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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 8, 1995
REGISTRATION NO. 33-60441
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
SOUTHERN CALIFORNIA WATER COMPANY
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
CALIFORNIA
(STATE OR OTHER JURISDICTION OF
INCORPORATION OR ORGANIZATION)
95-1243678
(I.R.S. EMPLOYER
IDENTIFICATION NO.)
630 EAST FOOTHILL BOULEVARD
SAN DIMAS, CALIFORNIA 91773
(909) 394-3600
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
PRINCIPAL EXECUTIVE OFFICES)
------------------------
JAMES B. GALLAGHER
VICE PRESIDENT-FINANCE,
CHIEF FINANCIAL OFFICER AND SECRETARY
SOUTHERN CALIFORNIA WATER COMPANY
630 EAST FOOTHILL BOULEVARD
SAN DIMAS, CALIFORNIA 91773
(909) 394-3600
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
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IT IS RESPECTFULLY REQUESTED THAT THE COMMISSION SEND COPIES OF ALL NOTICES,
ORDERS AND COMMUNICATIONS TO:
C. JAMES LEVIN, ESQ.
O'MELVENY & MYERS
400 SOUTH HOPE STREET
LOS ANGELES, CALIFORNIA 90071-2899
GARY W. WOLF, ESQ.
CAHILL GORDON & REINDEL
EIGHTY PINE STREET
NEW YORK, NEW YORK 10005-1702
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALES TO THE PUBLIC:
From time to time after the effective date of this Registration Statement as
determined by market conditions.
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If the only securities being registered on this Form are being 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/
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act of 1933, please check the
following box and list the Securities Act registration statement number of the
earlier effective registration statement for the same offering. / /
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act of 1933, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. / /
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
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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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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 8, 1995
PROSPECTUS
SOUTHERN CALIFORNIA WATER COMPANY
SECURITIES
------------------------
Southern California Water Company (the "Company") may offer from time to
time, in one or more series, its unsecured debt securities (the "Debt
Securities"), and shares of its Common Shares, par value $2.50 per share (the
"Common Shares"). The Debt Securities and the Common Shares are collectively
referred to herein as the "Securities." The Securities will have an aggregate
offering price not exceeding $70,000,000 and will be offered on terms to be
determined at the time of offering.
In the case of Debt Securities, the specific title, the aggregate principal
amount, the purchase price, the maturity, the rate and time of payment of any
interest, any redemption or sinking fund provisions, any conversion provisions
and any other specific terms of the Debt Securities will be set forth in an
accompanying supplement to this Prospectus (a "Prospectus Supplement"). In the
case of Common Shares, the specific number of shares and issuance price per
share will be set forth in an accompanying Prospectus Supplement. Unless
otherwise disclosed in the applicable Prospectus Supplement, the Common Shares
will be listed on the New York Stock Exchange under the symbol "SCW."
Securities may be sold directly, through agents from time to time or
through underwriters and/or dealers. If any agent of the Company or any
underwriter is involved in the sale of the Securities, the name of such agent or
underwriter and any applicable commission or discount will be set forth in the
accompanying Prospectus Supplement. See "Plan of Distribution."
The Debt Securities, if issued, will rank on a parity with all other
unsecured and unsubordinated indebtedness of the Company. See "Description of
Debt Securities."
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
------------------------
THIS PROSPECTUS MAY NOT BE USED TO CONSUMMATE SALES OF SECURITIES UNLESS
ACCOMPANIED BY A PROSPECTUS SUPPLEMENT.
THE DATE OF THIS PROSPECTUS IS , 1995.
<PAGE> 3
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended, 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 can be inspected and copied at Room 1024 of the offices of the
Commission, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, and
should be available for inspection and copying at the regional offices of the
Commission located at 7 World Trade Center, 13th Floor, New York, New York 10048
and Suite 1400, Northwestern Atrium Center, 500 West Madison Street, Chicago,
Illinois 60661. Copies of such material can be obtained from the principal
offices of the Commission at Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549 at prescribed rates. The issued and outstanding Common
Shares of the Company are listed on the New York Stock Exchange, and such
reports, proxy statements and other information can also be inspected at such
Exchange.
This Prospectus does not contain all the information set forth in the
Registration Statement and exhibits thereto which the Company has filed with the
Commission under the Securities Act of 1933 and reference is hereby made to such
Registration Statement, including the exhibits thereto.
------------------------
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
There are incorporated herein by reference the following documents of the
Company filed with the Commission (file no. 0-1121): (1) Annual Report on Form
10-K for the fiscal year ended December 31, 1994; (2) Quarterly Report on Form
10-Q for the quarter ended March 31, 1995; (3) Amendment No. 1 to Quarterly
Report on Form 10-Q/A for the quarter ended March 31, 1995; (4) Quarterly Report
on Form 10-Q for the quarter ended June 30, 1995; and (5) all documents filed by
the Company pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Securities
Exchange Act of 1934, as amended, subsequent to the date of this Prospectus and
prior to the termination of the offering of the Securities.
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,
in a Prospectus Supplement or in any subsequently filed document which is
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.
The Company will provide without charge to each person, including any
beneficial holder, to whom a copy of this Prospectus is delivered, upon the
written or oral request of any such person, a copy of any or all the foregoing
documents incorporated by reference herein, including exhibits specifically
incorporated by reference in such documents but excluding all other exhibits to
such documents. Requests should be made to Southern California Water Company,
630 East Foothill Boulevard, San Dimas, California 91773 (Telephone: (909)
394-3600), Attention: Office of the Treasurer.
THE COMPANY
The Company is a public utility regulated by the California Public
Utilities Commission (the "CPUC"). The Company is engaged in the purchase,
production, distribution and sale of water and in the purchase, distribution and
sale of electricity.
The Company was incorporated in California in 1929. Its executive offices
are located at 630 East Foothill Boulevard, San Dimas, California 91773, and its
telephone number is (909) 394-3600.
USE OF PROCEEDS
The Company is unable to predict either the number of Common Shares or the
amount of Debt Securities that will ultimately be sold or the prices at which,
or other terms upon which, such Securities will be sold. However, the Company
proposes to use the net proceeds from the sale of such Securities for the
reimbursement of moneys actually expended from income, or from other moneys in
the Company's treasury, for the acquisition of property, for the construction,
completion, extension or improvement of the Company's facilities or for other
general corporate purposes. Such proceeds initially may be used to reduce
short-term borrowings or may be invested in short-term securities. Such proceeds
may also be used to refund certain existing debt obligations with maturities in
excess of one year, in which event such refunded debt obligations will be
specified in an applicable Prospectus Supplement.
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SELECTED FINANCIAL DATA
The following table sets forth selected financial and other data for the
Company and its consolidated subsidiaries for the periods indicated. Such
information is qualified in its entirety by the more detailed financial
information set forth in the financial statements and the notes thereto
incorporated by reference herein. See "Incorporation of Certain Documents by
Reference."
<TABLE>
<CAPTION>
AT OR FOR THE YEAR ENDED DECEMBER 31,
----------------------------------------------------
1994 1993 1992 1991 1990
-------- -------- -------- -------- --------
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS AND
RATIOS)
<S> <C> <C> <C> <C> <C>
BALANCE SHEET DATA
Total assets................................ $383,627 $358,533 $312,491 $293,444 $268,028
Total utility plant......................... 314,879 294,990 277,525 258,558 235,713
Capital additions........................... 30,935 28,500 28,162 32,472 27,077
Long-term debt.............................. 92,891 84,286 84,195 82,634 67,246
Preferred Shares subject to mandatory
redemption................................ 560 600 640 680 720
Common equity............................... 118,962 116,463 88,229 83,162 71,141
Total capitalization........................ 214,013 202,949 174,664 168,076 140,707
INCOME STATEMENT DATA
Total operating revenues.................... 122,675 108,506 100,660 90,660 87,340
Net gain from sale of operating
properties................................ 313 -- 849 5,463 --
Net income.................................. 11,338 12,026 12,142 15,363 8,907
Earnings available for common
shareholders.............................. 11,240 11,926 12,040 15,259 8,801
Earnings per Common Share................... 1.43 1.66 1.82 2.34 1.41
Dividends declared per Common Share......... $1.20 $1.19 $1.15 $1.10 $1.08
Ratio of earnings to fixed charges.......... 3.55 3.05 3.41 2.92 3.23
Ratio of debt to total capitalization....... 43.4% 41.5% 48.2% 49.2% 47.8%
</TABLE>
DESCRIPTION OF DEBT SECURITIES
Debt Securities may be issued from time to time in series under the
Indenture, dated as of September 1, 1993 (the "Indenture"), between the Company
and Chemical Trust Company of California, as trustee (the "Trustee"), or such
other trustee as may be designated in a Prospectus Supplement. As used under
this caption, unless the context otherwise requires, "Offered Debt Securities"
shall mean the Debt Securities offered by this Prospectus and the accompanying
Prospectus Supplement. The statements under this caption are brief summaries of
certain provisions contained in the Indenture, do not purport to be complete and
are qualified in their entirety by reference to the Indenture, including the
definitions therein of certain terms, which is filed as an exhibit to the
Registration Statement of which this Prospectus is a part. The following sets
forth certain general terms and provisions of the Debt Securities. Further terms
of the Offered Debt Securities will be set forth in a Prospectus Supplement.
GENERAL
The Indenture provides for the issuance of Debt Securities in series and
does not limit the principal amount of Debt Securities which may be issued
thereunder.
Reference is made to the applicable Prospectus Supplement for the following
terms of the Offered Debt Securities: (1) the designation, aggregate principal
amount and denominations; (2) the price at which such Debt Securities will be
issued and, if an index formula or other method is used, the method for
determining amounts of principal or interest; (3) the maturity date and other
dates, if any, on which principal will be payable; (4) the interest rate or
rates (which may be fixed or variable), if any; (5) the date or dates from which
interest will accrue and on which interest will be payable, and the record dates
for the payment of interest; (6) the manner of paying principal or interest; (7)
the places where principal and interest will be
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payable; (8) the terms of any mandatory or optional redemption by the Company;
(9) the terms of any redemption at the option of Holders; (10) whether and upon
what terms any Debt Securities may be exchanged; (11) whether such Debt
Securities are to be represented in whole or in part by a Debt Security in
global form and, if so, the identity of the depositary ("Depositary") for any
global Debt Security; (12) any tax indemnity provisions; (13) the amount or
portion of principal payable upon acceleration of a discounted Debt Security;
(14) whether and upon what terms Debt Securities may be defeased; (15) any
events of default or restrictive covenants in addition to or in lieu of those
set forth in the Indenture; (16) provisions for electronic issuance of Debt
Securities or for Debt Securities in uncertificated form; and (17) any
additional provisions or other special terms not inconsistent with the
provisions of the Indenture, including any terms that may be required or
advisable under United States or other applicable laws or regulations, or
advisable in connection with the marketing of the Debt Securities.
One or more series of the Debt Securities may be issued as discounted Debt
Securities (bearing no interest or bearing interest at a rate which at the time
of issuance is below market rates) to be sold at a substantial discount below
their stated principal amount. Tax and other special considerations applicable
to any such discounted Debt Securities will be described in the Prospectus
Supplement relating thereto.
STATUS OF DEBT SECURITIES
The Debt Securities will be unsecured and unsubordinated obligations of the
Company and will rank on a parity with all other unsecured and unsubordinated
indebtedness of the Company. At the date of this Prospectus, the Company had no
outstanding indebtedness for money borrowed secured by a mortgage or pledge of
or lien on assets.
GLOBAL SECURITIES
The Debt Securities of a series may be issued in whole or in part in global
form. A Debt Security in global form will be deposited with, or on behalf of, a
Depositary, which will be identified in an applicable Prospectus Supplement. A
global Debt Security may be issued in either registered or bearer form and in
either temporary or permanent form. Unless and until it is exchanged in whole or
in part for Debt Securities in definitive form, a Debt Security in global form
may not be transferred except as a whole by the Depositary for such Debt
Security to a nominee of such Depositary or by a nominee of such Depositary to
such Depositary or another nominee of such Depositary or by such Depositary or
any such nominee to a successor of such Depositary or a nominee of such
successor. If any Debt Securities of a series are issuable in global form, the
applicable Prospectus Supplement will describe the circumstances, if any, under
which beneficial owners of interests in any such global Debt Security may
exchange such interests for definitive Debt Securities of such series and of
like tenor and principal amount in any authorized form and denomination, the
manner of payment of principal of, premium and interest, if any, on any such
global Debt Security and the material terms of the depositary arrangement with
respect to any such global Debt Security.
ABSENCE OF RESTRICTIVE COVENANTS
The Company is not restricted by the Indenture from paying dividends or
from incurring, assuming or becoming liable for any type of debt or other
obligations, including obligations secured by property of the Company. The
Indenture does not require the maintenance of any financial ratios or specified
levels of net worth or liquidity. The Indenture does not contain a covenant or
other provision that specifically is intended to afford the holders of the Debt
Securities special protection in the event of a highly leveraged transaction.
SUCCESSOR CORPORATION
The Indenture provides that the Company may consolidate with, or transfer
all or substantially all of its assets to, or merge with or into, any other
corporation, provided, that in any such case: (i) the surviving Company is a
corporation organized and existing under the laws of the United States or any
state thereof and, if not the Company, assumes, by supplemental indenture, all
of the obligations of the Company under the Debt Securities and the Indenture
and (ii) immediately after such merger or consolidation, or such transfer,
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no default exists in the performance of any such obligation. Subject to certain
limitations in the Indenture, the Trustee may receive from the Company an
officer's certificate and an opinion of counsel as conclusive evidence that any
such consolidation or transfer, and any such assumption, complies with the
provision of the Indenture.
EVENTS OF DEFAULT
An "Event of Default" with respect to a series of Debt Securities will
occur if: (1) the Company defaults in any payment of interest on any Debt
Securities of the series when the same becomes due and payable and the Default
continues for a period of 60 days; (2) the Company defaults in the payment of
the principal of any Debt Securities of the series when the same becomes due and
payable at maturity or upon redemption, acceleration or otherwise and the
Default continues for a period of three business days; (3) the Company defaults
in the payment or satisfaction of any sinking fund obligation with respect to
any Debt Securities of a series as required by the Securities Resolution or
supplemental indenture establishing such series and the Default continues for a
period of three business days; (4) the Company defaults in the performance of
any of its other agreements applicable to the series and the Default continues
for 90 days after the notice specified below; (5) the Company pursuant to or
within the meaning of any Bankruptcy Law: (A) commences a voluntary case, (B)
consents to the entry of an order for relief against it in an involuntary case,
(C) consents to the appointment of a Custodian for it or for all or
substantially all of its property, or (D) makes a general assignment for the
benefit of its creditors; (6) a court of competent jurisdiction enters an order
or decree under any Bankruptcy Law that: (A) is for relief against the Company
in an involuntary case, (B) appoints a Custodian for the Company or for all or
substantially all of its property, or (C) orders the liquidation of the Company;
and the order or decree remains unstayed and in effect for 60 days; or (7) any
other event of default provided for in the series occurs.
"Bankruptcy Law" means Title 11, U.S. Code or any similar Federal or State
law for the relief of debtors.
"Custodian" means any receiver, trustee, assignee, liquidator or a similar
official under any Bankruptcy Law.
"Default" means any event which is, or after notice or passage of time
would be, an Event of Default. A Default described in clause (4) above is not an
Event of Default until the Trustee or the Holders of at least 33 1/3% in
principal amount of the series notify the Company of the Default and the Company
does not cure the Default within the time specified after receipt of the notice.
The Trustee may require indemnity satisfactory to it before it enforces the
Indenture or the Debt Securities of the series. Subject to certain limitations,
Holders of a majority in principal amount of the Debt Securities of the series
may direct the Trustee in its exercise of any trust or power. The Trustee may
withhold from Holders of the series notice of any continuing Default (except a
Default in payment of principal or interest) if it determines that withholding
notice is in their interest. The Company is required to furnish the Trustee,
annually, a brief certificate as to the Company's compliance with all conditions
and covenants under the Indenture.
The Indenture does not have a cross-default provision. Thus, a default by
the Company on any other debt would not constitute an Event of Default. A
Default on any series of Debt Securities shall not constitute a Default on any
other series unless so provided in such other series.
AMENDMENTS AND WAIVERS
Unless the Securities Resolution establishing the terms of a series
otherwise provides, the Indenture and the Debt Securities of a series may be
amended, and any default may be waived as follows. The Debt Securities and the
Indenture may be amended with the consent of the holders of a majority in
principal amount of the Debt Securities of all series affected voting as one
class. Unless the Securities Resolution establishing the terms of the series
otherwise provides, a default on a series may be waived with the consent of the
holders of a majority in principal amount of the Debt Securities of the series.
However, without the consent of each Holder affected, no amendment or waiver may
(1) reduce the amount of Debt Securities whose holders must consent to an
amendment or waiver, (2) reduce the interest on or change the time for payment
of interest on any Debt Security, (3) change the dates on which principal and
interest on any Debt
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Security are payable, (4) change the times at which principal or sinking fund
payments are payable pursuant to, or the amounts of principal or sinking fund
payments subject to, provisions, if any, relating to mandatory redemption,
redemption at the option of the Holder or sinking fund payments, (5) reduce the
principal of any non-discounted Debt Security or reduce the amount of principal
of any discounted Security that would be due on acceleration thereof, or (6)
waive any default in payment of interest on or principal of a Debt Security.
Without the consent of any Holder, the Indenture, the Debt Securities or any
coupons may be amended to cure any ambiguity, omission, defect or inconsistency;
to provide for assumption of Company obligations to Holders in the event of a
merger or consolidation requiring such assumption; to provide that specific
provisions of the Indenture not apply to a series of Securities not previously
issued; to create a series and establish its terms; to provide for a separate
Trustee for one or more series; or to make any change that does not materially
adversely affect the rights of any Securityholder.
