EXHIBIT 1.1
EIX Trust I
EIX Trust II
EIX Trust III
Preferred Securities
guaranteed to the extent set forth in the Guarantees by
Edison International
Underwriting Agreement
----------------------
July ___, 1999
To the Representatives of the several Underwriters
named in the respective Pricing Agreements
hereinafter described
Ladies and Gentlemen:
From time to time EIX Trust I, EIX Trust II or EIX Trust III, each a
statutory business trust formed under the laws of the State of Delaware (each a
"Trust" and collectively the "Trusts"), and Edison International, a California
corporation (the "Company"), as depositor 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, 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 July [___], 1999 (as supplemented or amended from time to time, the
"Subordinated Indenture") between the Company and The Chase Manhattan Bank, as
trustee (the "Indenture Trustee"). The Designated Securities will be guaranteed
by the Company to the extent set forth in a Guarantee Agreement between the
Company and The Chase Manhattan Bank, 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 trust agreement 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 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. Each of the Company and the Designated Trust, jointly and severally,
represents and warrants to, and agrees with, each of the Underwriters that:
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(a) A registration statement on Form S-3 (File No 333-82293) (the
"Initial Registration Statement") in respect of the Securities, the
Subordinated Debentures and the Guarantees 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,
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 became effective
upon filing, no other document with respect to the Initial Registration
Statement or 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 (i) the
information contained in the form of any final prospectus filed with the
Commission pursuant to Rule 424(b) under the Act and deemed by virtue of
Rule 430A under the Act to be part of the Initial Registration Statement at
the time it was declared effective or such part of the Rule 462(b)
Registration Statement, if any, became or hereafter becomes effective, (ii)
all exhibits thereto and (iii) 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 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, is 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
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either the Trusts or 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 as amended or supplemented shall be
deemed to refer to the Prospectus as amended or supplemented in relation to
the applicable Designated Securities in the form in which it is filed with
the Commission pursuant to Rule 424(b) under the Act in accordance with
Section 5(a) hereof, including any documents incorporated by reference
therein as of the date of such filing);
(b) The documents incorporated by reference in the Prospectus, when
they became effective or were filed with the Commission, as the case may
be, conformed in all material respects to the requirements of the Act or
the Exchange Act, as applicable, and the rules and regulations of the
Commission thereunder; the Prospectus at the time it was filed did not
include an untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; 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 include an untrue statement of a
material fact or omit to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they
were made, not misleading; provided, however, that 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 conforms, and any further amendments
or supplements to the Registration Statement will conform, in all material
respects to the requirements of the Act and the Trust Indenture Act of
1939, as amended (the "Trust Indenture Act"), and the rules and regulations
of the Commission thereunder and does not and will not, as of the
applicable effective date as to the Registration Statement and any
amendment 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 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 has
sustained since the date of the latest audited financial statements
included or incorporated by reference in the Prospectus
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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 change in the capital
stock or long-term debt of the Designated Trust, in either case in an
aggregate amount in excess of $__________, or of the Company and its
subsidiaries (other than the Designated Trust) taken as a whole, in either
case in an aggregate amount in excess of $__________, or any material
adverse change, or any development involving a prospective material adverse
change, in or affecting the general affairs, management, financial
position, stockholders' 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, with power and authority to conduct its business as described
in the Prospectus;
(f) The Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the jurisdiction of its
incorporation, with power and authority (corporate and other) to own its
properties and conduct its business as described in the Prospectus;
(g) 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; 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;
(h) Each of Southern California Edison Company, Edison Mission Energy
and Edison Capital (the "Significant Subsidiaries") has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of the jurisdiction of its incorporation, has power and
authority (corporate and other) to own, lease and operate its properties
and to conduct its business as described in the Prospectus, and is duly
qualified as a foreign corporation to transact business and is in good
standing in each jurisdiction in which such qualification is required,
whether by reason of ownership or leasing of property or the conduct of
business, except where the failure so to qualify or be in good standing
would not have a material adverse effect on the condition, financial or
otherwise, or the earnings or business affairs of the Company and its
subsidiaries taken as a whole; and all of the issued and outstanding
capital stock of each Significant Subsidiary has been duly authorized and
validly issued, is fully paid and non-assessable and all such shares owned
by the Company, directly or through subsidiaries, are owned free and clear
of any security interest, mortgage, pledge, lien, encumbrance, claim or
security;
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(i) 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 Over-allotment Options (as defined in Section 3 hereof) with respect to
such Securities, such Designated Securities will be duly and validly
authorized and 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 right; 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) 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 authorized and issued and will be fully
paid beneficial interests in the Designated Trust 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; 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 Agreement as to Expenses and
Liabilities between the Company and the Designated Trust in the form set
forth in Exhibit D to the Trust Agreement (the "Designated Expense
Agreement") (all such Designated Expense Agreements together, the "Expense
Agreements'), 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 Guarantee Trustee
(as defined in the Designated Guarantee), (ii) in the case of the
Designated Expense Agreement, by the Designated Trust, (iii) in the case of
the Trust Agreement, by the Trustees (as defined in the Trust Agreement)
and (iv) in the case of the Subordinated Indenture, by the Indenture
Trustee, and in the case of the Designated Subordinated Debentures, when
authenticated and delivered by the Indenture Trustee, 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
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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, reorganization and
other 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, which
will be in substantially the form filed as exhibits to the Registration
Statement, will conform in all material respects to the descriptions
thereof in the Prospectus as amended or supplemented with respect to the
Designated Securities to which they relate;
(m) 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
Designated Expense Agreement and the Trust Agreement and the consummation
