EXECUTION COPY
Southern California Edison Company
4,000,000 Shares
Series A Preference Stock
(Non-Cumulative, $100 Liquidation Value)
Underwriting Agreement
New York, New York
April 20, 2005
XXXXXX BROTHERS INC.
CITIGROUP GLOBAL MARKETS INC.
As Representatives of the several Underwriters
c/x XXXXXX BROTHERS INC.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Ladies and Gentlemen:
Southern California Edison Company, a corporation organized under the laws of the State of
California (the "Company"), proposes to sell to the several underwriters named in Schedule I hereto (the
"Underwriters"), for whom you (the "Representatives") are acting as representatives, an aggregate of 4,000,000
shares of Series A Preference Stock (Non-Cumulative, $100 Liquidation Value) (the "Securities"). To the extent
there are no additional Underwriters listed on Schedule I other than you, the term Representatives as used herein
shall mean you, as Underwriters, and the terms Representatives and Underwriters shall mean either the singular or
plural as the context requires. Any reference herein to the Registration Statement, a Preliminary Prospectus or
the Prospectus shall be deemed to refer to and include the documents incorporated by reference therein pursuant
to Item 12 of Form S-3 which were filed under the Exchange Act on or before the Effective Date of the
Registration Statement or the issue date of such Preliminary Prospectus or the Prospectus, as the case may be;
and any reference herein to the terms "amend," "amendment" or "supplement" with respect to the Registration
Statement, any Preliminary Prospectus or the Prospectus shall be deemed to refer to and include the filing of any
document under the Exchange Act after the Effective Date of the Registration Statement, or the issue date of any
Preliminary Prospectus or the Prospectus, as the case may be, deemed to be incorporated therein by reference.
Certain terms used herein are defined in Section 17 hereof.
1. Representations and Warranties. The Company represents and warrants to, and agrees with, each
Underwriter as set forth below in this Section 1.
(a) The Company meets the requirements for use of Form S-3 under the Act and has prepared and filed with the
Commission a registration statement (file number 333-123683) on Form S-3, including a related
preliminary prospectus, for registration under the Act of the offering and sale of the Securities. The
Company may have filed
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one or more amendments thereto, including a related preliminary prospectus, each of which has previously
been furnished to you. The Company will next file with the Commission one of the following: either
(1) prior to the Effective Date of such registration statement, a further amendment to such registration
statement, including the form of final prospectus or (2) after the Effective Date of such registration
statement, a final prospectus in accordance with Rules 430A and 424(b). In the case of clause (2), the
Company has included in such registration statement, as amended at the Effective Date, all information
(other than Rule 430A Information) required by the Act and the rules thereunder to be included in such
registration statement and the Prospectus. As filed, such amendment and form of final prospectus, or
such final prospectus, shall contain all Rule 430A Information, together with all other such required
information, and, except to the extent the Representatives shall agree in writing to a modification,
shall be in all substantive respects in the form furnished to you prior to the Execution Time or, to the
extent not completed at the Execution Time, shall contain only such specific additional information and
other changes (beyond that contained in the latest Preliminary Prospectus) as the Company has advised
you, prior to the Execution Time, will be included or made therein.
(b) On the Effective Date, the Registration Statement did or will, and when the Prospectus is first filed
(if required) in accordance with Rule 424(b) and on the Closing Date (as defined herein), the Prospectus
(and any supplements thereto) will, comply in all material respects with the applicable requirements of
the Act and the Exchange Act and the respective rules thereunder; on the Effective Date and at the
Execution Time, the Registration Statement did not or will not contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein or necessary in order to
make the statements therein not misleading; and, on the Effective Date, the Prospectus, if not filed
pursuant to Rule 424(b), will not, and on the date of any filing pursuant to Rule 424(b) and on the
Closing Date, the Prospectus (together with any supplement thereto) will not, include any untrue
statement of a material fact or omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not misleading; provided,
however, that the Company makes no representations or warranties as to the information contained in or
omitted from the Registration Statement, or the Prospectus (or any supplement thereto) in reliance upon
and in conformity with information furnished in writing to the Company by or on behalf of any
Underwriter through the Representatives specifically for inclusion in the Registration Statement or the
Prospectus (or any supplement thereto).
(c) The Company is not and, after giving effect to the offering and sale of the Securities and the
application of the proceeds thereof as described in the Prospectus, will not be an "investment company"
as defined in the Investment Company Act of 1940, as amended.
(d) The Company has been duly incorporated and is validly existing as a corporation in good standing under
the laws of the State of California with full corporate power and authority to own or lease, as the case
may be, and to operate its properties and conduct its business as described in the Prospectus, and is
duly qualified to do business as
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a foreign corporation and is in good standing under the laws of each jurisdiction that requires such
qualification.
(e) There is no franchise, contract or other document of a character required to be described in the
Registration Statement or Prospectus, or to be filed as an exhibit thereto, which is not described or
filed as required; and the statements in the Prospectus under the heading "Summary-- Southern California
Edison Company" and the statements incorporated into the Prospectus from the sections entitled
"Regulation" and "Environmental Matters" in the Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 2004 (the "Form 10-K"), as supplemented by information contained in the Company's
subsequent Current Reports on Form 8-K, which are incorporated into the Prospectus, fairly summarize the
matters therein described in all material respects.
(f) This Agreement has been duly authorized, executed and delivered by the Company.
(g) The Securities conform in all material respects to the description thereof contained in the Prospectus;
the Securities have been duly and validly authorized, and, when issued and delivered to and paid for by
the Underwriters pursuant to this Agreement, will be fully paid and nonassessable.
(h) No consent, approval, authorization, filing with or order of any court or governmental agency or body is
required in connection with the transactions contemplated herein, except such as have been obtained (i)
under the Act, (ii) from the California Public Utilities Commission and (iii) such as may be required
under the blue sky laws of any jurisdiction in connection with the purchase and distribution of the
Securities by the Underwriters in the manner contemplated herein and in the Prospectus.