DEFEASANCE
Debt Securities of a series may be defeased in accordance with their terms
and, unless the Securities Resolution establishing the terms of the series
otherwise provides, as set forth below. The Company at any time may terminate as
to a series all of its obligations (except for certain obligations with respect
to the defeasance trust and obligations to register the transfer or exchange of
a Debt Security, to replace destroyed, lost or stolen Debt Securities and to
maintain agencies in respect of the Debt Securities) with respect to the Debt
Securities of the series and the Indenture ("legal defeasance"). The Company at
any time may terminate as to a series its obligations, if any, with respect to
the Debt Securities of the series under the covenants, if any, described in the
Prospectus Supplement ("covenant defeasance").
The Company may exercise its legal defeasance option notwithstanding its
prior exercise of its covenant defeasance option. If the Company exercises its
legal defeasance option, a series may not be accelerated because of an Event of
Default. If the Company exercises its covenant defeasance option, a series may
not be accelerated by reference to the covenants described in the Prospectus
Supplement.
To exercise either defeasance option as to a series, the Company must
deposit in trust (the "defeasance trust") with the Trustee money or U.S.
Government Obligations for the payment of principal, premium, if any, and
interest on the Debt Securities of the series to redemption or maturity and must
comply with certain other conditions. In particular, the Company must obtain an
opinion of tax counsel that the defeasance will not result in recognition of any
gain or loss to Holders for Federal income tax purposes. "U.S. Government
Obligations" are direct obligations of the United States of America which have
the full faith and credit of the United States of America pledged for payment
and which are not callable at the issuer's option, or certificates representing
an ownership interest in such obligations.
REGARDING THE TRUSTEE
Chemical Trust Company of California will act as Trustee and Registrar for
Debt Securities issued under the Indenture and, unless otherwise indicated in a
Prospectus Supplement, the Trustee will also act as Transfer Agent and Paying
Agent with respect to the Debt Securities. The Company may remove the Trustee
with or without cause if the Company so notifies the Trustee one month in
advance and if no Default occurs or is continuing during the one-month period.
GOVERNING LAW
The Indenture and the Debt Securities will be governed by and construed in
accordance with the laws of the State of California.
DESCRIPTION OF CAPITAL SHARES
The authorized capital stock of the Company consists of 10,000,000 Common
Shares, par value $2.50 per share, and two classes of Preferred Shares,
consisting of 150,000 $100 Preferred Shares, par value $100 per share (the "$100
Preferred Shares"), and 88,000 Preferred Shares, par value $25 per share (the
"$25 Pre-
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ferred Shares"). As of July 31, 1995, there were outstanding 7,845,092 Common
Shares, 88,000 $25 Preferred Shares (of which 24,000 are subject to mandatory
redemption) and no $100 Preferred Shares.
The following statements are brief summaries of certain information
relating to the Company's Common Shares and their rights and limitations,
including those resulting from the provisions of the Company's debt instruments.
For a more complete statement, reference is made to the Company's Restated
Articles of Incorporation, which are filed as an exhibit to the Registration
Statement of which this Prospectus is a part.
DIVIDEND RIGHTS
Subject to the preferential dividend rights of holders of the Company's $25
Preferred Shares and $100 Preferred Shares, if any, dividends on the Common
Shares are payable when and as declared by the Board of Directors out of funds
not restricted as to the payment of dividends.
The Company's Restated Articles of Incorporation provide that except under
certain specified circumstances no dividend, other than dividends payable in
shares of the Company, may be declared on the Common Shares which, after giving
effect to such declaration, would cause the Company's Common Stock Equity to be
less than 25% of the Total Capitalization, as such terms are defined therein.
Common Stock Equity under this formula was approximately 55% of Total
Capitalization as of June 30, 1995. The payment of dividends on the Common
Shares is also restricted under various debt instruments which have been issued.
Under the most restrictive provision (which is contained in the Reimbursement
Agreement by and between the Company and Barclays Bank International Limited
dated as of November, 1984), as of June 30, 1995, earned surplus of $16,190,000
was available, subject to applicable law, for the payment of cash dividends on
the Common Shares.
Preferred dividends are cumulative, so that if full dividends, in respect
of any previous quarter, have not been paid, or declared and set apart for
payment, on all $25 Preferred Shares and $100 Preferred Shares at the time
outstanding, or if the Company is in default with respect to any preferred
sinking fund requirement, the deficiency must be fully paid before any dividend
can be paid on the Common Shares.
VOTING RIGHTS
Holders of Common Shares and $25 Preferred Shares are entitled to vote
together on all matters. Each holder of Common Shares is entitled to one-tenth
of one vote for each share held and each holder of $25 Preferred Shares is
entitled to one vote for each share held as of the applicable record date. If at
any time four quarterly dividends (whether or not consecutive) have accrued on
shares of any series of $25 Preferred Shares and are in arrears, then at the
annual meeting of shareholders next following such dividend default, or under
certain circumstances, at a special meeting called on the written request of the
holders of not less than 10% of the then-outstanding $25 Preferred Shares, the
holders of the outstanding $25 Preferred Shares are entitled, voting separately
as a class, to elect the smallest number of directors of the Company which
constitutes a majority of the authorized number of such directors.
In addition, it is provided in the Restated Articles of Incorporation with
respect to the $25 Preferred Shares as a class and each series of $100 Preferred
Shares that the Company may not take certain actions which may adversely affect
their interest without the approval of two-thirds ( 2/3), or in certain
instances a majority, of the outstanding shares of such class or series, as the
case may be. Actions with respect to which such approval is required (in some
instances only if the proposed action does not satisfy certain tests) include
(i) alterations in the preferences, voting powers and other rights of such class
or series, (ii) authorization or issuance of any shares of any class ranking
prior to such class or series, (iii) reclassification of shares of any class
ranking junior to or on a parity with such class or series into shares of any
other class ranking prior to such class or series, (iv) the sale, conveyance,
leasing or other disposition of all or substantially all of the Company's
assets, properties or business and (v) consolidation or merger with or into any
other corporation.
LIQUIDATION RIGHTS
After there shall have been paid in cash the full amounts to which the $25
Preferred Shares and the $100 Preferred Shares are entitled upon liquidation,
whether voluntary or involuntary ($25 per share and $100 per share,
respectively, except that the holders of two series of $25 Preferred Shares are
entitled to
7
<PAGE> 9
receive the then-applicable optional redemption price per share in the event of
a voluntary liquidation plus, in each case, accrued and unpaid dividends), the
holders of the Company's Common Shares are entitled to receive pro rata all
remaining assets of the Company available for distribution to its shareholders.
GENERAL
No holder of any of the Company's capital shares is entitled, as of right,
to subscribe for or to purchase any additional capital shares of the Company.
The Common Shares of the Company offered hereby will be fully paid and
nonassessable when issued.
The Transfer Agent and Registrar for the Common Shares is First Interstate
Bank of California.
Unless otherwise disclosed in the applicable Prospectus Supplement, the
Common Shares will be listed on the New York Stock Exchange under the symbol
"SCW".
PLAN OF DISTRIBUTION
The Company may sell the Securities to one or more underwriters for public
offering and sale by them or may sell the Securities to investors directly or
through agents. Any such underwriter or agent involved in the offer and sale of
Securities will be named in the applicable Prospectus Supplement. The Company
has reserved the right to sell Securities directly to investors on its own
behalf in those jurisdictions where it is authorized to do so.
Underwriters may offer and sell Securities at a fixed price or prices,
which may be changed, at market prices prevailing at the time of sale, at prices
related to such prevailing market prices or at negotiated prices. The Company
also may, from time to time, authorize dealers, acting as the Company's agents,
to offer and sell Securities upon the terms and conditions as are set forth in
the applicable Prospectus Supplement. In connection with the sale of Securities,
underwriters may receive compensation from the Company in the form of
underwriting discounts or commissions and may also receive commissions from
purchasers of Securities for whom they may act as agent. Underwriters may sell
Securities to or through dealers, and such dealers may receive compensation in
the form of discounts, concessions or commissions from the underwriters and/or
commissions from the purchasers for whom they may act as agent.
Any underwriting compensation paid by the Company to underwriters or agents
in connection with the offering of Securities, and any discounts, concessions or
commissions allowed by underwriters to participating dealers, will be set forth
in the applicable Prospectus Supplement. Dealers and agents participating in the
distribution of Securities may be deemed to be underwriters, and any discounts
and commissions received by them and any profit realized by them on resale of
the Securities may be deemed to be underwriting discounts and commissions.
Underwriters, dealers and agents may be entitled, under agreements entered into
with the Company, to indemnification against and contribution toward certain
civil liabilities, including liabilities under the Securities Act of 1933, as
amended. Underwriters, dealers and agents may be customers of, engage in
transactions with, or perform services for the Company in the ordinary course of
business.
It has not been determined whether any of the Debt Securities will be
listed on a securities exchange. Underwriters will not be obligated to make a
market in any of the Securities.
LEGAL MATTERS
Matters relating to the legality of the Debt Securities and Common Shares
offered by this Prospectus will be passed upon for the Company by O'Melveny &
Myers. R. Bradbury Clark, a director of the Company, is of counsel to and a
retired partner in the firm of O'Melveny & Myers. Certain legal matters relating
to the Debt Securities and Common Shares offered hereby will be passed upon for
the Underwriters by Cahill Gordon & Reindel, a partnership including a
professional corporation, New York, New York, which firm will rely upon the
opinion of O'Melveny & Myers as to matters of California law.
8
<PAGE> 10
EXPERTS
The financial statements and schedules of the Company incorporated in this
Prospectus by reference to its Annual Report on Form 10-K for the year ended
December 31, 1994 have been audited by Arthur Andersen LLP, independent public
accountants, as indicated in their reports with respect thereto, and are
incorporated herein in reliance upon the authority of said firm as experts in
accounting and auditing in giving said reports.
9
<PAGE> 11
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The other expenses of these offerings are as follows:
<TABLE>
<S> <C>
SEC Registration fee.............................................. $ 24,138
California Public Utilities Commission fee........................ 34,000
Printing and engraving expenses................................... 70,000*
Legal fees and expenses........................................... 100,000*
Accounting fees and expenses...................................... 12,000*
Trustee's fees.................................................... 5,000*
Registrar's fees.................................................. 3,000*
Rating Agency fees................................................ 45,000*
Blue Sky fees and expenses (including legal fees)................. 20,000*
Miscellaneous..................................................... 111,862*
--------
TOTAL........................................................ $425,000
========
</TABLE>
---------------
* Estimated
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 317 of the General Corporation Law of California provides that a
corporation has the power, and in some cases is required, to indemnify an agent,
including a director or officer, who was or is a party or is threatened to be
made a party to any proceeding, against certain expenses, judgments, fines,
settlements and other amounts under certain circumstances. Article VI of the
Registrant's Bylaws provides for the indemnification of directors, officers and
agents as allowed by statute. In addition, the Registrant has purchased
directors and officers insurance policies which provide insurance against
certain liabilities for directors and officers.
ITEM 16. EXHIBITS.
<TABLE>
<S> <C>
1.1 Form of Medium-Term Note Distribution Agreement
3.2 Restated Articles of Incorporation as amended to December 4, 1990, dated
December 7, 1990(1)
3.4 Certificate of Amendment of Restated Articles of Incorporation dated December
3, 1992(2)
3.5 Certificate of Amendment of Restated Articles of Incorporation dated February
14, 1994(3)
*3.6 Certificate of Amendment of Restated Articles of Incorporation dated September
23, 1993
4.1 Indenture(4)
*4.2 Specimen Certificate of Common Shares
5 Opinion of O'Melveny & Myers as to validity of securities
12 Statement regarding computation of ratios
23.1 Consent of Arthur Andersen LLP (set forth on Page II-5)
23.2 Consent of O'Melveny & Myers (included in Exhibit 5)
*24 Power of attorney
*25 Statement of Eligibility of Trustee (Form T-1)
</TABLE>
II-1
<PAGE> 12
---------------
* Previously filed.
(1) Incorporated herein by reference to the Registrant's Form 10-K (Commission
File No. 0-1121) with respect to the year ended December 31, 1990, in which
the incorporated document bore the same exhibit number.
(2) Incorporated herein by reference to the Registrant's Form 10-K (Commission
File No. 0-1121) with respect to the year ended December 31, 1992, in which
the incorporated document bore the same exhibit number.
(3) Incorporated herein by reference to the Registrant's Form 10-K (Commission
File No. 0-1121) with respect to the year ended December 31, 1993, in which
the incorporated document bore the same exhibit number.
(4) Incorporated herein by reference to the Registrant's Form 8-K (Commission
File No. 33-62832) filed on September 1, 1993 in which the incorporated
document bore the same exhibit number.
II-2
<PAGE> 13
ITEM 17. UNDERTAKINGS.
The 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 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 the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, as amended ("1933 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) For purposes of determining any liability under the 1933 Act, each
filing of the Registrant's annual report pursuant to Section 13(a) or 15(d)
of the Securities Exchange Act of 1934, as amended, that is incorporated by
reference in the registration statement 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.
(4) 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.
(5) For the purpose of determining any liability under the 1933 Act,
each post-effective amendment that contains a form of prospectus 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.
(6) That, for purposes of determining any liability under the 1933
Act, the information omitted from the form of prospectus filed as part of
this registration statement in reliance upon Rule 430A and contained in a
form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or
(4) or 497(h) under the 1933 Act shall be deemed to be part of this
registration statement as of the time it was declared effective.
(7) To file an application for the purpose of determining the
eligibility of the trustee to act under subsection (a) of Section 310 of
the Trust Indenture Act in accordance with the rules and regulations
prescribed by the Commission under Section 305(b)(2) of the Act.
Insofar as indemnification for liabilities arising under the 1933 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 Securities and Exchange
Commission such indemnification is against public policy as expressed in the
1933 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 1933 Act and
will be governed by the final adjudication of such issue.
II-3
<PAGE> 14
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
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 San Dimas, State of California, on August 7, 1995.
SOUTHERN CALIFORNIA WATER COMPANY
By /s/ JAMES B. GALLAGHER
-----------------------------------
James B. Gallagher
Vice President-Finance,
Chief Financial Officer and
Secretary
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
*WILLIAM V. CAVENEY Chairman of the Board August 7, 1995
-------------------------------------------
William V. Caveney
*FLOYD E. WICKS Director, President and August 7, 1995
------------------------------------------- Chief Executive Officer
Floyd E. Wicks
/s/ JAMES B. GALLAGHER Vice President-Finance, August 7, 1995
------------------------------------------- Chief Financial Officer
James B. Gallagher and Secretary
*JEAN E. AVER Director August 7, 1995
-------------------------------------------
Jean E. Auer
*R. BRADBURY CLARK Director August 7, 1995
-------------------------------------------
R. Bradbury Clark
*N.P. DODGE, JR. Director August 7, 1995
-------------------------------------------
N.P. Dodge, Jr.
*ROBERT F. KATHOL Director August 7, 1995
-------------------------------------------
Robert F. Kathol
*LLOYD E. ROSS Director August 7, 1995
-------------------------------------------
Lloyd E. Ross
*By /s/ JAMES B. GALLAGHER
----------------------------------------
James B. Gallagher
Attorney-in-fact
</TABLE>
II-4
<PAGE> 15
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation
by reference in this registration statement of our reports dated February 16,
1995 included (or incorporated by reference) in Southern California Water
Company's Form 10-K for the year ended December 31, 1994 and to all references
to our Firm included in this registration statement.
/s/ ARTHUR ANDERSEN LLP
--------------------------------------
ARTHUR ANDERSEN LLP
Los Angeles, California
August 7, 1995
II-5
<PAGE> 16
EXHIBIT INDEX
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER DESCRIPTION PAGE
------ ------------------------------------------------------------------------ ------------
<S> <C> <C>
1.1 Form of Medium-Term Note Distribution Agreement.........................
3.2 Restated Articles of Incorporation as amended to December 4, 1990, dated
December 7, 1990(1).....................................................
3.4 Certificate of Amendment of Restated Articles of Incorporation dated
December 3, 1992(2).....................................................
3.5 Certificate of Amendment of Restated Articles of Incorporation dated
February 14, 1994(3)....................................................
*3.6 Certificate of Amendment of Restated Articles of Incorporation dated
September 23, 1993......................................................
4.1 Indenture(4)............................................................
*4.2 Specimen Certificate of Common Shares...................................
5 Opinion of O'Melveny & Myers as to validity of securities...............
12 Statement regarding computation of ratios...............................
23.1 Consent of Arthur Andersen LLP (set forth on Page II-5).................
23.2 Consent of O'Melveny & Myers (included in Exhibit 5)....................
*24 Power of attorney.......................................................
*25 Statement of Eligibility of Trustee (Form T-1)..........................
</TABLE>
---------------
* Previously filed.
(1) Incorporated herein by reference to the Registrant's Form 10-K (Commission
File No. 0-1121) with respect to the year ended December 31, 1990, in which
the incorporated document bore the same exhibit number.
(2) Incorporated herein by reference to the Registrant's Form 10-K (Commission
File No. 0-1121) with respect to the year ended December 31, 1992, in which
the incorporated document bore the same exhibit number.
(3) Incorporated herein by reference to the Registrant's Form 10-K (Commission
File No. 0-1121) with respect to the year ended December 31, 1993, in which
the incorporated document bore the same exhibit number.
(4) Incorporated herein by reference to the Registrant's Form 8-K (Commission
File No. 33-62832) filed on September 1, 1993 in which the incorporated
document bore the same exhibit number.
<PAGE> 1
EXHIBIT 1.1
SOUTHERN CALIFORNIA WATER COMPANY
$45,000,000
Medium-Term Notes, Series B
Distribution Agreement
, 1995
Smith Barney Inc.
390 Greenwich Street
New York, New York 10013
A.G. Edwards & Sons, Inc.
One North Jefferson
St. Louis, Missouri 63103
Ladies and Gentlemen:
Southern California Water Company, a California corpo-
ration (the "Company"), proposes to issue and sell from time to
time up to $45,000,000 aggregate principal amount of its Medium-
Term Notes, Series B (the "Notes"), and agrees with Smith Barney
Inc. and A.G. Edwards & Sons, Inc. (each individually, an "Agent"
and collectively, the "Agents") as set forth in this Agreement.