of the transactions contemplated herein and therein 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 indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument to which such Trust
is a party or by which such Trust is bound or to which any of the property
or assets of such Trust is subject, nor will such action result in any
violation of the provisions of the Certificate of Trust or Trust Agreement
of such Trust or any statute or any order, rule or regulation of any court
or governmental agency or body having jurisdiction over such Trust or any
of its 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 Trust or the consummation by
such Trust of the transactions contemplated by this Agreement, the Pricing
Agreement or any Over-allotment Option, the Designated Securities, the
Designated Expense Agreement or the Trust Agreement, except (i) such as
have been, or will have been, prior to each Time of Delivery, obtained
under the Act and the Trust Indenture Act and (ii) 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;
(n) The issuance 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
Expense Agreements, the Subordinated Debentures, the Trust Agreements and
the Subordinated Indenture, and the consummation of the transactions
contemplated herein and therein 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 indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which the Company or any of
its subsidiaries is a party or by which the Company or any of its
subsidiaries is bound or to which any of the property or assets of the
Company or any of its subsidiaries is subject, nor will such action result
in
7
any violation of the provisions of the Articles of Incorporation or By-
Laws of the Company 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 properties or any of its 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 Guarantees or the Subordinated Debentures or the consummation
by the Company of the transactions contemplated by this Agreement, any
Pricing Agreement, the Guarantees, the Expense Agreements, the Subordinated
Debentures, the Trust Agreements or the Subordinated Indenture, except (i)
such as have been, or will have been, prior to each Time of Delivery,
obtained under the Act or the Trust Indenture Act and (ii) such consents,
approvals, authorizations, registrations or qualifications as may be
required under state securities or Blue Sky laws in connection with the
issuance and sale by the Company of the Guarantees and the Subordinated
Debentures;
(o) 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 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, would individually or in the aggregate
have a material adverse effect on the current or future consolidated
financial position, stockholders' equity or results of operations of either
the Designated Trust or the Company and its subsidiaries 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;
(p) None of the Designated Trust, the Company nor any of its
subsidiaries, as applicable, is 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 subsidiaries, or in default in the performance or
observance of any obligation, agreement, covenant or condition contained in
any indenture, mortgage, deed of trust, loan agreement, lease or other
agreement or instrument to which it is a party or by which it or any of its
properties may be bound, other than any such violation or default that
would not, individually or in the aggregate, have a material adverse effect
on or affecting the general affairs, management, financial position,
stockholders' equity or results of operations of either the Designated
Trust or the Company and its subsidiaries taken as a whole;
(q) The Company and its subsidiaries possess such certificates,
authorities or permits issued by the appropriate state, federal or foreign
regulatory agencies or bodies necessary to conduct the business 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 condition, financial or otherwise, or the
earnings or business affairs 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
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or in the aggregate, if the subject of an unfavorable decision, ruling or
finding, would materially and adversely affect the condition, financial or
otherwise, or the earnings or business affairs of the Company and its
subsidiaries taken as a whole;
(r) 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;
(s) The statements set forth in (i) the Prospectus under the captions
"Description of Securities", "Description of Debt Securities", "Description
of Preferred Securities", "Description of Preferred Securities Guarantees",
"Description of Expense Agreements" and "Relationship among Preferred
Securities, Preferred Securities Guarantees and Subordinated Debt
Securities Held by Each Trust" and (ii) in the Prospectus as amended or
supplemented under the captions "Description of Series __ QUIPS" and
"Description of Series __ QUIDS", insofar as they constitute a summary of
the terms of the Securities, the Subordinated Debentures, the Guarantees,
the Expense Agreements and the Company Agreements (including the Designated
Securities, the Designated Subordinated Debentures, the Designated
Guarantee and the Designated Expense Agreement) and (x) in the Prospectus
under the caption "Plan of Distribution" and (y) in the Prospectus as
amended or supplemented under the captions "Underwriting" and "Material
United States Federal Income Tax Considerations", insofar as they purport
to describe the provisions of the laws and documents referred to therein,
in each case are accurate, complete and fair;
(t) Neither the Designated Trust nor the Company nor any of its
subsidiaries is or, after giving effect to the offering and sale of the
Securities, will be, an "investment company" or an entity "controlled" by
an "investment company", as such term is defined in the Investment Company
Act of 1940, as amended (the "Investment Company Act");
(u) ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 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; and
(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 will be affected by the Year 2000 Problem.
As a result of such review, the Company does not believe that the Year 2000
Problem will have a material adverse effect on the general affairs,
management, the current or future consolidated financial position, business
prospects, stockholders' equity or results of operations of the Company and
its subsidiaries taken as a whole or result in
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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 will not, in the case of dates or time
periods occurring after December 31, 1999, function at least as effectively
as in the case of dates or time periods occurring prior to January 1, 2000.
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 in the sale of the Firm Designated Securities. Any such
election to purchase Optional Designated Securities may be exercised by written
notice from the Representatives to the Designated Trust and the Company, given
within a period specified in the Pricing Agreement, setting forth the aggregate
number of Optional Designated Securities to be purchased and the date on which
such Optional Designated Securities are to be delivered, as determined by the
Representatives but in no event earlier than the First Time of Delivery (as
defined in Section 4 hereof) or, unless the Representatives, the Designated
Trust and the Company otherwise agree in writing, earlier than or later than the
respective number of business days after the date of such notice set forth in
such Pricing Agreement.
The Number of Optional Designated Securities to be added to the number of
Firm Designated Securities to be purchased by each Underwriter as set forth in
Schedule I to the Pricing Agreement applicable to such Designated Securities
shall be, in each case, the number of 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.
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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 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 an account designated
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 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 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 time and date as the Representatives,
the Designated Trust and the Company may agree upon in writing, such time and
date, if not the First Time of Delivery, being herein called the "Second Time of
Delivery." Each such time and date for delivery is herein called a "Time of
Delivery".
