Exhibit 1.1
Sempra Energy Capital Trust I
Sempra Energy Capital Trust II
Sempra Energy Capital Trust III
Preferred Securities
guaranteed to the extent set forth in the Guarantees by
Sempra Energy
__________________________
Underwriting Agreement
----------------------
February 16, 2000
To the Representatives of the several
Underwriters named in the respective
Pricing Agreements hereinafter described
Ladies and Gentlemen:
From time to time, Sempra Energy Capital Trust I, Sempra Energy Capital
Trust II or Sempra Energy Capital Trust III, each a statutory business trust
created under the Business Trust Act (the "Delaware Act") of the State of
Delaware (Chapter 38, Title 12, of the Delaware Code, 12 Del. C. ((S)) 3801 et
------ --
seq.) (each a "Trust" and collectively the "Trusts"), and Sempra Energy, a
---
California corporation (the "Company"), as sponsor of each Trust and as
guarantor, propose to enter into one or more Pricing Agreements (each a "Pricing
Agreement") in the form of Annex I hereto, with such additions and deletions as
the parties thereto may determine, and, subject to the terms and conditions
stated herein and therein, that the Trust identified in the applicable Pricing
Agreement (such Trust being the "Designated Trust" with respect to such Pricing
Agreement) issue and sell to the firms named in Schedule I to the applicable
Pricing Agreement (such firms constituting the "Underwriters" with respect to
such Pricing Agreement and the securities specified therein) certain of its
preferred securities (the "Securities") representing undivided beneficial
interests in the assets of the Designated Trust. The Securities specified in
such Pricing Agreement are referred to as the "Firm Designated Securities" with
respect to such Pricing Agreement. If specified in such Pricing Agreement, the
Designated Trust may grant the Underwriters the right to purchase at their
election an additional number of Securities, for the sole purpose of covering
over-allotments, if any, in the sale of the Firm Designated Securities,
specified as provided in such Pricing Agreement as provided in Section 3 hereof
(the "Optional Designated Securities"). The Firm Designated Securities and any
Optional Designated Securities are collectively called the "Designated
Securities." The proceeds of the sale of the Designated Securities to the public
and of common securities of the Designated Trust (the "Common Securities") to
the Company concurrently with the sale of the Designated Securities are to be
invested in subordinated deferrable interest debentures of the Company (the
"Subordinated Debentures") identified in the Pricing Agreement with respect to
such Designated Securities (with respect to such Pricing Agreement, the
"Designated Subordinated Debentures"), to be issued pursuant to a subordinated
indenture to be dated as of February 23, 2000 (as supplemented or amended from
time to time, the "Subordinated Indenture") between the Company and The Bank of
New York, as trustee (the "Indenture Trustee"). The Designated Securities will
be guaranteed by the Company to the extent set forth in a Preferred Securities
Guarantee Agreement between the Company and The Bank of New York, as trustee,
with respect to such Designated Securities (the "Designated Guarantee") (all
such Designated Guarantees together, the "Guarantees").
The terms and rights of any particular issuance of Designated Securities
shall be as specified in the Pricing Agreement relating thereto and in or
pursuant to the amended and restated declaration of trust identified in such
Pricing Agreement (with respect to such Pricing Agreement, the "Trust
Agreement").
1. Particular sales of Designated Securities may be made from time to time
to the Underwriters of such Securities, for whom the firms designated as
representatives of the Underwriters of such Securities in the Pricing Agreement
relating thereto will act as representatives (the "Representatives"). The term
"Representatives" also refers to a single firm acting as sole representative of
the Underwriters and to an Underwriter or Underwriters who act without any firm
being designated as its or their representatives. This Underwriting Agreement
shall not be construed as an obligation of any Trust to sell any of the
Securities or as an obligation of any of the Underwriters to purchase any of the
Securities. The obligation of any Trust to issue and sell any of the Securities
and the obligation of any of the Underwriters to purchase any of the Securities
shall be evidenced by the Pricing Agreement with respect to the Designated
Securities specified therein. Each Pricing Agreement shall specify the aggregate
liquidation amount of Firm Designated Securities, the maximum aggregate
liquidation amount of Optional Designated Securities, if any, the initial public
offering price of such Firm Designated Securities and Optional Designated
Securities or the manner of determining such price, the terms of the Designated
Securities, including the terms on which and terms of the securities into which
the Designated Securities will be exchangeable, the purchase price to the
Underwriters of such Designated Securities, the names of the Underwriters of
such Designated Securities, the names of the Representatives of such
Underwriters and the number of such Designated Securities to be purchased by
each Underwriter and the commission, if any, payable to the Underwriters with
respect thereto and shall set forth the date, time and manner of delivery of
such Firm Designated Securities and such Optional Designated Securities, if any,
and payment therefor. The Pricing Agreement shall also specify (to the extent
not set forth in the Trust Agreement and the registration statement and
prospectus with respect thereto) the terms of such Designated Securities. A
Pricing Agreement shall be in the form of an executed writing (which may be in
counterparts), and may be evidenced by an exchange of telegraphic communications
or any other rapid transmission device designed to produce a written record of
communications transmitted. The obligations of the Underwriters under this
Agreement and each Pricing Agreement shall be several and not joint.
2. The Company and the Designated Trust, jointly and severally, represent
and warrant to, and agree with, each of the Underwriters that:
2
(a) A registration statement on Form S-3 (File No 333-77843) (the
"Initial Registration Statement") in respect of the Securities, the
Subordinated Debentures and the Guarantees and certain other securities has
been filed with the Securities and Exchange Commission (the "Commission");
the Initial Registration Statement and any post-effective amendment
thereto, each in the form heretofore delivered or to be delivered to the
Representatives and, excluding exhibits to the Initial Registration
Statement, but including all documents incorporated by reference in the
prospectus contained therein, to the Representatives for each of the other
Underwriters, have been declared effective by the Commission in such form;
other than a registration statement, if any, increasing the size of the
offering (a "Rule 462(b) Registration Statement"), filed pursuant to Rule
462(b) under the Securities Act of 1933, as amended (the "Act"), which, if
so filed, became effective upon filing, no other document with respect to
the Initial Registration Statement or any document incorporated by
reference therein has heretofore been filed or transmitted for filing with
the Commission (other than documents filed after the filing date of the
Initial Registration Statement under the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), and prospectuses filed pursuant to Rule
424(b) of the rules and regulations of the Commission under the Act, each
in the form heretofore delivered to the Representatives); and no stop order
suspending the effectiveness of the Initial Registration Statement, any
post-effective amendment thereto or the Rule 462(b) Registration Statement,
if any, has been issued and no proceeding for that purpose has been
initiated or threatened by the Commission (any preliminary prospectus
included in the Initial Registration Statement or filed with the Commission
pursuant to Rule 424(a) under the Act, is hereinafter called a "Preliminary
Prospectus"; the various parts of the Initial Registration Statement, any
post-effective amendment thereto and the Rule 462(b) Registration
Statement, if any, including all exhibits thereto and the documents
incorporated by reference in the prospectus contained in the Initial
Registration Statement at the time such part of the Initial Registration
Statement became effective but excluding any Form T-1, each as amended at
the time such part of the Initial Registration Statement became effective
or such part of the Rule 462(b) Registration Statement, if any, became or
hereafter becomes effective, are hereinafter collectively called the
"Registration Statement"; the prospectus relating to the Securities, the
Subordinated Debentures and the Guarantees, in the form in which it has
most recently been filed, or transmitted for filing, with the Commission on
or prior to the date of this Agreement, being hereinafter called the
"Prospectus"; any reference herein to any Preliminary Prospectus or the
Prospectus shall be deemed to refer to and include the documents
incorporated by reference therein pursuant to the applicable form under the
Act, as of the date of such Preliminary Prospectus or Prospectus, as the
case may be; any reference to any amendment or supplement to any
Preliminary Prospectus or the Prospectus shall be deemed to refer to and
include any documents filed after the date of such Preliminary Prospectus
or Prospectus, as the case may be, under the Exchange Act and incorporated
by reference in such Preliminary Prospectus or Prospectus, as the case may
be, as of the date of filing of such document; any reference to any
amendment to the Initial Registration Statement shall be deemed to refer to
and include any annual report of the Company filed pursuant to Sections
13(a) or 15(d) of the Exchange Act after the effective date of the Initial
Registration Statement that is incorporated by reference in the
Registration Statement; and any reference to the Prospectus shall be deemed
to refer to the Prospectus as
3
amended or supplemented in relation to the applicable Designated Securities
in the form in which it is filed with the Commission pursuant to Rule
424(b) under the Act in accordance with Section 5(a) hereof, including any
documents incorporated by reference therein as of the date of such filing);
(b) Based solely upon oral advice from the staff of the Commission,
the Trusts are not required to file reports or proxy or information
statements pursuant to Section 13(a), 13(c), 14 or 15(c) of the Exchange
Act. The documents incorporated by reference in the Prospectus, when they
became effective or were filed with the Commission, as the case may be,
conformed in all material respects to the requirements of the Act or the
Exchange Act, as applicable, and the rules and regulations of the
Commission thereunder and none of such documents contained an untrue
statement of a material fact or omitted to state a material fact necessary
in order to make the statements therein, in the light of the circumstances
under which they were made, not misleading; and any further documents so
filed and incorporated by reference in the Prospectus or any further
amendment or supplement thereto, when such documents become effective or
are filed with the Commission, as the case may be, will conform in all
material respects to the requirements of the Act or the Exchange Act, as
applicable, and the rules and regulations of the Commission thereunder and
will not contain an untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided,
however, that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Company by an Underwriter of
Designated Securities through the Representatives expressly for use in the
Prospectus as amended or supplemented relating to such Securities;
(c) The Registration Statement and the Prospectus conform, and any
further amendments or supplements to the Registration Statement or the
Prospectus will conform, in all material respects to the requirements of
the Act and the rules and regulations of the Commission thereunder and the
Registration Statement conforms, and any further amendments or supplements
to the Registration Statement will conform, in all material respects to the
requirements of the Trust Indenture Act of 1939, as amended (the "Trust
Indenture Act"), and the rules and regulations of the Commission thereunder
and do not and will not, as of the applicable effective date as to the
Registration Statement and any amendment thereto and as of the applicable
filing date as to the Prospectus and any amendment or supplement thereto,
contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading; provided, however, that this representation and warranty shall
not apply to any statements or omissions made in reliance upon and in
conformity with information furnished in writing to the Company by an
Underwriter of Designated Securities through the Representatives expressly
for use in the Prospectus as amended or supplemented relating to such
Securities;
(d) Neither the Designated Trust nor the Company and any of its
subsidiaries (other than the Designated Trust) taken as a whole, have
sustained since the date of the latest audited
4
financial statements included or incorporated by reference in the
Prospectus any material loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by insurance, or
from any labor dispute or court or governmental action, order or decree,
otherwise than as set forth or contemplated in the Prospectus; and, since
the respective dates as of which information is given in the Registration
Statement and the Prospectus, there has not been any material change in the
capital stock or long-term debt of the Designated Trust, the Company or any
of its subsidiaries (other than the Designated Trust) or any material
adverse change, or any development involving a prospective material adverse
change, in or affecting the general affairs, management, financial
position, shareholders' equity or results of operations of the Designated
Trust or the Company and its subsidiaries (other than the Designated
Trust), taken as a whole, otherwise than as set forth or contemplated in
the Prospectus;
(e) The Designated Trust has been duly created and is validly
existing as a business trust in good standing under the laws of the State
of Delaware and all filings required under the laws of the State of
Delaware with respect to the creation and valid existence of the Designated
Trust as a business trust have been made;
(f) The Designated Trust has the power and authority to conduct its
business as described in the Prospectus;
(g) The Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the State of California,
with power and authority (corporate and other) to own its properties and
conduct its business as described in the Prospectus, and has been duly
qualified as a foreign corporation for the transaction of business and is
in good standing under the laws of each other jurisdiction in which it owns
or leases properties or conducts any business so as to require such
qualification, except where the failure to be so qualified would not
subject it to material liability or disability; and each of Southern
California Gas Company, a California corporation ("SCGC"), San Diego Gas &
Electric Company, a California corporation ("SDG&E"), Pacific Enterprises,
a California corporation ("PE"), and Enova Corporation, a California
corporation ("Enova") (collectively, SCGC, SDG&E, PE and Enova are referred
to herein as the "Significant Subsidiaries") has been duly incorporated and
is validly existing as a corporation in good standing under the laws of its
jurisdiction of incorporation;
(h) The Company has an authorized capitalization as set forth in the
Prospectus, and all of the issued shares of capital stock of the Company
have been duly and validly authorized and issued and are fully paid and
non-assessable; and all of the issued shares of capital stock of each
Significant Subsidiary have been duly and validly authorized and issued,
are fully paid and non-assessable and, except for the outstanding preferred
stock of SCGC and PE and outstanding preferred and preference stock of
SDG&E, are owned directly or indirectly by the Company free and clear of