(i) Neither the issue and sale of the Securities nor the consummation of any other of the transactions
herein contemplated nor the fulfillment of the terms hereof will conflict with, result in a breach or
violation of, or imposition of any lien, charge or encumbrance upon any property or assets of the
Company pursuant to, (i) the articles of incorporation or by-laws of the Company, (ii) the terms of any
indenture, contract, lease, mortgage, deed of trust, note agreement, loan agreement or other agreement,
obligation, condition, covenant or instrument to which the Company is a party or bound or to which its
or their property is subject, or (iii) any statute, law, rule, regulation, judgment, order or decree
applicable to the Company of any court, regulatory body, administrative agency, governmental body,
arbitrator or other authority having jurisdiction over the Company or any of its properties.
(j) The consolidated historical financial statements and schedules of the Company and its consolidated
subsidiaries incorporated by reference in the Prospectus and the Registration Statement (the "Financial
Statements") present fairly in all material respects the financial condition, results of operations and
cash flows of the Company as of the dates and for the periods indicated, comply as to form with the
applicable accounting requirements of the Act and have been prepared in conformity with generally
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accepted accounting principles applied on a consistent basis throughout the periods involved
(except as otherwise noted therein). The selected financial data set forth under the caption "Selected
Financial Data" in the Company's Form 10-K, incorporated by reference in the Prospectus and Registration
Statement fairly present, on the basis stated in the Form 10-K, the information included therein. The
financial information included or incorporated in the Prospectus complies with the requirements of
Regulation G and Item 10(e) of Regulation S-K under the Act.
(k) PricewaterhouseCoopers LLP, who have certified certain financial statements of the Company and its
consolidated subsidiaries and delivered their report with respect to the audited consolidated financial
statements and schedules for the year ended December 31, 2004 incorporated by reference in the
Prospectus, are independent public accountants with respect to the Company within the meaning of the Act
and the applicable published rules and regulations thereunder.
(l) No action, suit or proceeding by or before any court or governmental agency, authority or body or any
arbitrator involving the Company or any of its subsidiaries or its or their property is pending or, to
the best knowledge of the Company, threatened that (i) could reasonably be expected to have a material
adverse effect on the performance of this Agreement or the consummation of any of the transactions
contemplated hereby or (ii) could reasonably be expected to have a Material Adverse Effect, except as
set forth in or contemplated in the Prospectus (exclusive of any supplement thereto).
(m) The Company and its subsidiaries maintain a system of internal accounting controls sufficient to provide
reasonable assurance that (i) transactions are executed in accordance with management's general or
specific authorizations; (ii) transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and to maintain asset
accountability; (iii) access to assets is permitted only in accordance with management's general or
specific authorization; and (iv) the recorded accountability for assets is compared with the existing
assets at reasonable intervals and appropriate action is taken with respect to any differences.
(n) The Company is not in violation or default of (i) any provision of its articles of incorporation or
bylaws, (ii) the terms of any indenture, contract, lease, mortgage, deed of trust, note agreement, loan
agreement or other agreement, obligation, condition, covenant or instrument to which it is a party or
bound or to which its property is subject, or (iii) any statute, law, rule, regulation, judgment, order
or decree of any court, regulatory body, administrative agency, governmental body, arbitrator or other
authority having jurisdiction over the Company or any of its properties, as applicable (except, in the
case of clauses (ii) and (iii), for such violations or defaults as would not, in the aggregate, have a
Material Adverse Effect).
(o) The Company possesses all licenses, certificates, permits and other authorizations issued by the
appropriate national and local U.S. federal and state regulatory authorities necessary to conduct their
respective businesses, and the Company
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has not received any notice of proceedings relating to the revocation or modification of any
such certificate, authorization or permit which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would have a Material Adverse Effect, except as set forth in or
contemplated in the Prospectus (exclusive of any supplement thereto).
(p) The Company is (i) in compliance with any and all applicable national and local U.S. federal and state
laws and regulations relating to the protection of human health and safety, the environment or hazardous
or toxic substances or wastes, pollutants or contaminants ("Environmental Laws"), (ii) has received and
are in compliance with all permits, licenses or other approvals required of them under applicable
Environmental Laws to conduct their respective businesses and (iii) has not received notice of any
actual or potential liability for the investigation or remediation of any disposal or release of
hazardous or toxic substances or wastes, pollutants or contaminants, except where such non-compliance
with Environmental Laws, failure to receive required permits, licenses or other approvals, or liability
would not have a Material Adverse Effect, except as set forth in or contemplated in the Prospectus
(exclusive of any supplement thereto). Except as set forth in the Prospectus, the Company has not been
named as a "potentially responsible party" under the Comprehensive Environmental Response, Compensation,
and Liability Act of 1980, as amended.
(q) In the ordinary course of its business, the Company periodically reviews the effect of Environmental
Laws on the business, operations and properties of the Company, in the course of which it identifies and
evaluates associated costs and liabilities (including, without limitation, any capital or operating
expenditures required for clean-up, closure of properties or compliance with Environmental Laws, or any
permit, license or approval, any related constraints on operating activities and any potential
liabilities to third parties). On the basis of such review, the Company has reasonably concluded that
such associated costs and liabilities would not, singly or in the aggregate, have a Material Adverse
Effect, except as set forth in the Prospectus (exclusive of any supplement thereto).
(r) No holders of securities of the Company have rights to the registration of such securities under the
Registration Statement.
(s) The Company owns or leases all such properties as are necessary to the conduct of its operations as
presently conducted.
(t) The Company has not taken, directly or indirectly, any action designed to or that would constitute or
that might reasonably be expected to cause or result in, under the Exchange Act or otherwise,
stabilization or manipulation of the price of any security of the Company to facilitate the sale or
resale of the Securities.
(u) Except as set forth in the Prospectus (exclusive of any supplement thereto), the minimum funding
standard under Section 302 of the Employee Retirement Income Security Act of 1974, as amended, and the
regulations and published interpretations thereunder ("ERISA"), has been satisfied by each "pension
plan" (as
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defined in Section 3(2) of ERISA) which has been established or maintained by the Company
and/or one or more of its subsidiaries, and the trust forming part of each such plan which is intended
to be qualified under Section 401 of the Code is so qualified; each of the Company and its subsidiaries
has fulfilled its obligations, if any, under Section 515 of ERISA; each pension plan and welfare plan
established or maintained by the Company and/or one or more of its subsidiaries is in compliance in all
material respects with the currently applicable provisions of ERISA; and neither the Company nor any of
its subsidiaries has incurred or could reasonably be expected to incur any withdrawal liability under
Section 4201 of ERISA, any liability under Section 4062, 4063, or 4064 of ERISA, or any other liability
under Title IV of ERISA.