5. The Designated Trust and the Company, jointly and severally, agree
with each of the Underwriters of any Designated Securities:
(a) To prepare the Prospectus as amended or supplemented in relation
to the applicable Designated Securities in a form approved by the
Representatives and to file such Prospectus pursuant to Rule 424(b) under
the Act not later than the Commission's close of business on the second
business day following the execution and delivery of the Pricing Agreement
relating to the applicable Designated Securities or, if applicable, such
earlier time as may be required by Rule 424(b); to make no further
amendment or any supplement to the Registration Statement or Prospectus as
amended or supplemented after the date of the Pricing 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 with the Commission pursuant to Section 13(a), 13(c),
14 or 15(d) of the Exchange Act for so
11
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 its
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,
provided that in connection therewith neither the Designated Trust nor the
Company shall be required to (i) qualify as a foreign corporation, (ii)
file a general consent to service of process in any jurisdiction or (iii)
comply with any other requirement in connection with such qualification
deemed by the Company to be unduly burdensome;
(c) Prior to 10:00 a.m., New York City time, on the New York Business
Day next succeeding the date of the Pricing Agreement for such Designated
Securities or such later time or date as agreed to by the Designated Trust,
the Company and the Representatives, and from time to time, to furnish the
Underwriters with copies of the Prospectus in New York City as amended or
supplemented in such quantities as the Representatives may reasonably
request, and, if the delivery of a prospectus is required at any time in
connection with the offering or sale of the Designated Securities or the
Designated Subordinated Debentures and if at such time any event shall have
occurred as a result of which the Prospectus as then amended or
supplemented would include an untrue statement of a material fact or omit
to state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made when
such Prospectus is delivered, not misleading, or, if for any other reason
it shall be necessary during such same period to amend or supplement the
Prospectus or to file under the Exchange Act any document incorporated by
reference in the Prospectus in order to comply with the Act, the Exchange
Act or the Trust Indenture Act, to notify the Representatives and upon
their request to file such document and to prepare and furnish without
charge to each Underwriter and to any dealer in securities as many copies
as the Representatives may from time to time reasonably request of an
amended Prospectus or a
12
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 subsidiaries (which need not be audited) complying with Section
11(a) of the Act and the rules and regulations of the Commission thereunder
(including, at the option of the Company, Rule 158);
(e) During the period beginning from the date of the Pricing
Agreement for such Designated Securities and continuing to and including
the later of (i) the termination of trading restrictions for such
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) which mature more than one year after such Time of
Delivery and which are substantially similar to such Designated Securities,
without the prior written consent of the Representatives;
(f) In the case of the Company, to issue the Designated Guarantee
concurrently with the issue and sale of the Designated Securities as
contemplated herein or in the Pricing Agreement;
(g) To use its best efforts to list within 30 days following the
First Time of Delivery, subject to notice of issuance, the Designated
Securities on the New York Stock Exchange and, if the Company elects to
dissolve the Designated Trust and to distribute the Designated Subordinated
Debentures to the holders of the Designated Securities in liquidation of
the Designated Trust, to use its best efforts to list the Designated
Subordinated Debentures on the New York Stock Exchange prior to such
distribution; and
(h) If the Designated Trust and the Company elect to rely upon Rule
462(b), the Designated Trust and the Company shall file a Rule 462(b)
Registration Statement with the Commission in compliance with Rule 462(b)
by 10:00 P.M., Washington, D.C. time, on the date of this Agreement, and
the Designated Trust and the Company shall at the time of filing either pay
to the Commission the filing fee for the Rule 462(b) Registration Statement
or give irrevocable instructions for the payment of such fee pursuant to
Rule 111(b) under the Act.
13
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, any Blue Sky and Legal
Investment Memoranda, closing documents (including any compilations thereof) and
any other documents in connection with the offering, purchase, sale and delivery
of the Securities; (iii) all expenses in connection with the qualification of
the Securities for offering and sale under state securities laws as provided in
Section 5(b) hereof, including the reasonable fees and disbursements of counsel
for the Underwriters in connection with such qualification and in connection
with the Blue Sky and Legal Investment Surveys; (iv) any fees charged by
securities rating services for rating the Securities 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,
Guarantee Trustee 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) the cost of qualifying the Securities and the
Subordinated Debentures with The Depository Trust Company; (ix) 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 (x) all other costs and expenses incident to the performance
of its obligations hereunder and under any Over-allotment Options which are not
otherwise specifically provided for in this Section. It is understood, however,
that, except as provided in this Section, and Sections 8 and 11 hereof, the
Underwriters will pay all of their own costs and expenses, including the fees of
their counsel, transfer taxes on resale of any of the Securities by them, and
any advertising expenses connected with any offers they may make.
7. The obligations of the Underwriters of any Designated Securities under
the Pricing Agreement relating to such Designated Securities shall be subject,
in the discretion of the Representatives, to the condition that all
representations and warranties and other statements of the Designated Trust and
the Company in or incorporated by reference in the Pricing Agreement relating to
such Designated Securities are, at and as of each Time of Delivery for such
Designated Securities, true and correct, the condition that the Designated Trust
and the Company shall have performed all of their respective obligations
hereunder theretofore to be performed, and the following additional conditions:
14
(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 this 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) 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, (i) to the effect set forth in Annex III hereto and (ii)
to the effect that
(i) 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 the Form T-1's. 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; and
(ii) Such counsel has participated in telephone conferences with
officers and other representatives of the Company, and representatives
of the Underwriters, at which the contents of the Registration
Statement and the Prospectus as amended or supplemented and related
matters were discussed and, although such counsel is not passing upon,
and do not assume any responsibility for, the accuracy, completeness
or fairness of the statements contained or incorporated by reference
in the Registration Statement and the Prospectus as amended or
supplemented and has not made any independent check or verification
thereof, during the course of such participation, no facts came to
such counsel's attention that caused them to believe that the
Registration Statement, at the time it became effective, contained an
untrue statement of a material fact or 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 or as of the date thereof, 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 the
Prospectus as amended or supplemented or with respect to the Form
T-1's.
(d) Special Delaware counsel to the Designated Trust and the Company
satisfactory to the Representatives shall have furnished to the
Representatives, the Company and the Designated Trust their written
opinion, dated the respective Time of Delivery, 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 Delaware
Business Trust Act, 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 Business Trust 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 as amended or supplemented;
(iii) The Trust Agreement constitutes a valid and binding
obligation of the Company and the Trustees, and is enforceable against
the Company and the Trustees, in accordance with its terms, subject,
as to enforcement, to bankruptcy, insolvency, receivership,
liquidation, fraudulent conveyance, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability
relating to or
15
affecting creditors' rights, to general equity principles, including
applicable law relating to fiduciary duties (regardless of whether
considered and applied in a proceeding in equity or at law), and to
the effect of applicable public policy on the enforceability of
provisions relating to indemnification or contribution;
(iv) Under the Delaware Business Trust 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 and (b) issue and perform its
obligations under the Designated Securities and the Common Securities
of the Designated Trust;
(v) Under the Delaware Business Trust 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;
(vi) The Designated Securities have been duly authorized by the
Trust Agreement and are duly and validly issued and, subject to the
qualifications set forth therein, fully paid and non-assessable
beneficial interests in the Designated Trust and are entitled to the
benefits provided by the Trust Agreement; the holders of the
Designated Securities, 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; provided that such
counsel may note that the holders of the Designated Securities may be
obligated, pursuant to the Trust Agreement, to (a) provide indemnity
and/or security in connection with and pay taxes or governmental
charges arising from transfers or exchanges of certificates evidencing
the Designated Securities and the issuance of replacement certificates
and (b) 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;
(vii) The Common Securities of the Designated Trust have been
duly authorized by the Trust Agreement and are validly issued and
represent beneficial interests in the Designated Trust;
(viii) Under the Delaware Business Trust 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) The issuance and sale by the Designated Trust of
Designated Securities and the Common Securities of the Designated
Trust, the execution, delivery and performance by the Designated Trust
of this Agreement and the Pricing Agreement, the consummation by the
Designated Trust of the transactions
16
contemplated hereby and thereby and compliance by the Designated Trust
with its obligations hereunder and thereunder will not violate (a) any
of the provisions of the Certificate of Trust of the Designated Trust
or the Trust Agreement, or (b) and applicable Delaware law or
administrative regulation;
(x) 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,
no authorization, approval, consent or order of any Delaware court or
governmental authority or agency is required to be obtained by the
Designated Trust solely in connection with the issuance and sale of
the Designated Securities and the Common Securities of the Designated
Trust. (In rendering the opinion expressed in this paragraph (x),
such counsel need express no opinion concerning the securities laws of
the State of Delaware); 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 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.
