<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 19, 1994
REGISTRATION STATEMENT NO. 33-
POST-EFFECTIVE AMENDMENT NO. 1 TO REGISTRATION STATEMENT NO. 33-44327
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT AND POST-EFFECTIVE AMENDMENT NO. 1
UNDER THE SECURITIES ACT OF 1933
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EL PASO NATURAL GAS COMPANY
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
DELAWARE 74-0608280
(State or other jurisdiction of incorporation or (I.R.S. Employer Identification No.)
organization)
BRITTON WHITE, JR.
SENIOR VICE PRESIDENT AND GENERAL COUNSEL
ONE PAUL KAYSER CENTER ONE PAUL KAYSER CENTER
100 NORTH STANTON STREET 100 NORTH STANTON STREET
EL PASO, TEXAS 79901 EL PASO, TEXAS 79901
(915) 541-2600 (915) 541-2600
(Address, including zip code, and telephone number, (Name, address, including zip code, and telephone
including area code, of registrant's principal number, including area code, of agent for service)
executive offices)
</TABLE>
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Copies to:
ARNOLD H. TRACY, ESQ.
MUDGE ROSE GUTHRIE ALEXANDER & FERDON
180 MAIDEN LANE
NEW YORK, NEW YORK 10038
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Approximate date of commencement of proposed sale to the public: From time
to time after the effective date of this Registration Statement, as determined
in light of market conditions and other factors.
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If the only securities being registered on this form are to be offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. /X/
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CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
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PROPOSED
PROPOSED MAXIMUM
MAXIMUM AGGREGATE AMOUNT OF
TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING PRICE PER OFFERING REGISTRATION
SECURITIES TO BE REGISTERED REGISTERED UNIT(1)(2)(3) PRICE(1)(2)(3) FEE(1)
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<S> <C> <C> <C> <C>
Debt Securities..................
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Preferred Stock..................
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Common Stock.....................
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Total............................ $375,000,000 100% $375,000,000 $129,311.25
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</TABLE>
(1) There are being registered hereunder such presently indeterminate principal
amount or number of Debt Securities, shares of Preferred Stock and shares of
Common Stock with an aggregate initial offering price not to exceed
$375,000,000. Pursuant to Rule 457(o) under the Securities Act of 1933 which
permits the registration fee to be calculated on the basis of the maximum
offering price of all securities listed, the table does not specify by each
class information as to the amount to be registered, proposed maximum
offering price per unit or proposed maximum aggregate offering price.
(2) Estimated solely for the purpose of determining the registration fee.
(3) Exclusive of accrued interest and dividends, if any.
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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933, OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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* Pursuant to Rule 429 under the Securities Act of 1933, the Prospectus included
in this registration statement is a combined prospectus relating also to
Registration Statement No. 33-44327 previously filed by El Paso Natural Gas
Company on Form S-3 and declared effective. This registration statement, which
is a new registration statement, also constitutes Post-Effective Amendment No.
1 to Registration Statement No. 33-44327 and such Post-Effective Amendment No.
1 shall hereafter become effective concurrently with the effectiveness of this
registration statement and in accordance with Section 8(c) of the Securities
Act of 1933. This registration statement and the registration statement
amended hereby are collectively referred to herein as the "Registration
Statement."
<PAGE> 2
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor
may offers to buy be accepted prior to the time the registration statement
becomes effective. This prospectus shall not constitute an offer to sell
or the solicitation of an offer to buy nor shall there be any sale of
these securities in any State in which such offer, solicitation or sale
would be unlawful prior to registration or qualification under the
securities laws of any such State.
SUBJECT TO COMPLETION DATED AUGUST 19, 1994
PROSPECTUS
EL PASO NATURAL GAS COMPANY
DEBT SECURITIES
PREFERRED STOCK
COMMON STOCK
------------------------
El Paso Natural Gas Company ("EPG") may offer and sell from time to time in
one or more series its (i) unsecured debt securities consisting of notes,
debentures, or other evidences of indebtedness (the "Debt Securities"), (ii)
shares of preferred stock, $.01 par value (the "Preferred Stock"), and (iii)
shares of common stock, $3.00 par value (the "Common Stock"). The Debt
Securities, the Preferred Stock, and the Common Stock offered hereby are
collectively hereinafter referred to as the "Securities." The Securities will be
limited to an aggregate initial public offering price not to exceed
$400,000,000, or, in the case of Debt Securities, the equivalent thereof in one
or more foreign currencies, including composite currencies. The Securities may
be offered, separately or together, in separate series, in amounts, at prices,
and on terms to be determined at the time of sale and set forth in a supplement
to this Prospectus (a "Prospectus Supplement").
Certain specific terms of the particular Securities in respect of which
this Prospectus is being delivered will be set forth in a related Prospectus
Supplement, including where applicable, in the case of Debt Securities, the
specific designation, aggregate principal amount, authorized denominations,
maturities, interest rate or rates (which may be fixed or variable), the date or
dates on which interest, if any, shall be payable, the place or places where
principal of and premium, if any, and interest, if any, on such Debt Securities
of the series will be payable, terms of optional or mandatory redemption or any
sinking fund or analogous provisions, currency or currencies, or currency unit
or currency units of denomination and payment if other than U.S. dollars, the
initial public offering price, terms relating to temporary or permanent global
securities, provisions regarding convertibility, if any, provisions regarding
registration of transfer or exchange, the proceeds to EPG, and other special
terms; and, in the case of Preferred Stock, the specific designations, the
number of shares, dividend rights (including, if applicable, the manner of
calculation thereof), and any liquidation, redemption, conversion, voting and
other rights, the initial public offering price, and other special terms.
The Securities may be offered and sold to or through underwriters, dealers,
or agents as designated from time to time, or through a combination of such
methods and also may be offered and sold directly to one or more other
purchasers. See "Plan of Distribution." The names of, and the principal amounts
or number of shares to be purchased by, underwriters, dealers, or agents and the
compensation of such underwriters, dealers, or agents, including any applicable
fees, commissions, and discounts, will be set forth in the related Prospectus
Supplement. No Securities may be sold without delivery of a Prospectus
Supplement describing such series or issue of Securities and the method and
terms of offering thereof.
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
THE DATE OF THIS PROSPECTUS IS , 1994
<PAGE> 3
AVAILABLE INFORMATION
EPG is subject to the informational requirements of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), and, in accordance therewith,
files reports, proxy statements, and other information with the Securities and
Exchange Commission (the "Commission"). Such reports, proxy statements, and
other information may be inspected and copied at the public reference facilities
maintained by the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549,
and at the following Regional Offices of the Commission: 7 World Trade Center,
New York, New York 10048; and 500 West Madison Street, Chicago, Illinois
60661-2511. Copies of such material may also be obtained at prescribed rates
from the Public Reference Section of the Commission, 450 Fifth Street, N.W.,
Washington, D.C. 20549. EPG's Common Stock is listed on the New York Stock
Exchange, and reports, proxy statements, and other information concerning EPG
can be inspected at the offices of the New York Stock Exchange, 20 Broad Street,
New York, New York 10005.
This Prospectus does not contain all of the information set forth in the
Registration Statement, of which this Prospectus is a part, filed with the
Commission under the Securities Act of 1933, as amended (the "Act"). Reference
is made to such Registration Statement for further information with respect to
EPG and the Securities offered hereby. Statements contained herein concerning
the provisions of documents are necessarily summaries of such documents, and
each statement is qualified in its entirety by reference to the copy of the
applicable document filed with the Commission.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents heretofore filed with the Commission by EPG
pursuant to the Exchange Act are incorporated herein by reference:
(a) Annual Report on Form 10-K for the fiscal year ended December 31,
1993;
(b) Quarterly Reports on Form 10-Q for the quarters ended March 31,
1994 and June 30, 1994; and
(c) Current Report on Form 8-K, dated March 29, 1994.
All documents filed by EPG pursuant to Sections 13(a), 13(c), 14, or 15(d)
of the Exchange Act subsequent to the date of this Prospectus and prior to the
termination of the offering of the Securities offered hereby shall be deemed to
be incorporated by reference in this Prospectus and to be part hereof from the
date of filing of such documents. Any statement contained in a document
incorporated or deemed to be incorporated by reference herein shall be deemed to
be modified or superseded for purposes of this Prospectus to the extent that a
statement contained herein or in any other subsequently filed document which
also is or is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of this
Prospectus.
EPG will provide without charge to each person, including any beneficial
owner, to whom a copy of this Prospectus is delivered, upon written or oral
request of such person, a copy of any or all documents incorporated by reference
in this Prospectus (other than exhibits to such documents unless such exhibits
are specifically incorporated by reference into such documents). Written
requests for such copies should be directed to the Vice President, Investor and
Public Relations, El Paso Natural Gas Company, One Paul Kayser Center, 100 North
Stanton Street, El Paso, Texas 79901 (telephone (915) 541-2600).
2
<PAGE> 4
EL PASO NATURAL GAS COMPANY
EPG, incorporated in Delaware in 1928, owns and operates one of the
nation's largest field and mainline natural gas transmission systems, connecting
gas supply regions in New Mexico, Texas, Oklahoma, and Colorado to markets in
California, Nevada, Arizona, New Mexico, Texas, and northern Mexico.
EPG is directly connected to three of the nation's most prolific gas
producing areas -- the San Juan, Permian, and Anadarko Basins. During 1993, EPG
delivered 1.3 trillion cubic feet of natural gas, accounting for approximately
seven percent of estimated total 1993 United States consumption.
EPG's system consists of approximately 17,000 miles of pipeline with 77
mainline compressor stations having an aggregate installed horsepower of
approximately 1.1 million. The system's present natural gas delivery capacity to
California and East-of-California markets is approximately 4.6 billion cubic
feet per day ("Bcf/d").
EPG's present capacity to deliver natural gas to California, the second
largest natural gas market in the United States, is approximately 3.3 Bcf/d.
EPG's system currently provides 48 percent of the total interstate pipeline
capacity serving the state. In 1993, EPG delivered approximately 43 percent of
all the natural gas consumed in California.
EPG is the principal interstate natural gas transmission system serving
Arizona, including the cities of Phoenix and Tucson; southern Nevada, including
Las Vegas; New Mexico; and El Paso, Texas. EPG's East-of-California market also
includes deliveries to the cities of Ciudad Juarez, Cananea, and Hermosillo, in
northern Mexico, and the Samalayuca Power Plant outside of Ciudad Juarez. EPG's
delivery capacity to East-of-California markets is approximately 1.3 Bcf/d.
Since the late 1980s, in response to changing market demands, EPG has been
delivering substantial quantities of gas from the San Juan Basin to
interconnecting pipelines for ultimate redelivery to off-system markets on the
Gulf Coast and in the Midwest. This alternate routing has been effectuated by
exchanges between EPG and interconnecting pipelines. Volumes of gas which an
interconnecting pipeline is otherwise scheduled to deliver to EPG for redelivery
in EPG's traditional markets are traded for like volumes of San Juan gas which
EPG has accepted for delivery to the interconnecting pipeline. With EPG's 1992
completion of a system modification which made an existing pipeline segment
linking the San Juan Basin and Permian Basin bi-directional, total delivery
capacity to off-system markets east of EPG's system can be as high as 1.1 Bcf/d
depending on the level of demand elsewhere on EPG's system. Although its
contributions to revenues and earnings are still comparatively small, off-system
deliveries represent a strategic long-term diversification of EPG's market base.
Presently, EPG is the largest provider of access to off-system markets for San
Juan Basin producers.
The principal executive offices of EPG are located at One Paul Kayser
Center, 100 North Stanton Street, El Paso, Texas 79901 (telephone (915)
541-2600).
USE OF PROCEEDS
Unless otherwise specified in the applicable Prospectus Supplement, the net
proceeds from the sale of the Securities will be used for general corporate
purposes.
3
<PAGE> 5
RATIO OF EARNINGS TO FIXED CHARGES AND RATIO OF
EARNINGS TO COMBINED FIXED CHARGES AND
PREFERRED AND PREFERENCE STOCK DIVIDEND REQUIREMENTS
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
JUNE 30, YEAR ENDED DECEMBER 31,
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1994 1993 1993 1992 1991 1990 1989
---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Ratio of Earnings to Fixed Charges and
Ratio of Earnings to Combined Fixed
Charges and Preferred and Preference
Stock Dividend Requirements............ 2.92x 3.40x 3.04x 2.73x 2.86x 2.41x 2.83x
</TABLE>
The ratio of earnings to combined fixed charges and preferred and
preference stock dividend requirements for the periods presented is the same as
the ratio of earnings to fixed charges since EPG has no outstanding preferred
stock or preference stock and, therefore, no dividend requirements.
For purposes of calculating these ratios: (i) "fixed charges" represent
interest expense (exclusive of interest on rate refunds), amortization of debt
costs, and the portion of rental expense representing the interest factor, and
(ii) "earnings" represent the aggregate of income from continuing operations
before income taxes, interest expense (exclusive of interest on rate refunds),
amortization of debt costs, and the portion of rental expense representing the
interest factor.
For the six months ended June 30, 1994, excluding the $0.33 per share
special charge recorded in the first quarter of 1994 to cover EPG's potential
exposure resulting from a judicial decision in favor of Amoco Production
Company, the ratios would have been 3.71.
DESCRIPTION OF DEBT SECURITIES
GENERAL
The Debt Securities offered hereby will represent unsecured obligations of
EPG. The Debt Securities offered hereby will be issued under an Indenture, dated
as of January 1, 1992 (the "Indenture"), between EPG and Citibank, N.A., as
trustee (the "Trustee"). The Indenture does not limit the aggregate principal
amount of debt securities that may be issued thereunder from time to time in one
or more series. The statements under this caption are brief summaries of certain
provisions contained in the Indenture, do not purport to be complete, and are
subject to, and are qualified in their entirety by reference to, all of the
provisions of the Indenture, including the definitions therein of certain terms,
a copy of which is incorporated by reference as an exhibit to the Registration
Statement of which this Prospectus is a part.
Reference is made to the Prospectus Supplement relating to the particular
series offered thereby for the terms of such Debt Securities, including where
applicable: (a) the form and title of the Debt Securities; (b) the aggregate
principal amount of the Debt Securities; (c) the date or dates on which the Debt
Securities may be issued; (d) the date or dates on which the principal of and
premium, if any, on the Debt Securities shall be payable; (e) the rate or rates
(which may be fixed or variable) at which the Debt Securities shall bear
interest, if any, and the date or dates from which such interest shall accrue;
(f) the dates on which such interest shall be payable and the record dates for
the interest payment dates; (g) the place or places where the principal of and
premium, if any, and interest, if any, on the Debt Securities of the series will
be payable; (h) the period or periods, if any, within which, the price or prices
at which, and the terms and conditions upon which, the Debt Securities may be
redeemed at the option of EPG or otherwise; (i) any optional or mandatory
redemption or any sinking fund or analogous provisions; (j) if other than
denominations of $1,000 and integral multiples thereof, the denominations in
which the Debt Securities of the series shall be issuable; (k) if other than the
principal amount thereof, the portion of the principal amount of the Debt
Securities which shall be payable upon declaration of the acceleration of the
maturity thereof in accordance with the provisions of the Indenture; (l) whether
payment of the principal of, premium, if any, and interest, if any, on the Debt
4
<PAGE> 6
Securities shall be with or without deduction for taxes, assessments, or
governmental charges, and with or without reimbursement of taxes, assessments,
or governmental charges paid by the holders; (m) the currency or currencies, or
currency unit or currency units, in which the principal of, premium, if any, and
interest, if any, on the Debt Securities shall be denominated, payable,
redeemable, or purchasable, as the case may be; (n) any Events of Default with
respect to the Debt Securities that differ from those set forth in the
Indenture; (o) whether the Debt Securities will be convertible; (p) whether the
Debt Securities of such series shall be issued as a global certificate or
certificates and, in such case, the identity of the depositary for such series;
and (q) any other terms not inconsistent with the Indenture. (Section 3.01)
If any Debt Securities offered hereby are sold for foreign currencies or
foreign currency units or if the principal of or interest, if any, on any series
of Debt Securities is payable in foreign currencies or foreign currency units,
the restrictions, elections, tax consequences, specific terms, and other
information with respect to such issue of Debt Securities and such currencies
and currency units will be set forth in the Prospectus Supplement relating
thereto.
Unless otherwise indicated in the Prospectus Supplement relating thereto,
the Debt Securities offered hereby will be issued only in fully registered form
in denominations of $1,000 or any integral multiple thereof. The Debt Securities
of a series may be issuable in the form of one or more global certificates,
which will be denominated in an amount equal to all or a portion of the
aggregate principal amount of such Debt Securities. See "Global Debt Securities"
below.
One or more series of Debt Securities offered hereby may be sold at a
substantial discount below their stated principal amount, bearing no interest or
interest at a rate that at the time of issuance is below market rates. The
Federal income tax consequences and special considerations applicable to any
such series of Debt Securities will be generally described in the Prospectus
Supplement relating thereto.
GLOBAL DEBT SECURITIES
The Debt Securities of a series may be issued in whole or in part in the
form of one or more global certificates that will be deposited with, or on
behalf of, a depositary (the "Depositary") identified in the Prospectus
Supplement relating to such series. Unless and until such global certificate or
certificates are exchanged in whole or in part for Debt Securities in
individually certificated form, a global Debt Security may not be transferred
except as a whole to a nominee of the Depositary for such global Debt Security,
or by a nominee for the Depositary to the Depositary, or to a successor of the
Depositary or a nominee of such successor.
The specific terms of the depositary arrangement with respect to a series
of Debt Securities and the rights of, and limitations on, owners of beneficial
interests in a global Debt Security representing all or a portion of a series of
Debt Securities will be described in the Prospectus Supplement relating to such
series.
CERTAIN COVENANTS
Limitation on Liens. The Indenture provides that EPG will not, nor will it
permit any Subsidiary to, create, assume, incur, or suffer to exist any Mortgage
upon any Principal Property, whether owned or leased on the date of the
Indenture or thereafter acquired, to secure any Debt of EPG or any other Person
(as defined below) (other than the Debt Securities issued thereunder), without
in any such case making effective provision whereby all of the Debt Securities
Outstanding thereunder shall be directly secured equally and ratably with such
Debt. The Indenture defines "Principal Property" as (i) any pipeline assets of
EPG or any Subsidiary, including any related facilities employed in the
transportation, distribution, or marketing of natural gas; and (ii) any
processing plant owned or leased by EPG or any Subsidiary and located within the
United States or Canada, except any such assets or plant which, in the opinion
of EPG's Board of Directors, are not Principal Properties in relation to the
activities of EPG and its Subsidiaries as a whole. There is excluded from this
restriction (i) any Mortgage upon property owned or leased by any corporation
existing at the time such corporation becomes a Subsidiary; (ii) any Mortgage
upon property existing at the time of acquisition of such property; (iii) any
Mortgage to secure payment of any part of the purchase price of property or to
secure any Debt incurred prior to, at the time of, or within 180 days after the
acquisition of such property to finance the
5
<PAGE> 7
purchase price thereof; (iv) any Mortgage upon property to secure all or any
part of the cost of construction, alteration, repair, or improvement of all or
any part of such property, or Debt incurred prior thereto, at the time thereof,
or within 180 days thereafter or commencement of full operations on such
property to finance such cost; (v) any Mortgage securing Debt of a Subsidiary
owing to EPG or to another Subsidiary; (vi) any Mortgage existing on the date of
the Indenture; and (vii) any extension, renewal, or replacement (or successive
extensions, renewals, or replacements) in whole or in part of any Mortgage
(without increase in principal amount secured or the amount of property subject
to any Mortgage). Notwithstanding the foregoing, under the Indenture EPG may,
and may permit any Subsidiary to, create, assume, incur, or suffer to exist any
Mortgage upon any Principal Property that is not excepted by clauses (i) through
(vii) above without equally and ratably securing the Debt Securities issued
thereunder, provided that the aggregate amount of all Debt then outstanding
thereunder secured by such Mortgage and all similar Mortgages, together with all
net sale proceeds from Sale-Leaseback Transactions (as defined below), does not
exceed 10% of the total consolidated stockholders' equity of EPG as shown on the
audited consolidated balance sheet contained or incorporated by reference in
EPG's latest Annual Report on Form 10-K. For the purpose of this restriction,
the Indenture provides that no Mortgage to secure any Debt will be deemed
created by any Mortgage in favor of the United States of America or any state
thereof, or any other country, or any political subdivision thereof, to secure
partial, progress, advance, or other payments pursuant to any contract or
statute, or any Mortgage securing industrial development, pollution control, or
similar revenue bonds. (Section 10.04) The Indenture defines "Mortgage" as any
mortgage, pledge, lien, charge, security interest, conditional sale, or other
title retention agreement or other similar encumbrance, and "Debt" as
indebtedness for money borrowed.
Restriction on Sale-Leasebacks. The Indenture provides that EPG will not,
nor will it permit any Subsidiary to, sell or transfer any Principal Property
with EPG or any Subsidiary taking back a lease of such Principal Property (a
"Sale-Leaseback Transaction"), unless (i) such Sale-Leaseback Transaction occurs
within 180 days from the date of acquisition of such Principal Property or the
date of the completion of construction or commencement of full operations on
such Principal Property, whichever is later; or (ii) EPG, within 120 days after
such Sale-Leaseback Transaction, applies or causes to be applied to the
retirement of Funded Debt (as hereinafter defined) of EPG or any Subsidiary
(other than Funded Debt of EPG which by its terms or the terms of the instrument
pursuant to which it was issued is subordinate in right of payment to the Debt
Securities issued thereunder) an amount not less than the net proceeds of the
sale of such Principal Property. Notwithstanding the foregoing, the Indenture
provides that EPG may, and may permit any Subsidiary to, effect any
Sale-Leaseback Transaction involving any Principal Property, provided that (a)
the net sale proceeds from such Sale-Leaseback Transaction, together with all
Debt secured by Mortgages not excepted by clauses (i) through (vii) above, do
not exceed 10% of the total consolidated stockholders' equity of EPG as shown on
the audited consolidated balance sheet contained or incorporated by reference in
EPG's latest Annual Report on Form 10-K, or (b) the Sale-Leaseback Transaction
involves a lease for a period, including renewals, of not more than 36 months.
(Section 10.04) The Indenture defines "Funded Debt" as all Debt maturing one
year or more from the date of the creation thereof, all Debt directly or
indirectly renewable or extendible, at the option of the debtor, by its terms or
by the terms of any instrument or agreement relating thereto, to a date one year
or more from the date of the creation thereof, and all Debt under a revolving
credit or similar agreement obligating the lender or lenders to extend credit
over a period of one year or more.
CONSOLIDATION, MERGER, CONVEYANCE, OR TRANSFER
The Indenture provides that EPG may, without the consent of the Trustee or
the holders of Debt Securities issued thereunder, consolidate with or merge
into, or convey, transfer, or lease its properties and assets substantially as
an entirety to, any Person, provided that such successor Corporation (as defined
below) is a Corporation organized and existing under the laws of the United
States, any state thereof or the District of Columbia, and such successor
Corporation expressly assumes all obligations of EPG under the related Debt
Securities, and that immediately after giving effect to such transaction no
Event of Default (as defined below), or event which, after notice or lapse of
time, or both, would become an Event of Default, shall have occurred and be
continuing and that certain other conditions are met, and thereafter, except in
the case of a lease, EPG shall be relieved of all obligations thereunder.
(Article Eight) The Indenture defines "Person" as any individual, corporation,
partnership, joint venture, association, joint-stock company, trust,
unincorporated
6
<PAGE> 8
organization, or government or any agency or political subdivision thereof, and
"Corporation" to include corporations, associations, companies, and business
trusts.
EVENTS OF DEFAULT
An Event of Default will occur under the Indenture with respect to Debt
Securities of a particular series issued thereunder if (a) EPG shall fail to pay
when due all or any part of the principal of, or premium, if any, on such series
(whether at maturity or otherwise); (b) EPG shall fail to pay when due any
installment of interest on such series and such default shall continue for a
period of 30 days; (c) EPG shall fail to make, when and as due by the terms of
such series, the deposit of any sinking fund payment; (d) EPG shall fail to
perform or observe any other term, covenant, or agreement contained in the
Indenture or the Debt Securities with respect to such series for a period of 60
days after written notice thereof, as provided in the Indenture; (e) a default
shall occur which involves the failure to pay principal of, or interest, if any,
on, any Debt of EPG or any Subsidiary (including any other series issued
thereunder) in excess of $25 million at the stated maturity thereof, or which
results in the acceleration of Debt of EPG or any Subsidiary in excess of $25
million, and such acceleration shall not have been rescinded, stayed, or
annulled, or such Debt shall not have been discharged within 15 days after a
written notice thereof, as provided in the Indenture; or (f) certain events of
bankruptcy, insolvency, or reorganization shall have occurred. (Section 5.01)
The Indenture provides that (1) if an Event of Default due to the default
in payment of principal, premium, or interest on, a series of Debt Securities
issued thereunder or due to a failure to perform or observe any other term,
covenant, or agreement contained therein with respect to a series of Debt
Securities issued thereunder (but not with respect to all series of Debt
Securities issued thereunder) shall have occurred and be continuing, either the
Trustee or the holders of not less than 25% in aggregate principal amount of
Debt Securities of such series then outstanding thereunder may declare the
principal amount of all Debt Securities of such series to be due and payable
immediately; or (2) if an Event of Default due to a failure to perform or
observe any other term, covenant, or agreement contained in the Indenture with
respect to all series of Debt Securities issued thereunder then outstanding, any
default described in clause (e) in the preceding paragraph and certain events of
bankruptcy, insolvency, and reorganization shall have occurred and be
continuing, either the Trustee or the holders of not less than 25% in aggregate
principal amount of all Debt Securities then outstanding thereunder (treated as
one class) which have not previously become due and payable may declare the
principal amount of all Debt Securities then outstanding thereunder to be due
and payable immediately. Upon certain conditions, the Indenture provides that
such declarations may be annulled by the holders of a majority in aggregate
principal amount of Debt Securities of each series affected (voting as a
separate class) and past defaults may be waived (except a continuing default in
payment of principal of and premium, if any, or interest, if any, on any series
of Debt Securities) by the holders of a majority in aggregate principal amount
of Debt Securities of each series affected (voting as a separate class).
(Sections 5.02 and 5.13)
Pursuant to the Indenture, the holders of a majority in aggregate principal
amount of each affected series of Debt Securities (each series voting as a
separate class) may direct with respect to such series the time, method, and
place of conducting any proceeding for any remedy available to the Trustee or
exercising any trust or power conferred on the Trustee, provided that such
direction shall not be in conflict with any rule of law or the Indenture.
(Section 5.12) Before proceeding to exercise any right or power under the
Indenture with respect to such series at the direction of such holders, the
Trustee shall be entitled to receive from such holders reasonable security or
indemnity against the costs, expenses, and liabilities which might be incurred
by it in compliance with any such direction. (Section 5.14)
Under the terms of the Indenture, EPG is required to furnish to the Trustee
annually a statement of certain officers to the effect that to the best of their
knowledge EPG is not in default in the performance of the terms of the Indenture
or, if they have knowledge that EPG is in default, specifying such default.
(Section 7.04) The Indenture requires the Trustee to give to all holders of Debt
Securities outstanding thereunder notice of any default by EPG, unless such
default shall have been cured or waived; however, except in the case of a
default in the payment of principal of and premium, if any, or interest, if any,
on any Debt Securities outstanding thereunder, the Trustee is entitled to
withhold such notice in the event that the board of directors, the executive
committee, or a trust committee of directors or certain officers of the Trustee
in good
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<PAGE> 9
faith determine that withholding such notice is in the interest of the holders
of such outstanding Debt Securities. (Section 6.02)
SATISFACTION AND DISCHARGE
Under the terms of the Indenture, under arrangements reasonably
satisfactory to the Trustee, EPG may discharge certain obligations to holders of
Debt Securities of any series which have not already been delivered to the
Trustee for cancellation and which have either become due and payable or are by
their terms due and payable within one year or are to be called for redemption
within one year by irrevocably depositing or causing to be irrevocably deposited
with the Trustee (or an escrow agent satisfactory to the Trustee) funds in an
amount sufficient to pay at maturity the principal of and interest, if any, on
such series of Debt Securities. (Section 4.01)
The Indenture also provides that EPG will be discharged from obligations in
respect of any series of Debt Securities issued thereunder (including its
obligation to comply with the provisions referred to under "Certain Covenants,"
if applicable, but excluding certain other obligations, such as the obligation
to pay principal of and interest, if any, on the Debt Securities of such series
then outstanding, obligations of EPG in the event of acceleration following
default under clause (e) referred to above under "Events of Default" and
obligations to register the transfer or exchange of such outstanding Debt
Securities of such series and to replace stolen, lost, or mutilated
certificates) upon the irrevocable deposit, in trust, of cash or U.S. Government
Obligations which through the payment of interest and principal thereof in
accordance with their terms will provide cash in an amount sufficient to pay any
installment of principal of and premium, if any, and interest, if any, on the
outstanding Debt Securities of such series on the stated maturity of such
payments in accordance with the terms of the Indenture and the outstanding Debt
Securities of such series, provided that EPG has received an opinion of counsel
or a favorable ruling of the Internal Revenue Service to the effect that such a
discharge will not be deemed, or result in, a taxable event with respect to
holders of the outstanding Debt Securities of such series and that certain other
conditions are met. (Section 4.01)
CHANGES IN CONTROL AND HIGHLY LEVERAGED TRANSACTIONS
The Indenture does not contain provisions requiring redemption of the Debt
Securities issued thereunder, or adjustment to any terms of such Debt
Securities, upon any change in control of EPG.
Other than restrictions on Mortgages and Sale-Leaseback Transactions
described under "Certain Covenants" above, the Indenture does not contain any
covenant or other provisions designed to afford holders of the Debt Securities
issued thereunder protection in the event of a highly leveraged transaction
involving EPG.
MODIFICATION OF THE INDENTURE
The Indenture provides that EPG and the Trustee may enter into supplemental
indentures without the consent of the holders of Debt Securities issued
thereunder to: (a) secure any of such Debt Securities, (b) evidence the
assumption by a successor corporation of the obligations of EPG, (c) add
covenants and Events of Default for the protection of the holders of all or any
particular series of such Debt Securities, (d) change or eliminate any of the
provisions of the Indenture, provided that any such change or elimination shall
become effective only after there are no such Debt Securities of any series
entitled to the benefit of such provision outstanding, (e) establish the forms
or terms of the Debt Securities of any series issued thereunder, (f) cure any
ambiguity or correct any inconsistency in the Indenture, and (g) evidence the
acceptance of appointment by a successor trustee. (Sections 3.01 and 9.01)
The Indenture also contains provisions permitting EPG and the Trustee, with
the consent of the holders of not less than a majority in principal amount of
all series of Debt Securities then outstanding thereunder (each such series
voting as a separate class) affected thereby, to add any provisions to, or
change in any manner or eliminate any of the provisions of, the Indenture, or
modify in any manner the rights of the holders of such Debt Securities, provided
that EPG and the Trustee may not, without the consent of the holder of each
outstanding Debt Security affected thereby, (a) change the stated maturity of,
the principal of, or
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<PAGE> 10
premium, if any, on or any installment of principal of or interest, if any, on
any Debt Security, reduce the principal amount thereof, reduce the rate of
interest thereon, change the place of payment where, or the coin or currency in
which, interest is payable, or impair the right to institute suit for the
enforcement of any such payment when due, or (b) reduce the percentage in
principal amount of Debt Securities required for any such modification. (Section
9.02)
APPLICABLE LAW
The Indenture is, and the Debt Securities offered hereby will be, governed
by, and construed in accordance with, the laws of the State of New York.
(Section 1.13)
CONCERNING THE TRUSTEE
Citibank, N.A. is currently the Trustee under the Indenture under which EPG
issued its 6.90% Notes due 1997, 7 3/4% Notes due 2002, and 8 5/8% Debentures
due 2022. EPG maintains various banking relationships with Citibank, N.A. in the
ordinary course of business. Citibank is also the trustee under indentures with
EPG dated as of March 1, 1987 and August 1, 1987, each of which has been amended
by a First Supplemental Indenture thereto, dated as of December 24, 1991, under
which EPG issued its 8 5/8% Debentures due 2012 and 9.45% Notes due 1999,
respectively.
DESCRIPTION OF CAPITAL STOCK
The statements under this caption are brief summaries, do not purport to be
complete, and are subject to, and are qualified in their entirety by reference
to, the more complete descriptions contained in (a) EPG's Restated Certificate
of Incorporation, as amended, and the Shareholder Rights Agreement, dated as of
July 7, 1992, between EPG and The First National Bank of Boston, as Rights Agent
(the "Shareholder Rights Agreement"), copies of which are incorporated by
reference as exhibits to the Registration Statement of which this Prospectus is
a part, and (b) the certificate of designation relating to each series of
Preferred Stock, which will be filed with the Commission at, or prior to, the
time of the offering of such series of Preferred Stock.
GENERAL
EPG is currently authorized by its Restated Certificate of Incorporation,
as amended, to issue up to 100,000,000 shares of Common Stock and up to
25,000,000 shares of Preferred Stock. The Board of Directors of EPG has
authority to divide the Preferred Stock into one or more series and to fix by
resolution or resolutions any of the designations, powers, preferences and
rights, and the qualifications, limitations, or restrictions of the shares of
each such series, including, but not limited to, dividend rates, conversion
rights, voting rights, terms of redemption and liquidation preferences, and the
number of shares constituting each such series, without any further vote or
action by the stockholders of EPG.