all liens, encumbrances, equities or claims; the Designated Trust has an
authorized capitalization as described in the Prospectus, and all the
outstanding beneficial interests in the Designated Trust have been duly and
validly authorized and issued, are fully paid and non-assessable and
conform in all material respects to the descriptions thereof contained in
the Prospectus;
5
(i) The Designated Securities have been duly authorized, and, when
the Designated Securities are issued and delivered pursuant to this
Agreement and the Pricing Agreement with respect to such Designated
Securities and, in the case of any Optional Designated Securities, pursuant
to an Over-allotment Option (as defined in Section 3 hereof) with respect
to such Designated Securities, such Designated Securities will be duly and
validly issued and will be fully paid and non-assessable beneficial
interests in the Designated Trust entitled to the benefits provided by the
applicable Trust Agreement; the issuance of the Designated Securities will
not be subject to preemptive or other similar rights; and the Designated
Securities will conform in all material respects to the description thereof
contained in the Prospectus as amended or supplemented with respect to such
Designated Securities;
(j) The holders of the Designated Securities (the "Securityholders")
will be entitled to the same limitation of personal liability extended to
stockholders of private corporations for profit organized under the General
Corporation Law of the State of Delaware;
(k) The Common Securities of the Designated Trust have been duly
authorized, and, when the Common Securities of the Designated Trust are
issued and delivered pursuant to the applicable Trust Agreement, such
Common Securities will be duly and validly issued and will be fully paid
beneficial interests in the Designated Trust entitled to the benefits
provided by the applicable Trust Agreement and will conform in all material
respects to the description thereof contained in the Prospectus; the
issuance of the Common Securities of the Designated Trust will not be
subject to preemptive or other similar rights; and at each Time of Delivery
(as defined in Section 4 hereof), all of the issued and outstanding Common
Securities of the Designated Trust will be directly owned by the Company
free and clear of any security interest, mortgage, pledge, lien,
encumbrance, claim or equity;
(l) The Designated Guarantee, the Trust Agreement for the Designated
Trust, the Designated Subordinated Debentures and the Subordinated
Indenture (the Designated Guarantee, the Designated Expense Agreement, such
Trust Agreement, the Designated Subordinated Debentures and the
Subordinated Indenture being collectively referred to as the "Company
Agreements") have each been duly authorized by the Company and, when
executed and delivered by the Company and (i) in the case of the Designated
Guarantee, by the Preferred Guarantee Trustee (as defined in the Designated
Guarantee), (ii) in the case of the Trust Agreement, by the Trustees (as
defined in the Trust Agreement), (iii) in the case of the Subordinated
Indenture, by the Indenture Trustee, and (iv) in the case of the Designated
Subordinated Debentures, when authenticated and delivered by the Indenture
Trustee and paid for by the Designated Trust in accordance with the
applicable Note Purchase Agreement (the "Note Purchase Agreement") between
the Company and the Designated Trust, will be duly executed and delivered
by the Company (and, in the case of the Designated Subordinated Debentures,
duly authenticated and issued) and will constitute at each Time of Delivery
valid and legally binding obligations of the Company, enforceable in
accordance with their respective terms (and, in the case of the Designated
Subordinated Debentures, entitled to the benefits of the Subordinated
Indenture), subject, as to enforcement, to bankruptcy, insolvency,
receivership,
6
liquidation, fraudulent conveyance, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or
affecting creditors' rights and to general equity principles; the Trust
Agreement, the Subordinated Indenture and the Designated Guarantee have
each been duly qualified under the Trust Indenture Act; and the Company
Agreements will conform, to the descriptions thereof contained in the
Prospectus as amended or supplemented with respect to the Designated
Securities, the Designated Guarantee and the Designated Subordinated
Debentures to which they relate;
(m) The Trust Agreement for the Designated Trust has been duly
authorized by the Designated Trust and, when executed and delivered by the
Designated Trust and by the Trustees (as defined in the Trust Agreement)
will be duly executed and delivered by the Designated Trust and will
constitute at each Time of Delivery valid and legally binding obligations
of the Designated Trust, enforceable in accordance with their respective
terms, subject, as to enforcement, to bankruptcy, insolvency, receivership,
liquidation, fraudulent conveyance, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or
affecting creditors' rights and to general equity principles;
(n) The issue and sale of the Designated Securities and the Common
Securities by the Designated Trust, the compliance by the Designated Trust
with all of the provisions of this Agreement, any Pricing Agreement and
each Over-allotment Option, if any, the Designated Securities, the Common
Securities of such Designated Trust, and the Trust Agreement and the
consummation of the transactions herein and therein contemplated will not
conflict with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any material contract,
indenture, mortgage, deed of trust, loan agreement, note, lease or other
agreement or instrument to which such Designated Trust or the Company or
any of its Significant Subsidiaries is a party or by which such Designated
Trust or the Company or any of its Significant Subsidiaries is bound or to
which any of the material properties or assets of such Designated Trust or
the Company or any of its Significant Subsidiaries is subject, nor will
such action result in any violation of the provisions of the Certificate of
Trust or Trust Agreement of such Designated Trust or the provisions of the
Articles of Incorporation or By-laws of the Company or any of its
Significant Subsidiaries or any statute or any order, rule or regulation of
any court or governmental agency or body having jurisdiction over such
Designated Trust, the Company or any of its Significant Subsidiaries or any
of their material properties; and no consent, approval, authorization,
order, registration or qualification of or with any such court or
governmental agency or body is required for the issue and sale of the
Designated Securities and the Common Securities by such Designated Trust or
the consummation by such Designated Trust or the Company of the
transactions contemplated by this Agreement, any Pricing Agreement or any
Over-allotment Option, the Designated Securities, the Common Securities of
such Designated Trust, or the Trust Agreement, except such as have been
obtained under the Act and the Trust Indenture Act and such consents,
approvals, authorizations, registrations or qualifications as may be
required under state securities or Blue Sky laws in connection with the
purchase and distribution of the Designated Securities by the Underwriters;
7
(o) The issue by the Company of the Guarantees and the Subordinated
Debentures, the compliance by the Company with all of the provisions of
this Agreement, any Pricing Agreement, the Guarantees, the Subordinated
Debentures, the Trust Agreement and the Subordinated Indenture, and the
consummation of the transactions herein and therein contemplated will not
conflict with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any material contract,
indenture, mortgage, deed of trust, loan agreement, note, lease or other
agreement or instrument to which the Company or any of its Significant
Subsidiaries is a party or by which the Company or any of its Significant
Subsidiaries is bound or to which any of the material properties or assets
of the Company or any of its Significant Subsidiaries is subject, nor will
such action result in any violation of the provisions of the Articles of
Incorporation or By-Laws of the Company and its Significant Subsidiaries or
any statute or any order, rule or regulation of any court or governmental
agency or body having jurisdiction over the Company or any of its
Significant Subsidiaries or any of their material properties; and no
consent, approval, authorization, order, registration or qualification of
or with any such court or governmental agency or body is required for the
issue of the Guarantees or the issue and sale of the Subordinated
Debentures or the consummation by the Company of the transactions
contemplated by this Agreement, any Pricing Agreement, the Guarantees, the
Subordinated Debentures, the Trust Agreement or the Subordinated Indenture,
except such as have been obtained under the Act and the Trust Indenture Act
and such consents, approvals, authorizations, registrations or
qualifications as may be required under state securities or Blue Sky laws
in connection with the issuance by the Company of the Guarantees and the
issue and sale of the Subordinated Debentures;
(p) The statements set forth in the Prospectus as amended or
supplemented under the captions "Description of Securities", "Description
of Debt Securities", "Description of Preferred Securities", "Description of
Preferred Securities Guarantees", "Description of Series A QUIPS" and
"Description of Series A QUIDS", insofar as they purport to constitute a
summary of the terms of the Securities, the Common Securities, the
Subordinated Debentures, the Guarantees and the Company Agreements and
under the captions "Material United States Federal Income Tax
Considerations" (or similar caption), "Plan of Distribution" and
"Underwriting", insofar as they purport to describe the provisions of the
laws and documents referred to therein, are accurate, complete and fair in
all material respects;
(q) Neither the Designated Trust, the Company nor any of its
Significant Subsidiaries is (i) in violation of the Trust Agreement for the
Designated Trust, the Certificate of Trust for the Designated Trust, the
Articles of Incorporation or By-Laws of the Company, or the charter or by-
laws of any of its Significant Subsidiaries, or (ii) in default in the
performance or observance of any material obligation, agreement, covenant
or condition contained in any contract, indenture, mortgage, deed of trust,
loan agreement, note, lease or other agreement or instrument to which it is
a party or by which it or any of its properties may be bound, except in the
case of clause (ii) for such defaults which, individually or in the
aggregate, would not reasonably be expected to have a material adverse
effect on the consolidated financial position, shareholders' equity or
8
results of operations of either the Designated Trust or the Company and its
subsidiaries (other than the Designated Trust), taken as a whole;
(r) Other than as set forth in the Prospectus, there are no legal or
governmental proceedings pending to which the Designated Trust, the Company
or any of its subsidiaries (other than the Designated Trust) is a party or
of which any of their properties is the subject which, if determined
adversely to the Designated Trust, the Company or any of its subsidiaries
(other than the Designated Trust), would individually or in the aggregate
have a material adverse effect on the current or future consolidated
financial position, shareholders' equity or results of operations of either
the Designated Trust or the Company and its subsidiaries (other than the
Designated Trust), taken as a whole; and, to the best of the Designated
Trust's and the Company's knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by others;
(s) Neither the Designated Trust nor the Company is or, after giving
effect to the offering and sale of the Designated Securities and the
Designated Guarantee, will be, an "investment company", as such term is
defined in the Investment Company Act of 1940, as amended (the "Investment
Company Act");
(t) Deloitte & Touche LLP, who have certified certain financial
statements of the Company and its subsidiaries, are independent public
accountants as required by the Act and the rules and regulations of the
Commission thereunder;
(u) The financial statements of the Company and its consolidated
subsidiaries included or incorporated by reference in the Registration
Statement and Prospectus present fairly in all material respects the
consolidated financial position of the Company and its consolidated
subsidiaries as of the dates indicated and the consolidated results of
their operations for the periods specified; and, except as stated therein,
such financial statements have been prepared in conformity with generally
accepted accounting principles in the United States applied on a consistent
basis;
(v) The Company has reviewed its operations and that of its
subsidiaries and any third parties with which the Company and its
subsidiaries, taken as a whole, have a material relationship to evaluate
the extent to which the business or operations of the Company and its
subsidiaries, taken as a whole, have been or will be affected by the Year
2000 Problem. As a result of such review, the Company has no reason to
believe, and does not believe, that the Year 2000 Problem has had or could
reasonably be expected to have a material adverse effect on the current or
future consolidated financial position, business prospects, shareholders'
equity or results of operations of the Company and its subsidiaries, taken
as a whole, or has resulted or will result in any material loss or
interference with the business or operations of the Company and its
subsidiaries, taken as a whole. The "Year 2000 Problem" as used herein
means any significant risk that computer hardware or software used by the
Company or any of its subsidiaries in the receipt, transmission,
processing, manipulation, storage, retrieval, retransmission or other
utilization of data or in the operation of mechanical or electrical systems
of any kind is not functioning or will not function, in the case of dates
or time periods occurring after
9
December 31, 1999, at least as effectively as in the case of dates or time
periods occurring prior to January 1, 2000;
(w) The Company has received an order from the Commission exempting
the Company from all of the provisions of the Public Utility Holding
Company Act of 1935, as amended (the "1935 Act"), except for Section
9(a)(2) thereof;
(x) The Company and its subsidiaries possess such certificates,
authorities or permits issued by the appropriate state, federal, local or
foreign regulatory agencies or bodies necessary to conduct the businesses
now operated by them, except where the failure to possess such
certificates, authorities or permits, individually or in the aggregate,
would not have a material adverse effect on the current or future
consolidated financial position, shareholders' equity or results of
operations of the Company and its subsidiaries taken as a whole; and
neither the Company nor any of its subsidiaries has received any notice of
proceedings relating to the revocation or modification of any such
certificate, authority or permit which, individually or in the aggregate,
if the subject of an unfavorable decision, ruling or finding, would have a
material adverse affect on the current or future consolidated financial
position, shareholders' equity or results of operations of the Company and
its subsidiaries, taken as a whole;
(y) The Company and its subsidiaries are in compliance with, and
conduct their respective businesses in conformity with, all applicable
state, federal, local and foreign laws and regulations relating to the
operation and ownership of a public utility, including, without limitation,
those relating to the distribution and transmission of natural gas, except
to the extent that any failure so to comply or conform would not
individually or in the aggregate have a material adverse effect on the
current or future consolidated financial position, shareholders' equity or
results of operations of the Company and its subsidiaries, taken as a
whole; and
(z) The Designated Subordinated Debentures will be classified for
United States federal income tax purposes as indebtedness of the Company.