(e) Tax counsel for the Designated Trust and the Company satisfactory
to the Representatives shall have furnished to the Representatives their
written opinion, dated the respective Time of Delivery, 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";
(f) 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 effective date of
the Registration Statement or the date of the most recent report filed with
the Commission containing financial statements and incorporated by
reference in the Registration Statement, if the date of such report is
later than such effective date, and a letter dated such Time of Delivery,
respectively, to the effect set forth in Annex II hereto, and with
17
respect to such letter dated such Time of Delivery, as to such other
matters as the Representatives may reasonably request and in form and
substance satisfactory to the Representatives;
(g) (i) Neither the Designated Trust nor the Company and its
subsidiaries (other than the Designated Trust) taken as a whole shall have
sustained since the date of the latest audited financial statements
included or incorporated by reference in the Prospectus as amended prior to
the date of the Pricing Agreement relating to the Designated Securities any
loss or interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor dispute or
court or governmental action, order or decree, otherwise than as set forth
or contemplated in the Prospectus as amended or supplemented 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 and
its subsidiaries (other than the Designated Trust) taken as a whole or any
change, or any development involving a prospective change, in or affecting
the general affairs, management, financial position, stockholders' 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 as amended or
supplemented 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 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;
(h) 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;
(i) 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 Federal or
New York State or State of California authorities; or (iv) the outbreak or
escalation of hostilities involving the United States or the declaration by
the United States
18
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;
(j) 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 this Agreement or such later date
as agreed to among the Designated Trust, the Company and the
Representatives; and
(k) The Designated Trust and the Company shall have furnished or
caused to be furnished to the Representatives at each Time of Delivery for
the Designated Securities certificates 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 its obligations hereunder to be
performed at or prior to such Time of Delivery, as to the matters set forth
in subsections (a) and (g) 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 Securities.
19
(b) Each Underwriter will indemnify and hold harmless the Designated Trust
and the Company against any losses, claims, damages or liabilities to which the
Designated Trust may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon an untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Prospectus, any preliminary
prospectus supplement, the Registration Statement, the Prospectus as amended or
supplemented and any other prospectus relating to the Designated Securities, or
any amendment or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, in
each case to the extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission was made in any
Preliminary Prospectus, any preliminary prospectus supplement, the Registration
Statement, the Prospectus as amended or supplemented and any other prospectus
relating to the Designated Securities, or any such amendment or supplement, in
reliance upon and in conformity with written information furnished to the
Designated Trust and the Company by such Underwriter through the Representatives
expressly for use therein; and will reimburse the Designated Trust and the
Company for any legal or other expenses reasonably incurred by the Company or
the Designated Trust 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.
20
(d) If the indemnification provided for in this Section 8 is unavailable to
or insufficient to hold harmless an indemnified party under subsection (a) or
(b) above in respect of any losses, claims, damages or liabilities (or actions
in respect thereof) referred to therein, then each indemnifying party shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages or liabilities (or actions in respect thereof)
in such proportion as is appropriate to reflect the relative benefits received
by the Designated Trust and the Company on the one hand and the Underwriters of
the Designated Securities on the other from the offering of the Designated
Securities to which such loss, claim, damage or liability (or action in respect
thereof) relates. If, however, the allocation provided by the immediately
preceding sentence is not permitted by applicable law or if the indemnified
party failed to give the notice required under subsection (c) above, then each
indemnifying party shall contribute to such amount paid or payable by such
indemnified party in such proportion as is appropriate to reflect not only such
relative benefits but also the relative fault of the Designated Trust and the
Company on the one hand and the Underwriters of the Designated Securities on the
other in connection with the statements or omissions which resulted in such
losses, claims, damages or liabilities (or actions in respect thereof), as well
as any other relevant equitable considerations. The relative benefits received
by the Designated Trust and the Company on the one hand and such Underwriters on
the other shall be deemed to be in the same proportion as the total net proceeds
from such offering (before deducting expenses) received by the Designated Trust
and the Company bear to the total underwriting discounts and commissions
received by such Underwriters. The relative fault shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Designated Trust and the Company on the
one hand or such Underwriters on the other and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Designated Trust, the Company and the Underwriters
agree that it would not be just and equitable if contribution pursuant to this
subsection (d) were determined by pro rata allocation (even if the Underwriters
were treated as one entity for such purpose) or by any other method of
allocation which does not take account of the equitable considerations referred
to above in this subsection (d). The amount paid or payable by an indemnified
party as a result of the losses, claims, damages or liabilities (or actions in
respect thereof) referred to above in this subsection (d) shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this subsection (d), no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the applicable Designated Securities underwritten by it and
distributed to the public were offered to the public exceeds the amount of any
damages which such Underwriter has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The obligations of the
Underwriters of Designated Securities in this subsection (d) to contribute are
several in proportion to their respective underwriting obligations with respect
to such Securities and not joint.
21
(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
officer and director of the Designated Trust or the Company and to each person,
if any, who controls the Designated Trust or the Company within the meaning of
the Act.
9. (a) If any Underwriter shall default in its obligation to purchase
the Firm Designated Securities or Optional Designated Securities which it has
agreed to purchase under the Pricing Agreement relating to such Designated
Securities, the Representatives may in their discretion arrange for themselves
or another party or other parties to purchase such Designated Securities on the
terms contained herein. If within thirty-six hours after such default by any
Underwriter the Representatives do not arrange for the purchase of such Firm
Designated Securities or Optional Designated Securities, as the case may be,
then the Designated Trust and the Company shall be entitled to a further period
of thirty-six hours within which to procure another party or other parties
satisfactory to the Representatives to purchase such Designated Securities on
such terms. In the event that, within the respective prescribed period, the
Representatives notify the Designated Trust and the Company that they have so
arranged for the purchase of such Designated Securities, or the Designated Trust
and the Company notify the Representatives that it has so arranged for the
purchase of such Designated Securities, the Representatives or the Designated
Trust and the Company shall have the right to postpone a Time of Delivery for
such Designated Securities for a period of not more than seven days, in order to
effect whatever changes may thereby be made necessary in the Registration
Statement or the Prospectus as amended or supplemented, or in any other
documents or arrangements, and the Designated Trust and the Company agree to
file promptly any amendments or supplements to the Registration Statement or the
Prospectus which in the opinion of the Representatives may thereby be made
necessary. The term "Underwriter" as used in this Agreement shall include any
person substituted under this Section with like effect as if such person had
originally been a party to the Pricing Agreement with respect to such Designated
Securities.