COMMON STOCK
EPG is authorized by its Restated Certificate of Incorporation, as amended,
to issue up to 100,000,000 shares of Common Stock. The holders of Common Stock
are entitled to one vote for each share held of record on all matters submitted
to a vote of stockholders. Subject to preferences that may be applicable to any
outstanding Preferred Stock, holders of Common Stock are entitled to receive
ratably such dividends as may be declared by the Board of Directors of EPG out
of funds legally available therefor. In the event of a liquidation, dissolution,
or winding up of EPG, holders of Common Stock are entitled to share ratably in
all assets remaining after payment of liabilities and liquidation preference of
any outstanding Preferred Stock. Holders of Common Stock have no preemptive
rights and have no rights to convert their Common Stock into any other
securities. There are no redemption provisions with respect to any shares of
Common Stock. All of the outstanding shares of Common Stock are, and the Common
Stock offered hereby will be, upon issuance against full payment of the purchase
price therefor, fully paid and nonassessable.
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<PAGE> 11
The transfer agent and registrar for EPG's Common Stock is The First
National Bank of Boston.
PREFERRED STOCK
EPG's Board of Directors, without any further action by the stockholders of
EPG, is authorized to issue up to 25,000,000 shares of Preferred Stock, and to
divide the Preferred Stock into one or more series, and to fix by resolution or
resolutions any of the designations, powers, preferences and rights, and
qualifications, limitations, or restrictions of the shares of each series,
including, but not limited to, dividend rates, conversion rights, voting rights,
terms of redemption and liquidation preferences, and the number of shares
constituting each such series. The issuance of Preferred Stock may have the
effect of delaying, deferring, or preventing a change in control of EPG.
Preferred Stock, upon issuance against full payment of the purchase price
therefor, will be fully paid and nonassessable. The specific terms of a
particular series of Preferred Stock will be described in the Prospectus
Supplement relating to that series. The description of Preferred Stock set forth
below and the description of the terms of the particular series of Preferred
Stock set forth in the related Prospectus Supplement do not purport to be
complete and are qualified in their entirety by reference to the certificate of
designation relating to the particular series of Preferred Stock.
The designations, powers, preferences and rights, and qualifications,
limitations, or restrictions of the Preferred Stock of each series will be fixed
by the certificate of designation relating to such series. The Prospectus
Supplement relating to each series will specify the terms of the Preferred Stock
as follows:
(a) The maximum number of shares to constitute the series and the
distinctive designation thereof;
(b) The annual dividend rate, if any, on shares of the series, whether
such rate is fixed or variable or both, the date or dates from which
dividends will begin to accrue or accumulate, and whether dividends will be
cumulative;
(c) The price at and the terms and conditions on which the shares of
the series may be redeemed, including the time during which shares of the
series may be redeemed and any accumulated dividends thereon that the
holders of shares of the series shall be entitled to receive upon the
redemption thereof;
(d) The liquidation preference, if any, and any accumulated dividends
thereon, that the holders of shares of the series shall be entitled to
receive upon the liquidation, dissolution, or winding up of the affairs of
EPG;
(e) Whether or not the shares of the series will be subject to
operation of a retirement or sinking fund, and, if so, the extent and
manner in which any such fund shall be applied to the purchase or
redemption of the shares of the series for retirement or for other
corporate purposes, and the terms and provisions relating to the operation
of such fund;
(f) The terms and conditions, if any, on which the shares of the
series shall be convertible into, or exchangeable for, debt securities,
shares of any other class or classes of capital stock of EPG, or any series
of any other class or classes, or of any other series of the same class,
including the price or prices or the rate or rates of conversion or
exchange and the method, if any, of adjusting the same;
(g) The voting rights, if any, on the shares of the series; and
(h) Any or all other preferences and relative, participating,
operational, or other special rights, qualifications, limitations, or
restrictions thereof.
The Federal income tax consequences and special considerations applicable
to any such series of Preferred Stock will be generally described in the
Prospectus Supplement relating thereto.
As of the date of this Prospectus, no Preferred Stock is outstanding.
Pursuant to the Shareholder Rights Agreement, the Board of Directors of EPG has
designated the Series A Preferred Stock (as hereinafter defined).
SHAREHOLDER RIGHTS AGREEMENT
In July 1992, EPG's Board of Directors declared a dividend distribution of
one right (a "Right") for each share of Common Stock then outstanding. All
shares of Common Stock issued subsequently also include these
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<PAGE> 12
Rights. Under certain conditions, each Right may be exercised to purchase from
EPG one one-hundredth of a share of a series of EPG's Preferred Stock,
designated as Series A Junior Participating Preferred Stock, $.01 par value (the
"Series A Preferred Stock"), at a price of $75 per one one-hundredth of a share,
subject to adjustment.
The Rights are exercisable only if, without the prior consent of EPG's
Board of Directors, a person or group acquires or obtains the right to acquire
beneficial ownership of 15% or more of the voting power of all outstanding
voting securities of EPG or commences or announces a tender or exchange offer,
after consummation of which such person or group would beneficially own 15% or
more of EPG's voting securities. If, after the Rights become exercisable, EPG is
involved in a merger or other business combination transaction in which its
Common Stock is exchanged or changed, or it sells 50% or more of its assets or
earning power, each Right will entitle the holder to purchase, at the Right's
then-current exercise price, common stock of the acquiring company having a
value of twice the exercise price of the Right. In addition, if EPG is involved
in a merger transaction in which EPG is the surviving corporation and its Common
Stock is not changed or exchanged, or in the event that a person becomes the
beneficial owner of securities having 15% or more of the voting power of all
then-outstanding voting securities of EPG, then each Right not owned by such
person will entitle its holder to purchase, at the Right's then-current exercise
price, shares of Common Stock (or in certain circumstances other equity
securities of EPG with at least the same economic value as the Common Stock)
having a market value of twice the Right's then-current exercise price. The
Rights, which have no voting rights, expire no later than July 7, 2002. The
Rights may be redeemed by EPG under certain circumstances prior to their
expiration date at a purchase price of $.01 per Right. It is possible that the
existence of the Rights may have the effect of delaying, deterring, or
preventing a takeover of EPG.
SECTION 203 OF THE DELAWARE GENERAL CORPORATION LAW
EPG is subject to Section 203 of the Delaware General Corporation Law
("Section 203") which restricts certain transactions and business combinations
between a corporation and an interested stockholder (defined in Section 203,
generally, as a person owning 15% or more of a corporation's outstanding voting
stock) for a period of three years from the date such person becomes an
interested stockholder. Subject to certain exceptions, unless the transaction is
approved by the Board of Directors and the holders of at least 66 2/3% of the
outstanding voting stock of the corporation (excluding voting stock held by the
interested stockholder), Section 203 prohibits certain business transactions,
such as a merger with, disposition of assets to, or receipt of disproportionate
financial benefits by the interested stockholder, or any other transaction that
would increase the interested stockholder's proportionate ownership of any class
or series of the corporation's stock. The statutory ban does not apply if, upon
consummation of the transaction in which any person becomes an interested
stockholder, the interested stockholder owns at least 85% of the outstanding
voting stock of the corporation (excluding voting stock held by persons who are
both directors and officers or by certain employee stock plans) or if either the
proposed transaction or the transaction by which the interested stockholder
became such is approved by the board of directors of the corporation prior to
the date such stockholder becomes an interested stockholder.
EPG'S RESTATED CERTIFICATE OF INCORPORATION
EPG's Restated Certificate of Incorporation, as amended, contains
provisions applicable to a merger, consolidation, asset sale, liquidation,
recapitalization, or certain other business transactions, including the issuance
of stock of EPG ("Business Combinations"). The Restated Certificate of
Incorporation, as amended, requires the affirmative vote of 51% or more of the
voting stock of EPG, excluding any voting stock held by an interested
stockholder (defined in the certificate as any person who owns 10% or more of
the voting stock and certain defined affiliates), with respect to all Business
Combinations involving the interested stockholder, unless a minimum price is
received by all stockholders. To meet the minimum price criteria, the
stockholders must receive consideration in or retain value per share after the
transaction which is not less than the price per share paid by the interested
stockholder. Directors who served as such prior to the time the interested
stockholder became an interested stockholder determine by a two-thirds vote
whether the proposed consideration meets the minimum price criteria. The
interested stockholder also must not have received
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<PAGE> 13
(other than proportionately as a stockholder) the benefit of any financial
assistance from EPG, whether in anticipation of or in connection with such
Business Combination. If the interested stockholder holds 80% or more of the
voting stock, the stockholder vote specified above is not required. EPG's
Restated Certificate of Incorporation, as amended, also requires the
dissemination to stockholders of a proxy or information statement describing the
Business Combination.
EPG's Restated Certificate of Incorporation, as amended, also prohibits the
taking of any action by written stockholder consent in lieu of a meeting and the
subsequent amendment of the Restated Certificate of Incorporation, as amended,
to repeal or alter the above provisions without the affirmative vote of 51% of
EPG's voting stock, excluding voting stock held by any interested stockholder.
PLAN OF DISTRIBUTION
EPG may offer or sell Securities to or through one or more underwriters,
dealers, or agents as designated from time to time, or through a combination of
such methods and also may offer or sell the Securities directly to one or more
other purchasers. EPG may sell Securities as soon as practicable after
effectiveness of the Registration Statement.
A Prospectus Supplement will set forth the terms of the offering of the
particular series of Securities offered thereby, including (i) the name or names
of any underwriters or agents; (ii) the initial public offering or purchase
price of such series of Securities; (iii) any underwriting discounts,
commissions, and other items constituting underwriters' compensation and any
other discounts, concessions, or commissions allowed or reallowed or paid by any
underwriters to other dealers; (iv) any commissions paid to any agents; (v) the
net proceeds to EPG from the sales; and (vi) any securities exchanges or markets
on which the Securities may be listed.
Unless otherwise set forth in the Prospectus Supplement relating to a
particular series of Securities, the obligations of the underwriters to purchase
such series of Securities will be subject to certain conditions precedent and
each of the underwriters with respect to such series of Securities will be
obligated to purchase all of the Securities of such series allocated to it if
any such Securities are purchased. Any initial public offering price and any
discounts or concessions allowed, reallowed, or paid to dealers may be changed
from time to time.
The Securities may be offered and sold by EPG directly or through agents
designated by EPG from time to time. Unless otherwise indicated in the related
Prospectus Supplement, each such agent will be acting on a best efforts basis
for the period of its appointment. Any agent participating in the distribution
of Securities may be deemed to be an "underwriter," as that term is defined in
the Act, of the Securities so offered and sold. The Securities also may be sold
to dealers at the applicable price to the public set forth in the Prospectus
Supplement relating to such series of Securities. Such dealers may be deemed to
be "underwriters" within the meaning of the Act. Underwriters, dealers, and
agents may be entitled, under agreements entered into with EPG, to
indemnification by EPG against certain civil liabilities, including liabilities
under the Act.
Underwriters, dealers, and agents may engage in transactions with, or
perform services for, or be customers of, EPG in the ordinary course of
business.
If so indicated in the related Prospectus Supplement relating to a
particular series of Securities, EPG will authorize underwriters, dealers, or
agents to solicit offers by certain institutions to purchase Securities of such
series pursuant to delayed delivery contracts providing for payment and delivery
at a future date. Such contracts will be subject only to those conditions set
forth in the related Prospectus Supplement and such Prospectus Supplement will
set forth the commission payable for solicitation for such contracts.
All Securities offered other than Common Stock will be a new issue of
securities with no established trading market. Any underwriter to whom
Securities are sold by EPG for public offering and sale may make a market in
such Securities, but such underwriters will not be obligated to do so and may
discontinue any market making at any time without notice. The Securities may or
may not be listed on a national securities exchange or a foreign securities
exchange, except that the Common Stock is listed on the New York Stock
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<PAGE> 14
Exchange. Any Common Stock sold pursuant to a Prospectus Supplement will be
listed on the New York Stock Exchange, subject to notice of issuance. No
assurance can be given as to the liquidity of or the trading markets for any
Securities.
LEGAL MATTERS
The validity of the Securities will be passed upon for EPG by Mudge Rose
Guthrie Alexander & Ferdon. If the Securities are being distributed in an
underwritten offering, the validity of the Securities will be passed upon for
the underwriters by counsel identified in the related Prospectus Supplement.
EXPERTS
The consolidated financial statements and financial statement schedules of
EPG as of December 31, 1993 and 1992, and for the years ended December 31, 1993,
1992, and 1991, incorporated by reference in this Prospectus, have been
incorporated herein in reliance on the report of Coopers & Lybrand, independent
accountants, given on the authority of such firm as experts in accounting and
auditing.
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the estimated costs and expenses, other than
selling or underwriting discounts and commissions, to be incurred by EPG in
connection with the issuance and distribution of the Securities being
registered. All amounts shown are estimated except the Commission registration
fee.
<TABLE>
<S> <C>
Securities and Exchange Commission registration fee..................... $129,311.25
Blue Sky expenses, including legal fees................................. 7,500.00
Printing and engraving expenses......................................... 100,000.00
Legal fees and expenses................................................. 85,000.00
Rating agency fees...................................................... 35,000.00
Accounting fees and expenses............................................ 75,000.00
Trustees' fees and expenses............................................. 20,000.00
Miscellaneous........................................................... 3,188.75
-----------
Total......................................................... $455,000.00
===========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the Delaware General Corporation Law provides that a
corporation may indemnify directors and officers as well as other employees and
individuals against expenses (including attorneys' fees), judgments, fines, and
amounts paid in settlement in connection with specified actions, suits, or
proceedings, whether civil, criminal, administrative, or investigative (other
than action by or in the right of the corporation -- a "derivative action"), if
they acted in good faith and in a manner they reasonably believed to be in or
not opposed to the best interests of the corporation and, with respect to any
criminal action or proceeding, had no reasonable cause to believe their conduct
was unlawful. A similar standard is applicable in the case of derivative
actions, except that indemnification only extends to expenses (including
attorneys' fees) incurred in connection with the defense or settlement of such
action, and the statute requires court approval before there can be any
indemnification where the person seeking indemnification has been found liable
to the corporation. The statute provides that it is not exclusive of other
indemnification that may be granted by a corporation's charter, by-laws,
disinterested director vote, stockholder vote, agreement, or otherwise.
Article X of EPG's By-laws requires indemnification to the full extent
permitted under Delaware law as from time to time in effect. Subject to any
restrictions imposed by Delaware law, the By-laws of EPG provide an
unconditional right to indemnification for all expense, liability, and loss
(including attorneys' fees, judgments, fines, ERISA excise taxes, or penalties
and amounts paid in settlement) actually and reasonably incurred or suffered by
any person in connection with any actual or threatened proceeding (including, to
the extent permitted by law, any derivative action) by reason of the fact that
such person is or was serving as a director, officer, or employee of EPG or
that, being or having been such a director or officer or an employee of EPG,
such person is or was serving at the request of EPG as a director, officer,
employee, or agent of another corporation, partnership, joint venture, trust, or
other enterprise, including an employee benefit plan. The By-laws of EPG also
provide that EPG may, by action of its Board of Directors, provide
indemnification to its agents with the same scope and effect as the foregoing
indemnification of directors and officers.
Section 102(b)(7) of the Delaware General Corporation Law permits a
corporation to provide in its certificate of incorporation that a director of
the corporation shall not be personally liable to the corporation or its
stockholders for monetary damages for breach of fiduciary duty as a director,
except for liability for (i) any breach of the director's duty of loyalty to the
corporation or its stockholders, (ii) acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (iii)
payment of unlawful dividends or unlawful stock purchases or redemptions, or
(iv) any transaction from which the director derived an improper personal
benefit.
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<PAGE> 16
Article 10 of EPG's Restated Certificate of Incorporation, as amended,
provides that to the full extent that the Delaware General Corporation Law, as
it now exists or may hereafter be amended, permits the limitation or elimination
of the liability of directors, a director of EPG shall not be liable to EPG or
its stockholders for monetary damages for breach of fiduciary duty as a
director. Any amendment to or repeal of such Article 10 shall not adversely
affect any right or protection of a director of EPG for or with respect to any
acts or omissions of such director occurring prior to such amendment or repeal.
EPG maintains directors' and officers' liability insurance which provides
for payment, on behalf of the directors and officers of EPG and its
subsidiaries, of certain losses of such persons (other than matters uninsurable
under law) arising from claims, including claims arising under the Act, for acts
or omissions by such persons while acting as directors or officers of EPG and/or
its subsidiaries, as the case may be.
Reference is made to exhibits 1.1 through 1.3 hereto, respectively, which
contain provisions for indemnification of EPG, and its directors, officers, and
any controlling persons, against certain liabilities for information furnished
by the underwriters and/or agents, as applicable, expressly for use in the
Prospectus Supplements.
ITEM 16. EXHIBITS.
<TABLE>
<CAPTION>
EXHIBIT NO. EXHIBIT
- ----------------- ------------------------------------------------------------------------
<S> <C>
1.1 -- Form of EPG Debt Securities Underwriting Agreement
1.2 -- Form of EPG Equity Securities Underwriting Agreement
1.3 -- Form of EPG Distribution Agreement
4.1 -- Indenture, dated as of January 1, 1992, between EPG and the Trustee
(incorporated by reference to exhibit 4.B.3 of EPG's Form 10-K for
the fiscal year ended December 31, 1991, file no. 1-2700, filed
January 29, 1992)
4.2 -- Restated Certificate of Incorporation of EPG (incorporated by
reference to exhibit 3.A of EPG's Form 10-K for the fiscal year ended
December 31, 1991, file no. 1-2700, filed January 29, 1992);
Certificate of Designation, Preferences and Rights of Series A Junior
Participating Preferred Stock of EPG, dated July 7, 1992
(incorporated by reference to exhibit 3.A.1 of EPG's Form 10-K for
the fiscal year ended December 31, 1992, file no. 1-2700, filed
February 3, 1993)
4.3 -- By-laws of EPG, as amended July 22, 1993 (incorporated by reference
to exhibit 3(ii) of EPG's Form 10-K for the fiscal year ended
December 31, 1993, file no. 1-2700, filed February 2, 1994)
4.4 -- Shareholder Rights Agreement, dated as of July 7, 1992, between EPG
and The First National Bank of Boston, as Rights Agent (incorporated
by reference to exhibit 4 of EPG's Form 10-Q for the quarter ended
September 30, 1992, file no. 1-2700, filed November 12, 1992)
5 -- Opinion of Mudge Rose Guthrie Alexander & Ferdon as to the legality
of the Securities
12 -- Computation of Ratio of Earnings to Fixed Charges and Ratio of
Earnings to Combined Fixed Charges and Preferred and Preference Stock
Dividend Requirements
23.1 -- Consent of Coopers & Lybrand L.L.P.
23.2 -- Consent of Mudge Rose Guthrie Alexander & Ferdon (included in Exhibit
5)
24 -- Powers of Attorney (appears on page II-4)
25 -- Form T-1 Statement of Eligibility under the Trust Indenture Act of
1939 of the Trustee
</TABLE>
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<PAGE> 17
ITEM 17. UNDERTAKINGS.
A. The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement;
(a) To include any prospectus required by Section 10(a)(3) of the
Act;
(b) To reflect in the Prospectus any facts or events arising after
the effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the Registration Statement;
(c) To include any material information with respect to the plan of
distribution not previously disclosed in the Registration Statement or
any material change to such information in this Registration Statement;
provided, however, that paragraphs A(1)(a) and A(1)(b) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the Registrant
pursuant to Section 13 or 15(d) of the Exchange Act, that are incorporated
by reference in the Registration Statement.
(2) That, for the purpose of determining any liability under the Act,
each such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial bona fide
offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
B. The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Act, each filing of EPG's annual report
pursuant to Section 13(a) or Section 15(d) of the Exchange Act (and, where
applicable, each filing of an employee benefit plan's annual report pursuant to
Section 15(d) of the Exchange Act) that is incorporated by reference in this
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered herein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
C. Insofar as indemnification for liabilities arising under the Act may be
permitted to directors, officers, and controlling persons of the Registrant
pursuant to the provisions described in Item 15 above, or otherwise, the
Registrant has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses incurred
or paid by a director, officer, or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer, or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
II-3
<PAGE> 18
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, El
Paso Natural Gas Company certifies that it has reasonable grounds to believe
that it meets all of the requirements for filing on Form S-3 and has duly caused
this Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of El Paso, State of Texas, on August 19,
1994.
EL PASO NATURAL GAS COMPANY
By: /s/ WILLIAM A. WISE
William A. Wise
Chairman of the Board,
President and Chief Executive
Officer
POWER OF ATTORNEY
Each person whose individual signature appears below hereby authorizes H.
Brent Austin and Britton White, Jr. and each of them as attorneys-in-fact with
full power of substitution, to execute in the name and on behalf of such person,
individually and in each capacity stated below, and to file, any and all
amendments to this Registration Statement, including any and all post-effective
amendments.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed below by the following persons on
the date and in the capacities indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- --------------------------------------------- ------------------------------------------------
<S> <C> <C>
/s/ WILLIAM A. WISE Chairman of the Board, August 19, 1994
William A. Wise President, Chief Executive
Officer and Director
/s/ LUINO DELL'OSSO, JR. Executive Vice President, August 19, 1994
Luino Dell'Osso, Jr. Chief Operating Officer
and Director
/s/ H. BRENT AUSTIN Senior Vice President and August 19, 1994
H. Brent Austin Chief Financial Officer
/s/ THOMAS E. RICKS Vice President, Chief August 19, 1994
Thomas E. Ricks Accounting Officer and
Controller
/s/ BYRON ALLUMBAUGH Director August 19, 1994
Byron Allumbaugh
/s/ EUGENIO GARZA LAGUERA Director August 19, 1994
Eugenio Garza Laguera
/s/ JAMES F. GIBBONS Director August 19, 1994
James F. Gibbons
/s/ BEN F. LOVE Director August 19, 1994
Ben F. Love
/s/ KENNETH L. SMALLEY Director August 19, 1994
Kenneth L. Smalley
</TABLE>
II-4
<PAGE> 19
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NO. DESCRIPTION OF EXHIBIT PAGE
- ---------- ------------------------------------------------------------------------ -------------
<S> <C> <C>
1.1 -- Form of EPG Debt Securities Underwriting Agreement
1.2 -- Form of EPG Equity Securities Underwriting Agreement
1.3 -- Form of EPG Distribution Agreement
4.1 -- Indenture, dated as of January 1, 1992, between EPG and the Trustee
(incorporated by reference to exhibit 4.B.3 of EPG's Form 10-K for
the fiscal year ended December 31, 1991, file no. 1-2700, filed
January 29, 1992)
4.2 -- Restated Certificate of Incorporation of EPG (incorporated by
reference to exhibit 3.A of EPG's Form 10-K for the fiscal year ended
December 31, 1991, file no. 1-2700, filed January 29, 1992);
Certificate of Designation, Preferences and Rights of Series A Junior
Participating Preferred Stock of EPG, dated July 7, 1992
(incorporated by reference to exhibit 3.A.1 of EPG's Form 10-K for
the fiscal year ended December 31, 1992, file no. 1-2700, filed
February 3, 1993)
4.3 -- By-laws of EPG, as amended July 22, 1993 (incorporated by reference
to exhibit 3(ii) of EPG's Form 10-K for the fiscal year ended
December 31, 1993, file no. 1-2700, filed February 2, 1994)
4.4 -- Shareholder Rights Agreement, dated as of July 7, 1992, between EPG
and The First National Bank of Boston, as Rights Agent (incorporated
by reference to exhibit 4 of EPG's Form 10-Q for the quarter ended
September 30, 1992, file no. 1-2700, filed November 12, 1992)
5 -- Opinion of Mudge Rose Guthrie Alexander & Ferdon as to the legality
of the Securities
12 -- Computation of Ratio of Earnings to Fixed Charges and Ratio of
Earnings to Combined Fixed Charges and Preferred and Preference Stock
Dividend Requirements
23.1 -- Consent of Coopers & Lybrand L.L.P.
23.2 -- Consent of Mudge Rose Guthrie Alexander & Ferdon (included in Exhibit
5)
24 -- Powers of Attorney (appears on page II-4)
25 -- Form T-1 Statement of Eligibility under the Trust Indenture Act of
1939 of the Trustee
</TABLE>
<PAGE> 1
EXHIBIT 1.1
EL PASO NATURAL GAS COMPANY
(a Delaware corporation)
(Title of Debt Securities)
TERMS AGREEMENT
Dated: ( ) , 199( )
El Paso Natural Gas Company
100 North Stanton Street
El Paso, Texas 79901
Dear Sirs:
We (the "Representative(s)") are acting on behalf of the
underwriter or underwriters (including ourselves) named below (such underwriter
or underwriters being herein called the "Underwriters"), and we understand that
El Paso Natural Gas Company, a Delaware corporation (the "Company"), proposes
to issue and sell $( ) aggregate principal amount of its (Title of Debt
Securities) (the "Debt Securities"). The Debt Securities will be issued
pursuant to the provisions of an Indenture, dated as of January 1, 1992 (the
"Indenture"), between the Company and Citibank, N.A., as Trustee (the
"Trustee").
Subject to the terms and conditions set forth or incorporated
by reference herein, the Company hereby agrees to sell and the Underwriters
agree to purchase, severally and not jointly, the respective principal amounts
of Debt Securities set forth below opposite their names at the (respective)
purchase price(s) set forth below.
<TABLE>
<CAPTION>
Principal Amount of
Underwriter Debt Securities
----------- -------------------
<S> <C>
$
$
------------------
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
==================
</TABLE>
<PAGE> 2
The Debt Securities shall have the terms set forth in the
Prospectus dated ( ), 199( ), and the Prospectus Supplement dated
( ), 199( ), including the following:
Title:
(Currency: )
Principal Amount
to be Issued:
Maturity Date:
Interest Rate or Formula:
Interest Payment Dates: Each ( ) and
( ), commencing
( ), ( )
Redemption Provisions:
Sinking Fund Requirements:
Delayed Delivery Contracts: (authorized) (not authorized)
(Date of Delivery:
Minimum Contract:
Maximum Aggregate Principal Amount:
Fee: %)
(Initial Public Offering Price: ( )%, plus accrued interest, if any,
or amortized original issue discount, if any, from ( ), 19( ).)
Purchase Price: ( )%, plus accrued interest, if any, or amortized
original issue discount, if any, from ( ), 19( ) (payable in
(next day) funds).
Other Terms:
Closing Date and Location:
All provisions contained in the document attached as Annex A
hereto entitled "El Paso Natural Gas Company - Underwriting Agreement Standard
Provisions (Debt Securities)," are hereby incorporated by reference in their
entirety and shall be deemed to be a part of this Terms Agreement to the same
extent as if such provisions had been set forth in full herein. Terms defined
in such document are used herein as therein defined.
2
<PAGE> 3
Please confirm your agreement by having an authorized officer
sign a copy of this Terms Agreement in the space set forth below.
Very truly yours,
(NAME(S) OF REPRESENTATIVE(S))
Acting severally on behalf of (itself)
(themselves) and the several
Underwriters named herein
By: (NAME OF LEAD-REPRESENTATIVE)
By: ________________________________
Name:
Title:
Accepted:
EL PASO NATURAL GAS COMPANY
By: __________________________
Name:
Title:
3
<PAGE> 4
Annex A
EL PASO NATURAL GAS COMPANY
(a Delaware corporation)
UNDERWRITING AGREEMENT
STANDARD PROVISIONS
(DEBT SECURITIES)
El Paso Natural Gas Company, a Delaware corporation (the
"Company") proposes to issue and sell up to ($ ) aggregate principal
amount of its unsecured debt securities (the "Debt Securities"), from time to
time in one or more offerings on terms determined at the time of sale. The
Debt Securities will be issued under an Indenture, dated as of January 1, 1992
(the "Indenture"), between the Company and Citibank, N.A., as trustee (the
"Trustee"). Each issue of Debt Securities may vary as to the aggregate
principal amount, maturity date, interest rate or formula and timing of payment
thereof, redemption provisions, conversion provisions and sinking fund
requirements, if any, and any other variable terms which the Indenture
contemplates may be set forth in the Debt Securities as issued from time to
time.
This is to confirm the arrangements with respect to the
purchase of Debt Securities from the Company by the Representative(s) and the
several Underwriters listed in the applicable terms agreement entered into
between the Representative(s) and the Company of which this Underwriting
Agreement is Annex A thereto (the "Terms Agreement"). With respect to any
particular Terms Agreement, the Terms Agreement, together with the provisions
hereof incorporated therein by reference, is herein referred to as the
"Agreement." Terms defined in the Terms Agreement are used herein as therein
defined.
The Company has filed with the Securities and Exchange
Commission (the "Commission") a registration statement on Form S-3 (No. 33- )
in respect of the Debt Securities, shares of the Company's Common Stock,
$3.00 par value, and shares of the Company's Preferred Stock, $.01 par value,
which registration statement also constitutes post-effective amendment No. 1 to
registration statement No. 33-44327 relating to the Company's debt securities,
and has filed such amendments thereto as may have been required to the date of
the Terms Agreement. Such registration statement and such post-effective
amendment, as amended, have been declared effective by the Commission and the
Indenture has been requalified under the Trust Indenture Act of 1939, as
amended (the "Trust Indenture Act"). Such registration statement and such
post-effective amendment, as amended, and the combined prospectus
<PAGE> 5
constituting a part thereof, including all documents incorporated therein by
reference, as from time to time amended or supplemented pursuant to the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), the
Securities Act of 1933, as amended (the "Securities Act"), or otherwise, are
collectively referred to herein as the "Registration Statement" and the
"Prospectus," respectively; provided, however, that a supplement to the
Prospectus contemplated by Section 3(a) (a "Prospectus Supplement") shall be
deemed to have supplemented the Prospectus only with respect to the offering of
Debt Securities to which it relates.
1. Representations and Warranties. The Company
represents and warrants to each of the Underwriters named in the Terms
Agreement that:
(a) The Registration Statement has become effective, no stop
order suspending the effectiveness of the Registration Statement is in effect,
and no proceedings for such purpose are pending before or, to the best of the
Company's knowledge, contemplated by the Commission.
(b) (i) Each document, if any, filed or to be filed pursuant
to the Exchange Act and incorporated by reference in the Prospectus complied or
will comply when so filed in all material respects with the Exchange Act and
the applicable rules and regulations of the Commission thereunder; (ii) each
part of the Registration Statement, when such part became effective, did not
contain, and each such part, as amended or supplemented, if applicable, will
not contain, any 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; (iii) the Registration Statement and the Prospectus
comply, and, as amended or supplemented, if applicable, will comply, in all
material respects with the Securities Act and the applicable rules and
regulations of the Commission thereunder; and (iv) the Prospectus does not
contain and, as amended or supplemented, if applicable, will not contain any
untrue statement of a material fact or omit to state a material fact necessary
to make the statements therein, in the light of the circumstances under which
they were made, not misleading, except that the representations and warranties
set forth in this Section 1(b) do not apply (A) to statements or omissions in
the Registration Statement or the Prospectus based upon information relating to
any Underwriter furnished to the Company in writing by such Underwriter through
the Representative(s) expressly for use in the Registration Statement or
Prospectus, or (B) to that part of the Registration Statement that constitutes
the Statement of Eligibility (Form T-1) of the Trustee under the Trust
Indenture Act.
(c) The Company has been duly incorporated and is a
corporation duly organized, validly existing in good standing under the laws of
the State of Delaware, has the corporate power and
2
<PAGE> 6
authority to own 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 the conduct of its
business or its ownership or leasing of property requires such qualification,
except to the extent that the failure to be so qualified or be in good standing
would not have a material adverse effect on the Company and its subsidiaries,
taken as a whole.
(d) Each significant subsidiary of the Company within the
meaning of Regulation S-X (each hereinafter referred to as a "significant
subsidiary") has been duly incorporated and is a corporation duly organized,
validly existing in good standing under the laws of the jurisdiction of its
incorporation, has the corporate power and authority to own 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 the conduct of its business or its ownership or leasing
of property requires such qualification, except to the extent that the failure
to be so qualified or be in good standing would not have a material adverse
effect on the Company and its significant subsidiaries, taken as a whole.
(e) This Agreement and the Delayed Delivery Contracts, if
any, have been duly authorized, executed and delivered by the Company.
(f) The Indenture has been duly authorized, executed and
delivered by the Company and duly requalified under the Trust Indenture Act and
is a valid and legally binding agreement of the Company, enforceable in
accordance with its terms, subject, as to enforcement, to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and other laws of
general applicability relating to or affecting creditors' rights and to general
equity principles.
(g) The Debt Securities being sold pursuant to a Terms
Agreement have, as of the date of such Terms Agreement, been duly authorized
and, when executed and authenticated in accordance with the provisions of the
Indenture and delivered to and paid for by the Underwriters in accordance with
the terms of the Underwriting Agreement, will be entitled to the benefits of
the Indenture and will be valid and legally binding obligations of the Company,
in each case enforceable in accordance with their respective terms, subject, as
to enforcement, to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and other laws of general applicability relating to or affecting
creditors' rights and to general equity principles; and the Debt Securities
being sold pursuant to a Terms Agreement conform in all material respects to
all statements relating thereto contained in the Prospectus.
3
<PAGE> 7
(h) The execution and delivery by the Company of, and the
performance by the Company of its obligations under, this Agreement, the
Indenture and the Debt Securities will not contravene any provision of
applicable law or the Restated Certificate of Incorporation, as amended, or
By-laws of the Company or any agreement or other instrument binding upon the
Company or any of its subsidiaries that is material to the Company and its
subsidiaries, taken as a whole, or any judgment, order or decree of any
governmental body, agency or court having jurisdiction over the Company or any
subsidiary, and no consent, approval, authorization or order of or
qualification with any governmental body or agency is required for the
performance by the Company of its obligations under this Agreement, the
Indenture or the Debt Securities, except such as may be required by the
securities or Blue Sky laws of the various states in connection with the offer
and sale of the Debt Securities.