Subject to the terms and conditions stated herein, the
Company hereby (i) appoints each of the Agents as an agent of the
Company for the purpose of soliciting and receiving offers to
purchase Notes from the Company and (ii) agrees that, except as
otherwise contemplated herein, whenever it determines to sell
Notes directly to an Agent as principal, it will enter into a
separate agreement (each a "Terms Agreement"), substantially in
the form of Annex I hereto, relating to such sale in accordance
with Section 2(b) hereof.
The Notes will be issued under an Indenture, dated as
of September 1, 1993 (the "Indenture"), between the Company and
Chemical Trust Company of California, as Trustee (the "Trustee").
The Notes shall have the maturities, annual interest rates and
other terms set forth in the Prospectus referred to below as it
<PAGE> 2
may be amended or supplemented in relation to the Notes from time
to time. The Notes will be issued, and the terms and rights
thereof established, from time to time by the Company in accor-
dance with (i) the Indenture, (ii) the Administrative Procedures
attached hereto as Annex II, as they may be amended from time to
time by written agreement among the Agents and the Company (the
"Procedures"), and (iii) if applicable, a Terms Agreement.
1. Representations and Warranties of the Company.
The Company represents and warrants to, and agrees with, each
Agent that:
(a) The Company meets the requirements for use of Form
S-3 under the Securities Act of 1933, as amended (the "Act"); the
registration statement on Form S-3 (Registration No. 33-60441)
in respect of $70,000,000 aggregate amount of securities has been
filed with the Securities and Exchange Commission (the "Commis-
sion"); the registration statement and any post-effective amend-
ment thereto, in the form heretofore delivered or to be delivered
to the Agents, excluding exhibits to such registration statement
but including all documents incorporated by reference in the pro-
spectus included therein, has been declared effective by the Com-
mission in such form and meets the requirements of paragraph
(a)(1)(ix) or (a)(1)(x) of Rule 415 under the Act and complies in
all other material respects with said Rule; no other document
with respect to such registration statement or document incorpo-
rated by reference therein has heretofore been filed or transmit-
ted for filing with the Commission; and no stop order suspending
the effectiveness of such registration statement has been issued
and no proceeding for that purpose has been initiated or threat-
ened by the Commission. For purposes of this Agreement, any pre-
liminary prospectus relating to the Notes omitting information of
the kind described in Rule 430 under the Act and furnished by the
Company for use by the Agents (including a preliminary prospectus
supplement to the Prospectus hereinafter referred to) is herein-
after called a "Preliminary Prospectus"; the various parts of
such registration statement, including all exhibits thereto and
the documents incorporated by reference in the prospectus con-
tained in the registration statement at the time such part of the
registration statement became effective but excluding the State-
ment of Eligibility on Form T-1 and, if applicable, including the
information contained in the form of final prospectus filed with
the Commission pursuant to Rule 424(b) under the Act, each as
amended at the time such part of the registration statement
became effective, is hereinafter collectively called the "Regis-
tration Statement"; the prospectus (including, if applicable, any
prospectus supplement) relating to the Notes, in the form in
which it has most recently been filed, or transmitted for filing,
with the Commission on or prior to the date of this Agreement, is
hereinafter called the "Prospectus"; any reference herein to any
-2-
<PAGE> 3
Preliminary Prospectus or the Prospectus shall be deemed to refer
to and include the documents incorporated by reference (or the
applicable portions thereof if incorporated only in part) therein
pursuant to the applicable form under the Act, as of the date of
such Preliminary Prospectus or Prospectus, as the case may be;
any reference to any amendment or supplement to the Registration
Statement, any Preliminary Prospectus or the Prospectus shall be
deemed to refer to and include any documents filed after the
effective date of the Registration Statement or after the date of
such Preliminary Prospectus or Prospectus, as the case may be,
under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and incorporated therein by reference (or the
applicable portions thereof if incorporated only in part); and
any reference to the Prospectus as amended or supplemented shall
be deemed to refer to and include the Prospectus as amended or
supplemented in relation to Notes sold pursuant to this Agree-
ment, in the form in which it is filed with the Commission pursu-
ant to Rule 424(b) under the Act and in accordance with Section
4(a) hereof, including any documents incorporated by reference
(or the applicable portions thereof if incorporated only in part)
therein as of the date of such filing.
(b) The documents incorporated by reference in the
Prospectus, when they were filed with the Commission conformed in
all material respects to the requirements of the Exchange Act and
the rules and regulations of the Commission thereunder, when read
together with the other information in or incorporated by refer-
ence in the Prospectus, 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, in
the light of the circumstances under which they were made, not
misleading; and any further documents so filed and incorporated
by reference in the Prospectus, when such documents are filed
with the Commission will conform in all material respects to the
requirements of the Act or the Exchange Act, as applicable, and
the rules and regulations of the Commission thereunder and, when
read together with the other information in or incorporated by
reference in the Prospectus, will 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, in
the light of the circumstances under which they were made, not
misleading; provided, however, that this representation and war-
ranty shall not apply to any statements or omissions made in
reliance upon and in conformity with information furnished in
writing to the Company by any Agent expressly for use in the Pro-
spectus as amended or supplemented to relate to a particular
issuance of Notes.
(c) As of the applicable effective date of the Regis-
tration Statement and each time thereafter at which any amendment
-3-
<PAGE> 4
to the Registration Statement becomes effective or any Annual
Report on Form 10-K is filed by the Company with the Commission
and as of the applicable filing date under Rule 424(b) under the
Act of the Prospectus and any amendment or supplement thereto,
(i) the Registration Statement conforms, and any further amend-
ments or supplements to the Registration Statement will conform,
in all material respects to the requirements of the Act and the
Trust Indenture Act of 1939, as amended (the "Trust Indenture
Act"), and the rules and regulations of the Commission thereun-
der, (ii) the Registration Statement does not and will not con-
tain 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, and (iii) the Prospectus
does not and will 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 the light of the circumstances under
which they were made, not misleading; provided, however, that
this representation and warranty shall not apply to any state-
ments or omissions made in reliance upon and in conformity with
information furnished in writing to the Company by any Agent
expressly for use in the Registration Statement or the Prospectus
as amended or supplemented to relate to a particular issuance of
Notes.
(d) The Company has an authorized capitalization as
set forth for it in the Prospectus, and all the outstanding Com-
mon Shares of the Company have been duly authorized and validly
issued, are fully paid and nonassessable and are free of any pre-
emptive or similar rights; and the capital stock of the Company
conforms, in all material respects, to the description thereof in
the Registration Statement and the Prospectus.
(e) The Company is a corporation duly organized and
validly existing in good standing under the laws of the State of
California with full corporate power and authority to own, lease
and operate its properties and to conduct its business as
described in the Registration Statement and the Prospectus, and
is not required to be qualified as a foreign corporation for the
transaction of business under the laws of any jurisdictions in
which the consequences of a failure to qualify, individually or
in the aggregate, would have a material adverse effect on the
business of the Company.
(f) There are no legal or governmental proceedings
pending or, to the knowledge of the Company, threatened, against
the Company, or to which the Company or any of its properties is
subject, that are required to be described in the Registration
Statement or the Prospectus but are not described as required,
and there are no agreements, contracts, indentures, leases or
other instruments that are required to be described in the
-4-
<PAGE> 5
Registration Statement or the Prospectus or to be filed as an
exhibit to the Registration Statement or any Incorporated Docu-
ment that are not described or filed as required by the Act or
the Exchange Act, as applicable.
(g) The Company is not in violation of its articles of
incorporation or by-laws and has complied, in all respects mate-
rial to the Company, with any law, ordinance, administrative or
governmental rule or regulation applicable to the Company or any
decree applicable to the Company of any court or governmental
agency or body having jurisdiction over the Company, and is not
in default in any material respect in the performance of any
obligation, agreement or condition contained in any material
bond, debenture, note or other evidence of indebtedness or in any
material agreement, lease or other instrument to which the Com-
pany is a party or by which its properties are bound.
(h) Neither the solicitation of offers to purchase the
Notes, the issue and sale of the Notes, nor the execution or con-
summation by the Company of this Agreement, any Terms Agreement
or the Indenture (i) requires any consent, approval, authoriza-
tion or other order of or registration or filing with, any court,
regulatory body, administrative agency or other governmental
body, agency or official on the part of the Company (except
(a) authorizations and orders of the Public Utilities Commission
of the State of California, which have been obtained, are in full
force and effect and are sufficient to authorize the transactions
contemplated hereby and (b) such as may be required for compli-
ance with the securities or Blue Sky laws of various jurisdic-
tions) or conflicts or will conflict with or constitutes or will
constitute a breach of, or a default under, the articles of
incorporation or bylaws of the Company or (ii) conflicts or will
conflict with or constitutes or will constitute a breach of, or a
default under, any agreement, indenture, lease or other instru-
ment to which the Company is a party or by which it or any of its
properties may be bound, or violates or will violate any statute,
law, regulation or filing or judgment, injunction, order or
decree applicable to the Company or any of its properties, or
will result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company pursuant
to the terms of any agreement or instrument to which it is a
party or by which it may be bound or to which any of its property
or assets is subject.
(i) The accountants, Arthur Andersen LLP, who have
certified or shall certify the financial statements included or
incorporated by reference in the Registration Statement and the
Prospectus (or any amendment or supplement thereto) are indepen-
dent public accountants as required by the Act.
-5-
<PAGE> 6
(j) The financial statements, together with related
schedules and notes, included or incorporated by reference in the
Registration Statement and the Prospectus (and any amendment or
supplement thereto for use in connection with an offering of the
Notes), present fairly the financial position, results of opera-
tions and cash flows of the Company on the basis stated in the
Registration Statement at the respective dates or for the respec-
tive periods to which they apply; such statements and related
schedules and notes have been prepared in accordance with gener-
ally accepted accounting principles consistently applied through-
out the periods involved, except as disclosed therein; and the
other financial and statistical information and data included or
incorporated by reference in the Registration Statement and the
Prospectus (and any amendment or supplement thereto for use in
connection with the offering of the Notes) are accurately pre-
sented and to the extent derived therefrom prepared on a basis
consistent with such financial statements and the books and
records of the Company.
(k) The execution and delivery of, and the performance
by the Company of its obligations under, this Agreement have been
duly and validly authorized by the Company, and this Agreement
has been duly executed and delivered by the Company and consti-
tutes the valid and legally binding agreement of the Company,
enforceable against the Company in accordance with its terms,
except as rights to indemnity and contribution hereunder may be
limited by federal or state securities laws, and except as lim-
ited by bankruptcy, insolvency, reorganization, moratorium or
other laws or equitable principles.
(l) The Notes have been duly authorized, and, when
issued and delivered pursuant to the Indenture and this Agreement
and any Terms Agreement, will have been duly executed, authenti-
cated, issued and delivered and will constitute valid and legally
binding obligations of the Company entitled to the benefits pro-
vided by the Indenture enforceable in accordance with their
terms, subject, as to enforcement, to bankruptcy, insolvency,
reorganization and other laws of general applicability relating
to or affecting creditors' rights and to general equitable prin-
ciples; the Indenture has been duly authorized, executed and
delivered and duly qualified under the Trust Indenture Act and
constitutes a valid and legally binding instrument, enforceable
against the Company in accordance with its terms, subject, as to
enforcement, to bankruptcy, insolvency, reorganization and other
laws of general applicability relating to or affecting creditors'
rights and to general equitable principles; and the Indenture
conforms and the Notes of any particular issuance of Notes will
conform, in all material respects, to the descriptions thereof
contained in the Prospectus as amended or supplemented to relate
to such issuance of Notes.
-6-
<PAGE> 7
(m) Except as disclosed in the Registration Statement
and the Prospectus (or any amendment or supplement thereto for
use in connection with an offering of the Notes), subsequent to
the respective dates as of which such information is given in the
Prospectus (or any amendment or supplement thereto for use in
connection with an offering of the Notes), the Company has not
incurred any liability or obligation, direct or contingent, or
entered into any transaction, in each case other than in the
ordinary course of business, that is material to the Company, and
there has not been any change (other than pursuant to employee
option or savings plans and dividend reinvestment plans) in the
capital stock, or material increase in the short-term debt or
long-term debt, of the Company, or any material adverse change,
or any development involving, or which would reasonably be
expected to involve, a prospective material adverse change, in
the condition (financial or other), business, net worth or
results of operations of the Company.
(n) The Company has good and marketable title to all
property (real and personal) described in the Prospectus as being
owned by it, free and clear of all liens, claims, security inter-
ests or other encumbrances except such as are described in the
Registration Statement and the Prospectus or in a document filed
as an exhibit to the Registration Statement and except for liens
claims, security interests or other encumbrances that would not,
individually or in the aggregate, have a material adverse effect
on the business of the Company; and all the property described in
the Prospectus as being held under lease by the Company is held
by it under valid, subsisting and enforceable leases except in
any respect that would not, individually or in the aggregate,
have a material adverse effect on the business of the Company.
(o) The Company has such permits, licenses, franchises
and authorizations of governmental or regulatory authorities
("permits") as are necessary to own its properties and to conduct
its business, in all material respects, in the manner described
in the Prospectus, subject to such qualifications as may be set
forth in the Prospectus; the Company has fulfilled and performed
all its obligations with respect to such permits where the fail-
ure to fulfill or perform would have a material adverse effect on
the business of the Company and has no knowledge of the occur-
rence of any event which, pursuant to the terms thereof, allows,
or after notice or lapse of time would allow, the early revoca-
tion or termination thereof or results in any other material
impairment of the rights of the holder of any such permit, sub-
ject in each case to such qualification as may be set forth in
the Prospectus.
(p) No holder of any security of the Company has any
right to require registration of any security of the Company
-7-
<PAGE> 8
because of the filing of the registration statement or consumma-
tion of the transactions contemplated by this Agreement.
(q) Immediately after the settlement of any sale of
Notes by the Company resulting from solicitation by an Agent
hereunder and immediately after any Time of Delivery relating to
a sale under a Terms Agreement, the aggregate amount of Notes
which shall have been issued and sold by the Company hereunder
(when taken together with any other securities the issuance of
which was covered by the Registration Statement) or under any
Terms Agreement will not exceed the amount of securities regis-
tered under the Registration Statement.
2. Appointment of Agents; Solicitation by the Agents
of Offers to Purchase; Sales of Notes to a Purchaser.
(a) Subject to the terms and conditions set forth
herein, the Company hereby authorizes each of the Agents to act
as its agent to solicit offers for the purchase of all or part of
the Notes from the Company. The Company may appoint additional
agents in connection with the offering of the Notes; provided
that (i) the Company promptly notifies each Agent of such
appointment and (ii) such additional agent enters into an agree-
ment with the Company making such agent an Agent under this
Agreement or enters into an agreement with the Company on terms
which are substantially similar to those contained in this Agree-
ment, which agreement shall include appropriate changes to
reflect the arrangements between the Company and such additional
agent.
On the basis of the representations and warranties, and
subject to the terms and conditions herein set forth, each Agent
hereby agrees, as agent of the Company, to use its reasonable
efforts when requested by the Company to solicit and receive
offers to purchase the Notes from the Company upon the terms and
conditions set forth in the Prospectus as amended or supplemented
from time to time. The Agents may sell to or through dealers who
may resell to investors. Each Agent may pay all or part of its
discount or commission to such dealers.
The Company reserves the right, in its sole discretion,
to suspend at any time, for any period of time or permanently,
the solicitation of offers to purchase the Notes. Upon receipt
of instructions from the Company, the Agents will forthwith sus-
pend solicitation of offers to purchase Notes from the Company
until such time as the Company has advised it that such solicita-
tion may be resumed.
At the time of delivery of, and payment for, any Notes
sold by the Company as a result of a solicitation made by, or
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<PAGE> 9
offer to purchase received by, an Agent, the Company agrees to
pay such Agent a commission in an amount equal to the following
percentage of the principal amount of such Notes sold:
<TABLE>
<CAPTION>
Commission
(percentage of aggregate
Range of Maturities principal amount of Notes sold)
------------------- -------------------------------
<S> <C>
From less than 1 year .125%
From 1 year to less than 18 months .150%
From 18 months to less than 2 years .200%
From 2 years to less than 3 years .250%
From 3 years to less than 4 years .350%
From 4 years to less than 5 years .450%
From 5 years to less than 6 years .500%
From 6 years to less than 7 years .550%
From 7 years to less than 10 years .600%
From 10 years to less than 15 years .625%
From 15 years to less than 20 years .700%
From 20 years up to and including 30 years .750%
</TABLE>
Subject to the provisions of this Section and to the
Procedures, offers for the purchase of Notes may be solicited by
each Agent as an agent of the Company at such time and in such
amounts as each Agent deems advisable. Each Agent shall communi-
cate to the Company, orally or in writing, each reasonable offer
to purchase Notes received by it as Agent other than those
rejected by such Agent. The Company shall have the sole right to
accept offers to purchase Notes and may reject any proposed pur-
chase of Notes as a whole or in part. Each Agent shall have the
right, in its discretion reasonably exercised, to reject any
offer received by it to purchase Notes, as a whole or in part,
and any such rejection by it shall not be deemed a breach of its
agreements contained herein.
(b) Each sale of Notes to an Agent as principal shall
be made in accordance with the terms of this Agreement and
(unless the Company and such Agent shall otherwise agree) a Terms
Agreement which will provide for the sale of such Notes to, and
the purchase thereof by, such Agent. A Terms Agreement may also
specify certain provisions relating to the reoffering of such
Notes by the applicable Agent. The commitment of an Agent to
purchase Notes pursuant to any 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 the
applicable Agent pursuant thereto, the price to be paid to the
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<PAGE> 10
Company for such Notes, any provisions relating to rights of, and
default by, underwriters acting together with such Agent in the
reoffering of the Notes and the time and date (each such time and
date being referred to herein as a "Time of Delivery") and place
of delivery of and payment for such Notes. Such Terms Agreement
shall also specify any requirements for opinions of counsel,
accountants' letters and officers' certificates pursuant to Sec-
tion 4 hereof.