(v) Except as disclosed in the Registration Statement and the Prospectus, the Company (i) does not have any
material lending or other relationship with any bank or lending affiliate of the Underwriters and
(ii) does not intend to use any of the proceeds from the sale of the Securities hereunder to repay any
outstanding debt owed to any affiliate of the Underwriters.
(w) There is and has been no failure on the part of the Company and any of the Company's directors or
officers, in their capacities as such, to comply with Section 401 of the Sarbanes Oxley Act of 2002 and
the rules and regulations promulgated in connection therewith (the "Sarbanes Oxley Act") related to
loans.
Any certificate signed by any officer of the Company and delivered to the Representatives or
counsel for the Underwriters in connection with the offering of the Securities shall be deemed a representation
and warranty by the Company, as to matters covered thereby, to each Underwriter.
2. Purchase and Sale. Subject to the terms and conditions and in reliance upon the representations and
warranties herein set forth, the Company agrees to sell to each Underwriter, and each Underwriter agrees,
severally and not jointly, to purchase from the Company, at a purchase price of $98.75 per share, the amount of
the Securities set forth opposite such Underwriter's name in Schedule I hereto.
3. Delivery and Payment. Delivery of and payment for the Securities shall be made at 10:00 AM, New York
City time, on April 27, 2005 or at such time on such later date not more than five Business Days after the
foregoing date as the Representatives shall designate, which date and time may be postponed by agreement between
the Representatives and the Company or as provided in Section 9 hereof (such date and time of delivery and
payment for the Securities being herein called the "Closing Date"). Delivery of the Securities shall be made to
the Representatives for the respective accounts of the several Underwriters against payment by the several
Underwriters through the Representatives of the purchase price thereof to or upon the order of the Company by
wire transfer payable in same-day funds to an account specified by the Company. Delivery of the Securities shall
be made through the facilities of The Depository Trust Company unless the Representatives shall otherwise
instruct.
4. Offering by Underwriters. It is understood that the several Underwriters propose to offer the
Securities for sale to the public as set forth in the Prospectus.
Page 6
5. Agreements. The Company agrees with the several Underwriters that:
(a) The Company will use its best efforts to cause the Registration Statement, if not effective at the
Execution Time, and any amendment thereof, to become effective. Prior to the termination of the
offering of the Securities, the Company will not file any amendment of the Registration Statement or
supplement to the Prospectus or any Rule 462(b) Registration Statement unless the Company has furnished
you a copy for your review prior to filing and will not file any such proposed amendment or supplement
to which you reasonably object. Subject to the foregoing sentence, if the Registration Statement has
become or becomes effective pursuant to Rule 430A, or filing of the Prospectus is otherwise required
under Rule 424(b), the Company will cause the Prospectus, properly completed, and any supplement thereto
to be filed in a form approved by the Representatives with the Commission pursuant to the applicable
paragraph of Rule 424(b) within the time period prescribed and will provide evidence satisfactory to the
Representatives of such timely filing. The Company will promptly advise the Representatives (1) when
the Registration Statement, if not effective at the Execution Time, shall have become effective,
(2) when the Prospectus, and any supplement thereto, shall have been filed (if required) with the
Commission pursuant to Rule 424(b) or when any Rule 462(b) Registration Statement shall have been filed
with the Commission, (3) when, prior to termination of the offering of the Securities, any amendment to
the Registration Statement shall have been filed or become effective, (4) of any request by the
Commission or its staff for any amendment of the Registration Statement, or any Rule 462(b) Registration
Statement, or for any supplement to the Prospectus or for any additional information, (5) of the
issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement
or the institution or threatening of any proceeding for that purpose and (6) of the receipt by the
Company of any notification with respect to the suspension of the qualification of the Securities for
sale in any jurisdiction or the institution or threatening of any proceeding for such purpose. The
Company will use its best efforts to prevent the issuance of any such stop order or the suspension of
any such qualification and, if issued, to obtain as soon as possible the withdrawal thereof.
(b) If, at any time when a prospectus relating to the Securities is required to be delivered under the Act,
any event occurs as a result of which the Prospectus as then supplemented would include any untrue
statement of a material fact or omit to state any material fact necessary to make the statements therein
in the light of the circumstances under which they were made not misleading, or if it shall be necessary
to amend the Registration Statement or supplement the Prospectus to comply with the Act or the Exchange
Act or the respective rules thereunder, the Company promptly will (1) notify the Representatives of such
event; (2) prepare and file with the Commission, subject to the second sentence of paragraph (a) of this
Section 5, an amendment or supplement which will correct such statement or omission or effect such
compliance; and (3) supply any supplemented Prospectus to you in such quantities as you may reasonably
request.
(c) As soon as practicable, the Company will make generally available to its security holders and to the
Representatives an earnings statement or statements of the
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Company and its subsidiaries which will satisfy the provisions of Section 11(a) of the Act and
Rule 158 under the Act.
(d) The Company will furnish to the Representatives and counsel for the Underwriters, without charge, signed
copies of the Registration Statement (including exhibits thereto) and to each other Underwriter a copy
of the Registration Statement (without exhibits thereto) and, so long as delivery of a prospectus by an
Underwriter or dealer may be required by the Act, as many copies of each Preliminary Prospectus and the
Prospectus and any supplement thereto as the Representatives may reasonably request. The Company will
pay the expenses of printing or other production of all documents relating to the offering.
(e) The Company will arrange, if necessary, for the qualification of the Securities for sale under the laws
of such jurisdictions as the Representatives may designate, will maintain such qualifications in effect
so long as required for the distribution of the Securities and will pay any fee of the National
Association of Securities Dealers, Inc., in connection with its review of the offering; provided that in
no event shall the Company be obligated to qualify to do business in any jurisdiction where it is not
now so qualified or to take any action that would subject it to service of process in suits, other than
those arising out of the offering or sale of the Securities in any jurisdiction where it is not now so
subject.