(i) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, except as may otherwise
be stated in or contemplated by the Registration Statement and Prospectus,
there has not occurred any material adverse change, or any development
involving a prospective material adverse change, in the condition, financial or
otherwise, or in the business or operations of the Company and its
subsidiaries, taken as a whole.
(j) All descriptions in the Registration Statement and
Prospectus of statutes, regulations, legal or governmental proceedings,
contracts and other documents are accurate in all material respects and fairly
present in all material respects the information required to be shown; and
there are no legal or governmental proceedings instituted or, to the best of
the Company's knowledge, threatened against the Company or any of its
subsidiaries which would restrict the issuance and sale of the Debt Securities
as contemplated by the Prospectus, or would be required to be disclosed therein
and which is not disclosed, or any statutes, regulations, contracts or other
documents which are required to be summarized in the Registration Statement or
the Prospectus or to be filed or incorporated by reference as exhibits to the
Registration Statement which are not summarized, filed or incorporated as
required.
(k) The Company is not, nor is it directly or indirectly
controlled by or acting on behalf of any person which is, (i) an "investment
company" within the meaning of the Investment Company Act of 1940, as amended,
and the rules and regulations promulgated by the Commission thereunder, or (ii)
a "holding company" within the meaning of, or subject to regulation under, the
Public Utility Holding Company Act of 1935, as amended, and the rules and
regulations promulgated by the Commission thereunder.
4
<PAGE> 8
(l) The Company has complied with all provisions of Section
517.075, Florida Statutes (Chapter 92-198, Laws of Florida).
2. Purchase and Sale. The obligations of the
Underwriters to purchase, and the Company to sell, the Debt Securities shall be
evidenced by the Terms Agreement. The Terms Agreement shall specify the
principal amount of Debt Securities, the names of the Underwriters
participating in such offering (subject to substitution as provided in Section
8 hereof), the principal amount of Debt Securities which each such Underwriter
severally agrees to purchase, the purchase price to be paid by the Underwriters
for the Debt Securities, the initial public offering price, the time and place
of delivery and payment, any delayed delivery arrangements and any other terms
of the Debt Securities not already specified in the Indenture (including, but
not limited to, designations, denominations, interest rates or formulas and
payment dates, maturity dates, conversion provisions, redemption provisions and
sinking fund requirements).
The several commitments of the Underwriters to purchase Debt
Securities pursuant to the Terms Agreement shall be deemed to have been made on
the basis of the representations and warranties herein contained and shall be
subject to the terms and conditions herein set forth.
Payment of the purchase price for, and delivery of, any Debt
Securities to be purchased by the Underwriters shall be made at the office of
Mudge Rose Guthrie Alexander & Ferdon, 180 Maiden Lane, New York, New York
10038, or at such other place as shall be agreed upon by the Representative(s)
and the Company, at (9:00) A.M., New York City time, on the fifth business day
(unless postponed in accordance with the provisions of Section 8) following the
date of the Terms Agreement or such other time as shall be agreed upon by the
Representative(s) and the Company (each such time and date being referred to as
a "Closing Time"). Payment shall be made to the Company (by wire transfer) (by
certified or official bank check or checks in New York Clearing House or
similar next day funds payable to the order of the Company) against delivery to
the Representative(s) for the respective accounts of the Underwriters of the
Debt Securities to be purchased by them. Certificates for such Debt Securities
shall be in such denominations and registered in such names as the
Representative(s) may request in writing at least two business days prior to
the applicable Closing Time. Such certificates will be made available for
examination and packaging by the Representative(s) on or before the first
business day prior to Closing Time.
If authorized by the Terms Agreement, the Underwriters named
therein may solicit offers to purchase Debt Securities from the Company
pursuant to delayed delivery contracts ("Delayed Delivery Contracts")
substantially in the form of Exhibit A hereto
5
<PAGE> 9
with such changes therein as the Company may approve. As compensation for
arranging Delayed Delivery Contracts, the Company will pay to the
Representative(s) at Closing Time, for the accounts of the Underwriters, a fee
specified in the Terms Agreement for each of the Debt Securities for which
Delayed Delivery Contracts are made at Closing Time as specified in the Terms
Agreement. Any Delayed Delivery Contracts are to be with institutional
investors of the types set forth in the Prospectus Supplement. At Closing
Time, the Company will enter into Delayed Delivery Contracts (for not less than
the minimum principal amount of Debt Securities per Delayed Delivery Contract
specified in the applicable Terms Agreement) with all purchasers proposed by
the Underwriters and previously approved by the Company as provided below, but
not for an aggregate principal amount of Debt Securities in excess of that
specified in the Terms Agreement. The Underwriters will not have any
responsibility for the validity or performance of Delayed Delivery Contracts.
The Representative(s) shall submit to the Company, at least
three business days prior to Closing Time, the names of any institutional
investors with which it is proposed that the Company will enter into Delayed
Delivery Contracts and the principal amount of Debt Securities to be purchased
by each of them, and the Company will advise the Representative(s), at least
two business days prior to Closing Time, of the names of the institutions with
which the making of Delayed Delivery Contracts is approved by the Company and
the principal amount of Debt Securities to be covered by each such Delayed
Delivery Contract.
The principal amount of Debt Securities to be purchased by the
respective Underwriters pursuant to the Terms Agreement shall be reduced by the
principal amount of Debt Securities covered by Delayed Delivery Contracts, as
to each Underwriter as set forth in a written notice delivered by the
Representative(s) to the Company; provided, however, that the aggregate
principal amount of Debt Securities to be purchased by all Underwriters shall
be the aggregate principal amount of Debt Securities covered by the applicable
Terms Agreement, less the principal amount of Debt Securities covered by
Delayed Delivery Contracts.
3. Covenants of the Company. In further consideration
of the agreements of the Underwriters contained herein, the Company covenants
as follows:
(a) Immediately following the execution of the Terms
Agreement, the Company will prepare a Prospectus Supplement setting
forth the principal amount of Debt Securities covered thereby and
their terms not otherwise specified in the Indenture, the names of the
Underwriters participating in the offering and the principal amount of
Debt Securities which each severally has agreed to purchase, the price
at which the Debt Securities are to be purchased by the Underwriters
from
6
<PAGE> 10
the Company, the initial public offering price, the selling concession
and reallowance, if any, any delayed delivery arrangements, and such
other information as the Representative(s) and the Company deem
appropriate in connection with the offering of the Debt Securities.
The Company will promptly transmit copies of the Prospectus Supplement
to the Commission for filing pursuant to Rule 424 of the Securities
Act and will furnish to the Underwriters named therein as many copies
of the Prospectus and such Prospectus Supplement as the
Representative(s) shall reasonably request.
(b) To furnish to (the) (each) Representative(s), without
charge, (one) signed copy of the Registration Statement (including
exhibits thereto) and for delivery to each other Underwriter a
conformed copy of the Registration Statement (without exhibits
thereto) and, during the period mentioned in paragraph (d) below, as
many copies of the Prospectus, any documents incorporated by reference
therein and any supplements and amendments thereto or to the
Registration Statement as the Representative(s) may reasonably
request.
(c) At any time when the Prospectus is required by the
Securities Act to be delivered in connection with sales of the Debt
Securities, the Company will give the Representative(s) notice of its
intention to file any amendment to the Registration Statement or any
amendment or supplement to the Prospectus, whether pursuant to the
Securities Act, the Exchange Act or otherwise, will furnish the
Representative(s) with copies of each such proposed amendment or
supplement or other documents proposed to be filed a reasonable time
in advance of filing, and will not file any such proposed amendment or
supplement or other documents to which the Representative(s) shall
reasonably object.
(d) If, at any time when the Prospectus is required by
the Securities Act to be delivered in connection with sales of any of
the Debt Securities, any event shall occur or condition exist as a
result of which it is necessary, in the opinion of counsel for the
Underwriters or counsel for the Company, to amend or supplement the
Prospectus in order to make the statements therein, in the light of
the circumstances when the Prospectus is delivered to a purchaser, not
misleading, or if, in the opinion of either such counsel, it is
necessary to amend or supplement the Prospectus to comply with law,
the Company will promptly prepare and file with the Commission and
furnish, at its own expense, to the Underwriters, and to the dealers
(whose names and addresses the Representative(s) will furnish to the
Company) to which Debt Securities may have been sold by the
Representative(s) on behalf of the Underwriters and to any other
dealer upon request, either amendments or
7
<PAGE> 11
supplements to the Prospectus so that the statements in the Prospectus
as so amended or supplemented will not, in the light of the
circumstances when the Prospectus is delivered to a purchaser, be
misleading or so that the Prospectus, as so amended or supplemented,
will comply with law.
(e) The Company will endeavor in good faith to qualify
the Debt Securities for offer and sale under the securities or Blue
Sky laws of such jurisdictions as the Representative(s) shall
reasonably request; provided, however, that the Company shall not be
obligated to file any general consent to service or to qualify as a
foreign corporation in any jurisdiction in which it is not so
qualified. The Company will maintain such qualification in effect for
so long as may be required for the distribution of the Debt
Securities. The Company will file such statements and reports as may
be required by the laws of each jurisdiction in which the Debt
Securities have been qualified as above provided.
(f) With respect to each sale of Debt Securities, the
Company will make generally available to its security holders as soon
as practicable an earnings statement covering a twelve month period
beginning, in each case, not later than the first day of the first
full fiscal quarter after the date of this Agreement, which earnings
statement shall satisfy the provisions of Section 11(a) of the
Securities Act and the rules and regulations of the Commission
thereunder.
(g) Unless otherwise provided in the Terms Agreement,
between the date of the Terms Agreement and the later of termination
of any trading restrictions or Closing Time with respect to the Debt
Securities covered thereby, the Company will not, without the
Representative(s') prior consent, offer to sell, or enter into any
agreement to sell, any new issue of Debt Securities of the Company
with a maturity of more than ( ) year(s), including additional Debt
Securities (other than INSERT AGREED UPON EXCEPTIONS).
4. Conditions to Closing. The several obligations of
the Underwriters to purchase Debt Securities pursuant to the Terms Agreement
are subject to the following conditions:
(a) As of the applicable Closing Time, there shall not
have been, since the date of the Terms Agreement or since the
respective dates as of which information is given in the Registration
Statement and the Prospectus, as amended and supplemented,
(i) any downgrading, nor shall any notice have been
given of any intended or potential downgrading or of any
review for a possible change that does not indicate the
direction of the possible change, in the rating accorded
8
<PAGE> 12
any of the Company's securities by any "nationally recognized
statistical rating organization," as such term is defined for
purposes of Rule 436(g)(2) under the Securities Act; and
(ii) any change, or any development involving a
prospective change, in the condition, financial or otherwise,
or in the business or operations, of the Company and its
subsidiaries, taken as a whole, from that set forth in the
Prospectus that, in the reasonable judgment of the
Representative(s), is material and adverse and that makes it,
in the reasonable judgment of the Representative(s),
impracticable to market the Debt Securities on the terms and
in the manner contemplated in the Prospectus.
(b) The Representative(s) shall have received at the
applicable Closing Time a certificate, dated the applicable Closing
Time and signed by an executive officer of the Company, to the effect
set forth in clause (a)(i) above and to the effect that the
representations and warranties of the Company contained in this
Agreement are true and correct at the applicable Closing Time and that
the Company has complied with all of the agreements and satisfied all
of the conditions on its part to be performed or satisfied on or
before the applicable Closing Time.
The officer signing and delivering such certificate may
rely upon the best of his knowledge as to proceedings contemplated.
(c) The Representative(s) shall have received at the
applicable Closing Time (i) an opinion of Mudge Rose Guthrie Alexander
& Ferdon, special counsel to the Company, addressing the matters set
forth in paragraphs (i), (ii)(a), (iv), (v), (vi), (vii) (only as to
the Company and only as to Federal, Delaware and New York law), (viii)
(items (a), (b) and (c)), (ix) (to the best of such counsel's
knowledge), (x) and (xi) of Exhibit B attached hereto, and (ii) an
opinion of the (General Counsel)(Associate General Counsel) of the
Company, addressing the matters set forth in paragraphs (i), (ii),
(iii), (vi), (vii), (viii) (items (d) and (e)),(ix), (x) and (xi) of
Exhibit B.
(d) The Representative(s) shall have received at the
applicable Closing Time an opinion of ( ), special
counsel for the Underwriters, dated the applicable Closing Time, to
the effect set forth in Exhibit C.
(e) The Representative(s) shall have received on the date
of the Terms Agreement and as of the applicable Closing Time a letter,
dated such date, in form and substance
9
<PAGE> 13
satisfactory to the Representative(s), from independent accountants
for the Company, containing statements and information of the type
ordinarily included in accountants' "comfort letters" with respect to
the financial statements and certain financial information contained
in or incorporated by reference into the Prospectus.
If any condition specified in this Section shall not have been
fulfilled when and as required to be fulfilled, this Agreement may be
terminated by the Representative(s) by notice to the Company at any time at or
prior to the applicable Closing Time, and such termination shall be without any
liability of any party to any other party except as provided in Section 5.
5. Payment of Expenses. The Company will pay all
expenses incident to the performance of its obligations under this Agreement,
including (i) the preparation and filing of the Registration Statement and all
amendments thereto, and the reproduction of this Agreement and the Terms
Agreement, (ii) the preparation, issuance and delivery of the Debt Securities
to the Underwriters, (iii) the fees and disbursements of the Company's counsel
and accountant and the Trustee and its counsel, (iv) the qualification of the
Debt Securities under securities laws in accordance with the provisions of
Section 3(e), including filing fees and the fees and disbursements of counsel
for the Underwriters in connection therewith and in connection with the
preparation of any Blue Sky Surveys and Legal Investment Surveys, (v) the
printing and delivery to the Underwriters in quantities as hereinabove stated
of copies of the registration statement and all amendments thereto, of the
Registration Statement and any amendments thereto, and of the Prospectus and
any amendment or supplement thereto, (vi) the reproduction and delivery to the
Underwriters of copies of the Indenture and any Blue Sky Surveys and Legal
Investment Surveys, (vii) the fees, if any, of rating agencies, and (viii) the
fees and expenses, if any, incurred in connection with the listing of the Debt
Securities on any national securities exchange.
If this Agreement is terminated by the Representative(s) in
accordance with the provisions of Section 4, the Company shall reimburse the
Underwriters named in the Terms Agreement for all of their out-of-pocket
expenses, including the reasonable fees and disbursements of counsel for the
Underwriters.
6. Indemnification and Contribution. The Company agrees
to indemnify and hold harmless each Underwriter and each person, if any, who
controls such Underwriter within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act from and against any and all
losses, claims, damages and liabilities (including, without limitation, any
legal or other expenses reasonably incurred by any Underwriter or any such
controlling person in connection with defending or investigating
10
<PAGE> 14
any such action or claim) caused by any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement or any
amendment thereof, any preliminary prospectus or the Prospectus (as amended or
supplemented if the Company shall have furnished any amendments or supplements
thereto), or caused by any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading, except insofar as such losses, claims, damages or liabilities are
caused by any such untrue statement or omission or alleged untrue statement or
omission based upon information relating to any Underwriter furnished to the
Company in writing by such Underwriter through the Representative(s) expressly
for use therein or was based on the Form T-1 of the Trustee.
Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Company, its directors, its officers who sign
the Registration Statement and each person, if any, who controls the Company
within the meaning of either Section 15 of the Securities Act or Section 20 of
the Exchange Act to the same extent as the foregoing indemnity from the Company
to such Underwriter, but only with reference to information relating to such
Underwriter furnished to the Company by such Underwriter in writing through the
Representative(s) expressly for use in the Registration Statement, any
preliminary prospectus, the Prospectus or any amendments or supplements
thereto.
In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of which
indemnity may be sought pursuant to either of the two preceding paragraphs,
such person (the "indemnified party") shall promptly notify the person against
whom such indemnity may be sought (the "indemnifying party") in writing and the
indemnifying party, upon request of the indemnified party, shall retain counsel
reasonably satisfactory to the indemnified party to represent the indemnified
party and any others the indemnifying party may designate in such proceeding
and shall pay the reasonable fees and disbursements of such counsel related to
such proceeding. In any such proceeding, any indemnified party shall have the
right to retain its own counsel, but the fees and expenses of such counsel
shall be at the expense of such indemnified party unless (i) the indemnifying
party and the indemnified party shall have mutually agreed to the retention of
such counsel or (ii) the named parties to any such proceeding (including any
impleaded parties) include both the indemnifying party and the indemnified
party and representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests between them. It
is understood that the indemnifying party shall not, in respect of the legal
expenses of any indemnified party in connection with any proceeding or related
proceedings in the same jurisdiction, be liable for the fees and expenses of
more than one separate firm (in addition to any local counsel) for all such
11
<PAGE> 15
indemnified parties and that all such fees and expenses shall be reimbursed as
they are incurred. Such firm shall be designated in writing by the
Representative(s), in the case of parties indemnified pursuant to the second
preceding paragraph, and by the Company, in the case of parties indemnified
pursuant to the first preceding paragraph. The indemnifying party shall not be
liable for any settlement of any proceeding effected without its written
consent, but if settled with such consent or if there be a final judgment for
the plaintiff, the indemnifying party agrees to indemnify the indemnified party
from and against any loss or liability by reason of such settlement or
judgment. Notwithstanding the foregoing sentence, if at any time an indemnified
party shall have requested an indemnifying party to reimburse the indemnified
party for fees and expenses of counsel as contemplated by the third sentence of
this paragraph, the indemnifying party agrees that it shall be liable for any
settlement of any proceeding effected without its written consent if (i) such
settlement is entered into more than 30 days after receipt by such indemnifying
party of the aforesaid request and (ii) such indemnifying party shall not have
reimbursed the indemnified party in accordance with such request prior to the
date of such settlement. No indemnifying party shall, without the prior
written consent of the indemnified party, effect any settlement of any pending
or threatened proceeding in respect of which any indemnified party is or could
have been a party and indemnity could have been sought hereunder by such
indemnified party, unless such settlement includes an unconditional release of
such indemnified party from all liability on claims that are the subject matter
of such proceeding.
If the indemnification provided for in the first or second
paragraph in this Section 6 is unavailable to an indemnified party or
insufficient in respect of any losses, claims, damages or liabilities referred
to therein, then each indemnifying party under such paragraph, in lieu of
indemnifying such indemnified party thereunder, shall contribute to the amount
paid or payable by such indemnified party as a result of such losses, claims,
damages or liabilities (i) in such proportion as is appropriate to reflect the
relative benefits received by the Company on the one hand and the Underwriters
on the other hand from the offering of the Debt Securities or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company on
the one hand and of the Underwriters on the other hand in connection with the
statements or omissions that resulted in such losses, claims, damages or
liabilities, as well as any other relevant equitable considerations. The
relative benefits received by the Company on the one hand and the Underwriters
on the other hand in connection with the offering of the Debt Securities shall
be deemed to be in the same respective proportions as the net proceeds from the
offering of such Debt Securities (before deducting expenses) received by the
Company and the total
12
<PAGE> 16
underwriting discounts and commissions received by the Underwriters, in each
case as set forth in the table on the cover of the Prospectus Supplement, bear
to the aggregate public offering price of the Debt Securities. The relative
fault of the Company on the one hand and of the Underwriters on the other hand
shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or omission or alleged omission to
state a material fact relates to information supplied by the Company or by the
Underwriters and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission. The
Underwriters' respective obligations to contribute pursuant to this Section 6
are several in proportion to the respective principal amounts of Debt
Securities purchased by each of such Underwriters, and not joint.
The Company and the Underwriters agree that it would not be
just or equitable if contribution pursuant to this Section 6 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 that does not take account
of the equitable considerations referred to in the immediately preceding
paragraph. The amount paid or payable by an indemnified party as a result of
the losses, claims, damages and liabilities referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, 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 Section 6, no Underwriter
shall be required to contribute any amount in excess of the amount by which the
total price at which the Debt Securities underwritten by it and distributed to
the public were offered to the public exceeds the amount of any damages that
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
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The remedies provided for in this
Section 6 are not exclusive and shall not limit any rights or remedies which
may otherwise be available to any indemnified party at law or in equity.
The indemnity and contribution provisions contained in this
Section 6 and the representations and warranties of the Company contained
herein shall remain operative and in full force and effect regardless of (i)
any termination of this Agreement, (ii) any investigation made by or on behalf
of any Underwriter or any person controlling any Underwriter or by or on behalf
of the Company, its directors or officers or any person controlling the Company
and (iii) acceptance of and payment for any of the Debt Securities.
13
<PAGE> 17
7. Termination. This Agreement shall be subject to
termination, by notice given by the Representative(s) to the Company, at any
time prior to the applicable Closing Time, if (a) after the execution and
delivery of the Terms Agreement and prior to the Closing Time (i) trading
generally shall have been suspended or materially limited on or by, as the case
may be, any of the New York Stock Exchange, the American Stock Exchange or the
National Association of Securities Dealers, Inc., (ii) trading of any
securities of the Company shall have been suspended on any exchange or in any
over-the-counter market, (iii) a general moratorium on commercial banking
activities in New York shall have been declared by either Federal or New York
State authorities, or (iv) there shall have occurred any outbreak or escalation
of hostilities or any change in financial markets or any calamity or crisis
that, in the reasonable judgment of the Representative(s), is material and
adverse and (b) in the case of any of the events specified in clauses (a)(i)
through (iv), such event, singly or together with any other such event, makes
it, in the reasonable judgment of the Representative(s), impracticable to
market the Debt Securities on the terms and in the manner contemplated by the
Prospectus.
8. Defaulting Underwriters. If one or more of the
Underwriters participating in an offering of Debt Securities shall fail or
refuse at the applicable Closing Time to purchase Debt Securities which it or
they are obligated to purchase under the applicable Terms Agreement (the
"Defaulted Securities"), and the aggregate amount of Defaulted Securities is
not more than one-tenth of the aggregate amount of the Debt Securities to be
purchased pursuant to the Terms Agreement, the non- defaulting Underwriters
named in such Terms Agreement shall be obligated severally in the proportions
that the amount of Debt Securities set forth opposite their respective names
above bears to the aggregate amount of Debt Securities set forth opposite the
names of all such non-defaulting Underwriters, or in such other proportions as
the Representative(s) may specify, to purchase the Debt Securities which such
defaulting Underwriter or Underwriters agreed but failed or refused to purchase
on such date; provided that in no event shall the amount of Debt Securities
that any Underwriter has agreed to purchase pursuant to this Agreement be
increased pursuant to this Section 8 by an amount in excess of (one-ninth) of
such amount of Debt Securities without the written consent of such Underwriter.
If, at the applicable Closing Time, any Underwriter or Underwriters shall fail
or refuse to purchase Debt Securities and the aggregate amount of Debt
Securities with respect to which such default occurs is more than one-tenth of
the aggregate amount of Debt Securities to be purchased pursuant to such Terms
Agreement, and arrangements satisfactory to the Representative(s) and the
Company for the purchase of such Debt Securities are not made within 36 hours
after such default, this Agreement shall terminate without liability on the
part of any non-defaulting Underwriter or the Company. In any such case either
the Representative(s) or the Company shall have the right to postpone the
Closing Time but in no event for longer
14
<PAGE> 18
than seven days, in order that the required changes, if any, in the
Registration Statement and in the Prospectus or in any other documents or
arrangements may be effected. Any action taken under this paragraph shall not
relieve any defaulting Underwriter from liability in respect of any default of
such Underwriter under this Agreement.
If this Agreement shall be terminated by the Underwriters, or
any of them, because of any failure or refusal on the part of the Company to
comply with the terms or to fulfill any of the conditions of this Agreement, or
if for any reason the Company shall be unable to perform its obligations under
this Agreement, the Company will reimburse the Underwriters or such
Underwriters as have so terminated this Agreement with respect to themselves,
severally, for all out-of-pocket expenses (including the fees and disbursements
of their counsel) reasonably incurred by such Underwriters in connection with
this Agreement or the offering of the Debt Securities.
9. Parties. This Agreement shall inure to the benefit
of and be binding upon the Company and any Underwriter who becomes a party
hereto, and their respective successors. Nothing expressed or mentioned in
this Agreement is intended or shall be construed to give any person, firm or
corporation, other than the parties hereto or thereto and their respective
successors and the controlling persons and officers and directors referred to
in Section 6 and their heirs and legal representatives, any legal or equitable
right, remedy or claim under or in respect of this Agreement or any provision
herein contained. This Agreement and all conditions and provisions hereof are
intended to be for the sole and exclusive benefit of the parties and their
respective successors and said controlling persons and officers and directors
and their heirs and legal representatives, and for the benefit of no other
person, firm or corporation. No purchaser of Debt Securities from any
Underwriter shall be deemed to be a successor by reason merely of such
purchase.
10. Counterparts. The Underwriting Agreement may be
signed in any number of counterparts, each of which shall be an original, with
the same effect as if the signatures thereto and hereto were upon the same
instrument.
11. Governing Law. This Agreement shall be governed by
and construed in accordance with the internal laws of the State of New York.
12. Headings. The headings of the sections of this
Agreement have been inserted for convenience of reference only and shall not be
deemed a part of this Agreement.
15
<PAGE> 19
13. Notices. All references herein and in the
Underwriting Agreement to the Representative(s) when made in connection with
any notice to or communication by or with such Representative(s) shall, if
there is more than one representative, be deemed to be to the Lead
Representative, as designated in the Terms Agreement, and all notices shall be
given to such Lead Representative at the address set forth therein.
16
<PAGE> 20
EXHIBIT A
EL PASO NATURAL GAS COMPANY
(a Delaware corporation)
(Title of Securities)
DELAYED DELIVERY CONTRACT
Dated: ( ),19( )
El Paso Natural Gas Company
100 North Stanton Street
El Paso, Texas 79901
Attention: ( )
Dear Sirs:
The undersigned hereby agrees to purchase from El Paso Natural
Gas Company (the "Company"), and the Company agrees to sell to the undersigned
on ( ), 19( ) (the "Delivery Date"), ( ) principal
amount of the Company's (insert title of security) (the "Securities"), offered
by the Company's Prospectus dated ( ), 19( ), as supplemented by the
Prospectus Supplement dated ( ), 19( ), receipt of which is hereby
acknowledged at a purchase price of ( % of the principal amount thereof, plus
accrued interest from ( ), 19( )) to the Delivery Date, and on the
further terms and conditions set forth in this contract.
Payment for the Securities which the undersigned has agreed to
purchase on the Delivery Date shall be made to the Company (by wire transfer)
(or its order by certified or official bank check in New York Clearing House
funds) at the office of Mudge Rose Guthrie Alexander & Ferdon, on the Delivery
Date, upon delivery to the undersigned of the Securities to be purchased by the
undersigned in definitive form and in such denominations and registered in such
names as the undersigned may designate by written or telegraphic communication
addressed to the Company not less than five full business days prior to the
Delivery Date.
The obligation of the undersigned to take delivery of and make
payment for Securities on the Delivery Date shall be subject only to the
conditions that (1) the purchase of Securities to be made by the undersigned
shall not on the Delivery Date be prohibited under the laws of the jurisdiction
to which the
<PAGE> 21
undersigned is subject and (2) the Company, on or before ( ), 19( ),
shall have sold to the Underwriters of the Securities (the "Underwriters") such
principal amount of the Securities as is to be sold to them pursuant to the
Terms Agreement dated ( ), 19( ), between the Company and the Underwriters.
The obligation of the undersigned to take delivery of and make payment for
Securities shall not be affected by the failure of any purchaser to take
delivery of and make payments for Securities pursuant to other contracts
similar to this contract. The undersigned represents and warrants to you that
its investment in the Securities is not, as of the date hereof, prohibited
under the laws of any jurisdiction to which the undersigned is subject and
which govern such investment.
Promptly after completion of the sale to the Underwriters, the
Company will mail or deliver to the undersigned at its address set forth below
notice to such effect, accompanied by a copy of the opinion of counsel for the
Company delivered to the Underwriters in connection therewith.
By the execution hereof, the undersigned represents and
warrants to the Company that all necessary corporate action for the due
execution and delivery of this contract and the payment for and purchase of the
Securities has been taken by it and no further authorization or approval of any
governmental or other regulatory authority is required for such execution,
delivery, payment or purchase, and that, upon acceptance hereof by the Company
and mailing or delivery or a copy as provided below, this contract will
constitute a valid and binding agreement of the undersigned in accordance with
its terms.
This contract will inure to the benefit of and be binding upon
the parties hereto and their respective successors, but will not be assignable
by either party hereto without the written consent of the other.
It is understood that the Company will not accept Delayed
Delivery Contracts for an aggregate principal amount of Securities in excess of
($ ) and that the acceptance of any Delayed Delivery Contract is in the
Company's sole discretion and, without limiting the foregoing, need not be on a
first-come, first-served basis. If this contract is acceptable to the Company,
it is requested that the Company sign the form of acceptance on a copy hereof
and mail or deliver a signed copy hereof to the undersigned at its address set
forth below. This will become a binding contract between the Company and the
undersigned when such copy is so mailed or delivered.
A-2
<PAGE> 22
This Agreement shall be governed by the laws of the State of
New York.
Yours very truly,
________________________________________
(Name of Purchaser)
By:_____________________________________
(Title)
________________________________________
________________________________________
(Address)
Accepted as of the date first above written.
EL PASO NATURAL GAS COMPANY
By:____________________________________________
(Title)
A-3
<PAGE> 23
PURCHASER--PLEASE COMPLETE AT TIME OF SIGNING
The name and telephone number of the representative of the
Purchaser with whom details of delivery on the Delivery Date may be discussed
are as follows: (Please print.)
<TABLE>
<CAPTION>
TELEPHONE NO.
(INCLUDING
NAME AREA CODE)
---- --------------
<S> <C>
</TABLE>
A-4
<PAGE> 24
Exhibit B
Opinion of
Counsel for the Company
The opinion of counsel for the Company to be delivered
pursuant to Section 4(c) of the Underwriting Agreement shall be to the effect
that:
(i) the Company has been duly incorporated and is a
corporation duly organized, validly existing in good standing
under the laws of the State of Delaware;
(ii) (a) the Company has the corporate power and
authority to own its properties and to conduct its business as
described in the Prospectus and (b) the Company is duly
requalified as a foreign corporation to transact business and
is in good standing in each jurisdiction in which the conduct
of its business or its ownership or leasing of property
requires such qualification, except to the extent that the
failure to be so qualified or be in good standing would not
have a material adverse effect on the Company and its
subsidiaries, taken as a whole;
(iii) each significant subsidiary of the Company has
been duly incorporated and is a corporation duly organized,
validly existing in good standing under the laws of the
jurisdiction of its incorporation, has the corporate power and
authority to own 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 the conduct of its business or its
ownership or leasing of property requires such qualification,
except to the extent that the failure to be so qualified or be
in good standing would not have a material adverse effect on
the Company and its significant subsidiaries, taken as a
whole;
(iv) the Underwriting Agreement and the Delayed
Delivery Contracts, if any, have been duly authorized,
executed and delivered by the Company;
(v) the Indenture has been duly authorized, executed
and delivered by the Company and duly requalified under the
Trust Indenture Act; the Debt Securities have been duly
authorized, executed, authenticated, issued and delivered; and
the Indenture
<PAGE> 25
and the Debt Securities constitute valid and legally binding
obligations of the Company, enforceable in accordance with
their terms, subject, as to enforcement, to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium
and other laws of general applicability relating to or
affecting creditors' rights and to general equity principles;
(vi) the execution and delivery by the Company of,
and the performance by the Company of its obligations under,
the Underwriting Agreement, the Indenture and the Debt
Securities will not contravene any provision of applicable law
or the Restated Certificate of Incorporation, as amended, or
By-laws of the Company;
(vii) the execution and delivery by the Company of,
and the performance by the Company of its obligations under,
the Underwriting Agreement, the Indenture and the Debt
Securities will not contravene, to the best of such counsel's
knowledge, any agreement or other instrument binding upon the
Company or any of its subsidiaries that is material to the
Company and its subsidiaries, taken as a whole, or, to the
best of such counsel's knowledge, any judgment, order or
decree of any governmental body, agency or court having
jurisdiction over the Company or any subsidiary, and no
consent, approval, authorization or order of or qualification
with any governmental body or agency is required for the
performance by the Company of its obligations under the
Underwriting Agreement, the Indenture or the Debt Securities,
except such as may be required by the securities or Blue Sky
laws of the various states in connection with the offer and
sale of the Debt Securities;
(viii) the statements (a) in the Prospectus
Supplement under the captions "(Certain Terms of the Debt
Securities)" and "Underwriting," (b) in the Basic Prospectus
under the captions "Description of the Debt Securities" and
"Plan of Distribution," (c) in the Registration Statement
under Item 15, (d) in "Item 3 -Legal Proceedings" of the
Company's most recent annual report on Form 10-K incorporated
by reference in the Prospectus and (e) in "Item 1 - Legal
Proceedings" of Part II of the Company's quarterly reports on
Form 10-Q, if any, filed since such annual report, in each
case insofar as such statements constitute summaries of the
legal matters, documents or proceedings referred to therein,
fairly present the information called for with respect to such
legal matters, documents or proceedings and fairly summarize
the matters referred to therein;
B-2
<PAGE> 26
(ix) after due inquiry, such counsel does not know
of any legal or governmental proceedings instituted or
threatened against the Company or any of its subsidiaries
which would restrict the issuance and sale of the Debt
Securities as contemplated by the Prospectus, or would be
required to be disclosed therein and which is not disclosed;
also, such counsel does not know of any statutes, regulations,
contracts or other documents which are required to be
summarized in the Registration Statement or the Prospectus or
to be filed or incorporated by reference as exhibits to the
Registration Statement which are not summarized, filed or
incorporated as required;
(x) the Company is not, nor is it directly or
indirectly controlled by or acting on behalf of any person
which is, (i) an "investment company" within the meaning of
the Investment Company Act of 1940, as amended, and the rules
and regulations promulgated by the Commission thereunder, or
(ii) a "holding company" within the meaning of, or subject to
regulation under, the Public Utility Holding Company Act of
1935, as amended, and the rules and regulations promulgated by
the Commission thereunder; and
(xi) such counsel (a) is of the opinion that each
document, if any, filed pursuant to the Exchange Act and
incorporated by reference in the Prospectus (except for
financial statements and schedules and other financial or
statistical data included therein as to which such counsel
need not express any opinion) complied when so filed as to
form in all material respects with the Exchange Act and the
applicable rules and regulations of the Commission thereunder,
(b) believes that (except for financial statements and
schedules and other financial or statistical data as to which
such counsel need not express any belief and except for that
part of the Registration Statement that constitutes the Form
T-1 of the Trustee heretofore referred to) each part of the
Registration Statement, when such part became effective, did
not, and as of the date such opinion is delivered, does not
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, (c)
is of the opinion that the Registration Statement and
Prospectus (except for financial statements and schedules and
other financial or statistical data included therein as to
which such counsel need not express any opinion) comply as to
form in all material respects with the requirements of the
Securities Act, the Trust Indenture Act and the applicable
rules and regulations of the Commission thereunder, and (d)
B-3
<PAGE> 27
believes that (except for financial statements and schedules
and other financial or statistical data as to which such
counsel need not express any belief) the Prospectus as of the
date such opinion is delivered does not contain an untrue
statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading.