For each sale of Notes to an Agent as principal that is
not made pursuant to a Terms Agreement, the Company agrees to pay
such Agent a commission (or grant an equivalent discount) as pro-
vided in Section 2(a) hereof and in accordance with the schedule
set forth therein.
(c) Procedural details relating to the issue and
delivery of Notes, the solicitation of offers to purchase, and
purchases by an Agent as principal of, Notes, and the payment in
each case therefor shall be as set forth in the Procedures. Each
Agent and the Company agree to perform the respective duties and
obligations specifically provided to be performed by each of them
in the Procedures. The Company will furnish to the Trustee a
copy of the Procedures as from time to time in effect.
3. Commencement Date. The documents required to be
delivered pursuant to Section 6 hereof on the Commencement Date
(as defined below) shall be delivered at the offices of O'Melveny
& Myers, 400 South Hope Street, Los Angeles, California, at 10:00
a.m., local time at the place of such delivery, on the date of
this Agreement, which date and time of such delivery may be post-
poned by agreement between the Agents and the Company but in no
event shall be later than the day prior to the date on which
solicitation of offers to purchase Notes is commenced or on which
any Terms Agreement is executed (such time and date being
referred to herein as the "Commencement Date").
4. Covenants of the Company. The Company covenants
and agrees with the Agents:
(a) To prepare the Prospectus, as amended and supple-
mented, in a form approved by the Agents and (i) except with
respect to Pricing Supplements filed as contemplated by subsec-
tion (d), below, to file such Prospectus pursuant to Rule 424(b)
under the Act not later than the Commission's close of business
on the second business day following the acceptance of an offer
to purchase a Note (as described in the Procedures pursuant to
Section 2(c) of this Agreement) or (ii) to file such Prospectus
pursuant to Rule 424(b) under the Act not later than the Commis-
sion's close of business on the second business day following the
execution and delivery of the Terms Agreement relating to the
-10-
<PAGE> 11
Purchased Notes (as defined therein); to make no amendment to the
Registration Statement or amendment or supplement to the Prospec-
tus for use in connection with any offering or sale of the Notes
between the date of this Agreement and the Commencement Date
which shall be disapproved by either Agent promptly after reason-
able notice thereof or after the date of any Terms Agreement or
other agreement by an Agent to purchase Notes as principal and
prior to the related Time of Delivery which shall be disapproved
by the purchasing Agent promptly after reasonable notice thereof,
which approval in any event shall not be unreasonably withheld or
delayed; to make no such amendment or supplement at any other
time prior to having afforded each Agent a reasonable opportunity
to review and comment thereon; to file promptly all reports and
any definitive proxy or information statements required to be
filed by the Company with the Commission pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act for so long as the
delivery of a prospectus is required in connection with the
offering or sale of the Notes, and during such same period to
advise each Agent, promptly after the Company receives notice
thereof, of the time when any amendment to the Registration
Statement has been filed or has become effective or any supple-
ment to the Prospectus relating to the Notes or any amended Pro-
spectus for use in connection with any offering or sale of the
Notes has been filed with the Commission, of the issuance by the
Commission of any stop order or of any order preventing or sus-
pending the use of any prospectus relating to the Notes, of the
suspension of the qualification of the Notes for offering or sale
in any jurisdiction, of the initiation or threatening of any pro-
ceeding for any such purpose, or of any request by the Commission
for the amendment of the Registration Statement or the amendment
or supplement of the Prospectus in connection with any offering
or sale of the Notes or for additional information; and, in the
event of the issuance of any such stop order or of any such order
preventing or suspending the use of any such prospectus or sus-
pending any such qualification, to use promptly its best efforts
to obtain its withdrawal.
(b) Promptly from time to time to take such action as
the Agents may reasonably request to qualify the Notes for offer-
ing and sale under the securities laws of such jurisdictions of
the United States as the Agents may request and to comply with
such laws so as to permit the continuance of sales and dealings
therein for as long as may be necessary to complete the distribu-
tion or sale of the Notes; provided, however, that in connection
therewith the Company shall not be required to qualify as a for-
eign corporation or to file a general consent to service of pro-
cess in any jurisdiction.
(c) To furnish each Agent with copies of the Registra-
tion Statement and each amendment thereto, and with copies of the
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<PAGE> 12
Prospectus as each time amended or supplemented in the form in
which it is filed with the Commission pursuant to Rule 424 under
the Act, both in such quantities as such Agent may reasonably
request from time to time; and, if the delivery of a prospectus
is required at any time in connection with the offering or sale
of the Notes (including Notes purchased from the Company by an
Agent as principal) and if at such time any event shall have
occurred as a result of which, in the reasonable opinion of
Cahill Gordon & Reindel, counsel to the Agents ("Counsel to the
Agents"), or O'Melveny & Myers, counsel to the Company ("Counsel
to the Company"), the Prospectus as then amended or supplemented
would include an untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were
made when such Prospectus is delivered, not misleading, or, if
for any reason it shall be necessary, in the reasonable opinion
of Counsel to the Agents or Counsel to the Company, during such
same period to amend or supplement the Prospectus in relation to
any offering or sale of the Notes or to file under the Exchange
Act any document incorporated by reference in the Prospectus in
order to comply with the Act, the Exchange Act or the Trust
Indenture Act, to notify each Agent and request each Agent, in
its capacity as agent of the Company, to suspend solicitation of
offers to purchase Notes from the Company and, if so notified,
the Agents shall cease such solicitations as soon as practicable,
but in any event not later than one business day later; and if
the Company shall decide to amend or supplement the Registration
Statement or the Prospectus for use in connection with any offer-
ing or sale of the Notes as then amended or supplemented, to so
advise each Agent promptly by telephone (with confirmation in
writing) and to prepare and cause to be filed promptly with the
Commission an amendment or supplement to the Registration State-
ment or the Prospectus as then amended or supplemented that will
correct such statement or omission or effect such compliance;
provided, however, that if during such same period an Agent con-
tinues to own Notes purchased from the Company by such Agent as
principal, the Company shall promptly prepare and file with the
Commission such an amendment or supplement.
(d) The Company will prepare, with respect to any
Notes to be sold through or to an Agent pursuant to this Agree-
ment, a Pricing Supplement with respect to such Notes in a form
previously approved by such Agent and will file such Pricing Sup-
plement pursuant to Rule 424(b)(3) under the Act not later than
the close of business of the Commission on the fifth business day
after the date on which such Pricing Supplement is first used.
(e) Except as otherwise provided in subsection (n) of
this Section, on or prior to the date on which there shall be
released to the general public interim financial statement
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<PAGE> 13
information related to the Company with respect to each of the
first three quarters of any fiscal year or preliminary financial
statement information with respect to any fiscal year (or, if no
such release is made by the Company, on the date such information
becomes available), the Company shall furnish such information to
each Agent, confirmed in writing, and shall include such finan-
cial information and corresponding information for the comparable
period of the preceding fiscal year, as well as such other infor-
mation and explanations as shall be necessary in order to make
the statements therein not misleading, in each Pricing Supplement
issued after such date and prior to the date such information is
included in a document filed by the Company with the Commission
pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange
Act.
(f) To make generally available to its security hold-
ers an earning statement, which need not be audited, covering a
twelve-month period commencing after the effective date of the
Registration Statement and ending not later than 15 months there-
after, as soon as practicable after the end of such period, which
earning statement shall satisfy the provisions of Section 11(a)
of the Act.
(g) So long as any Notes are outstanding, to furnish
to each Agent copies of all reports or other communications
(financial or other) furnished to shareholders, and deliver to
each Agent as soon as they are available, copies of any reports
and financial statements furnished to or filed with the Commis-
sion or any national securities exchange on which any class of
securities of the Company is listed.
(h) That, from the date of any Terms Agreement and
continuing to and including the earlier of (i) the termination of
the trading restrictions for the Notes purchased thereunder, as
notified to the Company by the Agent purchasing Notes pursuant to
such Terms Agreement and (ii) the related Time of Delivery, the
Company will not, without the prior written consent of the pur-
chasing Agent, offer, sell, contract to sell or otherwise dispose
of any debt securities of the Company which mature more than nine
months after such Time of Delivery and which are substantially
similar to the Notes.
(i) That each acceptance by the Company of an offer to
purchase Notes hereunder, and each execution and delivery by the
Company of a Terms Agreement with an Agent, shall be deemed to be
an affirmation that the representations and warranties of the
Company contained in or made pursuant to this Agreement are true
and correct as of the date of such acceptance or of such Terms
Agreement, as the case may be, as though made at and as of such
date, and an undertaking that such representations and warranties
-13-
<PAGE> 14
will be true and correct as of the settlement date for the Notes
relating to such acceptance or as of the Time of Delivery relat-
ing to such sale, as the case may be, as though made at and as of
such date (except that such representations and warranties shall
be deemed to relate to the Registration Statement and the Pro-
spectus as amended and supplemented relating to such Notes).
(j) That reasonably in advance of each time the Regis-
tration Statement or the Prospectus shall be amended or supple-
mented (other than by an amendment or supplement providing solely
for a change in the interest rates, manner of determining inter-
est rates, interest payment dates, or maturities of the Notes or
a supplement to the Prospectus relating to the sale of Notes oth-
erwise than through or to an Agent) and each time a document
filed under the Act or the Exchange Act is incorporated by refer-
ence into the Prospectus (other than an underwriting agreement or
form of certificate for a Note relating to the sale of Notes oth-
erwise than through or to an Agent and other than proxy materials
for meetings of the Company's shareholders), and each time the
Company sells Notes to an Agent as principal and the applicable
Terms Agreement specifies the delivery of any opinion or opinions
by Counsel to the Agents, as a condition to the purchase of Notes
pursuant to such Terms Agreement, the Company shall furnish such
counsel such papers and information as they may reasonably
request to enable them to furnish to the applicable Agent or
Agents the opinion or opinions referred to in Section 6(b)
hereof.
(k) That each time the Registration Statement or the
Prospectus shall be amended or supplemented (other than by an
amendment or supplement providing solely for a change in the
interest rates, manner of determining interest rates, interest
payment dates, or maturities of the Notes or a supplement to the
Prospectus relating to the sale of Notes otherwise than through
or to an Agent), (so long as sales of Notes have not been then
suspended or terminated, hereunder) each time a document filed
under the Act or the Exchange Act is incorporated by reference
into the Prospectus (other than an underwriting agreement or form
of certificate for a Note relating to the sale of Notes otherwise
than through or to an Agent and other than proxy materials for
meetings of the Company's shareholders and, if such incorporated
document is a quarterly report on Form 10-Q or a current report
on Form 8-K under the Exchange Act, then only if requested by the
applicable Agent or Agents), and each time the Company sells
Notes to an Agent as principal and the applicable Terms Agreement
specifies the delivery of an opinion under this Section 4(k) as a
condition to the purchase of Notes pursuant to such Terms Agree-
ment, the Company shall furnish or cause to be furnished forth-
with to the applicable Agent or Agents a written opinion of Coun-
sel to the Company, dated the date of such amendment, supplement,
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<PAGE> 15
incorporation or Time of Delivery relating to such sale, as the
case may be, in form satisfactory to such Agent or Agents, in
each case to the effect that such Agent or Agents may rely on the
opinion referred to in Section 6(c) hereof which was last fur-
nished to such Agent or Agents to the same extent as though it
were dated the date of such letter authorizing reliance (except
that the statements in the next to last paragraph thereof shall
be deemed to relate to the Registration Statement and the Pro-
spectus as amended and supplemented to such date) or, in lieu of
such opinion, an opinion of the same tenor as the opinion
referred to in Section 6(c) hereof but modified to relate to the
Registration Statement and the Prospectus as amended and supple-
mented to such date.
(l) That each time the Registration Statement or the
Prospectus shall be amended or supplemented (other than by an
amendment or supplement providing solely for a change in the
interest rates, manner of determining interest rates, interest
payment dates, or maturities of the Notes or a supplement to the
Prospectus relating to the sale of Notes otherwise than through
or to an Agent), each time a document filed under the Act or the
Exchange Act is incorporated by reference into the Prospectus
(but, if such incorporated document is a quarterly report on Form
10-Q or a current report on Form 8-K under the Exchange Act, only
if requested by the applicable Agent or Agents), in either case
to set forth financial information included in or derived from
the Company's financial statements or accounting records, and
each time the Company sells Notes to an Agent as principal and
the applicable Terms Agreement specifies the delivery of a letter
under this Section 4(l) as a condition to the purchase of Notes
pursuant to such Terms Agreement, the Company shall cause the
independent certified public accountants who have certified the
financial statements of the Company included or incorporated by
reference in the Registration Statement forthwith to furnish the
applicable Agent or Agents a letter, dated the date of such
amendment, supplement, incorporation or Time of Delivery relating
to such sale, as the case may be, in form satisfactory to such
Agent or Agents, of the same tenor as the letter referred to in
Section 6(d) hereof but modified to relate to the Registration
Statement and the Prospectus as amended or supplemented to the
date of such letter, with such changes as may be necessary to
reflect changes in the financial statements and other information
derived from the accounting records of the Company, to the extent
such financial statements and other information are available as
of a date not more than five business days prior to the date of
such letter; provided, however, that, with respect to any finan-
cial information or other matter, such letter may reconfirm as
true and correct at such date as though made at and as of such
date, rather than repeat, statements with respect to such finan-
cial information or other matter made in the letter referred to
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<PAGE> 16
in Section 6(d) hereof which was last furnished to such Agent or
Agents.
(m) That each time the Registration Statement or the
Prospectus shall be amended or supplemented (other than by an
amendment or supplement providing solely for a change in the
interest rates, manner of determining interest rates, interest
payment dates, or maturities of the Notes or a supplement to the
Prospectus relating to the sale of Notes otherwise than through
or to an Agent), each time a document filed under the Act or the
Exchange Act is incorporated by reference into the Prospectus
(other than an underwriting agreement or form of certificate for
a Note relating to the sale of Notes otherwise than through or to
an Agent and other than proxy materials for meetings of the Com-
pany's shareholders and, if such incorporated document is a cur-
rent report on Form 8-K under the Exchange Act, then only if
requested by the applicable Agent or Agents), and each time the
Company sells Notes to an Agent as principal and the applicable
Terms Agreement specifies the delivery of a certificate under
this Section 4(m) as a condition to the purchase of Notes pursu-
ant to such Terms Agreement, the Company shall furnish or cause
to be furnished forthwith to the applicable Agent or Agents a
certificate or certificates of the Company, dated the date of
such supplement, amendment, incorporation or Time of Delivery
relating to such sale, as the case may be, in such form and exe-
cuted on its behalf by such officers of the Company as shall be
satisfactory to such Agent or Agents, to the effect that the
statements contained in the certificate or certificates referred
to in Section 6(g) hereof as last furnished to such Agent or
Agents are true and correct at such date as though made at and as
of such date (except that such statements shall be deemed to
relate to the Registration Statement and the Prospectus as
amended and supplemented to such date) or, in lieu of such cer-
tificate, certificates of the same tenor as the certificates
referred to in said Section 6(g) but modified to relate to the
Registration Statement and the Prospectus as amended and supple-
mented to such date.
(n) The Company shall not be required to comply with
the provisions of Section 4(e) with respect to a particular Agent
during any period from the time (i) such Agent shall have sus-
pended solicitations of purchases of the Notes in its capacity as
agent pursuant to a request from the Company and (ii) such Agent
shall not then hold any Notes as principal purchased pursuant to
a Terms Agreement, to the time the Company shall determine that
solicitation of purchases of the Notes should be resumed or shall
subsequently enter into a new Terms Agreement with such Agent.
5. Expenses. The Company covenants and agrees with
each Agent that the Company will pay or cause to be paid the
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<PAGE> 17
following: (i) the fees, disbursements and expenses of the Com-
pany's counsel and accountants in connection with the registra-
tion of the Notes under the Act and all other expenses in connec-
tion with the preparation, printing and filing of the Registra-
tion Statement, any Preliminary Prospectus and the Prospectus and
amendments and supplements thereto and the mailing and delivering
of copies thereof in quantities as herein stated above; (ii) the
fees and expenses of Counsel to the Agents in connection with the
establishment of the program contemplated hereby and the transac-
tions contemplated hereunder; (iii) the reasonable out-of-pocket
expenses of each Agent; (iv) the cost of printing, producing or
reproducing this Agreement, any Terms Agreement, any Indenture
(including any supplement thereto or resolutions thereunder), any
Blue Sky Memorandum and any other documents in connection with
the offering, purchase, sale and delivery of the Notes; (v) all
expenses in connection with the qualification of the Notes for
offering and sale under state securities laws as provided in Sec-
tion 4(b) hereof, including the fees and reasonable disbursements
of Counsel to the Agents in connection with such qualification
and in connection with the Blue Sky Memorandum; (vi) any fees
charged by securities rating services for rating the Notes;
(vii) the cost of preparing, printing, issuing and delivering the
Notes and any costs relating to the use of book-entry notes;
(viii) the fees and expenses of the Trustee and any agent of the
Trustee and any transfer or paying agent of the Company and the
reasonable fees and disbursements of counsel for the Trustee or
such agent in connection with any Indenture and the Notes; and
(ix) all other costs and expenses incident to the performance of
the Company's obligations hereunder which are not otherwise spe-
cifically provided for in this Section. It is understood, how-
ever, that except as provided in this Section 5 and Section 9
hereof, each Agent will pay all other costs and expenses it
incurs.
