to any Environmental Laws, which violation, contamination, liability or
claim could, individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect; and there is no investigation pending or, to the Company’s knowledge,
threatened against it or its subsidiaries, that could reasonably be expected to lead to the
making of such a claim.
(s) The Company does not have any significant subsidiaries as defined by Rule 1-02 of
Regulation S-X.
(t) The CPUC has authorized the issuance and sale by the Company of the Securities, and
such authorization is in full force and effect and sufficient for the issuance and sale of
the Securities to the Underwriters.
Any certificate signed by any officer of the Company and delivered to the Representatives or
counsel for the Underwriters pursuant to this Agreement shall be deemed a representation and
warranty by the Company, as to matters covered thereby, to each Underwriter.
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2. Purchase and Sale. Subject to the terms and conditions and in reliance upon the
representations and warranties herein set forth, the Company agrees to sell to each Underwriter,
and each Underwriter agrees, severally and not jointly, to purchase from the Company, at the
purchase prices (including accrued interest) set forth in Schedules I-A and I-B hereto, the
principal amount of the Securities set forth opposite such Underwriter’s name in Schedule II
hereto.
3. Delivery and Payment. Delivery of and payment for the Securities shall be made on
the date and at the time specified in Schedules I-A and I-B hereto or at such time on such later
date not more than three Business Days after the foregoing date as the Representatives shall
designate, which date and time may be postponed by agreement between the Representatives and the
Company or as provided in Section 9 hereof (such date and time of delivery and payment for the
Securities being herein called the “Closing Date”). Delivery of the Securities shall be made to
the Representatives for the respective accounts of the several Underwriters against payment by the
several Underwriters through the Representatives of the purchase price (including accrued interest)
thereof to or upon the order of the Company by wire transfer payable in same-day funds to an
account specified by the Company. Delivery of the Securities shall be made through the facilities
of The Depository Trust Company unless the Representatives shall otherwise instruct.
4. Offering by Underwriters. It is understood that the several Underwriters propose
to, and they hereby represent that they will, offer the Securities for sale to the public as set
forth in the Disclosure Package and the Final Prospectus.
5. Agreements. The Company agrees with the several Underwriters that:
(a) Prior to the termination of the offering of the Securities, the Company will not
file any amendment of the Registration Statement or supplement (including the Final
Prospectus or any Preliminary Prospectus) to the Base Prospectus unless the Company has
furnished you a copy for your review prior to filing and will not file any such proposed
amendment or supplement to which you reasonably object. The Company will cause the Final
Prospectus, properly completed, and any supplement thereto to be filed in a form approved by
the Representatives with the Commission pursuant to the applicable paragraph of Rule 424(b)
within the time period prescribed and will provide evidence satisfactory to the
Representatives of such timely filing. The Company will promptly advise the Representatives
(i) when the Final Prospectus, and any supplement thereto, shall have been filed (if
required) with the Commission pursuant to Rule 424(b), (ii) when, prior to termination of
the offering of the Securities, any amendment to the Registration Statement shall have been
filed or become effective, (iii) of any request by the Commission or its staff for any
amendment of the Registration Statement, or for any supplement to the Final Prospectus or
for any additional information, (iv) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or any notice objecting to its
use, any order preventing or suspending the use of any preliminary prospectus, any Issuer
Free Writing Prospectus or the Final Prospectus, or the institution or threatening of any
proceeding for the purpose of suspending the effectiveness of the Registration Statement or
preventing or suspending the use of any preliminary prospectus, any Issuer Free Writing
Prospectus or the Final
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Prospectus, and (v) of the receipt by the Company of any notification with respect to
the suspension of the qualification of the Securities for sale in any jurisdiction or the
institution or threatening of any proceeding for such purpose. The Company will use its
reasonable best efforts to prevent (i) the issuance of such stop order or other order
referred to in the preceding sentence, or (ii) the occurrence of (A) any suspension of the
effectiveness, or objection to the use, of the Registration Statement or (B) any prevention
or suspension of the use of the preliminary prospectus, any Issuer Free Writing Prospectus
or the Final Prospectus and, upon such issuance, occurrence or notice of objection, to
obtain as soon as possible the withdrawal of such stop order or relief from such occurrence
or objection, including, if necessary, by filing an amendment to the Registration Statement
or a new registration statement and using its best efforts to have such amendment or new
registration statement declared effective as soon as practicable.
(b) The Company shall prepare final term sheets for each of the 2020 Notes and the 2040
Notes, containing solely descriptions of the respective final terms and offerings of each of
the 2020 Notes and the 2040 Notes, respectively, in the forms approved by you and attached
as Schedules IV-A and IV-B hereto and to file such term sheets pursuant to Rule 433(d)
within the time required by such Rule.
(c) If, at any time prior to the filing of the Final Prospectus pursuant to Rule
424(b), any event occurs as a result of which the Disclosure Package would include any
untrue statement of a material fact or omit to state any material fact necessary to make the
statements therein in the light of the circumstances under which they were made or the
circumstances then prevailing not misleading, the Company will (i) notify promptly the
Representatives so that any use of the Disclosure Package may cease until it is amended or
supplemented; (ii) amend or supplement the Disclosure Package to correct such statement or
omission; and (iii) supply any amendment or supplement to you in such quantities as you may
reasonably request.
(d) If, at any time when a prospectus relating to the Securities is required to be
delivered under the Act (including in circumstances where such requirement may be satisfied
pursuant to Rule 172), any event occurs as a result of which the Final Prospectus as then
supplemented would include any untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein in the light of the circumstances
under which they were made at such time not misleading, or if it shall be necessary to amend
the Registration Statement, file a new registration statement or supplement the Final
Prospectus to comply with the Act or the Exchange Act or the respective rules thereunder,
including in connection with use or delivery of the Final Prospectus, the Company promptly
will (i) notify the Representatives of any such event, (ii) prepare and file with the
Commission, subject to the second sentence of paragraph (a) of this Section 5, an amendment
or supplement or new registration statement which will correct such statement or omission or
effect such compliance, (iii) use its best efforts to have any amendment to the Registration
Statement or new registration statement declared effective as soon as practicable in order
to avoid any disruption in use of the Final Prospectus and (iv) supply any supplemented
Final Prospectus to you in such quantities as you may reasonably request.
8
(e) As soon as practicable, the Company will make generally available to its security
holders and to the Representatives an earnings statement or statements of the Company and
its subsidiaries which will satisfy the provisions of Section 11(a) of the Act and Rule 158.
(f) The Company will furnish to the Representatives and counsel for the Underwriters,
without charge, signed copies of the Registration Statement (including exhibits thereto) and
to each other Underwriter a copy of the Registration Statement (without exhibits thereto)
and, so long as delivery of a prospectus by an Underwriter or dealer may be required by the
Act (including in circumstances where such requirement may be satisfied pursuant to Rule
172), as many copies of each Preliminary Prospectus, the Final Prospectus and the Issuer
Free Writing Prospectuses and any supplement thereto as the Representatives may reasonably
request. The Company will pay the expenses of printing or other production of all documents
relating to the offering.
(g) The Company will arrange, if necessary, for the qualification of the Securities for
sale under the laws of such jurisdictions as the Representatives may designate and will
maintain such qualifications in effect so long as required for the distribution of the
Securities; provided that in no event shall the Company be obligated to qualify to do
business in any jurisdiction where it is not now so qualified or to take any action that
would subject it to service of process in suits, other than those arising out of the
offering or sale of the Securities, in any jurisdiction where it is not now so subject.