With respect to paragraph (xi) above, Mudge Rose Guthrie
Alexander & Ferdon may state that their opinion and belief is based upon their
participation in the preparation of the Registration Statement and Prospectus
and any amendments or supplements thereto and documents incorporated therein by
reference and review and discussion of the contents thereof, but are without
independent check or verification, except as specified.
B-4
<PAGE> 28
Exhibit C
Opinion of ( ),
Counsel for the Underwriters
The opinion of ( ), counsel for the
Underwriters, to be delivered pursuant to Section 4(d) of the Underwriting
Agreement shall be to the effect that:
(i) the Company has been duly incorporated and is a
corporation duly organized, validly existing in good standing
under the laws of the State of Delaware;
(ii) the Underwriting Agreement and Delayed Delivery
Contracts, if any, have been duly authorized, executed and
delivered by the Company;
(iii) the Indenture has been duly authorized,
executed and delivered by the Company and duly requalified
under the Trust Indenture Act; the Debt Securities have been
duly authorized, executed, authenticated, issued and
delivered; and the Indenture and the Debt Securities
constitute valid and legally binding obligations of the
Company, enforceable in accordance with their terms, subject,
as to enforcement, to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and other laws of general
applicability relating to or affecting creditors' rights and
to general equity principles;
(iv) the statements (a) in the Prospectus Supplement
under the captions "(Certain Terms of the Debt Securities)"
and "Underwriting," and (b) in the Basic Prospectus under the
captions "Description of the Debt Securities" and "Plan of
Distribution," in each case insofar as such statements
constitute summaries of the legal matters or documents
referred to therein, fairly present the information called for
with respect to such legal matters or documents and fairly
summarize the matters referred to therein;
(v) the Registration Statement became effective
under the Securities Act on ( ), and, to the best
knowledge of such counsel, no stop order suspending the
effectiveness of the Registration Statement has been issued
and no proceedings for that purpose have been initiated or are
pending or contemplated under the Securities Act; and
<PAGE> 29
(vi) such counsel (1) believes that (except for
financial statements and schedules and other financial or
statistical data as to which such counsel need not express any
belief and except for that part of the Registration Statement
that constitutes the Form T-1 heretofore referred to) each
part of the Registration Statement, when such part became
effective, did not 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, (2) is of the opinion that the Registration
Statement and Prospectus (except for financial statements and
schedules and other financial or statistical data included
therein as to which such counsel need not express any opinion)
comply as to form in all material respects with the Securities
Act, the Trust Indenture Act and the applicable rules and
regulations of the Commission thereunder, and (3) believes
that (except for financial statements and schedules and other
financial or statistical data as to which such counsel need
not express any belief) the Prospectus as of the date such
opinion is delivered does not contain an untrue statement of a
material fact or omit to state a material fact necessary in
order to make the statements therein, in light of the
circumstances under which they were made, not misleading.
With respect to clause (vi) above, such counsel may state that
their opinion and belief is based upon their participation in the preparation
of the Registration Statement and the Prospectus and any amendments or
supplements thereto (other than the documents incorporated by reference) and
upon review and discussion of the contents thereof (including documents
incorporated by reference) but are without independent check or verification,
except as specified.
Such counsel may rely, to the extent their opinions are based
upon matters governed by the laws of other jurisdictions, upon the opinion of
other counsel admitted to the bar in such jurisdictions.
C-2
<PAGE> 1
EXHIBIT 1.2
EL PASO NATURAL GAS COMPANY
(a Delaware corporation)
(Title of Securities)
TERMS AGREEMENT
Dated: ( ), 199( )
El Paso Natural Gas Company
100 North Stanton Street
El Paso, Texas 79901
Dear Sirs:
We (the "Representative(s)") are acting on behalf of the
underwriter or underwriters (including ourselves) named below (such underwriter
or underwriters being herein called the "Underwriters"), and we understand that
El Paso Natural Gas Company, a Delaware corporation (the "Company"), proposes
to issue and sell the number of shares of its (Common Stock, $3.00 par value
(the "Common Stock")) (Preferred Stock, $.01 par value (the "Preferred Stock"))
(such (Common Stock) (Preferred Stock) (collectively) hereinafter (also)
referred to as the "Underwritten Securities").
Subject to the terms and conditions set forth or incorporated
by reference herein, the Company hereby agrees to sell and the Underwriters
agree to purchase, severally and not jointly, the respective number of shares
of Initial Underwritten Securities (as defined in the Underwriting Agreement -
Basic Provisions referenced below) set forth opposite their respective names,
and a proportionate share of Option Securities (as defined in the Underwriting
Agreement - Basic Provisions referenced below) to the extent any are purchased,
at the purchase price set forth below.
<TABLE>
<CAPTION>
NUMBER OF SHARES OF
INITIAL UNDERWRITTEN
UNDERWRITER SECURITIES
----------- ---------------------
<S> <C>
--------------
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
==============
</TABLE>
<PAGE> 2
The Underwritten Securities shall have the terms set forth in
the Prospectus dated ( ), 199( ), and the Prospectus Supplement
dated ( ), 199( ), including the following:
Title:
Number of Shares:
(Dividend Rate: $( ) ( %). Payable: )
(Stated Value:)
(Ranking:)
Public Offering Price Per Share: $( ) (, plus
accumulated dividends, if any, from ( ), 19 ( ).)
Purchase Price Per Share: $( ) (, plus
accumulated dividends, if any, from ( ), 19 ( ).)
(Conversion Provisions:)
(Redemption Provisions:)
(Sinking Fund Requirements:)
Number of Option Securities, if any, that may be purchased by the
Underwriters:
(Delayed Delivery Contracts: (authorized) (not authorized)
(Date of Delivery:
Minimum Contract:
Maximum Number of Shares:
Fee: )
Other Terms:
Closing Date and Location:
All provisions contained in the document attached as Annex A
hereto entitled "El Paso Natural Gas Company -- Common Stock ($3.00 par value)
and Preferred Stock ($.01 par value) -- Underwriting Agreement Standard
Provisions," are hereby incorporated by reference in their entirety and shall
be deemed to be a part of this Terms Agreement to the same extent as if such
provisions had been set forth in full herein. Terms defined in such document
are used herein as therein defined.
2
<PAGE> 3
Please confirm your agreement by having an authorized officer
sign a copy of this Terms Agreement in the space set forth below.
Very truly yours,
(NAME(S) OF REPRESENTATIVE(S))
Acting severally on behalf of
(itself) (themselves) and the several
Underwriters named herein
By: (NAME OF LEAD-REPRESENTATIVE)
By: ____________________________
Name:
Title:
Accepted:
EL PASO NATURAL GAS COMPANY
By: _______________________
Name:
Title:
3
<PAGE> 4
Annex A
EL PASO NATURAL GAS COMPANY
(a Delaware corporation)
Common Stock ($3.00 par value)
and
Preferred Stock ($.01 par value)
UNDERWRITING AGREEMENT STANDARD PROVISIONS
El Paso Natural Gas Company, a Delaware corporation (the
"Company") proposes to issue and sell shares of Common Stock, $3.00 par value
(the "Common Stock"), or Preferred Stock, $.01 par value (the "Preferred
Shares"), or both, from time to time in one or more offerings on terms
determined at the time of sale. The Common Stock and the Preferred Shares are
hereinafter referred to as the "Securities." Each issue of Preferred Shares
may vary as to the specific number of shares, title, stated value and
liquidation preference, issuance price, ranking, dividend rate or rates (or
method of calculation), dividend payment dates, any redemption or sinking fund
requirements, any conversion provisions and any other variable terms as set
forth in the applicable certificate of designation (each, a "Certificate of
Designation") relating to such Preferred Shares.
This is to confirm the arrangements with respect to the
purchase of the Underwritten Securities (as defined in Section 2 hereof) from
the Company by the Representative(s) and the several Underwriters listed in the
applicable terms agreement entered into between the Representative(s) and the
Company of which this Underwriting Agreement is Annex A thereto (the "Terms
Agreement"). With respect to any particular Terms Agreement, the Terms
Agreement, together with the provisions hereof incorporated therein by
reference, is herein referred to as the "Agreement." Terms defined in the
Terms Agreement are used herein as therein defined.
The Company has filed with the Securities and Exchange
Commission (the "Commission") a registration statement on Form S-3 (No. 33- )
in respect of the Securities and the Company's debt securities, which
registration statement also constitutes post-effective amendment No. 1 to
registration statement No. 33-44327 relating to the Company's debt securities,
and has filed such amendments thereto as may have been required to the date of
the Terms Agreement. Such registration statement and such post-effective
amendment, as amended, have been declared effective by
<PAGE> 5
the Commission. Such registration statement and such post-effective amendment,
as amended, and the combined prospectus constituting a part thereof, including
all documents incorporated therein by reference, as from time to time amended
or supplemented pursuant to the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), the Securities Act of 1933, as amended (the "Securities
Act"), or otherwise, are collectively referred to herein as the "Registration
Statement" and the "Prospectus," respectively; provided, however, that a
supplement to the Prospectus contemplated by Section 3(a) (a "Prospectus
Supplement") shall be deemed to have supplemented the Prospectus only with
respect to the offering of Underwritten Securities to which it relates.
1. Representations and Warranties. The Company represents
and warrants to each of the Underwriters named in the Terms Agreement that:
(a) The Registration Statement has become effective, no stop
order suspending the effectiveness of the Registration Statement is in effect,
and no proceedings for such purpose are pending before or, to the best of the
Company's knowledge, contemplated by the Commission.
(b) (i) Each document, if any, filed or to be filed pursuant
to the Exchange Act and incorporated by reference in the Prospectus complied or
will comply when so filed in all material respects with the Exchange Act and
the applicable rules and regulations of the Commission thereunder; (ii) each
part of the Registration Statement, when such part became effective, did not
contain, and each such part, as amended or supplemented, if applicable, will
not contain, any 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; (iii) the Registration Statement and the Prospectus
comply, and, as amended or supplemented, if applicable, will comply, in all
material respects with the Securities Act and the applicable rules and
regulations of the Commission thereunder; and (iv) the Prospectus does not
contain and, as amended or supplemented, if applicable, will not contain any
untrue statement of a material fact or omit to state a material fact necessary
to make the statements therein, in the light of the circumstances under which
they were made, not misleading, except that the representations and warranties
set forth in this Section 1(b) do not apply to statements or omissions in the
Registration Statement or the Prospectus based upon information relating to any
Underwriter furnished to the Company in writing by such Underwriter through the
Representative(s) expressly for use in the Registration Statement or
Prospectus.
(c) The Company has been duly incorporated and is a
corporation duly organized, validly existing in good standing under
2
<PAGE> 6
the laws of the State of Delaware, has the corporate power and authority to own
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 the conduct of its business or its
ownership or leasing of property requires such qualification, except to the
extent that the failure to be so qualified or to be in good standing would not
have a material adverse effect on the Company and its subsidiaries, taken as a
whole.
(d) Each significant subsidiary of the Company within the
meaning of Regulation S-X (each hereinafter referred to as a "significant
subsidiary") has been duly incorporated and is a corporation duly organized,
validly existing in good standing under the laws of the jurisdiction of its
incorporation, has the corporate power and authority to own 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 the conduct of its business or its ownership or leasing
of property requires such qualification, except to the extent that the failure
to be so qualified or be in good standing would not have a material adverse
effect on the Company and its significant subsidiaries, taken as a whole.
(e) The authorized, issued and outstanding capital stock of
the Company is as set forth under "( )" and is accurate as of the date
indicated in such section.
(f) This Agreement and the Delayed Delivery Contracts, if
any, have been duly authorized, executed and delivered by the Company.
(g) The Underwritten Securities being sold pursuant to a
Terms Agreement have, as of the date of such Terms Agreement, been duly
authorized by the Company and such Underwritten Securities have been duly
authorized for issuance and sale pursuant to this Agreement (or will have been
so authorized prior to each issuance of Underwritten Securities) and such
Underwritten Securities, when issued and delivered by the Company pursuant to
this Agreement, against payment of the consideration set forth in this
Agreement, will be validly issued, fully paid and nonassessable; the
Underwritten Securities being sold pursuant to a Terms Agreement conform in all
material respects to all statements relating thereto contained in the
Prospectus; and the issuance of the Underwritten Securities is not subject to
preemptive or other similar rights.
(h) The execution and delivery by the Company of, and the
performance by the Company of its obligations under, this Agreement will not
contravene any provision of applicable law or the Restated Certificate of
Incorporation, as amended, or By-laws
3
<PAGE> 7
of the Company or any agreement or other instrument binding upon the Company or
any of its subsidiaries that is material to the Company and its subsidiaries,
taken as a whole, or any judgment, order or decree of any governmental body,
agency or court having jurisdiction over the Company or any subsidiary, and no
consent, approval, authorization or order of or qualification with any
governmental body or agency is required for the performance by the Company of
its obligations under this Agreement, except such as may be required by the
securities or Blue Sky laws of the various states in connection with the offer
and sale of the Underwritten Securities.
(i) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, except as may otherwise
be stated in or contemplated by the Registration Statement and Prospectus,
there has not occurred any material adverse change, or any development
involving a prospective material adverse change, in the condition, financial or
otherwise, or in the business or operations of the Company and its
subsidiaries, taken as a whole.
(j) If applicable, the shares of Common Stock issuable upon
conversion of any issue of Preferred Shares have been duly authorized and
reserved for issuance upon the conversion by all necessary corporate action and
when issued upon conversion, will be validly issued, fully paid and
nonassessable, and the issuance of such shares upon such conversion will not be
subject to preemptive rights.
(k) All descriptions in the Registration Statement and
Prospectus of statutes, regulations, legal or governmental proceedings,
contracts and other documents are accurate in all material respects and fairly
present in all material respects the information required to be shown; and
there are no legal or governmental proceedings instituted or, to the best of
the Company's knowledge, threatened against the Company or any of its
subsidiaries which would restrict the issuance and sale of the Underwritten
Securities as contemplated by the Prospectus, or would be required to be
disclosed therein and which is not disclosed, or any statutes, regulations,
contracts or other documents which are required to be summarized in the
Registration Statement or the Prospectus or to be filed or incorporated by
reference as exhibits to the Registration Statement which are not summarized,
filed or incorporated as required.
(l) The Company is not, nor is it directly or indirectly
controlled by or acting on behalf of any person which is, (i) an "investment
company" within the meaning of the Investment Company Act of 1940, as amended,
and the rules and regulations promulgated by the Commission thereunder, or (ii)
a "holding company" within the meaning of, or subject to regulation under, the
Public Utility
4
<PAGE> 8
Holding Company Act of 1935, as amended, and the rules and regulations
promulgated by the Commission thereunder.
(m) The Company has complied with all provisions of Section
517.075, Florida Statutes (Chapter 92-198, Laws of Florida).
2. Purchase and Sale. The obligations of the Underwriters to
purchase, and the Company to sell, the Underwritten Securities shall be
evidenced by the Terms Agreement. The Terms Agreement shall specify the number
of Underwritten Securities to be initially issued (the "Initial Underwritten
Securities"), the names of the Underwriters participating in such offering
(subject to substitution as provided in Section 8 hereof), the number of
Initial Underwritten Securities which each such Underwriter severally agrees to
purchase, the price at which the Initial Underwritten Securities are to be
purchased by the Underwriters from the Company, the initial public offering
price, the time and place of delivery and payment, any delayed delivery
arrangements and any other terms of the Initial Underwritten Securities
pursuant to which they are being issued (including, but not limited to,
designations, conversion provisions, redemption provisions and sinking fund
requirements). In addition, each Terms Agreement shall specify whether the
Company has agreed to grant to the Underwriters an option to purchase
additional Underwritten Securities subject to such option (the "Option
Securities"). As used herein, the term Underwritten Securities shall include
the Initial Underwritten Securities and all or any portion of the Option
Securities agreed to be purchased by the Underwriters as provided herein, if
any.
The several commitments of the Underwriters to purchase
Underwritten Securities pursuant to the Terms Agreement shall be deemed to have
been made on the basis of the representations and warranties herein contained
and shall be subject to the terms and conditions herein set forth.
In addition, on the basis of the representations and
warranties herein contained and subject to the terms and conditions herein set
forth, the Company may grant, if so provided in the Terms Agreement relating to
any Initial Underwritten Securities, an option to the Underwriters, named in
such Terms Agreement, severally and not jointly, to purchase up to the number
of Option Securities set forth therein at the same price per share as is
applicable to the Initial Underwritten Securities. Such option, if granted,
will expire 30 days or such lesser number of days as may be specified in the
Terms Agreement after the Closing Time (as hereinafter defined) relating to the
Initial Underwritten Securities, and may be exercised in whole or in part from
time to time only for the purchase of covering over-allotments which may be
made in connection with the offering and distribution of the Initial
Underwritten Securities upon notice by the
5
<PAGE> 9
Representative(s) to the Company setting forth the number of Option Securities
as to which the several Underwriters are then exercising the option and the
time and date of payment and delivery for such Option Securities. Any such
time and date of delivery (a "Date of Delivery") shall be determined by the
Representative(s), but shall not be later than seven full business days and not
earlier than two full business days after the exercise of said option, unless
otherwise agreed upon by the Representative(s) and the Company. If the option
is exercised as to all or any portion of the Option Securities, each of the
Underwriters, acting severally and not jointly, will purchase that proportion
of the total number of Option Securities then being purchased which the number
of Initial Underwritten Securities each such Underwriter has agreed to purchase
as set forth in the related Terms Agreement bears to the total number of
Initial Underwritten Securities, subject to such adjustments as the
Representative(s) in (your) (their) discretion shall make to eliminate any
sales or purchases of fractional shares.
Payment of the purchase price for, and delivery of, any
Initial Underwritten Securities to be purchased by the Underwriters shall be
made at the office of Mudge Rose Guthrie Alexander & Ferdon, 180 Maiden Lane,
New York, New York 10038, or at such other place as shall be agreed upon by
the Representative(s) and the Company, at (9:00) A.M., New York City time, on
the fifth business day (unless postponed in accordance with the provisions of
Section 8) following the date of the Terms Agreement or such other time as
shall be agreed upon by the Representative(s) and the Company (each such time
and date being referred to as a "Closing Time"). In addition, in the event
that any or all of the Option Securities are purchased by the Underwriters,
payment of the purchase price for, and delivery of certificates representing,
such Option Securities, shall be made at the above-mentioned office of Mudge
Rose Guthrie Alexander & Ferdon, or at such other place as shall be agreed upon
by the Representative(s) to the Company. Payment shall be made to the Company
(by wire transfer) (by certified or official bank check or checks in New York
Clearing House or similar next day funds payable to the order of the Company)
against delivery to the Representative(s) for the respective accounts of the
Underwriters of the Underwritten Securities to be purchased by them.
Certificates for such Underwritten Securities shall be in such denominations
and registered in such names as the Representative(s) may request in writing at
least two business days prior to the applicable Closing Time or Date of
Delivery, as the case may be. Such certificates or receipts will be made
available for examination and packaging by the Representative(s) on or before
the first business day prior to Closing Time or Date of Delivery, as the case
may be.
If authorized by the Terms Agreement, the Underwriters named
therein may solicit offers to purchase Underwritten Securities from the Company
pursuant to delayed delivery contracts
6
<PAGE> 10
("Delayed Delivery Contracts") substantially in the form of Exhibit A hereto
with such changes therein as the Company may approve. As compensation for
arranging Delayed Delivery Contracts, the Company will pay to the
Representative(s) at Closing Time, for the accounts of the Underwriters, a fee
specified in the Terms Agreement for each of the Underwritten Securities for
which Delayed Delivery Contracts are made at Closing Time as specified in the
Terms Agreement. Any Delayed Delivery Contracts are to be with institutional
investors of the types set forth in the Prospectus Supplement. At Closing
Time, the Company will enter into Delayed Delivery Contracts (for not less than
the minimum number of Securities per Delayed Delivery Contract specified in the
applicable Terms Agreement) with all purchasers proposed by the Underwriters
and previously approved by the Company as provided below, but not for an
aggregate number of Underwritten Securities in excess of that specified in the
Terms Agreement. The Underwriters will not have any responsibility for the
validity or performance of Delayed Delivery Contracts.
The Representative(s) shall submit to the Company, at least
three business days prior to Closing Time, the names of any institutional
investors with which it is proposed that the Company will enter into Delayed
Delivery Contracts and the number of Underwritten Securities to be purchased by
each of them, and the Company will advise the Representative(s), at least two
business days prior to Closing Time, of the names of the institutions with
which the making of Delayed Delivery Contracts is approved by the Company and
the number of Underwritten Securities to be covered by each such Delayed
Delivery Contract.
The number of Underwritten Securities to be purchased by the
respective Underwriters pursuant to the Terms Agreement shall be reduced by the
number of Underwritten Securities covered by Delayed Delivery Contracts, as to
each Underwriter as set forth in a written notice delivered by the
Representative(s) to the Company; provided, however, that the total number of
Underwritten Securities to be purchased by all Underwriters shall be the total
number of Underwritten Securities covered by the applicable Terms Agreement,
less the number of Underwritten Securities covered by Delayed Delivery
Contracts.
3. Covenants of the Company. In further consideration of the
agreements of the Underwriters contained herein, the Company covenants as
follows:
(a) Immediately following the execution of the Terms
Agreement, the Company will prepare a Prospectus Supplement setting
forth the number of Underwritten Securities covered thereby and their
terms not otherwise set forth in the Prospectus, the names of the
Underwriters participating in the offering and the number of
Underwritten Securities which each severally has agreed to purchase,
the price at which the
7
<PAGE> 11
Underwritten Securities are to be purchased by the Underwriters from
the Company, the initial public offering price, the selling concession
and reallowance, if any, any delayed delivery arrangements, and such
other information as the Representative(s) and the Company deem
appropriate in connection with the offering of the Underwritten
Securities. The Company will promptly transmit copies of the
Prospectus Supplement to the Commission for filing pursuant to Rule
424 of the Securities Act and will furnish to the Underwriters named
therein as many copies of the Prospectus and such Prospectus
Supplement as the Representative(s) shall reasonably request.
(b) To furnish to (the) (each) Representative(s), without
charge, (one) signed copy of the Registration Statement (including
exhibits thereto) and for delivery to each other Underwriter a
conformed copy of the Registration Statement (without exhibits
thereto) and, during the period mentioned in paragraph (d) below, as
many copies of the Prospectus, any documents incorporated by reference
therein and any supplements and amendments thereto or to the
Registration Statement as the Representative(s) may reasonably
request.
(c) At any time when the Prospectus is required by the
Securities Act to be delivered in connection with sales of the
Underwritten Securities, the Company will give the Representative(s)
notice of its intention to file any amendment to the Registration
Statement or any amendment or supplement to the Prospectus, whether
pursuant to the Securities Act, the Exchange Act or otherwise, will
furnish the Representative(s) with copies of each such proposed
amendment or supplement or other documents proposed to be filed a
reasonable time in advance of filing, and will not file any such
proposed amendment or supplement or other documents to which the
Representative(s) shall reasonably object.
(d) If, at any time when the Prospectus is required by
the Securities Act to be delivered in connection with sales of any of
the Underwritten Securities, any event shall occur or condition exist
as a result of which it is necessary, in the opinion of counsel for
the Underwriters or counsel for the Company, to amend or supplement
the Prospectus in order to make the statements therein, in the light
of the circumstances when the Prospectus is delivered to a purchaser,
not misleading, or if, in the opinion of either such counsel, it is
necessary to amend or supplement the Prospectus to comply with law,
the Company will promptly prepare and file with the Commission and
furnish, at its own expense, to the Underwriters, and to the dealers
(whose names and addresses the Representative(s) will furnish to the
Company) to which
8
<PAGE> 12
Underwritten Securities may have been sold by the Representative(s) on
behalf of the Underwriters and to any other dealer upon request,
either amendments or supplements to the Prospectus so that the
statements in the Prospectus as so amended or supplemented will not,
in the light of the circumstances when the Prospectus is delivered to
a purchaser, be misleading or so that the Prospectus, as so amended or
supplemented, will comply with law.
(e) The Company will endeavor in good faith to qualify
the Underwritten Securities for offer and sale under the securities or
Blue Sky laws of such jurisdictions as the Representative(s) shall
reasonably request; provided, however, that the Company shall not be
obligated to file any general consent to service or to qualify as a
foreign corporation in any jurisdiction in which it is not so
qualified. The Company will maintain such qualification in effect for
so long as may be required for the distribution of the Underwritten
Securities. The Company will file such statements and reports as may
be required by the laws of each jurisdiction in which the Underwritten
Securities have been qualified as above provided.
(f) With respect to each sale of Underwritten Securities,
the Company will make generally available to its security holders as
soon as practicable an earnings statement covering a twelve month
period beginning, in each case, not later than the first day of the
Company's first full fiscal quarter after the date of this Agreement,
which earnings statement shall satisfy the provisions of Section 11(a)
of the Securities Act and the rules and regulations of the Commission
thereunder.
(g) Unless otherwise provided in the Terms Agreement,
between the date of the Terms Agreement and the later of termination
of any trading restrictions or Closing Time or Date of Delivery, as
the case may be, with respect to the Underwritten Securities covered
thereby, the Company will not without the Representative(s') prior
consent, offer to sell, or enter into any agreement to sell, any
Securities of the same class or series or ranking on a parity with
such Underwritten Securities or, if such Terms Agreement relates to
Underwritten Securities that are convertible into Common Stock, any
Common Stock or any security convertible into Common Stock (except for
Common Stock issued pursuant to reservations or agreements, pursuant
to any employee stock option plan, stock ownership plan or dividend
reinvestment plan).
9
<PAGE> 13
4. Conditions to Closing. The several obligations of the
Underwriters to purchase Underwritten Securities pursuant to the Terms
Agreement are subject to the following conditions:
(a) As of the applicable Closing Time, there shall not
have been, since the date of the Terms Agreement or since the
respective dates as of which information is given in the Registration
Statement and the Prospectus, as amended and supplemented,
(i) any downgrading, nor shall any notice have been
given of any intended or potential downgrading or of any
review for a possible change that does not indicate the
direction of the possible change, in the rating accorded any
of the Company's securities by any "nationally recognized
statistical rating organization," as such term is defined for
purposes of Rule 436(g)(2) under the Securities Act; and
(ii) any change, or any development involving a
prospective change, in the condition, financial or otherwise,
or in the business or operations, of the Company and its
subsidiaries, taken as a whole, from that set forth in the
Prospectus that, in the reasonable judgment of the
Representative(s), is material and adverse and that makes it,
in the reasonable judgment of the Representative(s),
impracticable to market the Underwritten Securities on the
terms and in the manner contemplated in the Prospectus.
(b) The Representative(s) shall have received at the
Closing Time a certificate, dated the applicable Closing Time and
signed by an executive officer of the Company, to the effect set forth
in clause (a)(i) above and to the effect that the representations and
warranties of the Company contained in this Agreement are true and
correct at the applicable Closing Time and that the Company has
complied with all of the agreements and satisfied all of the
conditions on its part to be performed or satisfied on or before the
applicable Closing Time.
The officer signing and delivering such certificate may
rely upon the best of his knowledge as to proceedings contemplated.
(c) The Representative(s) shall have received at the
Closing Time (i) an opinion of Mudge Rose Guthrie Alexander & Ferdon,
special counsel to the Company, addressing the matters set forth in
paragraphs (i), (ii)(a), (iv), (v), (vi), (vii), (viii) (only as to
the Company and only as to Federal, Delaware and New York law), (ix)
(items (a), (b) and (c)), (x) (to the best of such counsel's
knowledge), (xi) and (xii) of
10
<PAGE> 14
Exhibit B attached hereto, and (ii) an opinion of the (General
Counsel)(Associate General Counsel) of the Company, addressing the
matters set forth in paragraphs (i), (ii), (iii), (vii), (viii), (ix)
(items (d) and (e)), (x), (xi) and (xii) of Exhibit B.
(d) The Representative(s) shall have received at the
applicable Closing Time an opinion of ( ), special
counsel for the Underwriters, dated the applicable Closing Time, to
the effect set forth in Exhibit C.
(e) The Representative(s) shall have received on the date
of the Terms Agreement and as of the applicable Closing Time a letter,
dated such date, in form and substance satisfactory to the
Representative(s), from independent accountants for the Company,
containing statements and information of the type ordinarily included
in accountants' "comfort letters" with respect to the financial
statements and certain financial information contained in or
incorporated by reference into the Prospectus.
(f) In the event the Underwriters exercise their option
provided in a Terms Agreement as set forth in Section 2 hereof to
purchase all or any portion of the Option Securities, the
Representative(s) shall have received:
(1) A certificate, dated such Date of Delivery, signed by
an executive officer of the Company, confirming that the
certificate delivered at Closing Time pursuant to Section 4(b)
hereof remains true and correct as of such Date of Delivery.
(2) An opinion of Mudge Rose Guthrie Alexander & Ferdon,
in form and substance satisfactory to the Representative(s),
dated such Date of Delivery, relating to the Option Securities
and otherwise substantially to the same effect as the opinion
required by Section 4(c)(i) hereof.
(3) An opinion of the (General Counsel)(Associate General
Counsel) of the Company, in form and substance satisfactory to
the Representative(s), dated such Date of Delivery, relating
to the Option Securities and otherwise substantially to the
same effect as the opinion required by Section 4(c)(ii).
(4) An opinion of ( ), counsel for the
Underwriters, dated such Date of Delivery, relating to the
Option Securities and otherwise substantially to the same
effect as the opinion required by Section 4(d) hereof.
11
<PAGE> 15
(5) A letter from the Company's independent accountants
in form and substance satisfactory to the Representative(s)
and dated the Date of Delivery, substantially the same in
scope and substance as the letter furnished to the
Representative(s) pursuant to Section 4(e) hereof on the
applicable Closing Time.
If any condition specified in this Section shall not have been
fulfilled when and as required to be fulfilled, this Agreement may be
terminated by the Representative(s) by notice to the Company at any time at or
prior to the applicable Closing Time, and such termination shall be without any
liability of any party to any other party except as provided in Section 5.
5. Payment of Expenses. The Company will pay all expenses
incident to the performance of its obligations under this Agreement, including
(i) the preparation and filing of the Registration Statement and all amendments
thereto, and the reproduction of this Agreement and the Terms Agreement, (ii)
the preparation, issuance and delivery of the Underwritten Securities to the
Underwriters, (iii) the fees and disbursements of the Company's counsel and
accountant, (iv) the qualifications of the Underwritten Securities under
securities laws in accordance with the provisions of Section 3(e), including
filing fees and the fees and disbursements of counsel for the Underwriters in
connection therewith and in connection with the preparation of any Blue Sky
Surveys and Legal Investment Surveys, (v) the printing and delivery to the
Underwriters in quantities as hereinabove stated of copies of the registration
statement and all amendments thereto, of the Registration Statement and any
amendments thereto, and of the Prospectus and any amendment or supplement
thereto, (vi) the reproduction and delivery to the Underwriters of copies of
the Certificate of Designation and any Blue Sky Surveys and Legal Investment
Surveys, (vii) the fees, if any, of rating agencies, and (viii) the fees and
expenses, if any, incurred in connection with the listing of the Underwritten
Securities and, in the case of Preferred Shares convertible into Common Stock,
Common Stock issuable upon such conversion, on any national securities
exchange.
If this Agreement is terminated by the Representative(s) in
accordance with the provisions of Section 4, the Company shall reimburse the
Underwriters named in the Terms Agreement for all of their out-of-pocket
expenses, including the reasonable fees and disbursements of counsel for the
Underwriters.