6. Conditions to the Obligations of the Agents. The
obligation of each Agent, as agent of the Company, at any time
("Solicitation Time") to solicit offers to purchase the Notes and
the obligation of an Agent to purchase Notes as principal pursu-
ant to any Terms Agreement shall in each case be subject to
(i) the condition that all the representations and warranties of
the Company contained in this Agreement (and, in the case of an
obligation of an Agent under a Terms Agreement, in or incorpo-
rated in such Terms Agreement by reference) are true and correct
(a) on and as of the Commencement Date and (b) on and as of any
applicable date referred to in Section 4(j) that is after such
Commencement Date and prior to such Solicitation Time or Time of
Delivery, as the case may be, and (c) on and as of such Solicita-
tion Time or Time of Delivery, as the case may be, and (ii) the
condition that the Company shall not have failed at or prior to
such Solicitation Time or Time of Delivery, as the case may be,
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<PAGE> 18
to have performed or complied with any of its agreements herein
and therein contained and required to be performed or complied
with by it at or prior to such date and the following additional
conditions:
(a) (i) With respect to any Notes sold at or prior to
such Solicitation Time or Time of Delivery, as the case may be,
the Prospectus as amended or supplemented with respect to such
Notes shall have been filed with the Commission pursuant to Rule
424(b) within the applicable time period prescribed for such fil-
ing by the rules and regulations under the Act and in accordance
with Section 4(a); (ii) no stop order suspending the effective-
ness of the Registration Statement shall have been issued and no
proceedings for that purpose shall have been instituted or, to
the knowledge of the Company or any Agent, threatened by the Com-
mission; and (iii) any request of the Commission for additional
information (to be included in the Registration Statement or the
Prospectus or otherwise) shall have been complied with to the
reasonable satisfaction of the Agents;
(b) Counsel to the Agents shall have furnished to the
Agents (i) such opinion letter, dated the Commencement Date, with
respect to the validity of the Indenture and the Notes, the Reg-
istration Statement, the Prospectus as amended or supplemented
and other related matters as the Agents may reasonably request,
and (ii) if and to the extent requested by an Agent, with respect
to each applicable date referred to in Section 4(j) hereof that
is on or prior to such Solicitation Time or Time of Delivery, as
the case may be, an opinion letter, dated such applicable date,
to the effect that the applicable Agent or Agents may rely on the
opinion letter which was last furnished to such Agent or Agents
pursuant to this Section 6(b) to the same extent as though it was
dated the date of such letter authorizing reliance (except that
the statements in such last opinion letter shall be deemed to
relate to the Registration Statement and the Prospectus as
amended and supplemented to such date) or, in any case, in lieu
of such an opinion letter, an opinion letter of the same tenor as
the opinion letter referred to in clause (i) but modified to
relate to the Registration Statement and the Prospectus as
amended and supplemented to such date; and in each case such
counsel shall have received such papers and information as they
may reasonably request to enable them to pass upon such matters;
(c) Counsel to the Company, or other counsel for the
Company satisfactory to the Agents, shall have furnished to the
Agents their written opinions, dated the Commencement Date and
each applicable date referred to in Section 4(k) hereof that is
on or prior to such Solicitation Time or Time of Delivery, as the
case may be, in form and substance satisfactory to the Agents to
the effect that:
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<PAGE> 19
(i) The Company has been duly organized, and is val-
idly existing in good standing under the laws of the State
of California, with corporate power and corporate authority
to own its properties and to conduct its business as now
being conducted as described in the Prospectus (and any
amendment or supplement thereto as used in connection with
any offering or sale of the Notes), including the corporate
power and corporate authority to function as a water and
electric utility in the State of California;
(ii) The Company has authorized, issued and outstanding
capital stock as set forth in the Prospectus; the outstand-
ing Common Shares of the Company have been duly authorized
by all necessary corporate action on the part of the Company
and are validly issued, fully paid and non-assessable;
(iii) The Registration Statement has been declared
effective under the Act, and, to such counsel's knowledge,
no stop order suspending the effectiveness of the Registra-
tion Statement has been issued or threatened by the Commis-
sion; the descriptions in the Prospectus of contracts and
other documents of which such counsel has knowledge are
accurate in all material respects; to such counsel's knowl-
edge, there are no contracts or documents which are required
by the Act to be described in the Registration Statement or
the Prospectus, to be incorporated by reference therein, or
to be filed as exhibits to the Registration Statement, which
are not described, incorporated or filed as required;
(iv) Except for the matters disclosed in, or incorpo-
rated by reference into, the Registration Statement, to such
counsel's knowledge, there are no pending or threatened
actions, suits, proceedings or investigations against the
Company in any court or by or before any arbitrator or gov-
ernmental agency or authority which are required by the Act
to be disclosed therein;
(v) The execution, delivery and performance of this
Agreement have been duly authorized by all necessary corpo-
rate action on the part of the Company, and this Agreement
has been duly executed and delivered by the Company;
(vi) The Company's execution and delivery of the Notes,
the Indenture, this Agreement and any applicable Terms
Agreement, and the issuance and sale of the Notes thereunder
as contemplated by the Prospectus and therein contemplated
do not (a) violate, breach, or result in a default (or an
event which with notice or lapse of time or both would con-
stitute a default or event of acceleration) under, any
existing obligation of the Company under any material
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<PAGE> 20
agreement or instrument known to such counsel and to which
the Company is a party or to which any of the properties or
assets of the Company is subject, (b) breach or otherwise
violate any existing obligation of the Company under any
order, judgment or decree of any California or federal court
or governmental authority binding on the Company and known
to such counsel, or (c) violate any California or federal
statute or regulation that such counsel has, in the exercise
of customary professional diligence, recognized as directly
applicable to the Company or to transactions of the type
contemplated by the Notes, the Indenture, this Agreement or
any Terms Agreement, except that such counsel need not express
an opinion regarding any federal securities laws, or Blue Sky
or state securities laws or Section 9 of this Agreement, or
(d) violate the Company's articles of incorporation or bylaws;
(vii) The California Public Utilities Commission has
duly authorized the issuance of the Notes and the sale of
the Notes, in each case, as contemplated by the Prospectus;
such authorizations are still in full force and effect and
are sufficient pursuant to the California Public Utilities
Code for the issuance and the sale of the Notes; assuming
the Notes are issued and sold in accordance with the terms
of this Agreement and the Indenture, the issuance and sale
of the Notes is in conformity, in all material respects,
with the terms of such authorization; and no other order,
consent, permit or approval of any California or federal
governmental authority is required on the part of the Com-
pany for the issuance and sale of the Notes as contemplated
by this Agreement, except such as have been obtained under
the Act and the Trust Indenture Act and such as may be
required under applicable Blue Sky or state securities laws;
(viii) The documents incorporated by reference in the
Prospectus as of the date the Prospectus was filed with the
Commission (other than the financial statements and sched-
ules and other financial and statistical data contained
therein or incorporated by reference therein, as to which no
opinion is expressed), on the respective dates on which they
were filed, appeared on their face to comply in all material
respects with the requirements as to form for reports on
Form 10-K, Form 10-Q and Form 8-K, as the case may be, under
the Exchange Act and the related rules and regulations in
effect at the respective dates of their filing;
(ix) The Notes (in the form of specimens certified by
the Company's Secretary and examined by such counsel) have
been duly authorized by all necessary corporate action on
the part of the Company and, when duly executed, and authen-
ticated, and issued in accordance with the Indenture and
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<PAGE> 21
upon payment for and delivery thereof in accordance with the
terms hereof and any applicable Terms Agreement, will be
legally valid and binding obligations of the Company,
enforceable in accordance with their terms, except as may be
limited by bankruptcy, insolvency, reorganization, morato-
rium or similar laws relating to or affecting creditors'
rights generally (including, without limitation, fraudulent
conveyance laws), and by general principles of equity
including, without limitation, concepts of materiality, rea-
sonableness, good faith and fair dealing and the possible
unavailability of specific performance or injunctive relief,
regardless of whether considered in a proceeding in equity
or at law, and entitled to the benefits provided by the
Indenture;
(x) The Indenture has been duly and validly autho-
rized, executed and delivered by the Company and, assuming
due authorization, execution and delivery by the Trustee,
constitutes the legally valid and binding obligation of the
Company, enforceable in accordance with its terms, except as
may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws relating to or affecting credi-
tors' rights generally, and by general principles of equity
including, without limitation, concepts of materiality, rea-
sonableness, good faith and fair dealing and the possible
unavailability of specific performance or injunctive relief,
regardless of whether considered in a proceeding in equity
or at law, and the Indenture has been duly qualified under
the Trust Indenture Act; and
(xi) The statements in the Prospectus under the cap-
tions Description of Debt Securities and Description of
Medium-Term Notes, Series B, insofar as they summarize pro-
visions of the Indenture or the Notes, fairly present the
information required by Form S-3 and the Trust Indenture
Act.
Such counsel may state that in connection with its par-
ticipation in the preparation of the Registration Statement and
the Prospectus, such counsel has not independently verified the
accuracy, completeness or fairness of the statements contained or
incorporated therein, and the limitations inherent in the exami-
nation made by such counsel and the knowledge available to such
counsel are such that such counsel is unable to assume, and does
not assume, any responsibility for the accuracy, completeness or
fairness of the statements contained or incorporated in the Reg-
istration Statement, the Prospectus or the Incorporated Documents
(except as otherwise specifically stated in clauses (ii), (iii)
and (xi) above). Such counsel also shall state that, however, on
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<PAGE> 22
the basis of such counsel's review of the Registration Statement,
the Prospectus and the Incorporated Documents and its participa-
tion in conferences in connection with the preparation of the
Registration Statement and the Prospectus, such counsel does not
believe that the Registration Statement, on the date it was
declared effective, contained any untrue statement of a material
fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not mislead-
ing, and that such counsel does not believe that the Prospectus
and the documents incorporated therein, considered as a whole on
the date of the Prospectus and on a Closing Date with respect to
a sale of the Notes, contained any untrue statement of a material
fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading.
Such counsel need express no opinion or belief as to any document
filed by the Company under the Exchange Act, whether prior or
subsequent to the effective date of the Registration Statement,
except to the extent that any such document is an Incorporated
Document read together with the Registration Statement or the
Prospectus and considered as a whole, nor any opinion or belief
as to the financial statements and other financial and statisti-
cal information included or incorporated by reference in the Reg-
istration Statement, the Prospectus or the Incorporated
Documents.
Such counsel shall also state that, subject to the
foregoing, they also advise the Agents that, in such counsel's
opinion, the Registration Statement and the Prospectus (except
for the financial statements and other financial information
included or incorporated by reference therein, as to which such
counsel shall express no opinion) as of the effective date of the
Registration Statement and as of the date the Prospectus with
respect to a sale of the Notes, appeared on their face to comply
in all material respects with the requirements as to form for
registration statements on Form S-3 under the Act and the Trust
Indenture Act and the related rules and regulations in effect at
the date of filing.
Such counsel's opinion shall be rendered in respect of
the laws of the State of California and the federal law of the
United States. Such counsel's opinion further may be limited to
laws recognized by such counsel, through its representation of
the Company, as being applicable to the Company and to the issu-
ance and public sale of securities. For purposes of the limita-
tion in clauses (iii) and (iv) above, such counsel's knowledge
may be limited to the knowledge obtained by them in connection
with matters to which they have given substantive attention as
counsel for the Company, as determined from lawyers within the
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<PAGE> 23
firm who have performed services for the Company within the prior
twelve months.
(d) Not later than 10:00 a.m., New York City time, on
the Commencement Date and on each applicable date referred to in
Section 4(l) that is on or prior to such Solicitation Time or
Time of Delivery, as the case may be, the independent certified
public accountants who have certified the financial statements of
the Company and its subsidiaries included or incorporated by ref-
erence in the Registration Statement shall have furnished to the
Agents a letter, dated the Commencement Date or such applicable
date, as the case may be, in form and substance satisfactory to
the Agents, to the effect set forth in Annex III hereto;
(e) (i) There shall not have been any change in the
capital stock of the Company nor any material increase in the
short-term or long-term debt of the Company (other than in the
ordinary course of business) from that set forth or contemplated
in the Registration Statement or the Prospectus (or any amendment
or supplement thereto); (ii) there shall not have been, since the
respective dates as of which information is given in the Regis-
tration Statement and the Prospectus (or any amendment or supple-
ment thereto), except as may otherwise be stated in the Registra-
tion Statement and the Prospectus (or any amendment or supplement
thereto), any material adverse change in the condition (financial
or other), business, prospects, properties, net worth or results
of operations of the Company; and (iii) the Company shall not
have any liabilities or obligations, direct or contingent
(whether or not in the ordinary course of business), that are
material to the Company, other than those reflected in the Regis-
tration Statement or the Prospectus (or any amendment or supple-
ment thereto), the effect of which, in any such case described in
clause (i) or (ii), is in the reasonable judgment of the applica-
ble Agent or Agents so material and adverse as to make it imprac-
ticable or inadvisable to proceed with the solicitation of offers
to purchase Notes from the Company or the purchase by the appli-
cable Agent of Notes from the Company as principal, as the case
may be;
(f) There shall not have occurred any of the follow-
ing: (i) trading in securities generally on the New York Stock
Exchange, the American Stock Exchange or NASDAQ shall have been
suspended or materially limited; (ii) a general moratorium on
commercial banking activities in New York or California shall
have been declared by either federal or state authorities; (iii)
there shall have occurred any outbreak or escalation of hostili-
ties or other international or domestic calamity, crisis or
change in political, financial or economic conditions, if the
effect of any such event specified in this clause (iii) in the
reasonable judgment of the applicable Agent or Agents makes it
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<PAGE> 24
impracticable or inadvisable to proceed with the solicitation of
offers to purchase Notes or the purchase of Notes from the Com-
pany as principal pursuant to the applicable Terms Agreement, as
the case may be; (iv) any downgrading in the rating accorded the
Company's debt securities by any "nationally recognized statisti-
cal rating organization," as that term is defined by the Commis-
sion for purposes of Rule 436(g)(2) under the Act; or (v) any
such "nationally recognized statistical rating organization"
shall have publicly announced that it has under surveillance or
review, with possible negative implications or direction not
determined, its rating of any of the Company's debt securities;
and
(g) The Company shall have furnished or caused to be
furnished to the Agents certificates of officers of the Company
dated the Commencement Date and each applicable date referred to
in Section 4(m) that is on or prior to such Solicitation Time or
Time of Delivery, as the case may be, in such form and executed
by such officers of the Company as shall be satisfactory to the
Agents, (i) as to the accuracy of the representations and warran-
ties of the Company herein at and as of the Commencement Date or
such applicable date, as the case may be, (ii) as to the perfor-
mance by the Company of all of its obligations hereunder to be
performed at or prior to the Commencement Date or such applicable
date, as the case may be, (iii) as to the matters set forth in
subsections (a) and (e) of this Section 6, and (iv) as to such
other matters as the Agents may reasonably request.
7. Right of Person Who Agreed To Purchase To Refuse
To Purchase.
(a) The Company agrees that any person who has agreed
to purchase and pay for any Note, including an Agent purchasing
as principal and any person who purchases pursuant to a solicita-
tion by such Agent, shall have the right to refuse to purchase
such Note if, at the Closing Date therefor, any condition set
forth in Section 6 shall not be satisfied.
(b) The Company agrees that any person who has agreed
to purchase and pay for any Note pursuant to a solicitation by an
Agent shall have the right to refuse to purchase such Note if,
subsequent to the agreement to purchase such Note, any change,
condition or development specified in any of Section 6(f) shall
have occurred, the effect of which is so material and adverse as
to make it impractical or inadvisable to proceed with the deliv-
ery of such Note (it being understood that the judgment of such
person with respect to the impracticability or inadvisability of
such purchase of Notes shall be substituted, for purposes of this
Section 7(b), for the respective judgments referred to therein of
the Agents with respect to certain matters referred to in such
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<PAGE> 25
Section 6(f), and that under no circumstances shall the Agents
have any duty or obligation to exercise the judgment permitted to
be exercised under Section 6(f) on behalf of any such person).
8. Delivery of and Payment for Notes Sold through the
Agents. Delivery of Notes sold through an Agent as agent shall
be made by the Company to such Agent for the account of any pur-
chaser only against payment therefor in immediately available
funds. In the event that a purchaser shall fail either to accept
delivery of or to make payment for a Note on the date fixed for
settlement, the applicable Agent shall promptly notify the Com-
pany and deliver the Note to the Company, and, if such Agent has
theretofore paid the Company for such Note, the Company will
promptly return such funds to such Agent. If such failure
occurred for any reason other than default by an Agent in the
performance of its obligations hereunder, the Company will reim-
burse such Agent for its loss of the use of the funds for the
period such funds were credited to the Company's account to the
extent of any earnings thereon received by the Company.
9. Indemnification and Contribution.
(a) The Company agrees to indemnify and hold harmless
each Agent and each person, if any, who controls any Agent within
the meaning of Section 15 of the Act or Section 20 of the
Exchange Act from and against any and all losses, claims, dam-
ages, liabilities and expenses (including reasonable costs of
investigation) arising out of or based upon any untrue statement
or alleged untrue statement of a material fact contained in any
Preliminary Prospectus or in the Registration Statement or the
Prospectus or in any amendment or supplement thereto, or arising
out of or based upon any omission or alleged omission to state
therein a material fact required to be stated therein or neces-
sary to make the statements therein not misleading, except inso-
far as such losses, claims, damages, liabilities or expenses
arise out of or are based upon any untrue statement or omission
or alleged untrue statement or omission which has been made
therein or omitted therefrom in reliance upon and in conformity
with the information relating to an Agent furnished in writing to
the Company by or on behalf of an Agent expressly for use in con-
nection therewith; provided, however, that the indemnification
contained in this paragraph (a) with respect to any Preliminary
Prospectus shall not inure to the benefit of any Agent (or to the
benefit of any person controlling such Agent) on account of any
such loss, claim, damage, liability or expense arising from a
purchase of the Notes if a copy of the Prospectus shall not have
been delivered or sent to such person within the time required by
the Act and the regulations thereunder, and the untrue statement
or alleged untrue statement or omission or alleged omission of a
material fact contained in such Preliminary Prospectus was
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<PAGE> 26
corrected in the Prospectus, provided that the Company has deliv-
ered the Prospectus to such Agent in requisite quantity on a
timely basis to permit such delivery or sending. The foregoing
indemnity agreement shall be in addition to any liability which
the Company may otherwise have.