(h) The Company agrees that, unless it has or shall have obtained the prior written
consent of the Representatives, and each Underwriter, severally and not jointly, agrees with
the Company that, unless it has or shall have obtained, as the case may be, the prior
written consent of the Company, it has not made and will not make any offer relating to the
Securities that would constitute an Issuer Free Writing Prospectus or that would otherwise
constitute a “free writing prospectus” (as defined in Rule 405) required to be filed by the
Company with the Commission or retained by the Company under Rule 433, other than the free
writing prospectuses containing the information contained in the final term sheets prepared
and filed pursuant to Section 5(b) hereto, or one or more free writing prospectuses through
customary Bloomberg distribution that do not contain substantive changes from or additions
to the information contained in the final term sheet prepared and filed pursuant to Section
5(b) hereto; provided that the prior written consent of the parties hereto shall be deemed
to have been given in respect of the Free Writing Prospectuses included in Schedule III
hereto or term sheets, substantially in the form of Schedules IV-A and IV-B hereto and any
electronic road show. The Company consents to the use by any Underwriter of a free writing
prospectus that (a) is not an “issuer free writing prospectus” as defined in Rule 433, and
(b) contains only (i) information describing the preliminary terms of the Notes or the
offering or (ii) information permitted by Rule 134. Any such free writing prospectus
consented to by the Representatives or the Company is hereinafter referred to as a
“Permitted Free Writing Prospectus.” The Company agrees that (x) it has treated and will
treat, as the case may be, each Permitted Free Writing Prospectus as an Issuer Free Writing
Prospectus and (y) it has complied and will comply, as the case may be, with the
requirements of Rules 164 and 433 applicable to any Permitted Free Writing Prospectus,
including in respect of timely filing with the
9
Commission, legending and record keeping and that it will not take any action that
would result in any Underwriter or the Company being required to file with the Commission
pursuant to Rule 433(d) a Free Writing Prospectus prepared by or on behalf of such
Underwriter that such Underwriter would not otherwise have been required to so file.
(i) The Company will not, without the prior written consent of the Representatives,
offer, sell, contract to sell, pledge, or otherwise dispose of (or enter into any
transaction which is designed to, or might reasonably be expected to, result in the
disposition (whether by actual disposition or effective economic disposition due to cash
settlement or otherwise) by the Company or any affiliate of the Company or any person in
privity with the Company or any affiliate of the Company), directly or indirectly, including
the filing (or participation in the filing) of a registration statement with the Commission
in respect of, or establish or increase a put equivalent position or liquidate or decrease a
call equivalent position within the meaning of Section 16 of the Exchange Act, any debt
securities issued or guaranteed by the Company (other than the Securities) or publicly
announce an intention to effect any such transaction, until the Business Day set forth on
Schedules I-A and I-B hereto; provided that the prior written consent of the Representatives
shall not be required for the sale or remarketing of tax-exempt bonds issued by a
governmental authority or body for the benefit of the Company.
(j) The Company will not take, directly or indirectly, any action designed to or that
would constitute or that might reasonably be expected to cause or result in, under the
Exchange Act or otherwise, stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Securities.
(k) The Company agrees to pay the costs and expenses relating to the following matters:
(i) the preparation, printing or reproduction and filing with the Commission of the
Registration Statement (including financial statements and exhibits thereto), each
Preliminary Prospectus, the Final Prospectus and the Issuer Free Writing Prospectuses, and
each amendment or supplement to any of them; (ii) the printing (or reproduction) and
delivery (including postage, air freight charges and charges for counting and packaging) of
such copies of the Registration Statement, each Preliminary Prospectus, the Final Prospectus
and the Issuer Free Writing Prospectuses, and all amendments or supplements to any of them,
as may, in each case, be reasonably requested for use in connection with the offering and
sale of the Securities; (iii) the preparation, printing, authentication, issuance and
delivery of certificates for the Securities, including any stamp or transfer taxes in
connection with the original issuance and sale of the Securities; (iv) the printing (or
reproduction) and delivery of this Agreement, any blue sky memorandum and all other
agreements or documents printed (or reproduced) and delivered in connection with the
offering of the Securities; (v) any registration or qualification of the Securities for
offer and sale under the securities or blue sky laws of the several states (including filing
fees and the reasonable fees and expenses of counsel for the Underwriters relating to such
registration and qualification); (vi) any filings required to be made with the Financial
Industry Regulatory Authority, Inc. (including filing fees and the reasonable fees and
expenses of counsel for the Underwriters relating to such filings); (vii) the transportation
and other expenses incurred by or on behalf of Company representatives in connection with
presentations to
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prospective purchasers of the Securities; (viii) the fees and expenses of the Company’s
accountants and the fees and expenses of counsel (including local and special counsel) for
the Company; and (ix) all other costs and expenses incident to the performance by the
Company of its obligations hereunder.
6. Conditions to the Obligations of the Underwriters. The obligations of the
Underwriters to purchase the Securities shall be subject to the accuracy of the representations and
warranties on the part of the Company contained herein as of the Execution Time and the Closing
Date, to the accuracy of the statements of the Company made in any certificates pursuant to the
provisions hereof, to the performance by the Company of its obligations hereunder and to the
following additional conditions:
(a) The Final Prospectus, and any supplement thereto, shall have been filed in the
manner and within the time period required by Rule 424(b); the final term sheet contemplated
by Section 5(b) hereto, and any other material required to be filed by the Company pursuant
to Rule 433(d) under the Act, shall have been filed with the Commission within the
applicable time periods prescribed for such filings by Rule 433; and no stop order
suspending the effectiveness of the Registration Statement or any notice objecting to its
use shall have been issued and no proceedings for that purpose shall have been instituted or
threatened.
(b) The Company shall have requested and caused ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ LLP,
counsel for the Company, to have furnished to the Representatives their opinion, dated the
Closing Date and addressed to the Representatives, substantially in the form set forth in
Schedule V hereto.
(c) The Representatives shall have received from Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇
LLP, counsel for the Underwriters, such opinion or opinions, dated the Closing Date and
addressed to the Representatives, with respect to the issuance and sale of the Securities,
the Indenture, the Registration Statement, the Disclosure Package, the Final Prospectus
(together with any supplement thereto) and other related matters as the Representatives may
reasonably require, and the Company shall have furnished to such counsel such documents as
they request for the purpose of enabling them to pass upon such matters.
(d) The Company shall have furnished to the Representatives a certificate of the
Company, signed by the Chairman of the Board, the Chief Executive Officer, the President or
any Senior Vice President and by the Chief Financial Officer of the Company, dated the
Closing Date, to the effect that the signers of such certificate have carefully examined the
Registration Statement, the Disclosure Package, the Final Prospectus and any supplements or
amendments thereto, as well as each electronic road show used in connection with the
offering of the Securities, and this Agreement and that:
(i) the representations and warranties of the Company in this Agreement are
true and correct on and as of the Closing Date with the same effect as if made on
the Closing Date and the Company has complied with all the
11
agreements and satisfied all the conditions on its part to be performed or
satisfied at or prior to the Closing Date;
(ii) no stop order suspending the effectiveness of the Registration Statement
or any notice objecting to its use has been issued and no proceedings for that
purpose have been instituted or, to the Company’s knowledge, threatened; and
(iii) since the date of the most recent financial statements included in the
Disclosure Package and the Final Prospectus (exclusive of any supplement thereto),
there has been no Material Adverse Effect, except as set forth in or contemplated in
the Disclosure Package and the Final Prospectus (exclusive of any supplement
thereto).