3. Upon the execution of the Pricing Agreement applicable to any Firm
Designated Securities and authorization by the Representatives of the release of
such Firm Designated Securities, the several Underwriters propose to offer such
Firm Designated Securities for sale upon the terms and conditions set forth in
the Prospectus as amended or supplemented.
The Designated Trust may specify in the Pricing Agreement applicable
to any Designated Securities that the Designated Trust thereby grants to the
Underwriters the right (an "Over-allotment Option") to purchase at their
election up to the number of Optional Designated Securities set forth in such
Pricing Agreement, on the terms set forth therein, for the sole purpose of
covering over-allotments, if any, in the sale of the Firm Designated Securities.
Any such election to purchase Optional Designated Securities may be exercised by
written notice from the Representatives to the Designated Trust and the Company,
given within a period specified in the Pricing Agreement, setting forth the
aggregate number of Optional Designated Securities to be purchased and the date
on which such Optional Designated Securities are to be delivered, as determined
by the Representatives but in no event earlier than the First Time of Delivery
(as
10
defined in Section 4 hereof) or, unless the Representatives, the Designated
Trust and the Company otherwise agree in writing, earlier than or later than the
respective number of business days after the date of such notice set forth in
such Pricing Agreement.
The number of Optional Designated Securities to be added to the number of
Firm Designated Securities to be purchased by each Underwriter as set forth in
Schedule I to the Pricing Agreement applicable to such Designated Securities
shall be, in each case, the number of Optional Designated Securities which the
Designated Trust and the Company have been advised by the Representatives have
been attributed to such Underwriter; provided that, if the Designated Trust and
the Company have not been so advised, the number of Optional Designated
Securities to be so added shall be, in each case, that proportion of Optional
Designated Securities which the number of Firm Designated Securities to be
purchased by such Underwriter under such Pricing Agreement bears to the
aggregate number of Firm Designated Securities (rounded as the Representatives
may determine to the nearest 100 securities). The total number of Designated
Securities to be purchased by all the Underwriters pursuant to such Pricing
Agreement shall be the aggregate number of Firm Designated Securities set forth
in Schedule I to such Pricing Agreement plus the aggregate number of Optional
Designated Securities which the Underwriters elect to purchase.
As compensation to the Underwriters of the Designated Securities for their
commitments hereunder and under the Pricing Agreement, and in view of the fact
that the proceeds of the sale of the Designated Securities will be used by the
Designated Trust to purchase the Designated Subordinated Debentures of the
Company, the Company agrees to pay at each Time of Delivery to the
Representatives, for the accounts of the several Underwriters, the amount set
forth in the Pricing Agreement per Designated Security for the Designated
Securities to be delivered at each Time of Delivery.
4. Certificates for the Firm Designated Securities and the Optional
Designated Securities, if any, to be purchased by each Underwriter pursuant to
the Pricing Agreement relating thereto, in the form specified in the Trust
Agreement, and in such authorized denominations and registered in such names as
the Representatives may request upon at least forty-eight hours' prior notice to
the Designated Trust and the Company, shall be delivered by or on behalf of the
Designated Trust to the Representatives for the account of such Underwriter,
against payment by such Underwriter or on its behalf of the purchase price
therefor by wire transfer of Federal (same-day) funds to the account specified
by the Designated Trust, (i) with respect to the Firm Designated Securities, all
in the manner and at the place and time and date specified in such Pricing
Agreement or at such other place and time and date as the Representatives, the
Designated Trust and the Company may agree upon in writing, such time, date and
place being herein called the "First Time of Delivery" and (ii) with respect to
the Optional Designated Securities, if any, in the manner and at the place and
time and date specified by the Representatives in the written notice given by
the Representatives of the Underwriters' election to purchase such Optional
Designated Securities, or at such other place and time and date as the
Representatives, the Designated Trust and the Company may agree upon in writing,
such time, date and place, if not the First Time of Delivery, being herein
called the "Second Time of Delivery". Each such time and date for delivery is
herein called a "Time of Delivery".
11
5. The Designated Trust and the Company, jointly and severally, agree
with each of the Underwriters of any Designated Securities:
(a) To prepare the Prospectus as amended or supplemented in relation
to the applicable Designated Securities in a form approved by the
Representatives and to file such Prospectus pursuant to Rule 424(b) under
the Act not later than the Commission's close of business on the second
business day following the execution and delivery of the Pricing Agreement
relating to the applicable Designated Securities or, if applicable, such
earlier time as may be required by Rule 424(b); to make no further
amendment or any supplement to the Registration Statement or Prospectus as
amended or supplemented after the date of the Pricing Agreement relating to
such Securities and prior to the last Time of Delivery for such Securities
which shall be disapproved by the Representatives for such Securities
promptly after reasonable notice thereof; to advise the Representatives
promptly of any such amendment or supplement after such Time of Delivery
and furnish the Representatives with copies thereof; to file promptly all
reports and any definitive proxy or information statements required to be
filed by the Company or the Designated Trust with the Commission pursuant
to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act for so long as the
delivery of a prospectus is required in connection with the offering or
sale of such Securities, and during such same period to advise the
Representatives, promptly after it receives notice thereof, of the time
when any amendment to the Registration Statement has been filed or becomes
effective or any supplement to the Prospectus or any amended Prospectus has
been filed with the Commission, of the issuance by the Commission of any
stop order or of any order preventing or suspending the use of any
prospectus relating to the Securities, of the suspension of the
qualification of such Securities for offering or sale in any jurisdiction,
of the initiation or threatening of any proceeding for any such purpose, or
of any request by the Commission for the amending or supplementing of the
Registration Statement or Prospectus or for additional information; and, in
the event of the issuance of any such stop order or of any such order
preventing or suspending the use of any prospectus relating to the
Securities or suspending any such qualification, to promptly use
commercially reasonable efforts to obtain the withdrawal of such order;
(b) Promptly from time to time to take such action as the
Representatives may reasonably request to qualify such Designated
Securities or the Designated Subordinated Debentures for offering and sale
under the securities laws of such jurisdictions as the Representatives may
request and to comply with such laws so as to permit the continuance of
sales and dealings therein in such jurisdictions for as long as may be
necessary to complete the distribution of such Designated Securities or
such Designated Subordinated Debentures, provided that in connection
therewith neither the Designated Trust nor the Company shall be required to
qualify as a foreign corporation or to file a general consent to service of
process in any jurisdiction;
(c) Prior to 10:00 a.m., New York City time, on the New York business
day next succeeding the date of any Pricing Agreement for such Designated
Securities, or such later time or date as agreed to by the Designated
Trust, the Company and the Representatives, and from time to time, to
furnish the Underwriters with copies of the Prospectus in New York City as
amended or supplemented in such quantities as the
12
Representatives may reasonably request, and, if the delivery of a
prospectus is required at any time in connection with the offering or sale
of the Designated Securities or the Designated Subordinated Debentures and
if at such time any event shall have occurred as a result of which the
Prospectus as then amended or supplemented would include an untrue
statement of a material fact or omit to state any material fact necessary
in order to make the statements therein, in the light of the circumstances
under which they were made when such Prospectus is delivered, not
misleading, or, if for any other reason it shall be necessary during such
same period to amend or supplement the Prospectus or to file under the
Exchange Act any document incorporated by reference in the Prospectus in
order to comply with the Act, the Exchange Act or the Trust Indenture Act,
to notify the Representatives and upon their request to file such document
and to prepare and furnish without charge to each Underwriter and to any
dealer in securities as many copies as the Representatives may from time to
time reasonably request of an amended Prospectus or a supplement to the
Prospectus which will correct such statement or omission or effect such
compliance;
(d) In the case of the Company, to make generally available to its
securityholders as soon as practicable, but in any event not later than
eighteen months after the effective date of the Registration Statement (as
defined in Rule 158(c) under the Act), an earnings statement of the Company
and its consolidated subsidiaries and, if at such time, the Designated
Trust is required to file reports and proxy or information statements
pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act, of the
Designated Trust (which need not be audited) complying with Section 11(a)
of the Act and the rules and regulations of the Commission thereunder
(including, at the option of the Company, Rule 158);
(e) During the period beginning from the date of the Pricing
Agreement for such Designated Securities and continuing to and including
the later of (i) the termination of trading restrictions for such
Designated Securities, as notified to the Designated Trust and the Company
by the Representatives and (ii) 30 days after the last Time of Delivery for
such Designated Securities, not to offer, sell, contract to sell or
otherwise dispose of any Securities, any other beneficial interests in the
assets of any Trust, or any preferred securities or any other securities of
any Trust or the Company, as the case may be, that are substantially
similar to such Designated Securities (including any guarantee of such
securities) or any securities that are convertible into or exchangeable
for, or that represent the right to receive, Securities, preferred
securities or any such substantially similar securities of any Trust or the
Company, or any debt securities of the Company (other than the Designated
Subordinated Debentures and the senior debt securities of the Company which
are being sold concurrently with the Designated Securities to be sold by
Sempra Energy Capital Trust I) which mature more than one year after such
Time of Delivery (other than guarantees of commercial notes offered from
time to time by Sempra Energy Holdings pursuant to its commercial paper
program) and which are substantially similar to such Designated Securities,
without the prior written consent of the Representatives;
(f) In the case of the Company, to issue the Designated Guarantee
concurrently with the issue and sale of the Designated Securities as
contemplated herein or in the Pricing Agreement;
13
(g) To use its best efforts to list within 30 days following the
First Time of Delivery, subject to notice of issuance, the Designated
Securities on the New York Stock Exchange and, if the Company elects to
dissolve the Designated Trust and to distribute the Designated Subordinated
Debentures to the holders of the Designated Securities in liquidation of
the Designated Trust, to use its best efforts to list the Designated
Subordinated Debentures on the New York Stock Exchange prior to such
distribution; and
(h) If the Designated Trust and the Company elect to rely upon Rule
462(b), the Designated Trust and the Company shall file a Rule 462(b)
Registration Statement with the Commission in compliance with Rule 462(b)
by 10:00 P.M., Washington, D.C. time, on the date of this Agreement, and
the Designated Trust and the Company shall at the time of filing either pay
to the Commission the filing fee for the Rule 462(b) Registration Statement
or give irrevocable instructions for the payment of such fee pursuant to
Rule 111(b) under the Act.