(b) If any action, suit or proceeding shall be brought
against any Agent or any person controlling any Agent in respect
of which indemnity may be sought against the Company, such Agent
or such controlling person shall promptly notify the Company and
the Company shall assume the defense thereof, including the
employment of counsel and payment of all fees and expenses. Such
Agent or any such controlling person shall have the right to
employ separate counsel in any such action, suit or proceeding
and to participate in the defense thereof, but the fees and
expenses of such counsel shall be at the expense of such Agent or
such controlling person unless (i) the Company has agreed in
writing to pay such fees and expenses, (ii) the Company has
failed to assume the defense and employ counsel, or (iii) the
named parties to any such action, suit or proceeding (including
any impleaded parties) include both such Agent or such control-
ling person and the Company and such Agent or such controlling
person shall have been advised by its counsel that representation
of such indemnified party and the Company by the same counsel
would be inappropriate under applicable standards of professional
conduct (whether or not such representation by the same counsel
has been proposed) due to actual or potential differing interests
between them (in which case the Company shall not have the right
to assume the defense of such action, suit or proceeding on
behalf of such Agent or such controlling person). It is under-
stood, however, that the Company shall, in connection with any
one such action, suit or proceeding or separate but substantially
similar or related actions, suits or proceedings arising out of
the same general allegations or circumstances, be liable for the
reasonable fees and expenses of only one separate firm of attor-
neys (in addition to any local counsel) at any time for all such
Agents and controlling persons not having actual or potential
differing interests among themselves (the "Represented Group"),
which firm shall be designated in writing by Smith Barney Inc.
and must be reasonably acceptable to the Company, and that all
such fees and expenses shall be reimbursed as they are incurred.
The Company shall not be liable for the fees and expenses of sep-
arate counsel to Agents or controlling persons not included in
the Represented Group nor for any settlement of any such action,
suit or proceeding effected without its written consent, but if
settled with such written consent, or if there be a final judg-
ment for the plaintiff in any such action, suit or proceeding,
the Company agrees to indemnify and hold harmless any Agent, to
the extent provided in the preceding paragraph, and any such
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<PAGE> 27
controlling person from and against any loss, claim, damage,
liability or expense by reason of such settlement or judgment.
(c) Each Agent agrees, severally and not jointly, to
indemnify and hold harmless the Company, its directors, its
officers who sign the Registration Statement, and any person who
controls the Company within the meaning of Section 15 of the Act
or Section 20 of the Exchange Act, to the same extent as the
foregoing indemnity from the Company to each Agent, but only with
respect to information relating to such Agent furnished in writ-
ing by or on behalf of such Agent expressly for use in the Regis-
tration Statement, the Prospectus or any Preliminary Prospectus,
or any amendment or supplement thereto. If any action, suit or
proceeding shall be brought against the Company, any of its
directors, any such officer, or any such controlling person based
on the Registration Statement, the Prospectus or any Preliminary
Prospectus, or any amendment or supplement thereto, and in
respect of which indemnity may be sought against any Agent pursu-
ant to this paragraph (c), such Agent shall have the rights and
duties given to the Company by paragraph (b) above (except that
if the Company shall have assumed the defense thereof such Agent
shall not be required to do so, but may employ separate counsel
therein and participate in the defense thereof, but the fees and
expenses of such counsel shall be at such Agent's expense), and
the Company, its directors, any such officer, and any such con-
trolling person shall have the rights and duties given to the
Agents by paragraph (b) above. The foregoing indemnity agreement
shall be in addition to any liability which the Agents may other-
wise have.
(d) If the indemnification provided for in this Sec-
tion 9 is unavailable to an indemnified party under
paragraphs (a) or (c) hereof in respect of any losses, claims,
damages, liabilities or expenses referred to therein, then an
indemnifying party, in lieu of indemnifying such indemnified
party, shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages,
liabilities or expenses (i) in such proportion as is appropriate
to reflect the relative benefits received by the Company on the
one hand and the Agents on the other hand from the offering of
the 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 the Agents on the other in connection with the
statements or omissions that resulted in such losses, claims,
damages, liabilities or expenses, as well as any other relevant
equitable considerations. The relative benefits received by the
Company on the one hand and the Agents on the other shall be
deemed to be in the same proportion as the total net proceeds
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<PAGE> 28
from the offering (before deducting expenses) received by the
Company bear to the total net proceeds from the offering received
by the Agents. The relative fault of the Company on the one hand
and the Agents 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 the omission or alleged omission
to state a material fact relates to information supplied by the
Company on the one hand or by the Agents on the other hand and
the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission.
(e) The Company and the Agents agree that it would not
be just and equitable if contribution pursuant to this Section 9
were determined by a pro rata allocation (even if the Agents were
treated as one entity for such purpose) or by any other method of
allocation that does not take account of the equitable consider-
ations referred to in paragraph (d) above. The amount paid or
payable by an indemnified party as a result of the losses,
claims, damages, liabilities and expenses referred to in para-
graph (d) above shall be deemed to include, subject to the limi-
tations set forth above, any legal or other expenses reasonably
incurred by such indemnified party in connection with investigat-
ing any claim or defending any such action, suit or proceeding.
Notwithstanding the provisions of this Section 9, no Agent shall
be required to contribute any amount in excess of the amount by
which the total price of the Notes purchased by or through it
exceeds the amount of any damages which 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 Act) shall be entitled to contribution from any person who
was not guilty of such fraudulent misrepresentation. Each
Agent's obligations to contribute pursuant to this Section 9 are
several, in proportion to the amount of Notes which are the sub-
ject of the action and which were distributed to the public
through such Agent bears to the total amount of such Notes dis-
tributed to the public through any other Agent, and not joint.
(f) No indemnifying party shall, without the prior
written consent of the indemnified party, effect any settlement
of any pending or threatened action, suit or 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 uncondi-
tional release of such indemnified party from all liability on
claims that are the subject matter of such action, suit or
proceeding.
(g) Any losses, claims, damages, liabilities or
expenses for which an indemnified party is entitled to
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<PAGE> 29
indemnification or contribution under this Section 9 shall be
paid by the indemnifying party to the indemnified party as such
losses, claims, damages, liabilities or expenses are incurred.
10. No Agent Liability for Failed Purchases. Each
Agent, in soliciting offers to purchase Notes from the Company
and in performing the other obligations of an Agent hereunder
(other than in respect of any Terms Agreement), is acting solely
as agent for the Company and not as principal. Each Agent will
make reasonable efforts to assist the Company in obtaining per-
formance by each purchaser whose offer to purchase Notes from the
Company was solicited by such Agent and has been accepted by the
Company, but such Agent shall not have any liability to the Com-
pany in the event such purchase is not consummated for any rea-
son. If the Company shall default on its obligation to deliver
Notes to a purchaser whose offer it has accepted, the Company
shall hold the Agents harmless against any loss, claim or damage
arising from or as a result of such default by the Company.
11. Survival of Certain Provisions. The respective
indemnities, agreements, representations, warranties and other
statements by the Agents and the Company set forth in or made
pursuant to this Agreement, shall remain in full force and effect
regardless of any investigation (or any statement as to the
results thereof) made by or on behalf of any Agent or any con-
trolling person of any Agent or the Company, or any officer or
director or any controlling person of the Company, and shall sur-
vive each delivery of and payment for any of the Notes.
12. Suspension or Termination. The provisions of this
Agreement relating to the solicitation of offers to purchase
Notes from the Company may be suspended or terminated at any time
by the Company as to any Agent or, in the case of either Agent,
by such Agent insofar as this Agreement relates to such Agent
upon the giving of written notice of such suspension or termina-
tion to the other parties hereto. In the event of such suspen-
sion or termination, (x) this Agreement shall remain in full
force and effect with respect to the rights and obligations of
any party which have previously accrued or which relate to Notes
which are already issued, agreed to be issued or the subject of a
pending offer at the time of such suspension or termination and
(y) in any event, this Agreement shall remain in full force and
effect insofar as the fourth paragraph of Section 2(a) (with
respect to solicitations made prior to such suspension or termi-
nation), Section 4(h), Section 4(i), Section 5 (with respect to
solicitations made prior to such suspension or termination), Sec-
tion 9, Section 10 and Section 11 are concerned.
13. Notices. Except as otherwise specifically pro-
vided herein or in the Procedures, all statements, requests,
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<PAGE> 30
notices and advice hereunder shall be in writing, or by telephone
if promptly confirmed in writing, and if to Smith Barney Inc.
shall be sufficient in all respects when delivered or sent by
telex, facsimile transmission or registered mail to 390 Greenwich
Street - 4th Floor, New York, New York 10013, Facsimile Transmis-
sion No. (212) 723-8854, Attention: MTN Product
Management/Origination - Mark R. Meyer, if to A.G. Edwards & Sons,
Inc., shall be sufficient in all respects when delivered or sent
by telex, facsimile transmission or registered mail to One North
Jefferson, St. Louis, Missouri 63103, Facsimile Transmission No.
(314) 289-5989, Attention: John Meiners, Debt Syndicate, and if to
the Company shall be sufficient in all respects when delivered or
sent by telex, facsimile transmission or registered mail to
630 East Foothill Boulevard, San Dimas, California 91773, Facsimile
Transmission No. (909) 394-0711, Attention: Chief Financial Officer;
with a copy to C. James Levin, Esq., O'Melveny & Myers, 400 South Hope
Street, Los Angeles, California 90071, Facsimile Transmission No.
(213) 669-6407.
14. Successors. This Agreement and any Terms Agree-
ment shall be binding upon, and inure solely to the benefit of,
the Agents and the Company, and to the extent provided in Section
9, Section 10 and Section 11 hereof, the officers and directors
of the Company and any person who controls an Agent or the Com-
pany, and their respective personal representatives, successors
and assigns, and no other person shall acquire or have any right
under or by virtue of this Agreement or any Terms Agreement. No
purchaser of any of the Notes through or from an Agent hereunder
shall be deemed a successor or assign by reason merely of such
purchase.
15. Time of the Essence. Time shall be of the essence
in this Agreement and any Terms Agreement. As used herein the
term "business day" shall mean any day when the Commission's
office in Washington, D.C. is open for business.
16. Applicable Law. This Agreement and any Terms
Agreement shall be governed by, and construed in accordance with,
the laws of the State of New York applicable to contracts made
and to be performed within the State of New York.
17. Counterparts. This Agreement and any Terms Agree-
ment may be executed by any one or more of the parties hereto and
thereto in any number of counterparts, each of which shall be an
original, but all of such respective counterparts shall together
constitute one and the same instrument.
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<PAGE> 31
If the foregoing is in accordance with your understand-
ing, please sign and return to us two counterparts hereof, where-
upon this letter and the acceptance by such of you thereof shall
constitute a binding agreement between the Company and you in
accordance with its terms.
Very truly yours,
SOUTHERN CALIFORNIA WATER COMPANY
By: _____________________________
Name: James B. Gallagher
Title: Chief Financial Officer
Accepted in New York, New York,
as of the date hereof:
SMITH BARNEY INC.
By: __________________________
Name:
Title:
A. G. EDWARDS & SONS, INC.
By: __________________________
Name:
Title:
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<PAGE> 32
ANNEX I
SOUTHERN CALIFORNIA WATER COMPANY
Medium-Term Notes, Series B
TERMS AGREEMENT
_________, 199_
[Smith Barney Inc.
390 Greenwich Street
New York, New York 10013]
[A. G. Edwards & Sons, Inc.
One North Jefferson
St. Louis, Missouri 63103]
Ladies and Gentlemen:
Southern California Water Company (the "Company") pro- poses, subject
to the terms and conditions stated herein and in the Distribution Agreement,
dated , 1995 (the "Distribution Agreement"), among the Company,
Smith Barney Inc. and A.G. Edwards & Sons, Inc., to issue and sell to __________
("Purchaser") the notes specified in the attached Schedule hereto (the
"Purchased Notes"). Each of the provisions of the Distribution Agreement not
specifically related to the solicitation by an Agent, as agent of the Company,
of offers to purchase notes is incorporated herein by reference in its entirety,
and shall be deemed to be part of this Terms Agree- ment to the same extent as
if such provisions had been set forth in full herein. Nothing contained herein
or in the Distribution Agreement shall make any party hereto an agent of the
Company or make such party subject to the provisions therein relating to the
solicitation of offers to purchase notes from the Company, solely by virtue of
its execution of this Terms Agreement. Each of the representations and
warranties set forth therein shall be deemed to have been made at and as of the
date of this Terms Agreement, except that each representation and warranty in
Section 1 of the
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Distribution Agreement which makes reference to the Prospectus
shall be deemed to be a representation and warranty as of the
date of the Distribution Agreement in relation to the Prospectus
(as therein defined), and also a representation and warranty as
of the date of this Terms Agreement in relation to the Prospectus
as amended and supplemented to relate to the Purchased Notes.
An amendment to the Registration Statement, or a sup-
plement to the Prospectus, as the case may be, relating to the
Purchased Note, in the form heretofore delivered to you is now
proposed to be filed with the Commission.
Subject to the terms and conditions set forth herein
and in the Distribution Agreement incorporated herein by refer-
ence, the Company agrees to issue and sell to Purchaser and Pur-
chaser agrees to purchase from the Company the Purchased Notes,
at the time and place, in the principal amount and at the pur-
chase price set forth in the Schedule hereto.
If the foregoing is in accordance with your understand-
ing, please sign and return to us two counterparts hereof, and
upon acceptance hereof by you this letter, including those provi-
sions of the Distribution Agreement incorporated herein by refer-
ence, shall constitute a binding agreement between you and the
Company.
Very truly yours,
SOUTHERN CALIFORNIA WATER
COMPANY
By: ____________________
Name:
Title:
Accepted:
[SMITH BARNEY INC.]
By: ____________________
Name:
Title:
[A.G. EDWARDS & SONS, INC.]
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By: ____________________
Name:
Title:
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<PAGE> 35
Schedule to Annex I
Title of Purchased Notes:
Medium-Term Notes, Series B ("Purchased Notes")
Aggregate Principal Amount:
$
[Price to Public:]
Purchase Price by Purchaser:
____% of the principal amount of the Purchased Notes, plus
accrued interest from _________ to _________________.
Method of and Specified Funds for Payment of Purchase Price:
[By certified or official bank check or checks, payable to
the order of the Company, in [[New York] Clearing House]
[immediately available]funds]
[By wire transfer to a bank account specified by the Company
in [next day] [immediately available] funds].
Indenture:
Indenture, dated as of September 1, 1993, between the Com-
pany and Chemical Trust Company of California, as Trustee.
Time of Delivery:
Closing Location:
Maturity:
Interest Rate:
[_____%]
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Interest Payment Dates:
[months and dates]
Record Dates:
Redemption Dates:
Documents to be Delivered:
The following documents referred to in the Distribution
Agreement shall be delivered as a condition to the Closing:
[(1) The opinion or opinions of counsel to the Agents
referred to in Section 4(j).]
[(2) The opinion or opinions of counsel to the Com-
pany referred to in Section 4(k).]
[(3) The accountants' letter referred to in Section
4(l).]
[(4) The officers' certificate referred to in Section
4(m).]
Syndicate Provisions:
[Set forth any provisions relating to underwriters'
default and step-up of amounts to be purchased by underwriters
acting with Purchaser.]
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ANNEX II
MEDIUM-TERM NOTE ADMINISTRATIVE
PROCEDURE FOR FIXED RATE NOTES
(Dated as of , 1995)
Medium-Term Notes, Series B (the "Notes") in the aggre-
gate principal amount of up to U.S. $45,000,000 are to be offered
on a continuing basis by Southern California Water Company (the
"Company") through Smith Barney Inc. and A.G. Edwards & Sons, Inc.,
who, as agents (individually, an "Agent" and collectively, the
"Agents"), have each agreed to use their reasonable efforts to
solicit offers to purchase the Notes from the Company. The Agents
may also purchase Notes as principal for resale.
The Notes are being sold pursuant to a Distribution
Agreement among the Company and the Agents, dated ,
1995 (the "Distribution Agreement"). The Notes will be issued
pursuant to an Indenture (the "Indenture"), dated as of
between the Company and Chemical Trust Company of California, as
trustee (the "Trustee"). A Registration Statement (the "Regis-
tration Statement") with respect to the Notes has been filed with
the Securities and Exchange Commission (the "Commission"). The
most recent Prospectus included in the Registration Statement is
herein referred to as the "Prospectus" (which term includes all
applicable supplements thereto other than Pricing Supplements).
The most recent supplement to the Prospectus with respect to the
specific terms of the Notes is herein referred to as the "Pricing
Supplement."
The Notes will either be issued (a) in book-entry form
and represented by one or more fully registered Notes (each, a
"Book-Entry Note") delivered to the Trustee, as agent for The
Depository Trust Company ("DTC"), and recorded in the book-entry
system maintained by DTC, or (b) in certificated form delivered
to the purchaser thereof or a person designated by such pur-
chaser. Except in the limited circumstances described in the
Prospectus, owners of beneficial interests in Notes issued in
book-entry form will not be entitled to physical delivery of
Notes in certificated form equal in principal amount to their
respective beneficial interests.
General procedures relating to the issuance of all
Notes are set forth in Part I hereof. Additionally, Notes issued
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in book-entry form will be issued in accordance with the proce-
dures set forth in Part II hereof and Notes issued in certifi-
cated form will be issued in accordance with the 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, as the case may be.
PART I: PROCEDURES OF GENERAL
APPLICABILITY
Date of Issuance/ Each Note will be dated as of the date of
Authentication: its authentication by the Trustee. Each
Note shall also bear an original issue date
(the "Original Issue Date"). The Original
Issue Date shall 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 thirty years from its Original Issue
Date.
Registration: Notes will be issued only in fully regis-
tered form.
Calculation of Interest (including payments for partial
Interest: periods) will be calculated and paid on the
basis of a 360-day year of twelve 30-day
months.
Acceptance and The Company shall have the sole right to
Rejection of accept offers to purchase Notes from the
Offers: Company and may reject any such offer in
whole or in part. Each Agent shall commu-
nicate to the Company, orally or in writ-
ing, each reasonable offer to purchase
Notes from the Company received by it.
Each Agent shall have the right, in its
discretion reasonably exercised, without
notice to the Company, to reject any offer
to purchase Notes through it in whole or
in part.