(e) The Company shall have requested and caused Deloitte & Touche LLP to have furnished
to the Representatives, at the Execution Time and at the Closing Date, letters (which may
refer to letters previously delivered to one or more of the Representatives), dated
respectively as of the Execution Time and as of the Closing Date, in form and substance
satisfactory to the Representatives, confirming that they are independent accountants within
the meaning of the Act and the Exchange Act and the respective applicable rules and
regulations adopted by the Commission thereunder and stating in effect that:
(i) in their opinion the audited financial statements and financial statement
schedules included or incorporated by reference in the Registration Statement, the
Preliminary Prospectus and the Final Prospectus and reported on by them comply as to
form with the applicable accounting requirements of the Act and the Exchange Act and
the related rules and regulations adopted by the Commission;
(ii) carrying out certain specified procedures (but not an examination in
accordance with generally accepted auditing standards) which would not necessarily
reveal matters of significance with respect to the comments set forth in such
letter; and inquiries of certain officials of the Company who have responsibility
for financial and accounting matters of the Company and its subsidiaries as to
transactions and events subsequent to September 30, 2010, nothing came to their
attention which caused them to believe that, with respect to the period subsequent
to September 30, 2010, there were any changes, at a specified date not more than
five days prior to the date of the letter, in the long-term debt or short-term
borrowings of the Company and its subsidiaries or the capital stock of the Company
or decreases in current assets or the shareholders’ equity of the Company, as
compared with the amounts shown on the September 30, 2010 consolidated balance sheet
included or incorporated by reference in the Registration Statement, the Preliminary
Prospectus and the Final Prospectus, or for the period from October 1, 2010 to such
specified date there were any decreases, as compared with the corresponding period
in the preceding year in operating revenues, income before income taxes or net
income of the Company
12
and its subsidiaries, except in all instances for changes or decreases set
forth in such letter, in which case the letter shall be accompanied by an
explanation by the Company as to the significance thereof unless said explanation is
not deemed necessary by the Representatives; and
(iii) they have performed certain other specified procedures as a result of
which they determined that certain information of an accounting, financial or
statistical nature (which is limited to accounting, financial or statistical
information derived from the general accounting records of the Company and its
subsidiaries) set forth in the Registration Statement, the Preliminary Prospectus
and the Final Prospectus and in Exhibit 12 to the Registration Statement, including
the information set forth under the captions “Ratio of Earnings to Fixed Charges”
and “Capitalization” in the Preliminary Prospectus and the Final Prospectus, and the
information included or incorporated by reference in Items 1, 1A, 6, 7 and 7A of the
Company’s Annual Report on Form 10-K and the information included in “Management’s
Discussion and Analysis of Financial Conditions and Results of Operations” included
in the Company’s Quarterly Reports on Form 10-Q, incorporated by reference in the
Registration Statement, the Preliminary Prospectus and the Final Prospectus, agrees
with the accounting records of the Company and its subsidiaries, excluding any
questions of legal interpretation.
References to the Final Prospectus in this paragraph (e) include any supplement thereto
at the date of the letter.
(f) Subsequent to the Execution Time or, if earlier, the dates as of which information
is given in the Registration Statement (exclusive of any amendment thereof) and the Final
Prospectus (exclusive of any amendment or supplement thereto), there shall not have been (i)
any material change or decrease specified in the letter or letters referred to in paragraph
(e) of this Section 6 or (ii) any change in or affecting the condition (financial or
otherwise), earnings, business or properties of the Company and its subsidiaries taken as a
whole, whether or not arising from transactions in the ordinary course of business, except
as set forth in or contemplated in the Disclosure Package and the Final Prospectus
(exclusive of any amendment or supplement thereto) the effect of which, in any case referred
to in clause (i) or (ii) above, is, in the judgment of the Representatives, so material and
adverse as to make it impractical or inadvisable to proceed with the offering or delivery of
the Securities as contemplated by the Registration Statement (exclusive of any amendment
thereof), the Disclosure Package and the Final Prospectus (exclusive of any amendment or
supplement thereto).
(g) Subsequent to the Execution Time, there shall not have been any decrease in the
rating of any of PG&E Corporation’s or the Company’s debt securities by any “nationally
recognized statistical rating organization” (as defined in Section 3(a)(62) of the Exchange
Act) or any notice given of any intended or potential decrease in any such rating or of a
possible change in any such rating.
13
(h) Prior to the Closing Date, the Company shall have furnished to the Representatives
such further information, certificates and documents as the Representatives may reasonably
request.
If any of the conditions specified in this Section 6 shall not have been fulfilled when and as
provided in this Agreement, or if any of the opinions and certificates mentioned above or elsewhere
in this Agreement shall not be reasonably satisfactory in form and substance to the Representatives
and counsel for the Underwriters, this Agreement and all obligations of the Underwriters hereunder
may be canceled at, or at any time prior to, the Closing Date by the Representatives. Notice of
such cancellation shall be given to the Company in writing or by telephone or facsimile confirmed
in writing.
The documents required to be delivered by this Section 6 shall be delivered at the office of
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, counsel for the Underwriters, at Four Times Square, New
York, New York, on the Closing Date.
7. Reimbursement of Underwriters’ Expenses. If the sale of the Securities provided
for herein is not consummated because any condition to the obligations of the Underwriters set
forth in Section 6 hereof is not satisfied, because of any termination pursuant to Section 10
hereof or because of any refusal, inability or failure on the part of the Company to perform any
agreement herein or comply with any provision hereof other than by reason of a default by any of
the Underwriters, the Company will reimburse the Underwriters severally through UBS Securities LLC
on demand for all expenses (including reasonable fees and disbursements of counsel) that shall have
been incurred by them in connection with the proposed purchase and sale of the Securities.
8. Indemnification and Contribution. (a) The Company agrees to indemnify and
hold harmless each Underwriter, the directors, officers, employees and agents of each
Underwriter and each person who controls any Underwriter within the meaning of either the
Act or the Exchange Act against any and all losses, claims, damages or liabilities, joint or
several, to which they or any of them may become subject under the Act, the Exchange Act or
other Federal or state statutory law or regulation, at common law or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon any untrue statement or alleged untrue statement of a material fact contained
in the Registration Statement or in any subsequent amendment thereof, or in the Base
Prospectus, any Preliminary Prospectus or any other preliminary prospectus supplement
relating to the Securities, the Final Prospectus, any Issuer Free Writing Prospectus or the
information contained in the final term sheet required to be prepared and filed pursuant to
Section 5(b) hereto, or in any amendment thereof 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 agrees to
reimburse each such indemnified party, as incurred, for any legal or other expenses
reasonably incurred by them in connection with investigating or defending any such loss,
claim, damage, liability or action; provided, however, that the Company will
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 any such untrue statement or alleged untrue statement or
omission or alleged omission made
14
therein in reliance upon and in conformity with written information furnished to the
Company by or on behalf of any Underwriter through the Representatives specifically for
inclusion therein. This indemnity agreement will be in addition to any liability which the
Company may otherwise have.
(b) Each Underwriter severally and not jointly agrees to indemnify and hold harmless
the Company, each of its directors, each of its officers who signs the Registration
Statement, and each person who controls the Company within the meaning of either the Act or
the Exchange Act, to the same extent as the foregoing indemnity from the Company to each
Underwriter, but only with reference to written information relating to such Underwriter
furnished to the Company by or on behalf of such Underwriter through the Representatives
specifically for inclusion in the documents referred to in the foregoing indemnity. This
indemnity agreement will be in addition to any liability which any Underwriter may otherwise
have. The Company acknowledges that the statements set forth (i) in the last paragraph of
the cover page regarding delivery of the Securities, (ii) under the heading “Underwriting,”
(A) the sentences related to concessions and reallowances and (B) the paragraph related to
stabilization, syndicate covering transactions and penalty bids in any Preliminary
Prospectus and the Final Prospectus constitute the only information furnished in writing by
or on behalf of the several Underwriters for inclusion in any Preliminary Prospectus, the
Final Prospectus or any Issuer Free Writing Prospectus.