(f) The Company will not, without the prior written consent of the Representatives, offer, sell, contract to
sell, pledge, or otherwise dispose of, (or enter into any transaction which is designed to, or might
reasonably be expected to, result in the disposition (whether by actual disposition or effective
economic disposition due to cash settlement or otherwise) by the Company or any affiliate of the Company
or any person in privity with the Company or any affiliate of the Company) directly or indirectly,
including the filing (or participation in the filing) of a registration statement with the Commission in
respect of, or establish or increase a put equivalent position or liquidate or decrease a call
equivalent position within the meaning of Section 16 of the Exchange Act, (i) any preferred securities
issued or guaranteed by the Company or (ii) shares of any class of capital stock of the Company (other
than the Securities) which is preferred as to the payment of dividends, or as to the distribution of
assets upon any liquidation or dissolution of the Company, over shares of any other class of capital
stock of the Company or publicly announce an intention to effect any such transaction for a period
commencing on the date hereof and ending on the Closing Date.
(g) The Company will not take, directly or indirectly, any action designed to or that would constitute or
that might reasonably be expected to cause or result in, under the Exchange Act or otherwise,
stabilization or manipulation of the price of any security of the Company to facilitate the sale or
resale of the Securities.
6. Conditions to the Obligations of the Underwriters. The obligations of the Underwriters to purchase the
Securities, shall be subject to the accuracy of the representations and warranties on the part of the Company
contained herein as of the Execution Time and the Closing Date, to the accuracy of the statements of the Company
made in any certificates pursuant
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to the provisions hereof, to the performance by the Company of its obligations hereunder and to
the following additional conditions:
(a) If the Registration Statement has not become effective prior to the Execution Time, unless the
Representatives agree in writing to a later time, the Registration Statement will become effective not
later than (i) 6:00 PM New York City time, on the date of determination of the public offering price, if
such determination occurred at or prior to 3:00 PM New York City time on such date or (ii) 9:30 AM on
the Business Day following the day on which the public offering price was determined, if such
determination occurred after 3:00 PM New York City time on such date; if filing of the Prospectus, or
any supplement thereto, is required pursuant to Rule 424(b), the Prospectus, and any such supplement,
will be filed in the manner and within the time period required by Rule 424(b); and no stop order
suspending the effectiveness of the Registration Statement shall have been issued and no proceedings for
that purpose shall have been instituted or threatened.
(b) The Company shall have requested and caused Xxxxxxx Xxxxxxx, Associate General Counsel of the Company,
to have furnished to the Representatives her opinion, dated the Closing Date and addressed to the
Representatives, to the effect that:
(i) The Company is a corporation duly incorporated, validly existing and in good standing under the laws of
the State of California;
(ii) The Company has the corporate power and authority to own and operate its property, to lease the property
it operates as lessee and to conduct the business in which it is currently engaged, as
described in the Prospectus;
(iii) The Company has all requisite corporate power and authority, has taken all requisite corporate action,
and has received and is in compliance with all governmental, judicial and other authorizations,
approvals and orders necessary to enter into and perform the Underwriting Agreement and to
offer, issue, sell and deliver the Securities;
(iv) The Company's authorized equity capitalization is as set forth or incorporated by reference in the
Prospectus; the capital stock of the Company conforms in all material respects to the
description thereof contained or incorporated by reference in the Prospectus; the outstanding
shares of Common Stock have been duly and validly authorized and issued and are fully paid and
nonassessable; the Securities have been duly and validly authorized, and, when issued and
delivered to and paid for by the Underwriters pursuant to this Agreement, will be fully paid
and nonassessable; the holders of outstanding shares of capital stock of the Company are not
entitled to preemptive or other rights to subscribe for the Securities; and except as set forth
or incorporated by reference in the Prospectus, no options, warrants or other rights to
purchase, agreements or other obligations to issue, or rights to convert any obligations into
or exchange any securities for, shares of capital stock of or ownership interest in the Company
are outstanding;
Page 9
(v) to the knowledge of such counsel, there is no pending or threatened action, suit or proceeding by or
before any court or governmental agency, authority or body or any arbitrator involving the
Company or any of its subsidiaries or its or their property which is not adequately disclosed
in the Prospectus, except in each case for such proceedings that, if the subject of an
unfavorable decision, ruling or finding, would not singly or in the aggregate, result in a
material adverse change in the condition (financial or otherwise), prospects, earnings,
business, properties or results of operations of the Company, and there is no franchise,
contract or other document of a character required to be described in the Registration
Statement or Prospectus, or to be filed as an exhibit thereto, which is not described or filed
as required; and the statements included or incorporated by reference in the Prospectus under
the headings "Legal Matters" and "Summary-- Southern California Edison Company" or incorporated
by reference into the Prospectus from the sections entitled "Regulation" and "Environmental
Matters" in the Company's Annual Report on Form 10-K for the fiscal year ended December 31,
2004, as supplemented by information contained in the Company's Current Reports on Form 8-K,
which are incorporated by reference in the Prospectus, fairly summarize the matters therein
described in all material respects; and the statements set forth in the Prospectus Supplement
under the heading "Certain Terms of the Shares" and in the base prospectus under the heading
"Description of the Preference Stock," insofar as those statements purport to summarize certain
provisions of the Securities, are accurate summaries in all material respects;
(vi) the Registration Statement has become effective under the Act; any required filing of the Prospectus,
and any supplements thereto, pursuant to Rule 424(b) has been made in the manner and within the
time period required by Rule 424(b); to the knowledge of such counsel, no stop order suspending
the effectiveness of the Registration Statement has been issued, no proceedings for that
purpose have been instituted or threatened and the Registration Statement and the Prospectus
(other than the financial statements and other financial and statistical information contained
therein, as to which such counsel need express no opinion) comply as to form in all material
respects with the applicable requirements of the Act and the Exchange Act and the respective
rules thereunder; and such counsel has no reason to believe that on the Effective Date or the
date the Registration Statement was last deemed amended the Registration Statement contained
any untrue statement of a material fact or omitted to state any material fact required to be
stated therein or necessary to make the statements therein not misleading or that the
Prospectus as of its date and on the Closing Date included or includes any untrue statement of
a material fact or omitted or omits to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not misleading (in each
case, other than the financial statements and other financial and statistical information
contained therein, as to which such counsel need express no opinion);
(vii) this Agreement has been duly authorized, executed and delivered by the Company;
Page 10
(viii)the Company is not and, after giving effect to the offering and sale of the Securities and the
application of the proceeds thereof as described in the Prospectus, will not be, an "investment
company" as defined in the Investment Company Act of 1940, as amended;
(ix) no consent, approval, authorization, filing with or order of any court or governmental agency or body is
required in connection with the transactions contemplated herein, except such as have been
obtained (i) under the Act, (ii) from the California Public Utilities Commission and (iii) such
as may be required under the blue sky laws of any jurisdiction in connection with the purchase
and distribution of the Securities by the Underwriters in the manner contemplated in this
Agreement and in the Prospectus and such other approvals (specified in such opinion) as have
been obtained;
(x) neither the issue and sale of the Securities, nor the consummation of any other of the transactions
herein contemplated nor the fulfillment of the terms hereof will conflict with, result in a
breach or violation of, or imposition of any lien, charge or encumbrance upon any property or
assets of the Company pursuant to, (i) the articles of incorporation or by-laws of the Company,
(ii) the terms of any indenture, contract, lease, mortgage, deed of trust, note agreement, loan
agreement or other agreement, obligation, condition, covenant or instrument to which the
Company is a party or bound or to which its or their property is subject, or (iii) any statute,
law, rule, regulation, judgment, order or decree applicable to the Company of any court,
regulatory body, administrative agency, governmental body, arbitrator or other authority having
jurisdiction over the Company or any of its properties; and
(xi) no holders of securities of the Company have rights to the registration of such securities under the
Registration Statement.