6. Indemnification and Contribution. The Company agrees to
indemnify and hold harmless each Underwriter and each person, if any, who
controls such Underwriter within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act from and against any and all
losses, claims, damages and liabilities (including, without limitation, any
legal or other expenses reasonably incurred by any Underwriter or any such
12
<PAGE> 16
controlling person in connection with defending or investigating any such
action or claim) caused by any untrue statement or alleged untrue statement of
a material fact contained in the Registration Statement or any amendment
thereof, any preliminary prospectus or the Prospectus (as amended or
supplemented if the Company shall have furnished any amendments or supplements
thereto), or caused by any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading, except insofar as such losses, claims, damages or liabilities are
caused by any such untrue statement or omission or alleged untrue statement or
omission based upon information relating to any Underwriter furnished to the
Company in writing by such Underwriter through the Representative(s) expressly
for use therein.
Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Company, its directors, its officers who sign
the Registration Statement and each person, if any, who controls the Company
within the meaning of either Section 15 of the Securities Act or Section 20 of
the Exchange Act to the same extent as the foregoing indemnity from the Company
to such Underwriter, but only with reference to information relating to such
Underwriter furnished to the Company by such Underwriter in writing through the
Representative(s) expressly for use in the Registration Statement, any
preliminary prospectus, the Prospectus or any amendments or supplements
thereto.
In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of which
indemnity may be sought pursuant to either of the two preceding paragraphs,
such person (the "indemnified party") shall promptly notify the person against
whom such indemnity may be sought (the "indemnifying party") in writing and the
indemnifying party, upon request of the indemnified party, shall retain counsel
reasonably satisfactory to the indemnified party to represent the indemnified
party and any others the indemnifying party may designate in such proceeding
and shall pay the reasonable fees and disbursements of such counsel related to
such proceeding. In any such proceeding, any indemnified party shall have the
right to retain its own counsel, but the fees and expenses of such counsel
shall be at the expense of such indemnified party unless (i) the indemnifying
party and the indemnified party shall have mutually agreed to the retention of
such counsel or (ii) the named parties to any such proceeding (including any
impleaded parties) include both the indemnifying party and the indemnified
party and representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests between them. It
is understood that the indemnifying party shall not, in respect of the legal
expenses of any indemnified party in connection with any proceeding or related
proceedings in the same jurisdiction, be liable for the fees and expenses of
more than one
13
<PAGE> 17
separate firm (in addition to any local counsel) for all such indemnified
parties and that all such fees and expenses shall be reimbursed as they are
incurred. Such firm shall be designated in writing by the Representative(s),
in the case of parties indemnified pursuant to the second preceding paragraph,
and by the Company, in the case of parties indemnified pursuant to the first
preceding paragraph. The indemnifying party shall not be liable for any
settlement of any proceeding effected without its written consent, but if
settled with such consent or if there be a final judgment for the plaintiff,
the indemnifying party agrees to indemnify the indemnified party from and
against any loss or liability by reason of such settlement or judgment.
Notwithstanding the foregoing sentence, if at any time an indemnified party
shall have requested an indemnifying party to reimburse the indemnified party
for fees and expenses of counsel as contemplated by the third sentence of this
paragraph, the indemnifying party agrees that it shall be liable for any
settlement of any proceeding effected without its written consent if (i) such
settlement is entered into more than 30 days after receipt by such indemnifying
party of the aforesaid request and (ii) such indemnifying party shall not have
reimbursed the indemnified party in accordance with such request prior to the
date of such settlement. No indemnifying party shall, without the prior
written consent of the indemnified party, effect any settlement of any pending
or threatened proceeding in respect of which any indemnified party is or could
have been a party and indemnity could have been sought hereunder by such
indemnified party, unless such settlement includes an unconditional release of
such indemnified party from all liability on claims that are the subject matter
of such proceeding.
If the indemnification provided for in the first or second
paragraph in this Section 6 is unavailable to an indemnified party or
insufficient in respect of any losses, claims, damages or liabilities referred
to therein, then each indemnifying party under such paragraph, in lieu of
indemnifying such indemnified party thereunder, shall contribute to the amount
paid or payable by such indemnified party as a result of such losses, claims,
damages or liabilities (i) in such proportion as is appropriate to reflect the
relative benefits received by the Company on the one hand and the Underwriters
on the other hand from the offering of the Underwritten Securities or (ii) if
the allocation provided by clause (i) above is not permitted by applicable law,
in such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company on
the one hand and of the Underwriters on the other hand in connection with the
statements or omissions that resulted in such losses, claims, damages or
liabilities, as well as any other relevant equitable considerations. The
relative benefits received by the Company on the one hand and the Underwriters
on the other hand in connection with the offering of the Underwritten
Securities shall be deemed to be in the same respective proportions as the net
proceeds from the offering of such Underwritten
14
<PAGE> 18
Securities (before deducting expenses) received by the Company and the total
underwriting discounts and commissions received by the Underwriters, in each
case as set forth in the table on the cover of the Prospectus Supplement, bear
to the aggregate public offering price of the Underwritten Securities. The
relative fault of the Company on the one hand and of the Underwriters on the
other hand shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or omission or alleged
omission to state a material fact relates to information supplied by the
Company or by the Underwriters and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission. The Underwriters' respective obligations to contribute pursuant to
this Section 6 are several in proportion to the respective principal amounts of
Offered Securities purchased by each of such Underwriters, and not joint.
The Company and the Underwriters agree that it would not be
just or equitable if contribution pursuant to this Section 6 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 that does not take account
of the equitable considerations referred to in the immediately preceding
paragraph. The amount paid or payable by an indemnified party as a result of
the losses, claims, damages and liabilities referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, 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 Section 6, no Underwriter
shall be required to contribute any amount in excess of the amount by which the
total price at which the Underwritten Securities underwritten by it and
distributed to the public were offered to the public exceeds the amount of any
damages that 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 Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. The remedies provided
for in this Section 6 are not exclusive and shall not limit any rights or
remedies which may otherwise be available to any indemnified party at law or in
equity.
The indemnity and contribution provisions contained in this
Section 6 and the representations and warranties of the Company contained
herein shall remain operative and in full force and effect regardless of (i)
any termination of this Agreement, (ii) any investigation made by or on behalf
of any Underwriter or any person controlling any Underwriter or by or on behalf
of the Company, its directors or officers or any person controlling the
15
<PAGE> 19
Company and (iii) acceptance of and payment for any of the Underwritten
Securities.
7. Termination. This Agreement shall be subject to
termination, by notice given by the Representative(s) to the Company, at any
time prior to the applicable Closing Time, if (a) after the execution and
delivery of the Terms Agreement and prior to the Closing Time (i) trading
generally shall have been suspended or materially limited on or by, as the case
may be, any of the New York Stock Exchange, the American Stock Exchange or the
National Association of Securities Dealers, Inc., (ii) trading of any
securities of the Company shall have been suspended on any exchange or in any
over-the-counter market, (iii) a general moratorium on commercial banking
activities in New York shall have been declared by either Federal or New York
State authorities, or (iv) there shall have occurred any outbreak or escalation
of hostilities or any change in financial markets or any calamity or crisis
that, in the reasonable judgment of the Representative(s), is material and
adverse and (b) in the case of any of the events specified in clauses (a)(i)
through (iv), such event, singly or together with any other such event, makes
it, in the reasonable judgment of the Representative(s), impracticable to
market the Underwritten Securities on the terms and in the manner contemplated
by the Prospectus.
8. Defaulting Underwriters. If one or more of the
Underwriters participating in an offering of Underwritten Securities shall fail
or refuse at the applicable Closing Time to purchase the Initial Underwritten
Securities which it or they are obligated to purchase under the applicable
Terms Agreement (the "Defaulted Securities"), and the number of Defaulted
Securities is not more than one-tenth of the number of Initial Underwritten
Securities to be purchased pursuant to the Terms Agreement, the non- defaulting
Underwriters named in such Terms Agreement shall be obligated severally in the
proportions that the amount of Initial Underwritten Securities set forth
opposite their respective names above bears to the number of Initial
Underwritten Securities set forth opposite the names of all such non-defaulting
Underwriters, or in such other proportions as the Representative(s) may
specify, to purchase the Initial Underwritten Securities which such defaulting
Underwriter or Underwriters agreed but failed or refused to purchase on such
date; provided that in no event shall the number of Initial Underwritten
Securities that any Underwriter has agreed to purchase pursuant to this
Agreement be increased pursuant to this Section 8 by an amount in excess of
(one-ninth) of such amount of Initial Underwritten Securities without the
written consent of such Underwriter. If, at the applicable Closing Time any
Underwriter or Underwriters shall fail or refuse to purchase Initial
Underwritten Securities and the number of Initial Underwritten Securities with
respect to which such default occurs is more than one-tenth of the number of
Initial Underwritten Securities to be purchased pursuant to such Terms
Agreement, and
16
<PAGE> 20
arrangements satisfactory to the Representative(s) and the Company for the
purchase of such Initial Underwritten Securities are not made within 36 hours
after such default, this Agreement shall terminate without liability on the
part of any non-defaulting Underwriter or the Company. In any such case either
the Representative(s) or the Company shall have the right to postpone the
Closing Time but in no event for longer than seven days, in order that the
required changes, if any, in the Registration Statement and in the Prospectus
or in any other documents or arrangements may be effected. Any action taken
under this paragraph shall not relieve any defaulting Underwriter from
liability in respect of any default of such Underwriter under this Agreement.
If this Agreement shall be terminated by the Underwriters, or
any of them, because of any failure or refusal on the part of the Company to
comply with the terms or to fulfill any of the conditions of this Agreement, or
if for any reason the Company shall be unable to perform its obligations under
this Agreement, the Company will reimburse the Underwriters or such
Underwriters as have so terminated this Agreement with respect to themselves,
severally, for all out-of-pocket expenses (including the fees and disbursements
of their counsel) reasonably incurred by such Underwriters in connection with
this Agreement or the offering of the Underwritten Securities.
9. Parties. This Agreement shall inure to the benefit of and
be binding upon the Company and any Underwriter who becomes a party hereto, and
their respective successors. Nothing expressed or mentioned in this Agreement
is intended or shall be construed to give any person, firm or corporation,
other than the parties hereto or thereto and their respective successors and
the controlling persons and officers and directors referred to in Section 6 and
their heirs and legal representatives, any legal or equitable right, remedy or
claim under or in respect of this Agreement or any provision herein contained.
This Agreement and all conditions and provisions hereof are intended to be for
the sole and exclusive benefit of the parties and their respective successors
and said controlling persons and officers and directors and their heirs and
legal representatives, and for the benefit of no other person, firm or
corporation. No purchaser of Underwritten Securities from any Underwriter
shall be deemed to be a successor by reason merely of such purchase.
10. Counterparts. The Underwriting Agreement may be signed
in any number of counterparts, each of which shall be an original, with the
same effect as if the signatures thereto and hereto were upon the same
instrument.
17
<PAGE> 21
11. Governing Law. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of New York.
12. Headings. The headings of the sections of this Agreement
have been inserted for convenience of reference only and shall not be deemed a
part of this Agreement.
13. Notices. All references herein and in the Underwriting
Agreement to the Representative(s) when made in connection with any notice to
or communication by or with such Representative(s) shall, if there is more than
one representative, be deemed to be to the Lead Representative, as designated
in the Terms Agreement, and all notices shall be given to such Lead
Representative at the address set forth therein.
18
<PAGE> 22
Exhibit A
EL PASO NATURAL GAS COMPANY
(a Delaware corporation)
(Title of Securities)
DELAYED DELIVERY CONTRACT
Dated: ( ), 199( )
El Paso Natural Gas Company
100 North Stanton Street
El Paso, Texas 79901
Attention:
Dear Sirs:
The undersigned hereby agrees to purchase from El Paso Natural
Gas Company (the "Company"), and the Company agrees to sell to the undersigned
on ( ), 19( ) (the "Delivery Date"),
of the Company's (insert title of security) (the "Securities"), offered by the
Company's Prospectus dated ( ), 19( ), as supplemented by the
Prospectus Supplement dated ( ), 19( ), receipt of which is hereby
acknowledged at a purchase price of ( ) to the Delivery Date, and
on the further terms and conditions set forth in this contract.
Payment for the Securities which the undersigned has agreed to
purchase on the Delivery Date shall be made to the Company (by wire transfer)
(or its order by certified or official bank check in New York Clearing House
funds) at the office of Mudge Rose Guthrie Alexander & Ferdon, on the Delivery
Date, upon delivery to the undersigned of the Securities to be purchased by the
undersigned in definitive form and in such denominations and registered in such
names as the undersigned may designate by written or telegraphic communication
addressed to the Company not less than five full business days prior to the
Delivery Date.
The obligation of the undersigned to take delivery of and make
payment for Securities on the Delivery Date shall be subject only to the
conditions that (1) the purchase of Securities to be made by the undersigned
shall not on the Delivery Date be prohibited under the laws of the jurisdiction
to which the undersigned is subject and (2) the Company, on or before (
<PAGE> 23
), 19( ), shall have sold to the Underwriters of the Securities (the
"Underwriters") such number of the Securities as is to be sold to them pursuant
to the Terms Agreement dated ( ), 19( ), between the Company and
the Underwriters. The obligation of the undersigned to take delivery of and
make payment for Securities shall not be affected by the failure of any
purchaser to take delivery of and make payments for Securities pursuant to
other contracts similar to this contract. The undersigned represents and
warrants to you that its investment in the Securities is not, as of the date
hereof, prohibited under the laws of any jurisdiction to which the undersigned
is subject and which govern such investment.
Promptly after completion of the sale to the Underwriters, the
Company will mail or deliver to the undersigned at its address set forth below
notice to such effect, accompanied by a copy of the opinion of counsel for the
Company delivered to the Underwriters in connection therewith.
By the execution hereof, the undersigned represents and
warrants to the Company that all necessary corporate action for the due
execution and delivery of this contract and the payment for and purchase of the
Securities has been taken by it and no further authorization or approval of any
governmental or other regulatory authority is required for such execution,
delivery, payment or purchase, and that, upon acceptance hereof by the Company
and mailing or delivery or a copy as provided below, this contract will
constitute a valid and binding agreement of the undersigned in accordance with
its terms.
This contract will inure to the benefit of and be binding upon
the parties hereto and their respective successors, but will not be assignable
by either party hereto without the written consent of the other.
It is understood that the Company will not accept Delayed
Delivery Contracts for a number of Securities in excess of ( ) and
that the acceptance of any Delayed Delivery Contract is in the Company's sole
discretion and, without limiting the foregoing, need not be on a first-come,
first-served basis. If this contract is acceptable to the Company, it is
requested that the Company sign the form of acceptance on a copy hereof and
mail or deliver a signed copy hereof to the undersigned at its address set
forth below. This will become a binding contract between the Company and the
undersigned when such copy is so mailed or delivered.
A-2
<PAGE> 24
This Agreement shall be governed by the laws of the State of
New York.
Yours very truly,
______________________________
(Name of Purchaser)
By:____________________________
(Title)
______________________________
______________________________
(Address)
Accepted as of the date
first above written.
EL PASO NATURAL GAS COMPANY
By:______________________________
(Title)
A-3
<PAGE> 25
PURCHASER - PLEASE COMPLETE AT TIME OF SIGNING
The name and telephone number of the representative of the
Purchaser with whom details of delivery on the Delivery Date may be discussed
are as follows: (Please print.)
TELEPHONE NO.
(INCLUDING
NAME AREA CODE)
---- ----------
A-4
<PAGE> 26
Exhibit B
Opinion of
Counsel for the Company
The opinion of counsel for the Company to be delivered
pursuant to Section 4(c) of the Underwriting Agreement shall be to the effect
that:
(i) the Company has been duly incorporated and is a
corporation duly organized, validly existing in good standing
under the laws of the State of Delaware;
(ii) (a) the Company has the corporate power and
authority to own its properties and to conduct its business as
described in the Prospectus and (b) the Company is duly
qualified as a foreign corporation to transact business and is
in good standing in each jurisdiction in which the conduct of
its business or its ownership or leasing of property requires
such qualification, except to the extent that the failure to
be so qualified or be in good standing would not have a
material adverse effect on the Company and its subsidiaries,
taken as a whole;
(iii) each significant subsidiary of the Company has
been duly incorporated and is a corporation duly organized,
validly existing in good standing under the laws of the
jurisdiction of its incorporation, has the corporate power and
authority to own 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 the conduct of its business or its
ownership or leasing of property requires such qualification,
except to the extent that the failure to be so qualified or be
in good standing would not have a material adverse effect on
the Company and its significant subsidiaries, taken as a
whole;
(iv) the Underwriting Agreement and the Delayed
Delivery Contracts, if any, have been duly authorized,
executed and delivered by the Company;
(v) the Underwritten Securities have been duly
authorized, executed, issued and delivered and are fully paid
and nonassessable, and the issuance of the Underwritten
Securities is not subject to any preemptive or similar rights;
<PAGE> 27
(vi) if any of the Underwritten Securities are
convertible into shares of Common Stock, the shares of Common
Stock issuable upon conversion thereof have been duly
authorized and reserved for issuance upon such conversion and,
when issued upon such conversion, will be validly issued,
fully paid and nonassessable, and the issuance of such shares
upon such conversion will not be subject to any preemptive or
similar rights;
(vii) the execution and delivery by the Company of,
and the performance by the Company of its obligations under,
the Underwriting Agreement will not contravene any provision
of applicable law or the Restated Certificate of
Incorporation, as amended, or By-laws of the Company;
(viii) the execution and delivery by the Company of,
and the performance by the Company of its obligations under,
the Underwriting Agreement will not contravene, to the best of
such counsel's knowledge, any agreement or other instrument
binding upon the Company or any of its subsidiaries that is
material to the Company and its subsidiaries, taken as a
whole, or, to the best of such counsel's knowledge, any
judgment, order or decree of any governmental body, agency or
court having jurisdiction over the Company or any subsidiary,
and no consent, approval, authorization or order of or
qualification with any governmental body or agency is required
for the performance by the Company of its obligations under
the Underwriting Agreement, except such as may be required by
the securities or Blue Sky laws of the various states in
connection with the offer and sale of the Underwritten
Securities;
(ix) the statements (a) in the Prospectus Supplement
under the captions "( )" and "Underwriting,"
(b) in the Basic Prospectus under the captions "Description of
Capital Stock" and "Plan of Distribution," (c) in the
Registration Statement under Item 15, (d) in "Item 3 -Legal
Proceedings" of the Company's most recent annual report on
Form 10-K incorporated by reference in the Prospectus and (e)
in "Item 1 - Legal Proceedings" of Part II of the Company's
quarterly reports on Form 10-Q, if any, filed since such
annual report, in each case insofar as such statements
constitute summaries of the legal matters, documents or
proceedings referred to therein, fairly present the
information called for with respect to such legal matters,
documents or proceedings and fairly summarize the matters
referred to therein;
(x) after due inquiry, such counsel does not know of
any legal or governmental proceedings instituted or
B-2
<PAGE> 28
threatened against the Company or any of its subsidiaries
which would restrict the issuance and sale of the Underwritten
Securities as contemplated by the Prospectus, or would be
required to be disclosed therein and which is not disclosed;
also, such counsel does not know of any statutes, regulations,
contracts or other documents which are required to be
summarized in the Registration Statement or the Prospectus or
to be filed or incorporated by reference as exhibits to the
Registration Statement which are not summarized, filed or
incorporated as required;
(xi) the Company is not, nor is it directly or
indirectly controlled by or acting on behalf of any person
which is, (i) an "investment company" within the meaning of
the Investment Company Act of 1940, as amended, and the rules
and regulations promulgated by the Commission thereunder, or
(ii) a "holding company" within the meaning of, or subject to
regulation under, the Public Utility Holding Company Act of
1935, as amended, and the rules and regulations promulgated by
the Commission thereunder; and
(xii) such counsel (a) is of the opinion that each
document, if any, filed pursuant to the Exchange Act and
incorporated by reference in the Prospectus (except for
financial statements and schedules and other financial or
statistical data included therein as to which such counsel
need not express any opinion) complied when so filed as to
form in all material respects with the Exchange Act and the
applicable rules and regulations of the Commission thereunder,
(b) believes that (except for financial statements and
schedules and other financial or statistical data as to which
such counsel need not express any belief) each part of the
Registration Statement, when such part became effective, did
not, and as of the date such opinion is delivered, does not
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, (c)
is of the opinion that the Registration Statement and
Prospectus (except for financial statements and schedules and
other financial or statistical data included therein as to
which such counsel need not express any opinion) comply as to
form in all material respects with the requirements of the
Securities Act and the applicable rules and regulations of the
Commission thereunder, and (d) believes that (except for
financial statements and schedules and other financial or
statistical data as to which such counsel need not express any
belief) the Prospectus as of the date such opinion is
delivered does not contain an untrue statement of a material
fact or
B-3
<PAGE> 29
omit to state a material fact necessary in order to make the
statements therein, in light of the circumstances under which they
were made, not misleading.
With respect to paragraph (xii) above, Mudge Rose Guthrie Alexander &
Ferdon may state that their opinion and belief is based upon their
participation in the preparation of the Registration Statement and Prospectus
and any amendments or supplements thereto and documents incorporated therein by
reference and review and discussion of the contents thereof, but are without
independent check or verification, except as specified.
B-4
<PAGE> 30
Exhibit C
Opinion of ( ),
Counsel for the Underwriters
The opinion of ( ), counsel for the
Underwriters, to be delivered pursuant to Section 4(d) of the Underwriting
Agreement shall be to the effect that:
(i) the Company has been duly incorporated and is a
corporation duly organized, validly existing in good standing
under the laws of the State of Delaware;
(ii) the Underwriting Agreement and Delayed Delivery
Contracts, if any, have been duly authorized, executed and
delivered by the Company;
(iii) the Underwritten Securities have been duly
authorized, executed, issued and delivered and are fully paid
and nonassessable, and the issuance of the Underwritten
Securities is not subject to any preemptive or similar rights;
(iv) if any of the Underwritten Securities are
convertible into shares of Common Stock, the shares of Common
Stock issuable upon conversion thereof have been duly
authorized and reserved for issuance upon such conversion and,
when issued upon such conversion, will be validly issued,
fully paid and nonassessable, and the issuance of such shares
upon such conversion will not be subject to any preemptive or
similar rights.
(v) the statements (a) in the Prospectus Supplement
under the captions "( )" and "Underwriting," and
(b) in the Basic Prospectus under the captions "Description of
Capital Stock" (other than under the caption "Shareholder
Rights Agreement," as to which we express no opinion) and
"Plan of Distribution," in each case insofar as such
statements constitute summaries of the legal matters or
documents referred to therein, fairly present the information
called for with respect to such legal matters or documents and
fairly summarize the matters referred to therein;
(vi) the Registration Statement became effective
under the Securities Act on ( ), and, to the best
knowledge of such counsel, no stop order suspending the
effectiveness of the Registration Statement has been issued
and no proceedings for that purpose have been
<PAGE> 31
initiated or are pending or contemplated under the Securities
Act; and
(vii) such counsel (1) believes that (except for
financial statements and schedules and other financial or
statistical data as to which such counsel need not express any
belief) each part of the Registration Statement, when such
part became effective, did not 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, (2) is of the opinion that the Registration
Statement and Prospectus (except for financial statements and
schedules and other financial or statistical data included
therein as to which such counsel need not express any opinion)
comply as to form in all material respects with the Securities
Act and the applicable rules and regulations of the Commission
thereunder, and (3) believes that (except for financial
statements and schedules and other financial or statistical
data as to which such counsel need not express any belief) the
Prospectus as of the date such opinion is delivered does not
contain an untrue statement of a material fact or omit to
state a material fact necessary in order to make the
statements therein, in light of the circumstances under which
they were made, not misleading.
With respect to clause (vii) above, such counsel may state
that their opinion and belief is based upon their participation in the
preparation of the Registration Statement and the Prospectus and any amendments
or supplements thereto (other than the documents incorporated by reference) and
upon review and discussion of the contents thereof (including documents
incorporated by reference) but are without independent check or verification,
except as specified.
Such counsel may rely, to the extent their opinions are based
upon matters governed by the laws of other jurisdictions, upon the opinion of
other counsel admitted to the bar in such jurisdictions.
C-2
<PAGE> 1
EXHIBIT 1.3
EL PASO NATURAL GAS COMPANY
($ )
Medium-Term Notes, Series A
Due from 9 Months to 40 Years from Date of Issue
DISTRIBUTION AGREEMENT
Dated: ( ), 19( )
(NAMES AND ADDRESSES OF AGENTS)
Dear Sirs:
El Paso Natural Gas Company, a Delaware corporation (the
"Company"), confirms its agreement with each of you with respect to the issue
and sale from time to time by the Company of up to ($ ) aggregate
principal amount of its Medium-Term Notes, Series A, Due from 9 Months to 40
Years from Date of Issue (the "Notes"). The Notes will be issued under an
Indenture, dated as of January 1, 1992 (the "Indenture"), between the Company
and Citibank, N.A., as Trustee (the "Trustee"), and will have the maturities,
interest rates or interest rate formulas, if any, redemption or sinking fund
provisions, if any, and other terms as set forth in the Prospectus referred to
below, as it may be amended or supplemented, from time to time, including any
supplement to the Prospectus that sets forth only the terms of a particular
issue of the Notes (a "Pricing Supplement").
Subject to the reservation by the Company of the right to sell
Notes directly to investors on its own behalf, the Company hereby appoints
( ) and ( )(individually, an "Agent" and collectively, the
"Agents") as its agents, subject to Section 12, for the purpose of soliciting
and receiving offers to purchase Notes from the Company by others and, so long
as this Agreement shall remain in effect with respect to each Agent, on the
basis of the representations and warranties herein contained, but subject to
the terms and conditions herein set forth, each Agent agrees to use best
efforts to solicit and receive offers to purchase Notes upon terms acceptable
to the Company at such times and in such amounts as the Company shall from
time to time specify. In addition, any Agent may also purchase Notes as
principal pursuant to the terms of a terms agreement relating to such sale (a
"Terms Agreement") in accordance with the provisions of Section 2(b) hereof.
The Company may from time to time offer Notes for sale otherwise than through
the Agents; provided, however, that (i) so long as this Agreement shall remain
in effect, the Company shall not solicit or accept offers to purchase Notes
through any agent other than the Agents unless such other agent shall have
entered into an agreement with the Company containing terms substantially the
same as those set forth in this
<PAGE> 2
Agreement, and (ii) promptly following the acceptance by the Company of any
offer to purchase Notes pursuant to such agency, the Company shall provide the
Agents with notice in writing or by telecopy of the terms of such sale. In
acting under this Agreement and in connection with the sale of any Notes by the
Company (other than Notes sold to an Agent pursuant to a Terms Agreement), each
Agent is acting solely as agent of the Company and does not assume any
obligation towards or relationship of agency or trust with any purchaser of the
Notes or assume any obligation towards, or any liability as the result of any
act or failure to act of, the other Agent.
The Company has filed with the Securities and Exchange
Commission (the "Commission") a registration statement on Form S-3 (No. 33- )
in respect of debt securities (including the Notes), shares of the Company's
Common Stock, $3.00 par value, and shares of the Company's Preferred Stock,
$.01 par value, which registration statement also constitutes post-effective
amendment No. 1 to registration statement No. 33-44327 relating to certain of
the Company's debt securities. Such registration statement and such
post-effective amendment, as amended, have been declared effective by the
Commission and the Indenture has been requalified under the Trust Indenture Act
of 1939, as amended (the "Trust Indenture Act"). Such registration statement
and such post-effective amendment, as amended, and the combined prospectus
constituting a part thereof, including the exhibits thereto, as amended at the
Commencement Date (as hereinafter defined), is hereinafter collectively
referred to as the "Registration Statement." The Company proposes to file with
the Commission from time to time, pursuant to Rule 424 under the Securities Act
of 1933, as amended (the "Securities Act"), supplements to the prospectus
included in the Registration Statement that will, among other things, describe
certain terms of the Notes. The prospectus in the form in which it appears in
the Registration Statement is hereinafter referred to as the "Basic
Prospectus." The term "Prospectus" means the Basic Prospectus as supplemented
as of the Commencement Date by a prospectus supplement specifically relating to
the Notes. As used herein, the terms "Basic Prospectus" and "Prospectus" shall
include in each case the documents, if any, incorporated by reference therein.
The terms "supplement," "amendment" and "amend" as used herein shall include
all documents deemed to be incorporated by reference in the Prospectus that are
filed subsequent to the date of the Basic Prospectus by the Company with the
Commission pursuant to the Securities Exchange Act of 1934, as amended (the
"Exchange Act").
1. Representations and Warranties. The Company
represents and warrants to and agrees with each Agent as of the Commencement
Date, as of each date on which an Agent solicits offers to purchase Notes, as
of each date on which the Company accepts an offer to purchase Notes (including
any purchase by an Agent pursuant to a Terms Agreement), as of each date the
Company issues and delivers Notes and as of each date the Registration
Statement or the Basic Prospectus is amended or supplemented, as follows (it
being understood that such representations, warranties and agreements shall be
deemed to relate to the Registration Statement, the Basic Prospectus and the
Prospectus, each as amended or supplemented to each such date):
(a) The Registration Statement has become effective, no
stop order suspending the effectiveness of the Registration Statement is in
effect, and no proceedings for such purpose are pending before or, to the best
of the Company's knowledge, contemplated by the Commission.
-2-
<PAGE> 3
(b) (i) Each document, if any, filed or to be filed
pursuant to the Exchange Act and incorporated by reference in the Prospectus
complied or will comply when so filed in all material respects with the
Exchange Act and the applicable rules and regulations of the Commission
thereunder; (ii) each part of the Registration Statement, when such part became
effective, did not contain, and each such part, as amended or supplemented, if
applicable, will not contain any 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; (iii) the Registration Statement and the
Prospectus comply, and, as amended or supplemented, if applicable, will comply
in all material respects with the Securities Act and the applicable rules and
regulations of the Commission thereunder; and (iv) the Prospectus does not
contain and, as amended or supplemented, if applicable, will not contain any
untrue statement of a material fact or omit to state a material fact necessary
to make the statements therein, in the light of the circumstances under which
they were made, not misleading, except that (1) the representations and
warranties set forth in this Section 1(b) do not apply (A) to statements or
omissions in the Registration Statement or the Prospectus based upon
information relating to an Agent furnished to the Company in writing by such
Agent expressly for use in the Registration Statement or Prospectus, or (B) to
that part of the Registration Statement that constitutes the Statement of
Eligibility (Form T-1) of the Trustee under the Trust Indenture Act, and (2)
the representations and warranties set forth in clauses (iii) and (iv) above,
when made as of the Commencement Date or as of any date on which an Agent
solicits offers to purchase Notes or on which the Company accepts an offer to
purchase Notes, shall be deemed not to cover information concerning an offering
of particular Notes to the extent such information will be set forth in a
Pricing Supplement.
(c) The Company has been duly incorporated and is a
corporation duly organized, validly existing in good standing under the laws of
the State of Delaware, has the corporate power and authority to own 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 the conduct of its business or its
ownership or leasing of property requires such qualification, except to the
extent that the failure to be so qualified or be in good standing would not
have a material adverse effect on the Company and its subsidiaries, taken as a
whole.
(d) Each significant subsidiary of the Company within the
meaning of Regulation S-X (each hereinafter referred to as a "significant
subsidiary") has been duly incorporated and is a corporation duly organized,
validly existing in good standing under the laws of the jurisdiction of its
incorporation, has the corporate power and authority to own 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 the conduct of its business or its ownership or leasing
of property requires such qualification, except to the extent that the failure
to be so qualified or be in good standing would not have a material adverse
effect on the Company and its significant subsidiaries, taken as a whole.
(e) Each of this Agreement and any applicable Written
Terms Agreement (as hereinafter defined) has been duly authorized, executed and
delivered by the Company.
(f) The Indenture has been duly authorized, executed and
delivered by the Company and duly requalified under the Trust Indenture Act and
is a valid and legally binding
-3-
<PAGE> 4
agreement of the Company, enforceable in accordance with its terms, subject, as
to enforcement, to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and other laws of general applicability relating to or affecting
creditors' rights and to general equity principles.
(g) The Notes have been duly authorized and, when the
terms of the Notes and their issue and sale have been duly established in
accordance with the Indenture and this Agreement, and when duly executed and
authenticated in accordance with the provisions of the Indenture and issued and
delivered against payment therefor in accordance with this Agreement, the Notes
will be entitled to the benefits of the Indenture and will be valid and legally
binding obligations of the Company, enforceable in accordance with their terms,
subject, as to enforcement, to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and other laws of general applicability relating to
or affecting creditors' rights and to general equity principles.
(h) The execution and delivery by the Company of, and the
performance by the Company of its obligations under, this Agreement, the
Indenture, the Notes and any applicable Written Terms Agreement, will not
contravene any provision of applicable law or the Restated Certificate of
Incorporation, as amended, or By-laws of the Company or any agreement or other
instrument binding upon the Company or any of its subsidiaries that is material
to the Company and its subsidiaries, taken as a whole, or any judgment, order
or decree of any governmental body, agency or court having jurisdiction over
the Company or any subsidiary, and no consent, approval, authorization or order
of or qualification with any governmental body or agency is required for the
performance by the Company of its obligations under this Agreement, the
Indenture, the Notes and any applicable Terms Agreement, except such as may be
required by the securities or Blue Sky laws of the various states in connection
with the offer and sale of the Notes.