(b) If, after giving effect to any arrangements for the purchase of the
Firm Designated Securities or Optional Designated Securities, as the case may
be, of a defaulting Underwriter or Underwriters by the Representatives and the
Designated Trust and the Company as provided in subsection (a) above, the
aggregate number of such Designated Securities which remains unpurchased does
not exceed one-eleventh of the aggregate number of the Firm Designated
Securities or Optional Designated Securities, as the case may be, to be
purchased at the respective Time of Delivery, then the Designated Trust shall
have the right to require each non-defaulting Underwriter to purchase the number
of Firm Designated Securities or Optional Designated Securities, as the case may
be, which such Underwriter agreed to purchase under the Pricing Agreement
relating to such Designated Securities and, in addition, to require each non-
defaulting Underwriter to purchase its pro rata share (based on the number of
Firm Designated Securities or Optional Designated Securities, as the case may
be, which such
22
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 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 or 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 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 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 the Designated Trust and the Company shall then be
under no further liability to any Underwriter with respect to such Designated
Securities except as provided in Sections 6 and 8 hereof.
23
12. In all dealings hereunder, the Representatives of the Underwriters of
Designated Securities shall act on behalf of each of such Underwriters, and the
parties hereto shall be entitled to act and rely upon any statement, request,
notice or agreement on behalf of any Underwriter made or given by such
Representatives jointly or by such of the Representatives, if any, as may be
designated for such purpose in the Pricing Agreement.
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Underwriters shall be delivered or sent by mail, telex or
facsimile transmission to the address of the Representatives as set forth in the
Pricing Agreement; and if to the Designated Trust or the Company shall be
delivered or sent by mail, telex or facsimile transmission to the address of the
Company set forth in the Registration Statement, Attention: Secretary; provided,
however, that any notice to an Underwriter pursuant to Section 8(c) hereof shall
be delivered or sent by mail, telex or facsimile transmission to such
Underwriter at its address set forth in its Underwriters' Questionnaire, or
telex constituting such Questionnaire, which address will be supplied to the
Designated Trust and the Company by the Representatives upon request. Any such
statements, requests, notices or agreements shall take effect upon receipt
thereof.
13. This Agreement and each Pricing Agreement shall be binding upon, and
inure solely to the benefit of, the Underwriters, each Designated Trust, the
Company and, to the extent provided in Sections 8 and 10 hereof, the officers
and directors of each Designated Trust, 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.
24
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,
EDISON INTERNATIONAL
By:......................................
Name:
Title:
EIX TRUST I
By: Edison International, as Depositor
By:......................................
Name:
Title:
EIX TRUST II
By: Edison International, as Depositor
By:......................................
Name:
Title:
EIX TRUST III
By: Edison International, as Depositor
By:......................................
Name:
Title:
25
ANNEX I
Pricing Agreement
-----------------
[Names of Representatives,]
As Representatives of the several
Underwriters named in Schedule I hereto
[Address]
____________, ____
Ladies and Gentlemen:
EIX Trust [I] [II] [III], a statutory business trust formed under the laws
of the State of Delaware (the "Designated Trust"), and Edison International, a
California corporation (the "Company"), propose, subject to the terms and
conditions stated herein and in the Underwriting Agreement, dated July [___],
1999 (the "Underwriting Agreement"), 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 this Agreement 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 or warranty as of the date of the Underwriting Agreement in
relation to the Prospectus (as therein defined), and also a representation and
warranty as of the date of this Pricing Agreement in relation to the Prospectus
as amended or supplemented relating to the Designated Securities which are the
subject of this Pricing Agreement. Each reference to the Representatives herein
and in the provisions of the Underwriting Agreement so incorporated by reference
shall be deemed to refer to you. Unless otherwise defined herein, terms defined
in the Underwriting Agreement are used herein as therein defined. The
Representatives designated to act on behalf of the Representatives and on behalf
of each of the Underwriters of the Designated Securities pursuant to Section 12
of the Underwriting Agreement and the address of the Representatives referred to
in such Section 12 are set forth at the end of Schedule II hereto.
An amendment to the Registration Statement, or a supplement to the
Prospectus, as the case may be, relating to the Designated Securities, in the
form heretofore delivered to you is now proposed to be filed with the
Commission.
1
Subject to the terms and conditions set forth herein and in the
Underwriting Agreement incorporated herein by reference, (a) the Designated
Trust agrees to issue and sell to each of the Underwriters, and each of the
Underwriters agrees, severally and not jointly, to purchase from the Designated
Trust, at the time and place and at the purchase price to the Underwriters set
forth in Schedule II hereto, the number of Firm Designated Securities set forth
opposite the name of such Underwriter in Schedule I hereto, and (b) in the event
and to the extent that the Underwriters shall exercise the election to purchase
Optional Designated Securities, as provided below, the Designated Trust agrees
to issue and sell to each of the Underwriters, and each of the Underwriters
agrees, severally and not jointly, to purchase from the Designated Trust at the
purchase price to the Underwriters set forth in Schedule II hereto that portion
of the number of Optional Designated Securities as to which such election shall
have been exercised.
The Designated Trust hereby grants to each of the Underwriters the right to
purchase at their election up to the number of Optional Designated Securities
set forth opposite the name of such Underwriter in Schedule I hereto on the
terms referred to in the paragraph above for the sole purpose of covering over-
allotments in the sale of the Firm Designated Securities. Any such election to
purchase Optional Designated Securities may be exercised by written notice from
the Representatives to the Designated Trust and the Company given within a
period of 30 calendar days after the date of this Pricing Agreement, setting
forth the aggregate number of Optional Designated Securities to be purchased and
the date on which such Optional Designated Securities are to be delivered, as
determined by the Representatives, but in no event earlier than the First Time
of Delivery or, unless the Representatives and the Company and the Designated
Trust otherwise agree in writing, no earlier than ten or later than ten business
days after the date of such notice.
2
If the foregoing is in accordance with your understanding, please sign and
return to us [___] 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
and the Designated Trust and the Company. 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,
EDISON INTERNATIONAL
By:......................................
Name:
Title:
EIX TRUST [I] [II] [III]
By: Edison International, as Depositor
By:......................................
Name:
Title:
Accepted as of the date hereof:
[Names of Representatives]
By:...............................