Preparation of If any offer to purchase a Note is
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Pricing Supplement: accepted by the Company, the Company, with
the approval of the applicable Agent, will
prepare a Pricing Supplement reflecting the
terms of such Note and file electronically
via EDGAR a Pricing Supplement relating to
the Notes and the plan of distribution
thereof with the Commission in accordance
with Rule 424 under the Act. Such Agent
will cause a Pricing Supplement and a Pro-
spectus to be delivered to the purchaser of
the Note.
The Company shall have delivered a com-
pleted Pricing Supplement, via next day
mail or telecopy, to arrive no later than
11 a.m. on the Business Day following the
trade date, to the applicable Agent at the
following address:
If to Smith Barney Inc.:
Smith Barney Inc.
390 Greenwich Street - 4th Floor
New York, New York 10013
Attention: MTN Product Management/
Origination -
Mark R. Meyer
Telephone: (212) 723-5123
Telecopy: (212) 723-8854
With a copy to:
Smith Barney Inc.
388 Greenwich St. - 34th Floor
New York, New York 10013
Attention: Legal Compliance -
Adrienne Garofolo
Telephone: (212) 816-7594
Telecopy: (212) 816-7912
If to A. G. Edwards & Sons, Inc.
A. G. Edwards & Sons, Inc.
One North Jefferson
St. Louis, Missouri 63103
Attention: Debt Syndicate/John Meiners
Telephone: (314) 289-5800
Telecopy: (314) 289-5989
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In each instance that a Pricing Supplement
is prepared, the applicable Agent will
affix the Pricing Supplement to Prospec-
tuses prior to their use. Outdated Pricing
Supplements, and the Prospectuses to which
they are attached (other than those
retained for files) will be destroyed.
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, con-
stitute "settlement." Offers accepted by
the Company will be settled from one to
three Business Days, or at a time as the
purchaser, the Trustee and the Company
shall agree, pursuant to the timetable for
settlement set forth in Parts II and III
hereof under "Settlement Procedures" with
respect to Book-Entry Notes and Certifi-
cated Notes, respectively. If procedures A
and B of the applicable Settlement Proce-
dures with respect to a particular offer
are not completed on or before the time set
forth under the applicable "Settlement Pro-
cedures 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 an
Agent as principal, appropriate settlement
details will be as agreed between such
Agent and the Company pursuant to the
applicable Terms Agreement.
Procedure for When a decision has been reached to change
Changing Rates or the interest rate or any other variable
Other Variable term on any Notes being offered for sale,
Terms: the Company will promptly advise the Agents
and the Agents will forthwith suspend
solicitation of offers to purchase such
Notes. Each Agent will telephone the Com-
pany with recommendations as to the changed
interest rates or other variable terms. At
such time as the Company advises the Agents
of the new interest rates or other variable
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terms, the Agents may resume solicitation
of offers to purchase such Notes. Until
such time only "indications of interest"
may be recorded. Immediately after accep-
tance by the Company of an offer to pur-
chase at a new interest rate or new vari-
able term, the Company, the Agents and the
Trustee shall follow the procedures set
forth under the applicable "Settlement
Procedures."
Suspension of Solicita- The Company may suspend solicitation of
tion; Amendment or purchases at any time. Upon receipt of
Supplement: such instructions the Agents will each
forthwith suspend solicitation of offers to
purchase from the Company until such time
as the Company has advised it that solici-
tation of offers to purchase may be
resumed. If the Company decides to amend
the Registration Statement (including
incorporating any documents by reference
therein) or supplement any of such docu-
ments (other than to change rates or other
variable terms), it will promptly furnish
each Agent and its counsel with copies of
the amendment (including any document pro-
posed to be incorporated by reference
therein) or supplement. One copy of such
filed document, along with a copy of the
cover letter sent to the Commission, will
be delivered or mailed to each Agent at the
following addresses:
Smith Barney Inc.
390 Greenwich St.
New York, New York 10013
Attention: MTN and Debt Marketing -
Mark R. Meyer
A.G. Edwards & Sons, Inc.
One North Jefferson
St. Louis, Missouri 63103
Attention: Debt Syndicate/John Meiners
Telecopy: (314) 289-5989
In the event that at the time the solicita-
tion of offers to purchase from the Company
is suspended (other than to change interest
rates or other variable terms) there shall
be any orders outstanding which have not
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been settled, the Company will promptly
advise the Agents and the Trustee whether
such orders may be settled and whether cop-
ies of the Prospectus as theretofore
amended and/or supplemented as in effect at
the time of the suspension may be delivered
in connection with the settlement of such
orders. The Company will have the sole
responsibility for such decision and for
any arrangements which may be made in the
event that the Company determines that such
orders may not be settled or that copies of
such Prospectus may not be so delivered.
Delivery of Prospectus: A copy of the most recent Prospectus and
Pricing Supplement must accompany or pre-
cede the earlier of (a) the written confir-
mation of a sale sent to a customer or the
agent of such customer, and (b) the deliv-
ery of Notes to a customer or the agent of
such customer.
Authenticity of The Agents will have no obligations
Signatures: or liability to the Company or the Trustee
in respect of the authenticity of the sig-
nature of any officer, employee or agent of
the Company or the Trustee on any Note.
Documents Incorporated The Company shall supply the Agents
by Reference: with an adequate supply of all documents
incorporated by reference in the Registra-
tion Statement.
Business Day: "Business Day" means any day, other than a
Saturday or Sunday, on which banks in The
City of New York, are not required or
authorized by law to close.
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PART II: PROCEDURES FOR NOTES ISSUED
IN BOOK-ENTRY FORM
In connection with the qualification of Notes issued in
book-entry form for eligibility in the book-entry system main-
tained by DTC, the Trustee will perform the custodial, document
control and administrative functions described below, in accor-
dance with its respective obligations under a Letter of Represen-
tation from the Company and the Trustee to DTC, dated as of
, 1995, and a Medium-Term Note Certificate Agreement between the
Trustee and DTC (the "Certificate Agreement"), and its obliga-
tions 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 Original
Issue Date, redemption provisions,
interest payment dates, interest rate,
and Stated Maturity (collectively, the
"Fixed Rate Terms") will be represented
initially by a single global security in
fully registered form without coupons
(each, a "Book-Entry Note").
Each Book-Entry Note will be dated and
issued as of the date of its authentica-
tion 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 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 Inter-
est 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 repre-
sent any Note issued in certificated
form.
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Identification: The Company has arranged with the CUSIP
Service Bureau of Standard & Poor's Cor-
poration (the "CUSIP Service Bureau")
for the reservation of approximately 900
CUSIP numbers which have been reserved
for and relating to Book-Entry Notes and
the Company has delivered to the Trustee
and DTC a written list of such CUSIP
numbers. The Trustee will assign CUSIP
numbers to Book-Entry Notes as descried
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 Com-
pany at any time when fewer than 50 of
the reserved CUSIP numbers remain unas-
signed to Book-Entry Notes, and, if it
deems necessary, the Company will
reserve additional CUSIP numbers for
assignment to Book-Entry Notes. Upon
obtaining such additional CUSIP numbers,
the Company will deliver a list of such
additional numbers to the Trustee and
DTC.
Registration: Each Book-Entry Note will be registered
in the name of Cede & Co., as nominee
for DTC, on the register maintained by
the Trustee under the Indenture. The
beneficial owner of a Note issued in
book-entry form (i.e., an owner of a
beneficial interest in a Book-Entry
Note) (or one or more indirect partici-
pants 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 for such beneficial
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 Par-
ticipants, a credit balance with respect
to such Note issued in book-entry form
in the account of such Participants.
The ownership interest of such benefi-
cial owner in such Note issued in book-
entry form will be recorded through the
records of such Participants or through
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<PAGE> 45
the separate records of such Partici-
pants and one or more indirect partici-
pants in DTC.
Transfers: Transfers of a Book-Entry Note will be
accomplished by book entries made by DTC
and, in turn, by Participants (and in
certain cases, one or more indirect par-
ticipants 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 writ-
ten notice specifying (a) the CUSIP num-
bers of two or more Book-Entry Notes
Outstanding on such date that represent
Book-Entry Notes having the same Fixed
Rate Terms (other than Original Issue
dates) and for which interest has been
paid to the same date; (b) a date,
occurring at least 30 days after such
written notice is delivered and at least
30 days before the next Interest Payment
Date for the related Notes issued in
book-entry form, on which such Book-
Entry Notes shall be exchanged for a
single replacement Book-Entry Note; and
(c) a new CUSIP number, obtained from
the Company, 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 speci-
fied exchange date, the Trustee will
deliver to the CUSIP Service Bureau
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 no
longer be valid. 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 will, in accordance
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<PAGE> 46
with CUSIP Service Bureau procedures, be
canceled and not reassigned.
Denominations: Notes issued in book-entry form will be
issued in denominations of $1,000 and
any larger denomination which is an
integral multiple of $1,000.
Interest: General. Interest on each Note issued
on book-entry form will accrue from the
Original Issue Date of the Book-Entry
Note representing such Note. Each pay-
ment of interest on a Note issued in
book-entry form will include interest
accrued through the day preceding, as
the case may be, the Interest Payment
Date or Maturity. Interest payable at
Maturity of a Note issued in book-entry
form will be payable to the Person to
whom the principal of such Note is pay-
able. DTC will arrange for each pending
deposit message described under Settle-
ment 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.
Regular Record Dates. The Regular
Record Date with respect to any Interest
Payment Date for a Note shall be the
fifteenth calendar day (whether or not a
business day) preceding such Interest
Payment Date.
Interest Payment Dates. Interest pay-
ments will be made on each Interest Pay-
ment Date commencing with the first
Interest Payment Date following the
Original Issue Date to the holders on
the Record Date preceding such Interest
Payment Date; provided, however, the
first payment of interest on any Note
originally issued between a Regular
Record Date and an Interest Payment Date
will occur on the Second Interest Pay-
ment Date following the Original Issue
Date.
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Interest payments on Notes issued in
book-entry form will be made semiannu-
ally as specified in each Note or Pric-
ing Supplement and at Maturity unless
such day is not a Business Day, in which
case such payment will be made on the
next Business Day.
Notice of Interest Payments and Regular
Record Dates. On the first Business Day
of January, March, June and September of
each year, the Trustee will deliver to
the Company and DTC a written list of
Regular Record Dates.
Payments of Principal Payments of Interest Only. Promptly
and Interest: after each Regular 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.
DTC will confirm the amount payable on
each Book-Entry Note on such Interest
Payment Date by reference to the daily
bond reports published by Standard &
Poor's. On such Interest Payment Date,
the Company will pay to the Trustee, and
the Trustee in turn will pay to DTC,
such total amount of interest due (other
than at Maturity), at the times and in
the manner set forth below under "Manner
of Payment."
Payments at Maturity. On or about the
first Business Day of each month on
which principal and/or interest is to be
paid, the Trustee will deliver to the
Company and DTC a written list of prin-
cipal, interest and premium, if any, to
be paid on each Book-Entry Note maturing
either at Stated Maturity or on a
Redemption Date in the following month.
The Trustee, the Company and DTC will
confirm the amounts of such principal
and interest payments with respect to a
Book-Entry Note on or about the fifth
Business Day preceding the Maturity of
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<PAGE> 48
such Book-Entry Note. At such Maturity,
the Company will pay to the Trustee, and
the Trustee in turn will pay to DTC, the
principal amount of such Note, together
with interest and premium, if any, due
at such Maturity, at the times and in
the manner set forth below under "Manner
of Payment." If any Maturity 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 Matu-
rity. Promptly after payment to DTC of
the principal, interest and premium, if
any, due at the maturity of such Book-
Entry Note, the Trustee will cancel such
Book-Entry Note and deliver it to the
Company with an appropriate debit
advice. On the first Business Day of
each month, the Trustee will deliver to
the Company a written statement indicat-
ing the total principal amount of Out-
standing Book-Entry Notes as of the
immediately preceding Business Day.
Manner of Payment. The total amount of
any principal, premium, if any, and
interest due on Book-Entry Notes on any
Interest Payment Date or at Maturity
shall be transferred by the Company to
the Trustee to an account designated by
the Trustee in funds available for use
by the Trustee as of 9:30 a.m., New York
City time, on such date. The Company
will confirm such instructions in writ-
ing to the Trustee. Prior to 10:00
a.m., New York City time, on such date
or as soon as possible thereafter, the
Trustee will pay (but only from funds
withdrawn from such account) by separate
wire transfer (using Fedwire message
entry instructions in a form previously
specified by DTC) to an account at the
Federal Reserve Bank of New York previ-
ously specified by DTC, in funds avail-
able for immediate use by DTC, each pay-
ment of interest, principal and premium,
if any, due on a Book-Entry Note on such
date. Thereafter on such date, DTC will
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<PAGE> 49
pay, in accordance with its SDFS operat-
ing procedures then in effect, such
amounts in funds available for immediate
use to the respective Participants in
whose names such Notes are recorded in
the book-entry system maintained by DTC.
Neither the Company nor the Trustee
shall have any responsibility or liabil-
ity for the payment by DTC of the prin-
cipal of, or premium, if any, or inter-
est on, the Book-Entry Notes to such
Participants.
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.
Settlement Procedures: Settlement Procedures with regard to
each Note in book-entry form sold by an
Agent, as agent of the Company, will be
as follows:
A. The applicable Agent will advise the
Company by telephone (confirmed in
writing) or telecopy of the follow-
ing Settlement information:
1. Taxpayer identification number
of the purchaser.
2. Principal amount of the Note.
3. Interest rate and Interest Pay-
ment Dates for the Notes.
4. Price to public of the Note.
5. Trade date.
6. Settlement Date (Original Issue
Date).
7. Maturity Date.
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8. Net proceeds to the Company.
9. Agent's commission.
10. Redemption provisions, if any.
B. The Company will advise the Trustee
by electronic transmission of the
above settlement information
received from such Agent with
respect to the Book-Entry Note rep-
resenting such Note.
C. The Trustee will assign a CUSIP num-
ber to such Note and the Trustee
will communicate to DTC through
DTC's Participant Terminal System, a
pending deposit message specifying
the following settlement informa-
tion, which will route such relevant
information to such Agent, Standard
& Poor's Corporation and Interactive
Data Corporation:
1. The information set forth in
Settlement Procedure A.
2. Identification numbers of the
participant accounts maintained
by DTC on behalf of the Trustee
and such Agent.
3. Identification as a Book-Entry
Note.
4. Initial Interest Payment Date
for such Note, number of days by
which such date succeeds the
related record dated for DTC
purposes and, if then calcula-
ble, the amount of interest pay-
able on such Interest Payment
Date (which amount shall have
been confirmed by the Trustee).
5. CUSIP number of the Book-Entry
Note representing such Note.
6. Whether such Book-Entry Note
represents any other Notes
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<PAGE> 51
issued or to be issued in book-
entry form.
D. The Trustee will complete a Book-
Entry Note representing such Note in
a form that has been approved by the
Company, such Agent and the Trustee.
E. The Trustee will authenticate the
Book-Entry Note representing such
Note.
F. DTC will credit such Note to the
participant account of the Trustee
maintained by DTC.
G. The Trustee will enter an SDFS
deliver order through DTC's Partici-
pant Terminal System instructing DTC
(i) to debit such Note to the Trust-
ee's participant account and credit
such Note to the participant account
of the applicable Agent maintained
by DTC and (ii) to debit the settle-
ment account of such Agent and
credit the settlement account of the
Trustee maintained by DTC, in an
amount equal to the price of such
Note less such Agent's commission.
Any entry of such a deliver order
shall be deemed to constitute a rep-
resentation and warranty by the
Trustee to DTC that (i) the Book-
Entry Note representing such Note
has been issued and authenticated
and (ii) the Trustee is holding such
Book-Entry Note pursuant to the
Medium Term Note Certificate Agree-
ment between the Trustee and DTC.
H. The applicable Agent will enter an
SDFS deliver order through DTC's
Participant Terminal System
instructing DTC (i) to debit such
Note to such Agent's participant
account and credit such Note to the
participant account of the Partici-
pants maintained by DTC and (ii) to
debit the settlement accounts of
such Participants and credit the
II-15
<PAGE> 52
settlement account of such Agent
maintained by DTC, in an amount
equal to the public offering price
of such Note.
I. Transfers of funds in accordance
with SDFS deliver orders described
in settlement Procedures G and H
will be settled in accordance with
SDFS operating procedures in effect
on the Settlement Date.
J. Upon receipt of such funds, the
Trustee will credit to an account of
the Company identified to the
Trustee funds available for immedi-
ate use in the amount transferred to
the Trustee in accordance with set-
tlement Procedure G.
K. The Trustee will send a copy of each
Book-Entry Note to the Company
together with a statement setting
forth the principal amount of Notes
Outstanding in accordance with the
Indenture.
L. The applicable 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.
Settlement Procedures For orders of Notes accepted by the
Timetable: Company, Settlement Procedures "A"
through "L" set forth above shall be
completed as soon as possible but not
later than the respective times (New
York City time) set forth below:
Settlement
Procedure Time
--------- ----
A 11:00 a.m. on the trade
date
B 12:00 noon on the trade
date
II-16
<PAGE> 53
C 2:00 p.m. on the trade
date
D 3:00 p.m. on the Business
Day before Settlement
Date
E 9:00 a.m. on Settlement
Date
F 10:00 a.m. on Settlement
Date
G-H 2:00 p.m. on the Settle-
ment Date
I 4:45 p.m. on Settlement
date
J-L 5:00 p.m. on Settlement
Date
If a sale is to be settled more than one
Business Day after the trade date, Set-
tlement Procedures A, B, and C may, if
necessary, be completed at any time
prior to the specified times on the
first Business Day after such sale date.
In connection with a trade which is to
be settled more than one Business Day
after the trade date, Settlement
Procedure I 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 Note issued in book
entry form is rescheduled or canceled,
the Trustee 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.