6. The Company covenants and agrees with the several Underwriters that the
Company will pay or cause to be paid the following: (i) the fees, disbursements
and expenses of the Company's counsel and accountants in connection with the
registration of the Securities, the Guarantees and the Subordinated Debentures
under the Act and all other expenses in connection with the preparation,
printing and filing of the Registration Statement, any Preliminary Prospectus
and the Prospectus and amendments and supplements thereto and the mailing and
delivering of copies thereof to the Underwriters and dealers; (ii) the cost of
printing or producing any Agreement among Underwriters, this Agreement, any
Pricing Agreement, any Company Agreement (including any amendment or supplement
to the Subordinated Indenture), the Securities, the Common Securities, the
Subordinated Debentures, any Blue Sky and Legal Investment Memoranda, closing
documents (including any compilations thereof) and any other documents in
connection with the offering, purchase, sale and delivery of the Securities and
the Subordinated Debentures; (iii) all expenses in connection with the
qualification of the Securities and, if necessary, the Subordinated Debentures,
for offering and sale under state securities laws as provided in Section 5(b)
hereof, including the reasonable fees and disbursements of counsel for the
Underwriters in connection with such qualification and in connection with the
Blue Sky and Legal Investment Surveys; (iv) any fees charged by securities
rating services for rating the Securities and the Subordinated Debentures; (v)
any filing fees incident to, and the reasonable fees and disbursements of
counsel for the Underwriters in connection with, any required review by the
National Association of Securities Dealers, Inc. of the terms of the sale of the
Securities and the issuance of the Guarantees and the Subordinated Debentures;
(vi) the cost of preparing the Securities and the Subordinated Debentures; (vii)
the fees and expenses of any Indenture Trustee, Preferred Guarantee Trustee (as
defined in any Designated Guarantee) or other trustee (including any trustee
under any Trust Agreement), and any agent of any such trustee and the reasonable
fees and disbursements of counsel for any such trustee in connection with any
Trust Agreement, the Subordinated Indenture, any Guarantee, the Securities and
the Subordinated Debentures; (viii) any fees and expenses in connection with
listing the Securities and the Subordinated Debentures and the cost of
registering the Securities under Section 12 of the Exchange Act; and (ix) all
other costs and expenses incident to the performance of its obligations
hereunder and under any Over-allotment Options which are not otherwise
specifically provided for in this Section. It is understood, however, that,
except as provided in this Section, and
14
Sections 8 and 11 hereof, the Underwriters will pay all of their own costs and
expenses, including the fees of their counsel, transfer taxes on resale of any
of the Securities by them, and any advertising expenses connected with any
offers they may make.
7. The obligations of the Underwriters of any Designated Securities under
the Pricing Agreement relating to such Designated Securities shall be subject,
in the discretion of the Representatives, to the condition that all
representations and warranties and other statements of the Designated Trust and
the Company in or incorporated by reference in the Pricing Agreement relating to
such Designated Securities are, at and as of each Time of Delivery for such
Designated Securities, true and correct, the condition that the Designated Trust
and the Company shall have performed all of their respective obligations
hereunder theretofore to be performed, and the following additional conditions:
(a) The Prospectus as amended or supplemented in relation to the
applicable Designated Securities shall have been filed with the Commission
pursuant to Rule 424(b) within the applicable time period prescribed for
such filing by the rules and regulations under the Act and in accordance
with Section 5(a) hereof; if the Designated Trust and the Company have
elected to rely upon Rule 462(b), the Rule 462(b) Registration Statement
shall have become effective by 10:00 P.M., Washington, D.C. time, on the
date of the applicable Pricing Agreement; no stop order suspending the
effectiveness of the Registration Statement or any part thereof shall have
been issued and no proceeding for that purpose shall have been initiated or
threatened by the Commission; and all requests for additional information
on the part of the Commission shall have been complied with to the
Representatives' reasonable satisfaction;
(b) Counsel for the Underwriters shall have furnished to the
Representatives such written opinion or opinions, dated each Time of
Delivery for such Designated Securities, with respect to the Registration
Statement and the Prospectus as amended or supplemented, as well as such
other related matters as the Representatives may reasonably request, and
such counsel shall have received such papers and information as they may
reasonably request to enable them to pass upon such matters;
(c) ▇▇▇▇ ▇. ▇▇▇▇, Chief Corporate Counsel of the Company, shall have
furnished to the Representatives a written opinion or opinions, dated each
Time of Delivery for such Designated Securities, in form and substance
satisfactory to the Representatives, to the effect that:
(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of California, with power and authority (corporate and other) to own
its properties and conduct its business as described in the
Prospectus, and has been duly qualified as a foreign corporation for
the transaction of business and is in good standing under the laws of
each other jurisdiction in which it owns or leases properties or
conducts any business so as to require such qualification, except
where the failure to be so qualified would not subject it to material
liability or disability; and each Significant Subsidiary has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of its jurisdiction of incorporation;
15
(ii) The Company has an authorized capitalization as set forth
in the Prospectus and all of the issued shares of capital stock of the
Company have been duly and validly authorized and issued and are fully
paid and non-assessable; and all of the issued shares of capital stock
of each Significant Subsidiary have been duly and validly authorized
and issued, are fully paid and non-assessable and, except for the
outstanding preferred stock of SCGC and PE and the outstanding
preferred and preference stock of SDG&E, are owned of record directly
or indirectly by the Company and, to such counsel's knowledge, free
and clear of all liens, encumbrances, equities or claims;
(iii) To the best of such counsel's knowledge and other than as
set forth in the Prospectus, there are no legal or governmental
proceedings pending to which the Designated Trust, the Company or any
of its subsidiaries (other than the Designated Trust) is a party or of
which any property of the Designated Trust, the Company or any of its
subsidiaries (other than the Designated Trust) is the subject which,
if determined adversely to the Designated Trust, the Company or any of
its subsidiaries (other than the Designated Trust), would reasonably
be expected, individually or in the aggregate, to have a material
adverse effect on the current or future consolidated financial
position, shareholders' equity or results of operations of the
Designated Trust or the Company and its subsidiaries (other than the
Designated Trust), taken as a whole; and, to the best of such
counsel's knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by others;
(iv) This Agreement and the Pricing Agreement with respect to
the Designated Securities have been duly authorized, executed and
delivered by the Company;
(v) The Company Agreements have each been duly authorized,
executed and delivered by the Company and when executed and delivered
(i) in the case of the Designated Guarantee, by the Preferred
Guarantee Trustee (as defined in the Designated Guarantee), (ii) in
the case of the Trust Agreement, by the Trustees (as defined in the
Trust Agreement), (iii) in the case of the Subordinated Indenture, by
the Indenture Trustee, and (iv) in the case of the Designated
Subordinated Debentures, when authenticated and delivered by the
Indenture Trustee and paid for by the Designated Trust in accordance
with the applicable Note Purchase Agreement between the Company and
the Designated Trust, will constitute valid and legally binding
obligations of the Company, enforceable in accordance with their
respective terms (and, in the case of the Designated Subordinated
Debentures, entitled to the benefits of the Subordinated Indenture),
subject, as to enforcement, to bankruptcy, insolvency, receivership,
liquidation, fraudulent conveyance, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights and to general equity
principles; the Trust Agreement, the Subordinated Indenture and the
Designated Guarantee have each been duly qualified under the Trust
Indenture Act; and the Company Agreements, the
16
Designated Securities and the Common Securities of the Designated
Trust will conform to the descriptions thereof in the Prospectus;
(vi) The issue and sale of the Designated Securities and the
Common Securities by the Designated Trust, the compliance by the
Designated Trust and the Company with all of the provisions of this
Agreement, the Pricing Agreement, the Designated Securities, the
Common Securities of such Designated Trust and the Trust Agreement and
the consummation of the transactions herein and therein contemplated
will not conflict with or result in a breach or violation of any of
the terms or provisions of, or constitute a default under, any
material contract, indenture, mortgage, deed of trust, loan agreement,
note, lease or other agreement or instrument to which such Designated
Trust or the Company or any of its Significant Subsidiaries is a party
or by which such Designated Trust or the Company or any of its
Significant Subsidiaries is bound or to which any of the material
properties or assets of such Designated Trust or the Company or any of
its Significant Subsidiaries is subject, nor will such action result
in any violation of the provisions of the Certificate of Trust of the
Designated Trust or the Articles of Incorporation or By-laws of the
Company or any of its Significant Subsidiaries or any statute or any
order, rule or regulation of any court or governmental agency or body
having jurisdiction over such Designated Trust or the Company or any
of its Significant Subsidiaries or any of their material properties;
and no consent, approval, authorization, order, registration or
qualification of or with any such court or governmental agency or body
is required for the consummation by the Company of the transactions
contemplated by this Agreement, the Pricing Agreement, the Designated
Securities, the Common Securities of such Designated Trust or the
Company Agreements, except such as have been obtained under the Act
and the Trust Indenture Act and such consents, approvals,
authorizations, registrations or qualifications as may be required
under state securities or Blue Sky laws in connection with the
purchase and distribution of the Designated Securities by the
Underwriters;
(vii) The issue by the Company of the Guarantees and the issue
and sale of the Subordinated Debentures, the compliance by the Company
with all of the provisions of the Guarantees, the Subordinated
Debentures and the Subordinated Indenture, and the consummation of the
transactions therein contemplated will not conflict with or result in
a breach or violation of any of the terms or provisions of, or
constitute a default under, any material contract, indenture,
mortgage, deed of trust, loan agreement, note, lease or other
agreement or instrument to which the Company or any of its Significant
Subsidiaries is a party or by which the Company or any of its
Significant Subsidiaries is bound or to which any of the material
properties or assets of the Company or any of its Significant
Subsidiaries is subject, nor will such actions result in any violation
of the provisions of the Articles of Incorporation or By-Laws of the
Company and its Significant Subsidiaries or any statute or any order,
rule or regulation of any court or governmental agency or body having
jurisdiction over the Company or any of its Significant Subsidiaries
or any of their material properties; and no consent, approval,
authorization, order, registration or qualification of or with any
such
17
court or governmental agency or body is required for the issue of
the Guarantees or the issue and sale of the Subordinated Debentures or
the consummation by the Company of the transactions contemplated by
the Guarantees, the Subordinated Debentures, or the Subordinated
Indenture, except such as have been obtained under the Act and the
Trust Indenture Act and such consents, approvals, authorizations,
registrations or qualifications as may be required under state
securities or Blue Sky laws in connection with the issue by the
Company of the Guarantees and the issue and sale of the Subordinated
Debentures;
(viii) The statements set forth in the Prospectus as amended or
supplemented under the captions "Description of Securities",
"Description of Debt Securities", "Description of Preferred
Securities", "Description of Preferred Securities Guarantees",
"Description of Series A QUIPS" and "Description of Series A QUIDS"
insofar as they purport to constitute a summary of the terms of the
Securities, the Common Securities, the Subordinated Debentures, the
Guarantees and the Company Agreements and under the captions "Plan of