(c) Promptly after receipt by an indemnified party under this Section 8 of notice of
the commencement of any action, such indemnified party will, if a claim in respect thereof
is to be made against the indemnifying party under this Section 8, notify the indemnifying
party in writing of the commencement thereof; but the failure so to notify the indemnifying
party (i) will not relieve it from liability under paragraph (a) or (b) above unless and to
the extent it did not otherwise learn of such action and such failure results in the
forfeiture by the indemnifying party of substantial rights and defenses and (ii) will not,
in any event, relieve the indemnifying party from any obligations to any indemnified party
other than the indemnification obligation provided in paragraph (a) or (b) above. The
indemnifying party shall be entitled to appoint counsel of the indemnifying party’s choice
at the indemnifying party’s expense to represent the indemnified party in any action for
which indemnification is sought (in which case the indemnifying party shall not thereafter
be responsible for the fees and expenses of any separate counsel retained by the indemnified
party or parties except as set forth below); provided, however, that such
counsel shall be satisfactory to the indemnified party. Notwithstanding the indemnifying
party’s election to appoint counsel to represent the indemnified party in an action, the
indemnified party shall have the right to employ separate counsel (including local counsel),
and the indemnifying party shall bear the reasonable fees, costs and expenses of such
separate counsel if (i) the use of counsel chosen by the indemnifying party to represent the
indemnified party would present such counsel with a conflict of interest, (ii) the actual or
potential defendants in, or targets of, any such action include both the indemnified party
and the indemnifying party and the indemnified party shall have reasonably concluded that
there may be legal defenses available to it and/or other indemnified parties which are
different from or additional to those available to the indemnifying party, (iii) the
indemnifying party shall not have
15
employed counsel satisfactory to the indemnified party to represent the indemnified
party within a reasonable time after notice of the institution of such action or (iv) the
indemnifying party shall authorize the indemnified party to employ separate counsel at the
expense of the indemnifying party. It is understood that the indemnifying party shall not,
in connection with any proceeding or related proceedings in the same jurisdiction, be liable
for the fees and expenses of more than one separate counsel (in addition to one local
counsel) for all such indemnified parties. An indemnifying party will not, without the
prior written consent of the indemnified parties, settle or compromise or consent to the
entry of any judgment with respect to any pending or threatened claim, action, suit or
proceeding in respect of which indemnification or contribution may be sought hereunder
(whether or not the indemnified parties are actual or potential parties to such claim or
action) unless such settlement, compromise or consent includes an unconditional release of
each indemnified party from all liability arising out of such claim, action, suit or
proceeding. No indemnifying party will be liable for any settlement of any such action
effected without its prior written consent (which consent shall not be unreasonably
withheld), but if settled with the consent of the indemnifying party or if there be a final
judgment of the plaintiff in any such action, the indemnifying party agrees to indemnify and
hold harmless any indemnified party from and against any loss or liability by reason of such
settlement or judgment.
(d) In the event that the indemnity provided in paragraph (a), (b) or (c) of this
Section 8 is unavailable to or insufficient to hold harmless an indemnified party for any
reason, the Company and the Underwriters severally agree to contribute to the aggregate
losses, claims, damages and liabilities (including legal or other expenses reasonably
incurred in connection with investigating or defending the same) (collectively “Losses”) to
which the Company and one or more of the Underwriters may be subject in such proportion as
is appropriate to reflect the relative benefits received by the Company on the one hand and
by the Underwriters on the other from the offering of the Securities; provided,
however, that in no case shall any Underwriter (except as may be provided in any
agreement among underwriters relating to the offering of the Securities) be responsible for
any amount in excess of the underwriting discount or commission applicable to the Securities
purchased by such Underwriter hereunder. If the allocation provided by the immediately
preceding sentence is unavailable for any reason, the Company and the Underwriters severally
shall contribute 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 of the Underwriters
on the other in connection with the statements or omissions which resulted in such Losses as
well as any other relevant equitable considerations. Benefits received by the Company shall
be deemed to be equal to the total net proceeds from the offering (before deducting
expenses) received by it, and benefits received by the Underwriters shall be deemed to be
equal to the total underwriting discounts and commissions, in each case as set forth on the
cover page of the Final Prospectus. Relative fault shall be determined by reference to,
among other things, whether any untrue or any alleged untrue statement of a material fact or
the omission or alleged omission to state a material fact relates to information provided by
the Company on the one hand or the Underwriters on the other, the intent of the parties and
their relative knowledge, access to information and opportunity to correct or prevent such
untrue statement or omission. The Company and the Underwriters agree that it
16
would not be just and equitable if contribution were determined by pro rata allocation
or any other method of allocation which does not take account of the equitable
considerations referred to above. Notwithstanding the provisions of this paragraph (d), 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. For purposes of this Section 8, each person who controls an Underwriter
within the meaning of either the Act or the Exchange Act and each director, officer,
employee and agent of an Underwriter shall have the same rights to contribution as such
Underwriter, and each person who controls the Company within the meaning of either the Act
or the Exchange Act, each officer of the Company who shall have signed the Registration
Statement and each director of the Company shall have the same rights to contribution as the
Company, subject in each case to the applicable terms and conditions of this paragraph (d).
9. Default by an Underwriter. If any one or more Underwriters shall fail to purchase
and pay for any of the Securities agreed to be purchased by such Underwriter or Underwriters
hereunder and such failure to purchase shall constitute a default in the performance of its or
their obligations under this Agreement, the remaining Underwriters shall be obligated severally to
take up and pay for (in the respective proportions which the principal amount of Securities set
forth opposite their names in Schedule II hereto bears to the aggregate principal amount of
Securities set forth opposite the names of all the remaining Underwriters) the Securities which the
defaulting Underwriter or Underwriters agreed but failed to purchase; provided,
however, that in the event that the aggregate principal amount of Securities which the
defaulting Underwriter or Underwriters agreed but failed to purchase shall exceed 10% of the
aggregate principal amount of Securities set forth in Schedule II hereto, the remaining
Underwriters shall have the right to purchase all, but shall not be under any obligation to
purchase any, of the Securities, and if such nondefaulting Underwriters do not purchase all the
Securities, this Agreement will terminate without liability to any nondefaulting Underwriter or the
Company. In the event of a default by any Underwriter as set forth in this Section 9, the Closing
Date shall be postponed for such period, not exceeding five Business Days, as the Representatives
shall determine in order that the required changes in the Registration Statement and the Final
Prospectus or in any other documents or arrangements may be effected. Nothing contained in this
Agreement shall relieve any defaulting Underwriter of its liability, if any, to the Company and any
nondefaulting Underwriter for damages occasioned by its default hereunder.
10. Termination. This Agreement shall be subject to termination in the absolute
discretion of the Representatives, by notice given to the Company prior to delivery of and payment
for the Securities, if at any time prior to such delivery and payment: (a) (i) trading in the
common stock of PG&E Corporation shall have been suspended by the Commission or the New York Stock
Exchange, (ii) trading in any series of the preferred stock of the Company shall have been
suspended by the Commission or the NYSE Amex Equities, (iii) (A) trading in securities generally on
the New York Stock Exchange shall have been suspended or limited, (B) minimum prices shall have
been established on either of such exchanges, or (C) there shall have been a material disruption in
the clearance or settlement of securities generally on either of such exchanges which makes it, in
the sole judgment of the Representatives, impractical or inadvisable to proceed with the offering
or delivery of the Securities as contemplated by this Agreement, the Disclosure Package or the
Final Prospectus (exclusive of any amendment or
17
supplement thereto), (b) a banking moratorium shall have been declared either by Federal,
California or New York State authorities, (c) there shall have occurred any outbreak or escalation
of hostilities, declaration by the United States of a national emergency or war, or other calamity
or crisis which makes it, in the sole judgment of the Representatives, impractical or inadvisable
to proceed with the offering or delivery of the Securities as contemplated by this Agreement, the
Disclosure Package or the Final Prospectus (exclusive of any amendment or supplement thereto), or
(d) there shall have been such a material adverse change in general economic, political or
financial conditions or the financial markets in the United States which makes it, in the sole
judgment of the Representatives, impractical or inadvisable to proceed with the offering or
delivery of the Securities as contemplated by this Agreement, the Disclosure Package or the Final
Prospectus (exclusive of any amendment or supplement thereto).