3
SCHEDULE I
Number of Maximum Number
Firm Designated of Optional Designated
Securities Securities Which
Underwriter to be Purchased May be Purchased
----------- --------------- -----------------------
[Names of Representatives] ]..........
[Names of other Underwriters]..........
Total........................ ============== =======================
4
SCHEDULE II
Designated Trust:
EIX Trust [I] [II] [III]
Title of Designated Securities:
[____ % Cumulative Quarterly Income Preferred Securities, Series ___
(QUIPS(SM)] (Liquidation Amount $25 per Preferred Security)
Aggregate liquidation amount:
Firm Designated Securities: $_________________
Optional Designated Securities: [up to $_______________]
[none]
Price to public:
_____% of the liquidation amount of the Designated Securities
Purchase price to Underwriters:
_____% 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
Accountants' letter to be delivered on date of Pricing Agreement:
Yes
5
Trust Agreement:
Amended and Restated Trust Agreement dated as of_______________, ____ among
the Company, as Depositor, The Chase Manhattan Bank, as Property Trustee,
Chase Manhattan Bank Delaware, as Delaware Trustee, the Regular Trustees
named therein and the several Holders of Trust Securities
Designated Guarantee:
Guarantee Agreement dated as of _____________, ____ between the Company and
The Chase Manhattan Bank, as Trustee
Designated Subordinated Debentures:
[$_____________ aggregate principal amount of ___% Subordinated Deferrable
Interest Notes, 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:
______________________ 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
6
Exchange for Designated Securities:
[The Subordinated Debentures may be delivered in exchange for the
Designated Securities as provided in the Trust Agreement]
Time of Delivery:
________ a.m., New York City time
___________, _____
Closing location for delivery of Designated Securities:
Names and addresses of Representatives:
[Representatives]
[Address for Notices]
7
ANNEX II
Pursuant to Section 7(f) 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 Designated Trust and 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 (and, if applicable,
financial forecasts and/or pro forma financial information) audited or
examined 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 separately furnished to the representative or
representatives of the Underwriters (the "Representatives")] [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 condensed consolidated statements of income, consolidated
balance sheets and consolidated statements of cash flows included in the
Prospectus and/or 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 [have been separately furnished to the
Representatives][are attached to such letters]; and on the basis of
specified procedures including inquiries of officials of the Company who
have responsibility for financial and accounting matters regarding whether
the unaudited condensed consolidated financial statements referred to in
paragraph (vi)(A)(i) below comply as to form in all material respects with
the applicable accounting requirements of the Act and the Exchange Act and
the related rules and regulations, nothing came to their attention that
caused them to believe that the unaudited condensed consolidated financial
statements do not comply as to form in all material respects with the
applicable accounting requirements of the Act and the Exchange Act and the
related rules and regulations adopted by the Commission;
(iv) The unaudited selected financial information with respect to
the consolidated results of operations and financial position of the
Company for the five most recent fiscal years included in the Prospectus
and included or incorporated by reference in Item 6 of the Company's Annual
Report on Form 10-K for the most recent fiscal year agrees with the
corresponding amounts (after restatement where applicable) in the audited
consolidated financial statements for five such fiscal years included or
incorporated by reference in the Company's Annual Reports on Form 10-K for
such fiscal years;
1
(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 condensed consolidated statements of
income, consolidated balance sheets and consolidated statements of
cash flows included in the Prospectus and/or included or incorporated
by reference 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 condensed consolidated statements of income,
consolidated balance sheets and consolidated statements of cash flows
included in the Prospectus or included in the Company's Quarterly
Reports on Form 10-Q incorporated by reference in the Prospectus for
them to be in conformity with generally accepted accounting
principles;
(B) any other unaudited income statement data and balance sheet
items included in the Prospectus do not agree with the corresponding
items in the unaudited consolidated financial statements from which
such data and items were derived, and any such unaudited data and
items were not determined on a basis substantially consistent with the
basis for the corresponding amounts in the audited consolidated
financial statements included or incorporated by reference in the
Company's Annual Report on Form 10-K for the most recent fiscal year;
(C) the unaudited financial statements which were not included
in the Prospectus but from which were derived the unaudited condensed
financial statements referred to in clause (A) and any unaudited
income statement data and balance sheet items included in the
Prospectus and referred to in clause (B) were not determined on a
basis substantially consistent with the basis for the audited
financial statements included or incorporated by reference in the
Company's Annual Report on Form 10-K for the most recent fiscal year;
2
(D) any unaudited pro forma consolidated condensed financial
statements included or incorporated by reference in the Prospectus do
not comply as to form in all material respects with the applicable
accounting requirements of the Act and the rules and regulations
adopted by the Commission thereunder or the pro forma adjustments have
not been properly applied to the historical amounts in the compilation
of those statements;
(E) as of a specified date not more than five days prior to the
date of such letter, there have been any changes in the consolidated
capital stock (other than issuances of capital stock upon exercise of
options and stock appreciation rights, upon earn-outs of performance
shares and upon conversions of convertible securities, in each case
which were outstanding on the date of the latest balance sheet
included or incorporated by reference in the Prospectus) or any
increase in the consolidated long-term debt of the Company and its
subsidiaries, or any decreases in consolidated net current assets or
stockholders' 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 net revenues or operating profit 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)
included or incorporated by reference in the Prospectus and the limited
procedures, inspection of minute books, inquiries and other procedures
referred to in paragraphs (iii) and (vi) above, they have carried out
certain specified procedures, not constituting an audit in accordance with
generally accepted auditing standards, with respect to certain amounts,
percentages and financial information specified by the Representatives
which are derived from the general accounting records of the Company and
its subsidiaries, which appear in the Prospectus (excluding documents
incorporated by reference), or in Part II of, or in exhibits and schedules
to, the Registration Statement specified by the Representatives or in
documents incorporated by reference in the Prospectus specified by the
Representatives, and have compared certain of such amounts, percentages and
financial information with the accounting records of the Company and its
subsidiaries and have found them to be in agreement.
3
All references in this Annex II to the Prospectus shall be deemed to refer
to the Prospectus (including the documents incorporated by reference therein) as
defined in the Underwriting Agreement as of the date of the letter delivered on
the date of the Pricing Agreement for purposes of such letter and to the
Prospectus as amended or supplemented (including the documents incorporated by
reference therein) in relation to the applicable Designated Securities for
purposes of the letter delivered at each Time of Delivery for such Designated
Securities.