Distribution" and "Underwriting", insofar as they purport to describe
the provisions of the laws and documents referred to therein, are
accurate, complete and fair in all material respects;
(ix) All of the issued and outstanding Common Securities of the
Designated Trust will be directly owned of record by the Company and,
to such counsel's knowledge, free and clear of any security interest,
mortgage, pledge, lien, encumbrance, claim or equity;
(x) Neither the Company nor any of its Significant
Subsidiaries is (i) in violation of its By-laws or Articles of
Incorporation or (ii) in default in the performance or observance of
any material obligation, agreement, covenant or condition contained in
any contract, indenture, mortgage, deed of trust, loan agreement,
note, lease or other agreement or instrument to which it is a party or
by which it or any of its properties may be bound, except in the case
of clause (ii) for such defaults which, individually or in the
aggregate, would not reasonably be expected to have a material adverse
effect on the consolidated financial position, shareholders' equity or
results of operations of the Company and its subsidiaries, taken as a
whole;
(xi) Neither the Company nor the Designated Trust is, or after
giving effect to the offering and sale of the Designated Securities
and the Designated Guarantee, will be, an "investment company", as
such term is defined in the Investment Company Act;
(xii) Based solely upon oral advice from the staff of the
Commission, the Trusts are not required to file reports or proxy or
information statements pursuant to Section 13(a), 13(c), 14 or 15(c)
of the Exchange Act. The documents incorporated by reference in the
Prospectus as amended or supplemented (other than the financial
statements and related schedules therein, as to which such counsel
need express no opinion), when they became effective or were filed
with
18
the Commission, as the case may be, complied as to form in all
material respects with the requirements of the Act or the Exchange
Act, as applicable, and the rules and regulations of the Commission
thereunder; and such counsel has no reason to believe that any of such
documents, when they became effective or were so filed, as the case
may be, contained, in the case of a registration statement which
became effective under the Act, an untrue statement of a material fact
or omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, or, in the
case of other documents which were filed under the Act or the Exchange
Act with the Commission, an untrue statement of a material fact or
omitted to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made when such documents were so filed, not misleading; it being
understood that such counsel expresses no belief with respect to the
financial statements or other financial data included or incorporated
by reference in, or omitted from, the Prospectus as amended or
supplemented;
(xiii) The Registration Statement and the Prospectus as amended
or supplemented and any further amendments and supplements thereto
made by the Company or the Designated Trust prior to the Time of
Delivery for the Designated Securities (in each case, excluding the
documents incorporated by reference therein) comply as to form in all
material respects with the requirements for registration statements on
Form S-3 under the Act, and the requirements under the Trust Indenture
Act and the rules and regulations of the Commission thereunder, it
being understood, however, that such counsel expresses no opinion with
respect to the financial statements, schedules or other financial data
included or incorporated by reference in, or omitted from the
Registration Statement or the Prospectus as amended or supplemented or
with respect to any Form T-1. In passing upon the compliance as to
form of the Registration Statement and the Prospectus as amended or
supplemented (in each case, excluding the documents incorporated by
reference therein), except for those statements referred to in the
opinion in subsection (viii) of this Section 7(c), such counsel has
assumed that the statements made and incorporated by reference therein
are correct and complete; and
(xiv) The Company has received an order from the Commission
exempting the Company from all of the provisions of the 1935 Act,
except for Section 9(a)(2) thereof.
(d) Counsel for the Company and the Designated Trust satisfactory to
the Representatives shall have furnished to the Representatives their written
opinion or opinions, dated each Time of Delivery for such Designated Securities,
in form and substance satisfactory to the Representatives, to the effect that:
(i) Each of the Trust Agreement and the Subordinated Indenture
constitutes a legally valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms;
19
(ii) The Designated Subordinated Debentures, when executed and
authenticated in accordance with the terms of the Subordinated
Indenture and delivered to and paid for by the Designated Trust in
accordance with the terms of the Note Purchase Agreement, will
constitute legally valid and binding obligations of the Company,
enforceable against the Company in accordance with their terms, and
are entitled to the benefits of the Subordinated Indenture;
(iii) The Designated Guarantee, upon due execution,
authentication and delivery of the Designated Securities, will
constitute a legally valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms; and
(iv) The Registration Statement and the Prospectus as amended
or supplemented (in each case, excluding the documents incorporated by
reference therein) comply as to form in all material respects with the
requirements for registration statements on Form S-3 under the Act,
and the requirements under the Trust Indenture Act and the rules and
regulations of the Commission thereunder; it being understood,
however, that such counsel expresses no opinion with respect to the
financial statements, schedules or other financial data included or
incorporated by reference in, or omitted from, the Registration
Statement or the Prospectus as amended or supplemented or with respect
to any Form T-1. In passing upon the compliance as to form of the
Registration Statement and the Prospectus as amended or supplemented
(in each case, excluding the documents incorporated by reference
therein), such counsel has assumed that the statements made and
incorporated by reference therein are correct and complete.
In addition, such counsel shall provide a statement to the effect that
such counsel has participated in telephone conferences with officers and
other representatives of the Company, the Designated Trust and
representatives of the Underwriters, at which the contents of the
Registration Statement and the Prospectus as amended or supplemented and
related matters were discussed and, although such counsel is not passing
upon, and does not assume any responsibility for, the accuracy,
completeness or fairness of the statements contained or incorporated by
reference in the Registration Statement and the Prospectus as amended or
supplemented and has not made any independent check or verification
thereof, during the course of such participation, no facts came to such
counsel's attention that caused them to believe that the Registration
Statement, at the time it became effective, contained an untrue statement
of material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, or that
the Prospectus as amended or supplemented (including the documents
incorporated by reference), as of its date and as of the date of such
opinion, contained or contains an untrue statement of a material fact or
omitted or omits to state a material fact necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading; it being understood that such counsel expresses no belief with
respect to the financial statements or other financial data included or
incorporated by reference in, or omitted from, the Registration Statement
or Prospectus as amended or supplemented.
20
(e) Special Delaware counsel to the Designated Trust and the Company
satisfactory to the Representatives shall have furnished to the Representatives
their written opinion or opinions, dated each Time of Delivery for such
Designated Securities, in form and substance satisfactory to the
Representatives, to the effect that:
(i) The Designated Trust has been duly created and is validly
existing in good standing as a business trust under the laws of the State
of Delaware, and all filings required under the laws of the State of
Delaware with respect to the creation and valid existence of the Designated
Trust as a business trust have been made;
(ii) Under the Delaware Act and the Trust Agreement, the Designated
Trust has the trust power and authority to own property and conduct its
business, all as described in the Prospectus;
(iii) The Designated Securities have been duly authorized by the
Trust Agreement and are duly and validly issued, fully paid and, subject to
the qualifications set forth in this paragraph, non-assessable undivided
beneficial interests in the assets of the Designated Trust, and are
entitled to the benefits provided by the Trust Agreement. The holders of
Designated Securities (the "Preferred Security Holders"), as beneficial
owners of the Designated Trust, will be entitled to the same limitation of
personal liability extended to stockholders of private corporations for
profit organized under the General Corporation Law of the State of
Delaware. We note that the Preferred Security Holders may be obligated,
pursuant to the Trust Agreement, (a) to provide indemnity and security in
connection with and pay taxes or governmental charges arising from
transfers of certificates evidencing the Designated Securities and the
issuance of replacement certificates, and (b) to provide security and
indemnity in connection with requests of or directions to the Property
Trustee (as defined in the Trust Agreement) to exercise its rights and
remedies under the Trust Agreement;
(iv) The Trust Agreement constitutes a valid and binding obligation of
the Company and the trustees of the Designated Trust, and is enforceable
against the Company and the trustees of the Designated Trust, in accordance
with its terms, subject, as to enforcement, to the effect upon the Trust
Agreement of (i) bankruptcy, insolvency, reorganization, moratorium,
receivership, liquidation, fraudulent transfer and conveyance, and other
similar laws relating to or affecting the rights and remedies of creditors
generally, (ii) principles of equity, including applicable law relating to
fiduciary duties (regardless of whether considered and applied in a
proceeding in equity or at law), and (iii) the effect of applicable public
policy on the enforceability of provisions relating to indemnification or
contribution;
(v) The issue and sale by the Designated Trust of the Designated
Securities and the Common Securities of the Designated Trust, the
compliance by the Designated Trust of this Agreement, the Pricing
Agreement, the Designated Securities, the Common Securities of the
Designated Trust and the Trust
21
Agreement, and the consummation by the Designated Trust of the transactions
herein and therein contemplated do not violate (a) any provisions of the
Certificate of Trust of the Designated Trust (as amended to date) or the
Trust Agreement, or (b) any applicable Delaware law or administrative
regulation;
(vi) Under the Delaware Act and the Trust Agreement, the Designated
Trust has the requisite trust power and authority to (a) execute, deliver
and perform its obligations under this Agreement and the Pricing Agreement,
(b) issue and perform its obligations under the Designated Securities and
the Common Securities of the Designated Trust, and (c) to purchase and hold
the Designated Subordinated Debentures;
(vii) The Common Securities of the Designated Trust have been duly
authorized and are validly issued and fully paid undivided beneficial
interests in the assets of the Designated Trust and are entitled to the
benefits provided by the Trust Agreement;
(viii) Under the Delaware Act and the Trust Agreement, the issuance of
the Designated Securities and the Common Securities of the Designated Trust
is not subject to preemptive rights;
(ix) No consent, approval, authorization, order or registration with
or qualification of or with any Delaware court or Delaware governmental
authority or Delaware agency is required to be obtained by the Designated
Trust solely in connection with the issue and sale of the Designated
Securities and the Common Securities of the Designated Trust or the
consummation of the transactions contemplated by this Agreement or the
Pricing Agreement;
(x) Under the Delaware Act and the Trust Agreement, the execution
and delivery by the Designated Trust of this Agreement and the Pricing
Agreement, and the performance by the Designated Trust of its obligations
hereunder and thereunder, have been duly authorized by the requisite trust
action on the part of the Designated Trust; and
(xi) Assuming that the Designated Trust derives no income from or
connected with sources within the State of Delaware and has no assets,
activities (other than maintaining the Delaware Trustee (as defined in the
Trust Agreement) and the filing of documents with the Secretary of State of
the State of Delaware) or employees in the State of Delaware and assuming
that the Designated Trust is treated as a grantor trust for federal income
tax purposes, the holders of the Designated Securities (other than those
holders who reside or are domiciled in the State of Delaware) will have no
liability for income taxes imposed by the State of Delaware solely as a
result of their participation in the Designated Trust, and the Designated
Trust will not be liable for any income tax imposed by the State of
Delaware.