(i) There has not occurred any material adverse change,
or any development involving a prospective material adverse change, in the
condition, financial or otherwise, or in the business or operations of the
Company and its subsidiaries, taken as a whole, from that set forth in the
Prospectus, as amended or supplemented.
(j) All descriptions in the Registration Statement and
Prospectus of statutes, regulations, legal or governmental proceedings,
contracts and other documents are accurate in all material respects and fairly
present in all material respects the information required to be shown; and
there are no legal or governmental proceedings instituted or, to the best of
the Company's knowledge, threatened against the Company or any of its
subsidiaries which would restrict the issuance and sale of the Notes as
contemplated by the Prospectus or would be required to be disclosed therein and
which is not disclosed, or any statutes, regulations, contracts or other
documents which are required to be summarized in the Registration Statement or
the Prospectus or to be filed or incorporated by reference as exhibits to the
Registration Statement which are not summarized, filed or incorporated as
required.
(k) The Company is not, nor is it directly or indirectly
controlled by or acting on behalf of any person which is, (i) an "investment
company" within the meaning of the Investment Company Act of 1940, as amended,
and the rules and regulations promulgated by the Commission thereunder, or (ii)
a "holding company" within the meaning of, or subject to
-4-
<PAGE> 5
regulation under, the Public Utility Holding Company Act of 1935, as amended,
and the rules and regulations promulgated by the Commission thereunder.
(l) The Company has complied with all provisions of
Section 517.075, Florida Statutes (Chapter 92-198, Laws of Florida).
Notwithstanding the foregoing, the representations and
warranties set forth in Section 1(b) (iii) and (iv), (g) (except as to due
authorization of the Notes) and (h), when made as of the Commencement Date, or
as of any date on which an Agent solicits offers to purchase Notes, with
respect to any Notes the payments of principal or interest on which will be
determined by reference to one or more currency exchange rates, commodity
prices, equity indices or other factors, shall be deemed not to address the
application of the Commodity Exchange Act, as amended, or the rules,
regulations or interpretations of the Commodity Futures Trading Commission.
2. Solicitations as Agent; Purchases as Principal.
(a) Solicitations as Agent. In connection with an
Agent's actions as agent hereunder, such Agent agrees to use best efforts to
solicit offers to purchase Notes upon the terms and conditions set forth in the
Prospectus as then amended or supplemented.
The Company reserves the right, in its sole discretion, to
instruct the Agents to suspend at any time, for any period of time or
permanently, the solicitation of offers to purchase Notes. Upon receipt of
telephonic notice confirmed in writing from the Company, the Agents will
forthwith suspend solicitations of offers to purchase Notes from the Company
until such time as the Company has advised the Agents that such solicitation
may be resumed. While such solicitation is suspended, the Company shall not be
required to deliver any certificates, opinions or letters in accordance with
Sections 5; provided, however, that if the Registration Statement or Prospectus
is amended or supplemented during the period of suspension (other than by an
amendment or supplement providing solely for a change in the interest rates,
redemption provisions, amortization schedules or maturities offered on the
Notes or for a change deemed immaterial in the reasonable opinion of the
Agents), no Agent shall be required to resume soliciting offers to purchase
Notes until the Company has delivered such certificates, opinions and letters
as such Agent may request.
The Company agrees to pay to each Agent, as consideration for
the sale of each Note resulting from a solicitation made or an offer to
purchase received by such Agent, a commission in the form of a discount from
the purchase price of such Note equal to the percentage set forth below of the
purchase price of such Note:
-5-
<PAGE> 6
<TABLE>
<CAPTION>
TERM COMMISSION RATE
---- ---------------
<S> <C>
From 9 months to less than 1 year .%
From 1 year to less than 18 months .%
From 18 months to less than 2 years .%
From 2 years to less than 3 years .%
From 3 years to less than 4 years .%
From 4 years to less than 5 years .%
From 5 years to less than 6 years .%
From 6 years to less than 7 years .%
From 7 years to less than 10 years .%
From 10 years to less than 15 years .%
From 15 years to less than 30 years .%
From 30 years to and including 40 years .%
</TABLE>
Each Agent shall communicate to the Company, orally or in
writing, each offer to purchase Notes received by such Agent as agent that in
its reasonable judgment should be considered by the Company. The Company shall
have the sole right to accept offers to purchase Notes and may reject any offer
in whole or in part. Each Agent shall have the right without notice to the
Company to reject any offer to purchase Notes that it, in its discretion
reasonably exercised, considers to be unacceptable, and any such rejections
shall not be deemed a breach of its agreements contained herein. The
procedural details relating to the issue and delivery of Notes sold by the
Agents as agents and the payment therefor shall be as set forth in the
Administrative Procedures (as hereinafter defined).
(b) Purchases as Principal. Each sale of Notes to an
Agent as principal shall be made in accordance with the terms of this
Agreement. In connection with each such sale, the Company will enter into a
Terms Agreement that will provide for the sale of such Notes to and the
purchase thereof by such Agent. Each Terms Agreement will take the form of
either (i) a written agreement between such Agent and the Company, which may be
substantially in the form of Exhibit A hereto (a "Written Terms Agreement"), or
(ii) an oral agreement between such Agent and the Company confirmed in writing
by such Agent to the Company.
An Agent's commitment to purchase Notes pursuant to a Terms
Agreement shall be deemed to have been made on the basis of the representations
and warranties of the Company herein contained and shall be subject to the
terms and conditions herein set forth. Each Terms Agreement shall specify the
principal amount of Notes to be purchased by such Agent pursuant thereto, the
maturity date of such Notes, the price to be paid to the Company for such
Notes, the interest rate and interest rate formula, if any, applicable to such
Notes and any other terms of such Notes. Each such Terms Agreement may also
specify any requirements for officers' certificates, opinions of counsel and
letters from the independent public accountants of the Company pursuant to
Section 4 hereof. A Terms Agreement may also specify certain provisions
relating to the reoffering of such Notes by such Agent.
-6-
<PAGE> 7
Each Terms Agreement shall specify the time and place of
delivery of and payment for such Notes. Unless otherwise specified in a Terms
Agreement, the procedural details relating to the issue and delivery of Notes
purchased by an Agent as principal and the payment therefor shall be as set
forth in the Administrative Procedures (as defined herein). Each date of
delivery of and payment for Notes to be purchased by an Agent pursuant to a
Terms Agreement is referred to herein as a "Settlement Date."
Unless otherwise specified in a Terms Agreement, if an Agent
is purchasing Notes as principal it may resell such Notes to other dealers.
Any such sales may be at a discount, which shall not exceed the amount set
forth in the Pricing Supplement relating to such Notes.
(c) Administrative Procedures. The Agents and the
Company agree to perform the respective duties and obligations specifically
provided to be performed in the Medium-Term Notes Administrative Procedures
(attached hereto as Exhibit B) (the "Administrative Procedures"), as amended
from time to time. The Administrative Procedures may be amended only by
written agreement of the Company and the Agents.
(d) Delivery. The documents required to be delivered by
Section 4 of this Agreement as a condition precedent to each Agent's obligation
to begin soliciting offers to purchase Notes as an agent of the Company shall
be delivered at the office of Mudge Rose Guthrie Alexander & Ferdon, special
counsel for the Company, not later than (3:00) p.m., New York time, on the date
hereof, or at such other time and/or place as the Agents and the Company may
agree upon in writing, but in no event later than the day prior to the earlier
of (i) the date on which the Agents begin soliciting offers to purchase Notes
and (ii) the first date on which the Company accepts any offer by an Agent to
purchase Notes as principal pursuant to a Terms Agreement. The date of
delivery of such documents is referred to herein as the "Commencement Date."
(e) Obligations Several. The Company acknowledges
that the obligations of the Agents under this Agreement are several and not
joint.
3. Agreements of the Company. The Company agrees with
each Agent that:
(a) Prior to the termination of the offering of the Notes
pursuant to this Agreement or any Terms Agreement, the Company will not file
any supplement relating to the Notes or any amendment to the Registration
Statement unless the Company has previously furnished to the Agents copies
thereof for their review and will not file any such proposed supplement or
amendment to which the Agents reasonably object; provided, however, that (i)
the foregoing requirement shall not apply to any of the Company's periodic
filings with the Commission required to be filed pursuant to Section 13(a),
13(c), 14 or 15(d) of the Exchange Act, copies of which filings the Company
will cause to be delivered to the Agents promptly after being transmitted for
filing with the Commission and (ii) any Pricing Supplement that merely sets
forth the terms or a description of particular Notes shall only be reviewed and
approved by the Agent or Agents offering such Notes. Subject to the foregoing
sentence, the Company will promptly cause each supplement to be filed with or
transmitted for filing to the Commission in accordance with Rule 424(b) under
the Securities Act. The Company will promptly advise the Agents (i) of the
filing of any amendment or supplement to the Prospectus (except that notice of
the filing of an amendment or supplement to the Prospectus that merely sets
forth the terms
-7-
<PAGE> 8
or a description of particular Notes shall only be given to the Agent or Agents
offering such Notes), (ii) of the filing and effectiveness of any amendment to
the Registration Statement, (iii) of any request by the Commission for any
amendment to the Registration Statement or any amendment or supplement to the
Prospectus or for any additional information, (iv) of the issuance by the
Commission of any stop order suspending the effectiveness of the Registration
Statement or the institution or threatening of any proceeding for that purpose,
and (v) of the receipt by the Company of any notification with respect to the
suspension of the qualification of the Notes for sale in any jurisdiction or
the initiation 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
notice of suspension of qualification and, if issued, to obtain as soon as
possible the withdrawal thereof. If the Prospectus is amended or supplemented
as a result of the filing under the Exchange Act of any document incorporated
by reference in the Prospectus, no Agent shall be obligated to solicit offers
to purchase Notes so long as it is not reasonably satisfied with such document.
(b) If, at any time when a Prospectus is required by the
Securities Act to be delivered in connection with sales of any of the Notes,
any event shall occur or condition exist as a result of which it is necessary,
in the opinion of counsel for the Agents or counsel for the Company, to amend
or supplement the Prospectus in order to make the statements therein, in the
light of the circumstances when the Prospectus, as then amended or
supplemented, is delivered to a purchaser, not misleading, or if, in the
opinion of either such counsel, it is necessary at any time to amend or
supplement the Prospectus, as then amended or supplemented, to comply with law,
the Company will immediately notify the Agents by telephone (with confirmation
in writing) to suspend solicitation of offers to purchase Notes and, if so
notified by the Company, the Agents shall forthwith suspend such solicitation
and cease using the Prospectus, as then amended or supplemented. If the
Company shall decide to amend or supplement the Registration Statement or
Prospectus, as then amended or supplemented, it shall so advise the Agents
promptly by telephone (with confirmation in writing) and, at its own expense,
shall prepare and cause to be filed promptly with the Commission an amendment
or supplement to the Registration Statement or Prospectus, as then amended or
supplemented, satisfactory in all respects to the Agents, that will correct
such statement or omission or effect such compliance and will supply such
amended or supplemented Prospectus to the Agents in such quantities as they may
reasonably request. If any documents, certificates, opinions and letters
furnished to the Agents pursuant to paragraph (f) below and Section 5 in
connection with the preparation and filing of such amendment or supplement are
satisfactory in all respects to the Agents, upon the filing with the Commission
of such amendment or supplement to the Prospectus or upon the effectiveness of
an amendment to the Registration Statement, the Agents will resume the
solicitation of offers to purchase Notes thereunder. Notwithstanding any other
provision of this Section 3(b), until the distribution of any Notes an Agent
may own as principal has been completed, if any event described above in this
paragraph (b) occurs, the Company will, at its own expense, forthwith prepare
and cause to be filed promptly with the Commission an amendment or supplement
to the Registration Statement or Prospectus, as then amended or supplemented,
satisfactory in all respects to such Agent, will supply such amended or
supplemented Prospectus to such Agent in such quantities as it may reasonably
request and shall furnish to such Agent pursuant to paragraph (f) below and
Section 5 such documents, certificates, opinions and letters as it may request
in connection with the preparation and filing of such amendment or supplement.
-8-
<PAGE> 9
(c) The Company will make generally available to its
security holders and to each Agent as soon as practicable an earnings statement
that satisfies the provisions of Section 11(a) of the Securities Act and the
rules and regulations of the Commission thereunder covering twelve month
periods beginning, in each case, not later than the first day of the Company's
fiscal quarter next following the "effective date" (as defined in Rule 158
under the Securities Act) of the Registration Statement with respect to each
sale of Notes. If such fiscal quarter is the last fiscal quarter of the
Company's fiscal year, such earning statement shall be made available not later
than 90 days after the close of the period covered thereby and in all other
cases shall be made available not later than 45 days after the close of the
period covered thereby.
(d) The Company will furnish to each Agent, without
charge, one signed copy of the Registration Statement, including exhibits and
all amendments thereto, and during the period mentioned in Section 3(b) above
as many copies of the Prospectus, any documents incorporated by reference
therein and any supplements and amendments thereto as such Agent may reasonably
request.
(e) The Company will endeavor in good faith to qualify
the Notes for offer and sale under the securities or Blue Sky laws of such
jurisdictions as the Agents shall reasonably request; provided, however, that
the Company shall not be obligated to file any general consent to service or to
qualify as a foreign corporation in any jurisdiction in which it is not so
qualified. The Company will maintain such qualification in effect for so long
as may be required for the distribution of the Notes. The Company will file
such statements and reports as may be required by the laws of each jurisdiction
in which the Notes have been qualified as above provided.
(f) The Company shall furnish to the Agents such relevant
documents and certificates of officers of the Company relating to the business,
operations and affairs of the Company, the Registration Statement, the
Prospectus, any amendments or supplements thereto, the Indenture, the Notes,
this Agreement, the Administrative Procedures, any Terms Agreement and the
performance by the Company of its obligations hereunder or thereunder as the
Agents may from time to time reasonably request.
(g) The Company shall notify the Agents promptly in
writing of any downgrading, or of its receipt of any notice of any intended or
potential downgrading or of any review for a possible change that does not
indicate the direction of the possible change, in the rating accorded any of
the Company's securities by any "nationally recognized statistical rating
organization," as such term is defined for purposes of Rule 436(g)(2) under the
Securities Act.
(h) The Company will, whether or not any sale of Notes is
consummated, pay all expenses incident to the performance of its obligations
under this Agreement and any Terms Agreement, including: (i) the preparation
and filing of the Registration Statement and the Prospectus and all amendments
and supplements thereto (including any Pricing Supplement), (ii) the
preparation, issuance and delivery of the Notes, (iii) the fees and
disbursements of the Company's counsel and accountant and of the Trustee and
its counsel, (iv) the qualification of the Notes under securities or Blue Sky
laws in accordance with the provisions of Section 3(e), including filing fees
and the reasonable fees and disbursements of counsel for the Agents in
connection therewith and in connection with the preparation of any Blue Sky
Surveys and Legal Investment Surveys, (v) the printing and delivery to the
Agents in quantities as hereinabove
-9-
<PAGE> 10
stated of copies of the Registration Statement and all amendments thereto and
of the Prospectus and any amendments or supplements thereto, (vi) the
reproduction and delivery to the Agents of copies of the Indenture and any Blue
Sky Surveys or Legal Investment Surveys, (vii) any fees charged by rating
agencies for the rating of the Notes, (viii) the reasonable fees and
disbursements of counsel for the Agents incurred in connection with the
offering and sale of the Notes, including any opinions to be rendered by such
counsel hereunder, and (ix) any reasonable out-of-pocket expenses incurred by
the Agents; provided that any advertising expenses incurred by the Agents shall
have been approved by the Company.
(i) Between the date of any Terms Agreement and the
Settlement Date with respect to such Terms Agreement, the Company will not,
without such Agent's prior consent, offer, sell, contract to sell or otherwise
dispose of any debt securities of the Company substantially similar to such
Notes (other than (i) the Notes that are to be sold pursuant to such Terms
Agreement, (ii) Notes previously agreed to be sold by the Company, and (iii)
commercial paper issued in the ordinary course of business), except as may
otherwise be provided in such Terms Agreement.
4. Conditions of the Agents' Obligations. Each Agent's
obligation to solicit offers to purchase Notes as agent of the Company, each
Agent's obligation to purchase Notes pursuant to any Terms Agreement and the
obligation of any other purchaser to purchase Notes will be subject to the
accuracy of the representations and warranties on the part of the Company
herein, to the accuracy of the statements of the Company's officers made in
each certificate furnished pursuant to the provisions hereof and to the
performance and observance by the Company of all covenants and agreements
herein contained on its part to be performed and observed (in the case of an
Agent's obligation to solicit offers to purchase Notes, at the time of such
solicitation, and, in the case of an Agent's or any other purchaser's
obligation to purchase Notes, at the time the Company accepts the offer to
purchase such Notes and at the time of issuance and delivery) and (in each
case) to the following additional conditions precedent when and as specified:
(a) Prior to such solicitation or purchase, as the case
may be:
(i) there shall not have occurred any change, or any
development involving a prospective change, in the condition,
financial or otherwise, or in the business or operations of the
Company and its subsidiaries, taken as a whole, from that set forth in
the Prospectus, as amended or supplemented at the time of such
solicitation or at the time such offer to purchase was made, that, in
the reasonable judgment of the relevant Agent, is material and adverse
and that makes it, in the reasonable judgment of such Agent,
impracticable to market the Notes on the terms and in the manner
contemplated by the Prospectus, as so amended or supplemented;
(ii) there shall not have occurred any (A) suspension or
material limitation of trading generally on or by, as the case may be,
any of the New York Stock Exchange, the American Stock Exchange, the
National Association of Securities Dealers, Inc., the Chicago Board
Options Exchange, the Chicago Mercantile Exchange or the Chicago Board
of Trade, (B) suspension of trading of any securities of the Company
on any exchange or in any over-the-counter market,
-10-
<PAGE> 11
(C) declaration of a general moratorium on commercial banking
activities in New York by either Federal or New York State
authorities, or (D) any outbreak or escalation of hostilities or any
change in financial markets or any calamity or crisis that, in the
reasonable judgment of the relevant Agent, is material and adverse
and, in the case of any of the events specified in clauses (ii)(A)
through (D), such event, singly or together with any other such event,
makes it, in the reasonable judgment of such Agent, impracticable to
market the Notes on the terms and in the manner contemplated by the
Prospectus, as amended or supplemented at the time of such
solicitation or at the time such offer to purchase was made; and
(iii) there shall not have occurred any downgrading, nor
shall any notice have been given of any intended or potential
downgrading or of any review for a possible change that does not
indicate the direction of the possible change, in the rating accorded
any of the Company's securities by any "nationally recognized
statistical rating organization," as such term is defined for purposes
of Rule 436(g)(2) under the Securities Act;
(A) except, in each case described in paragraph (i),
(ii) or (iii) above, as disclosed to the relevant Agent in writing by
the Company prior to such solicitation or, in the case of a purchase
of Notes, as disclosed to the relevant Agent before the offer to
purchase such Notes was made or (B) unless in each case described in
(ii) above, the relevant event shall have occurred and been known to
the relevant Agent before such solicitation or, in the case of a
purchase of Notes, before the offer to purchase such Notes was made.
(b) On the Commencement Date and, if called for by any
Terms Agreement, on the corresponding Settlement Date, the relevant Agents
shall have received (i) an opinion of Mudge Rose Guthrie Alexander & Ferdon,
special counsel to the Company, addressing the matters set forth in paragraphs
(i), (ii)(a), (iv), (v), (vi), (vii), (viii) (only as to the Company and only
as to Federal, Delaware and New York law), (ix) (items (a), (b) and (c)), (x)
(to the best of such counsel's knowledge), (xi), (xii) and (xiii) of Exhibit C
attached hereto, and (ii) an opinion of the (General Counsel)(Associate General
Counsel) of the Company addressing the matters set forth in paragraphs (i),
(ii), (iii), (vii), (viii), (ix) (items (d) and (e)), (x), (xii), and (xiii) of
Exhibit C.
(c) On the Commencement Date, and, if called for by any
Terms Agreement, on the corresponding Settlement Date, the relevant Agents
shall have received an opinion of ( ), special counsel to the
Agents, to the effect set forth in Exhibit D.
(d) On the Commencement Date and, if called for by any
Terms Agreement, on the corresponding Settlement Date, the relevant Agents
shall have received a certificate, dated the Commencement Date or such
Settlement Date, as the case may be, signed by an executive officer of the
Company, to the effect set forth in subparagraph (a)(iii) above and to the
effect that the representations and warranties of the Company contained in this
Agreement are true and correct as of such date and that the Company has
complied with all of the agreements and satisfied all of the conditions on its
part to be performed or satisfied on or before such date.
-11-
<PAGE> 12
The officer signing and delivering such certificate may rely upon the
best of his knowledge as to proceedings contemplated.
(e) On the Commencement Date and, if called for by any
Terms Agreement, on the corresponding Settlement Date, the relevant Agents
shall have received a letter or letters, dated as of the Commencement Date or
such Settlement Date, as the case may be, in form and substance satisfactory to
such Agents, from independent accountants for the Company, containing
statements and information of the type ordinarily included in accountants'
"comfort letters" to underwriters with respect to the financial statements
and certain financial information contained in or incorporated by reference
into the Prospectus, as then amended or supplemented.
(f) On the Commencement Date and on each Settlement Date,
the Company shall have furnished to the relevant Agents such appropriate
further information, certificates and documents as they may reasonably request.
5. Additional Agreements of the Company.
(a) Each time the Registration Statement or Prospectus
is amended or supplemented (other than by Pricing Supplement providing solely
for a change in the interest rates or interest rate formulas, redemption or
sinking fund provisions, amortization schedules or maturities offered on the
Notes or for a change deemed immaterial in the reasonable opinion of the
Agents), the Company will deliver or cause to be delivered forthwith to each
Agent a certificate signed by an executive officer of the Company, dated the
date of such amendment or supplement, as the case may be, in form reasonably
satisfactory to the Agents, of the same tenor as the certificate referred to in
Section 4(d) relating to the Registration Statement or the Prospectus as
amended or supplemented to the time of delivery of such certificate.
(b) Each time the Company furnishes a certificate
pursuant to Section 5(a), the Company will furnish or cause to be furnished
forthwith to each Agent written opinions of counsel for the Company. Such
opinions shall be dated the date of such amendment or supplement, as the case
may be, shall be in a form reasonably satisfactory to the Agents and shall be
of the same tenor as the opinions referred to in Section 4(b), but modified to
relate to the Registration Statement and the Prospectus as amended and
supplemented to the time of delivery of such opinions. In lieu of such
opinions, counsels' last furnishing such opinions to an Agent may furnish to
each Agent a letter to the effect that such Agent may rely on such last
opinions to the same extent as though it were dated the date of such letters
(except that statements in such last opinions will be deemed to relate to the
Registration Statement and the Prospectus as amended or supplemented to the
time of delivery of such letter).
(c) Each time the Registration Statement or the
Prospectus is amended or supplemented to set forth amended or supplemental
financial information or such amended or supplemental information is
incorporated by reference in the Prospectus, the Company shall cause its
independent public accountants, forthwith to furnish each Agent with a letter,
dated the date of such amendment or supplement, as the case may be, in form
reasonably satisfactory to the Agents, of the same tenor as the letter
referred to in Section 4(e), with regard to the amended or supplemental
financial information included or incorporated by
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<PAGE> 13
reference in the Registration Statement or the Prospectus as amended or
supplemented to the date of such letter.
6. Indemnification and Contribution. The Company agrees
to indemnify and hold harmless each Agent and each person, if any, who controls
such Agent within the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act from and against any and all losses, claims,
damages and liabilities (including, without limitation, any legal or other
expenses reasonably incurred by any Agent or any such controlling person in
connection with defending or investigating any such action or claim) caused by
any untrue statement or alleged untrue statement of a material fact contained
in the Registration Statement or any amendment thereof or the Prospectus (as
amended or supplemented if the Company shall have furnished any amendments or
supplements thereto), or caused by any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading except insofar as such losses, claims, damages or liabilities
are caused by any such untrue statement or omission or alleged untrue statement
or omission based upon information relating to such Agent furnished to the
Company in writing by or on behalf of such Agent expressly for use therein or
was based on the Form T-1 of the Trustee.
Each Agent agrees, severally and not jointly, to indemnify and
hold harmless the Company, its directors, its officers who sign the
Registration Statement and each person, if any, who controls the Company within
the meaning of either Section 15 of the Securities Act or Section 20 of the
Exchange Act to the same extent as the foregoing indemnity from the Company to
such Agent, but only with reference to information relating to such Agent
furnished to the Company in writing by or on behalf of such Agent expressly for
use in the Registration Statement or the Prospectus or any amendments or
supplements thereto.
In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of which
indemnity may be sought pursuant to either of the two preceding paragraphs,
such person (the "indemnified party") shall promptly notify the person against
whom such indemnity may be sought (the "indemnifying party") in writing and the
indemnifying party, upon request of the indemnified party, shall retain counsel
reasonably satisfactory to the indemnified party to represent the indemnified
party and any others the indemnifying party may designate in such proceeding
and shall pay the reasonable fees and disbursements of such counsel related to
such proceeding. In any such proceeding, any indemnified party shall have the
right to retain its own counsel, but the fees and expenses of such counsel
shall be at the expense of such indemnified party unless (i) the indemnifying
party and the indemnified party shall have mutually agreed to the retention of
such counsel or (ii) the named parties to any such proceeding (including any
impleaded parties) include both the indemnifying party and the indemnified
party and representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests between them. It
is understood that the indemnifying party shall not, in respect of the legal
expenses of any indemnified party in connection with any proceeding or related
proceedings in the same jurisdiction, be liable for the fees and expenses of
more than one separate firm (in addition to any local counsel) for all such
indemnified parties and that all such fees and expenses shall be reimbursed as
they are incurred. Such firm shall be mutually agreed upon by the Agents who
are parties to any such proceeding and designated in writing by an Agent
included in any such proceeding after consultation with the other Agents who
are parties to such proceeding, in the
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<PAGE> 14
case of parties indemnified pursuant to the second preceding paragraph, and by
the Company, in the case of parties indemnified pursuant to the first preceding
paragraph. The indemnifying party shall not be liable for any settlement of
any proceeding effected without its written consent, but if settled with such
consent or if there be a final judgment for the plaintiff, the indemnifying
party agrees to indemnify the indemnified party from and against any loss or
liability by reason of such settlement or judgment. Notwithstanding the
foregoing sentence, if at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for reasonable fees and
expenses of counsel as contemplated by the third sentence of this paragraph,
the indemnifying party agrees that it shall be liable for any settlement of any
proceeding effected without its written consent if (i) such settlement is
entered into more than 30 days after receipt by such indemnifying party of the
aforesaid request and (ii) such indemnifying party shall not have reimbursed
the indemnified party in accordance with such request prior to the date of such
settlement. No indemnifying party shall, without the prior written consent of
the indemnified party, effect any settlement of any pending or threatened
proceeding in respect of which any indemnified party is or could have been a
party and indemnity could have been sought hereunder by such indemnified party,
unless such settlement includes an unconditional release of such indemnified
party from all liability on claims that are the subject matter of such
proceeding.
If the indemnification provided for in the first or second
paragraph in this Section 6 is unavailable to an indemnified party or
insufficient in respect of any losses, claims, damages or liabilities referred
to therein in connection with any offering of Notes, then each indemnifying
party under such paragraph, in lieu of indemnifying such indemnified party
thereunder, shall contribute to the amount paid or payable by such indemnified
party as a result of such losses, claims, damages or liabilities (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company on the one hand and each Agent on the other hand from the offering of
such Notes or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect
not only the relative benefits referred to in clause (i) above but also the
relative fault of the Company on the one hand and each Agent on the other hand
in connection with the statements or omissions that resulted in such losses,
claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one hand
and each Agent on the other hand in connection with the offering of such Notes
shall be deemed to be in the same respective proportions as the net proceeds
from the offering of such Notes (before deducting expenses) received by the
Company and the total discounts and commissions received by each Agent in
respect thereof bear to the aggregate public offering price of such Notes. The
relative fault of the Company on the one hand and of each Agent on the other
hand shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or omission or alleged
omission to state a material fact relates to information supplied by the
Company or by such Agent and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
Each Agent's obligations to contribute pursuant to this Section 6 are several
(in the proportion that the principal amount of the Notes the sale of which by
or through such Agent gave rise to such losses, claims, damages or liabilities
bears to the aggregate principal amount of the Notes the sale of which by or
through any Agent gave rise to such losses, claims, damages or liabilities) and
not joint.
The Company and the Agents agree that it would not be just or
equitable if contribution pursuant to this Section 6 were determined by pro
rata allocation (even if the Agents
-14-
<PAGE> 15
were treated as one entity for such purpose) or by any other method of
allocation that does not take account of the equitable considerations referred
to in the immediately preceding paragraph. The amount paid or payable by an
indemnified party as a result of the losses, claims, damages and liabilities
referred to in the immediately preceding paragraph shall be deemed to include,
subject to the limitations set forth above, 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
Section 6, no Agent shall be required to contribute any amount in excess of the
amount by which the total price at which the Notes referred to in the
immediately preceding paragraph that were offered and sold to the public
through such Agent exceeds the amount of any damages that such Agent 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 Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The remedies provided for in this Section 6 are
not exclusive and shall not limit any rights or remedies which may otherwise be
available to any indemnified party at law or in equity.
7. Position of the Agents. In acting under this
Agreement and in connection with the sale of any Notes by the Company (other
than Notes sold to an Agent pursuant to a Terms Agreement), each Agent is
acting solely as agent of the Company, and not as principal, and does not
assume any obligation towards or relationship of agency or trust with any
purchaser of Notes. An Agent shall make reasonable efforts to assist the
Company in obtaining performance by each purchaser whose offer to purchase
Notes has been solicited by such Agent and accepted by the Company, but such
Agent shall not have any liability to the Company in the event any such
purchase is not consummated for any reason. If the Company shall default in
its obligations to deliver Notes to a purchaser whose offer it has accepted,
the Company shall hold the relevant Agent harmless against any loss, claim,
damage or liability arising from or as a result of such default and shall, in
particular, pay to such Agent the commission it would have received had such
sale been consummated.
8. Termination. This Agreement may be terminated at any
time by the Company or, as to any Agent, by the Company or such Agent upon the
giving of written notice of such termination to the other parties hereto, but
without prejudice to any rights, obligations or liabilities of any party hereto
accrued or incurred prior to such termination. Any Terms Agreement shall be
subject to termination in the absolute discretion of each Agent on the terms
set forth therein. The termination of this Agreement shall not require
termination of any Terms Agreement, and the termination of any such Terms
Agreement shall not require termination of this Agreement. If this Agreement
is terminated, the provisions of the third paragraph of Section 2(a), Section
2(e), the last sentence of Section 3(b) and Sections 3(c), 3(h), 6, 7, 9, 11
and 14 shall survive; provided that if at the time of termination an offer to
purchase Notes has been accepted by the Company but the time of delivery to the
purchaser or its agent of such Notes has not occurred, the provisions of
Sections 2(b), 2(c), 3(a), 3(e), 3(f), 3(g), 3(i), 4 and 5 shall also survive
until such delivery has been made. If any Terms Agreement is terminated, the
provisions of Section 3(c), 3(h), 6 and 9 and the last two sentences of Section
3(h) (which shall be deemed to have been incorporated by reference in such
Terms Agreement) shall survive.
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<PAGE> 16
9. Representations and Indemnities to Survive. The
respective indemnity and contribution agreements, representations, warranties
and other statements of the Company, its officers and the Agents set forth in
or made pursuant to this Agreement or any Terms Agreement will remain in full
force and effect, regardless of any termination of this Agreement or any such
Terms Agreement, any investigation made by or on behalf of an Agent or the
Company or any of the officers, directors or controlling persons referred to in
Section 6 and delivery of and payment for the Notes.
10. Notices. All communications hereunder will be in
writing and effective only on receipt, and, if sent to (INSERT NAME OF LEAD
AGENT), will be mailed, delivered or telecopied and confirmed to ( ),
Attention: ( ) (telecopy number: ( )), with a copy to (ADD
ADDRESSES AND TELECOPY NUMBERS OF OTHER AGENTS) or, if sent to the Company,
will be mailed, delivered or telecopied and confirmed to the Company at 100
North Stanton Street, El Paso, Texas 79901, Attention: Chief Financial Officer
(telecopy number: (915) 541-2800.
11. Successors. This Agreement and any Terms Agreement
will inure to the benefit of and be binding upon the parties hereto and their
respective successors and the officers, directors and controlling persons
referred to in Section 6 and the purchasers of Notes (to the extent expressly
provided in Section 4), and no other person will have any right or obligation
hereunder.
12. Amendments. This Agreement may be amended or
supplemented if, but only if, such amendment or supplement is in writing and is
signed by the Company and each Agent; provided that the Company may from time
to time, without the consent of any Agent, amend this Agreement to add as a
party hereto one or more additional firms registered under the Exchange Act,
whereupon each such firm shall become an Agent hereunder on the same terms and
conditions as the other Agents that are parties hereto. The Agents shall sign
any amendment or supplement giving effect to the addition of any such firm as
an Agent under this Agreement.
13. Counterparts. This Agreement may be signed in any
number of counterparts, each of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
14. Governing Law. This Agreement shall be governed by
and construed in accordance with the internal laws of the State of New York.
15. Headings. The headings of the sections of this
Agreement have been inserted for convenience of reference only and shall not be
deemed a part of this Agreement.
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<PAGE> 17
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
between the Company and the Agents.
Very truly yours,
EL PASO NATURAL GAS COMPANY
By:
__________________________
Title:
The foregoing Agreement
is hereby confirmed
and accepted as of the
date first above written.