4
ANNEX III
1
[EDISON INTERNATIONAL LETTERHEAD]
July ____, 1999
To the Representatives named on
Exhibit A hereto of the Underwriters
named on Exhibit B hereto
Re: Issuance of $500,000,000 Aggregate Liquidation Amount of
Cumulative Quarterly Income Preferred Securities, Series A
----------------------------------------------------------
Ladies and Gentlemen:
This opinion is rendered to you in compliance with the provisions of
subsection (c) of Section 7 of the Underwriting Agreement dated as of July ___,
1999 among Edison International (the "Company"), EIX Trust I ("Trust I"), EIX
------- -------
Trust II and EIX Trust III, each a statutory business trust formed under the
laws of the State of Delaware (each a "Trust," and collectively, the "Trusts")
----- ------
and the Representatives (the "Representatives") of the several Underwriters
---------------
named in the pricing agreements hereinafter described (the "Underwriting
------------
Agreement") and the Pricing Agreement dated as of July ___, 1999 (the "Pricing
--------- -------
Agreement") among the Company, Trust I and the Representatives. The
---------
Underwriting Agreement and the Pricing Agreement provide for the sale to you of
$500,000,000 aggregate principal amount of ___% Cumulative Quarterly Income
Preferred Securities, Series A, issued by Trust I (the "QUIPS"). The QUIPS
-----
represent undivided beneficial interests in the assets of Trust I, which
generally comprise a corresponding principal amount of ___% Subordinated
Deferrable Interest Notes, Series A (the "QUIDS") issued by the Company, under a
-----
Subordinated Indenture, as amended (the "Indenture"), entered into by and
---------
between the Company and The Chase Manhattan Bank, as trustee (the "Trustee").
-------
The QUIPS and QUIDS have been registered under the Securities Act of 1933, as
amended (the "Act"), on a Registration Statement on Form S-3 filed with the
---
Securities and Exchange Commission (the "Commission") on July 2, 1999 (File No.
----------
333-82293), as amended by Amendment No. 1 filed with the Commission on July 13,
1999 and Amendment No. 2 filed with the Commission on July ___, 1999 (as so
amended, including the documents incorporated by reference therein, the
"Registration Statement"). The QUIDS and QUIPS are to be sold as described in
-----------------------
the Registration Statement and the prospectus and prospectus supplement relating
to the QUIDS and QUIPS. Capitalized terms used herein without definition have
the meanings ascribed to them in the Underwriting Agreement, and, in the case of
terms not used in the Underwriting Agreement, the meanings ascribed to them in
the Indenture.
Representatives Named on Exhibit A
July __, 1999
Page 2
I am the Assistant General Counsel and Assistant Secretary of the
Company. In rendering the opinions expressed below, I or attorneys acting under
my supervision have (a) examined and relied on originals, or copies certified or
otherwise identified as true copies of the originals, of such records,
documents, certificates and other instruments, (b) made such investigations of
law as I have deemed appropriate to enable me to give the opinions expressed
below and (c) relied upon appropriate certificates of public officials, officers
or employees of the Company and other persons, as to factual matters. I believe
that both you and I are justified in relying upon such certificates.
I am opining herein as to the effect on the subject transactions only
of the federal laws of the United States and the internal laws of the State of
California, and I express no opinion with respect to the applicability thereto,
or the effect thereon, of the laws of any other jurisdiction, or as to any
matters of municipal law or the laws of any local agencies within any state.
I am familiar with and have examined the Registration Statement,
including the prospectus dated July ___, 1999 (the "Prospectus") and the
----------
prospectus supplement dated July ___, 1999 (the "Prospectus Supplement," and
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together with the Prospectus, the "Final Prospectus"), which Prospectus and
----------------
Prospectus Supplement incorporate by reference certain documents filed with the
Commission.
Based on the foregoing, it is my opinion that, as of the date hereof:
1. Each of the Company, Southern California Edison Company, a
California corporation, Edison Mission Energy, a California corporation, and
Edison Capital, a California corporation, has been duly incorporated and is
validly existing and in good standing under the laws of the state of its
incorporation, with corporate power and authority to own, lease and operate its
properties and to conduct its business as described in the Registration
Statement and the Final Prospectus.
2. The Company has an authorized capitalization as set forth in the
Final 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.
3. To the best of my knowledge, there is no pending or threatened
action, suit or proceeding before any court or governmental agency, authority or
body or any arbitrator involving the Company or any of its subsidiaries
(including Trust I) of a character required to be disclosed in the Registration
Statement which is not adequately disclosed in the Final Prospectus.
4. Each of the Underwriting Agreement and the Pricing Agreement has
been duly authorized, executed and delivered by Trust I and the Company.
5. Each of the Trust Agreement, the Indenture, the Designated Expense
Agreement and the Designated Guarantee has been duly authorized, executed and
delivered by
Representatives Named on Exhibit A
July __, 1999
Page 3
the Company, and each of the Indenture, the Designated Expense Agreement and the
Designated Guarantee constitutes a legally valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms.
6. Each of the Trust Agreement, the Indenture and the Designated
Guarantee has been duly qualified under the Trust Indenture Act.
7. The QUIDS have been duly authorized, executed, issued and
delivered by the Company and constitute the legally valid and binding obligation
of the Company, enforceable against the Company in accordance with its terms,
and are entitled to the benefits provided by the Indenture.
8. The issuance by the Company of the Designated Guarantee and the
QUIDS, the issuance and sale by Trust I of the QUIPS, the compliance by the
Company with the provisions of the Underwriting Agreement, the Pricing Agreement
and the Company Agreements, the compliance by Trust I with the provisions of the
Underwriting Agreement, the Pricing Agreement and the Designated Securities and
the consummation of the transactions herein and therein contemplated will not:
(a) to the best of my knowledge violate 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 properties or Trust I, (b) violate provisions of the
Articles of Incorporation or By-laws of the Company, (c) result in the breach of
or a default under any material indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument known to me to which the Company or
any of its subsidiaries is a party or by which the Company or any of its
subsidiaries is bound or to which any of the material property or assets of the
Company or any of its subsidiaries is subject, or (d) require any consents,
approvals, authorizations, registrations, declarations or filings by the
Company, except (i) such as have been obtained under the Act and the Trust
Indenture Act and (ii) such as may be required under state securities or Blue
Sky laws in connection with the purchase and distribution of the QUIPS by the
Underwriters or the issuance of the Designated Guarantee and QUIDS by the
Company.