In rendering such opinion, such counsel may rely (A) as to matters involving the application of laws of
any jurisdiction other than the State of California or the Federal laws of the United States, to the
extent he deems proper and specified in such opinion, upon the opinion of other counsel of good standing
whom he believes to be reliable and who are satisfactory to counsel for the Underwriters and (B) as to
matters of fact, to the extent he deems proper, on certificates of responsible officers of the Company
and public officials. Such counsel may render such opinion subject to such exceptions and
qualifications as are reasonable or customary under the circumstances and acceptable to counsel for the
Underwriters. References to the Prospectus in this paragraph (b) shall also include any supplements
thereto at the Closing Date.
(c) The Representatives shall have received from Xxxxxx Xxxxxxxx Xxxxx & Xxxxxxxx LLP, counsel for the
Underwriters, such opinion or opinions, dated the Closing Date and addressed to the Representatives as
the Representatives may reasonably require, and the Company shall have furnished to such counsel such
documents as they request for the purpose of enabling them to pass upon such matters.
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(d) The Company shall have furnished to the Representatives a certificate of the Company, signed by the vice
president, chief financial officer and controller of the Company, dated the Closing Date, to the effect
that he has carefully examined the Registration Statement, the Prospectus, any supplements to the
Prospectus and this Agreement and that:
(i) the representations and warranties of the Company in this Agreement are true and correct on and as of
the Closing Date with the same effect as if made on the Closing Date and the Company has
complied with all the agreements and satisfied all the conditions on its part to be performed
or satisfied at or prior to the Closing Date;
(ii) no stop order suspending the effectiveness of the Registration Statement has been issued and no
proceedings for that purpose have been instituted or, to the Company's knowledge, threatened;
and
(iii) since the date of the most recent financial statements included or incorporated by reference in the
Prospectus (exclusive of any supplement thereto), there has been no material adverse effect on
the condition (financial or otherwise), prospects, earnings, business or properties of the
Company and its subsidiaries, taken as a whole, whether or not arising from transactions in the
ordinary course of business, except as set forth in or contemplated in the Prospectus
(exclusive of any supplement thereto).
(e) The Company shall have requested and caused PricewaterhouseCoopers LLP to have furnished to the
Representatives, at the Execution Time and at the Closing Date, letters, dated respectively as of the
Execution Time and as of the Closing Date, in form and substance satisfactory to the Representatives,
confirming that they are independent accountants within the meaning of the Act and the Exchange Act and
the respective applicable rules and regulations adopted by the Commission thereunder, stating in effect
that:
(i) in their opinion the audited financial statements and financial statement schedules included or
incorporated by reference in the Registration Statement and the Prospectus and reported on by
them 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;
(ii) on the basis of carrying out certain specified procedures (but not an examination in accordance with
generally accepted auditing standards) which would not necessarily reveal matters of
significance with respect to the comments set forth in such letter; a reading of the minutes of
the meetings of the stockholders, directors and the executive, finance, compensation and audit
committees of the Company, and inquiries of certain officials of the Company who have
responsibility for financial and accounting matters of the Company and its subsidiaries as to
transactions and events subsequent to December 31, 2004, nothing came to their attention which
caused them to believe that:
Page 12
(1) with respect to the period subsequent to December 31, 2004, there were any changes, at the most recent
month end for which the financial statements were available, in the long-term debt of
the Company and its subsidiaries or common stock of the Company or decreases in the
consolidated net current assets (working capital) or shareholders equity of the
Company as compared with the amounts shown on the December 31, 2004, consolidated
balance sheet included or incorporated by reference in the Registration Statement and
the Prospectus, or for the period from January 1, 2005 to the most recent month end
for which the financial statements are available there were any decreases, as compared
with the corresponding period in the preceding year and quarter in total consolidated
operating revenue, operating income, net income before taxes or net income available
for common stock of the Company and its subsidiaries, except in all instances for
changes or decreases set forth in such letter, in which case the letter shall be
accompanied by an explanation by the Company as to the significance thereof unless
said explanation is not deemed necessary by the Representatives; and
(2) with respect to the period subsequent to December 31, 2004, there were any changes, at a specified date
not more than five days prior to the date of the letter, in the long-term debt of the
Company and its subsidiaries or common stock of the Company as compared with the
amounts shown on the December 31, 2004, consolidated balance sheet included or
incorporated by reference in the Registration Statement and the Prospectus,
(iii) they have performed certain other specified procedures as a result of which they determined that certain
information of an accounting, financial or statistical nature (which is limited to accounting,
financial or statistical information derived from the general accounting records of the Company
and its subsidiaries) set forth in the Registration Statement and the Prospectus and in Exhibit
12 to the Registration Statement, including the information set forth under the caption
"Selected Financial Information" incorporated by reference in the Prospectus, the information
included or incorporated by reference in Items 1, 2, 6, 7 and 11 of the Company's Annual Report
on Form 10-K, agrees with the accounting records of the Company and its subsidiaries, excluding
any questions of legal interpretation.