22
(f) Tax counsel for the Designated Trust and the Company satisfactory
to the Representatives shall have furnished to the Representatives their
written opinion (a draft of such opinion is attached as ▇▇▇▇▇ ▇▇▇(a)
hereto), dated each Time of Delivery for such Designated Securities, in
form and substance satisfactory to the Representatives, to the effect that
such firm confirms its opinion set forth in the Prospectus as amended or
supplemented under the caption "Material United States Federal Income Tax
Considerations" and that the Designated Subordinated Debentures will be
classified for United States federal income tax purposes as indebtedness of
the Company;
(g) Counsel for the Indenture Trustee, the Property Trustee (as such
term is defined in the Trust Agreement for the Designated Trust) and the
Preferred Guarantee Trustee satisfactory to the Representatives shall have
furnished to the Representatives their written opinion (a draft of such
opinion is attached as ▇▇▇▇▇ ▇▇▇ (b) hereto), dated each Time of Delivery
for such Designated Securities, in form and substance satisfactory to the
Representatives, with respect to the trust powers, organization, valid
existence and good standing of each such trustee, the corporate power and
authority of each such trustee to execute, deliver and perform its
obligations under the Trust Agreement for the Designated Trust, the
Designated Guarantee and the Subordinated Indenture (the Trust Agreement
for the Designated Trust, the Designated Guarantee and the Subordinated
Indenture being collectively referred to as the "QUIPS Documents"), as the
case may be, the due authorization, execution and delivery by each such
trustee, as the case may be, of the QUIPS Documents, the validity and
enforceability against each such trustee, as the case may be, of the QUIPS
Documents, that execution, delivery and performance by each such trustee of
the QUIPS Documents does not conflict with or constitute a breach of the
charter or by-laws of each such trustee, that no consent, approval,
authorization of, or registration with, or any notice to any banking
authority is required for the execution, delivery and performance by each
such trustee of the QUIPS Documents or such other matters as the
Representatives may reasonably request;
(h) On the date of the Pricing Agreement for such Designated
Securities at a time prior to the execution of the Pricing Agreement with
respect to such Designated Securities and at each Time of Delivery for such
Designated Securities, the independent accountants of the Company who have
certified the financial statements of the Company and its subsidiaries
included or incorporated by reference in the Registration Statement shall
have furnished to the Representatives a letter, dated the date of the
Pricing Agreement to the effect set forth in Annex II hereto, and a letter
dated each Time of Delivery reaffirming the statements made in their letter
dated the date of the Pricing Agreement, except that the specified date
referred to in such letter delivered on such Time of Delivery shall be a
date not more than three days prior to such Time of Delivery, and with
respect to such letter dated each such Time of Delivery, as to such other
matters as the Representatives may reasonably request and in form and
substance satisfactory to the Representatives;
(i) (i) Neither the Designated Trust nor the Company and any of its
subsidiaries (other than the Designated Trust) taken as a whole, shall
have sustained since the date of the latest audited financial statements
included or incorporated by reference in the Prospectus as amended prior to
the date of the Pricing Agreement relating to the Designated Securities any
loss
23
or interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor dispute or
court or governmental action, order or decree, otherwise than as set forth
or contemplated in the Prospectus as amended prior to the date of the
Pricing Agreement relating to the Designated Securities, and (ii) since the
respective dates as of which information is given in the Prospectus as
amended prior to the date of the Pricing Agreement relating to the
Designated Securities there shall not have been any change in the capital
stock or long-term debt of the Designated Trust or the Company or any of
its subsidiaries (other than the Designated Trust) or any change, or any
development involving a prospective change, in or affecting the general
affairs, management, financial position, shareholders' equity or results of
operations of the Designated Trust or the Company or any of its
subsidiaries (other than the Designated Trust), otherwise than as set forth
or contemplated in the Prospectus as amended prior to the date of the
Pricing Agreement relating to the Designated Securities, the effect of
which, in any such case described in clause (i) or (ii), is in the judgment
of the Representatives so material and adverse to the Designated Trust or
the Company and its subsidiaries, taken as a whole, as to make it
impracticable or inadvisable to proceed with the public offering or the
delivery of the Firm Designated Securities or Optional Designated
Securities or both on the terms and in the manner contemplated in the
Prospectus as first amended or supplemented relating to the Designated
Securities;
(j) On or after the date of the Pricing Agreement relating to the
Designated Securities (i) no downgrading shall have occurred in the rating
accorded the Company's debt securities or preferred stock by any
"nationally recognized statistical rating organization", as that term is
defined by the Commission for purposes of Rule 436(g)(2) under the Act, and
(ii) no such organization shall have publicly announced that it has under
surveillance or review, with possible negative implications, its rating of
any of the Company's debt securities or preferred stock;
(k) On or after the date of the Pricing Agreement relating to the
Designated Securities there shall not have occurred any of the following:
(i) a suspension or material limitation in trading in securities generally
on the New York Stock Exchange, (ii) a suspension or material limitation in
trading in the Company's securities on the New York Stock Exchange; (iii) a
general moratorium on commercial banking activities declared by either
Federal or New York or California State authorities; or (iv) the outbreak
or escalation of hostilities involving the United States or the declaration
by the United States of a national emergency or war, if the effect of any
such event specified in this clause (iv) in the judgment of the
Representatives makes it impracticable or inadvisable to proceed with the
public offering or the delivery of the Firm Designated Securities or
Optional Designated Securities or both on the terms and in the manner
contemplated in the Prospectus as first amended or supplemented relating to
the Designated Securities;
(l) The Company shall have complied with the provisions of Section
5(c) hereof with respect to the furnishing of prospectuses on the New York
business day next succeeding the date of any Pricing Agreement for such
Designated Securities; and
(m) The Designated Trust and the Company shall have furnished or
caused to be furnished to the Representatives at each Time of Delivery for
the Designated
24
Securities a joint and several certificate of officers of the Designated
Trust and the Company satisfactory to the Representatives as to the
accuracy of the representations and warranties of the Designated Trust and
the Company herein at and as of such Time of Delivery, as to the
performance by the Designated Trust and the Company of all of their
respective obligations hereunder to be performed at or prior to such Time
of Delivery, as to the matters set forth in subsections (a) and (i) of this
Section and as to such other matters as the Representatives may reasonably
request.
8.
(a) The Designated Trust and the Company, jointly and severally, will
indemnify and hold harmless each Underwriter against any losses, claims,
damages or liabilities, joint or several, to which such Underwriter may
become subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are
based upon an untrue statement or alleged untrue statement of a material
fact contained in any Preliminary Prospectus, any preliminary prospectus
supplement, the Registration Statement, the Prospectus as amended or
supplemented and any other prospectus relating to the Designated
Securities, or any amendment or supplement thereto, or arise out of or are
based upon the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements
therein not misleading, and will reimburse each Underwriter for any legal
or other expenses reasonably incurred by such Underwriter in connection
with investigating or defending any such action or claim as such expenses
are incurred; provided, however, that neither the Designated Trust nor the
Company shall be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission made
in any Preliminary Prospectus, any preliminary prospectus supplement, the
Registration Statement, the Prospectus as amended or supplemented and any
other prospectus relating to the Designated Securities, or any such
amendment or supplement, in reliance upon and in conformity with written
information furnished to the Designated Trust and the Company by any
Underwriter of Designated Securities through the Representatives expressly
for use in the Prospectus as amended or supplemented relating to such
Designated Securities.
(b) Each Underwriter will indemnify and hold harmless the Designated
Trust and the Company against any losses, claims, damages or liabilities to
which the Designated Trust may become subject, under the Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon an untrue statement or
alleged untrue statement of a material fact contained in any Preliminary
Prospectus, any preliminary prospectus supplement, the Registration
Statement, the Prospectus as amended or supplemented and any other
prospectus relating to the Designated Securities, or any amendment or
supplement thereto, or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading in each
case to the extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission was made in any
Preliminary Prospectus, any preliminary prospectus supplement, the
Registration Statement, the Prospectus as
25
amended or supplemented and any other prospectus relating to the Designated
Securities, or any such amendment or supplement in reliance upon and in
conformity with written information furnished to the Designated Trust and
the Company by such Underwriter through the Representatives expressly for
use therein; and will reimburse the Designated Trust and the Company for
any legal or other expenses reasonably incurred by the Designated Trust or
the Company in connection with investigating or defending any such action
or claim as such expenses are incurred.
(c) Promptly after receipt by an indemnified party under subsection
(a) or (b) above of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made
against the indemnifying party under such subsection, notify the
indemnifying party in writing of the commencement thereof, but the omission
so to notify the indemnifying party shall not relieve it from any liability
which it may have to any indemnified party otherwise than under such
subsection. In case any such action shall be brought against any
indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to
participate therein and, to the extent that it shall wish, jointly with any
other indemnifying party similarly notified, to assume the defense thereof,
with counsel satisfactory to such indemnified party (who shall not, except
with the consent of the indemnified party, be counsel to the indemnifying
party), and, after notice from the indemnifying party to such indemnified
party of its election so to assume the defense thereof, the indemnifying
party shall not be liable to such indemnified party under such subsection
for any legal expenses of other counsel or any other expenses, in each case
subsequently incurred by such indemnified party, in connection with the
defense thereof other than reasonable costs of investigation. No
indemnifying party shall, without the written consent of the indemnified
party, effect the settlement or compromise of, or consent to the entry of
any judgment with respect to, any pending or threatened action or claim in
respect of which indemnification or contribution may be sought hereunder
(whether or not the indemnified party is an actual or potential party to
such action or claim) unless such settlement, compromise or judgment (i)
includes an unconditional release of the indemnified party from all
liability arising out of such action or claim and (ii) does not include a
statement as to or an admission of fault, culpability or a failure to act,
by or on behalf of any indemnified party.
(d) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or
liabilities (or actions in respect thereof) in such proportion as is
appropriate to reflect the relative benefits received by the Designated
Trust and the Company on the one hand and the Underwriters of the
Designated Securities on the other from the offering of the Designated
Securities to which such loss, claim, damage or liability (or action in
respect thereof) relates. If, however, the allocation provided by the
immediately preceding sentence is not permitted by applicable law or if the
indemnified party failed to give the notice required under subsection (c)
above, then each indemnifying party shall contribute to such amount paid or
payable by such indemnified party in such proportion as is appropriate to
reflect not
26
only such relative benefits but also the relative fault of the Designated
Trust and the Company on the one hand and the Underwriters of the
Designated Securities on the other in connection with the statements or
omissions which resulted in such losses, claims, damages or liabilities (or
actions in respect thereof), as well as any other relevant equitable
considerations. The relative benefits received by the Designated Trust and
the Company on the one hand and such Underwriters on the other shall be
deemed to be in the same proportion as the total net proceeds from such
offering (before deducting expenses) received by the Designated Trust and
the Company bear to the total underwriting discounts and commissions
received by such Underwriters. The relative fault shall be determined by
reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by the Designated Trust and
the Company on the one hand or such Underwriters on the other and the
parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission. The Designated Trust, the
Company and the Underwriters agree that it would not be just and equitable
if contribution pursuant to this subsection (d) were determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account
of the equitable considerations referred to above in this subsection (d).
The amount paid or payable by an indemnified party as a result of the
losses, claims, damages or liabilities (or actions in respect thereof)
referred to above in this subsection (d) shall be deemed to include any
legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this subsection (d), no Underwriter shall
be required to contribute any amount in excess of the amount by which the
total price at which the applicable Designated Securities underwritten by
it and distributed to the public were offered to the public exceeds the
amount of any damages which such Underwriter has otherwise been required to
pay by reason of such untrue or alleged untrue statement or omission or
alleged omission. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Act) shall be entitled to contribution
from any person who was not guilty of such fraudulent misrepresentation.
The obligations of the Underwriters of Designated Securities in this
subsection (d) to contribute are several in proportion to their respective
underwriting obligations with respect to such Securities and not joint. The
obligations of the Designated Trust and the Company in this subsection (d)
to contribute are joint and several.
(e) The obligations of the Designated Trust and the Company under
this Section 8 shall be in addition to any liability which the Designated
Trust or the Company may otherwise have and shall extend, upon the same
terms and conditions, to each person, if any, who controls any Underwriter
within the meaning of the Act; and the obligations of the Underwriters
under this Section 8 shall be in addition to any liability which the
respective Underwriters may otherwise have and shall extend, upon the same
terms and conditions, to each trustee, officer and director of the
Designated Trust or the Company and to each person, if any, who controls
the Designated Trust or the Company within the meaning of the Act.
27
9.