11. Representations and Indemnities to Survive. The respective agreements,
representations, warranties, indemnities and other statements of the Company or its officers and of
the Underwriters set forth in or made pursuant to this Agreement will remain in full force and
effect, regardless of any investigation made by or on behalf of any Underwriter or the Company or
any of the officers, directors, employees, agents or controlling persons referred to in Section 8
hereof, and will survive delivery of and payment for the Securities. The provisions of Sections 7
and 8 hereof shall survive the termination or cancellation of this Agreement.
12. Notices. All communications hereunder will be in writing and effective only on
receipt, and, if sent to the Representatives, will be mailed, delivered or telefaxed to (i) ▇▇▇▇▇▇▇
Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated, Attention: High Grade Transaction Management/Legal (fax
no.: (▇▇▇) ▇▇▇-▇▇▇▇) at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇-▇▇▇-▇▇-▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, (ii) RBS Securities
Inc., Attention: Debt Capital Markets Syndicate (fax no.: (▇▇▇) ▇▇▇-▇▇▇▇) at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, (iii) UBS Securities LLC, Attention: Fixed Income Syndicate (fax
no.: (▇▇▇) ▇▇▇-▇▇▇▇) at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ and (iv) ▇▇▇▇▇ Fargo
Securities, LLC, Attention: Transaction Management (fax no.: (▇▇▇) ▇▇▇-▇▇▇▇) at ▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, or, if sent to the Company, will be mailed, delivered or telefaxed to
the Company’s General Counsel (fax no.: (▇▇▇) ▇▇▇-▇▇▇▇) and confirmed to the Company’s General
Counsel, PG&E Corporation, at ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: General Counsel.
In accordance with the requirements of the USA Patriot Act (Title III of Pub. L. 107-56
(signed into law October 26, 2001)), the Underwriters are required to obtain, verify and record
information that identifies their respective clients, including the Company, which information may
include the name and address of their respective clients, as well as other information that will
allow the Underwriters to properly identify their respective clients.
13. Successors. This Agreement will inure to the benefit of and be binding upon the
parties hereto and their respective successors and the officers, directors, employees, agents and
controlling persons referred to in Section 8 hereof, and no other person will have any right or
obligation hereunder.
14. No Fiduciary Duty. The Company hereby acknowledges that (a) the purchase and sale
of the Securities pursuant to this Agreement is an arm’s-length commercial transaction between the
Company, on the one hand, and the Underwriters and any affiliate
18
through which it may be acting, on the other, (b) the Underwriters are acting as principal and
not as an agent or fiduciary of the Company and (c) the Company’s engagement of the Underwriters in
connection with the offering and the process leading up to the offering is as independent
contractors and not in any other capacity. Furthermore, the Company agrees that it is solely
responsible for making its own judgments in connection with the offering (irrespective of whether
any of the Underwriters has advised or is currently advising the Company on related or other
matters). The Company agrees that it will not claim that the Underwriters have rendered advisory
services of any nature or respect, or owe an agency, fiduciary or similar duty to the Company, in
connection with such transaction or the process leading thereto.
15. Research Analyst Independence. The Company acknowledges that the Underwriters’
research analysts and research departments are required to be independent from their respective
investment banking divisions and are subject to certain regulations and internal policies, and that
such Underwriters’ research analysts may hold views and make statements or investment
recommendations and/or publish research reports with respect to the Company and/or the offering of
the Securities that differ from the views of their respective investment banking divisions. The
Company hereby waives and releases, to the fullest extent permitted by law, any claims that the
Company may have against the Underwriters with respect to any conflict of interest that may arise
from the fact that the views expressed by their independent research analysts and research
departments may be different from or inconsistent with the views or advice communicated to the
Company by such Underwriters’ investment banking divisions. The Company acknowledges that each of
the Underwriters is a full service securities firm and as such from time to time, subject to
applicable securities laws, may effect transactions for its own account or the account of its
customers and hold long or short positions in debt or equity securities of the companies that may
be the subject of the transactions contemplated by this Agreement.
16. Integration. This Agreement supersedes all prior agreements and understandings
(whether written or oral) between the Company and the Underwriters, or any of them, with respect to
the subject matter hereof.
17. Applicable Law. This Agreement will be governed by and construed in accordance
with the laws of the State of New York applicable to contracts made and to be performed within the
State of New York.
18. Waiver of Jury Trial. The Company hereby irrevocably waives, to the fullest
extent permitted by applicable law, any and all right to trial by jury in any legal proceeding
arising out of or relating to this Agreement or the transactions contemplated hereby.
19. Counterparts. This Agreement may be signed in one or more counterparts, each of
which shall constitute an original and all of which together shall constitute one and the same
agreement.
20. Headings. The section headings used herein are for convenience only and shall not
affect the construction hereof.
19
21. Definitions. The terms that follow, when used in this Agreement, shall have the
meanings indicated.
“Act” shall mean the Securities Act of 1933, as amended and the rules and regulations
of the Commission promulgated thereunder.
“Base Prospectus” shall mean the base prospectus referred to in paragraph 1(a) above
contained in the Registration Statement at the Execution Time.
“Business Day” shall mean any day other than a Saturday, a Sunday or a legal holiday or
a day on which banking institutions or trust companies are authorized or obligated by law to
close in New York City.
“Closing Date” shall mean November 18, 2010.
“Commission” shall mean the Securities and Exchange Commission.
“Disclosure Package” shall mean (i) the Base Prospectus, (ii) the Preliminary
Prospectus used most recently prior to the Execution Time, (iii) the Issuer Free Writing
Prospectuses, if any, identified in Schedule III hereto, (iv) the final term sheet prepared
and filed pursuant to Section 5(b) hereto, if any, and (v) any other Free Writing Prospectus
that the parties hereto shall hereafter expressly agree in writing to treat as part of the
Disclosure Package.
“Effective Date” shall mean each date and time that the Registration Statement, any
post-effective amendment or amendments thereto became or becomes effective.
“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended, and the
rules and regulations of the Commission promulgated thereunder.
“Execution Time” shall mean [12:15] p.m. Eastern Time on November 16, 2010, which is
the time of the first contract of sale of the Securities.
“Final Prospectus” shall mean the prospectus supplement relating to the Securities that
was first filed pursuant to Rule 424(b) after the Execution Time, together with the Base
Prospectus.
“Free Writing Prospectus” shall mean a free writing prospectus, as defined in Rule 405.
“Issuer Free Writing Prospectus” shall mean an issuer free writing prospectus, as
defined in Rule 433.
“Preliminary Prospectus” shall mean any preliminary prospectus supplement to the Base
Prospectus referred to in paragraph 1(a) above which is used prior to the filing of the
Final Prospectus, together with the Base Prospectus.
20
“Registration Statement” shall mean the registration statement referred to in paragraph
1(a) above, including exhibits and financial statements and any prospectus supplement
relating to the Securities that is filed with the Commission pursuant to Rule 424(b) and
deemed part of such registration statement pursuant to Rule 430B, as amended on each
Effective Date and, in the event any post-effective amendment thereto becomes effective
prior to the Closing Date, shall also mean such registration statement as so amended.
“Rule 134,” “Rule 158,” “Rule 163,” “Rule 164,” “Rule 172,” “Rule 405,” “Rule 415,”
“Rule 424,” “Rule 430B” and “Rule 433” refer to such rules under the Act.