References to the Prospectus in this paragraph (e) include any supplement thereto at the date
of the letter.
(f) Subsequent to the Execution Time or, if earlier, the dates as of which information is given in the
Registration Statement (exclusive of any amendment thereof) and the Prospectus (exclusive of any
supplement thereto), there shall not have been (i) any change or decrease specified in the letter or
letters referred to in paragraph (e) of this Section 6 or (ii) any change, or any development involving
a prospective change, in or affecting the condition (financial or otherwise), earnings, business or
properties of the
Page 13
Company and its subsidiaries, taken as a whole, whether or not arising from transactions in the
ordinary course of business, except as set forth in or contemplated in the Prospectus (exclusive of any
supplement thereto) the effect of which, in any case referred to in clause (i) or (ii) above, is, in the
sole judgment of the Representatives, so material and adverse as to make it impractical or inadvisable
to proceed with the offering or delivery of the Securities as contemplated by the Registration Statement
(exclusive of any amendment thereof) and the Prospectus (exclusive of any supplement thereto).
(g) Subsequent to the Execution Time, there shall not have been any decrease in the rating of any of the
Company's debt securities or preferred securities by any "nationally recognized statistical rating
organization" (as defined for purposes of Rule 436(g) under the Act) or any notice given of any intended
or potential decrease in any such rating or of a possible change in any such rating that does not
indicate the direction of the possible change.
(h) Prior to the Closing Date, the Company shall have furnished to the Representatives such further
information, certificates and documents as the Representatives may reasonably request.
If any of the conditions specified in this Section 6 shall not have been fulfilled when and as
provided in this Agreement, or if any of the opinions and certificates mentioned above or elsewhere in this
Agreement shall not be reasonably satisfactory in form and substance to the Representatives and counsel for the
Underwriters, this Agreement and all obligations of the Underwriters hereunder may be canceled at, or at any time
prior to, the Closing Date by the Representatives. Notice of such cancellation shall be given to the Company in
writing or by telephone or facsimile confirmed in writing.
The documents required to be delivered by this Section 6 shall be delivered at the office of
Xxxxxx Xxxxxxxx Xxxxx & Xxxxxxxx LLP, counsel for the Underwriters, at Xxx Xxxxxxx Xxxxx, Xxx Xxxx, XX, on the
Closing Date.
7. Reimbursement of Underwriters' Expenses. If the sale of the Securities provided for herein is not
consummated because any condition to the obligations of the Underwriters set forth in Section 6 hereof is not
satisfied, because of any termination pursuant to Section 10 hereof or because of any refusal, inability or
failure on the part of the Company to perform any agreement herein or comply with any provision hereof other than
by reason of a default by any of the Underwriters, the Company will reimburse the Underwriters severally through
Xxxxxx Brothers Inc. on demand for all out-of-pocket expenses (including reasonable fees and disbursements of
counsel) that shall have been incurred by them in connection with the proposed purchase and sale of the
Securities.
8. Indemnification and Contribution. (a) The Company agrees to indemnify and hold harmless each
Underwriter, the directors, officers, employees and agents of each Underwriter and each person who controls any
Underwriter within the meaning of either the Act or the Exchange Act against any and all losses, claims, damages
or liabilities, joint or several, to which they or any of them may become subject under the Act, the Exchange Act
or other Federal or state statutory law or regulation, at common law or otherwise, insofar as such losses,
claims,
Page 14
damages or liabilities (or actions in respect thereof) arise out of, or are based upon any
untrue statement or alleged untrue statement of a material fact contained in the registration statement for the
registration of the Securities as originally filed or in any amendment thereof, or in any Preliminary Prospectus
or the Prospectus, or in any amendment thereof or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, and agrees to reimburse each such indemnified party, as incurred, for any
legal or other expenses reasonably incurred by them in connection with investigating or defending any such loss,
claim, damage, liability or action; provided, however, that the Company will not be liable in any such case to
the extent that any such loss, claim, damage or liability arises out of or is based upon any such untrue
statement or alleged untrue statement or omission or alleged omission made therein in reliance upon and in
conformity with written information furnished to the Company by or on behalf of any Underwriter through the
Representatives specifically for inclusion therein. This indemnity agreement will be in addition to any
liability which the Company may otherwise have.
(b) Each Underwriter severally and not jointly agrees to indemnify and hold harmless the Company, each of
its directors, each of its officers who signs the Registration Statement, and each person who controls the
Company within the meaning of either the Act or the Exchange Act, to the same extent as the foregoing indemnity
from the Company to each Underwriter, but only with reference to written information relating to such Underwriter
furnished to the Company by or on behalf of such Underwriter through the Representatives specifically for
inclusion in the documents referred to in the foregoing indemnity. This indemnity agreement will be in addition
to any liability which any Underwriter may otherwise have. The Company acknowledges that the statements set
forth in the last paragraph of the cover page regarding delivery of the Securities and, under the heading
"Underwriting," (i) the list of Underwriters and their respective participation in the sale of the Securities,
(ii) the sentences related to concessions and reallowances and (iii) the paragraph related to stabilization,
syndicate covering transactions and penalty bids in any Preliminary Prospectus and the Prospectus constitute the
only information furnished in writing by or on behalf of the several Underwriters for inclusion in any
Preliminary Prospectus or the Prospectus.