(NAME OF AGENT)
By: ________________________________________
Title:
(NAME OF AGENT)
By _________________________________________
Title:
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<PAGE> 18
Exhibit A
EL PASO NATURAL GAS COMPANY
MEDIUM-TERM NOTES
WRITTEN TERMS AGREEMENT
( ), 19( )
El Paso Natural Gas Company
100 North Stanton Street
El Paso, Texas 79901
Attention:
Re: Distribution Agreement dated ( ),
19( ) (the "Agreement")
The undersigned agrees to purchase the following principal
amount of your Medium-Term Notes: $( ).
<TABLE>
<CAPTION>
All Notes: Fixed Rate Notes: Floating Rate Notes:
- ---------- ----------------- --------------------
<S> <C> <C>
Purchase Interest
price: rate: Base Rate:
Settlement Amortization Index
date and time: schedule: maturity:
Place of
delivery: Spread:
Maturity Initial interest
date: rates:
Interest Initial interest
payment dates: reset date:
Original issue Maximum rate:
discount provisions:
Minimum rate:
Redemption Interest reset
provisions: period:
</TABLE>
A-1
<PAGE> 19
Other Terms: Calculation Agent:
The provisions of the Agreement and the related definitions
are incorporated by reference herein and shall be deemed to have the same force
and effect as if set forth in full herein.
(The certificate referred to in Section 4 (d) of the
Agreement, the opinions of the (General Counsel)(Associate General Counsel) for
the Company and special counsel for the Company referred to in Section 4 (b) of
the Agreement and the accountants' letter referred to in Section 4 (e) of the
Agreement will be required.) (The following information, opinions,
certificates, letters and documents referred to in Section 4 of the Agreement
will be required: ____________________.)
(NAME OF AGENT)
By:_____________________________________
Name:
Title:
Accepted:
EL PASO NATURAL GAS COMPANY
By:________________________
Name:
Title:
A-2
<PAGE> 20
Exhibit B
MEDIUM-TERM NOTES
ADMINISTRATIVE PROCEDURES
______________________________
Medium Term Notes, Series A (the "Notes") in the aggregate
principal amount of ($ ) are to be offered on a continuing basis by El
Paso Natural Gas Company (the "Company"). ( ) and ( ) (the
"Agents") have agreed to solicit purchases of the Notes, as agents for the
Company, or to purchase Notes, as principal, for their own account. The Notes
are being sold pursuant to a Distribution Agreement between the Company and the
Agents dated ( ), 19( ) (the "Agreement"). The Notes have been
registered with the Securities and Exchange Commission (the "Commission") and
will be offered pursuant to the Prospectus as amended and supplemented by the
applicable Pricing Supplement (each such capitalized term having the meaning
provided in the Agreement). Citibank, N.A. (the "Trustee") is the trustee
under the Indenture, dated as of January 1, 1992 (the "Indenture").
The Notes will either be issued (a) in book-entry form and
represented by one or more global notes delivered to the Trustee as custodian
for The Depository Trust Company ("DTC") (or on behalf of such other depositary
as is identified in the applicable Pricing Supplement, provided that such
depositary shall execute a letter of representations and a medium-term note
certificate agreement with the Trustee with respect to the Notes), and recorded
in the book-entry system maintained by DTC and registered in the name of DTC's
nominee (each, a "Book-Entry Note"), or (b) in the form of a Certificate issued
in definitive form (a "Certificated Note").
Administrative procedures and specific terms of the offering
are explained below. Owners of beneficial interests in Book-Entry Notes will
be entitled to physical delivery of Certificated Notes equal in principal
amount to their respective beneficial interests only upon certain limited
circumstances described in the Prospectus.
General procedures relating to the issuance of all Notes are
set forth in Part I hereof. Additionally, Book-Entry Notes will be issued in
accordance with the administrative procedures set forth in Part II hereof and
Certificated Notes will be issued in accordance with the administrative
procedures set forth in Part III hereof. Capitalized terms used herein that
are not otherwise defined shall have the meanings ascribed thereto in the
Indenture or the Notes (which in the case of Book-Entry Notes shall be the
related global Note), as the case may be.
PART I: GENERAL
Date of Issuance/ Each Note will be dated as of the date of its
Authentication: authentication by the Trustee. Each Note shall
also bear an original issue date (the "Original
Issue Date"). The Original Issue Date shall
B-1
<PAGE> 21
remain the same for all Notes
subsequently issued upon transfer,
exchange or substitution of an
original Note regardless of their
dates of authentication.
Maturities: Each Note will mature on a date
selected by the purchaser and
agreed to by the Company which is
not less than nine months nor more
than forty years from its Original
Issue Date; provided, however, that
Floating Rate Notes will bear
interest pursuant to the interest
rate formula stated therein and in
the applicable Pricing Supplement
and will mature on an Interest
Payment Date.
Price To Public: Each Note will be sold at 100% of
principal amount (unless otherwise
agreed in a Terms Agreement as
defined in the Agreement).
Interest Payments: Each payment of interest on Fixed
Rate Notes will include interest
accrued through the day preceding,
as the case may be, the Interest
Payment Date or Stated Maturity
(each Stated Maturity is referred
to herein as "Maturity"). Unless
otherwise indicated in the
applicable Pricing Supplement,
interest payments on each Floating
Rate Note (except in the case of
Floating Rate Notes which reset
daily or weekly) shall be the
amount of interest accrued from,
and including, the next preceding
Interest Payment Date in respect of
which interest has been paid (or
from, and including, the date of
original issue if no interest has
been paid with respect to such
Floating Rate Note) to, but
excluding, the Interest Payment
Date. In the case of Floating Rate
Notes on which the interest is
reset daily or weekly, however, the
interest payments shall include
interest accrued from, but
excluding, the next preceding
Regular Record Date in respect of
which interest has been paid (or
from, and including, the date of
original issue if no interest has
been paid with respect to such
Floating Rate Note) to, and
including the Regular Record Date
next preceding the applicable
Interest Payment Date, except that
the interest payment at Maturity
will include interest accrued to,
but excluding, such date.
Regular Record Dates: The Regular Record Date with
respect to any Interest Payment
Date for a Fixed Rate Note shall be
the ( ) or ( )
preceding such Interest Payment
Date. The Regular Record Date with
respect to any Interest Payment
Date for a Floating Rate Note shall
be the date 15 calendar days
(whether or not a Business Day) (as
hereinafter defined) preceding such
Interest Payment Date.
B-2
<PAGE> 22
Interest Payment Dates: Interest payments will be made on
each payment date commencing with
the first Interest Payment Date
following the Original Issue Date;
provided, however, the first
payment of interest of any Note
originally issued between a Regular
Record Date and an Interest Payment
Date will occur on the Interest
Payment Date following the next
succeeding Regular Record Date to
the registered owner on such next
succeeding Regular Record Date.
If an Interest Payment Date with
respect to any Note would otherwise
fall on a day that is not a
Business Day with respect to such
Note, such Interest Payment Date
will be the following day that is a
Business Day with respect to such
Note except that in the case of a
LIBOR Note, if such day falls in
the next calendar month, such
Interest Payment Date will be the
preceding day that is a Business
Day with respect to such LIBOR
Note.
Fixed Rate Notes: Interest payments on Fixed Rate
Notes will be made semiannually on
( ) and ( ) of each year
and at Maturity.
Floating Rate Notes: Unless otherwise stated in the
applicable Pricing Supplement,
interest will be payable, in the
case of the Floating Rate Notes
which reset daily, weekly or
monthly, on the third Wednesday of
each month or on the third
Wednesday of March, June, September
and December of each year; in the
case of Floating Rate Notes which
reset quarterly, on the third
Wednesday of March, June, September
and December of each year; in the
case of Floating Rate Notes which
reset semiannually, on the third
Wednesday of the two months of each
year specified in the Floating Rate
Note; and in the case of Floating
Rate Notes which reset annually, on
the third Wednesday of the month
specified in the Floating Rate Note
and, in each case, at Maturity or,
if applicable, upon redemption or
optional repayment. For additional
special provisions relating to
Floating Rate Notes, see the
Prospectus and the applicable
Pricing Supplement.
B-3
<PAGE> 23
Calculation of Interest: In the case of Fixed Rate Notes,
interest (including payments for
partial periods) will be calculated
and paid on the basis of a 360-day
year of twelve 30-day months. In
the case of Floating Rate Notes,
interest will be calculated and
paid on the basis of the actual
number of days in the interest
period divided by 360 for
Commercial Paper Rate Notes,
Federal Funds Rate Notes, and LIBOR
Notes, and on the basis of the
actual number of days in the
interest period divided by the
actual number of days in the year
for Treasury Rate Notes and on any
other basis as set forth in the
applicable Pricing Supplement.
Floating Rate Notes will have
daily, weekly, monthly, quarterly,
semiannual or annual resets of the
rate of interest which will be
specified in the applicable Pricing
Supplement and in the applicable
Note.
Acceptance of Offers: The Company will have the sole
right to accept offers to purchase
Notes. Each Agent will
communicate, orally or in writing,
each reasonable offer to purchase
Notes received by it. The Company
may reject any offer in whole or in
part and will promptly notify such
Agent of any such rejection. Each
Agent may without notice to the
Company reject any offer received
by it in whole or in part in its
discretion reasonably exercised.
Preparation of Pricing If any offer to purchase a Note is
Supplements: accepted by the Company, the
Company, with the approval of the
Agent which presented such offer
(the "Presenting Agent"), will
prepare a Pricing Supplement
reflecting the terms of such Note
and will, so long as the Company is
a participant in the Commission's
Electronic Data Gathering,
Analysis, and Retrieval system
("EDGAR"), electronically submit a
version of such Pricing Supplement
complying with the rules of
Commission relating to such
program, or, if the Company is no
longer a participant in such
program, arrange to have 10 copies
of such Pricing Supplement filed
with or mailed to, the Commission
in accordance with the applicable
provision of Rule 424(b) under the
Securities Act. The Presenting
Agent will cause a stickered
Prospectus to be delivered to the
purchaser of the Note.
In each instance that a Pricing
Supplement is prepared, the Agents
will affix the Pricing Supplement
to the Prospectus prior to their
use. Outdated Pricing Supplements,
and the Prospectus to which they
are attached (other than those
retained for files) will be
destroyed.
B-4
<PAGE> 24
Settlement: The receipt of immediately
available funds by the Company in
payment for a Note and the
authentication and delivery of such
Note shall, with respect to such
Note, constitute "settlement." All
offers accepted by the Company will
be settled from three to five
business days after the date of
such acceptance by the Company at a
time as the purchaser and the
Company shall agree (but no earlier
than the next Business Day)
pursuant to the timetable for
settlement set forth in Parts II
and III hereof under "Settlement
Procedures" with respect to
Book-Entry Notes and Certificated
Notes, respectively. If procedures
A and B of the applicable
Settlement Procedures with respect
to a particular offer are not
completed on or before the time set
forth under the applicable
"Settlement Procedures Timetable,"
such offer shall not be settled
until the Business Day following
the completion of settlement
procedures A and B or such later
date as the purchaser and the
Company shall agree.
In the event of a purchase of Notes
by any Agent as principal,
appropriate settlement details will
be set forth in the applicable Terms
Agreements to be entered into
between such Agent and the Company
pursuant to the Agreement.
PART II: ADMINISTRATIVE PROCEDURES FOR BOOK-ENTRY NOTES
In connection with the qualification of the Book-Entry Notes
for eligibility in the book-entry system maintained by DTC, the Trustee will
perform the custodial, document control and administrative functions described
below, in accordance with its obligations under a Letter of Representations
from the Company and the Trustee to DTC, dated as of ( ), 19( ) (the
"Letter of Representations"), and its obligations as a participant in DTC,
including DTC's Same-Day Funds Settlement System ("SDFS").
Issuance: All Fixed Rate Notes issued in
book-entry form having the same
Interest Rate, Original Issue Date,
Maturity Date, Redemption Date and
Prices, if any, Sinking Fund Dates
and Amounts, if any, and Original
Issue Discount features, if any
(collectively, the "Fixed Rate
Terms"), will be represented
initially by a single Book-Entry
Note and all Floating Rate Notes
issued in book-entry form having
the same Original Issue Date, base
rate upon which interest may be
determined (each, an "Interest Rate
Basis"), which may be the
Commercial Paper Rate, the Federal
Funds Rate, the Treasury Rate,
LIBOR or any other rate set forth
by the Company, Initial Interest
Rate, Index Maturity, Spread, if
any, Minimum Interest Rate, if any,
Maximum Interest Rate, if any,
Redemption Dates and Prices, if
any, Sinking Fund Dates and
amounts, if any, Original Issue
Discount features, if any, Interest
Reset Dates, Interest Payment Dates
and Maturity
B-5
<PAGE> 25
(collectively, "Floating Rate
Terms") will be represented
initially by a single Book-Entry
Note.
Each Book-Entry Note will be dated
and issued as of the date of its
authentication by the Trustee.
Each Book-Entry Note will bear an
Interest Accrual Date, which will
be (a) with respect to an original
Book-Entry Note (or any portion
thereof), its Original Issue Date
and (b) with respect to any
Book-Entry Note (or any portion
thereof) issued subsequently upon
exchange of a Book-Entry Note or in
lieu of a destroyed, lost or stolen
Book-Entry Note, the most recent
Interest Payment Date to which
interest has been paid or duly
provided for on the predecessor
Book-Entry Note or Notes (or if no
such payment or provision has been
made, the Original Issue Date of
the predecessor Book-Entry Note or
Notes), regardless of the date of
authentication of such subsequently
issued Book-Entry Note. No
Book-Entry Note shall represent any
Note issued in certificated form.
Identification Numbers: The Company has arranged with the
CUSIP Service Bureau of Standard &
Poor's Corporation (the "CUSIP
Service Bureau") for the
reservation of a series of CUSIP
numbers for the Notes, consisting
of approximately 900 CUSIP numbers
which have been reserved for future
assignment to Book-Entry Notes
representing Notes issued in
book-entry form. The Company has
obtained from the CUSIP Service
Bureau a written list of the
reserved CUSIP numbers and has
delivered such list to the Trustee
and DTC. The Trustee will assign
CUSIP numbers serially to
Book-Entry Notes as described below
under Settlement Procedure "B."
DTC will notify the CUSIP Service
Bureau periodically of the CUSIP
numbers that the Trustee has
assigned to Book-Entry Notes. The
Trustee will notify the Company at
any time when fewer than 100 of the
reserved CUSIP numbers remain
unassigned to Book-Entry Notes,
and, if the Company deems
necessary, the Company will reserve
additional CUSIP numbers for
assignment to Book-Entry Notes
representing Notes issued in
book-entry form. Upon obtaining
such additional CUSIP numbers, the
Company shall deliver a list of
such additional CUSIP numbers to
the Trustee and DTC.
B-6
<PAGE> 26
Registration: Each Book-Entry Note will be
registered in the name of Cede &
Co., as nominee for DTC, on the
security register maintained under
the Indenture. The beneficial
owner of a Note issued in
book-entry form (or one or more
indirect participants in DTC
designated by such owner) will
designate one or more participants
in DTC with respect to such Note
issued in book-entry form (the
"Participants") to act as agent or
agents for such owner in connection
with the book-entry system
maintained by DTC, and DTC will
record in book-entry form, in
accordance with instructions
provided by such Participants, a
credit balance with respect to such
beneficial owner in such Note in
the accounts of such Participants.
The ownership interest of such
beneficial owner in such Note
issued in book-entry form will be
recorded through the records of
such Participants or through the
separate records of such
Participants and one or more
indirect Participants in DTC. So
long as Cede & Co. is the
registered owner of a Book-Entry
Note, DTC will be considered the
sole owner and holder of such
Book-Entry Note for all purposes
under the Indenture.
Transfers: Transfers of a Book-Entry Note will
be effectuated by book entries made
by DTC and, in turn, by
Participants (and in certain cases,
one or more indirect participants
in DTC) acting on behalf of
beneficial transferors and
transferees of such Book- Entry
Note.
Exchanges: The Trustee may deliver to DTC and
the CUSIP Service Bureau at any
time a written notice of
consolidation specifying (i) the
CUSIP numbers of two or more
Outstanding Book-Entry Notes that
represent Book-Entry Notes having
the same Fixed Rate Terms or
Floating Rate Terms, as the case
may be (other than Original Issue
Dates) and for which interest has
been paid to the same date, (ii) a
date, occurring at least thirty
days after such written notice is
delivered and at least thirty days
before the next Interest Payment
Date for the related Note issued in
book-entry form, on which such
Book-Entry Notes shall be exchanged
for a single replacement Book-Entry
Note and (iii) a new CUSIP number
to be assigned to such replacement
Book-Entry Note. Upon receipt of
such a notice, DTC will send to its
Participants (including the
Trustee) a written reorganization
notice to the effect that such
exchange will occur on such date.
Prior to the specified exchange
date, the Trustee will deliver to
the CUSIP Service Bureau a written
notice setting forth such exchange
date and the new CUSIP number and
stating that, as of such exchange
date, the CUSIP numbers of the
Book-Entry Notes to be exchanged
will be no longer be valid.
B-7
<PAGE> 27
On the specified exchange date, the
Trustee will exchange such
Book-Entry Notes for a single
Book-Entry Note bearing the new
CUSIP number, and the CUSIP numbers
of the exchanged Book-Entry Notes,
in accordance with the CUSIP
Service Bureau procedures, will be
cancelled and not immediately
reassigned. Notwithstanding the
foregoing, if the Book-Entry Notes
to be exchanged exceed $150,000,000
in aggregate principal amount, one
or more replacement Book-Entry
Note(s) will be authenticated and
issued, each to represent
$150,000,000 principal amount of
the exchanged Book-Entry Notes and
an additional Book-Entry Note will
be authenticated and issued to
represent any remaining principal
amount of such Book-Entry Notes
(see "Denominations" below).
Denominations: Book-Entry Notes will be issued in
denominations of $100,000 or any
amount in excess thereof that is an
integral multiple of $1,000.
Book-Entry Notes will be
denominated in principal amounts
not in excess of $150,000,000. If
one or more Book-Entry Notes having
an aggregate principal amount in
excess of $150,000,000 would, but
for the preceding sentence, be
represented by a single Book-Entry
Note, then one Book-Entry Note will
be issued to represent each
$150,000,000 principal amount of
such Note or Notes issued in
book-entry form and an additional
Book-Entry Note or Notes will be
issued to represent any remaining
principal amount of such Note or
Notes issued in book-entry form.
In such a case, each of the
Book-Entry Notes representing such
Note or Notes issued in book-entry
form shall be assigned the same
CUSIP number.
Interest General:
Each payment of interest on each
Book-Entry Note that is a Fixed
Rate Note will include interest
accrued through the day proceeding,
as the case may be, the Interest
Payment Date or Maturity Date.
Unless otherwise indicated in the
applicable Pricing Supplement,
interest payments on each
Book-Entry Note that is a Floating
Rate Note (except in the case of
Floating Rate Notes which reset
daily or weekly) shall be the
amount of interest accrued from,
and including, the next preceding
Interest Payment Date in respect of
which interest has been paid (or
from, and including, the date of
issue if no interest has been paid
with respect to such Floating Rate
Note) to, but excluding, the
Interest Payment Date. In the case
of Floating Rate Notes on which the
interest is reset daily or weekly,
however, the interest payments
shall include interest accrued
from, but excluding the next
preceding Regular Record Date in
respect of which interest has been
paid to, and including the Regular
Record Date next preceding the
applicable Interest Payment Date,
except that the interest payment at
Maturity will include interest
accrued to, but
B-8
<PAGE> 28
excluding, such date. Interest
payable at Maturity of a Book-Entry
Note will be payable to the Person
to whom the principal of such Note
is payable. DTC will arrange for
each pending deposit message
described under Settlement
Procedure C below to be transmitted
to Standard & Poor's, which will
use the information in the message
to include certain terms of the
related Book-Entry Note in the
appropriate daily bond report
published by Standard & Poor's.
Notice of Interest Payments On the first Business Day of March,
and Regular Record Date: June, September and December of
each year, upon request by the
Company, the Trustee will deliver
to the Company and DTC a written
list of Regular Record Dates and
Interest Payment Dates that will
occur during the six-month period
beginning on such first Business
Day with respect to Floating Rate
Notes issued in book-entry form.
Promptly after each Interest
Determination Date or Calculation
Date, if applicable (including the
first initial Interest
Determination Date) for Floating
Rate Notes issued in book-entry
form, the Trustee will notify
Standard & Poor's of the interest
rates determined on such Interest
Determination Date or Calculation
Date, if applicable.
Payments of Principal and Payments of Interest. Promptly
Interest: after each Record Date, the Trustee
will deliver to the Company and DTC
a written notice specifying by
CUSIP number the amount of interest
to be paid on each Book-Entry
Note on the following Interest
Payment Date (other than an
Interest Payment Date coinciding
with Maturity) and the total of
such amounts. The Company will
confirm with the Trustee and DTC
the amount payable on each such
Book-Entry Note on such Interest
Payment Date by reference to the
daily bond reports published by
Standard & Poor's Corporation. On
such Interest Payment Date, the
Company will pay to the Trustee, as
paying agent, the total amount of
interest due on such Interest
Payment Date (other than at
Maturity), and the Trustee will
pay such amount to DTC at the times
and in the manner set forth below
under "Manner of Payment."
B-9
<PAGE> 29
Payments at Maturity or Upon
Redemption or Repayment. On or
about the first Business Day of each
month, the Trustee will deliver to
the Company and DTC a written list
of principal, interest and premium,
if any, to be paid on each Book-
Entry Note maturing either at
Stated Maturity or on a Redemption
Date or on an optional repayment
date, if any, in the following
month. The Company, the Trustee
and DTC will confirm the amounts of
such principal, interest and
premium payments with respect to
each such Book-Entry Note on or
about the fifth Business Day
preceding the Maturity of such
Book-Entry Note. The Company will
pay to the Trustee, as the paying
agent, the principal amount of such
Book-Entry Note, together with
interest due at such Maturity or
Redemption Date. The Trustee will
pay such amounts to DTC at the
times and in the manner set forth
below under "Manner of Payment."
Payments Not on Business Days. If
any Interest Payment Date or
Maturity or Redemption Date of a
Book-Entry Note is not a Business
Day, the payment due on such day
shall be made on the next succeeding
Business Day and no interest shall
accrue on such payment for the
period from and after such Interest
Payment Date, Maturity or
Redemption Date, as the case may
be.
Promptly after payment to DTC of the
principal and interest due on the
Maturity or Redemption Date of a
Book-Entry Note, the Trustee will
cancel such Book-Entry Note in
accordance with the terms of the
Indenture and deliver it to the
Company with a certificate of
cancellation.
Manner of Payment. The total
amount of any principal, interest
and premium, if any, due on a
Book-Entry Note on any Interest
Payment Date or at Maturity or upon
redemption shall be paid by the
Company to the Trustee in funds
available for immediate use by the
Trustee not later than 9:30 A.M.
(New York City time) on such date
by wire transfer of immediately
available funds or by instructing
the Trustee to withdraw sufficient
funds from an account maintained by
the Company with the Trustee.
Prior to 10 A.M. (New York City
time) on each Maturity Date or
Redemption
B-10
<PAGE> 30
Date. On each Interest Payment Date
or, if any such date is not a
Business Day, as soon as possible
thereafter (but in any event only
after receipt of sufficient funds
by the Trustee), interest payments
shall be made to DTC in same day
funds in accordance with existing
arrangements between the Trustee
and DTC. Thereafter on each such
date, DTC will pay, in accordance
with its SDFS operating procedures
then in effect, such amounts in
funds available for immediate use
to the respective Participants in
whose names the Notes are recorded
in the book-entry system maintained
by DTC. Neither the Company nor
the Trustee shall have any
responsibility or liability for the
payment by DTC to such Participants
of the principal of, or interest
on, the Book-Entry Notes.
Withholding Taxes. The amount of any
taxes required under applicable law
to be withheld from any interest
payment on a Note will be
determined and withheld by the
Participant, indirect participant
in DTC or other person responsible
for forwarding payments and
materials directly to the
beneficial owner of such Note.
Acceptance and Rejections of The Company shall have the sole
Offers: right to accept offers to purchase
Notes and may reject any such offer
in whole or in part. Each Agent
shall promptly communicate to the
Company, orally or in writing, each
reasonable offer to purchase Book-
Entry Notes received by it, other
than those rejected by such Agent.
The Agents shall have the right,
in their discretion reasonably
exercised, without notice to the
Company, to reject any offer to
purchase Notes in whole or in part.
Settlement Procedures: Settlement Procedures with regard
to each Book-Entry Note sold by the
Company to or through the Agents
(unless otherwise specified
pursuant to a Terms Agreement, as
defined in the Agreement), shall be
as follows:
A. The respective Agent will
advise the Company by
telephone that such Note is a
Book-Entry Note and of the
following settlement
information.
1. Taxpayer
identification number
of purchaser.
2. Principal amount of
the Note.
3. Fixed Rate Notes:
(a) Interest Rate
B-11
<PAGE> 31
Floating Rate Notes:
(a) Interest Rate Basis
(b) Initial Interest Rate
(c) Spread, if any
(d) Interest Rate Reset Dates
(e) Interest Rate Reset Period
(f) Interest Payment Dates
(g) Interest Payment Period
(h) Index Maturity
(i) Calculation Agent
(j) Maximum Interest Rate, if any
(k) Minimum Interest Rate, if any
(l) Calculation Date
(m) Interest Determination Dates
(n) Redemption Dates, if any
(o) Original Issue Discount
features, if any
(p) Sinking Fund Dates and Amounts,
if any
4. Settlement Date (Original Issue Date).
5. Price to the public.
6. Net proceeds to the Company.
7. Trade Date.
8. Agent's commission, determined as
provided in the Agreement.
9. The number of Participant accounts to
be maintained by DTC on behalf of the
Agent.
10. Any other applicable terms.
B. The Company will advise the Trustee by
telephone or electronic transmission
(confirmed in writing at any time on the same
date) of the information set forth in
Settlement Procedure "A" above. The Trustee
will then assign a CUSIP number to the
Book-Entry Note representing such Note and
will notify the Company and the Agent of such
CUSIP number by telephone as soon as
practicable.
B-12
<PAGE> 32
C. The Trustee will enter a pending
deposit message through DTC's
Participant Terminal System, providing
the following settlement information
to DTC, the Agent and Standard &
Poor's Corporation:
1. The applicable information set
forth in Settlement Procedure "A."
2. Identification as a Fixed Rate
Book-Entry Note or a Floating Rate
Book-Entry Note.
3. Initial Interest Payment Date for
such Note, number of days by which
such date succeeds the related
record date for DTC purposes
(which shall be the Regular Record
Date, or, in the case of Floating
Rate Notes which reset daily or
weekly, the date which is five
calendar days preceding the
Interest Payment Date) and, if
then calculable, the amount of
interest payable on such Interest
Payment Date (which amount shall
have been confirmed by the
Trustee).
4. The CUSIP number of the Book-Entry
Note representing such Note.
5. Whether such Book-Entry Note will
represent any other Note issued or
to be issued in book-entry form
(to the extent known at such
time).
6. The number of Participant
accounts to be maintained by DTC
on behalf of the Agent and the
Trustee.
D. The Company will deliver to the
Trustee and the Trustee will
authenticate the Book-Entry Note
representing such Note.
E. DTC will credit such Note to the
Trustee's participant account at DTC.
B-13
<PAGE> 33
F. The Trustee will enter an SDFS
deliver order through DTC's
Participant Terminal System,
with respect to each Note in
book-entry form, instructing
DTC to (i) debit such Note to
the Trustee's participant
account and credit such Note
to the Presenting Agent's
participant account and (ii)
debit the respective Agent's
settlement account and credit
the Trustee's settlement
account for an amount equal
to the price of such Note
less the Agent's commission,
if any. The entry of such a
deliver order shall
constitute a representation
and warranty by the Trustee
to DTC that (a) the
Book-Entry Note representing
such Note has been issued and
authenticated and (b) the
Trustee is holding such
Book-Entry Note pursuant to
the Medium-Term Note
Certificate Agreement between
the Trustee and DTC.
G. Unless the Presenting Agent
purchased such Note as
principal, the Presenting
Agent will enter an SDFS
deliver order through DTC's
Participant Terminal System,
with respect to each Note
represented by the Book-Entry
Note to be issued,
instructing DTC (i) to debit
such Book-Entry Note to the
Presenting Agent's
participant account and
credit such Note to the
participant accounts of the
Participants with respect to
such Note and (ii) to debit
the settlement accounts of
such Participants and credit
the settlement account of the
Presenting Agent for an
amount equal to the initial
public offering price of such
Note.
H. Transfers of funds in
accordance with SDFS deliver
orders described in
Settlement Procedures "F" and
"G" will be settled in
accordance with SDFS
operating procedures in
effect on the Settlement
Date.
I. Upon receipt of such funds, the
Trustee will credit to the
account of the Company
maintained at the Trustee,
funds available for immediate
use in the amount transferred
to the Trustee in accordance
with Settlement Procedure
"F."
J. Unless the Presenting Agent
purchased such Note as
principal, the Presenting
Agent will confirm the
purchase of such Note to the
purchaser either by
transmitting to the
Participant with respect to
such Note a confirmation
order through DTC's
Participant Terminal System
or by mailing a written
confirmation to such
purchaser.
B-14
<PAGE> 34
K. Monthly, the Trustee will send
to the Company a statement
setting forth the principal
amount of Notes outstanding as
of that date under the
Indenture.
Settlement Procedures Timetable: For sales by the Company of
Notes to or through the Agent
unless otherwise specified
pursuant to a Terms Agreement
for settlement on the first
Business Day after the sale
date, Settlement Procedures "A"
through "J" set forth above
shall be completed as soon as
possible but not later than the
respective times (New York City
time) set forth below:
<TABLE>
<CAPTION>
Settlement
Procedure Time
--------- ----
<S> <C>
A 11:00 A.M. on the trade date
B 12:00 Noon on the trade date
C 2:00 P.M. on the trade date
D 3:00 P.M. on the business day
immediately prior to the settlement date
E 10:00 A.M. on the settlement date
F-G 2:00 P.M. on the settlement date
H 4:45 P.M. on the settlement date
I-J 5:00 P.M. on the settlement date
</TABLE>
If a sale is to be settled more than
one Business Day after the sale
date, Settlement Procedures "A,"
"B" and "C" shall be completed as
soon as practicable but not later
than 11:00 A.M., 12 Noon and 2:00
P.M., respectively, on the first
Business Day after the trade date.
In connection with a sale which is
to be settled more than one
Business Day after the trade date,
if the initial interest rate for a
Floating Rate Note is not known at
the time that Settlement Procedure
A is completed, Settlement
Procedures B and C shall be
completed as soon as such rates
have been determined, but not later
than 12:00 Noon and 2:00 P.M. (New
York City time) respectively, on
the Second Business Day before the
Settlement Date. Settlement
Procedure "H" is subject to
extension in accordance with any
extension of Fedwire closing
deadlines and in the other events
specified in the SDFS operating
procedures in effect on the
settlement date.
If settlement of a Book-Entry Note
is rescheduled or cancelled, the
Trustee, after receiving notice
from the Company or the Agent, will
deliver to DTC, through DTC's
Participant Terminal System, a
cancellation message to such effect
by no later than 2:00 P.M. (New
York City time) on the Business Day
immediately preceding the scheduled
settlement date.
B-15
<PAGE> 35
Failure to Settle: If the Trustee fails to enter an
SDFS deliver order with respect to
a Book-Entry Note pursuant to
Settlement Procedure "F," then upon
written request (which may be
evidenced by telecopy transmission)
of the Company the Trustee shall
deliver to DTC, through DTC's
Participant Terminal System, as
soon as practicable, a withdrawal
message instructing DTC to debit
such Note to the Trustee's
participant account, provided that
the Trustee's participant account
contains a principal amount of the
Book-Entry Note representing such
Note that is at least equal to the
principal amount to be debited. If
a withdrawal message is processed
with respect to all the Notes
represented by a Book-Entry Note,
the Trustee will mark such Book-
Entry Note "cancelled," make
appropriate entries in the
Trustee's records and send such
cancelled Book-Entry Note to the
Company. The CUSIP number assigned
to such Book-Entry Note shall, in
accordance with CUSIP Service
Bureau procedures, be cancelled and
not immediately reassigned. If a
withdrawal message is processed
with respect to one or more, but
not all, of the Notes represented
by a Book-Entry Note, the Trustee
will exchange such Book-Entry Note
for two Book-Entry Notes, one of
which shall represent such
Book-Entry Note or Notes with
respect to which the withdrawal
message is to be processed and
shall be cancelled immediately
after issuance and the other of
which shall represent the remaining
Book-Entry Notes previously
represented by the surrendered
Book-Entry Note and shall bear the
CUSIP number of the surrendered
Book-Entry Note.
If the purchase price for any
Book-Entry Note is not timely paid
to the Participants with respect to
such Note by the beneficial
purchaser thereof (or a person,
including an indirect participant
in DTC, acting on behalf of such
purchaser), such Participants and,
in turn, the related Agent may
enter SDFS deliver orders through
DTC's Participant Terminal System
reversing the orders entered
pursuant to Settlement Procedures
"F" and "G," respectively.
Thereafter, the Trustee will
deliver the withdrawal message and
take the related actions described
in the preceding paragraph.
Notwithstanding the foregoing, upon
any failure to settle with respect
to a Book-Entry Note, DTC may take
any actions in accordance with its
SDFS operating procedures then in
effect.