Failure to Settle: If the Trustee fails to enter an SDFS
deliver order with respect to a Book-
Entry Note issued in book-entry form
pursuant to Settlement Procedure G, the
Trustee may deliver to DTC, through
DTC's Participant Terminal System, as
soon as practicable a withdrawal message
instructing DTC to debit such Note to
the participant account of the Trustee
II-17
<PAGE> 54
maintained at DTC. DTC will process the
withdrawal message, provided that such
participant account contains a principal
amount of the Book-Entry Note represent-
ing such Note that is at least equal to
the principal amount to be debited. If
withdrawal messages are processed with
respect to all the Notes represented by
a Book-Entry Note, the Trustee will mark
such Book-Entry Note "canceled," make
appropriate entries in its records and
send such canceled Book-Entry Note to
the Company. The CUSIP number assigned
to such Book-Entry Note shall, in accor-
dance with CUSIP Service Bureau proce-
dures, be canceled and not immediately
reassigned. If withdrawal messages are
processed with respect to a portion 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 the
Book-Entry Notes for which withdrawal
messages are processed and shall be can-
celed immediately after issuance, and
the other of which shall represent the
other Notes previously represented by
the surrendered Book-Entry Note and
shall bear the CUSIP number of the sur-
rendered Book-Entry Note.
If the purchase price for any Book-Entry
Note is not timely paid to the Partici-
pants with respect to such Note by the
beneficial purchaser thereof (or a per-
son, including an indirect participant
in DTC, acting on behalf of such pur-
chaser), such Participants and, in turn,
the applicable Agent may enter SDFS
delivery orders through DTC's Partici-
pant Terminal System reversing the
orders entered pursuant to Settlement
Procedures G and H, respectively.
Thereafter, the Trustee will deliver the
withdrawal message and take the related
actions described in the preceding para-
graph. If such failure shall have
occurred for any reason other than
default by such Agent to perform its
obligations hereunder or under the
II-18
<PAGE> 55
Distribution Agreement, the Company will
reimburse such Agent on an equitable
basis for its loss of the use of funds
during the period when the funds were
credited to the account of the Company.
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 a Note that was to have been
represented by a Book-Entry Security
also representing other Notes, the
Trustee will provide, in accordance with
Settlement Procedures D and E, for the
authentication and issuance of a Book-
Entry Note representing such remaining
Notes and will make appropriate entries
in its records.
Nothing herein should be deemed to
require the Trustee to risk or expend
its own funds in connection with any
payment to the Company, or the Agents,
or DTC, or any Noteholder, it being
understood by all parties that payments
made by the Trustee shall be made solely
to the extent that funds are provided to
the Trustee for such purpose.
II-19
<PAGE> 56
PART III: PROCEDURES FOR NOTES ISSUED
IN CERTIFICATED FORM
Denominations: The Notes will be issued in denomina-
tions of U.S. $1,000 and integral multi-
ples of U.S. $1,000 in excess thereof.
Interest: Each Note will bear interest in accor-
dance with its terms. Interest will
begin to accrue on the Original Issue
Date of a Note for the first interest
period and on the most recent interest
payment date to which interest has been
paid for all subsequent interest peri-
ods. Each payment of interest shall
include interest accrued to, but exclud-
ing, the date of such payment. However,
the first payment of interest on any
Note issued between a Record Date and an
Interest Payment Date will be made on
the Interest Payment Date following the
next succeeding Record Date. The Record
Date for any payment of interest shall
be the fifteenth calendar day (whether
or not a business day), prior to the
applicable Interest Payment Date.
Interest at Maturity will be payable to
the person to whom the principal is
payable.
Nothing herein should be deemed to
require the Trustee to risk or expend
its own funds in connection with any
payment to the Company, or the Agents,
or DTC, or any Noteholder, it being
understood by all parties that payments
made by the Trustee shall be made solely
to the extent that funds are provided to
the Trustee for such purpose.
Payments of Principal Upon presentment and delivery of the
and Interest: Note, the Trustee will pay the principal
amount of each Note at Maturity and the
final installment of interest in immedi-
ately available funds. All interest
payments on a 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
II-20
<PAGE> 57
as provided in the Note. However, hold-
ers of $10 million or more in aggregate
principal amount of Notes (whether hav-
ing identical or different terms and
provisions) shall be entitled to receive
payments of interest, other than at
Maturity, by wire transfer of immedi-
ately available funds if appropriate
wire transfer instructions have been
received in writing by the Trustee not
less than 16 days prior to the applica-
ble Interest Payment Date. Any payment
of principal or interest required to be
made on an Interest Payment Date or at
Maturity of a Note which is not a Busi-
ness Day (as defined below) need not be
made on such day, but may be made on the
next succeeding Business Day 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.
The Trustee will provide to the Company
in each month prior to a month in which
any Note or Notes mature, a list of the
principal and interest to be paid on
Notes maturing in the next succeeding
month. The Trustee will be responsible
for withholding taxes on interest paid
as required by applicable law, but shall
be relieved from any such responsibility
if it acts in good faith and in reliance
upon an opinion of counsel.
Notes presented to the Trustee at Matu-
rity for payment will be canceled and
held by the Trustee.
Settlement Procedures: Settlement Procedures with regard to
each Note purchased through an Agent, as
agent, shall be as follows:
A. The applicable Agent will advise the
Company by telephone (confirmed in
writing) or telecopy of the follow-
ing Settlement information with
regard to each Note:
II-21
<PAGE> 58
1. Exact name in which the Note is
to be registered (the "Regis-
tered Owner").
2. Exact address or addresses of
the Registered Owner for deliv-
ery, notices and payments of
principal and interest.
3. Taxpayer identification number
of the Registered Owner.
4. Principal amount of the Note.
5. Denomination of the Note.
6. Interest rate and Interest Pay-
ment Date for the Note.
7. Price to public of the Note.
8. Trade date.
9. Settlement date (Original Issue
Date).
10. Maturity Date.
11. Net proceeds to the Company.
12. Agent's Commission.
13. Redemption provisions, if any.
B. The Company shall provide to the
Trustee the above Settlement infor-
mation received from such Agent and
shall cause the Trustee to issue,
authenticate and deliver Notes. The
Company also shall provide to the
Trustee and/or Agent a copy of the
applicable Pricing Supplement.
C. With respect to each trade, the
Trustee will deliver the Notes to
such Agent at the following address:
If to Smith Barney Inc.:
Smith Barney Inc.
II-22
<PAGE> 59
390 Greenwich St. - 3rd Floor
New York, New York 10013
Attention: Syndicate Operations -
James Steiner
Telephone: (212) 723-5427
Telecopy: (212) 723-8832
If to A. G. Edwards & Sons, Inc.:
A. G. Edwards & Sons, Inc.
77 Water Street
6th Floor
New York, New York 10004
Attention: Carlos Velez
Telephone: (212) 952-7228
Telecopy: (212) 952-6818
The Trustee will keep a copy of such
Note. The applicable Agent will
acknowledge receipt of the Note
through a broker's receipt and will
keep a copy of such Note. Delivery
of the Note will be made only
against such acknowledgment of
receipt. Upon determination that
the Note has been authorized, deliv-
ered and completed as aforemen-
tioned, such Agent will wire the net
proceeds of the Note after deduction
of its applicable commission to the
Company pursuant to standard wire
instructions given by the amount.
D. Such Agent will deliver the Note
(with confirmations), as well as a
copy of the Prospectus and the Pric-
ing Supplement received from the
Trustee to the purchaser against
payment in immediately available
funds.
E. The Trustee will send a copy of such
Note to the Company.
II-23
<PAGE> 60
Settlement Procedures For offers accepted by the Company,
Timetable: Settlement Procedures "A" through "E"
set forth above shall be completed on or
before the respective times set forth
below:
Settlement
Procedure Time
--------- ----
A 5:00 P.M. on the trade
date
B 3:00 P.M. on the second
Business Day prior to
settlement
C 12:00 noon on day of
settlement
D 3:00 P.M. on day of
settlement
E 5:00 P.M. on day of
settlement
Failure to Settle: In the event that a purchaser of a Note
from the Company shall either fail to
accept delivery of or make payment for a
Note on the date fixed for settlement,
the applicable Agent will forthwith
notify the Trustee and the Company by
telephone, confirmed in writing, and
return the Note to the Trustee. The
Trustee, upon receipt of the Note from
such Agent, will immediately advise the
Company and the Company will promptly
arrange to credit the account of such
Agent in an amount of immediately avail-
able funds equal to the amount previ-
ously paid by such Agent in settlement
for the Note. Such credits will be made
on the settlement date if possible, and
in any event not later than the Business
Day following the settlement date; pro-
vided that the Company has received
notice on the same day. If such failure
shall have occurred for any reason other
than failure by such Agent to perform
its obligations hereunder or under the
Distribution Agreement, the Company will
reimburse such Agent on an equitable
basis for its loss of the use of funds
during the period when the funds were
credited to the account of the Company.
II-24
<PAGE> 61
Immediately upon receipt of the Note in
respect of which the failure occurred,
the Trustee will cancel and destroy the
Note, make appropriate entries in its
records to reflect the fact that the
Note was never issued, and accordingly
notify in writing the Company.
II-25
<PAGE> 62
ANNEX III
Pursuant to Section 4(l) and Section 6(d), as the case
may be, of the Distribution Agreement, the Company's independent
certified public accountants shall furnish letters to the effect
that:
(i) They are independent certified public accoun-
tants with respect to the Company and its subsidiaries within the
meaning of the Act and the applicable published rules and regula-
tions thereunder;
(ii) In their opinion, the financial statements and
any supplementary financial information and schedules examined by
them and included or incorporated by reference in the Registra-
tion Statement or the Prospectus comply as to form in all mate-
rial respects with the applicable accounting requirements of the
Act or the Exchange Act, as applicable, and the related published
rules and regulations thereunder; and, if applicable, they have
made a review in accordance with standards established by the
American Institute of Certified Public Accountants of the interim
financial statements;
(iii) The unaudited selected financial information with
respect to the results of operations and financial position of
the Company for the five most recent fiscal years included in
the Prospectus and included or incorporated by reference in Item 6
of the Company's Annual Report on Form 10-K for the most recent
fiscal year agrees with the corresponding amounts (after
restatement where applicable) in the audited financial statements
for five such fiscal years which were included or incorporated
by reference in the Company's Annual Reports on Form 10-K for
such fiscal years;
(iv) On the basis of limited procedures, not consti-
tuting an examination in accordance with generally accepted
auditing standards, consisting of a reading of the unaudited
financial statements and other information referred to below, a
reading of the latest available interim financial statements of
the Company, inspection of the minute books of the Company since
the date of the latest audited financial statements included or
incorporated by reference in the Prospectus, inquiries of
III-1
<PAGE> 63
officials of the Company responsible for financial and accounting
matters and such other inquiries and procedures as may be speci-
fied in such letter, nothing came to their attention that caused
them to believe that:
(A) the unaudited statements of income, balance
sheets and statements of cash flows included or
incorporated by reference in the Company's Quarterly
Reports on Form 10-Q incorporated by reference in the
Prospectus do not comply as to form in all material
respects with the applicable accounting requirements
of the Exchange Act as it applies to Form 10-Q and the
related published rules and regulations thereunder or
are not in conformity with generally accepted accounting
principles applied on a basis substantially consistent
with the basis for the audited statements of income,
balance sheets and statements of cash flows included or
incorporated by reference in the Company's Annual Report
on Form 10-K for the most recent fiscal year;
(B) any other unaudited statement of income and
cash flow data, balance sheet items, per share and share
data and selected financial data included in the Prospec-
tus do not agree with the corresponding items in the
unaudited or audited financial statements from which such
data and items were derived, or that any such unaudited
data and items were not determined on a basis substan-
tially consistent with the basis for the corresponding
amounts in the audited financial statements included or
incorporated by reference in the Company's Annual Reports
on Form 10-K for the three most recent fiscal years;
(C) any unaudited financial statements which were
not included in the Prospectus but from which were
derived the unaudited financial statements referred to in
Clause (A) and any unaudited income statement data and
balance sheet items included in the Prospectus and
referred to in Clause (B) were not determined on a basis
substantially consistent with the basis for the audited
financial statements included or incorporated by refer-
ence in the Company's Annual Report on Form 10-K for the
most recent fiscal year;
III-2
<PAGE> 64
(D) for the period from the date of the latest
financial statements included or incorporated by refer-
ence in the Prospectus to the date of the most recent
unaudited financial statements not included in the
Prospectus there were any decreases in the amount of
the Company's retained earnings available for the payment
of dividends or in net revenues, income from operations
before provision for income taxes or operating profit or
the total or per share amounts of income before extraor-
dinary items or net income, or any decreases in the
ratios of income from continuing operations before provi-
sion for income taxes or net income to revenues, or any
increases in the ratios of selling and administrative
expense or interest expense to revenues, in each case as
compared to the average monthly period for the three
months constituting the latest quarter for which a bal-
ance sheet is included or incorporated by reference in
the Prospectus, except in each case for increases or
decreases which the Prospectus discloses have occurred or
may occur; or
(E) as of a specified date not more than five days
prior to the date of such letter, there have been any
decrease in the capital stock (other than issuances of
capital stock upon conversions of convertible securities
which were outstanding on the date of the latest balance
sheet included or incorporated by reference in the Pro-
spectus) or any increase in the long-term debt of the
Company, in each case as compared with amounts shown in
the latest balance sheet included or incorporated by
reference in the Prospectus, except in each case for
changes, increases or decreases, which the Prospectus
discloses have occurred or may occur; and
(v) In addition to the examination referred to in
their report(s) included or incorporated by reference in the Pro-
spectus and the limited procedures, inspection of minute books,
inquiries and other procedures referred to in paragraphs (iii)
and (iv) above, they have carried out certain specified proce-
dures, not constituting an examination in accordance with gener-
ally accepted auditing standards, with respect to certain
amounts, percentages and financial information specified by the
Agents which are derived from the general accounting records of
III-3
<PAGE> 65
the Company which appear in the Prospectus (excluding documents
incorporated by reference), or in Part II of, or in exhibits and
schedules to, the Registration Statement specified by the Agents
or in documents incorporated by reference in the Prospectus spec-
ified by the Agents, and have compared certain of such amounts,
percentages and financial information with the accounting records
of the Company and have found them to be in agreement.
All references in this Annex III to the Prospectus
shall be deemed to refer to the Prospectus (including the docu-
ments incorporated by reference therein) as defined in the Dis-
tribution Agreement as of the Commencement Date referred to in
Section 6(d) thereof and to the Prospectus as amended or supple-
mented (including the documents incorporated by reference
therein) as of the date of the amendment, supplement, incorpora-
tion or the Time of Delivery relating to the Terms Agreement
requiring the delivery of such letter under Section 4(l) thereof.
III-4
<PAGE> 1
EXHIBIT 5
OPINION OF O'MELVENY & MYERS
August 7, 1995
Southern California Water Company
630 East Foothill Boulevard
San Dimas, California 91773
Re: Common Shares and Debt Securities of
Southern California Water Company
Ladies and Gentlemen:
At your request, we have examined the Registration Statement on Form S-3 as
amended by Amendment No. 1 thereto (the "Registration Statement"), proposed to
be filed by Southern California Water Company (the "Company") with the
Securities and Exchange Commission in connection with the registration of
$70,000,000 aggregate initial offering price of Common Shares (the "Shares") and
Debt Securities (the "Debt Securities"). We have examined the indenture, dated
as of September 1, 1993, incorporated by reference as an exhibit to the
Registration Statement (the "Indenture") under which the Debt Securities are to
be issued. We are familiar with the proceedings taken and proposed to be taken
by the Company in connection with the authorization, registration, issuance and
sale of the Shares and the Debt Securities.
Subject to such proposed additional proceedings with respect to the Shares
being taken and completed as now are contemplated by us as your counsel prior to
the issuance and sale of the Shares, upon the issuance and sale thereof in the
manner referred to in the Registration Statement, the Shares will be legally and
validly issued, fully paid and nonassessable. Subject to such proposed
additional proceedings with respect to the Debt Securities being taken as now
are contemplated by us as your counsel and as contemplated by the Indenture, as
applicable, prior to the issuance and sale of the Debt Securities, and the
execution, delivery and authentication of the Debt Securities in accordance with
the Indenture, it is our opinion that the Debt Securities will, upon the
issuance and sale thereof in the manner referred to in the Registration
Statement, be legally valid and binding obligations of the Company, enforceable
against the Company in accordance with their terms, except as may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors' rights generally (including, without limitation, fraudulent
conveyance laws) and by general principles of equity, including, without
limitation, concepts of materiality, reasonableness, good faith and fair dealing
and the possible unavailability of specific performance or injunctive relief.
Please be advised that enforceability of the Debt Securities and the
Indenture is subject to the effect of general principles of equity including,
without limitation, concepts of materiality, reasonableness, good faith and fair
dealing and the possible unavailability of specific performance or injunctive
relief, regardless of whether considered in a proceeding in equity or at law.
We consent to the use of this opinion as an exhibit to the Registration
Statement, and we further consent to the use of our name under the caption
"Legal Matters" in the Registration Statement and the Prospectus which forms a
part thereof.
Respectfully submitted,
/s/ O'MELVENY & MYERS
--------------------------------------
O'Melveny & Myers
<PAGE> 1
EXHIBIT 12
SOUTHERN CALIFORNIA WATER COMPANY
Calculation Of Earnings To Fixed Charges
<TABLE>
<CAPTION>
Quarter Years Ended December 31,
Ended --------------------------------------------------------
Description 30-Jun-95 1994 1993 1992 1991 1990
---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
($000'S) ($000's) ($000's) ($000's) ($000's) ($000's)
Operating Income 5,129 18,930 20,050 19,098 16,825 14,733
Taxes On Income 2,159 8,865 5,491 7,791 5,340 6,034
---------------------------------------------------------------------
Earnings Available For
Fixed Charges 7,288 27,795 25,541 26,889 22,165 20,767
---------------------------------------------------------------------
Total Fixed Interest
Charges 2,309 7,828 8,378 7,890 7,583 6,421
---------------------------------------------------------------------
Ratio of Earnings to
Fixed Charges 3.16 3.55 3.05 3.41 2.92 3.23
=====================================================================
</TABLE>