“Trust Indenture Act” shall mean the Trust Indenture Act of 1939, as amended and the
rules and regulations of the Commission promulgated thereunder.
“Well-Known Seasoned Issuer” shall mean a well-known seasoned issuer, as defined in
Rule 405.
21
If the foregoing is in accordance with your understanding of our agreement, please sign and
return to us the enclosed duplicate hereof, whereupon this letter and your acceptance shall
represent a binding agreement among the Company and the several Underwriters.
| Very truly yours, Pacific Gas and Electric Company |
||||
| By: | /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ | |||
| Name: | ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ | |||
| Title: | Treasurer | |||
The foregoing Agreement is hereby confirmed
and accepted as of the date first written above.
and accepted as of the date first written above.
| By: | ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated |
|||
| By: | /s/ ▇▇▇▇▇ ▇▇▇▇▇▇ | |||
| Name: | ▇▇▇▇▇ ▇▇▇▇▇▇ | |||
| Title: | Managing Director | |||
| By: | RBS Securities Inc. |
|||
| By: | /s/ Okwudri Onyedum | |||
| Name: | Okwudri Onyedum | |||
| Title: | Director | |||
| By: | UBS Securities LLC |
|||
| By: | /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇ | |||
| Name: | ▇▇▇▇▇ ▇▇▇▇▇▇▇ | |||
| Title: | Managing Director | |||
| By: | /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ | |||
| Name: | ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ | |||
| Title: | Associate Director, Debt Capital Markets | |||
| By: | ▇▇▇▇▇ Fargo Securities, LLC |
|||
| By: | /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ | |||
| Name: | ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ | |||
| Title: | Director | |||
For themselves and the other several Underwriters, if any,
named in Schedule II to the foregoing Agreement.
named in Schedule II to the foregoing Agreement.
SCHEDULE I-A
| Underwriting Agreement dated November 15, 2010 | ||
| Registration Statement No. 333-149361 | ||
Representative(s):
|
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated | |
| RBS Securities Inc. | ||
| UBS Securities LLC | ||
| ▇▇▇▇▇ Fargo Securities, LLC | ||
Title, Purchase Price and Description of Securities:
Title:3.50% Senior Notes due October 1, 2020
Principal amount: $250,000,000
Purchase price: 97.264% (plus accrued interest of $6.125 per note for the period from and
including September 15, 2010 to but excluding November 18, 2010)
Interest payment dates: April 1 and October 1, commencing April 1, 2011
Sinking fund provisions: Not applicable
Redemption provisions: At any time prior to July 1, 2020, at the Company’s option, the 3.50%
Senior Notes due October 1, 2020 (in this Schedule, the “2020 Notes”) may be redeemed in
whole or in part at any time at a redemption price equal to the greater of: (1) 100% of the
principal amount of the 2020 Notes to be redeemed, plus accrued interest on those 2020 Notes
to the redemption date, or (2) as determined by the Quotation Agent (as defined in the
Preliminary Prospectus), the sum of the present values of the remaining scheduled payments
of principal and interest on the 2020 Notes to be redeemed (not including any portion of
payments of interest accrued as of the redemption date) discounted to the redemption date on
a semi-annual basis at the Adjusted Treasury Rate (as defined in the Preliminary Prospectus)
plus 15 basis points, plus accrued and unpaid interest, in either case, on those 2020 Notes
to the redemption date. At any time on or after July 1, 2020, the Company may redeem the
2020 Notes, in whole or in part, at 100% of the principal amount of the 2020 Notes to be
redeemed, plus accrued and unpaid interest thereon to but not including the redemption date.
The redemption price will be calculated assuming a 360-day year consisting of twelve 30-day
months.
Other provisions: Not applicable
Closing Date, Time and Location: November 18, 2010 at 10:00 a.m. at Skadden, Arps, Slate, ▇▇▇▇▇▇▇ &
▇▇▇▇ LLP, Four Times Square, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Date referred to in Section 5(i) after which the Company may offer or sell debt securities issued
or guaranteed by the Company without the consent of the Representative(s): November 18, 2010
Modification of items to be covered by the letter from Deloitte & Touche LLP delivered pursuant to
Section 6(e) at the Execution Time: None
SCHEDULE I-B
| Underwriting Agreement dated November 15, 2010 | ||
| Registration Statement No. 333-149361 | ||
Representative(s):
|
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated | |
| RBS Securities Inc. | ||
| UBS Securities LLC | ||
| ▇▇▇▇▇ Fargo Securities, LLC | ||
Title, Purchase Price and Description of Securities:
Title:5.40% Senior Notes due January 15, 2040
Principal amount: $250,000,000
Purchase price: 97.499% (plus accrued interest of $18.450 per note for the period from and
including July 15, 2010 to but excluding November 18, 2010)
Interest payment dates: January 15 and July 15, commencing January 15, 2011
Sinking fund provisions: Not applicable
Redemption provisions: At the Company’s option, the 5.40% Senior Notes due January 15, 2040,
(in this Schedule, the “2040 Notes”) may be redeemed in whole or in part at any time at a
redemption price equal to the greater of: (1)100% of the principal amount of the 2040 Notes
to be redeemed, plus accrued interest on those 2040 Notes to the redemption date, or (2) as
determined by the Quotation Agent (as defined in the Preliminary Prospectus), the sum of the
present values of the remaining scheduled payments of principal and interest on the 2040
Notes to be redeemed (not including any portion of payments of interest accrued as of the
redemption date) discounted to the redemption date on a semi-annual basis at the Adjusted
Treasury Rate (as defined in the Preliminary Prospectus) plus 20 basis points, plus accrued
interest, in either case, on those 2040 Notes to the redemption date. The redemption price
will be calculated assuming a 360-day year consisting of twelve 30-day months.