(a) If any Underwriter shall default in its obligation to purchase
the Firm Designated Securities or Optional Designated Securities which it
has agreed to purchase under the Pricing Agreement relating to such
Designated Securities, the Representatives may in their discretion arrange
for themselves or another party or other parties to purchase such
Designated Securities on the terms contained herein. If within thirty-six
hours after such default by any Underwriter the Representatives do not
arrange for the purchase of such Firm Designated Securities or Optional
Designated Securities, as the case may be, then the Designated Trust and
the Company shall be entitled to a further period of thirty-six hours
within which to procure another party or other parties satisfactory to the
Representatives to purchase such Designated Securities on such terms. In
the event that, within the respective prescribed period, the
Representatives notify the Designated Trust and the Company that they have
so arranged for the purchase of such Designated Securities, or the
Designated Trust and the Company notify the Representatives that it has so
arranged for the purchase of such Designated Securities, the
Representatives or the Designated Trust and the Company shall have the
right to postpone a Time of Delivery for such Designated Securities for a
period of not more than seven days, in order to effect whatever changes may
thereby be made necessary in the Registration Statement or the Prospectus
as amended or supplemented, or in any other documents or arrangements, and
the Designated Trust and the Company agree to file promptly any amendments
or supplements to the Registration Statement or the Prospectus which in the
opinion of the Representatives may thereby be made necessary. The term
"Underwriter" as used in this Agreement shall include any person
substituted under this Section with like effect as if such person had
originally been a party to the Pricing Agreement with respect to such
Designated Securities.
(b) If, after giving effect to any arrangements for the purchase of
the Firm Designated Securities or Optional Designated Securities, as the
case may be, of a defaulting Underwriter or Underwriters by the
Representatives and the Designated Trust and the Company as provided in
subsection (a) above, the aggregate number of such Designated Securities
which remains unpurchased does not exceed one-eleventh of the aggregate
number of the Firm Designated Securities or Optional Designated Securities,
as the case may be, to be purchased at the respective Time of Delivery,
then the Designated Trust shall have the right to require each non-
defaulting Underwriter to purchase the number of Firm Designated Securities
or Optional Designated Securities, as the case may be, which such
Underwriter agreed to purchase under the Pricing Agreement relating to such
Designated Securities and, in addition, to require each non-defaulting
Underwriter to purchase its pro rata share (based on the number of Firm
Designated Securities or Optional Designated Securities, as the case may
be, which such Underwriter agreed to purchase under such Pricing Agreement)
of the Firm Designated Securities or Optional Designated Securities, as the
case may be, of such defaulting Underwriter or Underwriters for which such
arrangements have not been made; but nothing herein shall relieve a
defaulting Underwriter from liability for its default.
(c) If, after giving effect to any arrangements for the purchase of
the Firm Designated Securities or Optional Designated Securities, as the
case may be, of a
28
defaulting Underwriter or Underwriters by the Representatives and the
Designated Trust and the Company as provided in subsection (a) above, the
aggregate number of Firm Designated Securities or Optional Designated
Securities, as the case may be, which remains unpurchased exceeds one-
eleventh of the aggregate number of the Firm Designated Securities or
Optional Designated Securities, as the case may be, to be purchased at the
respective Time of Delivery, as referred to in subsection (b) above, or if
the Designated Trust and the Company shall not exercise the right described
in subsection (b) above to require non-defaulting Underwriters to purchase
Firm Designated Securities or Optional Designated Securities, as the case
may be, of a defaulting Underwriter or Underwriters, then the Pricing
Agreement relating to such Firm Designated Securities or the Over-allotment
Option relating to such Optional Designated Securities, as the case may be,
shall thereupon terminate, without liability on the part of any non-
defaulting Underwriter, the Designated Trust or the Company, except for the
expenses to be borne by the Designated Trust and the Company and the
Underwriters as provided in Section 6 hereof and the indemnity and
contribution agreements in Section 8 hereof; but nothing herein shall
relieve a defaulting Underwriter from liability for its default.
10. The respective indemnities, agreements, representations, warranties
and other statements of the Designated Trust and the Company and the several
Underwriters, as set forth in this Agreement or made by or on behalf of them,
respectively, pursuant to this Agreement, shall remain in full force and effect,
regardless of any investigation (or any statement as to the results thereof)
made by or on behalf of any Underwriter or any controlling person of any
Underwriter, or the Designated Trust or the Company, or any trustee, officer or
director or controlling person of the Designated Trust or the Company, and shall
survive delivery of and payment for the Securities.
11. If any Pricing Agreement or Over-allotment Option shall be terminated
pursuant to Section 9 hereof, neither the Designated Trust nor the Company shall
then be under any liability to any Underwriter with respect to the Firm
Designated Securities or Optional Designated Securities with respect to which
such Pricing Agreement or Over-allotment Option, as the case may be, shall have
been terminated except as provided in Sections 6 and 8 hereof; but, if for any
other reason Designated Securities are not delivered by or on behalf of the
Designated Trust or the Company as provided herein, the Company will reimburse
the Underwriters through the Representatives for all out-of-pocket expenses
approved in writing by the Representatives, including fees and disbursements of
counsel, reasonably incurred by the Underwriters in making preparations for the
purchase, sale and delivery of such Designated Securities, but neither the
Designated Trust nor the Company shall then be under further liability to any
Underwriter with respect to such Designated Securities except as provided in
Sections 6 and 8 hereof.
12. In all dealings hereunder, the Representatives of the Underwriters of
Designated Securities shall act on behalf of each of such Underwriters, and the
parties hereto shall be entitled to act and rely upon any statement, request,
notice or agreement on behalf of any Underwriter made or given by such
Representatives jointly or by such of the Representatives, if any, as may be
designated for such purpose in the Pricing Agreement.
29
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Underwriters shall be delivered or sent by mail, telex or
facsimile transmission to the address of the Representatives as set forth in the
Pricing Agreement; and if to the Designated Trust or the Company shall bc
delivered or sent by mail, telex or facsimile transmission to the address of the
Company set forth in the Registration Statement, Attention: Secretary;
provided, however, that any notice to an Underwriter pursuant to Section 8(c)
hereof shall be delivered or sent by mail, telex or facsimile transmission to
such Underwriter at its address set forth in its Underwriters' Questionnaire, or
telex constituting such Questionnaire, which address will be supplied to the
Designated Trust and the Company by the Representatives upon request. Any such
statements, requests, notices or agreements shall take effect upon receipt
thereof.
13. This Agreement and each Pricing Agreement shall be binding upon, and
inure solely to the benefit of, the Underwriters, each Designated Trust, the
Company and, to the extent provided in Sections 8 and 10 hereof, the trustees,
officers and directors of each Designated Trust and the Company and each person
who controls any Designated Trust or the Company or any Underwriter, and their
respective heirs, executors, administrators, successors and assigns, and no
other person shall acquire or have any right under or by virtue of this
Agreement or any such Pricing Agreement. No purchaser of any of the Securities
from any Underwriter shall be deemed a successor or assign by reason merely of
such purchase.
14. Time shall be of the essence of each Pricing Agreement. As used
herein, "business day" shall mean any day when the Commission's office in
Washington, D.C. is open for business.
15. This Agreement and each Pricing Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
30
16. This Agreement and each Pricing Agreement may be executed by any one
or more of the parties hereto and thereto in any number of counterparts, each of
which shall be deemed to be an original, but all such respective counterparts
shall together constitute one and the same instrument.
Very truly yours,
Sempra Energy
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Vice President and Treasurer
Sempra Energy Capital Trust I
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Regular Trustee
Sempra Energy Capital Trust II
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Regular Trustee
Sempra Energy Capital Trust III
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Regular Trustee
31
Accepted as of the date hereof:
▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co.
▇▇▇▇▇▇▇ Lynch, ▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc.
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & Co. Inc.
PaineWebber Incorporated
Prudential Securities Incorporated
By: /s/ ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co.
----------------------------------------
(▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co.)
32
ANNEX I
Pricing Agreement
-----------------
▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co.,
.
.
.
.
As Representatives of the several Underwriters
named in Schedule I hereto,
c/▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co.,
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
, 2000
Ladies and Gentlemen:
Sempra Energy Capital Trust [I] [II] [III], a statutory business trust
created under the Business Trust Act of the State of Delaware (Chapter 38, Title
12, of the Delaware Code, 12 Del. C. ((S)) 3801 et seq.) (the "Designated
------
Trust"), and Sempra Energy, a California corporation (the "Company"), as sponsor
of the Designated Trust and as guarantor, propose, subject to the terms and
conditions stated herein and in the Underwriting Agreement, dated February 16,
2000 (the "Underwriting Agreement") between the Designated Trust and the Company
on the one hand and ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. and ., ., . and . on the other hand, to
issue and sell to the Underwriters named in Schedule I hereto (the
"Underwriters") the Securities specified in Schedule II hereto (the "Designated
Securities" [consisting of Firm Designated Securities and any Optional
Designated Securities the Underwriters may elect to purchase]). The principal
asset of the Designated Trust consists of debt securities of the Company
("Subordinated Debentures"), as specified in Schedule II to this Agreement. The
Designated Securities will be guaranteed by the Company to the extent set forth
in the Designated Guarantee with respect to such Designated Securities (the
"Guarantee"). Each of the provisions of the Underwriting Agreement is
incorporated herein by reference in its entirety, and shall be deemed to be a
part of this Agreement to the same extent as if such provisions had been set
forth in full herein; and each of the representations and warranties set forth
therein shall be deemed to have been made at and as of the date of this Pricing
Agreement, except that each representation and warranty which refers to the
Prospectus in Section 2 of the Underwriting Agreement shall be deemed to be a
representation and warranty as of the date of the Underwriting Agreement in
relation to the Prospectus (as therein defined), and also a representation and
warranty as of the date of this Pricing Agreement in relation to the Prospectus
as amended or supplemented relating to the Designated Securities which are the
subject of this Pricing Agreement. Each reference to the Representatives herein
and in the provisions of the Underwriting Agreement so incorporated by reference
shall be deemed to refer to you. Unless otherwise defined herein, terms defined
in the Underwriting Agreement are used herein as therein defined. The
Representatives designated to act on behalf of the Representatives and on behalf
of each of the Underwriters of the Designated
I-1
Securities pursuant to Section 12 of the Underwriting Agreement and the address,
of the Representatives referred to in such Section 12 are set forth at the end
of Schedule II hereto.
An amendment to the Registration Statement, or a supplement to the
Prospectus, as the case may be, relating to the Designated Securities, in the
form heretofore delivered to you is now proposed to be filed with the
Commission.
Subject to the terms and conditions set forth herein and in the
Underwriting Agreement incorporated herein by reference, [(a)] the Designated
Trust agrees to issue and sell to each of the Underwriters, and each of the
Underwriters agrees, severally and not jointly, to purchase from the Designated
Trust, at the time and place and at the purchase price to the Underwriters set
forth in Schedule II hereto, the number of [Firm] Designated Securities set
forth opposite the name of such Underwriter in Schedule I hereto[, and (b) in
the event and to the extent that the Underwriters shall exercise the election to
purchase Optional Designated Securities, as provided below, the Designated Trust
agrees to issue and sell to each of the Underwriters, and each of the
Underwriters agrees, severally and not jointly, to purchase from the Designated
Trust at the purchase price to the Underwriters set forth in Schedule II hereto
that portion of the number of Optional Designated Securities as to which such
election shall have been exercised.]