(c) Promptly after receipt by an indemnified party under this Section 8 of notice of the commencement of any
action, such indemnified party will, if a claim in respect thereof is to be made against the indemnifying party
under this Section 8, notify the indemnifying party in writing of the commencement thereof; but the failure so to
notify the indemnifying party (i) will not relieve it from liability under paragraph (a) or (b) above unless and
to the extent it did not otherwise learn of such action and such failure results in the forfeiture by the
indemnifying party of substantial rights and defenses and (ii) will not, in any event, relieve the indemnifying
party from any obligations to any indemnified party other than the indemnification obligation provided in
paragraph (a) or (b) above. The indemnifying party shall be entitled to appoint counsel of the indemnifying
party's choice at the indemnifying party's expense to represent the indemnified party in any action for which
indemnification is sought (in which case the indemnifying party shall not thereafter be responsible for the fees
and expenses of any separate counsel retained by the indemnified party or parties except as set forth below);
provided, however, that such counsel shall be satisfactory to the indemnified party. Notwithstanding the
indemnifying party's election to appoint counsel to represent the indemnified party in an action, the indemnified
party shall have the right to employ separate
Page 15
counsel (including local counsel), and the indemnifying party shall bear the reasonable fees,
costs and expenses of such separate counsel if (i) the use of counsel chosen by the indemnifying party to
represent the indemnified party would present such counsel with a conflict of interest, (ii) the actual or
potential defendants in, or targets of, any such action include both the indemnified party and the indemnifying
party and the indemnified party shall have reasonably concluded that there may be legal defenses available to it
and/or other indemnified parties which are different from or additional to those available to the indemnifying
party, (iii) the indemnifying party shall not have employed counsel satisfactory to the indemnified party to
represent the indemnified party within a reasonable time after notice of the institution of such action or
(iv) the indemnifying party shall authorize the indemnified party to employ separate counsel at the expense of the
indemnifying party. An indemnifying party will not, without the prior written consent of the indemnified
parties, settle or compromise or consent to the entry of any judgment with respect to any pending or threatened
claim, action, suit or proceeding in respect of which indemnification or contribution may be sought hereunder
(whether or not the indemnified parties are actual or potential parties to such claim or action) unless such
settlement, compromise or consent includes an unconditional release of each indemnified party from all liability
arising out of such claim, action, suit or proceeding.
(d) In the event that the indemnity provided in paragraph (a) or (b) of this Section 8 is unavailable to or
insufficient to hold harmless an indemnified party for any reason, the Company and the Underwriters severally
agree to contribute to the aggregate losses, claims, damages and liabilities (including legal or other expenses
reasonably incurred in connection with investigating or defending same) (collectively "Losses") to which the
Company and one or more of the Underwriters may be subject in such proportion as is appropriate to reflect the
relative benefits received by the Company on the one hand and by the Underwriters on the other from the offering
of the Securities; provided, however, that in no case shall any Underwriter (except as may be provided in any
-------- -------
agreement among underwriters relating to the offering of the Securities) be responsible for any amount in excess
of the underwriting discount or commission applicable to the Securities purchased by such Underwriter hereunder.
If the allocation provided by the immediately preceding sentence is unavailable for any reason, the Company and
the Underwriters severally shall contribute in such proportion as is appropriate to reflect not only such
relative benefits but also the relative fault of the Company on the one hand and of the Underwriters on the other
in connection with the statements or omissions which resulted in such Losses as well as any other relevant
equitable considerations. Benefits received by the Company shall be deemed to be equal to the total net proceeds
from the offering (before deducting expenses) received by it, and benefits received by the Underwriters shall be
deemed to be equal to the total underwriting discounts and commissions, in each case as set forth on the cover
page of the Prospectus. Relative fault shall be determined by reference to, among other things, whether any
untrue or any alleged untrue statement of a material fact or the omission or alleged omission to state a material
fact relates to information provided by the Company on the one hand or the Underwriters on the other, the intent
of the parties and their relative knowledge, access to information and opportunity to correct or prevent such
untrue statement or omission. The Company and the Underwriters agree that it would not be just and equitable if
contribution were determined by pro rata allocation or any other method of allocation which does not take account
of the equitable considerations referred to above. Notwithstanding the provisions of this paragraph (d), no
person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) shall be entitled
to contribution from any person who was not guilty of such
Page 16
fraudulent misrepresentation. For purposes of this Section 8, each person who controls an
Underwriter within the meaning of either the Act or the Exchange Act and each director, officer, employee and
agent of an Underwriter shall have the same rights to contribution as such Underwriter, and each person who
controls the Company within the meaning of either the Act or the Exchange Act, each officer of the Company who
shall have signed the Registration Statement and each director of the Company shall have the same rights to
contribution as the Company, subject in each case to the applicable terms and conditions of this paragraph (d).
9. Default by an Underwriter. If any one or more Underwriters shall fail to purchase and pay for any of
the Securities agreed to be purchased by such Underwriter or Underwriters hereunder and such failure to purchase
shall constitute a default in the performance of its or their obligations under this Agreement, the remaining
Underwriters shall be obligated severally to take up and pay for (in the respective proportions which the amount
of Securities set forth opposite their names in Schedule I hereto bears to the aggregate amount of Securities set
forth opposite the names of all the remaining Underwriters) the Securities which the defaulting Underwriter or
Underwriters agreed but failed to purchase; provided, however, that in the event that the aggregate amount of
Securities which the defaulting Underwriter or Underwriters agreed but failed to purchase shall exceed 10% of the
principal amount of Securities set forth in Schedule I hereto, the remaining Underwriters shall have the right to
purchase all, but shall not be under any obligation to purchase any, of the Securities, and if such nondefaulting
Underwriters do not purchase all the Securities, this Agreement will terminate without liability to any
nondefaulting Underwriter or the Company. In the event of a default by any Underwriter as set forth in this
Section 9, the Closing Date shall be postponed for such period, not exceeding five Business Days, as the
Representatives shall determine in order that the required changes in the Registration Statement and the
Prospectus or in any other documents or arrangements may be effected. Nothing contained in this Agreement shall
relieve any defaulting Underwriter of its liability, if any, to the Company and any nondefaulting Underwriter for
damages occasioned by its default hereunder.