Other provisions: Not applicable
Closing Date, Time and Location: November 18, 2010 at 10:00 a.m. at Skadden, Arps, Slate, ▇▇▇▇▇▇▇ &
▇▇▇▇ LLP, Four Times Square, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Date referred to in Section 5(i) after which the Company may offer or sell debt securities issued
or guaranteed by the Company without the consent of the Representative(s): November 18, 2010
Modification of items to be covered by the letter from Deloitte & Touche LLP delivered pursuant to
Section 6(e) at the Execution Time: None
SCHEDULE II
| Principal Amount of | ||||
| 3.50% Senior Notes due | ||||
| October 1, 2020 | ||||
| Underwriters | to be Purchased | |||
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated |
$ | 50,000,000 | ||
RBS Securities Inc. |
$ | 50,000,000 | ||
UBS Securities LLC |
$ | 50,000,000 | ||
▇▇▇▇▇ Fargo Securities, LLC |
$ | 50,000,000 | ||
BBVA Securities Inc. |
$ | 12,500,000 | ||
Mizuho Securities USA Inc. |
$ | 12,500,000 | ||
RBC Capital Markets, LLC |
$ | 12,500,000 | ||
The ▇▇▇▇▇▇▇▇ Capital Group, L.P. |
$ | 12,500,000 | ||
Total |
$ | 250,000,000 | ||
| Principal Amount of | ||||
| 5.40% Senior Notes due | ||||
| January 15, 2040 | ||||
| Underwriters | to be Purchased | |||
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated |
$ | 50,000,000 | ||
RBS Securities Inc. |
$ | 50,000,000 | ||
UBS Securities LLC |
$ | 50,000,000 | ||
▇▇▇▇▇ Fargo Securities, LLC |
$ | 50,000,000 | ||
BBVA Securities Inc. |
$ | 12,500,000 | ||
Mizuho Securities USA Inc. |
$ | 12,500,000 | ||
RBC Capital Markets, LLC |
$ | 12,500,000 | ||
The ▇▇▇▇▇▇▇▇ Capital Group, L.P. |
$ | 12,500,000 | ||
Total |
$ | 250,000,000 | ||
SCHEDULE III
Schedule of Free Writing Prospectuses included in the Disclosure Package
| 1. | Free Writing Prospectus, dated as of November 15, 2010 and filed pursuant to Rule 433 on November 16, 2010, relating to the 3.50% Senior Notes due October 1, 2020. | |
| 2. | Free Writing Prospectus, dated as of November 15, 2010 and filed pursuant to Rule 433 on November 16, 2010, relating to the 5.40% Senior Notes due January 15, 2040. |
SCHEDULE IV-A
Filed Pursuant to Rule 433
Registration No. 333-149361
November 15, 2010
Registration No. 333-149361
November 15, 2010
PRICING TERM SHEET
3.50% Senior Notes due October 1, 2020
Issuer:
|
Pacific Gas and Electric Company | |
Size:
|
$250,000,000 | |
| The 3.50% Senior Notes due October 1, 2020 will be part of the same series of notes as the $550,000,000 principal amount of 3.50% Senior Notes due October 1, 2020, offered and sold by the prospectus supplement dated September 9, 2010 and the accompanying prospectus. | ||
Maturity Date:
|
October 1, 2020 | |
Coupon:
|
3.50% | |
Interest Payment Dates:
|
April 1 and October 1, commencing April 1, 2011 | |
Price to Public:
|
97.264% (plus accrued interest of $6.125 per note for the period from and including September 15, 2010 to but excluding November 18, 2010) | |
Benchmark Treasury:
|
2.625% due November 15, 2020 | |
Benchmark Treasury Yield:
|
2.935% | |
Spread to Benchmark Treasury:
|
+90 basis points | |
Yield:
|
3.835% | |
Optional Redemption:
|
At any time prior to July 1, 2020, Pacific Gas
and Electric Company may, at its option,
redeem the 3.50% Senior Notes in whole or in
part at a redemption price equal to the
greater of: |
|
• 100% of the principal amount of the 3.50%
Senior Notes to be redeemed; or |
||
• as determined by the Quotation Agent, the
sum of the present values of the remaining
scheduled payments of principal and interest
on the 3.50% Senior Notes to be redeemed (not
including any portion of payments of interest
accrued as of the redemption date) discounted
to the redemption date on a semiannual basis
at the Adjusted Treasury Rate plus 15 basis
points, |
||
| plus, in either case, accrued and unpaid interest to the redemption date. |
| At any time on or after July 1, 2020, Pacific Gas and Electric Company may redeem the 3.50% Senior Notes, in whole or in part, at 100% of the principal amount of the 3.50% Senior Notes being redeemed plus accrued and unpaid interest to the redemption date. | ||
Expected Settlement Date:
|
November 18, 2010 (T+3) | |
CUSIP / ISIN:
|
694308 GT8 / US694308GT83 | |
Anticipated Ratings:
|
A3 by ▇▇▇▇▇’▇ Investors Service, Inc. BBB+ by Standard & Poor’s Ratings Services |
|
Joint Book-Running Managers:
|
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated RBS Securities Inc. UBS Securities LLC ▇▇▇▇▇ Fargo Securities, LLC |
|
Co-Managers:
|
BBVA Securities Inc. Mizuho Securities USA Inc. RBC Capital Markets, LLC The ▇▇▇▇▇▇▇▇ Capital Group, L.P. |
Market Discount
The following disclosure does not apply to qualified pension plans and other tax-exempt
investors.
The 3.50% Senior Notes have been issued with “market discount,” for United States federal
income tax purposes, in an amount equal to the excess of the principal amount of the 3.50% Senior
Notes over the purchase price paid for the 3.50% Senior Notes. Under the market discount rules,
any gain recognized upon a sale or retirement of the 3.50% Senior Notes will be treated as ordinary
income to the extent that such market discount has accrued during the period that the United States
holder has held his 3.50% Senior Notes, and a deduction in respect of the interest expense incurred
by the United States holder to carry the 3.50% Senior Notes may be required to be deferred until
the taxable year of such disposition. In the alternative, the United States holder may elect to
include market discount in income on a current basis, in which case the interest expense deferral
rule described immediately above would not apply, and such election would apply to all market
discount obligations subsequently acquired by the United States holder.
Note: A securities rating is not a recommendation to buy, sell or hold securities and may be
subject to revision or withdrawal at any time.
The issuer has filed a registration statement (including a prospectus) with the SEC for the
offering to which this communication relates. Before you invest, you should read the prospectus in
that registration statement and other documents the issuer has filed with the SEC for more complete
information about the issuer and this offering.
You may get these documents for free by visiting ▇▇▇▇▇ on the SEC Web site at ▇▇▇.▇▇▇.▇▇▇.
Alternatively, the issuer, any underwriter or any dealer participating in the offering will arrange
to send you the prospectus if you request it by calling ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated toll free at 1-800-294-1322; RBS Securities Inc. toll free at ▇-▇▇▇-▇▇▇-▇▇▇▇; UBS
Securities LLC toll free at ▇-▇▇▇-▇▇▇-▇▇▇▇, ext. 561 3884; or ▇▇▇▇▇ Fargo Securities, LLC toll free
at ▇-▇▇▇-▇▇▇-▇▇▇▇.
SCHEDULE IV-B
Filed Pursuant to Rule 433
Registration No. 333-149361
November 15, 2010
Registration No. 333-149361
November 15, 2010
PRICING TERM SHEET
5.40% Senior Notes due January 15, 2040
Issuer:
|
Pacific Gas and Electric Company | |
Size:
|
$250,000,000 | |
| The 5.40% Senior Notes due January 15, 2040 will be part of the same series of notes as the $550,000,000 principal amount of 5.40% Senior Notes due January 15, 2020, offered and sold by the prospectus supplement dated November 10, 2009 and the accompanying prospectus. | ||
Maturity Date:
|
January 15, 2040 | |
Coupon:
|
5.40% | |
Interest Payment Dates:
|
January 15 and July 15, commencing on January 15, 2011 | |
Price to Public:
|
97.499% (plus accrued interest of $18.450 per note for the period from and including July 15, 2010 to but excluding November 18, 2010) | |
Benchmark Treasury:
|
3.875% due August 15, 2040 | |
Benchmark Treasury Yield:
|
4.394% | |
Spread to Benchmark Treasury:
|
+118 basis points | |
Yield:
|
5.574% | |
Optional Redemption:
|
At any time Pacific Gas & Electric Company
may, at its option, redeem the 5.40% Senior
Notes in whole or in part at a redemption
price equal to the greater of: |
|
• 100% of the principal amount of the 5.40%
Senior Notes to be redeemed; or |
||
• as determined by the Quotation Agent, the
sum of the present values of the remaining
scheduled payments of principal and interest
on the 5.40% Senior Notes to be redeemed
(not including any portion of payments of
interest accrued as of the redemption date)
discounted to the redemption date on a
semi-annual basis at the Adjusted Treasury
Rate plus 20 basis points, |
| plus, in either case, accrued interest to the redemption date. | ||
Expected Settlement Date:
|
November 18, 2010 (T+3) | |
CUSIP / ISIN:
|
694308 GS0 / US694308GS01 | |
Anticipated Ratings:
|
A3 by ▇▇▇▇▇’▇ Investors Service, Inc. BBB+ by Standard & Poor’s Ratings Services |
|
Joint Book-Running Managers:
|
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated RBS Securities Inc. UBS Securities LLC ▇▇▇▇▇ Fargo Securities, LLC |
|
Co-Managers:
|
BBVA Securities Inc. Mizuho Securities USA Inc. RBC Capital Markets, LLC The ▇▇▇▇▇▇▇▇ Capital Group, L.P. |
Note: A securities rating is not a recommendation to buy, sell or hold securities and may be
subject to revision or withdrawal at any time.