[The Designated Trust hereby grants to each of the Underwriters the right
to purchase at their election up to the number of Optional Designated Securities
set forth opposite the name of such Underwriter in Schedule I hereto on the
terms referred to in the paragraph above for the sole purpose of covering over-
allotments in the sale of the Firm Designated Securities. Any such election to
purchase Optional Designated Securities may be exercised by written notice from
the Representatives to the Designated Trust and the Company given within a
period of 30 calendar days after the date of this Pricing Agreement, setting
forth the aggregate number of Optional Designated Securities to be purchased and
the date on which such Optional Designated Securities are to be delivered, as
determined by the Representatives, but in no event earlier than the First Time
of Delivery or, unless the Representatives and the Company and the Designated
Trust otherwise agree in writing, no earlier than ten or later than ten business
days after the date of such notice.]
I-2
If the foregoing is in accordance with your understanding, please sign and
return to us one for the Designated Trust, the Company and for each of the
Representatives plus one for each counsel counterparts hereof, and upon
acceptance hereof by you, on behalf of each of the Underwriters, this letter and
such acceptance hereof, including the provisions of the Underwriting Agreement
incorporated herein by reference, shall constitute a binding agreement between
each of the Underwriters, on the one hand, and the Designated Trust and the
Company, on the other hand. It is understood that your acceptance of this
letter on behalf of each of the Underwriters is or will be pursuant to the
authority set forth in a form of Agreement among Underwriters, the form of which
shall be submitted to the Designated Trust and the Company for examination upon
request, but without warranty on the part of the Representatives as to the
authority of the signers thereof.
Very truly yours,
Sempra Energy
By:
----------------------------------------
Name:
Title:
Sempra Energy Capital Trust [I] [II] [III]
By:
----------------------------------------
Name:
Title: Regular Trustee
Accepted as of the date hereof:
▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co.
.
.
.
.
By:
---------------------------------
(▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co.)
On behalf of each of the Underwriters
I-3
SCHEDULE I
[Maximum Number of
Number of Firm Optional Designated
Designated Securities Securities Which May
Underwriter to be Purchased be Purchased]
----------- --------------- -------------
▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co..............................
[Names of Co-Representatives]....................
[Names of Underwriters]..........................
Total....................................... -------------------- --------------------
I-4
SCHEDULE II
Designated Trust:
Sempra Energy Capital Trust [I] [II] [III]
Title of Designated Securities:
.% Cumulative Quarterly Income Preferred Securities, Series (QUIPS/(SM)/)
Aggregate liquidation amount:
Firm Designated Securities: $.
Optional Designated Securities: [up to a minimum of $.
[none]
Price to public:
$. per Designated Security or .% of the liquidation amount of the
Designated Securities
Purchase price to Underwriters:
$. per Designated Security or .% of the liquidation amount of the
Designated Securities
Underwriters' compensation:
As compensation to the Underwriters for their commitments hereunder, and in
view of the fact that the proceeds of the sale of the Designated Securities
will be used by the Designated Trust to purchase the Subordinated
Debentures of the Company, the Company hereby agrees to pay at each Time of
Delivery to [the Representatives], for the accounts of the several
Underwriters, an amount equal to $. per Designated Security for the
Designated Securities to be delivered at each Time of Delivery.
Specified funds for payment of purchase price:
Federal (same day) funds
Time of Delivery:
.a.m. (New York City time), ., 2000
Trust Agreement:
Amended and Restated Declaration of Trust dated as of ., 2000 among the
Company, as Depositor, ., as Property Trustee, ., as Delaware Trustee, the
Regular Trustees named therein and the several Holders of Trust Securities
I-5
Designated Guarantee:
Preferred Securities Guarantee Agreement dated as of ., 2000 between the
Company and ., as Trustee
Designated Subordinated Debentures:
[$. aggregate principal amount of .% Subordinated Deferrable Interest
Debentures, Series., due.]
Maturity:
.[(subject to (i) extension to a date not later than . and (ii)
shortening to a date not earlier than .)]
Interest Rate:
.%
Interest Payment Dates:
., ., . and . of each year, commencing on .
Extension period:
[. quarters] [. semi-annual periods]
Redemption provisions:
[Set forth in Section . of the Trust Agreement]
Sinking fund provisions:
No sinking fund provisions
Exchange for Designated Securities:
[The Subordinated Debentures may be delivered in exchange for the
Designated Securities as provided in the Trust Agreement]
Closing location for delivery of Designated Securities:
.
Names and addresses of Representatives:
Designated Representatives:
I-6
Address for Notices, etc.:
c/▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
[Other Terms]:
I-7
ANNEX II
Pursuant to Section 7(h) of the Underwriting Agreement, the
accountants shall furnish letters to the Underwriters to the effect that:
(i) They are independent certified public accountants with respect
to the Company and its subsidiaries within the meaning of the Act and the
applicable rules and regulations adopted by the Commission;
(ii) In their opinion, the financial statements and any
supplementary financial information and schedules audited (and, if
applicable, financial forecasts and/or pro forma financial information) by
them and included or incorporated by reference in the Registration
Statement or the Prospectus comply as to form in all material respects with
the applicable accounting requirements of the Act or the Exchange Act, as
applicable, and the related rules and regulations; and, if applicable, they
have made a review in accordance with standards established by the American
Institute of Certified Public Accountants of the consolidated interim
financial statements, selected financial data, pro forma financial
information, financial forecasts and/or condensed financial statements
derived from audited financial statements of the Company for the periods
specified in such letter, as indicated in their reports thereon, copies of
which have been furnished to the representative or representatives of the
Underwriters (the "Representatives") such term to include an Underwriter or
Underwriters who act without any firm being designated as its or their
representatives and are attached to such letters;
(iii) They have made a review in accordance with standards
established by the American Institute of Certified Public Accountants of
the unaudited statements of consolidated income, consolidated balance
sheets and condensed statements of consolidated cash flows included in the
Company's Quarterly Reports on Form 10-Q incorporated by reference into the
Prospectus as indicated in their reports thereon copies of which are
attached to such letters; and on the basis of specified procedures
including inquiries of officials of the Company who have responsibility for
financial and accounting matters regarding whether the unaudited condensed
consolidated financial statements referred to in paragraph (vi)(A)(i) below
comply as to form in all material respects with the applicable accounting
requirements of the Act and the Exchange Act and the related rules and
regulations, nothing came to their attention that caused them to believe
that the unaudited condensed consolidated financial statements do not
comply as to form in all material respects with the applicable accounting
requirements of the Act and the Exchange Act and the related rules and
regulations adopted by the Commission;
(iv) The unaudited selected financial information with respect to the
consolidated results of operations and financial position of the Company
for the five most recent fiscal years included in the Prospectus and
included or incorporated by reference in Item 6 of the Company's Annual
Report on Form 10-K for the most recent fiscal year agrees with the
corresponding amounts (after restatement where applicable) in the audited
consolidated financial statements for five such fiscal years included or
II-1
incorporated by reference in the Company's Annual Reports on Form 10-K for
such fiscal years;
(v) They have compared the information in the Prospectus under
selected captions with the disclosure requirements of Regulation S-K and on
the basis of limited procedures specified in such letter nothing came to
their attention as a result of the foregoing procedures that caused them to
believe that this information does not conform in all material respects
with the disclosure requirements of Items 301, 302, 402 and 503(d),
respectively, of Regulation S-K;
(vi) On the basis of limited procedures, not constituting an
examination in accordance with generally accepted auditing standards,
consisting of a reading of the unaudited financial statements and other
information referred to below, a reading of the latest available interim
financial statements of the Company and its subsidiaries, inspection of the
minute books of the Company and its subsidiaries since the date of the
latest audited financial statements included or incorporated by reference
in the Prospectus, inquiries of officials of the Company and its
subsidiaries responsible for financial and accounting matters and such
other inquiries and procedures as may be specified in such letter, nothing
came to their attention that caused them to believe that:
(A) (i) the unaudited statements of consolidated income,
consolidated balance sheets and condensed statements of consolidated
cash flows included in the Company's Quarterly Reports on Form 10-Q
incorporated by reference in the Prospectus do not comply as to form
in all material respects with the applicable accounting requirements
of the Exchange Act and the published rules and regulations adopted by
the Commission, or (ii) any material modifications should be made to
the unaudited statements of consolidated income, consolidated balance
sheets and condensed statements of consolidated cash flows included in
the Company's Quarterly Reports on Form 10-Q incorporated by reference
in the Prospectus for them to be in conformity with generally accepted
accounting principles;
(B) any other unaudited income statement data and balance
sheet items included in the Prospectus do not agree with the
corresponding items in the unaudited consolidated financial statements
from which such data and items were derived, and any such unaudited
data and items were not determined on a basis substantially consistent
with the basis for the corresponding amounts in the audited
consolidated financial statements included or incorporated by
reference in the Company's Annual Report on Form 10-K for the most
recent fiscal year;
(C) the unaudited financial statements which were not included
in the Prospectus but from which were derived the unaudited condensed
financial statements referred to in clause (A) and any unaudited
income statement data and balance sheet items included in the
Prospectus and referred to in clause (B) were not determined on a
basis substantially consistent with the basis for the audited
financial statements included or incorporated by reference in the
Company's Annual Report on Form 10-K for the most recent fiscal year;
II-2
(D) any unaudited pro forma consolidated condensed financial
statements included or incorporated by reference in the Prospectus do
not comply as to form in all material respects with the applicable
accounting requirements of the Act and the rules and regulations
adopted by the Commission thereunder or the pro forma adjustments have
not been properly applied to the historical amounts in the compilation
of those statements;
(E) as of a specified date not more than five days prior to
the date of such letter, there have been any changes in the
consolidated capital stock (other than issuances of capital stock upon
exercise of options and stock appreciation rights, upon earn-outs of
performance shares and upon conversions of convertible securities, in
each case which were outstanding on the date of the latest balance
sheet included or incorporated by reference in the Prospectus) or any
increase in the consolidated long-term debt of the Company and its
subsidiaries, or any decreases in consolidated current assets or
shareholders' equity or other items specified by the Representatives,
or any increases in any items specified by the Representatives, in
each case as compared with amounts shown in the latest balance sheet
included or incorporated by reference in the Prospectus, except in
each case for changes, increases or decreases which the Prospectus
discloses have occurred or may occur or which are described in such
letter; and
(F) for the period from the date of the latest financial
statements included or incorporated by reference in the Prospectus to
the specified date referred to in clause (E) there were any decreases
in consolidated revenues or income before interest and income taxes or
the total or per share amounts of consolidated net income or other
items specified by the Representatives, or any increases in any items
specified by the Representatives, in each case as compared with the
comparable period of the preceding year and with any other period of
corresponding length specified by the Representatives, except in each
case for increases or decreases which the Prospectus discloses have
occurred or may occur or which are described in such letter; and
(vii) In addition to the audit referred to in their report(s)
incorporated by reference in the Prospectus and the limited procedures,
inspection of minute books, inquiries and other procedures referred to in
paragraphs (iii) and (vi) above, they have carried out certain specified
procedures, not constituting an audit in accordance with generally accepted
auditing standards, with respect to certain amounts, percentages and
financial information specified by the Representatives which are derived
from the general accounting records of the Company and its subsidiaries,
which appear in the Prospectus (excluding documents incorporated by
reference), or in Part II of, or in exhibits and schedules to, the
Registration Statement specified by the Representatives or in documents
incorporated by reference in the Prospectus specified by the
Representatives, and have compared certain of such amounts, percentages and
financial information with the accounting records of the Company and its
subsidiaries and have found them to be in agreement.
II-3
All references in this Annex II to the Prospectus shall be deemed to refer
to the Prospectus (including the documents incorporated by reference therein) as
defined in the Underwriting Agreement as of the date of the letter delivered on
the date of the Pricing Agreement for purposes of such letter and to the
Prospectus as amended or supplemented (including the documents incorporated by
reference therein) in relation to the applicable Designated Securities for
purposes of the letter delivered at each Time of Delivery for such Designated
Securities.
II-4
ANNEX III
III-1