10. Termination. This Agreement shall be subject to termination in the absolute discretion of the
Representatives, by notice given to the Company prior to delivery of and payment for the Securities, if at any
time prior to such time (i) trading in the Company's Common Stock shall have been suspended by the Commission or
the New York Stock Exchange or trading in securities generally on the New York Stock Exchange shall have been
suspended or limited or minimum prices shall have been established on such Exchange, (ii) a banking moratorium
shall have been declared either by Federal or New York State authorities or (iii) there shall have occurred any
outbreak or escalation of hostilities, declaration by the United States of a national emergency or war, or other
calamity or crisis the effect of which on financial markets is such as to make it, in the sole judgment of the
Representatives, impractical or inadvisable to proceed with the offering or delivery of the Securities as
contemplated by the Prospectus (exclusive of any supplement thereto).
11. Representations and Indemnities to Survive. The respective agreements, representations, warranties,
indemnities and other statements of the Company or its officers and of the Underwriters set forth in or made
pursuant to this Agreement will remain in full force and effect, regardless of any investigation made by or on
behalf of any Underwriter or the Company or any of the officers, directors, employees, agents or controlling
persons referred to in Section 8
Page 18
hereof, and will survive delivery of and payment for the Securities. The provisions of
Sections 7 and 8 hereof shall survive the termination or cancellation of this Agreement.
12. Notices. All communications hereunder will be in writing and effective only on receipt, and, if sent to
the Representatives, will be mailed, delivered or sent by facsimile transmission to the Xxxxxx Brothers Inc., 000
Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Debt Capital Markets - Power Group (fax no. (212)
000-0000), and confirmed to the General Counsel, Xxxxxx Brothers Inc., 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000, Attention: General Counsel, if sent to the Company, will be mailed, delivered or sent by facsimile
transmission to Southern California Edison Company, Assistant Treasurer, 0000 Xxxxxx Xxxxx Xxx., Xxxxxxxx, XX
00000 (fax no. (000) 000-0000) and confirmed to the attention of the General Counsel at the same address, c/o
Xxxxxxx Xxxxxxx (fax no. (000) 000-0000).
13. Successors. This Agreement will inure to the benefit of and be binding upon the parties hereto and
their respective successors and the officers, directors, employees, agents and controlling persons referred to in
Section 8 hereof, and no other person will have any right or obligation hereunder.
14. Applicable Law. This Agreement will be governed by and construed in accordance with the laws of the
State of New York applicable to contracts made and to be performed within the State of New York.
15. Counterparts. This Agreement may be signed in one or more counterparts, each of which shall constitute
an original and all of which together shall constitute one and the same agreement.
16. Headings. The section headings used herein are for convenience only and shall not affect the
construction hereof.
17. Definitions. The terms which follow, when used in this Agreement, shall have the meanings indicated.
"Act" shall mean the Securities Act of 1933, as amended, and the rules and regulations of the
Commission promulgated thereunder.
"Business Day" shall mean any day other than a Saturday, a Sunday or a legal holiday or a day
on which banking institutions or trust companies are authorized or obligated by law to close in New York
City.
"Commission" shall mean the Securities and Exchange Commission.
"Effective Date" shall mean each date and time that the Registration Statement, any
post-effective amendment or amendments thereto and any Rule 462(b) Registration Statement became or
become effective.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended, and the rules and
regulations of the Commission promulgated thereunder.
Page 18
"Execution Time" shall mean the date and time that this Agreement is executed and delivered by
the parties hereto.
"Material Adverse Effect" shall mean, with respect to the Company, any effect that is
materially adverse to the condition (financial or otherwise), prospects, earnings, business or
properties of the Company and its subsidiaries, taken as a whole, whether or not arising from
transactions in the ordinary course of business.
"Preliminary Prospectus" shall mean any preliminary prospectus referred to in paragraph 1(a)
above and any preliminary prospectus included in the Registration Statement at the Effective Date that
omits Rule 430A Information.
"Prospectus" shall mean the prospectus relating to the Securities that is first filed pursuant
to Rule 424(b) after the Execution Time or, if no filing pursuant to Rule 424(b) is required, shall mean
the form of final prospectus relating to the Securities included in the Registration Statement at the
Effective Date.
"Registration Statement" shall mean the registration statement referred to in paragraph 1(a)
above, including exhibits and financial statements, as amended at the Execution Time (or, if not
effective at the Execution Time, in the form in which it shall become effective) and, in the event any
post-effective amendment thereto or any Rule 462(b) Registration Statement becomes effective prior to
the Closing Date, shall also mean such registration statement as so amended or such Rule 462(b)
Registration Statement, as the case may be. Such term shall include any Rule 430A Information deemed to
be included therein at the Effective Date as provided by Rule 430A.
"Rule 424", "Rule 430A" and "Rule 462" refer to such rules under the Act.
"Rule 430A Information" shall mean information with respect to the Securities and the offering
thereof permitted to be omitted from the Registration Statement when it becomes effective pursuant to
Rule 430A.
"Rule 462(b) Registration Statement" shall mean a registration statement and any amendments
thereto filed pursuant to Rule 462(b) relating to the offering covered by the registration statement
referred to in Section 1(a) hereof.
Page 19
If the foregoing is in accordance with your understanding of our agreement, please sign and
return to us the enclosed duplicate hereof, whereupon this letter and your acceptance shall represent a binding
agreement among the Company and the several Underwriters.
Very truly yours,
SOUTHERN CALIFORNIA EDISON COMPANY
By: /s/ Xxxx X. Xxxxxxx
---------------------------------------
Name: Xxxx X. Xxxxxxx
Title: Assistant Treasurer
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
XXXXXX BROTHERS INC.
By: /s/ Xxxx Xxxxxxx
----------------------------------
Name: Xxxx Xxxxxxx
Title: Managing Director
CITIGROUP GLOBAL MARKETS INC.
By: /s/ Xxxxxx Xxxxxxxx
---------------------------------------
Name: Xxxxxx Xxxxxxxx
Title: Director
For themselves and the other
several Underwriters named in
Schedule I to the foregoing
Agreement.
Page
SCHEDULE I
----------
Number of Securities to
be
Underwriter Purchased
Xxxxxx Brothers Inc............................................ 1,600,000
Citigroup Global Markets Inc................................... 1,600,000
Credit Suisse First Boston LLC................................. 200,000
Xxxxxxx, Sachs & Co............................................ 200,000
X.X. Xxxxxx Securities Inc..................................... 200,000
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated............................................ 200,000
---------
Total................................................ 4,000,000
=========