9. The statements set forth in (i) the Prospectus under the captions
"Description of Securities," "Description of Debt Securities," Description of
Preferred Securities," "Description of Preferred Securities Guarantees,"
"Description of Expense Agreements" and "Relationship Among Preferred
Securities, Preferred Securities Guarantees and Subordinated Debt Securities
Held by Each Trust" and (ii) in the Final Prospectus under the captions
"Description of Series A QUIDS" and "Description of Series A QUIPS," insofar as
they constitute a summary of the terms of the QUIPS, the Trust Agreement, the
QUIDS, the Indenture, the Designated Guarantee and the Designated Expense
Agreement and (y) in the Prospectus under the caption "Plan of Distribution" and
(z) in the Final Prospectus under the caption "Underwriting," insofar as they
purport to describe the provisions of the laws and documents referred to
therein, in each case are accurate and complete in all material respects. To
the best of my knowledge, there are no statutes or legal or governmental
proceedings required to be described in the Final Prospectus that are not
described as required, or contracts of documents of a character required to be
described in the Registration Statement or Prospectus (or required to
Representatives Named on Exhibit A
July __, 1999
Page 4
be filed under the Exchange Act, if upon such filing they would be incorporated
by reference therein) or to be filed as exhibits to the Registration Statement
that are not described and filed as required.
10. The Registration Statement and the Final Prospectus 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 I express 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 Final Prospectus or with respect
to the Form T-1's. In passing upon the compliance as to form of the
Registration Statement and the Final Prospectus, I have assumed that the
statements made and incorporated by reference therein are correct and complete.
11. Neither the Company nor Trust I is an "investment company" or an
entity "controlled" by an "investment company," as such terms are defined in the
Investment Company Act.
In addition, I have participated in conferences with officers and
other representatives of the Company, representatives of the independent public
accountants for the Company, and your representatives, at which the contents of
the Registration Statement and the Final Prospectus and related matters were
discussed and, although I am not passing upon, and do not assume any
responsibility for, the accuracy, completeness or fairness of the statements
contained or incorporated by reference in the Registration Statement and the
Final Prospectus and have not made any independent check or verification
thereof, during the course of such participation, no facts came to my attention
that caused me to believe that the Registration Statement, at the time it became
effective, contained an untrue statement of a material fact or omitted to state
a material fact required to be stated therein or necessary to make the
statements therein not misleading, or that the Final Prospectus (including the
documents incorporated by reference), as of its date or as of the date hereof,
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 I express no belief with respect to the financial statements,
schedules and other financial data included or incorporated by reference in, or
omitted from, the Registration Statement or the Final Prospectus or with respect
to the Form T-1's.
The opinions rendered in paragraphs 5 and 7, relating to the
enforceability of the Indenture, the Designated Expense Agreement, the
Designated Guarantee and the QUIDS, respectively, are subject to the following
exceptions, limitations and qualifications: (i) the effect of bankruptcy,
insolvency, reorganization, moratorium or other similar laws relating to or
affecting the rights and remedies of creditors generally; (ii) the effect of
general principles of equity, including without limitation concepts of
materiality, reasonableness, good faith and fair dealing and possible
unavailability of specific performance or injunctive relief, regardless of
whether considered in a proceeding in equity or at law; (iii) certain rights,
remedies and waivers
Representatives Named on Exhibit A
July __, 1999
Page 5
contained in the Indenture, the Designated Expense Agreement, the Designated
Guarantee and the QUIDS may be limited or rendered ineffective by applicable
California laws or judicial decisions governing such provisions, but such laws
or judicial decisions do not render the Indenture, the Designated Expense
Agreement, the Designated Guarantee and the QUIDS invalid or unenforceable as a
whole; (iv) the unenforceability under certain circumstances under law or court
decisions of provisions providing for the indemnification of or contribution to
a party with respect to a liability where such indemnification or contribution
is contrary to public policy; (v) I express no opinion concerning the
enforceability of the waiver of rights or defenses contained in the Indenture;
(vi) the unenforceability under certain circumstances, under California or
federal law or court decisions, of provisions expressly or by implication
waiving broadly or vaguely stated rights, unknown future rights, defenses to
obligations or rights granted by law, where such waivers are against public
policy or prohibited by law; (vii) the unenforceability under certain
circumstances of provisions to the effect that rights or remedies are not
exclusive, that every right or remedy is cumulative and may be exercised in
addition to or with any other right or remedy, that election of a particular
remedy or remedies does not preclude recourse to one or more other remedies,
that any right or remedy may be exercised without notice, or that failure to
exercise or delay in exercising rights or remedies will not operate as a waiver
of any such right or remedy; and (viii) the effect of California law, which
provides that a court may refuse to enforce, or may limit the application of, a
contract or any clause thereof which the court finds as a matter of law to have
been unconscionable at the time it was made or contrary to public policy.
To the extent that the obligations of the Company under the Company
Agreements may be dependent upon such matters, I assume for purposes of this
opinion that the parties to each of the Company Agreements (other than the
Company) is duly organized, validly existing and in good standing under the laws
of its jurisdiction of organization; that each of the Trustee, the Property
Trustee, the Delaware Trustee and the Guarantee Trustee is duly qualified to
engage in the activities contemplated by the Company Agreement to which it is a
party; that each of the Company Agreements has been duly authorized, executed
and delivered by the parties thereto (other than the Company) and constitutes a
legally valid and binding obligation of the parties thereto (other than the
Company) enforceable against such parties in accordance with its terms; and each
of the parties (other than the Company) to the Company Agreements is in
compliance generally under the Company Agreement to which it is a party and with
all applicable laws and regulations; and that each party to each of the Company
Agreements (other than the Company) has the requisite organizational and legal
power and authority to perform its obligations under the Company Agreements to
which it is a party.
This opinion is rendered only to you as Representatives of the several
Underwriters under the Underwriting Agreement and the Pricing Agreement and is
solely for the benefit of the Underwriters in connection with the transactions
covered hereby. This opinion may not be relied upon by you for any other
purpose, or furnished to, quoted to, or relied upon by any other person, firm or
corporation for any purpose, without my prior written consent.
Very truly yours,
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
EXHIBIT A
Representatives
---------------
▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co.
▇.▇. ▇▇▇▇▇▇▇ & Sons, Inc.
▇▇▇▇▇▇ Brothers Inc.
▇▇▇▇▇▇▇ Lynch, ▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
PaineWebber Incorporated
Prudential Securities Incorporated
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc.
A-1
EXHIBIT B
Underwriters
------------
▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co.
▇.▇. ▇▇▇▇▇▇▇ & Sons, Inc.
▇▇▇▇▇▇ Brothers Inc.
▇▇▇▇▇▇▇ Lynch, ▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
PaineWebber Incorporated
Prudential Securities Incorporated
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc.
[INSERT OTHER UNDERWRITERS]
B-1