In the event of a failure to settle
with respect to one or more, but
not all, of the Notes to have been
represented by a Book-Entry Note,
the Trustee will provide, in
accordance with Settlement
Procedures "D" and "F," for the
authentication and issuance of a
Book-Entry Note representing the
Notes to be
B-16
<PAGE> 36
represented by such Book-Entry Note
and will make appropriate entries in
its records.
PART III: ADMINISTRATIVE PROCEDURES FOR CERTIFICATED NOTES
The Trustee will serve as registrar in connection with the
Certificated Notes.
Registration: Certificated Notes will be issued
only in fully registered form
without coupons.
Transfers and Exchanges: A Certificated Note may be
presented for transfer or exchange
at the corporate trust office of
the Trustee. Certificated Notes
will be exchangeable for other
Certificated Notes having identical
terms but different denominations
without service charge.
Certificated Notes will not be
exchangeable for Book-Entry Notes.
Denominations: Unless otherwise provided in a
Pricing Supplement, the
denomination of any Certificated
Note will be a minimum of $100,000
or any amount in excess thereof
that is an integral multiple of
$1,000.
Interest: Each Certificated Note will bear
interest in accordance with its
terms.
Payments of Principal Upon presentment and delivery of a
and Interest: Certificated Note, the Trustee will
pay the principal amount of such
Note at Maturity and the final
installment of interest in
immediately available funds. All
interest payments on a Certificated
Note, other than interest due at
Maturity, will be made by check
drawn on the Trustee and mailed by
the Trustee to the person entitled
thereto as provided in such Note.
Any payment of principal or
interest required to be made on an
Interest Payment Date or at
Maturity of a Certificated Note
which is not a Business Day need
not be made on such day, but may be
made on the next succeeding
Business Day (except that in the
case of a LIBOR Note, if such day
falls in the next calendar month,
such Interest Payment Date will be
the preceding day that is a
Business Day with respect to such
LIBOR Note) with the same force and
effect as if made on the Interest
Payment Date or at Maturity, as the
case may be, and no interest shall
accrue for the period from and
after such Interest Payment Date or
Maturity.
B-17
<PAGE> 37
The Trustee will provide monthly to the
Company lists of principal and
interest, to the extent ascertainable,
to be paid on Certificated Notes
maturing in the next succeeding month.
The Trustee will be responsible for
withholding taxes on interest paid on
Certificated Notes as required by
applicable law.
Certificated Notes presented to the
Trustee at Maturity for payment will be
cancelled by the Trustee. All such
cancelled Notes held by the Trustee
shall be destroyed, and the Trustee
shall furnish to the Company a
certificate with respect to such
destruction.
Settlement Procedures: Settlement Procedures with regard to
each Certificated Note sold by the
Company to or through an Agent (unless
otherwise specified pursuant to a Terms
Agreement) shall be as follows:
A. The Presenting Agent will advise the
Company by telephone that such Note
is a Certificated Note and of the
following settlement information:
1. Name in which such Note is to
be registered ("Registered
Owner").
2. Address of the Registered Owner
and address for payment of
principal and interest.
3. Taxpayer identification number
of the Registered Owner (if
available).
4. Principal amount of the Note.
5. Denomination of the Note.
6. Fixed Rate Notes:
(a) Interest Rate
Floating Rate Notes:
(a) Interest Rate Basis
(b) Initial Interest Rate
(c) Spread, if any
(d) Interest Rate Reset Dates
(e) Interest Rate Reset Period
(f) Interest Payment Dates
(g) Interest Payment Period
B-18
<PAGE> 38
(h) Index Maturity
(i) Calculation Agent
(j) Maximum Interest
Rates, if any
(k) Minimum Interest
Rates, if any
(l) Redemption Dates, if
any
(m) Original Issue Discount
features, if any
(n) Sinking Fund Dates and
Amounts, if any
7. Maturity Date.
8. Settlement date and time
(Original Issue Date).
9. Price to public of the Note.
10. Net proceeds to the Company.
11. Agent's commission, if any,
determined as provided in the
Agreement.
12. Any other applicable terms.
B. The Company shall provide to the
Trustee, by telecopy or other mutually
acceptable method, the above Settlement
information received from the Agent and
shall cause the Trustee to execute,
authenticate and deliver the Notes.
The Company also shall provide to the
Trustee and the Agent a copy of the
applicable Pricing Supplement.
C. The Company will deliver to the Trustee
a pre-printed four-ply packet for such
Note, which packet will contain the
following documents in forms that have
been approved by the Company, the
Presenting Agent and the Trustee:
1. Note with Agent's customer
confirmation.
2. Stub One - For the Trustee.
3. Stub Two - For the Agent.
4. Stub Three - For the Company.
D. The Trustee will authenticate such Note
and deliver it (with the confirmation)
and the Stubs One and Two to the
Presenting Agent, and the Presenting
Agent will acknowledge receipt of the
Note by stamping or otherwise Stub One
and returning it to the
B-19
<PAGE> 39
Trustee. Such delivery will
be made only against such
acknowledgment of receipt and
evidence that instructions
have been given by such Agent
for payment to the account of
the Company at the Trustee,
or to such other account as
the Company shall have
specified to the Agent and
the Trustee in funds
available for immediate use,
of an amount equal to the
initial public offering price
of such Note less the Agent's
commission, if any. In the
event that the instructions
given by the Presenting Agent
for payment to the account of
the Company are revoked, the
Company will as promptly as
possible wire transfer to the
account of the Presenting
Agent an amount of
immediately available funds
equal to the amount of such
payment made.
E. Unless the Presenting Agent
purchased such Note as
principal, the Presenting
Agent will deliver such Note
(with confirmation), as well
as a copy of the Prospectus
and any applicable Pricing
Supplement received from the
Company to the customer
against payment in
immediately payable funds.
The Presenting Agent will
obtain the acknowledgment of
receipt of such Note by
retaining Stub Two.
F. The Trustee will send Stub
Three to the Company by
first-class mail. Monthly,
the Trustee will also send to
the Company a statement
setting forth the principal
amount of the Notes
outstanding as of that date
under the Indenture.
B-20
<PAGE> 40
Settlement Procedure For sales by the Company of
Timetable: Certificated Notes to or through
the Agent (unless otherwise
specified pursuant to a Terms
Agreement), Settlement Procedures
"A" through "F" set forth above
shall be completed on or before the
respective times (New York City
time) set forth below:
<TABLE>
<CAPTION>
Settlement
Procedure Time
--------- ----
<S> <C>
A 2:00 P.M. on day before the
settlement date
B 3:00 P.M. on day before the
settlement date
C 3:00 P.M. on the business day
immediately prior to the
settlement date
D 2:15 P.M. on the settlement date
E 3:00 P.M. on the settlement date
F 5:00 P.M. on the settlement date
</TABLE>
Failure to Settle: If a purchaser fails to accept
delivery of and make payment for
any Certificated Note, the Agent
will notify the Company and the
Trustee by telephone and return
such Note to the Trustee. Upon
receipt of such notice, the Company
will immediately wire transfer to
the account of the Agent an amount
equal to the amount previously
credited thereto in respect of such
Note. Such wire transfer will be
made on the settlement date, if
possible, and in any event not
later than the Business Day
following the settlement date. If
the failure shall have occurred for
any reason other than a default by
the Agent in the performance of its
obligations hereunder and under the
Agreement, then the Company will
reimburse the Agent or the Trustee,
as appropriate, on an equitable
basis for its loss of the use of
the funds during the period when
they were credited to the account
of the Company. Immediately upon
receipt of the Certificated Note in
respect of which such failure
occurred, the Trustee will mark
such Note "cancelled," make
appropriate entries in the
Trustee's records and send such
Note to the Company.
B-21
<PAGE> 41
Exhibit C
Opinion of
Counsel for the Company
The opinion of counsel for the Company to be delivered
pursuant to Section 4(b) of the Agreement shall be to the effect that:
(i) the Company has been duly incorporated and is a
corporation duly organized, validly existing in good standing under
the laws of the State of Delaware;
(ii) (a) the Company has the corporate power and authority to
own its properties and to conduct its business as described in the
Prospectus, as then amended or supplemented, and (b) the Company is
duly qualified as a foreign corporation to transact business and is in
good standing in each jurisdiction in which the conduct of its
business or its ownership or leasing of property requires such
qualification, except to the extent that the failure to be so
qualified or be in good standing would not have a material adverse
effect on the Company and its subsidiaries, taken as a whole;
(iii) each significant subsidiary of the Company has been
duly incorporated and is a corporation duly organized, validly
existing in good standing under the laws of the jurisdiction of its
incorporation, has the corporate power and authority to own its
properties and to conduct its business as described in the Prospectus,
as then amended or supplemented, and is duly qualified as a foreign
corporation to transact business and is in good standing in each
jurisdiction in which the conduct of its business or its ownership or
leasing of property requires such qualification, except to the extent
that the failure to be so qualified or be in good standing would not
have a material adverse effect on the Company and its significant
subsidiaries, taken as a whole;
(iv) each of the Agreement and any applicable Written Terms
Agreement has been duly authorized, executed and delivered by the
Company;
(v) the Indenture has been duly authorized, executed and
delivered by the Company and duly requalified under the Trust
Indenture Act; and the Indenture constitutes a valid and legally
binding agreement of the Company, enforceable in accordance with its
terms, subject, as to enforcement, to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and other laws of
general applicability relating to or affecting creditors' rights and
to general equity principles;
(vi) the Notes have been duly authorized and, when the terms
of the Notes and their issue and sale have been duly established in
accordance with the Indenture and the Agreement, and when duly
executed and authenticated in accordance with the provisions of the
Indenture and issued and delivered against
C-1
<PAGE> 42
payment therefor in accordance with the Agreement, the Notes will be
entitled to the benefits of the Indenture and the Notes will be valid
and legally binding obligations of the Company, enforceable in
accordance with their terms, subject, as to enforcement, to
bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and other laws of general applicability relating to or
affecting creditors' rights and to general equity principles;
(vii) the execution and delivery by the Company of, and the
performance by the Company of its obligations under, the Agreement,
the Indenture and the Notes will not contravene any provision of
applicable law or the Restated Certificate of Incorporation or By-laws
of the Company;
(viii) the execution and delivery by the Company of, and the
performance by the Company of its obligations under, the Agreement,
the Indenture, the Notes and any applicable Written Terms Agreement,
will not contravene, to the best of such counsel's knowledge, any
agreement or other instrument binding upon the Company or any of its
subsidiaries that is material to the Company and its subsidiaries,
taken as a whole, or, to the best of such counsel's knowledge, any
judgment, order or decree of any governmental body, agency or court
having jurisdiction over the Company or any subsidiary, and no
consent, approval, authorization or order of or qualification with any
governmental body or agency is required for the performance by the
Company of its obligations under the Agreement, the Indenture, the
Notes and any applicable Terms Agreement, except such as may be
required by the securities or Blue Sky laws of the various states in
connection with the offer and sale of the Notes;
(ix) the statements (a) in the Prospectus (Supplement) under
the captions "(Description of Notes)" and "Plan of Distribution," (b)
in the Basic Prospectus, as then amended or supplemented, under the
captions "Description of the Debt Securities" and "Plan of
Distribution," (c) in the Registration Statement under Item 15, (d) in
"Item 3 - Legal Proceedings" of the Company's most recent annual
report on Form 10-K incorporated by reference in the Prospectus and
(e) in "Item 1 - Legal Proceedings" of Part II of the Company's
quarterly reports on Form 10-Q, if any, filed since such annual
report, in each case insofar as such statements constitute summaries
of the legal matters, documents or proceedings referred to therein,
fairly present the information called for with respect to such legal
matters, documents or proceedings and fairly summarize the matters
referred to therein;
(x) after due inquiry, such counsel does not know of any
legal or governmental proceedings instituted or threatened against the
Company or any of its subsidiaries which would restrict the issuance
and sale of the Notes as contemplated by the Prospectus, or would be
required to be disclosed therein and which is not disclosed; also,
such counsel does not know of any statutes, regulations, contracts or
other documents which are required to be summarized in the
Registration Statement or the Prospectus, as then amended or
supplemented, or to be filed or incorporated by reference as exhibits
to such
C-2
<PAGE> 43
Registration Statement which are not summarized, filed or incorporated
as required;
(xi) such counsel is of the opinion ascribed to it in the
Prospectus (Supplement), as then amended or supplemented, under the
caption "(Taxation)";
(xii) the Company is not, nor is it directly or indirectly
controlled by or acting on behalf of any person which is, (i) an
"investment company" within the meaning of the Investment Company Act
of 1940, as amended, and the rules and regulations promulgated by the
Commission thereunder, or (ii) a "holding company" within the meaning
of, or subject to regulation under, the Public Utility Holding Company
Act of 1935, as amended, and the rules and regulations promulgated by
the Commission thereunder; and
(xiii) such counsel (a) is of the opinion that each document,
if any, filed pursuant to the Exchange Act and incorporated by
reference in the Prospectus, as then amended or supplemented (except
for financial statements and schedules and other financial or
statistical data included therein as to which such counsel need not
express any opinion), complied when so filed as to form in all
material respects with the Exchange Act and the applicable rules and
regulations of the Commission thereunder, (b) believes that (except
for financial statements and schedules and other financial or
statistical data as to which such counsel need not express any belief
and except for that part of the Registration Statement that
constitutes the Form T-1 of the Trustee heretofore referred to) each
part of the Registration Statement, as then amended, if applicable,
when such part became effective, did not, and as of the date such
opinion is delivered, does not contain any 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,
(c) is of the opinion that the Registration Statement and Prospectus,
as then amended or supplemented, if applicable (except for financial
statements and schedules and other financial or statistical data
included therein as to which such counsel need not express any
opinion), comply as to form in all material respects with the
requirements of the Securities Act, the Trust Indenture Act and the
applicable rules and regulations of the Commission thereunder, and (d)
believes that (except for financial statements and schedules and other
financial or statistical data as to which such counsel need not
express any belief) the Prospectus, as then amended or supplemented,
if applicable, as of the date such opinion is delivered does not
contain an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading;
provided that in the case of an opinion delivered on the Commencement
Date or pursuant to Section 5(b), the opinion and belief set forth in
clauses (c) and (d) above shall be deemed not to cover information
concerning an offering of particular Notes to the extent such
information will be set forth in a Pricing Supplement.
Notwithstanding the foregoing, the opinions described in
subparagraphs (vi) (except as to due authorization of the Notes), (viii),
(ix)(a) and (b) and (xiii)(c) and (d) above, when contained in an opinion
delivered on the Commencement Date or pursuant to Section 5(b)
C-3
<PAGE> 44
of the Agreement, shall be deemed not to address the application of the
Commodity Exchange Act, as amended, or the rules, regulations or
interpretations of the Commodity Futures Trading Commission to Notes the
payments of principal or interest on which will be determined by reference to
one or more currency exchange rates, commodity prices, equity indices or other
factors.
With respect to subparagraph (xiii) above, Mudge Rose Guthrie
Alexander & Ferdon may state that their opinion and belief is based upon their
participation in the preparation of the Registration Statement and Prospectus
and any amendments or supplements thereto and documents incorporated therein by
reference and review and discussion of the contents thereof, but are without
independent check or verification, except as specified.
C-4
<PAGE> 45
Exhibit D
Opinion of ( )
Counsel for the Agents
The opinion of ( ), counsel for the Agents, to be
delivered pursuant to Section 4(c) of the Agreement shall be to the effect
that:
(i) the Company has been duly incorporated and is a
corporation duly organized, validly existing in good standing under
the laws of the State of Delaware;
(ii) each of the Agreement and any applicable Written Terms
Agreement has been duly authorized, executed and delivered by the
Company;
(iii) the Indenture has been duly authorized, executed and
delivered by the Company and duly requalified under the Trust
Indenture Act; the Indenture constitutes a valid and legally binding
agreement of the Company, enforceable in accordance with its terms,
subject, as to enforcement, to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and other laws of general
applicability relating to or affecting creditors' rights and to
general equity principle;
(iv) the Notes have been duly authorized and, when the terms
of the Notes and their issue and sale have been duly established in
accordance with the Indenture and the Agreement, and when duly
executed and authenticated in accordance with the provisions of the
Indenture and issued and delivered against payment therefor in
accordance with the Agreement, the Notes will be entitled to the
benefits of the Indenture and the Notes will be valid and legally
binding obligations of the Company, enforceable in accordance with
their terms, subject, as to enforcement, to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and other laws of
general applicability relating to or affecting creditors' rights and
to general equity principles;
(v) the statements (a) in the Prospectus (Supplement) under
the captions "(Description of Notes)" and "Plan of Distribution," (b)
in the Basic Prospectus, as then amended or supplemented, under the
captions "Description of the Debt Securities" and "Plan of
Distribution," in each case insofar as such statements constitute
summaries of the legal matters or documents referred to therein,
fairly present the information called for with respect to such legal
matters or documents and fairly summarize the matters referred to
therein;
(vi) the Registration Statement became effective under the
Securities Act on ( ), and, to the best knowledge of such counsel,
no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose have
been initiated or are pending or contemplated under the Securities
Act; and
D-1
<PAGE> 46
(vii) such counsel (a) believes that (except for financial
statements and schedules and other financial or statistical data as to
which such counsel need not express any belief and except for that
part of the Registration Statement that constitutes the Form T-1
heretofore referred to) each part of the Registration Statement, as
then amended, if applicable, when such part became effective, did not,
and as of the date such opinion is delivered does not, 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, (b) is of the opinion that the Registration
Statement and Prospectus, as then amended, if applicable (except for
financial statements and schedules and other financial or statistical
data included therein as to which such counsel need not express any
opinion), comply as to form in all material respects with the
requirements of the Securities Act, the Trust Indenture Act and the
applicable rules and regulations of the Commission thereunder, and (c)
believes that (except for financial statements and schedules and other
financial or statistical data as to which such counsel need not
express any belief) the Prospectus, as then amended or supplemented,
as of the date such opinion is delivered does not contain an untrue
statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading; provided
that in the case of an opinion delivered on the Commencement Date or
pursuant to Section 5(b), the opinion and belief set forth in clauses
(b) and (c) above shall be deemed not to cover information concerning
an offering of particular Notes to the extent such information will be
set forth in a Pricing Supplement.
Notwithstanding the foregoing, the opinions described in subparagraphs
(iv) (except as to due authorization of the Notes), (v) and (vii)(b) and (c)
above, when contained in an opinion delivered on the Commencement Date or
pursuant to Section 5(b) of the Agreement, shall be deemed not to address the
application of the Commodity Exchange Act, as amended, or the rules,
regulations, or interpretations of the Commodity Futures Trading Commission to
Notes the payments of principal or interest on which will be determined by
reference to one or more currency exchange rates, commodity prices, equity
indices or other factors.
With respect to clause (vii) above, such counsel may state that their
opinion and belief is based upon their participation in the preparation of the
Registration Statement and Prospectus and any amendments or supplements thereto
(other than the documents incorporated by reference) and upon review and
discussion of the contents thereof (including documents incorporated by
reference) but are without independent check or verification, except as
specified.
Such counsel may rely, to the extent their opinions are based upon
matters governed by the laws of other jurisdictions, upon the opinion of other
counsel admitted to the bar in such jurisdictions.
D-2
<PAGE> 1
EXHIBIT 5
MUDGE ROSE GUTHRIE ALEXANDER & FERDON
180 MAIDEN LANE
NEW YORK, NEW YORK 10038-4996
August 18, 1994
El Paso Natural Gas Company
One Paul Kayser Center
100 North Stanton Street
El Paso, Texas 79901
Dear Sirs:
We have acted as special counsel to El Paso Natural Gas
Company ("EPG") in connection with its proposed issuance and sale of (i) debt
securities (the "Debt Securities"), (ii) shares of preferred stock, $.01 par
value (the "Preferred Stock"), in one or more series, and (iii) shares of
common stock, $3.00 par value (the "Common Stock"). The Debt Securities, the
Preferred Stock and the Common Stock are collectively hereinafter referred to
as the "Securities", and the Securities in the aggregate will have an initial
public offering price of up to U.S. $400,000,000 or the equivalent thereof.
The Securities are to be issued pursuant to a combined Registration Statement
on Form S-3 and Post-Effective Amendment No. 1 to Registration Statement No.
33-44327 (collectively, the "Registration Statement") filed by EPG with the
Securities and Exchange Commission on August 19, 1994 under the Securities Act
of 1933, as amended (the "Act").
As such counsel, we have examined such corporate records,
certificates and other documents and have reviewed such questions of law as we
have considered necessary or appropriate for the purpose of this opinion. Upon
the basis of such examination, we advise you that, in our opinion:
<PAGE> 2
1. EPG has been duly incorporated and is a corporation
duly organized, validly existing and in good standing under the laws of
the State of Delaware.
2. When (i) the Registration Statement has become
effective under the Act and the Indenture, dated as of January 1,
1992, between EPG and Citibank, N.A., as trustee (the "Indenture"),
has been requalified under the Trust Indenture Act, (ii) the terms of
the Debt Securities have been established in accordance with the
Indenture and the resolutions of EPG's Board of Directors authorizing
the creation, issuance and sale of the Debt Securities, (iii) the Debt
Securities have been executed and authenticated in accordance with the
provisions of the Indenture, and (iv) the Debt Securities have been
issued, sold and delivered in the manner and for the consideration
stated in the Registration Statement, and any prospectus supplement
relating thereto, and the Indenture, the Debt Securities will
constitute valid and legally binding obligations of EPG, enforceable
in accordance with their terms, subject, as to enforcement, (x) to
bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and other laws of general applicability relating to or
affecting creditors' rights and to general equity principles, and (y)
to the extent the Debt Securities are denominated in a currency other
than United States dollars, provisions of law that require that a
judgment for money damages rendered by a court in the United States be
expressed only in United States dollars.
3. When (i) the Registration Statement has become
effective under the Act, (ii) the terms of any particular series of
Preferred Stock have been established in conformity with EPG's
Restated Certificate of Incorporation, as amended, and in accordance
with the resolutions of EPG's Board of Directors authorizing the
issuance and sale of the Preferred Stock, (iii) a certificate of
designation conforming to the Delaware General Corporation Law
regarding the Preferred Stock has been filed with the Secretary of
State of the State of Delaware, and (iv) the Preferred Stock has been
issued, sold and delivered in the manner and for the consideration
(not less than the par value thereof) stated in the Registration
Statement, and any prospectus supplement relating thereto, and in
accordance with the terms of the particular series as established by
EPG's Board of Directors, the Preferred Stock will be validly issued,
fully paid and nonassessable.
4. When (i) the Registration Statement has become
effective under the Act, (ii) the terms of the issuance and sale of
the Common Stock have been established in conformity with EPG's
Restated Certificate of Incorporation, as amended, and authorized by
appropriate resolutions of EPG's Board of Directors, and (iii) the
Common Stock has been issued, sold
-2-
<PAGE> 3
and delivered in the manner and for the consideration (not less than
the par value thereof) stated in the Registration Statement, and any
prospectus supplement relating thereto, the Common Stock will be
validly issued, fully paid and nonassessable.
In connection with our opinions expressed above, we have, with
your approval, assumed that, at or prior to the time of the delivery of any
such Security, there will not have occurred any change in law affecting the
validity, legally binding character or enforceability of such Security. We
have also assumed that none of the terms of any Security to be established
subsequent to the date hereof nor the issuance and delivery of such Security,
nor the compliance by EPG with the terms of such Security, will violate any
applicable law, any agreement or instrument then binding upon EPG or any
restriction imposed by any court or governmental body having jurisdiction over
EPG.
We hereby consent to the filing of this opinion as an exhibit
to the Registration Statement and to the references to this Firm under the
heading "Legal Matters" in the Prospectus. In giving such consent, we do not
admit that we are in the category of persons whose consent is required under
Section 7 of the Act.
Very truly yours,
/s/ MUDGE ROSE GUTHRIE ALEXANDER & FERDON
-3-
<PAGE> 1
EXHIBIT 12
EL PASO NATURAL GAS COMPANY
RATIO OF EARNINGS TO FIXED CHARGES AND RATIO OF EARNINGS
TO COMBINED FIXED CHARGES AND PREFERRED AND PREFERENCE
STOCK DIVIDEND REQUIREMENTS
(DOLLARS IN MILLIONS)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED JUNE
30, YEAR ENDED DECEMBER 31,
------------- ----------------------------------------
1994 1993 1993 1992 1991 1990 1989
---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Earnings
Income (loss) from continuing
operations....................... $ 45 $ 52 $ 92 $ 76 $ 89 $ 83 $ 98
Income taxes (benefit).............. 30 32 59 47 52 45 45
---- ---- ---- ---- ---- ---- ----
Income (loss) from continuing
operations before income taxes... 75 84 151 123 141 128 143
Interest and debt expense........... 38 34 71 68 74 89 76
Interest component of rent.......... 1 1 3 3 2 2 2
---- ---- ---- ---- ---- ---- ----
Total Earnings Available for Fixed
Charges.......................... $114 $119 $225 $194 $217 $219 $221
==== ==== ==== ==== ==== ==== ====
Fixed Charges
Interest and debt expense........... 38 34 71 68 74 89 76
Interest component of rent.......... 1 1 3 3 2 2 2
---- ---- ---- ---- ---- ---- ----
Total Fixed Charges................. $ 39 $ 35 $ 74 $ 71 $ 76 $ 91 $ 78
==== ==== ==== ==== ==== ==== ====
Ratio of Earnings to Fixed Charges and
Ratio of Earnings to Combined Fixed
Charges and Preferred and Preference
Stock Dividend Requirements(1)...... 2.92x 3.40x 3.04x 2.73x 2.86x 2.41x 2.83x
</TABLE>
- ---------------
(1) The ratio of earnings to combined fixed charges and preferred and preference
stock dividend requirements for the periods presented is the same as the
ratio of earnings to fixed charges since EPG has no outstanding preferred
stock or preference stock and, therefore, no dividend requirements.
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this Registration Statement
on Form S-3 of our report dated January 21, 1994 on our audits of the
consolidated financial statements and financial statement schedules of El Paso
Natural Gas Company as of December 31, 1993 and 1992, and for each of the three
years in the period ended December 31, 1993, which report is included in its
Annual Report on Form 10-K for the year ended December 31, 1993, filed with the
Securities and Exchange Commission. We also consent to the reference to our firm
under the caption "Experts".
/s/ COOPERS & LYBRAND L.L.P.
COOPERS & LYBRAND L.L.P.
El Paso, Texas
August 17, 1994
<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________________________________________
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
Check if an application to determine eligibility of a Trustee
pursuant to Section 305(b)(2) _____
___________________________________________________
CITIBANK, N.A.
(Exact name of trustee as specified in its charter)
13-5266470
(I.R.S. employer
identification no.)
399 Park Avenue, New York, New York 10043
(Address of principal executive office) (Zip Code)
___________________________________________________
El Paso Natural Gas Company
(Exact name of obligor as specified in its charter)
Delaware 74-0608280
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
One Paul Kayser Center
El Paso, TX
79901
(Address of Principal Executive Offices) (Zip Code)
___________________________________________________
Debt Securities
(Title of the indenture securities)
<PAGE> 2
Item 1. GENERAL INFORMATION.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to
which it is subject.
Name Address
---- -------
Comptroller of the Currency, Washington, D.C.
Federal Reserve Bank of New York New York, NY
Federal Deposit Insurance Corporation Washington, D.C.
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
Item 2. AFFILIATIONS WITH OBLIGOR.
If the obligor is an affiliate of the trustee, describe each
such affiliation.
None.
Item 16. LIST OF EXHIBITS.
Exhibit 1 - Copy of Articles of Association of the Trustee,
as now in effect. (Exhibit 1 to T-1 to Registration Statement
No. 2-79983)
Exhibit 2 - Copy of certificate of authority of the Trustee
to commence business. (Exhibit 2 to T-1 to Registration
Statement No. 2-29577)
Exhibit 3 - Copy of authorization of the Trustee to exercise
corporate trust powers. (Exhibit 3 to T-1 to Registration
Statement No. 2-55519)
Exhibit 4 - Copy of existing By-Laws of the Trustee.
(Exhibit 4 to T-1 to Registration Statement No. 33-34988)
Exhibit 5 - Not applicable.
Exhibit 6 - The consent of the Trustee required by Section
321(b) of the Trust Indenture Act of 1939. (Exhibit 6 to T-1
to Registration Statement No. 33-19227.)
<PAGE> 3
Exhibit 7 - Copy of the latest Report of Condition of
Citibank, N.A (as of March 31, 1994 - attached).
Exhibit 8 - Not applicable.
Exhibit 9 - Not applicable.
___________________________________________________
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, the
Trustee, Citibank, N.A., a national banking association organized and existing
under the laws of the United States of America, has duly caused this statement
of eligibility to be signed on its behalf by the undersigned, thereunto duly
authorized, all in The City of New York and State of New York, on the 17th day
of August, 1994.
CITIBANK, N.A.
By /s/ ROBERT T. KIRCHNER
Robert T. Kirchner
Vice President
3
<PAGE> 4
Charter No. 1461
Comptroller of the Currency
Northeastern District
REPORT OF CONDITION
CONSOLIDATING
DOMESTIC AND FOREIGN
SUBSIDIARIES OF
CITIBANK, N.A.
OF NEW YORK IN THE STATE OF NEW YORK, AT THE CLOSE OF
BUSINESS ON MARCH 31, 1994, PUBLISHED IN RESPONSE
TO CALL MADE BY COMPTROLLER OF THE CURRENCY UNDER
TITLE 12, UNITED STATES CODE, SECTION 161 CHARTER
NUMBER 1461 COMPTROLLER OF THE CURRENCY NORTH-
EASTERN DISTRICT
<TABLE>
<CAPTION>
ASSETS
THOUSANDS
OF DOLLARS
<S> <C> <C>
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coin . . . . . . . . . . . . . . . . . . $ 6,452,000
Interest-bearing balances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,339,000
Securities:
Held-to-maturity securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,923,000
Available-for-sale securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,604,000
Federal funds sold and securities purchased under agreements to resell in domestic
offices of the bank and of its Edge and Agreement subsidiaries and in IBFs:
Federal funds sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,416,000
Securities purchased under agreements to resell . . . . . . . . . . . . . . . . . . . 3,128,000
Loans and lease financing receivables:
Loans and leases, net of unearned income . . . . . . . . . . . . . . . $ 116,456,000
LESS: Allowance for loan and lease losses . . . . . . . . . . . . . . 3,578,000
-------------
Loans and leases, net of unearned income and allowance . . . . . . . . . . . . . . . . 112,878,000
Assets held in trading accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38,412,000
Premises and fixed assets (including capitalized leases) . . . . . . . . . . . . . . . . 3,107,000
Other real estate owned . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,170,000
Investments in unconsolidated subsidiaries and associated companies . . . . . . . . . . 1,008,000
Customers' liability to this bank on acceptances outstanding . . . . . . . . . . . . . . 1,368,000
Intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15,000
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,397,000
-------------
TOTAL ASSETS $ 199,217,000
=============
LIABILITIES
Deposits:
In domestic offices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 34,936,000
Noninterest-bearing . . . . . . . . . . . . . . . . . . . . . . . . $ 12,668,000
Interest-bearing . . . . . . . . . . . . . . . . . . . . . . . . . . 22,268,000
-------------
In foreign offices, Edge and Agreement subsidiaries, and IBFs . . . . . . . . . . . . 100,380,000
Noninterest-bearing . . . . . . . . . . . . . . . . . . . . . . . . $ 6,932,000
Interest-bearing . . . . . . . . . . . . . . . . . . . . . . . . . . 93,448,000
-------------
Federal funds purchased and securities sold under agreements to repurchase in
domestic offices of the bank and of its Edge and Agreement subsidiaries
and in IBFs:
Federal funds purchased . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,556,000
Securities sold under agreements to repurchase . . . . . . . . . . . . . . . . . . . . 1,568,000
Trading liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21,074,000
Other borrowed money:
With original maturity of one year or less . . . . . . . . . . . . . . . . . . . . . . 7,837,000
With original maturity of more than one year . . . . . . . . . . . . . . . . . . . . . 3,844,000
Mortgage indebtedness and obligations under capitalized leases . . . . . . . . . . . . . 220,000
Bank's liability on acceptances executed and outstanding . . . . . . . . . . . . . . . . 1,386,000
Notes and debentures subordinated to deposits . . . . . . . . . . . . . . . . . . . . . 4,700,000
Other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,121,000
-------------
TOTAL LIABILITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 187,622,000
-------------
EQUITY CAPITAL
Common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 751,000
Surplus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,928,000
Undivided profits and capital reserves . . . . . . . . . . . . . . . . . . . . . . . . . 5,373,000
Net unrealized holding gains (losses) on available-for-sale securities . . . . . . . . . 191,000
Cumulative foreign currency translation adjustments . . . . . . . . . . . . . . . . . . (648,000)
-------------
TOTAL EQUITY CAPITAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 11,595,000
-------------
TOTAL LIABILITIES AND EQUITY CAPITAL . . . . . . . . . . . . . . . . . . . . . . . . . . $ 199,217,000
=============
</TABLE>
I, Roger W. Trupin, Controller of the above-
named bank do hereby declare that this
Report of Condition is true and correct to the
best of my knowledge and belief.
ROGER W. TRUPIN
We, the undersigned directors, attest to
the correctness of this Report of Condition.
We declare that it has been examined by us
and to the best of our knowledge and belief
has been prepared in conformance with the
instructions and is true and correct.
PAUL J. COLLINS )
PEI YUAN CHIA ) Directors
CHRISTOPHER J. STEFFEN )