The issuer has filed a registration statement (including a prospectus) with the SEC for the
offering to which this communication relates. Before you invest, you should read the prospectus in
that registration statement and other documents the issuer has filed with the SEC for more complete
information about the issuer and this offering.
You may get these documents for free by visiting ▇▇▇▇▇ on the SEC Web site at ▇▇▇.▇▇▇.▇▇▇.
Alternatively, the issuer, any underwriter or any dealer participating in the offering will arrange
to send you the prospectus if you request it by calling ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated toll free at 1-800-294-1322; RBS Securities Inc. toll free at ▇▇▇-▇▇▇-▇▇▇▇; UBS
Securities LLC toll free at ▇▇▇-▇▇▇-▇▇▇▇, ext. 561 3884; or ▇▇▇▇▇ Fargo Securities, LLC toll free
at ▇-▇▇▇-▇▇▇-▇▇▇▇.
SCHEDULE V
Form of Opinion of ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ LLP
(i) the Registration Statement has become effective under the Act; to the
knowledge of such counsel, no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that purpose have been
threatened or instituted by, or are pending before, the Commission, and the
Registration Statement, as of each Effective Date and the Final Prospectus, as of
its date (other than the financial statements, schedules and other financial data
contained or incorporated by reference therein, as to which such counsel need
express no opinion) comply as to form in all material respects with the applicable
requirements of the Act, the Exchange Act and the Trust Indenture Act and the
respective rules thereunder; the Final Prospectus and the final term sheet have been
filed pursuant to, and within the time frame contemplated by, Rule 424(b) and Rule
433, respectively, promulgated under the Act;
(ii) 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 the
corporate power and authority to own or lease, as the case may be, and to operate
its properties and conduct its business as described in the Registration Statement,
the Disclosure Package and the Final Prospectus;
(iii) the Indenture has been duly authorized, executed and delivered by the
Company, has been duly qualified under the Trust Indenture Act and, assuming due
authorization, execution and delivery thereof by the Trustee constitutes a valid and
binding obligation of the Company enforceable against the Company in accordance with
its terms (subject, to the effect of any bankruptcy, reorganization, insolvency,
arrangement, fraudulent conveyance, moratorium, receivership, assignment for the
benefit of creditors or other laws affecting creditors’ rights generally from time
to time in effect and to general principles of equity, including, without
limitation, concepts of materiality, reasonableness, good faith and fair dealing,
regardless of whether considered in a proceeding in equity or at law); and the
Securities have been duly authorized and, when executed and authenticated in
accordance with the provisions of the Indenture and delivered to and paid for by the
Underwriters pursuant to this Agreement, will have been validly issued and
delivered, will be entitled to the benefits of the Indenture and will constitute
valid and binding obligations of the Company, enforceable against the Company in
accordance with their terms;
(iv) to the knowledge of such counsel, there is no pending or threatened
action, suit or proceeding by or before any court or governmental agency, authority
or body or any arbitrator involving the Company or any of its subsidiaries or its or
their property, of a character required to be disclosed in the Registration
Statement other than those disclosed in any Preliminary Prospectus and the Final
Prospectus (in rendering such opinion, such counsel may note that it
has not conducted searches of the dockets of any court or administrative agency
whatsoever);
(v) this Agreement has been duly authorized, executed and delivered by the
Company;
(vi) the Company is not and, after giving effect to the offering and sale of
the Securities and the application of the proceeds thereof as described in the
Disclosure Package and the Final Prospectus, will not be an “investment company” as
defined in the 1940 Act or a company “controlled” by an “investment company” within
the meaning of the 1940 Act;
(vii) none of the issue or sale of the Securities, the consummation of the
transactions contemplated by this Agreement or the performance by the Company of its
obligations hereunder will (A) conflict with or result in any violation of (1) the
Articles of Incorporation or Bylaws of the Company, or (2) any Federal, California
or, as to this Agreement, New York, statute or any rule or regulation issued
pursuant to any Federal, California or, as to this Agreement, New York statute,
including, without limitation, the California Public Utilities Code and California
usury laws (“Applicable Laws”), or any order known to such counsel to have been
issued pursuant to any Applicable Law by any Federal, California or, as to this
Agreement, New York, court or governmental agency or body that such counsel has in
the exercise of customary professional diligence recognized as having jurisdiction
over the Company or any of its properties (“Applicable Governmental Authority”) or
(B) result in a breach or violation of, or constitute a default under, any
agreement, indenture or other instrument to which the Company or any of its
subsidiaries is a party that has been filed pursuant to Section 601(b)(4) or Section
601(b)(10) of Regulation S-K as exhibits to the Company’s Annual Report on Form 10-K
for the year ended December 31, 2009, the Company’s Quarterly Reports on Form 10-Q
for the quarters ended March 31, 2010, June 30, 2010 and September 30, 2010 or to
any report on Form 8-K filed by the Company between October 1, 2010 and the Closing
Date;
(viii) no consent, approval, authorization, filing with or order of or with any
Applicable Governmental Authority (a “Governmental Action”) is required for the
valid authorization, execution, issuance, sale and delivery of the Securities by the
Company except for any Governmental Actions that have been obtained, and such as may
be required under the blue sky laws of any jurisdiction in connection with the
purchase and distribution of the Securities by the Underwriters in the manner
contemplated in this Agreement, the Disclosure Package and the Final Prospectus; and
(ix) the statements in the Disclosure Package and the Final Prospectus under
the caption “Description of the Senior Notes” insofar as such statements purport to
summarize certain provisions of the Indenture and the Securities, fairly summarize
such provisions in all material respects, and the statements in the Disclosure
Package and the Final Prospectus under the caption “Certain United
States Federal Income Tax Considerations,” insofar as such statements
constitute summaries of the United States federal income tax laws and legal
conclusions with respect thereto, are accurate in all material respects.
The letter from such counsel shall include a separate paragraph to the effect
that in the course of its engagement as counsel to the Company in connection with
the offering of the Securities, it has participated in conferences with the
Underwriters and their representatives and representatives of the Company and its
accountants concerning the Registration Statement, the Disclosure Package and the
Final Prospectus and considered the matters required to be stated therein and the
statements contained therein, and, although they were not engaged to and did not
independently verify the accuracy, completeness or fairness of such statements
(except as stated above), and based upon and subject to the foregoing, such counsel
will advise the Underwriters, as a matter of fact and not opinion, that nothing came
to such counsel’s attention to cause them to believe that (A) the Registration
Statement, as of each Effective Date contained an untrue statement of a material
fact or omitted to state a material fact required to be stated therein or necessary
to make the statements therein not misleading, (B) the Final Prospectus, as of its
date and as of the Closing Date contained or contains an untrue statement of a
material fact or omitted or omits 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, or (C) the Disclosure Package, as of the Execution Time,
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; provided, however, that it is understood
that such counsel is not requested to and will not express any belief in this
paragraph with respect to the financial statements, schedules and other financial
data contained in or incorporated by reference in the Registration Statement, the
Disclosure Package, the Final Prospectus or the Statement of Eligibility and
Qualification of the Trustee. References to the Final Prospectus in this paragraph
shall also include any supplements thereto at the Closing Date.
In rendering such opinion, such counsel may rely (A) as to matters involving the
application of laws of any jurisdiction other than the State of California, New York or the
Federal laws of the United States, to the extent they deem proper and specified in such
opinion, upon the opinion of other counsel of good standing whom they believe to be reliable
and who are satisfactory to counsel for the Underwriters and (B) as to matters of fact, to
the extent they deem proper, on certificates of responsible officers of the Company and
public officials.